According to the Complaint, CS Disco, Inc. provides cloud-native and artificial intelligence-powered legal solutions for electronic discovery, legal document review, and case management for enterprises, law firms, legal services providers, and governments.

The Complaint alleges that during the Class Period, “CS Disco repeatedly touted strong growth in its revenues attributable to customer usage of its cloud-based electronic discovery platform and asserted that it had good advance visibility into changes in the demand from individual customers over time.” The Complaint also alleges that “[w]hile the Company also acknowledged that its rapid revenue growth was ‘usage driven’ and may be subject to volatility, it did not inform investors during the Class Period that it had any indication of significant headwinds to its growth.”

The Complaint further alleges that “[t]he truth began to emerge on August 11, 2022, when CS Disco released financial results for the second quarter of 2022 that shocked investors and analysts alike. Not only did the Company’s revenue growth taper drastically [as compared to] past quarters, but the Company alerted the markets that it would no longer be including in its guidance any revenues attributable to its largest customers for the entire year.” On August 12, 2022, CS Disco common shares fell 53% on heavy volume.

On December 14, 2023, the Court issued an Order appointing Lead Plaintiff and Counsel. On January 3, 2024, the Court issued an Order approving transfer of the case to the Western District of Texas. The case transferred into the Western District of Texas on January 9 under docket 24-CV-00028.

On March 8, 2024, Lead Plaintiff filed an amended Complaint. Defendants filed a Motion to Dismiss the amended Complaint on May 10. On January 30, 2025, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss.