The online review company successfully asked the court to dismiss other securities fraud claims against it in November.
But Judge Edward M. Chen of the U.S. District Court for the Northern District of California said Jan. 22 he didn’t err in keeping the remaining claims alive because of the independent argument that revelation of the true revenue figures caused Yelp’s stock price to drop.
Yelp argued that the court didn’t consider whether safe harbor protections for forward-looking statements made to investors, which doomed some of the suit’s claims, also applied to the investors’ loss causation arguments.
The court didn’t explicitly address that part of Yelp’s argument before, the judge said, but that isn’t dispositive.
Court rules allow reconsideration only where there’s a “material difference” in facts or law, new facts or law, or the court failed to consider “material facts or dispositive legal arguments” when it made its ruling.
The “premise of Yelp’s motion” is “flawed” because the investors’ argument over losses tied to the ad revenue figures didn’t rely solely on protected statements, the judge said. He denied the company’s motion to reconsider his earlier order.
Arnold & Porter Kaye Scholer LLP represented Yelp. Glancy Prongay & Murray LLP and Holzer and Holzer LLC represented the investors.
The case is Azar v. Yelp Inc., 2019 BL 20367, N.D. Cal., No. 18-cv-00400, 1/22/19.