The original Complaint charges that Zimmer and certain of its officers and directors violated federal securities laws by materially misrepresenting the Company and its products. Specifically, the complaint charges that defendants failed to disclose material flaws in the quality systems at Zimmer's Dover, Ohio facility, which manufactured Zimmer Orthopedic Surgical Products. In addition, defendants failed to disclose that patients receiving the Company's Durom Acetabular Component, used in total hip replacement procedures, disproportionately experienced cup loosening requiring additional corrective surgery after implantation. As a result of defendants' materially false and misleading statements, Zimmer's common stock traded at artificially inflated prices during the Class Period. When the true condition of the Company, its facilities, and its products began to come to light, the price of Zimmer stock declined, falling from $70.88 to $66.01 per share in one day.
On October 27, 2008, the judge entered an order appointing Plumbers and Pipefitters Local Union 719 Pension Fund as lead plaintiff and approving its selection of lead and liaison counsel. A Consolidated Class Action Complaint was filed on December 24, 2008. On February 23, 2009, the defendants responded by filing a motion to dismiss the Consolidated Complaint. On December 1, 2009, Judge Sarah Evans Barker granted the defendants’ motion to dismiss without prejudice. The plaintiffs are allowed 45 days to file an amended complaint.
On January 28, 2011, Judge Sarah Evans Barker denied the motion for leave to file an amended complaint. According to the Order, in light of these rulings that Plaintiffs Proposed Amended Complaint fails to create the requisite strong inference of scienter required to maintain its §10(b) claim, dismissal of that claim as well as its related § 20(a) and Rule 10b-5 claims is warranted. We hold that to grant Plaintiffs Motion for Leave to File Proposed Amended Complaint would be futile. Therefore, leave to amend pursuant to Federal Rule of Civil Procedure 15(a) is denied. Accordingly, this case is dismissed without prejudice and a final judgment shall enter.
On February 25, 2011, the plaintiffs filed a Notice of Appeal. On June 12, 2012, the United States Court of Appeals for the Seventh Circuit issued a mandate affirming the judgment of the District Court.