Summary
concluding that statements in offering materials related to "high quality" and "premium" products were non-actionable puffery or, in the alterative, nonactionable opinion
Summary of this case from Jia Wang Lin v. Can. Goose U.S., Inc.Opinion
13141 Index No. 655178/19 Case No. 2020-02704
02-16-2021
In the MATTER OF SUNDIAL GROWERS, INC. SECURITIES LITIGATION Trisha Peters, et al., Plaintiffs–Appellants, v. Sundial Growers, Inc., et al., Defendants–Respondents.
Kaplan Fox & Kilsheimer LLP, New York ( Robert N. Kaplan of counsel), for appellants. Shearman & Sterling LLP, New York ( Adam S. Hakki of counsel), for respondents.
Kaplan Fox & Kilsheimer LLP, New York ( Robert N. Kaplan of counsel), for appellants.
Shearman & Sterling LLP, New York ( Adam S. Hakki of counsel), for respondents.
Manzanet–Daniels, J.P., Webber, Oing, Kennedy, JJ.
Order, Supreme Court, New York County (Barry R. Ostrager, J.), entered May 15, 2020, which granted defendants' motion to dismiss the complaint, unanimously affirmed, with costs.
The statements in the offering materials that defendant Sundial Growers, Inc. produced "high quality" and "premium" cannabis were non-actionable puffery ( Ong v. Chipotle Mexican Grill, Inc., 294 F Supp 3d 199, 232 [S.D. N.Y.2018] ).
To the extent the statements were more than puffery, they were non-actionable opinion ( Abramson v. Newlink Genetics Corp., 965 F.3d 165, 173 [2d Cir. 2020] ).
Moreover, the risk disclosures in the offering materials expressly and repeatedly warned of the risk to the company's quality control, including fire, insects, and contamination, and noted that there had been such an incident in the past. In light of this, the disclosures were not misleading for not identifying a single incident of returned product, that constituted 10% of the company's sales for a single quarter ( see Jianming Lyu v. Ruhnn Holdings Ltd., 189 A.D.3d 441, 137 N.Y.S.3d 322 [1st Dept. 2020] ).