In re Pfizer Inc. Securities Litigation
936 F. Supp. 2d 252
S.D.N.Y.2013Background
- Lead Plaintiff TRSL represents a certified class of Pfizer investors who bought Pfizer securities during Oct 31, 2000–Oct 19, 2005.
- Plaintiffs allege Pfizer and officers misrepresented/omitted cardiovascular risks of Celebrex and Bextra throughout the Class Period.
- Pfizer acquired Pharmacia (including Celebrex and Bextra) in 2003; prior co-promotion with Searle/Pharmacia is noted.
- Key safety data prior to 2004 allegedly showed cardiovascular risks that were internalized by Pfizer management.
- The court granted summary judgment in part and denied in part after a long procedural history including a Daubert phase and class certification.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pfizer’s statements violated Section 10(b) and Rule 10b-5 | Plaintiffs claim material misstatements/omissions about cardiovascular risk were knowingly or recklessly made. | Defendants argue statements were true or non-misleading given data at the time. | Issues of material misstatement and omission survive summary judgment. |
| Whether the Defendants acted with scienter | Plaintiffs show conscious misbehavior or recklessness about cardiovascular data. | Disagree, asserting reasonable interpretation of science. | Sci enter disputed; triable issue exists. |
| Whether transaction causation was shown pre-August 2004 | Pre-2004 misstatements inflated stock or maintained inflation. | Pre-August 2004 statements did not affect price. | Disputed facts pre-August 2004 create facts for trial on transaction causation. |
| Whether loss causation was shown by materialization of risk disclosures | Seven post-2004 disclosures linked to stock declines. | Some disclosures did not reveal new risks; attribution disputed. | Partial loss causation issues disputed; some events dismissed. |
| Whether individual defendants can be liable for Pfizer statements | Individual Defendants had ultimate authority over statements. | Janus requires separate maker of statements; may limit liability. | Individual liability not barred by Janus; fact issues remain. |
Key Cases Cited
- Basic Inc. v. Levinson, 485 U.S. 224 (1988) (materiality and misrepresentation standard under 10b-5)
- Stoneridge Inv. Partners v. Scientific-Atlanta, 552 U.S. 148 (2008) (elements of §10(b) and reliance; causation framework)
- Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct. 1309 (2011) (materiality not limited to statistically significant data)
- In re Omnicom Group, Inc. Sec. Litig., 597 F.3d 501 (2d Cir. 2010) (establishing transaction causation in fraud on the market)
- In re Northern Telecom Ltd. Sec. Litig., 116 F. Supp. 2d 446 (S.D.N.Y. 2000) (causation analysis in securities fraud)
- Janus Capital Group v. First Derivative Traders, 131 S. Ct. 2296 (2011) (maker of a statement—ultimate authority over content)
- City of Roseville Employees’ Retirement System v. EnergySolutions, Inc., 814 F. Supp. 2d 395 (S.D.N.Y. 2011) (attribution of statements and control principles)
- City of Pontiac v. Lockheed Martin Corp., 875 F. Supp. 2d 359 (S.D.N.Y. 2012) (joint authority within a single corporation for liability)