In re OvaScience Inc. Stockholder Litigation (Lawyers Weekly No. 09-050-17)

COMMONWEALTH OF MASSACHUSETTS SUFFOLK, ss SUPERIOR COURT CIVIL ACTION NO. 2015-3087-BLS2 (Consol. with 16-0645) IN RE OVASCIENCE INC. STOCKHOLDER LITIGATION MEMORANDUM OF DECISION AND ORDER ON PLAINTIFFS’ MOTION FOR CLASS CERTIFICATION This is a putative class action arising under Sections 11, 12, and 15 of the Securities Act of 1933. Plaintiffs Westmoreland County Employee Retirement System, Phillip Hofmann, Carlos Rivas, and Cesar Castellanos are investors who purchased stock in the defendant OvaScience, Inc. (OvaScience). They allege that a Registration Statement and Prospectus issued in connection with a secondary offering of OvaScience stock on January 8, 2015 contained false statements and material omissions of fact concerning an experimental fertility treatment that OvaScience was in the process of developing. The case is now before the Court on the plaintiffs’ Motion for Class Certification pursuant to Mass R. Civ. P. 23. The plaintiffs seek to certify a nationwide class that consists of all persons who purchased OvaScience stock “pursuant and/or traceable to” the January 8 2015 secondary offering.1 Alternatively, they seek statewide class certification consisting of the Massachusetts-based purchasers. This Court concludes that the plaintiffs’ Motion must be DENIED. 1 Excluded from the proposed class are each of the defendants, past and current officers and directors of OvaScience, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, and Leerink Partners LLC, their affiliates or sponsors, the members of their families, and any entity which any defendant has or had a controlling interest, and the legal representatives, heirs, successors, or assigns of any such excluded party. 2 Certification of this class requires this Court to exercise personal jurisdiction over absent class members who are not residents of Massachusetts. Whether that can be done consistent with due process was first addressed by the Supreme Court in Phillips Petroleum Co v. Stutts, 472 U.S. 797 (1985) (Stutts). The Court reasoned that, “[b]ecause a state places fewer burdens upon an absent class plaintiff than it does upon an absent defendant in a nonclass suit, the Due Process Clause need not and does not afford the former as much protection from state-court jurisdiction as it does the latter.” 472 U.S. at 811. The Court went on to hold that the forum state may exercise jurisdiction over the absent class member even in the absence of minimum contacts so long as it provides certain basic due process protections. Id. At a minimum, that means that the absent plaintiff must have the opportunity to remove himself from the class. Because the case before it was brought in a state (Kansas) that permitted absent class members to opt out, the Supreme Court held that the state court could properly assert personal jurisdiction over nonresident class members. Massachusetts, of course, does not […]

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