Ninth Circuit Dismisses For Lack Of Jurisdiction Non-Lead Plaintiff's Appeal From The Dismissal Of A Putative Class Action Against Medical Device Company

• Published date: 19 January 2024
• Law Firm: Shearman & Sterling LLP
• Author: Shearman & Sterling LLP

On October 11, 2023, a divided panel of the United States Court of Appeals for the Ninth Circuit dismissed for lack of standing an appeal from the dismissal of a putative class action asserting claims under the Securities Exchange Act of 1934 against a medical device company and its former CEO. Habelt v. iRhythm Technologies, Inc., —F.4th—, 2023 WL 6614359 (9th Cir. 2023). Lead plaintiff alleged that the Company made misrepresentations regarding the regulatory process prior to the company receiving a historically low Medicare reimbursement rate for one of its products. After the district court granted defendants' motion to dismiss, lead plaintiff declined to appeal. However, the individual who filed the initial complaint in the action (but did not make a motion for appointment as lead plaintiff, or thereafter participate in the action) sought to appeal. The majority of the three-judge panel held that appellant was not a party to the action and therefore dismissed the appeal for lack of jurisdiction. In a dissenting opinion, Judge Mark J. Bennett opined that appellant should be deemed a party and that, even if he were not a party, exceptional circumstances existed to justify finding that he had standing to appeal (and, on the merits...