Judge dismisses class-action against Activision Blizzard’s sexual harassment probe

A California judge today granted Activision’s motion to dismiss a class-action lawsuit filed by investors who asserted the company misled them about sexual harassment allegations at the company, including probes by the Equal Employment Opportunity Commission (EEOC) and California’s Department of Fair Employment and Housing (DFEH). First reported by Bloomberg Law, the judge ruled that the plaintiffs failed to meet the threshold to pursue their claims under federal securities law.

First filed in August 2021 by a group of individual investors that includes Jeff Ross and Gary Cheng, they allege the EEOC and DFEH probes were intentionally downplayed by Activision in SEC filings, which calling them “routine”. But the judge argued these investors’ claims to be an example of “fraud-by-hindsight,” wherein companies which suffer bad outcomes are unfairly accused of having been able to predict them.

“Plaintiffs contend that the media’s reaction to news of the regulatory investigations and Defendants’ statement in response to the DFEH Action ‘belies any notion’ that the regulatory investigations were ordinary or routine. But such allegations constitute ‘fraud-by-hindsight’ and absent particularized, temporal facts, are insufficient to support a claim of securities fraud,” wrote Judge Percy Anderson of the US District Court of the Central District of California.

A US district court recently approved an $18 million dollar settlement between the videogame company and the EEOC. The lawsuit by California’s DFEH is still pending. While the motion to dismiss is a setback for the investors, they have 30 days to file an amended complaint.

Tesla investors say a judge found Elon Musk’s ‘funding secured’ tweet was misleading

In court documents filed late Friday, a group of Tesla shareholders said a federal judge recently ruled Elon Musk made “false and misleading” statements in 2018 when he said he was considering taking the company private at $420 per share, reports Reute…

DC Attorney General asks court to reconsider Amazon antitrust lawsuit

DC Attorney General Karl Racine has filed a motion (PDF) asking the court to reconsider its decision to dismiss the antitrust lawsuit he filed against Amazon in 2021. In the original lawsuit, Racine accused the e-commerce giant of “illegally abusing and maintaining its monopoly power by controlling prices across the online retail market.” Third-party sellers that use Amazon’s Marketplace have to abide by the company’s agreement, which includes a fair pricing policy. If they sell their goods for lower prices elsewhere, Amazon could remove their items’ buy box, suspend their shipment option and even terminate their selling privileges for “serious or repeated cases.”

The company stopped telling sellers back in 2019 in the midst of antitrust scrutiny that they couldn’t sell their products for cheaper prices elsewhere. However, the company later added back a clause under its fair pricing policy that’s nearly identical. Racine argued that since sellers price their goods with Amazon’s cut in mind, the policy artificially raises prices even on sellers’ own websites and on competing e-commerce platforms. 

Amazon told us when Racine first filed the lawsuit that the Attorney General had it “exactly backwards.” The spokesperson said: “Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively. The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law.” The Superior Court of the District of Columbia sided with Amazon and threw out Racine’s complaint back in March. 

Now, the DC AG wants another chance at proving that Amazon violated antitrust laws. His office’s amended complaint includes additional details about how the company’s policy violates DC code, mostly focusing on how it “causes prices to District residents to be higher than they otherwise would be” and how it inhibits sellers from competing with Amazon’s own products. 

Racine said in a statement about the motion he filed:

“We’re asking the court to reconsider its decision to dismiss our Amazon case because the antitrust laws and facts are on our side and we are determined to continue standing up for DC consumers. Amazon illegally uses its market power to prevent sellers from lowering their prices on other platforms — including their own. This results in higher prices for DC consumers.”

Juul will pay $22.5 million to settle a Washington state lawsuit

Vape pen maker Juul has agreed to settle another state lawsuit alleging that it targeted minors with its marketing. It will pay $22.5 million and undertake measures to prevent underage use and sales to settle a suit filed by Washington Attorney General Bob Ferguson in September 2020. Juul admits no wrongdoing under the settlement, though it told the Associated Press the agreement marked “another step in our ongoing effort to reset our company and resolve issues from the past.”

The AG claimed that when Juul debuted in 2015, it promoted itself with colorful ads on social media, leading to an increase in nicotine use and addiction in teens. Ferguson also claimed in the filing that the company deceived consumers about the addictiveness of its product. His office said the money from Juul’s settlement will be used to establish a health equity unit that will “respond to deceptive and discriminatory health care practices that disproportionately impact vulnerable communities and communities of color.”

Under the consent decree, Juul is not allowed to promote its products on social media and can’t use advertising that appeals to youths. It agreed to monitor and report social media posts from underage users about its products and to require an adult’s signature when delivering products that it sells online. Additionally, it must run a secret shopper program in the state for at least two years to ensure retailers aren’t selling its products to underage users.

Over the last year, Juul has settled several cases brought by state AGs. It agreed to pay $40 million to settle a case in North Carolina and $14.5 million to settle one in Arizona. The company says it has also resolved a suit in Louisiana but lawsuits in several otherstates remain active. “We will continue working with federal and state stakeholders to advance a fully regulated, science-based marketplace for vapor products,” the company said.