Paul, Weiss is widely recognized as having one of the nation’s preeminent securities litigation and regulatory practices. For two decades, our lawyers have guided global corporations and financial institutions through a series of “bet-the-company” securities-related crises, consistently reducing or eliminating their most damaging claims and negotiating favorable resolutions.
Teladoc Wins Dismissal of Securities Lawsuit
- Client News
- March 21, 2025
Practices
Paul, Weiss won the dismissal of a securities lawsuit brought in the U.S. District Court for the Southern District of New York against virtual healthcare provider Teladoc Health, Inc., concerning Teladoc’s integration with Livongo, a leading provider of virtual management of chronic disease, which Teladoc acquired in October 2020.
The plaintiffs brought claims under Sections 10(b) and 20(a) of the Securities Exchange Act, alleging that, following the merger, Teladoc experienced challenges in the integration of Livongo’s operations but misled shareholders about the success of its integration efforts. For example, the plaintiffs claimed that, by making public comments indicating that the Teladoc and Livongo sales teams had been “fully integrated,” Teladoc misled investors because confidential witnesses indicated that sales team integration had not actually been completed.
In 2023, District Judge Denise Cote granted Teladoc’s first motion to dismiss the complaint, finding that the plaintiffs had not sufficiently alleged the element of falsity. The plaintiffs appealed portions of that order, and while the Second Circuit upheld the decision as to the majority of the challenged statements in September 2024, it reversed and remanded on four statements.
On remand, Paul, Weiss brought a renewed motion to dismiss, arguing that the plaintiffs had not sufficiently alleged the elements of scienter or loss causation as to the four remaining statements. Echoing our arguments, Judge Cote found that the plaintiffs’ allegations about executive stock sales did not allege motive to defraud, since they were not suspicious in timing or amount, and that a strong inference of scienter was not established from the confidential witness allegations, since the confidential witnesses did not supply facts showing that senior management was aware of information inconsistent with their public statements.
The Paul, Weiss team includes litigation partners Audra Soloway and Daniel Kramer and counsel Caitlin Grusauskas.