On January 14, 2022, Judge William H. Orrick of the Northern District of California denied a motion to dismiss a putative securities class action asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, against a lithium battery development company (the “Company”) and certain of its executives (collectively, “defendants”). In re Quantumscape Securities Class Action Litigation, No. 3:21-cv-00058-WHO (N.D. Cal. Jan. 14, 2022). The Company’s “solid-state” battery is an aspiring competitor to conventional lithium-ion batteries for use in electric vehicles. The Court denied defendants’ motion to dismiss, holding that the Complaint was adequately plead with the exception of one of the challenged statements that it dismissed.

The Complaint alleged that defendants falsely represented the progress and effectiveness of the Company’s solid-state batteries and relied on two publications to support their claims. First, a January 4, 2021 publication authored by an expert who reviewed a December 2020 showcase by the Company revealed that, notwithstanding that the Company “had some successes,” the Company “had ‘overstated’ certain” of its capabilities, concluding, among other things, that the Company’s solid-state batteries were “completely unacceptable for real world field electric vehicle performance.” Second, an April 15, 2021 publication stated, among other things, that the Company’s testing of its solid-state...

Read Full Story: https://www.jdsupra.com/legalnews/northern-district-of-california-denies-1511...