Cooper Tire & Rubber wins dismissal of securities class action, and Third Circuit affirms
Clients Cooper Tire & Rubber Company
Jones Day, on behalf of Cooper Tire & Rubber Company and certain officers and directors, prevailed in a securities class action arising out of a terminated merger transaction. On August 22, 2016, the U.S. Court of Appeals for the Third Circuit affirmed dismissal of a securities class action that alleged that Cooper Tire, along with its CEO and CFO, made misrepresentations and omissions in violation of Sections 10(b), 14(a), and 20(a) of the Exchange Act in connection with disclosures leading up to and following the stockholder vote on a later-terminated merger.
In reaction to the announcement of a proposed merger, Cooper Tire experienced work stoppages at one of its subsidiaries in China and faced a labor grievance and arbitration proceeding in the U.S. Those developments eventually contributed to the termination of the merger, and the plaintiffs claimed that the defendants made a series of actionable misstatements about them.
Jones Day moved to dismiss the complaint and the U.S. District Court for the District of Delaware granted that motion in full. On August 22, 2016, the Third Circuit affirmed the dismissal in a published opinion. The Third Circuit agreed with Jones Day's arguments that, among other things, the complaint did not raise a strong inference of scienter, failed to plead actionable omissions, and did not plead that any alleged misstatement was false when made. The Third Circuit also agreed that the defendants' forward-looking statements were protected under the PSLRA safe harbor.
OFI Asset Management et al. v. Cooper Tire & Rubber et al., No. 1:14-cv-68-RGA (D. Del.), aff'd, No. 15-2664 (3d. Cir.)