A “class action” lawsuit is one in which a group of people with the same or similar injuries caused by the same product or action sue the defendant as a group. In a class action, it is often the case where many of the individuals’ injuries were relatively minor, such that they might not pursue legal redress on their own. However, together, the value of the claims of the class add up, and suing as a class means consolidating the attorneys, defendant, evidence, witnesses, and most other aspects of the litigation. If the number of people affected by the product or conduct is high, it becomes impractical or even impossible for them to file individual lawsuits. When a class action is permitted, the group files the lawsuit with a representative plaintiff — called a “named plaintiff” or “lead plaintiff” — at the forefront. Other names for lawsuits brought by a number of people who suffered similar harm or losses are “mass tort litigation” and “multi-district litigation” (“MDL”).
Essentially, in class action lawsuits, people are seeking justice for injuries they have sustained from defective products or bad business practices. Below are examples of instances where people may sue as a class:
As you can see from the above list, there are many reasons why individuals may opt to sue as a class. A class may consist of a group of employees who were subjected to race discrimination, a number of patients who were prescribed a drug with injurious side effects, a neighborhood of residents whose homes or families were injured by a toxic spill, all the consumers who purchased a defective product that caused them injuries, or corporate investors who suffered fraud in the purchase or sale of stocks and other securities.
Esperion Therapeutics, Inc.
Esperion is a pharmaceutical company that focuses on developing and commercializing oral low-density lipoprotein cholesterol (LDL-cholesterol) lowering therapies for patients with hypercholesterolemia. Esperion’s lead product candidate is ETC-1002, a once-daily small molecule designed to lower LDL-cholesterol levels. According to Esperion, ETC-1002 is designed to lower LDL-cholesterol while avoiding the side effects associated with other LDL-cholesterol lowering therapies on the market.
Recently, a complaint against Esperion charged the Company and it’s Chief Executive Officer (CEO) with violations of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants issued false and misleading statements and/or failed to disclose adverse information regarding Esperion’s business and prospects, including that there was no clear path to approval for ETC-1002, and that the FDA had encouraged the Company to initiate a cardiovascular outcomes trial (CVOT) and that completion of a CVOT could be necessary prior to approval of ETC-1002. As a result of these false statements, Esperion common stock traded at artificially inflated prices during the Class Period, reaching as high as $82 per share in intra-day trading.
On August 17, 2015, Esperion reported to investors material events from an early August 2015 meeting with the FDA regarding the next phase of the approval process for ETC-1002. The Company stated that during the meeting it was informed by the FDA that the Company would not have to complete a CVOT to gain approval of ETC-1002. Esperion also told investors that it had a “clear regulatory path forward for development and approval of ETC-1002.”
However, according to the complaint, when the market closed a month later, on September 28, 2015, Esperion changed the story. The Company stated that the FDA had actually “encouraged the Company to initiate a CVOT promptly,” and it may be necessary to have a completed CVOT prior to approval.
Investors quickly realized the different statements that were issued by Esperion and reacted accordingly. By the next day, on September 29, 2015, Esperion stock had fallen by almost 50% to $18.33 per share.
Why Class Actions? A benefit of the class action format is its efficiency. The class action lawsuit brings together and disposes of thousands of claims at one time that are impractical to litigate individually. The judge decides the basic question of who wins with regard to the entire group. If the defendant wins, the class lawsuit is dismissed and the individuals in the group are prohibited from filing new or individual lawsuits over the same issue against the same defendant. If the class of plaintiffs wins, the court finds the defendant liable for the plaintiffs’ injuries, and the amount of recovery is later divided among the plaintiffs. Because it aggregates small claims, the class action format lowers the often-high cost of litigation.
Another benefit of the class action is that it seeks to ensure that all injured plaintiffs receive something. When the class wins the lawsuit, each participant receives some payment, even if it is not an amount to fully cover damages.
What This Means For You
If you acquired securities in Esperion Thereputics, Inc. (ESPR) between August 18, 2015 and September 28, 2015, you may join the lawsuit by contacting The Levin Firm.
In a class action, every person who would be affected by the court’s decision in the class action is entitled to notice that the action has started. Although it usually is not possible to give every such individual personal notice, all persons who might be affected are entitled to the best notice possible.
Your Class Action Judgment
In a class action, the court’s decision applies to every participant who has opted into the class. All individuals who fit within the court’s original definition of a class member are bound by the final court decision, even if they never actually go to court or otherwise participate in the lawsuit.
Payment to the participants in the class action usually follows a “plan of distribution.” With the help of the parties and their attorneys, the judge develops the plan to distribute the amount that the plaintiff class won in the lawsuit minus the attorneys’ fees and litigation costs. Each member of the class may receive a certain percentage of the total amount fund, or may receive a certain dollar figure.
Class actions are a highly effective and efficient form of civil litigation. Accordingly, when seeking legal counsel, the best approach is to find a firm with experience in class action lawsuits.
At the Levin Firm, we understand how upsetting it can be if you made an investment based upon false or misleading claims. We know how to evaluate your situation based upon the facts of your case and to investigate what type of claim can be made on your behalf. Please call The Levin Firm at 215-825-5183 to schedule a free consultation today or call our toll free number at 877-825-8542.
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