In an unsigned, one-sentence opinion, the court dismissed the case as “improvidently granted,” meaning the justices concluded that it had been a mistake to take it up. There were no noted dissents.
The practical effect of the decision was to leave in place an appeals court decision that had let much of the case proceed.
The move followed a similar one in November in another securities fraud case, against Facebook, which had been accused of failing to adequately disclose a data breach that allowed Cambridge Analytica to harvest the private information of millions of users. In that case, too, the dismissal let stand an appeals court ruling, allowing the case to proceed.
At the argument in the Nvidia case, several members of the court across the ideological spectrum expressed frustration with the lawyers’ arguments. Some justices suggested that the court should not have granted review.
“This is a highly technical subject,” Justice Samuel Alito said, “and I just don’t understand how a court is supposed to evaluate that” at a preliminary stage.
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Justice Elena Kagan made a similar point to a lawyer for Nvidia, now the dominant manufacturer of chips for artificial intelligence services. “It just seems to me that you’re asking us to engage in a kind of analysis that we are not very good at and weren’t expecting to when we took this case,” she said, adding that “it becomes less and less clear why we took this case.” The question before the justices was whether an investment firm and a pension fund suing Nvidia for securities fraud had satisfied a 1995 law, the Private Securities Litigation Reform Act, which tightened the requirements for how much detail investors had to provide at the outset of such suits. The law, Justice Ruth Bader Ginsburg wrote in 2007, had “twin goals: to curb frivolous, lawyer-driven litigation, while preserving investors’ ability to recover on meritorious claims.”
Lawyers for Nvidia argued that the plaintiffs had not cleared two hurdles imposed by the law. One required detailed accusations about which statements from the company were false and how. The other required plaintiffs to describe “facts giving rise to a strong inference” that company officials knew the statements were false.
