Pierrelouis v. Gogo Inc., 414 F.Supp.3d 1164

Gogo, Inc. marketed a new satellite-based inflight internet system called 2Ku (deployed 2016–2017) that promised high speeds and 98% availability.
De-icing fluid could infiltrate 2Ku radomes, causing antennas to become "sticky" and degrade reliability; Delta reported problems to Gogo in Nov–Dec 2017.
Gogo attempted fixes (deflectors, radome replacements, software/manufacturing changes); some repairs were costly and prolonged, reducing ARPA for affected aircraft.
Between Feb 2017 and Feb 22, 2018 defendants made optimistic public statements about 2Ku performance; Gogo partially disclosed the de-icing issue on Feb 22, 2018 and more fully on May 4, 2018.
After the May 4 disclosure, Gogo stock fell sharply and Moody’s downgraded the credit rating; plaintiffs sued alleging omissions and false statements under §10(b)/Rule 10b-5 and §20(a).
The district court dismissed the amended complaint without prejudice for failure to plead material falsity and scienter with the particularity required by Rule 9(b) and the PSLRA; leave to amend was granted.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Material falsity of statements about 2Ku availability/performance	Defendants touted 98% availability and masked a known de-icing defect that materially reduced reliability and required costly repairs.	Plaintiffs rely on hindsight; they fail to allege specific contemporaneous data showing statements were false when made.	Dismissed — allegations insufficiently particular to show statements were false or misleading at the time.
Scienter (required state of mind)	Defendants monitored outages and had access to reports, so they must have known the defect’s scope and recklessly omitted it.	Mere access to data or importance of 2Ku does not create a strong inference of intentional or reckless concealment.	Dismissed — plaintiffs did not plead particularized facts giving rise to a strong, cogent inference of scienter.
Particularity under Rule 9(b) and PSLRA	Plaintiffs identified many statements and point to Delta complaints and outage monitoring as the basis for falsity and scienter.	Pleading must identify who knew what and when, or specific contemporaneous contradictory documents/data; conjecture is inadequate.	Dismissed — plaintiffs failed to specify contemporaneous contradictory information or facts supporting belief; pleading was impermissibly general.

Makor Issues & Rights, Ltd. v. Tellabs, Inc., 437 F.3d 588 (7th Cir. 2006) (elements and pleading requirements for §10(b)/Rule 10b-5 claims)
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007) (PSLRA requires plaintiff to plead a "strong inference" of scienter that is at least as compelling as nonfraudulent inferences)
Higginbotham v. Baxter Int’l, Inc., 495 F.3d 753 (7th Cir. 2007) (defining scienter as knowledge or reckless disregard of a substantial risk of falsity)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must be plausible, not merely speculative)
Ashcroft v. Iqbal, 556 U.S. 662 (2009) (court need not accept legal conclusions or conclusory allegations)
Yourish v. Cal. Amplifier, 191 F.3d 983 (9th Cir. 1999) (when alleging contemporaneous contradictory information, plaintiff must provide specific detail)
Arazie v. Mullane, 2 F.3d 1456 (7th Cir. 1993) (internal documents must be pleaded with detail showing authorship, timing, and distribution)
Metzler Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049 (9th Cir. 2008) (a list of alleged false statements without specific facts showing falsity is insufficient)
Windy City Metal Fabricators & Supply, Inc. v. CIT Tech. Fin. Servs., Inc., 536 F.3d 663 (7th Cir. 2008) (Rule 9(b) requires pleading the who, what, where, when, and how of alleged fraud)
Tellabs II (Makor Issues & Rights, Ltd. v. Tellabs, Inc.), 513 F.3d 711 (7th Cir. 2008) (explains comparative inquiry for plausible nonfraudulent inferences)