Jackson v. Abernathy

960 F.3d 94 (2020)

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Jackson v. Abernathy

United States Court of Appeals for the Second Circuit
960 F.3d 94 (2020)

Facts

Kimberly-Clark Corporation (KC) (defendant) and Avanos Medical, Inc. (Avanos) (defendant) manufactured surgical gowns used by healthcare providers for treating patients with infectious diseases. Three employees of KC and Avanos alerted senior company executives, including KC’s Chief Executive Officer Thomas Falk and others (senior executives) (defendants), that the gowns had failed quality-control tests and encountered compliance issues. KC and Avanos told shareholders that the surgical gowns met the highest level of protection standards. Ronald Jackson (plaintiff) filed a securities-fraud class action, alleging that KC, Avanos, and the senior executives misled shareholders by misrepresenting the quality of the surgical gowns and ignoring the concerns raised by KC’s and Avanos’s employees. After the district court dismissed the case, Jackson motioned to set aside the dismissal and to amend the complaint. The district court denied Jackson’s motion. Jackson appealed. On appeal, Jackson abandoned the claims against the individual senior executives. Jackson only sought to resurrect the claims against KC and Avanos on the appeal.

Rule of Law

Issue

Holding and Reasoning (Per curiam)

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