Ninth Circuit Holds that Independent Accountants Are Not Strictly Liable for Information in Financial Statements

On November 10, 2025, the Ninth Circuit Court of Appeals, in Hunt et al v. PricewaterhouseCoopers LLP (PwC) et al, No. 24-3568 (9th Cir. 2025), upheld the District Court’s decision, dismissing a Section 11 of the Securities Act of 1933 (“Section 11”) claim against PricewaterhouseCoopers (“PwC”) brought by former and current shareholders of Bloom Energy Corporation.

Bloom Energy, a manufacturer of fuel-cell servers that generate electricity, went public through an IPO in 2018. PwC audited Bloom Energy’s 2016 and 2017 financial statements and opined that the financial statements for those two years fairly presented Bloom Energy’s financial position.

In 2019, PwC identified an issue related to Bloom Energy’s Managed Sales Agreements (“MSAs”). Bloom Energy then reclassified certain of its MSAs as capital leases, revised its 2016 and 2017 financial statements, and restated its 2018 and 2019 financial statements. The next day, the price of Bloom Energy’s stock dropped by 13.8%.

Plaintiffs, consisting of former and current stockholders, filed a class action suit against Bloom Energy, nine of its directors and officers, and ten underwriters of the IPO. A year into the litigation, Plaintiffs amended their complaint to add allegations regarding the classification of the MSAs and to add PwC as a defendant, alleging that PwC was liable under Section 11 because it purported to have “conducted an adequate and reasonable investigation into the business, operations, financial statements, and accounting of Bloom Energy.”  

All Defendants, including PwC, moved to dismiss all claims against them. The district court partially dismissed the claims against the other defendants and dismissed the claims against PwC and Plaintiffs appealed. In an opinion written by Judge N. Randy Smith, the Ninth Circuit affirmed the dismissal of the claims against PwC, holding that Section 11 does not provide for strict liability for accountants because audit certifications are merely statements of opinions and that accountants have a due diligence defense, consistent with Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund, 575 U.S. 175 (2015). The Court held that 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 Court clarified that PwC did not prepare the financial statements and therefore was not liable as a preparer. The Court also clarified that Section 11 does not require accountants, by issuing an audit opinion, to guarantee that an issuer’s financial statements were free from error. Rather, accountants are required to perform a reasonable investigation, in accordance with PCAOB standards, and to have reasonable grounds to believe that the financial statements were accurate. The Court also affirmed the district court’s dismissal on the grounds that Bloom Energy’s statements regarding classification of the MSAs were opinions, not statements of fact.

The case is Hunt et al v. PricewaterhouseCoopers LLP (PwC) et al, case number 24-3568. Plaintiffs-Appellants were represented by Levi & Korsinsky and Hagens Berman Sobol Shapiro. PwC was represented by King & Spalding and Orrick Herrington & Sutcliffe. The Ninth Circuit’s opinion can be found here.