Investors filed separate suits in March and April alleging the cruise company claimed to prioritize guest safety while simultaneously instructing salespeople to downplay the chances the virus that causes Covid-19 could survive in the Caribbean.
The plaintiffs failed to allege NCL made any material misrepresentations or omissions, the court said.
Challenged statements about marketing strategy, a short period of improvement in bookings, and safety measures constitute “corporate puffery” because they are vague and “so broad that no reasonable investor would have relied on them to make a decision on whether to invest or not,” Judge Robert N. Scola Jr. said.
The statements don’t assert specific, verifiable facts that reasonable investors would rely on in deciding whether to buy or sell NCL stock, he said.
And the company acknowledged the pandemic’s impact on bookings during a conference call with analysts and investors, a press release, and securities filings, the court said.
No reasonable investor “would believe that a statement regarding a brief window of improvement in bookings during a global pandemic implied that all was well within the company and that its marketing strategies were not accounting for customer concerns regarding Covid-19,” it said.
Nor did the investors adequately allege NCL and top executives had the requisite intent to deceive or defraud them, the court said.
Additionally, the court said the statements fall within the Private Securities Litigation Reform Act’s safe harbor. They were accompanied by cautionary language about the financial effects of the Covid-19 pandemic on NCL, it said.
The plaintiffs allege the company’s stock fell 26.7% on March 11, 2020 after a news report that sales had fallen off due to the outbreak. The stock fell another 35.7% the next day, after a Washington Post story quoted a whistleblower saying “one of our own ratted,” the plaintiffs allege.
The suits were combined last May.
Robbins Geller Rudman & Dowd LLP was lead counsel for the plaintiffs. Holland & Knight LLP represented NCL.
The case is Douglas v. Norwegian Cruise Lines, S.D. Fla., No. 1:20-cv-21107, entered 4/12/21.