NEWS - DISMISSAL OF LAWSUIT
Court Dismisses Class Action Lawsuit Against Chromatics
NEW YORK, April 27 /PRNewswire/ -- The United State District Court for the Southern District of New York has dismissed a shareholders class action lawsuit filed in 1998 against Chromatics Color Sciences International Inc. (Nasdaq: CCSI) and four of its officers. The company announced the ruling today when the plaintiffs failed to re-plead their complaint within 30 days after the court conditionally granted the defendants' dismissal motion on March 20, 2000.
The class action suit had alleged that the defendants artificially inflated the price of CCSI's stock through false and misleading public statements made between July 30, 1997 and June 9, 1998. The statements -- nine press releases and a Form 10-K -- largely concerned the proprietary technology and the development, marketing and distribution plans and market size estimates for the company's ColorMate(R) TLc-BiliTest(R) System, a pain-free, non-invasive device for monitoring bilirubin infant jaundice in newborns.
In the dismissal ruling issued by Judge Sidney H. Stein, the court found that, regarding each of the company's statements at issue, "plaintiffs have either not sufficiently specified the reasons that the statements were misleading, thereby failing to satisfy Rule9(b) and the PSLRA(Private Securities Litigation Reform Act)'s heightened pleading standard, or failed to specify a reason that would be actionable under Section 10(b)."
Addressing several of the allegations of false statements, the court said, "(E)ach of the allegedly false statements ... is a factual statement whose truth is not in question. None of the statements were statements of optimism or even statements about promises regarding the future. They were factual statements about past events which included no promises as to the future and as such, plaintiffs have not adequately explained the basis on which the statements were false and misleading when made."
Addressing other allegations, the court said, "truthful statements about company policy or a course of action that is being pursued are not actionable and do not necessarily constitute promises to maintain the policy in the future."
CCSI Chief Executive Officer Darby Macfarlane commented, "We regard the court's ruling as due justice for the Company, its officers and many others who have labored so hard to bring our non-invasive, pain-free monitoring system to the medical community. We especially thank our legal counsel, Stuart Gerson of Epstein Becker & Green, who superbly represented CCSI in this litigation. Our Company's credibility was viciously challenged and we were determined to fight for the truth against such unfounded allegations. It is inspiring to have justice prevail."
CCSI began manufacturing its ColorMate(R)TLc-BiliTest(R) System in early 1999 and, during the second half of the year, began shipping the product to its distribution partner, Datex-Ohmeda and its Ohmeda Medical Division. Ms. Macfarlane said, "We are very pleased with the accelerated acceptance of the product since its recent launch by our distributor to the medical community."
CCSI also is investigating other medical and non-medical applications of its color science technology. Earlier this month, the Company announced it has entered into an agreement to acquire Gordon Laboratories, a privately-held manufacturer of cosmetic products.
Chromatics Color Sciences is in the business of color science.....
Certain of the matters discussed in this announcement contain forward-looking statements.... |
