Law Street Media

Nielsen Argues Against Class Certification in Shareholders’ Securities Suit

A man's eyes analze a graph.

Data analytics company Nielsen Holdings asserts that class certification is inappropriate in an opposition filed earlier this week in the Southern District of New York. The case concerns shareholder allegations that between July 2016 and 2018, the company and certain of its officers misled investors about the viability of its “buy” business, claiming it was stable while in reality it was in decline due to a drop in demand for Nielsen analytics products.

Previously, the court partly granted Nielsen’s motion to dismiss. After Judge Jesse M. Furman allowed certain claims to proceed, the plaintiffs filed a motion for class certification. Therein, they contended that certification is proper because they meet Federal Rule of Civil Procedure 23(a) and (b) requirements, including numerosity and common cause. The plaintiffs also claimed that they are entitled to use the fraud-on-the-market theory.

Now, Nielsen combats those arguments with its own theories that the plaintiffs “have not met the significant evidentiary hurdle to establish that questions of law or fact common to class members predominate over questions affecting individual members, that Plaintiffs’ claims are typical of the class, and that Plaintiffs will adequately represent the proposed class’s interests.”

The plaintiffs are not entitled to the fraud-on-the-market presumption because, according to Nielsen’s expert, the plaintiff expert’s analysis is irretrievably flawed. The defendant’s expert asserts that the competing report fails to contemplate “frictions that may impede market efficiency and relies on an unreliable, methodologically unsound event study that is incapable of demonstrating a cause-and-effect relationship between negative news about Nielsen and changes in Nielsen’s stock price.”

In addition, Nielsen argues that the plaintiffs fail to assert a viable method of computing damages capable of addressing case-specific issues. Their expert’s report, Nielsen says, falls short of addressing the “impact of confounding information on measurement of damages,” and provides no method of “calculating the inflation attributable to the surviving allegations.”

Finally, the opposition contends that the proposed class representatives are atypical and inadequate. The two lead plaintiffs, both institutional investors, are allegedly “subject to unique defenses concerning their knowledge and reliance, undermining their ability to represent the proposed class.” In addition, Nielsen urges that depositions revealed that neither plaintiff had more than a superficial understanding of the case.

The plaintiffs’ reply is due December 17. They are represented by Labaton Sucharow LLP and Robbins Geller Rudman & Dowd LLP. Nielsen is represented by Simpson Thacher & Bartlett LLP.

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