Basic instinct: Securities class by presumption

[1] 00:00:00.033 [1] --> 00:00:04.033 [121]
I’m Darryl Anderson, and this is Norton
Rose Fulbright’s The Pharma 5.

[2] 00:00:12.767 [383] --> 00:00:17.400 [522]
A group of Teva investors won class action
status from a Connecticut federal judge

[3] 00:00:17.400 [522] --> 00:00:19.667 [590]
in their securities lawsuit
against the manufacturer.

[4] 00:00:20.233 [607] --> 00:00:24.800 [744]
The investors claim Teva violated securities
laws by consistently attributing Teva’s

[5] 00:00:24.867 [746] --> 00:00:28.200 [846]
financial success to good business decisions
when, in reality,

[6] 00:00:28.200 [846] --> 00:00:31.200 [936]
Teva’s rapid growth was due
to its participation in

[7] 00:00:31.200 [936] --> 00:00:33.633 [1009]
a generic drug price fixing conspiracy.

[8] 00:00:34.233 [1027] --> 00:00:37.967 [1139]
The court relied on plaintiff’s expert to
hold that Teva’s securities were traded in

[9] 00:00:37.967 [1139] --> 00:00:41.000 [1230]
an efficient market, and the plaintiffs
were therefore entitled to

[10] 00:00:41.000 [1230] --> 00:00:44.800 [1344]
the “Basic” presumption that individual
class members each relied

[11] 00:00:44.800 [1344] --> 00:00:48.167 [1445]
on Teva’s alleged misstatements and
purchasing securities.

[12] 00:00:48.200 [1446] --> 00:00:49.800 [1494]
With the presumption, a class.

[13] 00:00:52.833 [1585] --> 00:00:56.667 [1700]
Gentle reminder, everyone, that
injunctions can be expensive.

[14] 00:00:57.067 [1712] --> 00:00:59.433 [1783]
A federal court in Illinois recently granted

[15] 00:00:59.433 [1783] --> 00:01:03.700 [1911]
a preliminary injunction to Life Spine Inc.
to protect its trade secrets related to

[16] 00:01:03.700 [1911] --> 00:01:08.567 [2057]
surgical spine devices, which were allegedly
misappropriated by its former distributor

[17] 00:01:08.667 [2060] --> 00:01:09.933 [2098]
Aegis Spine Inc.

[18] 00:01:10.267 [2108] --> 00:01:14.267 [2228]
The court enjoined Aegis
from producing or selling knockoff devices,

[19] 00:01:14.633 [2239] --> 00:01:17.667 [2330]
but also required Life Spine to post

[20] 00:01:17.667 [2330] --> 00:01:21.467 [2444]
a security bond of six million dollars
pending the outcome of the litigation.

[21] 00:01:23.767 [2513] --> 00:01:26.267 [2588]
Pharma executives in the cross hairs again.

[22] 00:01:26.300 [2589] --> 00:01:30.567 [2717]
In a securities class action involving Vanda
Pharmaceuticals and its executives,

[23] 00:01:30.933 [2728] --> 00:01:33.600 [2808]
plaintiffs alleged the defendants
artificially inflated

[24] 00:01:33.600 [2808] --> 00:01:37.300 [2919]
the stock price by marketing two
drugs for off label uses.

[25] 00:01:37.833 [2935] --> 00:01:40.867 [3026]
The New York federal court denied
defendants’ motions to dismiss,

[26] 00:01:41.167 [3035] --> 00:01:45.000 [3150]
finding plaintiffs properly
pled scienter as to the CEO

[27] 00:01:45.267 [3158] --> 00:01:50.400 [3312]
which could then be imputed to Vanda.
Allegations that Vanda’s CEO, quote,

[28] 00:01:50.400 [3312] --> 00:01:54.967 [3449]
“actively participated in trainings where
Vanda’s salesforce was directed to market

[29] 00:01:54.967 [3449] --> 00:01:59.333 [3580]
[two Vanda drugs] to individuals who did not
suffer from diseases those drugs were

[30] 00:01:59.333 [3580] --> 00:02:02.433 [3673]
approved to treat,” were sufficient
to survive dismissal.

[31] 00:02:04.900 [3747] --> 00:02:09.433 [3883]
A big win on the antitrust front
for Becton Dickinson for a second time.

[32] 00:02:09.533 [3886] --> 00:02:12.633 [3979]
Health care providers had filed
an amended complaint

[33] 00:02:12.767 [3983] --> 00:02:17.433 [4123]
claiming a conspiracy between BD and 
distributors to impede competition

[34] 00:02:17.500 [4125] --> 00:02:20.233 [4207]
in the safety syringe and catheter market.

[35] 00:02:20.367 [4211] --> 00:02:25.767 [4373]
On a 12(b) motion, the Illinois Federal Court
found no facts showing that BD conspired with

[36] 00:02:25.767 [4373] --> 00:02:30.767 [4523]
distributors to inflate prices or that the
distributors had received a quid pro quo

[37] 00:02:30.767 [4523] --> 00:02:35.500 [4665]
for anti-competitive acts. Bonuses and
incentive programs for sales staff,

[38] 00:02:35.733 [4672] --> 00:02:40.767 [4823]
higher distribution fees and guaranteed
purchasing volume from long term contracts

[39] 00:02:41.000 [4830] --> 00:02:43.400 [4902]
were not enough to establish a conspiracy.

[40] 00:02:45.800 [4974] --> 00:02:48.167 [5045]
Dust off your Bluebook, or better yet,

[41] 00:02:48.333 [5050] --> 00:02:52.633 [5179]
maybe throw it out. As someone who long
ago worked on revising that manual,

[42] 00:02:52.767 [5183] --> 00:02:54.533 [5236]
it hurts just a little bit to say that.

[43] 00:02:55.133 [5254] --> 00:02:58.033 [5341]
But Supreme Court Justice 
Clarence Thomas recently used

[44] 00:02:58.033 [5341] --> 00:03:02.367 [5471]
the parenthetical “(cleaned up)” in a SCOTUS
opinion citation to indicate

[45] 00:03:02.367 [5471] --> 00:03:04.667 [5540]
the omission of the string
of quotation marks,

[46] 00:03:04.700 [5541] --> 00:03:07.567 [5627]
ellipses and brackets from
a quoted authority.

[47] 00:03:08.167 [5645] --> 00:03:10.633 [5719]
And this isn’t just some
GenZ Tik Tok thing.

[48] 00:03:11.133 [5734] --> 00:03:15.500 [5865]
The “(cleaned up)” parenthetical was proposed
back in 2017 by Gen Xer

[49] 00:03:15.500 [5865] --> 00:03:17.667 [5930]
Jack Metzler, an FTC attorney.

[50] 00:03:18.167 [5945] --> 00:03:21.767 [6053]
It was soon thereafter blessed by
legal writing guru Bryan Garner.

[51] 00:03:22.400 [6072] --> 00:03:26.933 [6208]
No word yet on which of Justice Thomas’s
clerks made the bold move, but bravo.

[52] 00:03:26.967 [6209] --> 00:03:29.167 [6275]
And feel free to “clean up your own” cites.

[53] 00:03:33.600 [6408] --> 00:03:36.700 [6501]
Thanks for watching Norton Rose Fulbright’s,
The Pharma 5.

[54] 00:03:36.767 [6503] --> 00:03:37.800 [6534]
Do I need to Bluebook that?