This section contains the nature of the case and procedural background.

Ps were stockholders who purchased D stock during the period when the company was allegedly misrepresenting the status of its ongoing search for strategic partners to offset its $10 billion in debt after the merger of Time and Warner Communications. Ps alleged that D made materially misleading statements and that unnamed sources within the company had leaked materially misleading information to reporters and securities analysts on which the market relied. Because of the failure to attract partners, D was forced to offer a new stock subscription to coerce existing shareholders to purchase stock or face dilution. The stock fell from $117 per share to $94 per share in one week and eventually declined to $89.75. The district court found that the company's own statements were accurate when made, that later events did not give rise to a duty to correct or update them, and that a corporation could not be held liable for unattributed statements made to the press or security analysts. The complaint was dismissed. P appealed.

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