Robbins Geller Secures Appellate Victory in Securities Fraud Action Against HP
Robbins Geller Rudman & Dowd LLP secured a key appellate win in a securities fraud class action against HP Inc. (“HP”) and its executives. In reversing dismissal of the case, the U.S. Court of Appeals for the Ninth Circuit clarified how statutes of limitations apply in federal securities class actions.
The case involves allegations that HP and its executives concealed declining revenues and increased channel inventory levels and misled investors about the state of HP’s previously flagging business. When the effects of the scheme could no longer be concealed, HP announced disappointing financial results, causing its stock price to decline and investors to suffer losses. The alleged scheme was laid bare by a September 2020 SEC Cease and Desist Order detailing HP’s misconduct.
The district court dismissed the case on statute of limitations grounds. The Firm appealed the ruling, arguing that under the statute of limitations analysis required by the U.S. Supreme Court in Merck & Co. v. Reynolds, 559 U.S. 633 (2010), the suit against HP was timely.
The Ninth Circuit agreed, finding that plaintiffs “could not have discovered the facts necessary to plead its claims until after the publication” of the SEC Order, and that HP had “failed to meet its burden to show that [lead plaintiff] Maryland Electrical discovered the facts constituting its claims more than two years prior to the filing of its complaint.” The court reversed the district court’s March 2022 dismissal and remanded the case to the district court for further proceedings.
Notably, the Ninth Circuit also resolved the question of how much information a reasonable investor must have about the facts of a securities violation before the statute of limitations is triggered, holding that a “‘reasonably diligent plaintiff has not “discovered” one of the facts constituting a securities fraud violation until he can plead that fact with sufficient detail and particularity to survive a 12(b)(6) motion to dismiss.’”
Firm partner Darren Robbins shared with Reuters that the ruling would broadly help investors seeking to have their claims heard on the merits, noting that “[b]y their very nature, misrepresentations inhibit investors from discovering corporate misconduct.”
Lead plaintiff Maryland Electrical Industry Pension Fund and named plaintiff York County on behalf of the County of York Retirement Fund are represented by Robbins Geller attorneys Darren Robbins, Steven F. Hubachek, Darryl J. Alvarado, and Rachel A. Cocalis.
About Robbins Geller
Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex litigation firms, representing plaintiffs in securities fraud, shareholder derivative, antitrust, corporate takeover, and consumer fraud and privacy cases. With 200 lawyers in 9 offices, Robbins Geller is one of the world’s largest plaintiffs’ firms, and the Firm’s attorneys have obtained many of the largest securities, antitrust, and consumer class action recoveries in history.
The Firm is ranked #1 on the most recent ISS Securities Class Action Services Top 50 Report for recovering over $1.75 billion for investors in 2022. This is the third consecutive year in which the Firm topped these rankings. The Firm’s attorneys secured the largest-ever securities fraud class action settlement – $7.2 billion – in In re Enron Corp. Securities Litigation.
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York County on Behalf of the County of York Retirement Fund, et al. v. HP, Inc., et al., No. 22-15501 (9th Cir. Apr. 11, 2023).
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