Full text
Matter of Sundial Growers, Inc. Sec. Litig.
Matter of Sundial Growers, Inc. Sec. Litig. (2021 NY Slip Op 01014)
Matter of Sundial Growers, Inc. Sec. Litig.
2021 NY Slip Op 01014
Decided on February 16, 2021
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided and Entered: February 16, 2021 Before: Manzanet-Daniels, J.P., Webber, Oing, Kennedy, JJ.
Index No. 655178/19 Appeal No. 13141 Case No. 2020-02704
[*1]In the Matter of Sundial Growers, Inc. Securities Litigation
Trisha Peters, et al., Plaintiffs-Appellants,
Sundial Growers, Inc., et al., Defendants-Respondents.
Kaplan Fox & Kilsheimer LLP, New York (Robert N. Kaplan of counsel), for appellants.
Shearman & Sterling LLP, New York (Adam S. Hakki of counsel), for respondents.
Order, Supreme Court, New York County (Barry R. Ostrager, J.), entered May 15, 2020, which granted defendants' motion to dismiss the complaint, unanimously affirmed, with costs.
The statements in the offering materials that defendant Sundial Growers, Inc. produced "high quality" and "premium" cannabis were non-actionable puffery (Ong v Chipotle Mexican Grill, Inc., 294 F Supp 3d 199, 232 [SD NY 2018]).
To the extent the statements were more than puffery, they were non-actionable opinion (Abramson v Newlink Genetics Corp., 965 F3d 165, 173 [2d Cir 2020]).
Moreover, the risk disclosures in the offering materials expressly and repeatedly warned of the risk to the company's quality control, including fire, insects, and contamination, and noted that there had been such an incident in the past. In light of this, the disclosures were not misleading for not identifying a single incident of returned product, that constituted 10% of the company's sales for a single quarter (see Jianming Lyu v Ruhnn Holdings Ltd., 189 AD3d 441 [1st Dept 2020]).
THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: February 16, 2021