On March 4, 2021, the First Department Appellate Division of the New York Supreme Court unanimously reversed the trial court’s June 2020 denial of CVS’s motion to dismiss a putative securities class action arising from the company’s 2019 announcement of a goodwill writedown associated with its Omnicare business. The court held that plaintiffs failed to plead any actionable opinion that could give rise to a claim under the 1933 Securities Act and directed the clerk to enter judgment in the defendants’ favor.
This victory follows CVS’s earlier win in related litigation before the U.S. District Court for the District of Rhode Island, where the court dismissed plaintiffs’ putative securities class action claims under the 1934 Exchange Act with prejudice. These matters were part of a half-dozen securities class actions filed across three jurisdictions against CVS, several individual defendants, and two investment banks related to the same goodwill writedown. Four of those matters were filed in two different state courts, representing a newly-focused effort by the securities plaintiffs’ bar to bring 1933 Act claims in state court following the U.S. Supreme Court’s 2018 decision in Cyan Inc. v. Beaver County Employees Retirement Fund. Today’s ruling dismisses the claims filed in New York State court. Williams & Connolly previously secured a stay of the remaining consolidated class actions filed in Rhode Island State court in light of the earlier-filed federal and state cases.
The team representing CVS Health includes Steve Farina, Mandy MacDonald, Melissa Collins, Michael Mestitz, and Elizabeth Wilson.