On April 27, 2010, the Honorable Douglas P. Woodlock of the United States District Court for the District of Massachusetts (the "Court") granted summary judgment in favor of Shearman & Sterling's clients, Boston Scientific Corporation and certain of its current and former executives, in a Section 10(b) securities class action (In re Boston Scientific Corporation Securities Litigation, No. 05-11934-DPW, 2010 WL 1704043 (D. Mass. Apr. 27, 2010). The Plaintiff, Mississippi Public Employees' Retirement Systems ("PERS"), alleged that the defendants withheld material information and made misleading statements about certain of Boston Scientific's coronary stent systems; when some of those stents were subsequently recalled, the Company's stock price dropped 10.3%.

In its opinion, the Court found that plaintiff had failed to sustain its burden on all three issues that were the subject of defendants’ motion— scienter, materiality and loss causation. The crux of the case was what the defendants knew and disclosed regarding a deflation issue with some of the balloons used to deploy the stents ("no deflate")—the issue that led to the recalls. The Court found that no reasonable jury could conclude that the defendants knew of or recklessly disregarded a "significant risk" of no deflate, or that defendants were aware of the likelihood of recalls until shortly before they occurred. The Court found plaintiff’s insider trading allegations to be equally unavailing on the ground that there was nothing suspicious or unusual about the timing or amount of the individual defendants’ stock sales during the class period. The Court also granted summary judgment on the element of materiality, holding that although materiality is an "intensely fact-specific" question, it was appropriate to resolve the issue in this case at the summary judgment stage because it was "clear" that the market was aware of the "no deflate" problem. Last, the Court determined that plaintiff had failed to show that the alleged misrepresentations caused its alleged economic loss.

The Shearman & Sterling attorney team included partners Stuart J. Baskin (New York-Litigation), John Gueli (New York-Litigation) and Kirsten Nelson Cunha (New York-Litigation), and associates Christopher R. Fenton (New York-Litigation), Rebecca Boon (New York-Litigation), Kyla J. Stewart (New York-Litigation), Mary L. Runkle (New York-Litigation), Andrew B. Stephens (New York-Litigation) and Casey O'Neill (New York-Litigation).