In December 2014, Kessler Topaz was appointed co-lead counsel on behalf of two institutional lead plaintiffs and a putative class of investors in SeaWorld Entertainment, Inc. (“SeaWorld”). The action asserts claims on behalf of investors in SeaWorld regarding the company’s issuance of materially false and misleading statements concerning SeaWorld’s business. For decades, SeaWorld has kept orca whales in captivity and used them as performers in animal entertainment shows at its theme parks. The documentary film ‘Blackfish,’ released in 2013, portrayed SeaWorld’s treatment and use of orcas in a harshly negative light. ‘Blackfish,’ seen by millions of people around the world, sparked widespread public outcry and protests about SeaWorld’s animal treatment practices and orcas-as-entertainment business model. At the same time, attendance at SeaWorld theme parks – an important factor in SeaWorld’s revenues – turned sharply downward, and celebrity and corporate partners severed ties with the company. SeaWorld repeatedly asserted, however, that the film and the related public backlash was having no effect on the company’s business or attendance at its parks. Lead Plaintiffs claim that these representations by SeaWorld were false, and that when the falsity of these statements was finally revealed in August 2014, and the company’s stock price fell by approximately 33%, SeaWorld shareholders were harmed. After the case was initially dismissed with leave to re-plead, in 2016 Kessler Topaz, on behalf of the Lead Plaintiffs, successfully re-pled the complaint and argued to the federal court in San Diego, California, that the case should go forward. The court agreed, sustained the case over SeaWorld’s motion to dismiss, and in late 2016 merits discovery began.
On June 23, 2017, SeaWorld disclosed in a filing with the U.S. Securities and Exchange Commission (SEC) that it had received subpoenas from the United States Department of Justice and the SEC “concerning disclosures and public statements made by the Company and certain executives and/or individuals on or before August 2014, including those regarding the impact of the ‘Blackfish’ documentary, and trading in the company’s securities.” Kessler Topaz, on behalf of Lead Plaintiffs, subsequently filed a notice with the court indicating that the federal investigations concern the same events that are at issue in the ongoing securities litigation led by Kessler Topaz, and news outlets have also linked the federal investigations with the shareholder litigation (https://www.thestreet.com/story/14194454/1/feds-investigating-seaworld-for-blackfish-documentary-statements.html). Kessler Topaz will continue to monitor these investigations while it vigorously pursues merits discovery and the successful resolution of this case at trial.