Last month, Snapchat (“Snap”) petitioned the 9th Circuit to review U.S. District Judge Stephen Wilson’s certification of a class of investors suing Snap over alleged misrepresentations and omissions from its 2017 IPO. Snap argued that, among other reasons, the U.S. Supreme Court’s China Agritech v. Resh, 138 S.Ct. 1800 (2018) decision precluded the class certification because Judge Wilson had already denied a motion for class certification in 2018.
A Snap investor was originally appointed lead plaintiff in 2017 and moved for class certification in mid-2018. Following the bid for certification, the Snap lead plaintiff withdrew from the case due to health reasons causing Judge Wilson to deny the class certification and reopen the lead plaintiff selection process. A new investor group was selected to lead the case and a new motion for certification was filed and subsequently granted. Snap now wants the 9th circuit to step in, arguing that Judge Wilson erred by granting the certification since this situation fits the facts of China Agritech.
In China Agritech, the Supreme Court ruled that once a class certification is denied, a putative class member cannot commence a new class action with the same allegations after the applicable statute of limitations has expired. Id. at 1804-1811. Snap asserts that the Snap case is exactly this: Judge Wilson denied the original motion for class certification and none of the new lead plaintiffs from the investor group originally filed a class action within the applicable statute of limitations. Judge Wilson acknowledged these facts but ruled that this case was different. Judge Wilson found that because “(1) class certification has never been addressed on the merits, (2) the new Lead Plaintiffs were chosen to replace a class representative who withdrew for medical reasons, and (3) the previous Lead Plaintiff had validly asserted these claims within the requisite time period,” this case did not raise the concerns addressed by China Agritech and therefore the class could be certified. In re Snap Inc. Securities Litigation, No. 2:17-cv-03679-SVW-AGR, 2019 WL 6270291, at *10 (C.D. Cal Nov. 20, 2019).
The 9th Circuits decision on whether there are exceptions to China Agritech will have a substantial effect on investors who want to file class action lawsuits.
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About Robert W. Killorin
Robert W. Killorin is a Partner in the Atlanta office of Faruqi & Faruqi, LLP. His practice is focused on shareholder merger and securities litigation. Mr. Killorin is an accomplished trial lawyer with over twenty years of experience in civil litigation. Prior to joining Faruqi & Faruqi, Mr. Killorin was a partner at the firm of Chitwood Harley Harnes, LLP where he specialized in complex securities litigation. Mr. Killorin has represented numerous individual plaintiffs, as well as institutional pension funds, corporations and individual investors in courts around the country. He has obtained significant recoveries, including the following securities class actions: In re FireEye, Inc. Sec. Litig., No. 14-266866 ($10 million settlement pending); In re ArthroCare Sec. Litig. No. 08-0574 (W.D. Tex.) ($74 million); In re Maxim Integrated Prod. Sec. Litig., No. 08-0832 (N.D.Cal.) ($173 million); In re TyCom Ltd. Sec. Litig., MDL No. 02-1335 (D.N.H.)($79 million); and In re Providian Fin. Corp. Sec. Litig., No. 01-3952 (N.D. Cal.). Mr. Killorin has obtained significant relief for shareholders in merger suits, including the following: In re The Coca-Cola Company Shareholder Litigation, No. 10-182035 (Fulton County Superior Ct.).Mr. Killorin authored "Preparing Clients to Testify" – Chapter 19 of Civil Trial Practice, Winning Techniques of Successful Trial Attorneys, Lawyers and Judges Publishing Company (2000), and has written articles and lectured on various legal topics. He is listed in Who's Who in American Law and is an AV® Preeminent™ Peer Review Rated attorney. Mr. Killorin obtained his undergraduate degree from Duke University (B.A., cum laude, 1980) and his law degree from the University of Georgia (J.D. 1983) where he was on the national mock trial team and a national moot court team. He is licensed to practice law in Georgia and is admitted to the United States Supreme Court, the Courts of Appeals for the Eleventh Circuit, and the United States District Courts for Middle and Northern Districts of Georgia.