In Re Sanofi-Aventis Securities Litigation, 774 F. Supp. 2d 549

Sanofi-Aventis SA (sanofi) is a large global pharmaceutical company; plaintiffs purchased sanofi securities during 2/20/2006–6/13/2007 and assert Rule 10b-5 and control person liability claims.
Individual Defendants (Dehecq, Le Fur, Spek, Cluzel, Lehner, Greene, Leroy) held senior roles and allegedly discussed rimonabant's development and safety signals with investors.
Rimonabant trials and safety data showed suicidality signals; FDA requested an independent assessment (Posner/Columbia) after concerns post-NDA submission.
In Feb. 2006 the FDA issued an approvable letter raising suicidality concerns and directed a formal assessment; sanofi submitted Posner’s results in Oct. 2006.
Post-approval process disclosures and statements between Oct. 2006 and Feb. 2007 were alleged to be misleading omissions or mischaracterizations regarding FDA concerns and data submissions.
The court denied the motion to dismiss as to sanofi, Le Fur, and Spek, but granted dismissal as to Dehecq, Cluzel, Lehner, Greene, and Leroy; a Hague Convention letter request was denied without prejudice.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether FAC states a material misrepresentation or omission	Plaintiffs allege omissions post-2/17/2006 and several post-10/26/2006 statements were material.	Defendants contend many statements were non-actionable opinions or not tied to omitted material.	Two post-2/17/2006 omissions actionable; several opinions not actionable; overall, partial survival of §10(b) claims against sanofi, Le Fur, Spek.
Duty to disclose/update information	sanofi had a duty to disclose material FDA concerns about suicidality.	No independent duty to disclose beyond ongoing accuracy; some statements were forward-looking or puffery.	Duty to disclose not established for March 2005 statements; some post-2/17/2006 omissions actionable; update duty not found for March 2005 statements.
Scienter standard and pleading	Pleading shows motive and strong circumstantial evidence of recklessness.	Motive generalized; no concrete personal benefit shown.	Strong inference of recklessness supported as to omissions; motive alone not required where recklessness shown.
Control person liability under §20(a)	Certain defendants controlled misstatements and omissions; accountability for falsity.	Some individuals lacked direct involvement in asserted statements.	§20(a) liability sustained for Le Fur and Spek; dismissed as to Dehecq, Cluzel, Lehner, Greene, Leroy.

Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standard requires plausible claims; not a probability standard)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (heightened pleading standard; plausibility required)
Dura Pharm., Inc. v. Broudo, 544 U.S. 336 (U.S. 2005) (requirement to plead loss causation and elements of fraud)
Stoneridge Investment Partners v. Scientific-Atlanta, 552 U.S. 148 (U.S. 2008) (elements of §10(b) claims; reliance and causation framework)
Ganino v. Citizens Utils. Co., 228 F.3d 154 (2d Cir. 2000) (material misstatements or omissions; scienter context)
ATSI Communications v. Shaar Fund Ltd., 493 F.3d 87 (2d Cir. 2007) (strong inference standard for scienter under PSLRA)
Time Warner Inc. Sec. Litig., 9 F.3d 259 (2d Cir. 1993) (duty to disclose/materiality in securities disclosures)
Kalnit v. Eichler, 264 F.3d 131 (2d Cir. 2001) (recklessness standard for scienter; knowledge of conflicting facts)
Novak v. Kasaks, 216 F.3d 300 (2d Cir. 2000) (concerning omissions and scienter; recklessness standard)
In re Carter-Wallace Sec. Litig., 220 F.3d 36 (2d Cir. 2000) (duty to disclose; materiality in drug trials context)