A class action lawsuit against MakerBot - the desktop 3d printer company based in Brooklyn, acquired by Stratasys - which claimed the company misled customers and investors about its 3d printers, has been dismissed.
With the release of the company's 5th generation Replicator 3d printer came a myriad of complaints from customers that the extruders were faulty and clogging up all too often, which in turn affected Stratasys stock, which in turn led to the lawsuit.
“In this case, as in so many securities‐fraud cases, the Court has struggled with the question of whether the complaint adequately alleges scienter,” the verdict from a Minnesota court read today. “The Court has no difficulty finding that plaintiffs’ allegations create a reasonable inference of scienter. Unfortunately for plaintiffs, however, the PSLRA requires a strong inference of scienter—and, for the reasons described above, the Court finds that plaintiffs’ allegations fall short of creating such an inference. In addition, the Court finds that almost all of the statements regarding the quality of the 5G printers were inactionable puffery. The Court therefore dismisses plaintiffs’ complaint.”
(Scienter is a legal term that refers to intent or knowledge of wrongdoing. This means that an offending party has knowledge of the "wrongness" of an act or event prior to committing it.)
The court also mentioned former MakerBot employees that stated the company had known about faulty printers before releasing them to the public, stating that the specificity and the timeframe of their claims was too vague, particularly because a product was being developed and therefore issues are to be expected along the way.
“In fact, just about the only statements regarding the quality and features of the 5G printers that are potentially falsifiable (and thus actionable) are statements that the 5G printers provide ‘unmatched speed’ and are MakerBot’s ‘fastest’ 3D printers…But plaintiffs do not allege any facts demonstrating that the 5G printers are not faster than MakerBot’s other printers or other desktop 3D printers on the market,” the court wrote.