The 9th Circuit this week affirmed a decision to deny a pension fund’s class action suit which alleges that orthodontic device developer Align Technology (NSDQ:ALGN) misled it’s investors about it’s 2011 acquisition of Cadent for $187.6 million.
In the appeal, the plaintiffs, the Michigan-based City of Dearborn Heights Act 345 Police & Fire Retirement System, argued that an earlier decision had overstated standards for pleading falsity and scienter. The group argued that “falsity of opinion statements can be pleaded by alleging facts that demonstrate that ‘there is no reasonable basis for the belief’,” according to court documents.
The district court had previously concluded that the plaintiff was required to plead “particularized facts establishing that defendants did not believe in their statements concerning goodwill at the time they made them,” according to the court documents.
Judges in the case affirmed the earlier decision to dismiss the case with prejudice for failure to plead falsity and sciences, and determined that the plaintiff would be responsible for the costs of the appeal.
The case dates back to August 2014, when Align said that a California district court again dismissed a shareholder lawsuit, this time with prejudice.
A judge for the U.S. District Court for the Northern District of California shot down a complaint filed in 2012 by the Michigan-based City of Dearborn Heights Act 345 Police & Fire Retirement System, which had accused the dental devices maker and its leaders of insider trading.
The lawsuit was originally dismissed in December 2013 when the court ruled that the plaintiff failed to state a claim. U.S. District Judge William Orrick ruled at the time that the plaintiffs never accused Align or its leadership of any willful misconduct and that the lawsuit failed to specify how any of the challenged financial statements were specifically false or misleading.