Teladoc Wins Second Circuit Affirmance of Securities Class Action Dismissal

Paul, Weiss secured the Second Circuit’s affirmance of the March 2025 dismissal of a putative securities class action brought against our client Teladoc Health, Inc., over Teladoc’s integration with Livongo, a leading provider of virtual management of chronic disease, which Teladoc acquired in October 2020.

The plaintiffs brought claims in the U.S. District Court for the Southern District of New York under Sections 10(b) and 20(a) of the Securities Exchange Act, alleging that, following the merger, Teladoc experienced challenges in the integration of Livongo’s operations but misled shareholders about the success of its integration efforts.

In 2023, U.S. District Judge Denise Cote granted Teladoc’s first motion to dismiss the complaint, finding that the plaintiffs had not sufficiently alleged the element of falsity. The plaintiffs appealed portions of that order, and while the Second Circuit upheld the decision as to the majority of the challenged statements in September 2024, it reversed and remanded on four statements. On remand, Paul, Weiss brought a renewed motion to dismiss, arguing that the plaintiffs had not sufficiently alleged the elements of scienter or loss causation as to the four remaining statements. Echoing our arguments, Judge Cote again dismissed the case in 2025, finding that the plaintiffs’ allegations about executive stock sales did not allege motive to defraud, and that a strong inference of scienter also was not established from the plaintiffs’ confidential witness allegations. The plaintiffs again appealed to the Second Circuit.

On appeal, the Second Circuit affirmed the dismissal, largely agreeing with Paul, Weiss’s arguments as presented at oral argument in March 2026. The appellate court found that the plaintiffs failed to plead scienter, either by pleading motive to deceive, or by pleading facts showing that management had internal information that differed from public statements. The court also rejected the “core operations” doctrine invoked by the plaintiffs, holding that, even assuming that doctrine is viable, the integration-related issues were not sufficiently “core” to Teladoc’s operations that management’s knowledge could be assumed.

The Paul, Weiss team includes litigation partners Audra Soloway, who argued the appeal, Daniel Kramer and counsel Daniel Sinnreich.