Allergan Wins Second Circuit Affirmance of Summary Judgment in Securities Class Action

Cleary Gottlieb successfully represented Allergan plc (Allergan) and certain of its directors and officers in the U.S. Court of Appeals for the Second Circuit, securing affirmance of a summary judgment ruling in a securities class action.

The action arose out of the unexpected recall of Allergan textured breast implants by a French regulator in December 2018, which cited concerns that breast implants with textured outer shells are more associated with BIA-ALCL—a rare and generally treatable condition—than smooth implants. Following the dismissal of the majority of the claims at the motion-to-dismiss stage, discovery proceeded on the theory that Allergan allegedly misled investors about the extent to which its textured implants were more closely associated with BIA-ALCL than textured implants made by all other manufacturers.

On December 12, 2022, Judge Colleen McMahon of the U.S. District Court for the Southern District of New York granted Allergan’s motion for summary judgment on multiple independent grounds—including that plaintiff had produced no evidence that any of the challenged statements were false or misleading, material, or caused any loss. The district court further held that the plaintiff did not provide evidence that Allergan’s textured implants were in fact more closely associated with BIA-ALCL than textured implants made by all other manufacturers. The plaintiff appealed.

On February 20, 2024, the Second Circuit issued an order affirming the district court’s dismissal of all claims. In that order, the Second Circuit concluded that the plaintiff had failed to demonstrate that Allergan made any false or misleading statements or omissions. Because that ruling was sufficient to affirm the district court’s decision, the Second Circuit did not reach the merits of the multiple other alternative grounds for granting summary judgment.