Sheriffs' Pension & Relief Fund v. Lululemon Athletica Inc.
Opinion of the Court
Louisiana Sheriffs’ Pension & Relief Fund (the Fund) appeals from the'District Court’s dismissal of its consolidated class action complaint for failure to state a claim under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5. The Fund alleged that Lululemon Athletica Inc., its founder and former chairman Dennis Wilson, and its former CEO Christine Day materially misrepresented to investors the quality of Lululemon’s popular black luon yoga pants and the degree to which Lululemon implemented controls to prevent or minimize product quality deficiencies. We assume the parties’ familiarity with the facts and record of the prior proceedings, to which we refer only as necessary to explain our decision to affirm.
For substantially the reasons provided by the District Court in its April 18, 2014, opinion and order, we conclude that the Fund has failed adequately to plead that any of the statements attributed to the defendants were materially misleading at the time that they were made. See San Leandro Emergency Med. Grp. Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 812 (2d Cir. 1996). Insofar as the defendants are alleged to have omitted information from Lululemon’s corporate website, filings with the SEC, press releases, or investor calls, the Fund has failed adequately to plead with particularity that these omissions rendered the defendants’ statements “inaccurate, incomplete, or misleading” or that the defendants were otherwise under a duty to disclose such information.
. Indeed, in at least one of its SEC filings, Lululemon disclosed the possibility of product quality deficiencies and the potential adverse financial impact of these deficiencies, should they arise.
Reference
- Full Case Name
- In re LULULEMON SECURITIES LITIGATION Louisiana Sheriffs' Pension & Relief Fund v. Lululemon Athletica Inc., Dennis J. Wilson, Christine McCormick Day
- Cited By
- 61 cases
- Status
- Published