DaVita, Inc.

Case Details

Class Period: August 5, 2015 - October 21, 2016
Date Filed: Feb 01, 2017
Case Number: 1:17-cv-00304
Jurisdiction: District of Colorado

Case Summary

The Complaint brings forth claims for violations of the Securities Exchange Act of 1934. The Complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects.

Specifically, the Complaint alleges that, throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company and its senior executives purposefully steered patients into unnecessary insurance plans in order to maximize profits; (2) the Company was using AKF as a vehicle to facilitate these improper practices; (3) as a result, DaVita’s revenues and profits were illegally obtained; (4) in turn, DaVita lacked effective internal controls over financial reporting; and (5) as a result of the foregoing, Defendants’ statements about DaVita’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis.

On November 6, 2017, the Court appointed the Peace Officers’ Annuity and Benefit Fund of Georgia and the Jacksonville Police and Fire Pension Fund as Lead Plaintiff.

On January 12, 2018, Lead Plaintiffs filed their Amended Complaint, alleging that Defendants engaged in a fraudulent scheme to illegally steer dialysis patients away from Medicare and Medicaid and into more lucrative commercial insurance plans for DaVita’s own financial gain, artificially inflating DaVita’s stock price in violation of the federal securities laws. On March 27, 2018, Defendants filed a motion to dismiss the Amended Complaint.  Lead Plaintiffs filed their opposition to Defendants’ motion on June 6, 2018, and Defendants filed their reply on July 20, 2018.

Based on Defendants’ raising of new arguments in their reply, on August 1, 2018, Lead Plaintiffs filed a motion for leave to file a sur-reply, which was granted by the Court.  Lead Plaintiffs filed their sur-reply on August 3, 2018.

On March 28, 2019, Saxena White secured a major victory with the Court denying Defendants’ motion to dismiss in its entirety. The Court determined that “DaVita expressly disclaimed steering and publicly attributed success to other factors, while fully cognizant that it had a policy of directing ESRD patients to private insurance and internal metrics to demonstrate its success in directing patients.” The Court found that the facts alleged in the complaint “give rise to a strong inference that Defendants made statements about steering and the source of Defendants’ financial success with the intent to manipulate, deceive, or defraud, or were reckless because their statements presented a danger of misleading buyers.”

The case is now in the discovery phase.