Lululemon poised to defeat pant lawsuits, judge’s draft decision dismisses cases

NEW YORK, N.Y. – Lululemon Athletica Inc. appeared poised to defeat a class action lawsuit filed against the company over a recall of its black Luon pants last year because they were too sheer.

U.S. Judge Katherine Forrest has released a draft decision that proposes the case be dismissed.

The lawsuit by shareholders accused the athletic-wear company of failing to disclose the quality defects in its Luon yoga pants.

It also accused the company of making misleading statements and omissions that caused its stock price to become artificially inflated.

However, the draft decision by Forrest says many of the statements were “simple puffery” by the company and that no reasonable investor would base their decisions on them.

Forrest also proposed dismissing a second lawsuit against 13 current or former Lululemon directors or executives for breaking securities laws. In that case, the executives and directors including former chief executive Christine Day and chairman Chip Wilson are accused of breach of their fiduciary duty and gross mismanagement.

Forrest is expected to hold a hearing to review the proposed decisions before making them final.