In re Teva Sec. Litig.
| Docket Number | 3:17-cv-00558 (SRU),3:18-cv-01681 (SRU),3:18-cv-01721 (SRU),3:18-cv-01956 (SRU),3:19-cv-00192 (SRU),3:19-cv-00449 (SRU),3:19-cv-00513 (SRU),3:19-cv-00543 (SRU),3:19-cv-00603 (SRU),3:19-cv-00655 (SRU),3:19-cv-00656 (SRU),3:19-cv-00923 (SRU),3:19-cv-01167 (SRU),3:19-cv-01173 (SRU),3:20-cv-00083 (SRU),3:20-cv-01630 (SRU) |
| Decision Date | 01 May 2023 |
| Parties | IN RE TEVA SECURITIES LITIGATION THIS DOCUMENT RELATES TO: |
| Court | U.S. District Court — District of Connecticut |
ORDER ON MOTIONS TO DISMISS
Before the Court are three omnibus motions to dismiss fifteen Direct Actions by plaintiffs who opted out of the class certified in the lead action, as noted in the caption above. See Defs.' Mot. to Dismiss on Pleading and Other Grounds Doc. No. 784; Defs.' Mot. to Dismiss New Claims and Claims Against New Defendants, Doc. No. 786; Defs.' Mot to Dismiss State and Common Law Claims, Doc. No. 787. The motions have been fully briefed, and I held oral argument on the motions on January 19, 2022. See Min. Entry Doc. No. 921.
For the reasons set forth below, I grant in part and deny in part the Defendants' motions to dismiss.
Since November 2016, Teva Pharmaceutical Industries, Ltd. (“Teva”) has been embroiled in private securities fraud litigation. Amram Galmi, an Israeli investor, commenced the first of a series of lawsuits alleging that Teva and its corporate executives misled investors about Teva's financial condition. See generally Compl., Doc. No. 1. That lawsuit, filed on behalf of a class of similarly-situated persons, was initially filed in the Central District of California and transferred to the District of Connecticut in April 2017.[1]See Order, Doc. No. 74.
Once transferred, the case proceeded through the Private Securities Litigation Reform Act (“PSLRA”) process of appointing lead plaintiff and lead class counsel. See 15 U.S.C. § 78u-4(a)(3)(B)(i) (). In July 2017, Ontario Teachers' Pension Plan Board (“Ontario Teachers”) was appointed as lead plaintiff and Bleichmar Fonti & Auld LLP was approved as lead counsel. See Order, Doc. No. 124. Shortly thereafter, Anchorage Police & Fire Retirement System (“Anchorage Police”) was added to this case as a named plaintiff. See Am. Order, Doc. No. 137. Together, Ontario Teachers and Anchorage Police are the class representatives of the “Ontario Class.”
The class action (“Ontario Action”) continued to be fiercely litigated: the Ontario Class filed several amended complaints, while the Class Defendants fought to dismiss those complaints. Relevant here, on September 25, 2019, I granted in part and denied in substantial part the Class Defendants' motion to dismiss the Second Amended Consolidated Class Action Complaint (“SAC”) in the lead action in this matter. See Order, Doc. No. 283; Ontario Teachers' Pension Plan Bd. v. Teva Pharm. Indus. Ltd., 432 F.Supp.3d 131 (D. Conn. 2019). Meanwhile, additional lawsuits kept coming. By January 2020, I consolidated over two-dozen related cases, many transferred to me from this district and other districts. Consolidation Order, Doc. No. 341. Of those cases, four were putative class actions[2] and seventeen were individual actions (“Direct Actions”)[3], in which those plaintiffs indicated that they would “opt out” of any class eventually certified. Shortly thereafter, I issued a pretrial consolidation order, where I ordered, inter alia, the plaintiffs in each Direct Action to designate their present complaint as operative or to file an amended complaint that complied with my ruling denying in substantial part the Class Defendants' motion to dismiss. See Pretrial Consolidation Order, Doc. No. 352, at ¶ 12; Order, Doc. No. 283 (). On May 28, 2020, the Direct Action Plaintiffs (“DAPs”) largely complied with my order.[4] What followed are the Defendants' three omnibus motions to dismiss those Direct Actions. See Defs.' Mot. to Dismiss on Pleading and Other Grounds, Doc. No. 784; Defs.' Mot. to Dismiss New Claims and Claims Against New Defendants, Doc. No. 786; Defs.' Mot. to Dismiss State and Common Law Claims, Doc. No. 787.
Meanwhile, in the Ontario Action, the Ontario Class moved for class certification pursuant to Rule 23(b)(3) of the Federal Rules of Civil Procedure. Mot. to Certify Class, Doc. No. 419. That motion was granted on March 9, 2021. Order, Doc. No. 736. The Ontario Action continued to be litigated for over a year until a final settlement was approved in June 2022. Order, Doc. No. 962. A final judgment was entered immediately thereafter. Doc. No. 964.
Still remaining before the Court, however, are the Direct Actions[5]that opted out of the class settlement, the subjects of the Defendants' instant motions.
The Direct Actions at issue are 15 individual lawsuits concerning the same alleged securities fraud involving the price-hike strategy and price-fixing conspiracy at issue in the Ontario Action, with which the Direct Actions are consolidated. The lawsuits were filed by various institutional investors that opted out of the Ontario Class. Pursuant to the pretrial consolidation order filed in the lead case, doc. no. 352, each of the Direct Actions are modeled on the SAC. That said, the Direct Action complaints raise new claims and add new defendants, which I will summarize below.
Nordea Investment Management AB is a Swedish limited liability company and licensed investment firm. Nordea Am. Compl., Doc. No. 390, at ¶ 28. It asserts claims on behalf multiple funds that were under its management. Id. at ¶¶ 28-43. Those funds are alleged to have “purchased or acquired Teva securities”[6] during the Relevant Period (February 6, 2014 to May 10, 2019) at artificially inflated prices due to the false and misleading statements alleged in the complaint. Id. at 1; ¶ 43.
The State of Alaska Department of Revenue, Treasury Division is the “bank and trust center” for the State of Alaska. Alaska Am. Compl., Doc. No. 389, at ¶ 28.
Alaska Permanent Fund Corporation is a state-owned corporation based in Alaska that manages the assets of funds designated by law. Id. at ¶ 29.
Both entities, acting on behalf Alaskan citizens, are alleged to have purchased or acquired Teva securities during the Relevant Period (February 6, 2014 to May 10, 2019) on the New York Stock Exchange (“NYSE”) at artificially inflated prices due to the false and misleading statements alleged in the complaint. Id. at 1; ¶¶ 28-30.
Pacific Funds Series Trust and Pacific Select Fund are Delaware statutory trusts, managed by asset manager and insurance company Pacific Life Insurance Company. Pacific Am. Compl., Doc. No. 392, at ¶¶ 34-36.
Both entities are suing on behalf of specific funds and portfolios. Id. at ¶¶ 34-35. During the Relevant Period (February 6, 2014 to May 10, 2019), those funds and portfolios are alleged to have purchased Teva American Depositary Shares (“ADS”) and other debt securities on a United States exchange and/or in transactions “whereby they incurred irrevocable liability for the purchases within the United States and/or title to the purchased securities passed within the United States.” Id. at 1, ¶¶ 34-37. It is further alleged that those purchases were made at prices that were artificially inflated due to the securities violations alleged in the complaint. Id. at ¶ 37.
Schwab Capital Trust is an open-end management investment company organized as a Massachusetts business trust. Schwab Am. Compl., Doc. No. 393, at ¶ 34. It asserts claims on behalf of several of its series. Id. During the Relevant Period (February 6, 2014 to May 10, 2019), those series are alleged to have “acquired Teva ADS in domestic transactions,” with some alleged to also have “acquired Teva ordinary shares” during the Relevant Period. Id. at 1; ¶ 34.
Schwab Strategic Trust, an open-end investment management company organized as a Delaware statutory trust, asserts claim on behalf of several of its series. Id. at ¶ 35. It is alleged that those series acquired Teva ordinary shares and Notes during the Relevant Period. Id.
It is alleged that the Schwab Plaintiffs paid artificially inflated prices for those securities due to the misstatements alleged in the complaint, and therefore suffered damages as a result of those violations. Id. at ¶ 36.
The Phoenix Pension Ltd., Excellence Gemel & Hishtalmut Ltd., Excellence Kesem ETNS and Excellence Mutual Funds are subsidiaries of The Phoenix Insurance Company Ltd., which is an insurance and financial services conglomerate headquartered in Israel. Phoenix Am. Compl., Doc. No. 397, at 1, ¶ 48. During the Relevant Period (October 30, 2013 to May 10, 2019), it is alleged that the Phoenix Plaintiffs “purchased or otherwise acquired Teva [ADS], ordinary shares, preferred shares, and Notes at artificially inflated prices during the Relevant Period and suffered damages as a result of the violations of the securities laws alleged [in the complaint].” Id. at ¶ 1.
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