Group Pleading Doctrine Ninth Circuit
The group pleading doctrine had its genesis in the pleading requirements pertaining to fraud that are contained in the Federal Rules of Civil Procedure. (See Wool v. Tandem Computers Inc. (9th Cir. 1987) 818 F.2d 1433.)
The doctrine is routinely described as one used to measure the sufficiency of a plaintiff's pleadings. (In re Huffy Corp. Securities Litigation (S.D. Ohio 2008) 577 F.Supp.2d 968, 984 citing cases.)
In Winer Family Trust v. Queen (3d Cir. 2007) 503 F.3d 319, 335, the United States Court of Appeals for the Third Circuit described the doctrine as follows:
"The group pleading doctrine is a judicial presumption that statements in group-published documents including annual reports and press releases are attributable to officers and directors who have day-to-day control or involvement in regular company operations. Under the doctrine, where defendants are insiders with such control or involvement, their specific connection to fraudulent statements in group-published documents is unnecessary. Accordingly, the group pleading doctrine allows a plaintiff to plead that defendants made a misstatement or omission of a material fact without pleading particular facts associating the defendants to the alleged fraud."
The doctrine is far from universally accepted, particularly in the wake of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. 78u-4 et seq. (PSLRA), in which Congress enacted heightened pleading requirements for securities class action lawsuits. (See Winer Family Trust v. Queen, supra, 503 F.3d at pp. 335-336; see also Tellabs, Inc. v. Makor Issues & Rights, Ltd. (2007) 551 U.S. 308, 326, fn. 6 168 L. Ed. 2d 179, 127 S.Ct. 2499, 2511, fn. 6 (Tellabs) "there is disagreement among the Circuits as to whether the group pleading doctrine survived the PSLRA ...".)