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Class Action Suit Against American Apparel Dismissed

By Riley Guerin | Jan. 27, 2012
News

Law Office Management

Jan. 27, 2012

Class Action Suit Against American Apparel Dismissed

A Los Angeles federal judge dismissed a shareholder class action lawsuit against American Apparel.

A Los Angeles federal judge on January 13 dismissed a shareholder class action lawsuit against American Apparel that accused the clothing company of hiding the risks it faced by hiring a largely immigrant work force, the Daily Journal reported.

U.S. District Judge Margaret Morrow said that plaintiffs failed to allege that the company made false statements to investors on the effect of an immigration raid to its productivity, and failed to show that the company made false statements about its accounting practices, which is the subject of a Securities and Exchange Commission investigation. Plaintiffs, however, prevailed on its claim that the company made false statements about its efforts to follow immigration laws.

Morrow gave the plaintiffs 45 days to amend their complaint.

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Riley Guerin

Daily Journal Staff Writer
rguerin@journaltech.com

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