We secured a complete victory for Lucid when we prevailed on our motion to dismiss

On January 11, 2023, the Northern District of California dismissed a putative securities class action brought by lead plaintiffs Paradigm Business Park, LLC and Sichao Xu against Lucid Motors and its CEO, Peter Rawlinson.

Lucid Motors is a publicly traded U.S. electric vehicle manufacturer that produces the Lucid Air, billed as the longest range, fastest charging luxury electric car in the world and named the 2022 MotorTrend Car of the Year. On February 22, 2021, Lucid became a public company through a merger with Churchill Capital Corporation IV (CCIV), a special purpose acquisition company (SPAC). After the merger, plaintiffs, who invested in CCIV stock, brought claims against Lucid and Mr. Rawlinson under sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, over statements they made about Lucid’s business and plans for production prior to the public announcement of the merger with CCIV.  

The lawsuit was originally filed on April 4, 2021, in federal court in Alabama by an individual shareholder. After the district court appointed lead plaintiffs, the case was transferred to the Northern District of California, where lead plaintiffs filed several iterations of their complaint. Davis Polk moved to dismiss on February 14, 2022. Among other things, Davis Polk argued that the alleged misstatements or omissions were immaterial as a matter of law because no reasonable investor in CCIV would have found that statements by Lucid, at a time when no merger or proposed merger had even been announced and when there was no other relationship between the companies, could have significantly altered the total mix of information available for purposes of making investment decisions in CCIV stock. Judge Gonzalez Rogers heard arguments on the motion on September 28, 2022, and granted the motion on January 11, 2023. In so doing, Judge Gonzalez Rogers agreed with Davis Polk’s argument that plaintiffs failed to show that the alleged misleading statements were material.

The Davis Polk litigation team includes partner Brian M. Burnovski (who argued the motion), counsel Daniel J. Schwartz and associates Chui-Lai Cheung and Micayla Hardisty. Partner Neal A. Potischman also provided advice. The members of the Davis Polk team are based in the New York and the Northern California offices.

Copy link to share post