Cassava Sciences, Inc. v. Bredt

Background

Cassava Sciences asserted defamation claims against three groups of defendants based on communications criticizing its scientific studies and accusing it of data manipulation and other fraudulent activity. On March 28, 2024, the court granted the defendants’ motions to dismiss all of Cassava’s claims. The court determined that most of the challenged statements were protected opinions or scientific debate. It also found that Cassava had adequately alleged that some statements by the Dot Com Defendants and QCM were defamatory, but had not adequately alleged the required actual malice. The court allowed Cassava to replead claims based on those statements but denied permission to replead the other dismissed claims.

Cassava then filed a second amended complaint asserting claims against the Dot Com Defendants based on 75 allegedly defamatory tweets. While those claims were pending, Cassava moved under Federal Rule of Civil Procedure 54(b) for a partial final judgment on its claims against QCM and the Neuroscientist Defendants, seeking to pursue an immediate appeal. Magistrate Judge Ona T. Wang recommended denying the motion, and Cassava objected.

Rule 54(b) standard

Rule 54(b) permits a court to enter a final judgment as to fewer than all claims or parties when there are multiple claims or parties, at least one claim or one party’s rights and liabilities have been finally determined, and there is no just reason to delay an appeal. The court explained that this decision requires consideration of judicial efficiency and fairness. A party seeking immediate appeal must show both that the claims are sufficiently separate to avoid inefficient appellate review and that fairness favors immediate appeal.

Court’s analysis

The court accepted Cassava’s objections for independent review but declined to enter a partial final judgment. It found that Cassava had not shown that the claims it wanted to appeal were sufficiently separate from the remaining claims. All of the claims involved similar critiques of Cassava’s scientific studies and overlapping factual allegations. Although the statements had to be analyzed individually to determine whether they were defamatory, the court said that the analyses could overlap because the statements concerned the same scientific issue and public debate.

The court also found substantial overlap in the allegations and evidence concerning actual malice—the requirement that Cassava adequately allege that defendants knew their statements were false or acted with reckless disregard for their truth. Cassava’s theories for the dismissed and remaining claims were broadly similar, including allegations about the statements’ improbability, defendants’ scientific knowledge, short positions in Cassava’s stock, and defendants’ access to contradictory public information. Because the second amended complaint included new factual allegations and context, the remaining claims could affect how an appellate court evaluated the earlier claims.

The court identified two additional efficiency concerns. If the remaining claims were dismissed, an appeal of the earlier dismissal could require the appeals court to consider similar actual-malice issues more than once. If the remaining claims proceeded to trial, the parties could litigate whether statements about Cassava’s alleged fraud, data manipulation, scientific studies, and drug candidate were true or false. That litigation could narrow or eliminate issues in a later appeal. The court also noted that discovery had been stayed while the Dot Com Defendants’ motion to dismiss the remaining claims was pending, making the possibility of duplicative trials speculative.

The court concluded that Cassava had not shown either that the claims were sufficiently separate to avoid judicial inefficiency or that fairness favored immediate appeal. It therefore denied Cassava’s motion for entry of a partial final judgment and directed the clerk to terminate the motion at Docket Number 129.