Stryker Corporation Wins Dismissal of Securities Fraud Class Action
On March 30, 2012, the U.S. District Court for the Western District of Michigan dismissed, with prejudice, a securities fraud class action lawsuit against medical technology company Stryker Corporation and its officers. Wilson Sonsini Goodrich & Rosati represented the defendants in this matter.
The complaint alleged that Stryker met annual earnings growth goals by "cutting corners on quality and regulatory compliance spending." It also alleged that Stryker concealed the full scope of its compliance issues and remediation costs after the Food and Drug Administration sent the company warning letters regarding compliance issues.
In granting the defendants' motion to dismiss, the district court held that none of the defendants' alleged misrepresentations or omissions were actionable. It also held that the defendants' financial projections were protected by the "safe harbor" provision of the Private Securities Litigation Reform Act, that the plaintiffs' allegations did not give rise to a strong inference of scienter, and that the plaintiffs did not allege loss causation.
For additional information, please refer to the court's decision.