In re Pfizer Inc. Securities Litigation
2012 WL 1059671
S.D.N.Y.2012Background
- Putative securities class actions consolidated in SDNY MDL against Pfizer and four corporate officers for alleged misstatements about Celebrex and Bextra during 2000–2005.
- Lead Plaintiff Teachers’ Retirement System of Louisiana represents investors who bought Pfizer stock in the Class Period.
- Plaintiffs move for class certification (main class and a 20A Subclass) and appointment of TRSL, Fleckles, Perusse, and Chace as class representatives; Grant & Eisenhofer as Class Counsel.
- Court had previously granted in part and denied in part a motion to dismiss the Consolidated Class Action Complaint and addressed scienter; Daubert motions were litigated in discovery.
- After extensive discovery and amendments, the Court grants the certification motions in full and certifies a Rule 23(b)(3) class and a 20A Subclass, with TRSL as Lead Plaintiff and Grant & Eisenhofer as Class Counsel.
- Class proceeding centers on fraud-on-the-market theory and common questions about misstatements and their impact on Pfizer stock.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the class meets Rule 23(a) prerequisites | TRSL satisfies numerosity, commonality, typicality, and adequacy | Defendants challenge typicality and adequacy due to TRSL’s investment strategy and potential unique defenses | Yes; all Rule 23(a) requirements met |
| Whether common questions predominate under Rule 23(b)(3) | Fraud-on-the-market and common misstatements establish predominance | Individual issues may undermine common proof | Yes; predominance established |
| Whether a 20A Subclass should be certified | Distinct elements (contemporaneous purchases with insider sales, knowledge of nonpublic info) warrant a subclass | 20A claims are intertwined with 10(b) claims | Yes; 20A Subclass certified under Rule 23(a) and (b) (c)(5) for a distinct issue |
| Whether the proposed class period is appropriate | Period through October 19, 2005 captures post-disclosure market effects | Period should end with the October 15, 2004 disclosure | Yes; class period extended to October 19, 2005 |
Key Cases Cited
- Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52 (2d Cir. 2000) (adequacy and typicality considerations in class actions)
- In re WorldCom, Inc. Sec. Litig., 219 F.R.D. 267 (S.D.N.Y. 2003) (courts honor market-based reliance defenses in complex securities actions)
- In re Harcourt Brace Jovanovich, Inc. Sec. Litig., 838 F. Supp. 109 (S.D.N.Y. 1993) (reliance on market integrity and third-party advice to satisfy typicality/adequacy)
- McLaughlin v. Am. Tobacco Co., 522 F.3d 215 (2d Cir. 2008) (rigorous Rule 23 analysis and threshold requirements in class certification)
- In re Crazy Eddie Sec. Litig., 135 F.R.D. 39 (E.D.N.Y. 1991) (illustrates typicality/adequacy considerations in securities class actions)