Opinion
Index No. 151432/2022
05-19-2022
Bruce HIPPLE, Plaintiff, v. OATLY GROUP AB, Toni Petersson, Christian Hanke, Bjorn Oste, Fredrik Berg, Ann Chung, Bernard Hours, Hannah Jones, Mattias Klintemar, Po Lai, Eric Melloul, Yawen Wu, Tim Zhang, Steven Chu, Frances Rathke, Nativus Company Limited, China Resources Verlinvest Health Investment Ltd., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, Defendant.
Plaintiff by: Robbins Geller Rudman & Dowd LLP, 58 S Service Rd Ste 200, Melville, NY 11747 Defendants by: Latham & Watkins LLP, 1271 Avenue of the Americas, New York, NY 10020
Plaintiff by: Robbins Geller Rudman & Dowd LLP, 58 S Service Rd Ste 200, Melville, NY 11747
Defendants by: Latham & Watkins LLP, 1271 Avenue of the Americas, New York, NY 10020
Andrew Borrok, J.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 34, 35, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51 were read on this motion to/for STAY.
The defendants’ motion to stay this action pursuant to CPLR 2201 is granted. The action captioned In re Oatly Grp. AB Sec. Litig , 1:21-cv-06360-AKH (the SDNY Action ) was the first-filed action in the United States District Court for the Southern District of New York and is based on the same allegations of wrongdoing as the plaintiffs assert this action ( Mahar v General Elec. Co. , 65 Misc 3d 1121, 1121 [Sup Ct, NY County 2019, Borrok, J.] ). There is substantial overlap between the SDNY Action and this action which warrants a stay to avoid the risk of inconsistent rulings and a waste of judicial resources.
This action and the SDNY Action both involve allegations of violations of the Securities Act of 1933 (the 1933 Act ) in connection with Oatly Group AB's (Oatly ) initial public offering on May 21, 2021 (the IPO ). It does not matter that the lead plaintiff in the SDNY Action originally asserted claims under the Securities Exchange Act of 1934 and did originally assert claims under the 1933 Act. They have now. It is also of no moment that certain of the defendants in this action are not defendants in the SDNY Action. There is no prejudice to the plaintiff here by a stay of this action, and permitting this action to proceed simultaneously with the SDNY Action is a waste of judicial resources and risks inconsistent rulings. Nor can the plaintiff move forward here because its application to be appointed lead plaintiff in the SDNY Action was denied and another plaintiff appointed.
For completeness, although some of the allegations are based on different allegedly false or misleading statements, the gravamen of both actions is that the documents offered in connection with the IPO contained false, misleading, or incomplete statements that failed to disclose to investors a drop in Oatly's output, growth, and market share. Undeniably, resolution of the SDNY Action shall dispose of or limit the issues to resolve in this action ( CMBSW Group, LLC v Inverness Counsel, LLC , 2020 WL 4391489, * 2 [Sup Ct, NY County 2020, Borrok, J.] ).
Lastly, and for the avoidance of doubt, the plaintiff's reliance on In re Qudian Sec. Litig. , 189 AD3d 449 (1st Dept 2020) is misplaced. In Qudian , the Appellate Division held that there was no basis for a stay because after the federal court dismissed certain of the claims asserted in the federal action and that the only claim remaining in the federal action concerned Dabai Auto which was not at issue in the state action, there was no overlap between the federal and state actions and, as such, no risk of inconsistent rulings ( id. , at 449-450 ). This is not the case here. Thus, a stay is appropriate.
It is hereby ORDERED that the motion to stay this action is granted and further proceedings in this action are stayed, except for an application to vacate or modify said stay; and it is further
ORDERED that either party may make an application by order to show cause to vacate or modify this stay following final adjudication of the SDNY Action.