Page 27 - Katten 2019 Annual Review

Client Collaboration 25 Annual Review

NATERA, INC. CASE STUDY

Katten Securities Litigation partners Bruce Vanyo, Christina Costley, Richard Zelichov and associate Paul Yong, obtained
a significant victory for genetic testing company Natera, Inc., with a complete dismissal with prejudice of a Section 11
(IPO) claim in San Mateo County Court.

Challenge Outcome

Natera, a leading genetic testing company that develops and commercial- Katten obtained what we understand to be the
izes noninvasive methods for analyzing DNA, faced claims against its first dismissal with prejudice of a Section 11
July 2015 initial public offering (IPO). Plaintiffs alleged that Natera’s (IPO) claim in San Mateo County Court. As many
offering documents were false and misleading because they failed to commentators have observed, in the wake of
disclose Natera’s financial results for 2Q2015, which ended just two the Supreme Court’s 2018 decision in Cyan,
days before its registration statement became effective. plaintiffs have increasingly looked to California
state courts to litigate Section 11 cases.
Solution

The Katten team represented Natera and certain of its directors and officers
in four securities class actions consolidated in the Superior Court of the
State of California for the County of San Mateo that asserted claims under
the Securities Act of 1933 in connection with Natera’s IPO. As a matter of
first impression, the team argued that Cyan, Inc. v. Beaver Creek Employees
Retirement Fund (Cyan) required the Superior Court to apply federal
substantive law to stay all discovery until and unless plaintiffs stated a
viable claim for relief. We subsequently moved to dismiss, then moved for
judgment on the pleadings. On August 7, 2018, the Court issued a 10-page
decision adopting our arguments and dismissing all claims, without
allowing discovery.