Cleary Gottlieb represented trivago N.V. (trivago) in obtaining the affirmance of the dismissal of a putative securities fraud class action before the U.S. Court of Appeals for the Second Circuit.
On December 16, 2019, the Second Circuit affirmed Judge Naomi Reice Buchwald’s February 2019 decision dismissing in full the securities class action filed against trivago, an online search engine specializing in hotel bookings. In its summary order, the Second Circuit held that the plaintiff failed to plead that trivago had an obligation under Item 303 to make more specific disclosures concerning changes to its search algorithm prior to its 2016 IPO or in the following financial quarters. The Second Circuit thus affirmed the district court’s dismissal of plaintiffs’ claims under Section 11 of the Securities Act and Section 10(b) and 20(a) of the Exchange Act, holding that trivago had made a “cascade of disclosures” and warnings addressing the specific issue complained of by the plaintiffs, and that plaintiffs’ quibbles with trivago’s word choice were insufficient to constitute a violation of the securities laws. The Second Circuit further affirmed the district court’s holding that plaintiffs failed to adequately allege scienter for purposes of the Exchange Act.