Tellabs, Inc. v. Makor Issues & Rights, Ltd.
Tellabs Inc. v. Makor Issues & Rights, 551 U.S. 308 (2007), was a United States Supreme Court case in which the Court ruled on the interpretation of the Private Securities Litigation Reform Act of 1995's requirement of scienter in a civil action in apply to Tellabs and Makor Issues & Rights. The various federal circuits have taken different approaches to defining what it means, under the PSLRA, for a plaintiff to sufficiently plead a "strong inference" of scienter (a mental state embracing intent to deceive, manipulate, or defraud). The Court ruled a reasonable inference of scienter from assumed-true facts was insufficient and inconsistent with Congressional intent. Writing for the Court, Justice Ginsburg wrote that "to qualify as "strong" within the intendment of § 21D(b)(2), we hold, an inference of scienter must be more than merely plausible or reasonable - it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent...the inference of scienter must be more than merely "reasonable" or "permissible"-it must be cogent and compelling, thus strong in light of other explanations. A complaint will survive, we hold, only if a reasonable person would deem the inference of scienter cogent and at least as