The U.S. District Court for the Southern District of New York granted the motions to dismiss filed by iAnthus Capital Holdings, Inc. (“iAnthus”) in a complex, consolidated action that includes (1) a putative class action securities complaint filed against iAnthus by its shareholders alleging violations of Sections 10(b) and 20(a) of the Exchange Act and (2) a complaint filed by Hi-Med LLC alleging violations of the Exchange Act and various state-law claims. iAnthus is a leading Canadian cannabis company that owns, operates and partners with regulated cannabis operations across the United States. Levine Lee represents iAnthus and certain of its current officers and directors in the consolidated litigation.
In granting iAnthus’s motions to dismiss both complaints, the Court accepted iAnthus’s argument that the U.S. Supreme Court’s recent decision in Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010), bars the plaintiffs’ securities claims. The Court found that plaintiffs failed to allege that their transactions in iAnthus’s securities constituted “transactions in securities listed on domestic exchanges” under Morrison’s first prong or as “domestic transactions in other securities” under Morrison’s second prong, rendering the Exchange Act’s application to the action extraterritorial and therefore improper. To the extent plaintiffs seek to move for leave to file additional amended complaints, they must do so by September 30, 2021.
This dismissal follows a series of favorable results that Levine Lee has reached on behalf of public companies facing class action securities claims over this past year. For example, on April 20, 2021, the U.S. District Court for the District of New Jersey partially granted the motion to dismiss filed by Levine Lee client Eros International PLC (“Eros”), a global media and entertainment company, in a putative class action securities litigation brought by Eros shareholders, finding that the vast majority of plaintiffs’ claims suffered from deficiencies in pleading falsity, causation, or scienter. Levine Lee is also currently representing Sterling Bancorp, Inc. (“Sterling”) in a putative class action securities litigation pending in the U.S. District Court for the Eastern District of Michigan.
Seth L. Levine, Chad P. Albert, and William Roth worked on the iAnthus matter. Kenneth E. Lee, Scott B. Klugman and Chad P. Albert are working on the Eros matter. Seth L. Levine, Kenneth E. Lee, and Chad P. Albert are working on the Sterling matter. The cases are In re iAnthus Capital Holdings, Inc. Securities Litigation, Nos. 20-cv-3135, 20-cv-03898 (S.D.N.Y.); In re Eros International Plc Securities Litigation, No. 19-cv-14125 (D.N.J.); and Oklahoma Police Pension & Retirement System v. Sterling Bancorp et al., No. 20-cv-10490 (E.D. Mich.). Selected press discussions of the above-achieved results are available here: Law360, “iAnthus Dodges Investor Suit”; Bloomberg, “Bollywood Film Firm Gets Some Investor Claims Trimmed”.