Hain Celestial Investors Win New Shot at ‘Channel Stuffing’ Suit

Hain Celestial Group Inc. investors who say it misled them about an alleged “channel stuffing” scheme will get another try to hold the company liable after the Second Circuit revived their securities suit Friday.

Investors accuse the organic and natural foods company, known for its Celestial Seasonings line of herbal teas, of not telling them it had increased sales by offering customers unsustainable incentives. The lower court’s dismissal was based in part on a “mistaken understanding of the substance of the alleged offense,” the U.S. Court of Appeals for the Second Circuit said.

The investors alleged violations of SEC ...