Blackberry Ltd. (“Blackberry” or the “Company”) successfully argued for the dismissal of a lawsuit brought by investors, that claimed the Company and its executives had hidden information about the Z10 smartphone. The Z10’s release was not successful, and investors claimed that the Company knew that the phone’s launch would fail. After the dismissal, the Plaintiffs appealed the decision to the Second Circuit Court of Appeals, but their dismissal was affirmed.
The Second Circuit pointed out that the Plaintiffs did not provide evidence that Blackberry was reckless or intentionally misled investors. Consequently, the Court decided the Company could not have known the product would fail before it was launched. Blackberry, as well as investors, did not realize the device would be unpopular until after its launch.
However, the Second Circuit ordered U.S. District Judge, Thomas P. Griesa, to reexamine the Plaintiffs’ motion to amend the complaint, considering they plan to include new data from an analyst’s report on the pre-launch prospects of the Z10. Judge Griesa must explain his reasoning if he chooses to not allow an amended complaint and must permit both sides to prepare a brief for him on the issue of an amended complaint.
In the event that the Plaintiffs are able to amend their complaint, they plan to include a report showing a negative analysis of the Z10’s projected sales, which will support their claim that Blackberry hid the bleak outlook from investors.
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Godoy, Jody. “2nd. Circ. Affirms BlackBerry Win But Gives Investors Hope.” Law360. Portfolio Media, Inc. 24 Aug. 2016. Web. Accessed 18 Oct. 2016.