Securities Fraud Class Action Decision Reversed: Lead Plaintiff's Claims Against Charles River Laboratories Found Plausible

Strategic Insights -

State Teachers Retirement System of Ohio's (State Teachers) securities-fraud class action against Charles River Laboratories International, Inc. (Charles River) has been reversed by the 1st U.S. Circuit Court of Appeals, which found that State Teachers plausibly alleged that Charles River knowingly misled investors about problems in its supply chain. The lead plaintiff alleged that Charles River's statements on November 30, 2022, were false and misleading because they conveyed that Charles River was not impacted by the federal indictment of a Vanny Group official, when in fact key sources of Charles River's macaques were targeted by the indictment. The appeals court agreed with State Teachers that it had plausibly alleged that Charles River's statements were made knowingly or recklessly as to their misleading nature.

Key Takeaways:

  • The 1st U.S. Circuit Court of Appeals reversed the district court's dismissal of the securities-fraud class action against Charles River Laboratories International, Inc.
  • State Teachers plausibly alleged that Charles River knowingly misled investors about problems in its supply chain through its November 2022 statements.
  • The court found that State Teachers had adequately alleged that Charles River's statement was misleading and that it was made knowingly or recklessly as to its misleading nature.
  • State Teachers also argued that Charles River's repeated statements in SEC disclosures that it "may" be required to source macaques from "non-preferred vendors" were misleading, but the court found insufficient allegations to support this claim.
  • The court declined to reach the issue of loss causation and instead left it to the district court to consider in the first instance.
  • The decision was appealed from a decision by Casper, J., in the U.S. District Court for the District of Massachusetts.

Statistics:

  • November 2022: Date of Charles River's allegedly misleading statements
  • 1st U.S. Circuit Court of Appeals: Reversed the district court's dismissal of the securities-fraud class action
  • 26 pages: Length of the opinion (Lawyers Weekly No. 01-173-25)
  • Aug. 15, 2025: Date of the opinion (Docket No. 24-1705)

Sources:

  • State Teachers Retirement System of Ohio v. Charles River Laboratories International, Inc., et al. (Lawyers Weekly No. 01-173-25)
  • 15 U.S.C. 78u-4(b)(1)(B)
  • Mass. Ret. Sys. v. CVS Caremark Corp., 716 F.3d 229, 238 (1st Cir. 2013)