Bridgestone/Firestone resolves tire recall securities class action
Clients Bridgestone/Firestone, Inc.
Jones Day represented Bridgestone/Firestone, Inc., in a securities fraud action brought in the aftermath of the Firestone ATX/Wilderness tire recall. Plaintiffs accused Bridgestone/Firestone of fraud under Section 10(b) and Section 20(a) for failing to disclose alleged tire safety problems and for publicly defending the quality of its tires in the face of negative publicity and lawsuits in the two years prior to the ATX/Wilderness recall. The district court granted Jones Day's motion to dismiss on the grounds that Firestone's statements were immaterial and therefore not actionable as a matter of law and that Firestone's knowledge of increasing product liability claims and of internal data allegedly raising questions about tire performance did not meet the required strong inference of scienter because plaintiffs had not "established a definitive causal connection: between the tires and the alleged product failures." The Sixth Circuit reversed in part and remanded. After discovery, the parties briefed class certification, including the question of whether plaintiffs could maintain a worldwide class on behalf of foreign purchasers on foreign exchanges (Bridgestone is listed in Japan and does not sponsor ADRs in the United States). Before that issue was argued or decided, however, the parties reached a settlement in September, 2007.
In re Bridgestone Securities Litigation, No. 3:01-0017 (M.D. Tenn.); 399 F. 3d 651 (6th Cir 2005)