Pomerantz Delivers Victory with Blue Apron’s Motion to Dismiss Denied in its Entirety

On April 22, 2020, Judge William F. Kuntz II in the United Stated District Court in the Eastern District of New York denied Blue Apron’s motion to dismiss Pomerantz LLP’s action in its entirety.

The case, In Re Blue Apron Holdings, Inc. Securities Litigation, alleges Section 11 claims against Blue Apron, a subscription-based meal preparation and delivery service that went public in 2017.  Blue Apron’s IPO Prospectus allegedly failed to disclose that their new facility in Linden, New Jersey was experiencing serious operational delays that would materially and negatively impact the company’s performance.  Specifically, the case alleges that the defendants had a duty to disclose these problems under Item 303 (17 C.F.R. § 229.303(a)(3)(ii)) which requires disclosure of known trends that management reasonably expects to impact the business.

 The court upheld the claims under Item 303, and further held that the “bespeaks caution” doctrine does not apply here because it does not shield statements that fail to disclose known risks.  The court also upheld claims based on statements which on their face were literally true, but materially misleading by omitting the Linden problems.  For example, the statement that the company was “completing the build out of a new fulfillment center in Linden, New Jersey, which we have recently begun to utilize” was misleading by its failure to disclose the Linden delays.

 Judge Kuntz wrote “Taken in context together and with the remaining statements, it could plausibly “have misled a reasonable investor” through the suggestion increasing automation was actively improving cost-efficiency, when delays at the Linden Facility were in fact doing the opposite.”

 Pomerantz LLP is Co-Lead Counsel in this class action lawsuit that was filed on behalf of a class consisting of investors who purchased or otherwise acquired Blue Apron securities:  (1) pursuant and/or traceable to Blue Apron's false and misleading Registration Statement and Prospectus, issued in connection with the Company's initial public offering on or about June 29, 2017; and/or (2) on the open market between June 29, 2017 and August 9, 2017, both dates inclusive, seeking to recover damages caused by Defendants' violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.

 Partner Murielle Steven Walsh represents Pomerantz in this matter with Associate Eric Gottlieb.