On May 19, 2022, Justice Borrok of the New York County Commercial Division issued a decision in Hipple v. Oatly Group AB, 2022 NY Slip Op. 50411(U), dismissing an action in favor of a first-filed federal action even though there was not a complete duplication of parties in both actions, explaining:
This action and the SDNY Action both involve allegations of violations of the Securities Act of 1933 (the 1933 Act) in connection with Oatly Group AB’s (Oatly) initial public offering on May 21, 2021 (the IPO). It does not matter that the lead plaintiff in the SDNY Action originally asserted claims under the Securities Exchange Act of 1934 and did originally assert claims under the 1933 Act. They have now. It is also of no moment that certain of the defendants in this action are not defendants in the SDNY Action. There is no prejudice to the plaintiff here by a stay of this action, and permitting this action to proceed simultaneously with the SDNY Action is a waste of judicial resources and risks inconsistent rulings. Nor can the plaintiff move forward here because its application to be appointed lead plaintiff in the SDNY Action was denied and another plaintiff appointed.
For completeness, although some of the allegations are based on different allegedly false or misleading statements, the gravamen of both actions is that the documents offered in connection with the IPO contained false, misleading, or incomplete statements that failed to disclose to investors a drop in Oatly’s output, growth, and market share. Undeniably, resolution of the SDNY Action shall dispose of or limit the issues to resolve in this action.
Lastly, and for the avoidance of doubt, the plaintiff’s reliance on In re Qudian Sec. Litig., 189 AD3d 449 (1st Dept 2020) is misplaced. In Qudian, the Appellate Division held that there was no basis for a stay because after the federal court dismissed certain of the claims asserted in the federal action and that the only claim remaining in the federal action concerned Dabai Auto which was not at issue in the state action, there was no overlap between the federal and state actions and, as such, no risk of inconsistent rulings. This is not the case here. Thus, a stay is appropriate.