Tuesday, February 26, 2013

Gallagher v. Abbott Laboratories, Inc. case brief

Gallagher v. Abbott Labs. case brief summary
269 F.3d 806

PROCEDURAL POSTURE: Plaintiffs appealed from an order of the United States District Court for the Northern District of Illinois dismissing their claims under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.S. § 78j(b), and the Securities Exchange Commission's Rule 10b-5, 17 C.F.R. § 240.10b-5, for failure to state a claim upon which relief may be granted. Fed. R. Civ. P. 12(b)(6).

OVERVIEW: Plaintiffs contended that defendant committed fraud by deferring public revelation that it was engaged with the Food and Drug Administration (FDA) in settlement talks regarding deficiencies the FDA found in the defendant's manufacturing quality control. The court of appeals affirmed the district court's dismissal.

HOLDING:
The appellate court found that plaintiffs' claims were defeated by their inability to identify any false statement, or any truthful statement made misleading by the omission of news about the FDA's demands made of the defendant to correct deficiencies found in its manufacturing quality control. Specifically, the appeals court found the plaintiffs had not met the requirements for pleading fraud.

OUTCOME: The district court's judgment was affirmed dismissing plaintiff's Rule 10b-5 class action against defendant, drug manufacturer, concerning defendant's public disclosure that it was engaged in settlement talks with the FDA regarding deficiencies in its manufacturing quality control.  

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