Berman Tabacco successfully defeated Defendants’ motion to dismiss federal securities fraud claims against Inotiv, Inc. (“Inotiv”) and several of its executive officers in a case that alleges Defendants’ concealment of, among other things, pervasive mistreatment of animals that the Court described as “appalling violations of the Animal Welfare Act.”
Berman Tabacco is Lead Counsel representing the Oklahoma Police Pension and Retirement System in this securities class action lawsuit brought on behalf of (1) all persons who acquired Inotiv common stock during the period between September 21, 2021 and May 26, 2022; and/or (2) all persons who held Inotiv common stock as of November 4, 2021 and were entitled to vote at a special meeting of shareholders on matters necessary to approve Inotiv’s acquisition of a leading research animal supply company, Envigo RMS, LLC (“Envigo”).
Inotiv is a contract research organization that provides various drug discovery and development services to customers in the pharmaceutical, chemical, and medical device industries, as well as to academic and governmental research institutions. The action alleges that Defendants issued materially false and misleading statements and failed to disclose the alleged existence of flagrant violations of federal animal welfare regulations at an Envigo dog breeding facility located in Cumberland, Virginia that led the U.S. Department of Justice, with federal and state law enforcement agents, to conduct a search and seizure, which eventually led to the rescue of more than 4,000 animals and shuttering of the Cumberland Facility in June 2022. The action also alleges that Defendants made material misrepresentations and omissions in Proxy Materials provided to Inotiv investors in advance of the November 4, 2021 shareholder vote concerning the Cumberland Facility, as well as concerning risks to Envigo’s ability to continue importing research primates from Asia.
On March 29, 2024, the Honorable Philip P. Simon of the U.S. District Court for the Northern District of Indiana issued an Opinion and Order denying Defendants’ Motion to Dismiss. The Court found that Lead Plaintiff’s First Amended Complaint (“FAC”) sufficiently pled claims under Section 10(b) of the Securities Exchange Act of 1934 in connection with Defendants’ concealment of “what can only be described as appalling violations of the Animal Welfare Act dating back to at least July 2021, when USDA conducted an inspection at [Envigo’s] dog-breeding facility in Cumberland Virginia.” The Court further found that the FAC sufficiently alleged claims under Section 14(a) of the Exchange Act based on Defendants’ alleged material misrepresentations and omissions concerning the Cumberland Facility and Envigo’s primate importing business.
Boston Partner Steven Buttacavoli stated: “The Court’s ruling is a major step forward for Inotiv investors who were harmed by Defendants’ concealment of material problems with the Envigo businesses acquired in November 2021, including mistreatment of beagles that the court rightly found to be ‘appalling.’ We are looking forward to the discovery stage and litigating this case on behalf of our client and the class.”
The case is In re Inotiv, Inc. Sec. Litig., No. 4:22-cv-045-PPS-JEM (N.D. Ind.). The litigation team includes Patrick T. Egan, Steven J. Buttacavoli, Justin N. Saif, and Christina L. Gregg of Berman Tabacco’s Boston Office.