Judge Is Unimpressed with Coughlin Stoia's Confidential Witnesses, Dismisses Class Action Against Zimmer

Judge Is Unimpressed with Coughlin Stoia's Confidential Witnesses, Dismisses Class Action Against Zimmer - 12-2-2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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DISMISSAL NEWS:

Judge Is Unimpressed with Coughlin Stoia's Confidential Witnesses, Dismisses Class Action Against Zimmer
Andrew Longstreth

http://www.americanlawyer.com. December 2, 2009
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EXCERPT: As lead counsel in the securities class action against the orthopedic device manufacturer Zimmer and two of its officers, Coughlin Stoia Geller Rudman & Robbins undergirded its complaint with evidence from more than a dozen confidential witnesses. But the numbers didn't impress Indianapolis federal district court judge Sarah Evans Barker, who granted the defendants' motion to dismiss in a decision made public Tuesday. The shareholder had alleged that the Zimmer defendants withheld information about two big problems: production issues at the company's Dover, Ohio, plant; and concerns about a hip replacement product called the Durom Cup. Confidential witnesses cited in Coughlin Stoia's complaint, who claimed certain Zimmer products were contaminated, alleged that the Food and Drug Administration inspected production problems at the Dover plant. They also asserted that Zimmer was aware of problems with the Durom Cup well before it suspended sales of the device in 2008, following complaints by doctors whose hip replacement patients were experiencing pain. Judge Barker, however, found that the allegations of the confidential witnesses didn't meet the materiality and scienter standards required by the Private Securities Litigation Reform Act. Regarding the FDA visit, for example, she wrote that that the plaintiffs had "not pleaded with the requisite particularity that the FDA inspection of the Dover facility resulted in any significant action that was material." Judge Barker also found that the plaintiffs had not shown the defendants "were in possession of material information about the Durom Cup" during the class period. […] Judge Barker gave the plaintiffs 45 days to seek leave to amend their complaint.

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