Posted Mar 22, 2011 03:21 pm CDT
The U.S. Supreme Court is allowing an investor lawsuit that claims the makers of Zicam should have disclosed reports that the cold remedy caused a loss of smell, even though the reported incidents weren’t statistically significant.
Justice Sonia Sotomayor wrote the opinion (PDF) for a unanimous court. The manufacturer, Matrixx Initiatives Inc., had argued there was no material misrepresentation supporting a suit under federal securities laws.
“We conclude that the materiality of adverse event reports cannot be reduced to a bright-line rule,” Sotomayor wrote. The decision affirms a ruling by the San Francisco-based 9th U.S. Circuit Court of Appeals.
The case is Matrixx Initiatives v. Siracusano.