Turquoise Hill Wins Motion to Dismiss in Securities Class Action

Paul, Weiss won the dismissal of claims against Canadian mineral exploration and development company Turquoise Hill Resources Ltd. and three of its current and former senior executives in a putative class action asserting violations of Sections 10(b) and 20(a) of the Securities Exchange Act. The claims were brought against the Turquoise Hill defendants as well as Turquoise Hill’s majority shareholder, Rio Tinto, and Rio Tinto’s wholly owned subsidiary, Rio Tinto International Holdings. On September 2, Judge Lewis Liman of the Southern District of New York granted in its entirety Turquoise Hill’s motion to dismiss the claims brought against the company and the three individual Turquoise Hill defendants. Judge Liman also granted in part and denied in part Rio Tinto’s separate motion to dismiss.

The claims were brought by Turquoise Hill shareholder the Pentwater Funds, and concerned the Oyu Tolgoi copper-gold mine in southern Mongolia. The complaint alleged that statements made in public disclosures by Turquoise Hill and Rio Tinto concerning Oyu Tolgoi’s underground development and production schedule, and $5.3 billion budget, were false and misleading. In his 134-page opinion, Judge Liman addressed nearly all of Paul, Weiss’s arguments, including our primary argument that the plaintiffs failed to adequately plead scienter against the Turquoise Hill Defendants. Judge Liman also concluded that many of Turquoise Hill’s alleged misstatements were non-actionable forward-looking statements, statements of opinion, or statements of corporate optimism.

The Paul, Weiss team includes, among others, litigation partners Gregory Laufer, who argued the motion, and Roberto Finzi, and counsel Robert Kravitz; and corporate partner Adam Givertz.