On June 25, 2024, Judge Michael E. Farbiarz of the United States District Court for the District of New Jersey denied in large part a motion to dismiss a putative securities class action against an internet-based educational platform that sells online classes and certain of its senior officers. Zequi Wu, et al. v. GSX Techedu Inc., et al., No. 20-4457 (MEF) (JRA) (D.N.J. June 25, 2024). Plaintiff alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making false statements that misled investors about defendants’ inclusion of fake “bot” students in enrollment numbers to inflate the company’s revenue. The Court in large part denied defendants’ motion to dismiss, finding that plaintiff sufficiently alleged numerous false statements and scienter.

On June 24, 2024, the United States District Court for the Southern District of New York granted with prejudice a motion to dismiss a putative securities class action against a coffee chain and two of its executive officers.Rein v. Dutch Bros, Inc., et al., No. 23-cv-1794 (PAE) (S.D.N.Y. June 24, 2024).Plaintiff alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by making a series of false and misleading statements touting the company’s performance in a manner that understated the threat to sales and profitability presented by rising inflation affecting the cost of commodities key to the company’s success.The Court granted defendants’ motion to dismiss the amended complaint with prejudice, holding that plaintiff failed to allege materially false or misleading statements and scienter.

On June 17, 2024, the Supreme Court granted certiorari to review a decision of the United States Court of Appeals for the Ninth Circuit reversing the dismissal of a putative class action asserting claims under the Securities Exchange Act of 1934 and to address the following questions: “1. Whether plaintiffs seeking to allege scienter under the Private Securities Litigation Reform Act (“PSLRA”) based on allegations about internal company documents must plead with particularity the contents of those documents”; and “2. Whether plaintiffs can satisfy the PSLRA’s falsity requirement by relying on an expert opinion to substitute for particularized allegations of fact.” 

On May 31, 2024, Judge Julie S. Sneed of the United States District Court for the Middle District of Florida granted a motion to dismiss a putative securities class action against an autonomous vehicle technology company (the “Company”), certain of its officers, and an officer of one of the Company’s subsidiaries. Alms v. Luminar Technologies, Inc., et al, No. 6:23-cv-982-JSS-LHP (M.D. Fla. May 31, 2024). Plaintiff alleged that defendants violated Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by allegedly making false statements in an investor presentation regarding plans to economize its newly developed technology. The Court dismissed plaintiff’s amended complaint, holding that plaintiff failed to adequately plead a false statement of a material fact and scienter.

On May 22, 2024, Judge Cecilia M. Altonoga of the United States District Court for the Southern District of Florida granted a motion to dismiss a putative shareholder action asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against a French company that provides outsourced content-moderation services for social media platforms (the “Company”) and certain of its former executives (the “Individual Defendants”). City of Warren Gen. Emps.’ Ret. Sys. v. Teleperformance SE, No. 23-cv-24580 (S.D. Fla. May 22, 2024). The complaint alleged that defendants made false and misleading statements about the treatment and training of the Company’s content moderators and the Company’s plan to exit the “highly egregious portion” of the content-moderation business. Judge Altonoga dismissed the complaint without prejudice, holding that plaintiffs did not adequately plead as a threshold matter that they purchased the Company’s shares within the United States and that plaintiffs had engaged in improper “puzzle pleading” in violation of Federal Rule of Civil Procedure 8(a)(1). Nevertheless, construing the complaint generously and relying on the parties’ briefing to organize the alleged misstatements, the Court identified several alleged misstatements that would be actionable, as pled, in an amended complaint with the noted deficiencies cured. 

On May 16, 2024, Judge James L. Robart of the United States District Court for the Western District of Washington granted a motion to dismiss a putative securities class action against a manufacturer of pop culture collectibles (the “Company”) and certain of its former executives (the “Individual Defendants”). Studen v. Funko, Inc., No. C23-0824JLR (W.D. Wash. May 16, 2024). The complaint alleged that the Company failed to disclose accurate information regarding the risks associated with its infrastructure projects and inventory in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). Judge Robart dismissed the complaint, holding that plaintiffs did not adequately plead falsity or offer any particularized allegations showing that defendants knew that the risks could or did occur. 

On May 14, 2024, Judge Rita F. Lin of the United States District Court for the Northern District of California granted a motion to dismiss a putative securities class action against a ridesharing company (the “Company”) and its CEO and former CFO (collectively, “defendants”). Cao et al. v. Uber Techs., Inc., et al., No. 22-cv-04688-RFL (N.D. Cal. May 14, 2024). Plaintiffs alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder by allegedly making false statements in the Company’s post-IPO Sarbanes-Oxley Act (“SOX”) certifications attached to the Company’s quarterly and annual reports for 2019 and 2020, and during its annual general meeting on May 11, 2020.

On March 30, 2024, Judge Araceli Martínez-Olguín of the Northern District of California granted a motion to dismiss a putative class action against a biotechnology company that develops and sells skin treatment drugs and certain of its officers. Aramic LLC, et al. v. Revance Therapeutics, Inc., No. 21-cv-0985-AMO (N.D. Cal. Mar. 30, 2024). Plaintiff, on behalf of a putative class of investors in the Company, alleged that defendants made false or misleading statements about the timing and likelihood of FDA approval of the Company’s drug in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Court dismissed the amended complaint, finding that plaintiff failed to allege that most of the challenged statements were false or misleading and that plaintiff in any event failed to allege adequately scienter.

On March 30, 2024, Judge Victoria Marie Calvert of the United States District Court for the Northern District of Georgia granted a motion to dismiss a putative securities class action against an optical retail company and certain of its executive officers (the “Individual Defendants”). City of Southfield General Employees Retirement Sys. v. National Vision Holdings, et al., No. 23-cv-00425-VMC (N.D. Ga. Mar. 30, 2024). Plaintiff alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions regarding staffing and wage pressures faced by the Company leading up to and through the Covid-19 pandemic. The Court granted defendants’ motion to dismiss with prejudice, holding that plaintiff failed to adequately plead falsity and scienter. 

On February 20, 2024, Judge Haywood S. Gilliam, Jr. of the United States District Court for the Northern District of California granted with leave to amend a motion to dismiss a putative securities class action against a manufacturer of laboratory instruments and other advanced automation systems (the “Company”), certain of its current and former officers and directors, several venture capital firms that invested in the Company, and the underwriters of the Company’s July 2020 IPO. Victor J. Ng, et al. v. Berkeley Lights, Inc., et al., No. 21-cv-09497-HSG (N.D. Cal. Feb. 20, 2024). Plaintiff alleged that defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, by making false and misleading statements and omissions regarding the functionality of the Company’s flagship product (the “Product”).

On March 11, 2024, Judge Haywood S. Gilliam, Jr. of the United States District Court for the Northern District of California granted in part and denied in part a motion to dismiss a putative securities class action brought against a biopharmaceutical company (the “Company”) and its CEO. Pardi et al., v. Tricida, Inc., et al., No. 21-cv-00076-HSG (N.D. Cal. Mar. 11, 2024). Plaintiff alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions regarding the likelihood that the Company’s new drug would receive accelerated FDA approval. The Company filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code and was voluntarily dismissed, and the CEO moved to dismiss.

On January 30, 2024, Judge Susan Illston of the United States District Court for the Northern District of California granted with leave to amend a motion to dismiss a putative securities class action against a battery company and its directors and officers.  In Re Enovix Corp. Securities Litigation, No. 23-cv-00071-SI (N.D. Cal. Jan. 30, 2024).  Plaintiffs alleged that defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and Rule 10b-5(b) promulgated thereunder by failing to disclose that the Company overlooked critical testing of its manufacturing equipment, which led to equipment failure that caused the Company to miss its performance targets.

On February 1, 2024, Judge Gerald J. Pappert of the United States District Court for the Eastern District of Pennsylvania granted a motion to dismiss a putative securities class action against an IT solutions company that provides digital communication, cybersecurity and IT consulting services, its CEO and current and former CFOs.  Connor v. Unisys Corp., et al., No. 22-4529 (E.D. Pa. Feb. 1, 2024).  Plaintiff alleged that defendants made false representations about the Company’s disclosure controls and procedures and internal control over financial reporting in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.  The Court dismissed the amended complaint, holding that plaintiff failed to adequately allege falsity, scienter and loss causation.

On January 5, 2024, Judge Jon S. Tigar of the United States District Court for the Northern District of California granted a motion to dismiss a proposed securities class action against an entertainment company that primarily operates a subscription-based streaming service, alleging that defendants made misrepresentations in public statements about the Company’s growth, customer retention, and challenges related to shared accounts in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.  

On December 26, 2023, the United States Court of Appeals for the Second Circuit affirmed a district court’s dismissal of a putative class action asserting claims against a tobacco company (the “Company”) under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). In re Philip Morris Int’l Inc. Sec. Litig., No. 21-2546 (2d Cir. Dec. 26, 2023). Plaintiffs alleged that the Company made false or misleading statements regarding both the scientific studies it conducted in support of an application to the Food and Drug Administration (“FDA”) and the outlook for the Company’s sales growth in Japanese markets. The district court held that plaintiffs failed to adequately plead falsity or scienter, in a decision previously covered here. The Second Circuit affirmed the dismissal, holding that plaintiffs failed to adequately plead falsity. In its decision, the Court decided two questions of first impression in the Second Circuit. First, it held a securities fraud defendant’s statement that its scientific studies comply with a methodological standard that is published and internationally recognized, but stated in general and inherently subjective terms, is properly analyzed as a statement of opinion, rather than a statement of fact. Second, the Court held that, where a securities fraud defendant’s statement expresses an interpretation of scientific data that is ultimately endorsed by the FDA, such a statement is per se “[]reasonable” (i.e., supported by “meaningful inquiry”) as a matter of law.

On September 29, 2023, Judge Andrew L. Carter, Jr. of the United States District Court for the Southern District of New York denied in part and granted in part a motion to dismiss a putative securities class action against the owner of a social media company and his beneficial trust.  Oklahoma Firefighters Pension and Retirement System v. Musk, No. 22-cv-03026 (ALC) (S.D.N.Y. Sept. 29, 2023).  Plaintiff alleged that defendants violated Sections 10(b), 20A, and 20(a) of the Securities and Exchange Act of 1934 by allegedly concealing the owner’s ownership interests in the Company to investors who sold shares of the Company between March 25, 2022, and April 4, 2022, the putative class period.

On August 21, 2023, Judge Paul A. Crotty of the United States District Court for the Southern District of New York granted a motion for reconsideration of his denial of an earlier motion to dismiss a putative securities class action against a pharmaceutical and cannabis company that sells cannabis, hemp, and related products (the “Company”) and certain of its officers (the “Individual Defendants”).  Kasilingam et al. v. Tilray Inc., et al., No. 1:20-cv-03459 (S.D.N.Y. Aug. 21, 2023).  Based on the Court’s reconsidered analysis, the Court granted defendants’ second motion to dismiss.  Plaintiffs alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 thereunder by making false and misleading statements to inflate the Company’s stock price.

On August 23, 2023, the United States Court of Appeals for the Second Circuit affirmed in part and vacated in part an order dismissing a putative securities class action against a property and casualty insurer (the “Company”), various corporate officers and board members of the Company, the Company’s outside auditor, and multiple underwriters of the Company’s sale of securities.  New England Carpenters Guaranteed Annuity and Pension Funds, et al. v. AmTrust Financial Services Inc., et al., 20-1643 (Aug. 23, 2023).  In vacating the district court’s dismissal in part, the Second Circuit held that in light of its more recent precedent, certain alleged misstatements of opinion were actionable as alleged in the complaint, and therefore reversed the district court’s dismissal of claims related to those alleged misstatements, but otherwise affirmed the district court’s decision dismissing the remaining claims.

On July 21, 2023, Judge Lewis J. Liman of the United States District Court for the Southern District of New York granted in part and denied in part a motion to dismiss a putative securities class action alleging that an agriculture company (the “Company”) and certain of its officers (the “Individual Defendants”) violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 thereunder.  In Re Appharvest Sec. Litig., No. 21-cv-7985 (LJL), 2023 BL 261952 (S.D.N.Y. July 31, 2023).  Plaintiffs alleged that defendants made misleading statements about the impact of the Covid-19 pandemic on quality control, training, yield, and employee attrition at the Company’s main plant.

On July 10, 2023, Chief Judge Patrick J. Schiltz of the United States District Court for the District of Minnesota granted a motion to dismiss a putative securities fraud class action against a mattress and bedding company (the “Company”) and two of its executives.  Steamfitters Local 449 Pension & Retirement Securities Funds v. Sleep Number Corp., et al, No. 21-CV-2669 (PJS/DTS) (D. Minn. July 10, 2010).  Plaintiffs alleged that defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder by making material misstatements and omissions regarding an alleged disruption to the Company’s supply chain after a natural disaster that forced certain of the Company’s distributors to temporarily shut down.  The Court dismissed the amended complaint with prejudice, holding that plaintiffs failed to adequately plead falsity and scienter.

On July 3, 2023, Judge Josephine L. Staton of the United States District Court for the Central District of California denied a motion to dismiss a putative class action against an electric automobile company (the “Company”), alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), Sections 11, 12(a)(2), and 15 of the Securities Exchange Act of 1933 (“Securities Act”), and Regulation S-K.  Crews v. Rivian Auto., Inc., No. 2:22-CV-01524-JLS-E, 2023 WL 4361098 (C.D. Cal. July 3, 2023).  We previously covered the Court’s decision dismissing plaintiffs’ initial complaint without prejudice.  In their amended complaint, plaintiffs alleged that the company made various misleading statements relating to the pricing and profitability of its vehicles despite knowing for several years prior to the Company’s 2021 IPO that it would need to increase pricing to address higher-than-anticipated costs for materials needed for production.  The Court held that plaintiffs’ amended complaint sufficiently alleged actionable misrepresentations and raised a plausible inference of scienter.

On June 13, 2023, the United States Court of Appeals for the Third Circuit affirmed in part and reversed in part the dismissal of a putative class action against an insurance company (the “Company”) and certain of its executives under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.  City of Warren Police & Fire Ret. Sys. v. Prudential Fin., Inc., No. 21-1147, 2023 WL 3961128 (3d Cir. June 13, 2023).  Plaintiffs alleged that the Company misled investors by misrepresenting the adequacy of their reserves, which are funds to pay for anticipated benefit claims by their policy holders.  The district court had held that plaintiffs failed to plead falsity with respect to all the alleged misstatements.  The Third Circuit affirmed the dismissal on all but one of the alleged misstatements, holding that plaintiffs adequately alleged falsity with respect to that statement including through allegations attributed to a confidential informant, and remanded to the district court to consider the elements of loss causation and scienter.

On April 18, 2023, Judge William H. Orrick of the United States District Court for the Northern District of California denied a motion to dismiss a putative securities class action alleging a software company (the “Company”) and several of its officers (the “individual defendants”) violated Sections 10(b) and 20(a) of the Securities Exchange Act (the “Exchange Act”). Weston v. DocuSign, Inc. et al., No. 22-cv-00824 (Apr. 18, 2023).  Plaintiff claimed that defendants made false and misleading statements to investors about the sustainability of the Company’s COVID-19 pandemic-driven growth.  The Court denied defendants’ motion to dismiss, holding that at least some of the alleged material misstatements or omissions were not protected by the safe-harbor provision of the Private Securities Litigation Reform Act (“PSLRA”), and that plaintiff had sufficiently pled falsity, scienter, and loss causation as it related to those statements.

On March 29, 2023, Judge William G. Young of the United States District Court for the District of Massachusetts granted a motion to dismiss a putative securities class action alleging a pharmaceutical company (the “Company”), its former CEO, the president of its U.S. division, and its former Chief Medical Officer (“CMO”) made false and misleading statements regarding the efficacy of the Company’s new Alzheimer’s drug. Okla. Firefighters Pension and Ret. Sys. v. Biogen Inc., et al., No. 22-10200-WGY (D. Mass. Mar. 29, 2023). In granting defendants’ motion to dismiss, the Court held that plaintiffs failed to plead facts with particularity establishing that any of the challenged statements were false or misleading or that there was a strong inference of scienter.

On March 30, 2023, Judge Andrew L. Carter, Jr. of the United States District Court for the Southern District of New York granted a motion to dismiss a putative securities fraud class action brought against a fitness technology company (the “Company”) and certain of its executives. Robeco Capital Growth Funds SICAV – Robeco Global Consumer Trends v. Peloton Interactive, Inc., et al., No. 21-cv-9582 (ALC)(OTW) (S.D.N.Y. Mar. 30, 2023). Plaintiff alleged that defendants violated Section 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 thereunder, by making material misstatements and omissions about the demand for the Company’s product following the peak of the COVID-19 pandemic. The Court dismissed the amended complaint, holding that certain of defendants’ alleged statements were non-actionable under the PSLRA safe harbor, and that plaintiff had not alleged sufficient facts to demonstrate other statements were false when made.

On March 14, 2023, Judge Zahid N. Quraishi of the United States District Court for the District of New Jersey dismissed a putative class action suit against a pharmaceutical company (the “Company”) and its executives alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act. Lewakowski v. Aquestive Therapeutics, Inc. et al., No. 3:21-cv-03751, 2023 WL 2496504 (D.N.J. Mar. 14, 2023). Plaintiffs alleged that defendants misled investors regarding the efficacy of a new drug and the likelihood of approval by the Food and Drug Administration. The Court dismissed the action without prejudice, holding that the complaint “cherry-pick[ed] out-of-context quotes from the Company’s disclosures” and failed to allege falsity or scienter.

On March 2, 2023, the United States Court of Appeals for the Fourth Circuit affirmed the dismissal of a putative securities class action against a company that manufactures cancer drugs (the “Company”), its president and CEO, and its senior vice president and CFO, for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and Sections 11, 12(a), and 15 of the Securities Act of 1933 (the “Securities Act”). Employees’ Retirement System of the City of Baton v. Macrogenics, Inc., No. 21-2238 (4th Cir. Mar. 2, 2023). Plaintiffs alleged that defendants made materially misleading statements or omissions concerning a clinical trial drug, which negatively affected the Company’s stock price. The Court affirmed the district court’s order granting defendants’ motion to dismiss, finding that plaintiffs failed to sufficiently allege any actionable misrepresentations or omissions that would give rise to a duty to disclose, and that most of defendants’ alleged statements also were immunized from suit.

​On February 1, 2023, Judge Anthony J. Trenga of the United States District Court for the Eastern District of Virginia dismissed a putative securities fraud action against a cybersecurity company (the “Company”) and several of its executives and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Section 11 of the Securities Act.  Firemen’s Retirement System of St. Louis, et al. v. Telos Corp., et al., No. 1:22-cv-00135 (E.D. Va. Feb. 1, 2023).  Plaintiffs alleged that defendants misled investors about the status and prospects of key government contracts and falsely certified to having reasonable financial controls.  The court dismissed the action without prejudice, holding that plaintiffs failed to allege falsity or scienter. 
 

On January 22, 2023, Judge Percy Anderson of the United States District Court for the Central District of California granted a motion to dismiss the third amended class action complaint (“TAC”) in a putative class action alleging that a video game company (the “Company”) and four of its officers misled investors by making material misstatements and omissions concerning sexual harassment and discrimination at the Company.  Cheng v. Activision Blizzard Inc. et al., 2:21-cv-06240 (C.D. Cal. Jan. 22, 2023).  Plaintiffs alleged that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5 promulgated thereunder.  The Court dismissed plaintiffs’ TAC with prejudice, finding plaintiffs failed to plead falsity and scienter.

On December 12, 2022, Judge Colleen McMahon of the United States District Court for the Southern District of New York granted summary judgment to a major pharmaceutical company (the “Company”) and dismissed class action claims that the Company failed to disclose a “serious and known link” between the Company’s breast implant products and a rare form of cancer, breast implant-associated anaplastic large cell lymphoma (BIA-ALCL), in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In re Allergan PLC Securities Litigation, 2022 WL 17584155 (S.D.N.Y. 2022).  The Court held that the challenged statements were “literally true and not misleading” and that plaintiff failed to prove after extensive discovery that either scientific studies or the regulatory community had determined that the Company’s implants were in fact more closely associated with BIA-ALCL than other types of implants. Because discovery did not uncover any evidence of falsity and plaintiff failed to raise a genuine issue of fact with respect to the materiality of the alleged misrepresentations or as to loss causation, the Court granted the Company’s motion for summary judgment.

On August 18, 2022, a unanimous panel of the United States Court of Appeals for the First Circuit affirmed a decision by the United States District Court for the District of Rhode Island granting a motion to dismiss a putative securities fraud class action asserting claims under Section 10(b) of the Securities Exchange Act (the “Exchange Act”), Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange against a health care and pharmaceutical company (the “Company”) and two of its senior executives. City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et. al. v. CVS Health Corporation, No. 21-1479 (1st Cir. Aug 18, 2022). Plaintiffs alleged that, following the Company’s 2015 acquisition of another health care company (the “Merger”), the Company’s executives issued false statements and misleading omissions about various post-Merger issues. In affirming dismissal of the amended complaint, the First Circuit held that the district court’s assessment was “right on the mark” and that “[p]laintiffs failed to allege that defendants made statements of fact that were false when made or misleadingly incomplete in light of the contemporaneous circumstances.”

On August 18, 2022, a unanimous panel of the United States Court of Appeals for the First Circuit affirmed a decision by the United States District Court for the District of Rhode Island granting a motion to dismiss a putative securities fraud class action asserting claims under Section 10(b) of the Securities Exchange Act (the “Exchange Act”), Rule 10b-5 promulgated thereunder, and Section 20(a) of the Exchange against a health care and pharmaceutical company (the “Company”) and two of its senior executives.  City of Miami Fire Fighters’ and Police Officers’ Retirement Trust, et. al. v. CVS Health Corporation, No. 21-1479 (1st Cir. Aug 18, 2022).  Plaintiffs alleged that, following the Company’s 2015 acquisition of another health care company (the “Merger”), the Company’s executives issued false statements and misleading omissions about various post-Merger issues.  In affirming dismissal of the amended complaint, the First Circuit held that the district court’s assessment was “right on the mark” and that “[p]laintiffs failed to allege that defendants made statements of fact that were false when made or misleadingly incomplete in light of the contemporaneous circumstances.”

On August 8, 2022, Judge Charles R. Breyer of the United States District Court for the Northern District of California granted a motion to dismiss a proposed securities class action suit against a financial technology company (the “Company”) and four of its executives alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.  Huei-Ting Kang v. PayPal Holdings Inc., No. 3:21-cv-06468 (N.D. Cal. Aug. 8, 2022).  Plaintiffs alleged that the Company misled investors about its compliance with (1) a Consumer Financial Protection Bureau (“CFPB”) Consent Order (the “Consent Order”) prohibiting deceptive marketing of the company’s revolving line of credit; and (2) the Federal Reserve Board’s Regulation II, which caps debit card interchange fees.  The Court’s dismissal of the complaint (with leave to amend) is a reminder of the challenges plaintiffs face when trying to assert securities claims in the wake of company announcements of regulatory investigations.

On July 15, 2022, Judge Edward M. Chen of the United States District Court for the Northern District of California largely denied a motion to dismiss a securities fraud class action against a biopharmaceutical company (the “Company”) and certain of its officers alleging violations of Sections 10(b) of the Securities Exchange Act of 1934.  In re FibroGen, Inc. Securities Litigation, No. 21-cv-02623-EMC (N.D. Cal. July 15, 2022).  Plaintiffs alleged that the Company made 96 false and misleading statements concerning the “safety and efficacy data of its flagship drug.”  Although the Court held that a handful of the misstatements were not actionable for failure to adequately allege falsity, the Court otherwise denied the motion to dismiss.

On July 15, 2022, the United States District Court for the Central District of California granted a motion to dismiss a putative class action against a children’s cartoon company (the “Company”) and certain of its officers alleging violations of Section 10(b) of the Securities Exchange Act of 1934.  In Re Genius Brands Int’l, Inc. Sec. Litig., CV 20-7457 DSF (RAOx) (C.D. Cal. July 15, 2022).  In a second amended complaint, plaintiffs alleged that the Company made materially false and misleading statements and omissions about the Company’s engagement of a stock promotion company, an impending acquisition by Disney or Netflix, and its economic resilience in the face of COVID-19, among other topics.  The Court dismissed the claims with prejudice for failure to adequately plead falsity or materiality, and further held that the complaint of 289 paragraphs and 84 pages violated Rule 8 of the Federal Rules of Civil Procedure that requires a “short and plain statement” of the claims.

On July 5, 2022, Chief Judge Richard Seeborg of the Northern District of California granted motions to dismiss a putative securities class action asserting claims under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), Rule 10b-5 thereunder, Section 20(a) of the Exchange Act, and Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (“Securities Act”), against a mobile gaming technology company (the “Company”), certain of its officers and directors, and its underwriters.  Jedrzejczyk, et al. v. Skillz Inc., et al., No. 21-cv-03450-RS (N.D. Cal. July 5, 2022).  Plaintiffs alleged that defendants made material misstatements and omissions regarding the Company’s financial condition, technical capabilities, and business prospects.  The Court granted defendants’ motions to dismiss, holding that plaintiffs failed to adequately plead falsity, scienter, or loss causation as to the Exchange Act claims, and that plaintiffs had not established standing or adequately pled material untrue statements or omissions as to the Securities Act claims.

On July 7, 2022, a panel of the United States Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of a putative securities fraud class action against a medical device manufacturer company (the “Company”) and certain of its executives.  Macomb County Employees’ Retirement System et al. v. Align Technology Inc. et al., No. 21-15823 (9th Cir. July 7, 2022).  Plaintiff alleged that defendants violated Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934 (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, by misrepresenting the Company’s prospects about its future success in China.  The Court affirmed the district court’s order granting defendants’ motion to dismiss, holding that six of the challenged statements were non-actionable “puffery,” and the remaining six statements did not misrepresent the Company’s growth in China.

On May 19, 2022, the United States Court of Appeals for the Ninth Circuit affirmed a district court’s dismissal of a putative class action against a pharmaceutical company (the “Company”) asserting claims under Section 10(b) of the Securities Exchange Act of 1934.  In re Nektar Therapeutics Inc. Sec. Litig., No. 21-15170 (9th Cir. May 19, 2022).  Plaintiffs alleged that the Company misled investors about the results of its preliminary trial of the Company’s flagship drug when it presented the information without disclosing that outlier data was included in the average.  In December 2020, the Northern District of California dismissed the complaint for failure to plead falsity, scienter, or loss causation, which we covered here.  The Ninth Circuit affirmed the dismissal, holding that plaintiffs failed to sufficiently explain how the inclusion of the outlier data misled investors, or how the announcement of subsequent trial results caused a loss.

On April 21, 2022 the United States Court of Appeals for the Fourth Circuit unanimously affirmed a district Court’s dismissal of a putative class action against a major hotel chain (the “Company”) for violations of Section 10(b) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5.  In re Marriott Int’l, Inc., No. 21-1802 (4th Cir. Apr. 21, 2022).  Plaintiff alleged that the Company failed to disclose data vulnerabilities of a rival hotel company that it acquired in 2016, which rendered the Company’s subsequent public statements regarding its cybersecurity systems and the importance of protecting customer data false or misleading.  Agreeing with the district court that none of the Company’s statements were false or misleading when made, the Fourth Circuit affirmed the district court’s dismissal.

On March 23, 2022, Judge Kenneth K. Lee of the United States Court of Appeals for the Ninth Circuit affirmed the United States District Court for the Northern District of California’s dismissal of claims brought under Sections 10(b) and 20(a) of the Securities Exchange Act (the “Exchange Act”) and Rule 10b-5 thereunder against a social media company (the “Company”) and certain of its executive officers.  Weston Family Partnership LLLP et al. v. Twitter Inc. et al., No. 20-17465 (9th Cir. Mar. 23, 2022).  Plaintiffs alleged that the Company failed to disclose the scope of software issues that led to a loss in advertising revenue, which ultimately caused the Company’s share price to drop.  The Court affirmed the district court’s order granting defendants’ motion to dismiss, holding that plaintiffs failed to state a claim because the Company’s statements were not false or materially misleading.  The Court stated that “[s]ecurities laws . . . do not require real-time business updates or complete disclosure of all material information whenever a company speaks on a particular topic.  To the contrary, a company can speak selectively about its business so long as its statements do not paint a misleading picture.  [The Company]’s statements about its advertising program were not false or misleading because they were qualified and factually true.  The Company had no duty to disclose any more than it did under federal securities law.”

On January 14, 2022, Judge William H. Orrick of the Northern District of California denied a motion to dismiss a putative securities class action asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, against a lithium battery development company (the “Company”) and certain of its executives (collectively, “defendants”).  In re Quantumscape Securities Class Action Litigation, No. 3:21-cv-00058-WHO (N.D. Cal. Jan. 14, 2022).  The Company’s “solid-state” battery is an aspiring competitor to conventional lithium-ion batteries for use in electric vehicles.  The Court denied defendants’ motion to dismiss, holding that the Complaint was adequately plead with the exception of one of the challenged statements that it dismissed.

On December 2, 2021, Judge Cormac J. Carney of the United Stated District Court for the Central District of California denied, in substantial part, a motion to dismiss a putative securities class action against an electric truck manufacturer (the “Company”) for allegedly misleading investors by overhyping its production capabilities and its prospects for winning a multibillion-dollar contract to revamp the U.S. Postal Service’s (“USPS”) delivery fleet in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.  Farrar v. Workhorse Grp., Inc., No. 2:21-cv-02072 (C.D. Cal. Dec. 2, 2021).   Plaintiff alleged the Company made false and misleading statements in 2020 and early 2021 about the viability of the Company’s bid for the USPS contract and the Company’s “backlog” of customer orders.  Plaintiff also alleged the Company made misrepresentations regarding its use of Payroll Protection Program (“PPP”) funds provided by the federal government during the COVID-19 pandemic.  The Court denied the Company’s motion to dismiss on all but the PPP claims.

On November 2, 2021, Judge Sharon Johnson Coleman of the Northern District of Illinois Eastern Division granted in part defendants’ motion for summary judgment and denied plaintiff’s partial motion for summary judgment in a securities class action asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) against a retail drugstore chain (the “Company”) and two of its former senior executives.  Washtenaw County Employees' Retirement System v. Walgreen Co. et al., No. 15-cv-03187 (N.D. Ill. Nov. 2, 2021).  Plaintiff alleged defendants made materially false and misleading statements concerning the Company’s earnings before interest and taxes (“EBIT”) projections and its ability to meet it.  The Court granted in part defendants’ motion for summary judgment, holding that one of the alleged misstatements was a non-actionable forward-looking statement under the Private Securities Litigation Reform Act’s (“PSLRA”) safe harbor, that defendants proved the truth of certain alleged misstatements, but that triable issues of material fact remained with respect to a number of other alleged misstatements.  The Court denied plaintiff’s motion for partial summary judgment regarding one of the individual defendant’s intent to deceive, holding that there was a genuine issue of material fact as to the falsity of that defendant’s statements and is therefore a question for the jury.

On September 30, 2021, Judge Nancy E. Brasel of the United States District Court for the District of Minnesota granted a motion to dismiss a putative class action against an industrial chemical manufacturer (the “Company”) and certain of its officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5.  In re 3M Co. Sec. Litig., No. 19-CV-2488 (D. Minn. Sept. 30, 2021).  Plaintiffs alleged that the Company downplayed its potential legal and financial exposure over its production and disposal of toxic per- and poly-fluoroalkyl substances (“PFAS”) by failing to estimate the contingent losses associated with the Company’s PFAS liabilities.  The Court dismissed plaintiffs’ complaint for failure to plead an actionable misrepresentation or allegations sufficient to support a strong inference of scienter.

On September 21, 2021, Judge Michael A. Shipp of the District of New Jersey overruled an objection to a special master’s report and recommendation to deny a motion for judgment on the pleadings concerning claims under Section 11 of the Securities Act of 1933 (the “Securities Act”) against an accounting firm (the “Firm”).  In re Valeant Pharmaceuticals Intl., Inc. Securities Litigation, No. 15-7658 (MAS) (LHG) (D. N.J. Sept. 21, 2021).  We previously covered the district court’s decision denying a motion to dismiss by other defendants in this action.  The Firm is the only defendant left in a purported class action lawsuit related to a pharmaceutical company’s public offering in 2015.  The Court agreed with the special master’s findings, among other things, that plaintiff was not required to plead damages for a Section 11 claim at the pleading stage.

On September 13, 2021, Judge Edward M. Chen of the United States District Court for the Northern District of California dismissed with prejudice a putative class action against a cybersecurity company (the “Company”) and its CEO for violations of Section 14(e) and 20(a) of the Securities Exchange Act of 1934.  In re Finjan Holdings, Inc. Sec. Litig., No. 20-cv-04289 (N.D. Cal. Sep. 13, 2021).  Plaintiff alleged that defendants made material misrepresentations about the value of the Company in connection with the sale of the Company through a tender offer (the “Merger”) and that the CEO was motivated by his desire to retain his position at the Company.  The Court dismissed the claims, holding that (i) the sales process indicated that the offer price reflected the market value of the Company’s stock, and (ii) plaintiff failed to present particularized evidence that the CEO had a motive to mislead shareholders.

On September 15, 2021, Judge Stanley R. Chesler of the United States District Court for the District of New Jersey dismissed a putative class action against a medical device manufacturer (the “Company”) and certain of its officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.  Industriens Pensionsforsikring A/S v. Becton Dickinson & Co., No. 20-cv-02155 (D.N.J. Sept. 15, 2021).  Plaintiff alleged the Company made misleading statements concerning regulatory approval of one of its medical devices, its regulatory compliance program, and financial projections.  The Court dismissed plaintiff’s claims without prejudice in an unpublished opinion confirming the many challenges to pleading securities fraud claims based on alleged misrepresentations regarding U.S. Food and Drug Administration (“FDA”) approval processes.

On August 25, 2021, the United States Court of Appeals for the Second Circuit unanimously affirmed the dismissal of a putative class action against a Danish bank (the “Company”) and certain of its former officers and directors alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5.  Plaintiffs alleged misstatements and omissions concerning the Company’s anti-money laundering (“AML”) controls and protocols.  Plumbers & Steamfitters Local v. Danske Bank, No. 20-3231 (2d Cir. Aug. 25, 2021).  The Second Circuit affirmed the dismissal for failure to allege an actionable misrepresentation or a scheme to defraud investors.

On August 10, 2021, the United States Court of Appeals for the Seventh Circuit affirmed a decision of the United States District Court for the Northern District of Illinois, Eastern Division that dismissed a putative securities fraud class action asserting claims under Rule 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder.  City of Taylor Police and Fire Retirement System v. Zebra Technologies Corp., et al, No. 20-3258 (7th Cir. Aug. 10, 2021).  Plaintiff alleged that defendants, a commercial electronics manufacturer (the “Company”) and two of its executives, misled investors by issuing false statements about the integration of assets following the Company’s acquisition of a separate commercial electronics company.  The district court dismissed the claims, holding that plaintiff failed to adequately allege scienter and falsity.  The Seventh Circuit affirmed the dismissal.

On July 28, 2021, Judge Andrew P. Gordon of the United States District Court for the District of Nevada granted in part and denied in part a motion to dismiss a putative securities class action against a resort and casino operator (the “Company”) and its current and former officers alleging violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”), Rule 10b-5, and Section 20(a) of the Exchange Act.  Ferris v. Wynn Resorts Ltd., No. 18-CV-00479 (D. Nev. July 28, 2021).  Plaintiffs alleged that the Company made material misstatements and omissions concerning allegations that its CEO engaged in sexual misconduct.  The Court denied the Company’s motion to dismiss plaintiffs’ claims relating to alleged misstatements made directly in response to a newspaper article and lawsuit concerning the CEO’s alleged misconduct, but granted the motion to dismiss with respect to the alleged misstatements that concerned the Company’s code of conduct, compliance with laws and regulations, and corporate culture.