Abu Dhabi Investment Authority v. Mylan N.V.

Background

Abu Dhabi Investment Authority brought claims under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. It alleged that Mylan made false or misleading statements in filings with the Securities and Exchange Commission, press releases, and other public documents. The allegations concerned Mylan’s conduct involving the EpiPen and its generic drugs, including alleged misclassification, anticompetitive conduct, and price-fixing agreements. The complaint identified statements made from February 21, 2012, through May 7, 2019.

The plaintiff filed this action on February 14, 2020. Mylan moved to dismiss the claims to the extent they relied on statements made before February 14, 2015.

Legal Standard

The court applied the standard for a motion to dismiss. At that stage, the court accepts the complaint’s factual allegations as true and asks whether they plausibly state a claim for relief.

Parties’ Arguments

Mylan relied on the Exchange Act’s statute of repose, which provides that an action involving securities fraud may be brought no later than five years after the violation. Mylan argued that this deadline cannot be extended through equitable tolling or a continuing-violation theory. Under Mylan’s position, claims based on statements made before February 14, 2015, were barred.

Abu Dhabi Investment Authority argued that the relevant “violation” was Mylan’s last alleged misrepresentation or omission. Because the complaint alleged a final violation in 2019, the plaintiff argued that all of its claims were timely.

Court’s Analysis

The court rejected the plaintiff’s interpretation. It explained that the Supreme Court decisions cited by the plaintiff involved different statutes and did not establish that a continuing series of independently actionable statements delays the Exchange Act’s five-year repose period.

The court also relied on Second Circuit decisions holding that statutes of repose are not subject to equitable tolling. It found persuasive a prior Southern District of New York decision holding that applying a continuing-violation theory to independently actionable statements and omissions would be inconsistent with the Exchange Act’s right to repose after five years.

The court concluded that the statutory language did not indicate that the five-year period runs from a defendant’s last violation. It therefore held that the plaintiff could not use a series of alleged misstatements and omissions to avoid the statute of repose.

Disposition

The court held that claims based on misstatements or omissions before February 14, 2015, were barred by the statute of repose and dismissed those claims. Judge J. Paul Oetken granted Mylan’s motion to dismiss in part and directed the Clerk of Court to close the motion at Docket Number 24.