MILWAUKEE, Wis. (Legal Newsline) - Solar power company Generac says class action lawyers who targeted it over a drop in stock value are "hindsight critics."
Two shareholder class actions are consolidated in Milwaukee, Wis., federal court before Judge Brett Ludwig. He's picked Robbins Geller as lead counsel and a Tampa, Fla., firefighters and police pension fund as lead plaintiff.
The lawsuit allege Generac and senior executives concealed information from investors regarding a defective SnapRS component on its solar power products that allegedly overheat, melt and start fires.
"Their 132-page complaint is effectively three separate securities actions," the company said in an Oct. 9 motion to dismiss.
"Each quibbles over nearly every public statement that Defendants made during a 19-month period - amidst the unprecedented COVID-19 pandemic - concerning (1) consumer demand for Generac's home standby generators, (2) a specific solar energy component, or (3) the Company's dealer distribution network.
"Tellingly, the Complaint does not allege that Defendants' statements were actually false. Instead, Plaintiffs complain that Defendants' public statements allegedly omitted information about which Plaintiffs now speculate in hindsight."
The complaint fails, under the standards of the Private Securities Litigation Reform Act of 1995, to identify each misleading statement made by the company, the motion says.
"Rather than satisfy that requirement, the Complaint quotes extensively from Defendants' public disclosures (118 statements in all), ticks off laundry lists of reasons the statements were supposedly misleading (22 purported reasons in all), and leaves the Court and Defendants to guess which reasons apply to which statements," the motion says.
"This is exactly the kind of 'puzzle pleading' warranting dismissal."
The plaintiff lawyers claim that the defendants knew that the component, which was installed on thousands of homes, was defective and dangerous. The plaintiffs also claim several consumer complaints were filed with regulators regarding the defective SnapRS without Generac issuing warnings to investors or consumers.
They also allege the defendants misled investors about the company's financial conditions and about its dependence on "channel partners" to sell, service and install the solar battery systems. The plaintiffs allege that due to the defendants' actions, Generac stock shares declined by 8%.