Walker v. Chidambaran. — Entry #106: NOTICE by Marcum LLP re 80 MOTION to Dismiss for Failure to State a Claim Regarding Supplemental Authority

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                        FOR PUBLICATION

           UNITED STATES COURT OF APPEALS
                FOR THE NINTH CIRCUIT

         JAMES EVERETT HUNT; JUAN              No. 24-3568
         RODRIGUEZ; KURT VOUTAZ;
                                                 D.C. No.
         JOEL WHITE; ANDREW AUSTIN;
                                              4:19-cv-02935-
         SCOTT KLINE; RYAN FISHMAN,
                                                   HSG
                   Plaintiffs - Appellants,

          v.                                    OPINION

         PRICEWATERHOUSECOOPERS
         LLP (PWC),

                   Defendant - Appellee,

         and

         BLOOM ENERGY
         CORPORATION, JP MORGAN
         SECURITIES, LLC, MORGAN
         STANLEY SMITH BARNEY, LLC,
         CREDIT SUISSE SECURITIES
         (USA) LLC, KEYBANC CAPITAL
         MARKETS INC., MERRILL
         LYNCH, PIERCE, FENNER &
         SMITH INCORPORATED,
         ROBERT W. BAIRD & CO.
         INCORPORATED, COWEN AND
         COMPANY, LLC, HSBC


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         2             HUNT V. PRICEWATERHOUSECOOPERS LLP


         SECURITIES (USA) INC.,
         OPPENHEIMER & CO. INC.,
         RAYMOND JAMES &
         ASSOCIATES, INC.,

                        Defendants.

                  Appeal from the United States District Court
                    for the Northern District of California
                Haywood S. Gilliam, Jr., District Judge, Presiding

                      Argued and Submitted June 11, 2025
                           San Francisco, California

                            Filed November 10, 2025

             Before: Milan D. Smith, Jr. and N. Randy Smith, Circuit
                 Judges, and Douglas L. Rayes, District Judge. *

                       Opinion by Judge N. Randy Smith


         *
          The Honorable Douglas L. Rayes, United States District Judge for the
         District of Arizona, sitting by designation.


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                                   SUMMARY **


                                  Securities Law

             The panel affirmed the district court’s dismissal of
         claims under § 11 of the Securities Act of 1933 against
         PriceWaterhouseCoopers LLP (PwC), an outside accountant
         for Bloom Energy Corp., based on an audit opinion on
         Bloom Energy’s financial statements included with its
         registration statement for an initial public stock offering.
             At issue was the manner in which Bloom Energy, a
         designer, manufacturer, and seller of fuel-cell servers that
         converted natural gas or biogas into electricity for on-site
         power generation, accounted for Managed Services
         Agreements (MSAs), a type of sale-leaseback
         arrangement. On appeal, plaintiffs challenged the alleged
         incorrect statements of revenue, net loss, and net loss per
         share in Bloom Energy’s 2017 financial statement, due to the
         improper treatment of MSAs as operating rather than capital
         leases.
             The panel held that under § 11, an independent
         accountant is not strictly liable for the information in a
         registration statement or a client’s financial statements
         simply because the accountant certified the financial
         statements prepared by the issuer. Instead, under 15 U.S.C.
         § 77k(b)(3)(B)(i), an independent accountant certifies the
         underlying statements without liability if, “after reasonable
         investigation, [the accountant has a] reasonable ground to
         believe and did believe, at the time such part of the

         **
           This summary constitutes no part of the opinion of the court. It has
         been prepared by court staff for the convenience of the reader.


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         registration because effective, that the statements therein
         were true and that there was no omission to state a material
         fact required to be stated therein or necessary to make the
         statements therein not misleading." Under Omnicare, Inc. v.
         Laborers Dist. Council Const. Indus. Pension Fund, 575
         U.S. 175 (2015), an independent accountant is also protected
         from liability for its opinions (not factual statements) made
         about those underlying documents as long as the opinion was
         sincerely held.
             The panel held that PwC was not liable as a preparer of
         Bloom Energy’s financial statements. PwC also was not
         liable as a certifier of Bloom Energy’s financial statements
         because PwC’s audit opinion did not make any material
         misstatements of fact or omissions but rather was merely a
         statement of opinion based upon the subjective judgment of
         the MSA classification. The panel held that the district
         court’s decision also must be affirmed because, under
         Omnicare, Bloom Energy’s financial statements regarding
         classification of the MSAs were opinions.


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                                COUNSEL

         Nicholas I. Porritt (argued), Levi & Korsinsky LLP,
         Washington, D.C.; Adam M. Apton, Levi & Korsinsky LLP,
         San Francisco, California; Reed R. Kathrein and Lucas
         Gilmore, Hagens Berman Sobol Shapiro LLP, Berkeley,
         California; Kevin K. Green, Hagens Berman Sobol Shapiro
         LLP, San Diego, California; for Plaintiffs-Appellants.
         E. Joshua Rosenkranz (argued), Eliza Lehner, and Jodie C.
         Liu, Orrick Herrington & Sutcliffe LLP, New York, New
         York; Edward H. Williams II, Orrick Herrington & Sutcliffe
         LLP, Washington, D.C.; Lisa Bugni, King & Spalding LLP,
         San Francisco, California; for Defendant-Appellee.
         Linda T. Coberly, Winston & Strawn LLP, Chicago, Illinois;
         Lauren Gailey, Winston & Strawn LLP, Washington, D.C.;
         Janet Galeria and Tyler S. Badgley, U.S. Chamber Litigation
         Center, Washington, D.C.; Kevin Carroll, Securities
         Industry and Financial Markets Association, Washington,
         D.C.; for Amici Curiae the Chamber of Commerce of the
         United States of America and the Securities Industry and
         Financial Markets Association.
         David M. Parker and Elizabeth K. Brightwell, Hunton
         Andrews Kurth LLP, Richmond, Virginia; Matthew P.
         Bosher, Hunton Andrews Kurth LLP, Washington, D.C.; for
         Amicus Curiae American Institute of Certified Public
         Accountants.


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                                  OPINION

         N.R. SMITH, Circuit Judge:

             Under § 11 of the Securities Act of 1933, an independent
         accountant is not strictly liable for the information in a
         Registration Statement or a client’s financial statements
         simply because the accountant certified the financial
         statements prepared by the issuer. Instead, an independent
         accountant certifies the underlying statements without
         liability if, “after reasonable investigation, [the accountant
         has a] reasonable ground to believe and did believe, at the
         time such part of the registration statement became effective,
         that the statements therein were true and that there was no
         omission to state a material fact required to be stated therein
         or necessary to make the statements therein not misleading.”
         15 U.S.C. § 77k(b)(3)(B)(i). Moreover, an independent
         accountant is also protected from liability for its opinions
         (not factual statements) made about those underlying
         documents as long as the opinion was sincerely held. See
         Omnicare, Inc. v. Laborers Dist. Council Const. Indus.
         Pension Fund, 575 U.S. 175, 187–88 (2015).
                        FACTUAL BACKGROUND
             Bloom Energy designs, manufactures, sells, and (in
         some instances) installs fuel-cell servers (Energy Servers)
         that convert natural gas or biogas into electricity for on-site
         power generation.
             This case arises because of the manner in which Bloom
         Energy accounted for a type of contract that it used in
         connection with these Energy Servers; such contracts are
         known as Managed Services Agreements (MSA). MSAs are
         a type of sale-leaseback arrangement, where Bloom Energy


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         first sells the Energy Server to a bank and then leases it back
         from the bank. Bloom Energy then subleases the Energy
         Server to a customer, whereby Bloom Energy becomes the
         lessee (from the bank) and the lessor (to the customer) of the
         Energy Server. At the time of the lease to the customer,
         Bloom Energy also enters into another contract with the
         customer to service the Energy Server (from which customer
         payment for the service, Bloom Energy pays its lease to the
         bank and generates income for servicing the Energy Server).
             Bloom Energy can account for these types of sale-
         leaseback arrangements in either of two ways: (1) as an
         “operating lease,” accounting for the revenue it earns when
         it sells the Energy Server to the bank; or (2) as a “capital
         lease,” accounting for the revenue it earns when it gets the
         payment from the customer over the course of the service
         agreement with the customer. MSAs are classified as either
         an operating lease or a capital lease based on specific
         criteria. A capital lease is recognized if it meets any of the
         following criteria: (1) ownership is transferred to the lessee
         by the end of the lease term; (2) the lease contains a bargain
         purchase option; (3) the lease term is at least 75% of the
         property’s estimated remaining economic life; or (4) the
         present value of the minimum lease payments is 90% or
         more of the fair value of the leased property. See Accounting
         Standards Codification (ASC) 840-10-25-1 1. If none of these

         1
            ASC 840-10-25-1 was superseded by Topic 842 in the
          Accounting           Standards       Update         2016-02.       See
         https://asc.fasb.org/1943274/1855311/GUID-4073757B-B23C-4931-
         ABE0-8A1DF61EAFEA ((last visited Oct. 29, 2025). Lease
         classification, as of February 25, 2016, can be found at ASC 842-10-25-
         2. This section does not use 75% as a benchmark but rather a majority
         standard (ASC 842-10-25-2(c): “[t]he lease term is for the major part of
         the remaining economic life of the underlying asset”). However, the


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         criteria are met, the MSA is classified as an operating lease.
         Under an operating lease, an Energy Server would not be
         recognized as an asset on Bloom Energy’s books (because
         the Energy Server was sold to the bank); instead, lease
         payments to the bank would be recorded as an expense and
         payments from the customer would be recorded as revenue.
         In contrast, a capital lease would be recorded on Bloom
         Energy’s balance sheet by recognizing the Energy Server as
         an asset with a corresponding liability to the bank.
             Initially, Bloom Energy accounted for MSAs as
         operating leases. Bloom Energy determined that the MSAs
         were best classified as operating leases because the Energy
         Servers were not “integral equipment,” as the cost to remove
         and relocate an Energy Server would not exceed 10% of its
         original installation value. Bloom Energy also determined
         that its MSAs failed to meet the capital lease criteria because
         Bloom Energy determined that Energy Servers had useful
         lives of 15–21 years, with typical MSAs for each Energy
         Server having a lease term of 6–10 years—less than 75% of
         the estimated life, thus not triggering capital lease treatment.
            In 2018 (after more than 15 years as a private company),
         Bloom Energy decided to go public. To go public, it had to
         conduct an initial public stock offering (IPO) and file a
         Registration Statement with the Securities and Exchange
         Commission (SEC). To prepare the materials for the IPO and
         Registration Statement, Bloom Energy had already prepared

         February 2016 amendments were not effective for public business
         entities until fiscal years beginning after December 15, 2018, and the
         parties and the district court relied upon ASC 840-10-25-1. Moreover,
         the district court did not find the ASC to be dispositive: “ASC 840-10-
         10-1 merely states the ‘objectives’ underlying the more detailed
         provisions that follow,” and “[d]espite Plaintiffs’ urging, it does not
         appear to provide the definitive method for classifying a lease.”


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         its own financial statements for 2016, 2017, and the first
         quarter of 2018. It also retained responsibility for preparing
         all other financial statements for the IPO and Statement.
         However, Bloom Energy engaged PricewaterhouseCoopers
         LLP (PwC), as an outside accountant, to audit its 2016 and
         2017 financial statements, so it could include that audit
         opinion with the Registration Statement.
             PwC was hired to express an opinion on Bloom Energy’s
         2016 and 2017 financial statements based on audits. In its
         audits, PwC would investigate the business, operations,
         financial statements, and accounting of Bloom Energy.
         Those audits included “performing procedures to assess the
         risks of material misstatement of the consolidated financial
         statements, whether due to error or fraud, and performing
         procedures that respond to those risks” and “examining, on
         a test basis, evidence regarding the amounts and disclosure
         of consolidated financial statements.” It also “conducted [its]
         audits of the[] consolidated financial statements in
         accordance with standards of the” Public Company
         Accounting Oversight Board (PCAOB). 2
             Following the audit, PwC concluded:

                 In our opinion, the consolidated financial
                 statements present fairly, in all material
                 respects, the financial position of the
                 Company as of December 31, 2017 and
                 December 31, 2016, and the result of its
                 operations and its cash flows for each of the
                 two years in the period ended December 31,
                 2017 in conformity with accounting

         2
          Again, PwC did not prepare the 2016 and 2017 financial statements
         because Bloom Energy’s management had prepared them.


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                principles generally accepted in the United
                States of America.

         PwC’s audit did not identify any issue with Bloom Energy
         classifying the MSAs as operating leases under Generally
         Accepted Accounting Principles (GAAP) or Generally
         Accepted Auditing Standards (GAAS).
             When Bloom Energy prepared the Registration
         Statement, it included the PwC audit opinion. The
         Registration Statement also described an MSA and how the
         sale-leaseback arrangement operated. The Statement
         expressly stated an MSA may be “classified as a capital lease
         or an operating lease”; that Bloom Energy “[d]etermine[d] if
         the leaseback [was] classified as a capital lease or an
         operating lease,” and stated that its MSA “are classified as
         operating leases”; and it explained that this classification
         affected Bloom Energy’s recognition of revenue and
         liabilities.
             Its Registration Statement registered over 20.7 million
         Bloom Energy shares for sale. These shares were sold in the
         IPO at $15 per share and began trading on July 25, 2018.
         Bloom Energy received proceeds of $284.3 million, net of
         underwriting discounts, commissions, and estimated
         offering costs.
             In 2019, Bloom Energy reviewed the accounting for an
         MSA that had “closed on November 27, 2019 under an MSA
         financing . . . , [wherein] PwC identified an issue it had not
         previously identified related to the accounting for the
         Impacted MSA transactions.” Based upon this review,
         Bloom Energy reevaluated its MSAs and determined the
         MSAs should be treated as capital leases (loans from the
         bank rather than sales). Thus, Bloom Energy (with the


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         advice of its Audit Committee and PwC) reclassified certain
         MSAs as capital leases. To reflect these new classifications,
         Bloom Energy revised its 2016 and 2017 financial
         statements, and restated its 2018 and 2019 financial
         statements. 3 The next day, the price of Bloom Energy stock
         dropped by 13.8%.
                       PROCEDURAL BACKGROUND
              In 2019, Plaintiffs (consisting of former and current
         stockholders) filed a class action against Bloom Energy, nine
         of its officers and directors, and ten underwriters of the IPO.
         PwC was not a named defendant in the class action
         complaint. The complaint asserted claims under § 10(b) and
         § 11 of the Securities Exchange Act of 1934, based on
         alleged misstatements Bloom Energy made from 2018 to
         2019 and alleged misstatements in the Registration
         Statement. None of the allegations involved PwC or the
         classification of MSAs.
             A year into the litigation, Bloom Energy announced the
         restatements of the 2018 and 2019 financial statements that
         it deemed material and revisions of the 2016 and 2017
         financial statements that it deemed immaterial. After the
         amendment, Plaintiffs amended their complaint to add
         allegations, under § 10(b) and § 11, regarding the
         classifications of the MSAs. As a part of that amendment,
         PwC was added as a defendant. Plaintiffs alleged that PwC
         was liable under § 11 for the actionable statements and
         omissions in the Registration Statement because it purported
         to have “conducted an adequate and reasonable investigation

         3
           A restatement corrects a material error in prior financial statements,
         whereas a revision corrects an error that is “immaterial to the prior year
         financial statements.” SEC Staff Accounting Bulletin No. 108, 71 Fed.
         Reg. 54,580, 54,582 (Sept. 18, 2006).


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         into the business, operations, financial statements, and
         accounting of Bloom Energy.”
             All Defendants moved to dismiss all claims against
         them. PwC moved to dismiss the § 11 claims against it. The
         district court partially dismissed the claims against the other
         defendants and dismissed the claims against PwC.
             As to PwC, the court found that PwC’s audit opinion was
         an inactionable opinion under Omnicare; that the PwC
         opinion said only that the financial statements “present
         fairly, in all material respects, the financial position of the
         Company . . . in conformity [with GAAP]”; that “the
         financial statements are the responsibility of [Bloom
         Energy’s] management”; that PwC only had the
         responsibility “to express an opinion on [Bloom Energy’s]
         consolidated financial statements based on [its] audits”; that
         the classification of “MSAs are complex”; and thus, PwC
         was not liable. The district court also rejected Plaintiffs’
         argument that PwC’s opinions contained within them, as
         “embedded statements of fact,” the financial statements
         prepared by Bloom Energy. Lastly, the district court held
         that PwC’s certification of the financial statements was not
         a guarantee that they were accurate but rather was limited to
         the conclusions of the audit opinion.
             After the district court ruled on Defendants’ motions to
         dismiss, Plaintiffs settled their claims with all Defendants
         except PwC. Following the settlement, the district court
         entered a final judgment, dismissing all claims against PwC.
         However, the district court granted Plaintiffs leave to amend
         as to PwC, but Plaintiffs conceded that an amendment would
         be futile.
             Instead, Plaintiffs filed this timely appeal, challenging
         the alleged incorrect statements of revenue, net loss, and net


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         loss per share in Bloom Energy’s 2017 financial statement
         (due to the improper treatment of the MSAs as operating
         rather than capital leases). 4
                            STANDARD OF REVIEW
             We review de novo a district court’s order granting a
         motion to dismiss for failure to state a claim. Dunn v. Castro,
         621 F.3d 1196, 1198 (9th Cir. 2010). We must accept
         sufficient factual allegations in the complaint as true and
         construe them in the light most favorable to the plaintiff. See
         Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); In re Gilead
         Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008).
                                      ANALYSIS
              Under Omnicare, an accountant’s opinion is actionable
         under § 11 if: (1) “the speaker did not hold the belief she
         professed” and the supporting fact she supplied is
         objectively untrue; (2) the opinion contains false “embedded
         statements of fact”; or (3) the opinion omits facts “whose
         omission makes the opinion statement at issue misleading to
         a reasonable person reading the statement fairly and in
         context.” 575 U.S. at 185–86, 194. Before the district court,
         Plaintiffs focused their arguments primarily on the assertion
         that    PwC’s      audit    opinion    contained      material

         4
           In their opening brief, Plaintiffs admit that they do not challenge the
         dismissal of claims arising from their allegations concerning: (1) the
         alleged incorrect disclosure in Bloom Energy’s 2017 financial
         statements of contingent liabilities arising from MSAs; or (2) the alleged
         misrepresentations contained in PwC’s audit opinion on Bloom Energy
         2017 financial statements, meaning they do not challenge the district
         court’s dismissal of claims that the audit opinion itself was false or
         misleading apart from its certification of the financial statements.
         Accordingly, those issues are waived. See McKay v. Ingleson, 558 F.3d
         888, 891 n.5 (9th Cir. 2009).


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         misrepresentations or omissions that met one or more of the
         three exceptions under Omnicare. Because Plaintiffs’
         allegations did not meet any of the Omnicare exceptions, the
         district court dismissed their case.
             On appeal, Plaintiffs have abandoned those arguments.
         Plaintiffs do not deny that Bloom Energy prepared its own
         financial statements or that PwC neither prepared the
         statements nor repeated those statements in its opinion.
         Instead, they ask us to adopt the position that PwC is strictly
         liable under § 11(a)(4) for Bloom Energy’s 2017 financial
         statement.
              I. Section 11 of the Securities Exchange Act does not
                 provide for strict liability for accountants.
             Section 11 of the Securities Act of 1933, 15 U.S.C.
         § 77k, provides a private cause of action for investors who
         purchase securities pursuant to a registration statement
         containing “an untrue statement of a material fact” or a
         registration statement that omits “to state a material fact
         required to be stated therein or necessary to make the
         statements therein not misleading.” Id. § 77k(a). Section 11
         allows purchasers to file an action against anyone who
         signed or helped prepare the registration statement,
         including the issuer, underwriter, director, partner,
         accountant, engineer, or appraiser. See id. However, § 11
         does not impose the same type of liability on all of these
         potential defendants.
             Section 11 is a strict liability statute with respect to
         issuers of securities, company directors, and partners of
         issuers, without requiring proof of intent, negligence, or
         scienter. Id. § 77k(a). However, the statute provides defenses
         for other non-issuer defendants, such as experts, based on
         their reasonable investigation and belief in the accuracy of


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         the registration statement. Id. § 77k(b). We have also said
         that only “issuers are held strictly liable under § 11 for
         damages resulting from misrepresentations in a registration
         statement.” Monroe v. Hughes, 31 F.3d 772, 774 (9th Cir.
         1994).
             Relevant here, § 11(a)(4) imposes liability on an
         accountant “who has with his consent been named as having
         prepared or certified any part of the registration statement,
         or as having prepared or certified any report or valuation
         which is used in connection with the registration statement,
         with respect to the statement in such registration statement,
         report, or valuation, which purports to have been prepared or
         certified by him.” 5 However, the statute allows accountants
         to raise a defense to liability if they employed due diligence
         in preparing or certifying statements the registration
         statement, by showing that they “had, after reasonable
         investigation, reasonable ground to believe and did believe,
         at the time such part of the registration statement became
         effective, that the statements therein were true and that there
         was no omission to state a material fact required to be stated
         therein or necessary to make the statements therein not
         misleading.” 6 Id. § 77k(b)(3)(B)(i). Courts have interpreted
         § 77k(b)(3)(B)(i) to require accountants “to investigate, to
         various degrees, facts supporting and contradicting
         inclusions in registration statements. They must undertake
         that investigation which a reasonably prudent man in that
         position would conduct.” Endo v. Albertine, 863 F. Supp.

         5
           “The term certified, when used in regard to financial statements, means
         examined and reported upon with an opinion expressed by an
         independent public or certified public accountant.” 17 C.F.R. § 230.405.
         6
          PwC did not raise a due diligence defense in this case because Plaintiffs
         did not identify any statements of fact made by PwC.


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         708, 728 (N.D. Ill. 1994) (citation omitted); see 15 U.S.C.
         § 77k(c) (defining “standard of reasonableness” as “that
         required of a prudent man in the management of his own
         property”). In other words, accountants must exercise due
         diligence in investigating the materials provided to them
         using the accepted practices of their profession.
             However, “[a]ccountants cannot be held liable under
         Section 11 unless the misleading information can be
         expressly attributed to them.” In re Worlds of Wonder Sec.
         Litig., 694 F. Supp. 1427, 1434 (N.D. Cal. 1988). Thus,
         while, § 11(a)(4) outlines that investors may sue accountants
         for materially false registration statements, accountants are
         only subject to suit “with respect to the statement in such
         registration statement . . . , which purports to have been
         prepared or certified by [that accountant].” Id. § 77k(a)(4).
         The statute distinguishes between “prepar[ing]” and
         “certif[ying].” This distinction limits liability for certifiers
         and expands it for preparers, who may be subject to more
         general liability for the content they create. See id.
             Nevertheless, the statute does not impose strict liability
         on accountants for the statements or omissions regardless of
         whether they prepared or certified them. § 77k(b)(3)(B)(i).
         Instead, because “an accountant has a due diligence defense;
         § 11 therefore imposes a negligence standard for an
         accountant’s liability.” Monroe, 31 F.3d at 774 (citing Ernst
         & Ernst v. Hochfelder, 425 U.S. 185, 208 (1976)); see also
         In re Wachovia Equity Sec. Litig., 753 F. Supp. 2d 326, 379
         (S.D.N.Y. 2011) (“[A]lthough issuers are subject to virtually
         absolute liability under Section 11, experts such as
         accountants who have prepared portions of the registration
         statement are accorded a due diligence defense.” (cleaned
         up)).


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             As the Second Circuit correctly explained, strict liability
         is limited to those persons involved in “enumerated
         distributional activities.” See In re Lehman Bros. Mortg.-
         Backed Sec. Litig., 650 F.3d 167, 181 (2d Cir. 2011). “This
         approach avoids the implausible result of transforming every
         lawyer, accountant, and other professional whose work is
         theoretically ‘necessary’ to bringing a security to market into
         an ‘underwriter’ subject to strict liability under § 11, a
         dramatic outcome that Congress provided no sign of
         intending.” Id.
             This approach is consistent with Omnicare and
         extending its holding to accountants does not negate the due
         diligence defense. In Omnicare, the Supreme Court
         examined § 11 and addressed an issuer’s liability for
         statements of opinion, because “Congress effectively
         incorporated . . . [a] distinction [between facts and opinions]
         in § 11’s first part by exposing issuers to liability not for
         ‘untrue statement[s]’ . . . (which would have included ones
         of opinion), but only for ‘untrue statement[s] of fact.’” 575
         U.S. at 183 (quoting § 77k(a)) (alterations in original).
         Focusing on the language of the statute, the Supreme Court
         excluded statements of opinions from liability. Under the
         Supreme Court’s reasoning, accountants may be liable for
         statements of fact if they did not act with due diligence;
         however, accountants will not be liable for statements of
         opinion, even if they reflect a subjective belief that admits
         there is a possibility of error, as long as the statement of
         opinion was sincerely held. See id. As the Supreme Court
         aptly explained:

                A fact is “a thing done or existing” or “[a]n
                actual    happening.”     Webster’s     New
                International Dictionary 782 (1927). An


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                opinion is “a belief[,] a view,” or a “sentiment
                which the mind forms of persons or things.”
                Most important, a statement of fact (“the
                coffee is hot”) expresses certainty about a
                thing, whereas a statement of opinion (“I
                think the coffee is hot”) does not. . . . Indeed,
                that difference between the two is so
                ingrained in our everyday ways of speaking
                and thinking as to make resort to old
                dictionaries seem a mite silly. And Congress
                effectively incorporated just that distinction
                in § 11’s first part by exposing issuers to
                liability not for “untrue statement[s]” full
                stop (which would have included ones of
                opinion), but only for “untrue statement[s] of
                . . . fact.”

         Id. (citations omitted). The Supreme Court further explained
         a statement of opinion is not an “untrue statement of a
         material fact” simply because it is later determined to be
         incorrect (as here). Id. at 186–88.
              That said, Omnicare did not insulate accountants from
         liability. Accountants may instead be challenged based on
         their audit opinion as Omnicare outlines. The opinion can
         still be subject to liability under § 11 as a material
         misstatement, where (1) “the speaker did not hold the belief
         she professed”; (2) “the supporting fact[s] [the speaker]
         supplied were untrue”; or (3) the opinion omits facts “whose
         omission makes the opinion statement at issue misleading.”
         See id. at 186, 194. In the district court, Plaintiffs attempted
         to establish liability for PwC under these standards and
         failed. Rather than appeal that decision, they abandon those
         arguments.


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             Simply stated, an accountant’s liability is limited to
         “statement[s] in such registration statement, report, or
         valuation, which purports to have been prepared or certified
         by him.” § 77k(a)(4). Here, the PwC audit report did not
         incorporate the alleged misstatements or untrue facts, and
         clearly stated, in relevant part, that “[i]n our opinion, the
         consolidated financial statements present fairly, in all
         material respects, the financial position of [Bloom Energy]
         as of December 31, 2017 and December 31, 2016, and the
         results of its operations and its cash flows for each of the two
         years in the period ended December 31, 2017 in conformity
         with accounting principles generally accepted in the United
         States of America.”
             Thus, in order for Plaintiffs to prevail, they must
         establish that PwC did not have a “reasonable ground to
         believe and did [not] believe, at the time such part of the
         registration statement became effective, that the statements
         therein were true.” § 77(k)(b)(3)(A). As explained below,
         PwC made statements of opinion protected under Omnicare.
         PwC did not make or prepare any statements of material fact
         or omit any material statements.
            A. PwC is not liable as a preparer.
             In this case, Plaintiffs argue that, because PwC certified
         Bloom Energy’s financial statements, it became liable for
         any misstatements contained therein. However, no one
         disputes that PwC did not prepare the financial statements
         for 2017, or that Bloom Energy was responsible for
         preparing the consolidated financial statements. Frankly,
         PwC was not permitted (under the regulations) to prepare the
         financial statements. The regulations make clear that an
         accountant, who prepares the financial statements, is


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         disqualified from being the independent accountant
         authorized to certify it. See 17 C.F.R. § 230.405.
             Although PwC expressed an opinion in its audit with
         regard to Bloom Energy’s 2016–2017 financial statements,
         there is no evidence that PwC prepared materially false
         statements. Accountants do not, “by virtue of auditing a
         company’s financial statements, somehow make, own or
         adopt the assertions contained therein.” Deephaven Priv.
         Placement Trading, Ltd. v. Grant Thornton & Co., 454 F.3d
         1168, 1174 (10th Cir. 2006). Instead, PwC merely affirmed
         that, in its opinion, Bloom Energy followed the proper
         accounting principles, and those statements of opinions are
         protected under Omnicare.
              B. PwC is not liable as a certifier.
             Plaintiffs also seek to have us impose strict liability for
         PwC for Bloom Energy’s financial statements that they
         certified in their audit opinion. We decline to interpret the
         term “certify” so broadly.
             Bloom Energy prepared “consolidated financial
         statements,” which included the “accompanying
         consolidated balance sheets of Bloom Energy Corporation
         and its subsidiaries as of December 31, 2016 and December
         31, 2017, and the related consolidated statements of
         operations, of comprehensive loss, of convertible
         redeemable preferred stock and stockholders’ deficit and of
         cash flows for each of the two years in the period ended
         December 31, 2017, including the related notes.” PwC
         certified the “consolidated financial statements” using audit
         procedures aimed to obtain reasonable assurance. Section 11
         does not require that PwC, by certifying the financial
         statements, guarantee that the documents provided by
         Bloom Energy were free from error. Instead, PwC was


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         required to act in compliance with GAAP and GAAS, by
         performing a reasonable investigation and having reasonable
         grounds to believe, and did believe, that the statements
         provided by Bloom Energy were true and that there were no
         omissions that made the statement misleading. See 15 U.S.C.
         § 77k(b)(3). It was not the job of PwC to “guarantee or
         insure” the financial statements. Deephaven Priv. Placement
         Trading, Ltd., 454 F.3d at 1174 (internal quotation marks
         omitted); see also Dronsejko v. Thornton, 632 F.3d 658, 663
         (10th Cir. 2011) (“A company’s management—not the
         auditor—is responsible for the information contained in its
         financial statements and the propriety of its underlying
         accounting policies, including compliance with GAAP.”);
         Fehribach v. Ernst & Young LLP, 493 F.3d 905, 910 (7th
         Cir. 2007) (“The purpose of an audit report is to make sure
         the audited company’s financial statements—which are
         prepared by the company, not by the auditor, . . .—
         correspond to reality, lest they either have been doctored by
         a defalcating employee or innocently misrepresent the
         company’s financial situation.”).
             An accountant “is in a position to express an unqualified
         opinion on the financial statements when the auditor
         conducted an audit in accordance with the standards of the
         Public Company Accounting Oversight Board (“PCAOB”)
         and concludes that the financial statements, taken as a whole,
         are presented fairly, in all material respects, in conformity
         with the applicable financial reporting framework.” AS
         3101.02. 7 “Misstatements arising from fraudulent financial

         7
           AS references the Codification of Accounting Standards and
         Procedures, Statement on Auditing Standards No. 1, § 150 (American
         Inst. of Certified Pub. Accountants 2001). Relevant here, the PCAOB
         auditing standards were reorganized and went into effect after Dec. 30,
         2016, and were applicable to audits of financial statements for fiscal


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         reporting are intentional misstatements or omissions of
         amounts or disclosures in financial statements designed to
         deceive financial statement users where the effect causes the
         financial statements not to be presented, in all material
         respects, in conformity with [GAAP].” AS 2401.06. The
         independent accountant’s objective is to express “an opinion
         on the fairness with which [he or she] present[s], in all
         material respects, [the company’s] financial position, results
         of operations, and its cash flows in conformity with
         [GAAP].” AS 1001.01. However, “[e]ven with good faith
         and integrity, mistakes and errors in judgment can be made.”
         AS 1015.11. “[A]ccounting presentations contain
         accounting estimates, the measurement of which is
         inherently uncertain and depends on the outcome of future
         events. The auditor exercises professional judgment in
         evaluating the reasonableness of accounting estimates based
         on information that could reasonably be expected to be
         available prior to the completion of field work.” Id. To be
         sure, the division of responsibility is based on practical
         realities: Bloom Energy “operate[s] the business daily” and
         has superior knowledge of transactions, assets, and
         liabilities, whereas PwC’s function was confined to
         reasonable assurance through its audit. These limits placed
         on accountants to assess a company’s financial statements


         years       ending      before       Dec.       15,      2017.      See
         https://pcaobus.org/oversight/standards/auditing-standards (last visited
         Oct. 29, 2025). Other revisions occurred after December 15, 2017.
         However, the reorganized standards are substantially the same and
         would not alter PwC’s review of the 2016 or 2017 financial statements.


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         preclude its ability to ensure that there are no misstatements,
         and thus, accountants should consider risk factors such as:

                conditions in the company’s industry and
                environment, and company-specific factors,
                such as the nature of the company, its
                activities, and internal control over financial
                reporting. For example, external or company-
                specific factors can affect the judgments
                involved in determining accounting estimates
                or create pressures to manipulate the
                financial statements to achieve certain
                financial targets. Also, risks of material
                misstatement may relate to, e.g., personnel
                who lack the necessary financial reporting
                competencies, information systems that fail
                to accurately capture business transactions,
                or financial reporting processes that are not
                adequately aligned with the requirements in
                the applicable financial reporting framework.

         AS 2110.05.
             Again, “an accountant is not a guarantor of the reports he
         prepares and is only duty bound to act honestly, in good faith
         and with reasonable care in the discharge of his professional
         obligations.” SEC v. Arthur Young & Co., 590 F.2d 785, 788
         (9th Cir. 1979) (citation omitted). Nor does § 11 make
         accountants guarantors of every statement made by the
         issuer; to make such a holding would turn the whole
         accounting world upside down. Holding accountants strictly
         liable as if they were preparers would transform audits,
         making them prohibitively expensive. This was not
         Congress’s goal. When Congress enacted the statute,


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         Congress was clear that it was limiting the liability of
         accountants by only requiring a “reasonable investigation
         and reasonable ground for belief, [for which] the standard of
         reasonableness shall be that required of a prudent man in the
         management of his own property.” § 77k(c).
             Moreover, an accountant’s certification of financial
         statements is nothing more than an opinion. The term
         “certify” has been defined to mean that an independent
         public or certified public accountant has “examined and
         reported upon [the financial statements] with an opinion.” 17
         C.F.R. § 230.405. Omnicare protects opinions from liability
         unless one of the three exceptions is met. Omnicare made
         clear that “whether a statement is ‘misleading’ depends on
         the perspective of a reasonable investor.” 575 U.S. at 186.
         “Reasonable investors understand that opinions sometimes
         rest on a weighing of competing facts; indeed, the presence
         of such facts is one reason why an issuer may frame a
         statement as an opinion, thus conveying uncertainty.” Id. at
         189–90; see also Deephaven Priv. Placement Trading, Ltd.,
         454 F.3d at 1175 (explaining that “the phrase ‘in our
         opinion’ indicates that there may be some information risk
         associated with the [reviewed] financial statements, even
         though the statements have been audited”).
             In this case, PwC did just that. It conveyed its opinion as
         to Bloom Energy’s financial statements. There may have
         been some differing opinions with regard to the Energy
         Server’s useful life, but “[a] reasonable investor does not
         expect that every fact known to an [accountant] supports its
         opinion statement.” Omnicare, 575 U.S. at 176. And in this
         case, the classification and reasons for classification were
         provided to the investor. Thus, PwC’s “statement of opinion
         [was not] viewed in a vacuum,” but rather allowed each
         investor to “read[] each statement within such a document,


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         whether of fact or of opinion, in light of all its surrounding
         text, including hedges, disclaimers, and apparently
         conflicting information.” Id. at 190.
             In summary, Plaintiffs’ attempts to hold PwC liable fail.
         PwC’s audit opinion did not make any material
         misstatements of fact or omissions but rather was merely a
         statement of opinion based, again, upon the subjective
         judgment of the MSA classification. Plaintiffs made no
         allegation that PwC did not sincerely believe that Bloom
         Energy’s classification of the MSAs aligned with proper
         accounting principles based on the evidence available at that
         time. See id. at 186.
            Accordingly, PwC is not liable for the statements in its
         audit opinion.
            II. The district court’s decision should also be
                affirmed because Bloom Energy’s financial
                statements regarding classification of the MSAs
                were opinions.
             In this appeal, Plaintiffs challenge only the three line
         items referenced in the Registration Statement that related to
         whether MSAs should be classified as operating or capital
         leases. These line items in Bloom Energy’s financial report
         were based on Bloom Energy’s subjective judgments (not
         statements of fact) concerning the actual useful life of the
         Energy Server. Under ASC 840-10-25-1, an MSA qualifies
         as a capital lease if “[t]he lease term is at least 75% of the
         property’s [i.e., the Energy Servers’] estimated remaining
         economic life.” Plaintiffs allege that the lease terms were 6
         to 10 years; that Bloom Energy improperly estimated that the
         Energy Servers’ useful lives were 15-21 years. However,
         there is no dispute that Bloom Energy was basing its
         estimates on newly designed Energy Servers whose useful


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         life was unknown. Nevertheless, Plaintiffs allege that the
         actual useful lives of these Energy Servers were “much
         shorter.” With that shorter lease term, Plaintiffs claim that
         the 75% rule required a capital lease classification.
             However, the district court correctly concluded that
         Plaintiffs failed to allege sufficient facts to establish that
         Bloom Energy’s judgments were untrue. Throughout the
         district court opinion, it properly outlines that Bloom
         Energy’s classification of its MSAs was based on an exercise
         of judgment related to its information about its Energy
         Servers, which Bloom Energy used to classify MSAs as
         operating or capital leases. For example, the district court
         highlighted that “Plaintiffs contend that the service contracts
         ‘typically last[] from 10 to 21 years and can last as long as
         25 years,’ in total, and are renewed each year at the
         customer’s option,” but failed “to explain how Defendants
         could meaningfully estimate the length of future contracts
         from such a large range.” “Plaintiffs also suggest that Bloom
         knew the estimated life of its Energy Servers and fuel cells
         because it had to replace some of its earlier generation
         systems,” but “acknowledge[d], Bloom also had newer
         systems in place, and Plaintiffs [did] not explain how
         Defendants could extrapolate to determine the life or
         replacement schedule for all its Energy Servers.”
             Thus, the district court correctly concluded that Plaintiffs
         failed to adequately plead that the challenged line items were
         statements of fact. Instead, the district court recognized that
         Bloom Energy’s classification of the MSAs was the product
         of accounting judgments; it determined that those judgments
         “involve[d] complex consideration[]” of various GAAP
         provisions in determining how to evaluate the term of the
         MSAs and the value of the Energy Servers. Thus, the district
         court found those three line items to be opinions. Then,


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         because Plaintiff failed to plead nor argue any of the
         Omnicare exceptions to establish liability, the district court
         concluded that those three line items were not actionable.
         We agree.
             On appeal Plaintiffs argue that “statements of revenue,
         net loss, and net loss per share contained within a company’s
         financial statements” cannot be opinions because they are
         always statements of fact. However, again Plaintiffs ignore
         the language in Omnicare.
             Omnicare does not limit an opinion to words over
         figures. To be sure, the language of the statute is limited to
         facts, not opinions. Thus, as long as Bloom Energy’s
         statements were opinions and not facts, it is irrelevant
         whether the subject matter being opined about were words
         or figures. Instead, we need only determine whether Bloom
         Energy had a “sincere statement of pure opinion.” Omnicare,
         575 U.S. at 186. If it did, then it does not qualify as an
         “‘untrue statement of material fact,’ regardless whether an
         investor can ultimately prove the belief wrong.” Id.
             An “untrue statement of a material fact,” 15 U.S. C
         § 77k(a), “limited as it is to factual statements, does not
         allow investors to second-guess inherently subjective and
         uncertain assessments.” Omnicare, 575 U.S. at 186
         (emphasis added). Although figures, by themselves, do not
         clearly convey whether it is an opinion or a fact, “an investor
         [should] read[] each statement within such a document,
         whether of fact or of opinion, in light of all its surrounding
         text, including hedges, disclaimers, and apparently
         conflicting information[,] . . . tak[ing] into account the
         customs and practices of the relevant industry.” Id. at 190.
         “Section 11’s omissions clause, as applied to statements of
         both opinion and fact, necessarily brings the reasonable


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         person into the analysis, and asks what she would naturally
         understand a statement to convey beyond its literal
         meaning.” Id. at 193–94.
             The district court correctly applied Omnicare’s
         reasoning to conclude that numbers can sometimes be facts
         and other times be opinions, depending on whether “the
         considerations underlying the figures—such as which
         GAAP provisions apply and how to apply them— . . .
         require the exercise of judgment.”
             Plaintiffs do not explain what additional actions PwC
         should have taken in its audit, nor do they allege any facts
         that establish that PwC overlooked or disregarded warning
         signs about the Energy Server’s useful life or Bloom
         Energy’s MSA accounting.
             Because Plaintiffs failed to show that Bloom Energy’s
         subjective opinions were based on untrue facts or
         information that it did not believe, see Omnicare, 575 U.S.
         at 187, Plaintiffs cannot demonstrate that PwC certified
         untrue facts or information. Accordingly, Plaintiffs have
         failed to establish liability for PwC’s opinion. The record
         demonstrates that the classification of MSAs was a judgment
         call, and the Registration Statement thoroughly explained
         how it reached the classification. PwC was reasonable under
         the circumstances to certify Bloom Energy’s classification
         based on the evidence at that time. 8
              AFFIRMED.


         8
          Based on the foregoing, we need not decide whether the line item errors
         were material.