The theme park chain faced several lawsuits after the documentary detailed the dangers and cruelty inherent in keeping killer whales in captivity. But at least some of the company’s statements weren’t misleading, limiting investors’ claims, according to the California federal court opinion partially dismissing the case.
SeaWorld initially denied that the documentary was responsible for a 6 percent drop in visits to its parks during the first half of 2013. It blamed the decline on bad weather, conflicting school and holiday schedules, and new prices in 2013, the opinion said.
The company admitted in 2014 that California legislation aimed at curbing some of the problems identified in Blackfish had probably caused the ongoing attendance drop, according to the opinion.
The company should have known that the earlier drop in visits was related to the documentary, too, Highfields Capital I LP—which opted out of a securities class action over the Blackfish fallout—said. Other theme parks in the same regions faced the same weather, scheduling, and pricing issues, and saw their attendance increase, the investor alleged. And an SEC investigation showed the company’s executives were worried about the documentary’s effect even before its release, Highfields said.
But the visitor numbers for the other parks were for all of 2013, not just the first half, so they aren’t really comparable to SeaWorld’s attendance numbers, the opinion said. The company didn’t admit to the SEC findings, and worrying about Blackfish’s possible effects before it premiered doesn’t mean there was an effect later, according to the opinion.
The investor didn’t present any facts that actually demonstrate SeaWorld’s statements about the early 2013 decline were false when the company made them, so that part of the suit can’t go forward, the opinion said.
Highfields has until March 1 to file an amended complaint fixing the problems.
Judge Michael M. Anello of the U.S. District Court for the Southern District of California wrote the opinion.
Simpson Thacher & Bartlett LLP represented SeaWorld and several of its executives. Katten Muchin Rosenman LLP represented SeaWorld’s former CEO.
Lowenstein Sandler LLP represented Highfields.
The case is Highfields Capital I LP v. SeaWorld Entm’t Inc., S.D. Cal., No. 18-cv-1276, 2/7/19.
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