Public Pension Fund Group, et al. v. KV Pharmaceutical Co., et al., No. 10-3402 (8th Cir. 2012)Annotate this Case
Plaintiffs, groups of investors who purchased the securities of KV, brought this class action lawsuit alleging that KV and some of its individual officers committed securities fraud. Plaintiffs alleged that KV made false or misleading statements about its compliance with Food and Drug Administration (FDA) regulations governing the manufacture of pharmaceutical products, and made false or misleading statements about earnings resulting from pharmaceutical products allegedly manufactured in violation of FDA regulations. The court concluded plaintiffs' complaint adequately set forth the reasons why KV's statements about is compliance were false, or at least misleading, at the time they were made; the district court did not err when it determined the investors' complaint did not sufficiently plead that KV made false or misleading statements about earnings tied to the manufacture of generic Metoprolol; the district court correctly dismissed the scheme liability claims against the two individual KV officers; but the district court erred in denying the motion to amend the complaint. Accordingly the court affirmed in part, reversed in part, and remanded for further proceedings.
Court Description: Civil case - Securities Fraud. Plaintiffs' complaint alleged with sufficient particularity that defendant's statements about compliance with FDA regulations or the FDA's current Good Manufacturing Practices were false or misleading and the district court erred in dismissing this claim; district court did not err in determining that the plaintiff investors' complaint did not sufficiently plead that defendant made false or misleading statements about earnings tied to the manufacture of the generic drug Metoprolol; district court did not err in dismissing scheme liability claims against two of defendant's officers as the plaintiff investors did not allege with specificity what conduct they engaged in beyond having knowledge of the misrepresentations and omissions regarding KV's compliance with FDA regulations or current Good Manufacturing Practices and earnings tied to generic Metoprolol; district court abused its discretion in denying plaintiffs' post-judgment motion to amend their complaint.