Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page1of 42
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF NEW YORK
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`IN RE ALLERGAN PLC SECURITIES
`LITIGATION
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`No. 18 Civ, 12089 (CM)(GWG)
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`DECISION AND ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY
`JUDGMENT AND DENYING PLAINTIEF’S MOTION FOR SUMMARY JUDGMENT
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`McMahon,J:
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`Lead Plaintiff DeKalb County Pension Fund (hereinafter referred to as “DeKalb” or
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`“Plaintiff’) brings this securities fraud lawsuit on behalf of itself and a class of similarly situated
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`purchasers of shares of Allergan —a global pharmaceutical company. Plaintiff accuses Defendants
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`— Allergan PLC and associated individual defendants (collectively “Allergan’”) — of failing to
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`disclose information about a potential link between one of the company’s products, textured
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`silicone-gel breast implants, and a rare form of cancer.
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`Presently before the Court are cross motions for summary judgment: one for summary
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`judgmentdismissing the complaint,filed by Defendant Allergan (Dkt. No. 347) and onefor partial
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`summary judgment on the issue ofliability, filed by DeKalb (Dkt. No. 351). Also before the Court
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`are five Daubert motions to exclude the opinions and proposed testimony of several experts.
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`For the reasons set forth below, Defendants’ summary judgment motion is granted,
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`Plaintiff's partial summary judgment motion is denied, and the complaint is dismissed. There is
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`no need to addressin detail the parties’ Daubert motionsas the testimonyof the parties’ experts is
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`not necessary to grant Allergan’s motion. Those motionsare, therefore, denied as moot.
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`BACKGROUND
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`The Court assumes the parties’ familiarity with the facts and recounts only the facts
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`relevant to this summary judgment decision.
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`A more extensive discussion about the backgroundofthis case is available in the Court’s
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`opinions and orders addressing Allergan’s motion to dismiss and the motions for class
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`certification. See In re Allergan PLC Sec. Litig. (‘Allergan P’), No. 18 CIV. 12089 (CM), 2019
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`WL 4686445 (S.D.N.Y. Sept. 20, 2019) (granting in part and denying in part Defendants’ motion
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`to dismiss); In re Allergan PLC Secs. Litig. (“Allergan IF’), No. 18 CIV. 12089 (CM)(GWG), 2020
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`WL 5796763 (S.D.N.Y. Sept. 29, 2020) (denying motion for class certification filed by the former
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`lead plaintiff, Boston Retirement System); in re Allergan PLC Sec. Litig. (“Allergan II”), No. 18
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`CIV. 12089 (CM)(GWG), 2021 WL 4077942 (S.D.N.Y.Sept. 8, 2021) (granting DeKalb’s motion
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`for class certification).
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`L
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`Factual Background
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`A. The Parties
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`Lead Plaintiff DeKalb is a pension fund that alleges that it purchased shares of Allergan
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`at artificially inflated prices between January 30, 2017 and December 19, 2018, inclusive (the
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`“Class Period”). (Dkt. No. 58 4 19). See also Allergan IT, 2021 WL 4077942,at *1.
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`Defendants include Allergan and certain ofits senior executives.
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`Allergan is a global pharmaceutical and medical products company engaged in the
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`development, manufacturing, and distribution of over 100 pharmaceutical and medical-aesthetics
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`products. (Defs.’ 56.1 J 1).! The company’s stock is publicly traded on the New York Stock
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`Exchange. (Defs.’ 56.1 Counter 4/3).
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`The Executive Defendants include Brenton L. Saunders, who was Allergan’s President,
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`chief executive officer (“CEO”), and Chairman of the Board during the Class Period (Defs’
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`56.1
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`286); Maria Teresa Hilado, who served as Allergan’s chief financial officer (“CFO”) from
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`December 2014 until February 2018 (id. § 298); Matthew W. Walsh, Allergan’s CFO from
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`February 2018 through the end of the Class Period (id. | 299); Frances DeSena, who was vice
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`president of Allergan’s U.S. Brand and Research and Development Communication division
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`during the Class Period (id. | 300); Matk Marmur, who was global mediarelations and executive
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`communicationsdirector of Allergan from 2015 through 2018, and served as lead for
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`international communications and public relations from 2018 through the end of the Class Period
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`(id. | 305); Paul Bisaro, who was a Director on Allergan’s Board from December 2016 through
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`August 2018 (id. 309); and William Meury, Allergan’s chief commercial officer (“CCO”)
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`during the Class Period (id. § 315).
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`B. Allergan’s Textured Breast Implants and BIA-ALCL
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`For overthirty years, Allergan and its corporate predecessors — specifically, McGhan
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`Medical Corporation (“McGhan”), whichlater changed its name to Inamed Corporation
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`(“Inamed”) before Allergan purchased substantially all of the company in March 2006 — have
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`manufactured and sold breast implants for post-mastectomy reconstructive surgery and cosmetic
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`augmentation. (Defs’ 56.1 ff 13, 14).
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`| References to Defendants’ Rule 56.1 Statement (Dkt. No. 361) are designated “Defs.’ 56.1”; references to
`Defendants’ Counter-Statement of Undisputed Material Facts (Dkt. No. 382) are designated “Defs.’ 56.1 Counter”,
`references to Plaintiff's Rule 56.1 Statement (Dkt. No. 369) are designated “Pi.’s 56.1”; references to Plaintiff's
`Counter-Statement of Undisputed Material Facts (Dkt. No. 401) are designated “PI.’s 56.1 Counter”.
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`Duringthe Class Period, Allergan sold breast implants with several different shell textures,
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`including macro-textured breast implants bearing the “BIOCELL” trademark, micro-textured
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`breast implants bearing the “MicroCell” trademark, and smooth breast implants, which were sold
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`under several brand names. (Defs.’ 56.1 {| 2).
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`Breast implants with textured shells have been reported to offer several important benefits
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`over breast implants with smooth shells, including: better adherence to tissue; lower rates of
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`movement due to their better adherence; lower rates of capsular contracture, which is a common,
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`disfiguring and painful condition experienced by womenwith implants. Moreover, becauseoftheir
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`lower rates of movement and capsular contracture, women who use textured breast implants need
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`fewer re-operations. (Defs’ 56.1 JJ 23-35).
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`Allergan’s textured implants specifically have advantages over other types of implants. As
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`late as the end of September 2018, the chairman ofthe BIA-ALCL committee of France’s National
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`Agencyfor the Safety of Medicines & Health Products (“ANSM7”), Dr. Christian Marinetti, issued
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`a public statement in which she asserted that Allergan’s Biocell implants were “essential” and
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`“often irreplaceable” because they are “the only product that can adhere”to certain patients and
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`because they “enable optimal restoration of the body image of patients after amputation,” in
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`contrast to “[o}ther implants [that] may prove to be too mobile” and “requir[e] repeat operations
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`that have their ownrisks.” (DSJ Ex. 123; Defs’ 56.1 4 200).
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`Anaplastic large cell lymphoma (“ALCL”) is a form of non-Hodgkin lymphoma.(PL’s
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`56.1 | 48). As long ago as 1997, studies suggested that the disease was associated with breast
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`implants. (Id.50-61). In 2016, the World Health Organization designated breast implant-
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`associated anaplastic large-cell lymphoma (“BIA-ALCL”)as a distinct subgroup of ALCL. (PI.
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`Ex. 127; Dkt. No. 424 J 421). BIA-ALCLis rare and generally treatable. (P1.’s 56.1 Counter{ 12).
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`As of February 6, 2019, the FDA hadidentified 457 reported cases of BIA-ALCL in the
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`United States, and 9 reported deaths from the disease. (DSJ Ex. 54).
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`C. Scientific Studies and Regulatory Advisories on BIA-ALCL
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`Before and during the Class Period, studies analyzed reported cases of BIA-ALCL to
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`understand more about the disease. Due to the rarity of BIA-ALCLandthe preliminary nature of
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`the studies, the authors invariably noted that there were many gaps in their data. Specifically
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`researchers said that they lacked access to sales data by manufacturer and that implants were often
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`not labeled by their manufacturer — as well as the fact that there were very few reported cases of
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`the disease. (See Defs’ 56.1 J] 49, 77; Dkt. No. 424 ¥ 551).
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`Plaintiff claims that, by the beginning of the Class Period in January 2017, studies had
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`linked ALCL specifically to breast implants with a textured outer shell, (Dkt. No. 399 at 4). As
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`long ago as 2011, the FDA issued a report detailing the agency’s belief that “there is a possible
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`association between breast implants and ALCL,” and that “ALCL has been found more frequently
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`in association with breast implants having a textured outer shell rather than a smooth outer shell.”
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`(Pl.’s 56.1 456). Obviously, this information was in the public domain long before the Class
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`Period,
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`Plaintiff further alleges that, beginning in 2015, scientists began linking BIA-ALCL
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`specifically to Allergan products, and that substantial evidence showed that Allergan’s Biocell
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`textured implants were associated with a higher rate of incidence of the disease than competitors’
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`textured implants were. (Dkt. No. 399 at 4). Plaintiff cites the following studies as evidence:
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`©
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`The Gidengil Study: In March 2015,a study published in the Plastic and Reconstructive
`Surgery journal reported 54 cases of BIA-ALCL in women with breast implants. 31 of
`those implants were of unknown manufacture. Of the 23 cases for which manufacturer
`information was known, 19 of the patients had Allergan implants, 3 had Nagor implants,
`and 1 had a Silimed implant. (DSJ Ex. 78; PL.’s 56.1 Counter § 417).
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`e
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`The Brody Study: In March 2015, a study published in the Plastic and Reconstructive
`Surgery journal identified 173 cases of BIA-ALCL.The manufacturerofthe implant could
`not be identified in 61 ofthose cases. Of the 127 cases where the manufacturer was known,
`97 cases involved Allergan implants, 3 cases involved both Allergan and Mentor implants
`(i.c., the woman had received implants from both manufacturers), 3 cases involved only
`Mentor implants, 5 cases involved PIP implants, 3 cases involved Nagor implants, and 1
`case involved a Sientra implant. (DSJ Ex. 33; Pl.’s 56.1 Counter 4 413).
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`e Regulator Data: In June 2016, the ANSM sent a letter to Allergan stating that, of the 29
`cases of BIA-ALCL seen in France, 27 occurred in women who had Allergan implants.
`(Dkt. No. 399 at 5; PL Ex. 73; Pl.’s 56.1 Counter { 487). In July 2016, the ANSM issued a
`public release reporting these finding. It noted that “In the 29 cases diagnosedto date in
`France, Allergan brand textured breast implants are currently over-represented,” but went
`on to state that the “illness remains rare compared to the numberofbreast implants inserted
`each year.” (DSJ Ex. 38, Defs’ 56.2 § 194-95). The ANSMfurther said in this release that
`it was “continu[ing] its investigations” of BIA-ALCL“for all brands of breast implants,”
`and recommended continued monitoring of patients with implants, rather than removing
`any products from the market or changing their use, (Defs’ 56.2 4 196).
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`e
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`e
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`The Doren Study: In May 2017, a study was published in the Plastic and Reconstructive
`Surgery journal. The study comparedthe rate of incidence of BIA-ALCLin patients who
`had textured implants manufactured by Mentor (Allergan’s leading competitor during the
`Class Period) and in patients whose textured implants were manufactured by Allergan.
`Mentor uses a negative imprint stamping method to create its textured surface, while
`Allergan usesa salt-loss method for the same purpose. Of the 100 confirmed BIA-ALCL
`cases studied, 51 had a confirmed history of textured implants. Doren found that “[t]he
`overall incidence rate for salt-loss implants during this period was 1.87 per 1 million
`person-years. The overall incidence rate of breast implant-associated ALCL for negative-
`imprint stamping implants during this period was 0.33 per 1 million person-years.
`Compared to the salt-loss implants,
`the negative-imprint stamping implants were
`associated with a significantly lower incidence rate (p < 0.001).” (DSJ Ex, 36, PL’s 56.1
`Counter {J 583-85).
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`In May 2017, a study published in the Plastic and
`The Loch-Wilkinson Study.
`Reconstructive Surgery journal analyzing BIA-ALCL in Australia & New Zealand
`concluded that the risk of developing BIA-ALCLto be 14.11 times higher with Biocell
`textured implants and 10.84 higher with polyurethane (Silimed’s) textured implants
`compared with Siltex (Mentor’s) textured implants. (Dkt. No. 399 at 5; DSJ Ex, 74; Pl.’s
`56.1 Counter Ff 517, 520).
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`Like the earlier FDA report, all of these studies were published, so the information was
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`reasonably available to investors during the Class Period — and specifically when the four
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`statements alleged in this lawsuit to be misleading were made.
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`In addition, prior to and during the Class Period, Allergan was tracking and documenting
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`its own case count of BIA-ALCLcases.In an internal Allergan presentation, Joseph Purpura, Head
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`of Device Safety at Allergan, presented data showingthat, as of December 31, 2016, Allergan had
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`identified 376 confirmed and suspected cases of BIA-ALCL.Of these, 247 cases were associated
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`with Allergan-brand implants, and Mentor (the manufacturer with the next-largest BIA-ALCL
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`count) was associated with 32 cases; in 80 of the 376 cases the identity of the manufacturer was
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`unknown. (Dkt. No. 399 at 6; Pl. Ex. 56; PL.’s 56.1 Counter ff] 550-51).
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`D.
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`The ANSM Recall (The Alleged Corrective Disclosure)
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`In November 2018 — just two months after the Chair of its BLA-ALCL Committee had
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`announced to the world that Allergan’s Biocell textured implants were “essential” and “often
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`itreplaceable” — the ANSM announcedthatits expert committee would meet in February 2019 to
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`gain “a global perspective on the use of [breast] implants,” after which it would “make a decision
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`on the use of textured breast
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`implants.” (DSJ Ex. 125; Defs’ 56.1 202). Following this
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`announcement, the French Minister of Health stated in an interview that the ANSM wasnot yet
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`“prohibiting the fitting of textured implants” and acknowledged that “there are cases where it is
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`better for womento have a textured implant, so if we ban them completely, we will put a number
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`of womenin difficulty.” (DSJ Ex. 126; Defs’ 56.1 §[ 203).
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`Medical devices marketed in Europe bear a Conformité Européenne (“CE”) mark, which
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`connotes that they conform to European health and safety standards. Eligibility for the marks is
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`determined periodically by the “GMED” — a European regulatory body responsible for assessing
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 8 of 42
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`and certifying the conformity ofmedical devices to European standards.” (Defs’ 56.1 ¥ 216, 217).
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`CE marks are typically valid for five years. (DSJ Ex. 132). Allergan’s textured breast implants
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`happenedto be up for their 5-year renewal of their CE marks for use in France in Decemberof
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`2018 — two months before the ANSM review of textured implants generally was scheduled to take
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`place. (id.) Allergan was the only manufacturer of textured implants whose CE mark was up for
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`renewal in France before that conference. (Defs’ 56,1 { 214).
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`On December 14, 2018, the GMED opted not to reissue the CE mark for Alilergan’s
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`textured implants, The GMEDstated that the denial was based on(i) issues with the “technicalfile
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`assessed to demonstrate the conformity of the product to requirements of the [EU] directive”; and
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`(ii) “review of the post marketing data of the textured implants which raised a specific concern on
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`ALCL,” — specifically, that, “information provided in the file does not demonstrate that the
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`benefit/risk ratio is equivalent or greater than alternative solutions such as smooth breast
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`implants.” (Defs.’ 56.1] 217) (emphasis added). The GMED said nothing about the relative
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`risk/benefit ratio for different manufacturers of textured implants.*
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`Because medical devices that lack a CE mark cannot be sold in Europe, four days later, on
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`December 18, 2018, ANSM ordereda recall (hereinafter the “ANSM Recall”) of textured breast
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`implants manufactured by Allergan from the European market. (Defs’ 56.1 { 220). The ANSM
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`announcement notedthat it had “not as yet identified any immediate health risk to women carrying
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`2 CE marksare required to sell a wide variety of productsin the EU,and signify that the products meet certain
`requirements, CE marks are renewed at regular intervals and issued by “notified bodies” rather than the primary
`health regulators in EU memberstates. See European Commission, CE Marking(last visited Dec. 12, 2022),
`hitps://single-market-economy.ec.europa.eu/single-market/ce-marking_en. For example, in France, the notified body
`is GMED,whereas the primary health regulator is the ANSM.
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`3 As far as the court knows, none the few cases of BLA-ALCLthat have been reported are in women who have so-
`called “smooth breast implants.” This case is not abouttherelative safety of smooth versus textured implants;it is
`about whether Allergan failed to disclose thatits textured implants were more closely associated with the disease
`than were the textured implants of other manufacturers,
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 9 of 42
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`the implants concerned” but stated that “it recommended health professionals to prefer the use of
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`breast implants with a smooth envelope, pending the opinion ofa committee ofexperts on the use
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`ofimplants” and that it would “make a decision on the use of textured-envelope breast implants”
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`after its February 2019 meetings. (/d. §{] 225-26) (emphasis added). Again, there was no mention
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`by the ANSM ofrelative rates of BIA-ALCLfor different manufacturers of textured implants.
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`In April 2019, ANSM decidedto recall ali heavily textured implants from the European
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`market, regardless of manufacturers. (Defs’ 56.1 4] 230, 234-35).
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`IE.
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`Procedural Background
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`Following the December 2018 ANSM Recall announcement, Allergan’s common stock
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`price fell $10.20, or nearly 7%, to close at $136.56 on December 19, 2018. (PI.’s 56.1 {| 142).
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`This case was filed on December 20, 2018. (Dkt. No. 1).
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`The Court originally appointed Boston Retirement Services (“BRS”) to serve as lead
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`plaintiff and it filed the Consolidated Amended Class Action Complaint (“CAC”) — the operative
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`complaint in this action — alleging two counts against Allergan and seven individual defendants
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`affiliated with Allergan for (1) violations of Section 10(b) of the Exchange Act and the
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`corresponding SEC Rule 10b-5 against all defendants; and (2) violations of Section 20(a) of the
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`Exchange Actagainst the individual defendants. (Dkt. No. 58). Plaintiff alleged that Allergan was
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`well aware ofthe studies that showed a higher incidence of BIA-ALCLin patients with Allergan’s
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`textured breast implants than those made by others, but nonetheless issued statements that
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`downplayed the fact that patients had a higher risk of developing BIA-ALCL if they used
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`Allergan’s textured implants. (Dkt. No. 58 J 78, 94, 161). And they alleged that the revelation of
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`Allergan’s closer association with BIA-ALCLledto the sudden drop in stock price following the
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`ANSMRecall, and caused damagesto the putative class of investors, violating Sections 10(b) and
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`20(a) of the Exchange Act and Rule 10b-5. (Dkt. No. 58 ff 12-14).
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 10 of 42
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`Following Allergan’s motion to dismiss, very little was left of the CAC. The court allowed
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`Plaintiff to go forward only on the theory that four specifically identified statements “gave
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`investors a false impression that Allergan’s implants were no more linked with BIA-ALCL than
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`other implants” manufactured by other companies. Allergan I, 2019 WL 4686445, at *25.
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`The parties proceeded with discovery. During discovery, the Court denied BRS’ motion
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`for class certification for the reasons set forth in Allergan IZ, 2020 WL 5796763. The Court granted
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`DeKalb’s motion for class certification as the new Lead Plaintiff in Allergan HZ, 2021 WL
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`4077942.
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`LEGAL STANDARD
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`Summary judgment is appropriate only where “there is no genuine dispute as to any
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`material fact and the movantis entitled to a judgment as a matter of law.” Fed. R. Civ, P. 56(a).
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`A dispute is “genuine”if “the evidence is such that a reasonable jury could return a verdict for
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`the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factis
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`“material” “if it might affect the outcomeofthe suit under the governing law.” Frost v. N.Y.C.
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`Police Dep’t, 980 F.3d 231, 242 (2d Cir. 2020). The relevant inquiry on application for summary
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`judgment is “whether the evidence presents a sufficient disagreement to require submission to a
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`jury or whetherit is so one-sided that one party must prevail as a matter of law.” /d. at 251-52.
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`A court is not charged with weighing the evidence and determining its truth, but with
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`determining whetherthere is a genuineissue fortrial. Westinghouse Elec. Corp. v. N.Y.C. Transit
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`Auth., 735 F. Supp. 1205, 1212 (S.D.N.Y. 1990). “[T]he mere existence of somealleged factual
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`dispute between the parties will not defeat an otherwise properly supported motion for summary
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`judgment; the requirementis that there will be no genuine issue of material fact.” Anderson, 477
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`U.S. at 247-48 (emphasis in original). “Uncertainty as to the true state of any material fact
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 11 of 42
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`defeats the motion.” U.S. v. One Tintoretto Painting Entitled The Holy Fam. With Saint
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`Catherine & Honored Donor, 691 F.2d 603, 606 (2d Cir. 1982).
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`The movantbearsthe initial burden of demonstrating the absence of a genuine dispute of
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`material fact. Fed. R. Civ. P. 56(c\(1). “Courts must construe the evidence and drawall
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`reasonable inferences in the non-moving party’s favor.” United Specialty Ins. Co. v. JD Com.
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`Builders Inc., No. 18-cv-6735 (CM), 2020 WL 49017661, at *3 (S.D.N.Y. Aug. 20, 2020).
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`DISCUSSION
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`L
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`Defendants Are Entitled to Summary Judgment Dismissing Plaintiff's Section 10(b)
`Claim
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`Section 10(b) of the Exchange Act makesit unlawful to “use or employ,in connection
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`with the purchase orsale of any security... any manipulative or deceptive device or contrivance
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`in contravention of such rules and regulations as the Commission may prescribe.” 15 U.S.C.
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`§ 78j(b). SEC Rule 10b-5, which implements the statute, prohibits making “any untrue statement
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`of a material fact or [omitting] to state a material fact necessary in order to make the statements
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`made, in the light of the circumstances under which they were made, not misleading.” 17 C.F.R.
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`§ 240.10b-5(b). To recover for a violation of Section 10(b) and Rule 10b-5, a private securities
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`plaintiff must prove six elements: “(1) a material misrepresentation or omission by the
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`defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the
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`purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic
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`loss; and (6) loss causation.” City of Westland Police & Fire Ret. Sys. v. MetLife, Inc., 129 ¥.
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`Supp.3d 48, 65 (S.D.N.Y. 2015) (quoting Halliburton Co. v. Erica P. John Fund, Inc., 573 U.S.
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`258, 267 (2014)).
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`For the reasons outlined below,Plaintiff has not produced sufficient evidence to show
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`that a genuine issue of material fact remains on the elements of (i) a misrepresentation or
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`omission (falsity); (ii) materiality; and (ii) loss causation.’ Thus, Defendant’s motion for
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`summary judgment on the Section 10(b) claims is granted and Plaintiff's motion for partial
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`summary judgment is denied.
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`A. There is No Evidence That Allergan Made a False or Misleading Statement or
`Omission
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`To prove a material misrepresentation or omission, a plaintiff must show that the
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`defendant either made an untrue statement of a material fact or omitted to state a material fact
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`necessary to make whatever statements it made not misleading. 17 C.F.R. § 240.10b-5(b).
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`“A violation of Section 10(b) and Rule 10b-5 premised on misstatements cannot occur
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`unless an alleged material misstatement wasfalse at the time it was made.” In re LululemonSec.
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`Litig., 14 F. Supp. 3d 553, 571 (S.D.N.Y. 2014), aff'd, 604 Fed. App’x. 62 (2d Cir. 2015)
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`(emphasis in original) (citing San Leandro Emergency Med. Grp. Profit Sharing Plan v. Philip
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`Morris Cos., Inc., 75 F.3d 801, 812-13 (2d Cir, 1996)). A statement believed to be true when
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`made, but later shown to befalse,is insufficient, because it lacks contemporaneousfalsity. Id.
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`(citing Novak v. Kasaks, 216 F.3d 300, 309 (2d Cir. 2000)). “[F]alsity is a failure to be truthful —
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`it is not a misapprehension, misunderstanding, or mistake of fact at the time a statement was
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`made.” San Leandro, 75 F.3d at 813. Moreover, a plaintiff “must do more than simply assert that
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`a statement is false — [it] must demonstrate with specificity why that is so.” Lululemon, 14 F.
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`Supp. 3d at 571 (quoting Rombach v. Chang, 355 F.3d 164, 174 (2d Cir. 2004)).
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`Similar to the falsity of statements, omissions are only actionable if a defendantis undera
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`duty to disclose and fails to do so. Levitt v. JP. Morgan Sec., Inc., 710 F.3d 454, 465 (2d Cir.
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`2013). Such a duty to disclose arises where a “statute or regulation requir[es] disclosure” or a
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`4 Because there are more obvious bases for dismissing this claim, there is no need to address Defendants’ arguments
`aboutlack of scienter. To forestall argumentonthe point, no one should read anything substantive into my decision
`not to address this issue.
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 13 of 42
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`corporate statement would otherwise be “inaccurate, incomplete, or misleading.” Stratte—
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`McClure v. Morgan Stanley, 776 F.3d 94, 101 (2d Cir. 2015) (quoting Glazer v. Formica
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`Corp., 964 F.2d 149, 157 (2d Cir. 1992). “Silence, absent a duty to disclose, is not misleading
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`under Rule 10b-5.” Basic Inc. v. Levinson, 485 U.S. 224, 239 n.17 (1988); see also In re Time
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`Warner Sec. Litig., 9 F.3d 259, 267 (2d Cir. 1993).
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`lL. None of the Four Alleged Misstatements Was Literally False or Misleading
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`Plaintiff alleges that Allergan made four statements during the Class Period that were
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`false and misleading. (Dkt. No. 399 at 9). However, Plaintiff has produced no evidence showing
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`that any of these statements includeda literally untrue statement of material fact or were
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`otherwise misleading.
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`a. Alleged Misstatement 1: ABC News 7 January 2017 Response
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`The first alleged misstatementis a statement that Mark Marmur — Allergan’s global media
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`relations and executive communications director —- submitted in response to a January 30, 2017
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`ABC News 7 article titled, “Woman who beat cancer once says breast implants caused cancer
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`again.” (P1.’s 56.1 Counter
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`423). The statement reads:
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`“According to the FDA, BIA-ALCL has been reported in patients with textured breast
`implants from all manufacturers.”
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`(Dkt. No. 399 at 14).
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`Plaintiff has not produced any evidence to suggest that this statementis literally false.
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`Instead, Plaintiff asserts that the FDA’s database reflected a large overrepresentation of BIA-
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`ALCL cases associated with the use of Allergan’s textured implants, and that studies showed a
`higher incidence rate for BIA-ALCL with Allergan implants as opposed to those of other
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`manufacturers. This, according to Plaintiff, created a duty to disclose that, according to the FDA,
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`there was a “stronger association” between Allergan’s textured implants and BIA-ALCL as
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 14 of 42
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`compared to other manufacturers. (Dkt. No. 399 at 14). Absent that, according to Plaintiff,
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`Allergan’s statement, while technically true, was misleading.
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`But Plaintiff is incorrect whenit asserts that Allergan had a “duty”to disclose information
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`about comparative incidence rates among various manufacturers of textured breast implants.
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`Allergan’s statement mentioned nothing about the relative safety of its implants and did not
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`compareits products to those of any other manufacturer of textured breast implants. “It is well
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`settled that a corporation is not required to reveal all facts on a subject just because it reveals a
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`single fact.” In re Rockwell Med., Inc. Sec. Litig., 2018 WL 1725553, at *10 (S.D.N.Y. Mar. 30,
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`2018). Moreover, the studies that, according to Plaintiff, showed a higherrate ofincidence ofBIA-
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`ALCL in patients with Allergan implants were not a secret; they were publicly available, so that
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`information was part of the “total mix” of information available to investors at the time the
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`statement was made.
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`b, Alleged Misstatement 2: May 2018 Allergan Press Release
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`The second alleged misstatement is contained in a press release Allergan issued on May
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`29, 2018 entitled, “Allergan Responds to Media Reports on Breast Implant Associated Anaplastic
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`Cell Lymphoma (BIA-ALCL).” (PL.’s 56.1 Counter { 434). Plaintiff alleges that the following
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`language was false and misleading:
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`“The safety profile of Allergan’s smooth and textured breast implants is supported
`by ... more than a decade of U.S. and European clinical experience .
`.
`. as well as a large
`number of peer-reviewed and published studies,” and that “BIA-ALCL has been reported
`with multiple different implant manufacturers.”
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`(Dkt. No. 399 at 15).
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`Again, Plaintiff has not produced any evidence tending to show that what Allergan said
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`wasliterally false. Again, Plaintiff asserts that Allergan failed to disclose the alleged fact that its
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`implants were associated with more cases of BLA-ALCLthan were other manufacturers’ implants.
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 15 of 42
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`Butonce again, Allergan’s statementis not comparative in nature; it simply says that BIA-ALCL
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`has been reported with multiple different manufacturers’ implants. Per scientific and regulatory
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`reporting,thatis true. (See e.g., Pl.’s 56.1 Counter {| 195; DSJ Ex. 36 at 1049). Allergan thus had
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`no duty to disclose in this statement information about relative incidence rates of BIA-ALCL —
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`informationthat, to the limited extent it had been studied, was publicly available.
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`Plaintiff also points to no evidence that Allergan’s “smooth and textured implants” hadnot
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`been used safely for over a decade in the U.S. and Europe. Indeed, at the time the statement was
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`made, Allergan’s implants were FDA approved and bore the CE safety mark in Europe. Its
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`implants had been used in hundreds of thousands of women, with few reported cases of BIA-
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`ALCL and fewer than 10 deaths, not all of which involved Allergan products. Even at the end of
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`2018, the chairman ofthe ANSM’s BIA-ALCL committee stated that Allergan’s Biocell implants
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`were “essential” and “often irreplaceable” because they are “the only product that can adhere” to
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`certain patients, in contrast to “[o]ther implants .
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`.
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`. requiring] repeat operations that have their
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`own risks.” (DSJ Ex. 123; Defs’ 56.1 {[ 200). Nor has plaintiff demonstrated that there are not in
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`fact a large number of peer-reviewed and published studies supporting the safety profile of
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`Allergan’s products.
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`c. Alleged Misstatements 3 and 4: Allergan’s 2016 and 2017 10-Ks
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`The final Allergan statements that Plaintiff alleges are false and misleading are identical
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`statements included in (i) Allergan’s Form 10-K for the year ended December 31, 2016, which
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`was filed by Allergan on February 24, 2017; and (ii) Allergan’s Form 10-K for the year ended
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`December31, 2017, which wasfiled by Allergan on February 16, 2018. The statements read:
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`“From time to time reports related to the quality and safety of breast implant devices are
`published, including reports that have suggested a possible association between anaplastic
`large cell lymphoma and breast implants, as well as negative reports from regulatory
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`Case 1:18-cv-12089-CM-GWG Document 451 Filed 12/12/22 Page 16 of 42
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`authorities in Europe related to a breast implant manufacturerthat is not affiliated with the
`Company.”
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`(Dkt. No. 399 at 12).
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`Plaintiff does not allege that the first part of this statement, “From time to time reports
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`related to the quality and safety of breast implant decides are published, including reports that have
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`suggested a possible association between anaplastic large cell lymphoma and breast implants,”is
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`either untrue or misleading. Rather, Plaintiff claimsthat t