Zicam Shareholder Class Action Lawsuit Revived

The 9th Circuit Court of Appeals in San Francisco has restored a shareholder class action lawsuit against Matrixx Initiatives officials. The original lawsuit alleged that Matrixx officials knew about Zicam’s association with anosmia or loss of smell. The lawsuit further alleged that besides knowing that Zicam may cause anosmia, Matrixx officials made false and misleading statements about their cold remedy product Zicam in order to improve sales.
“According to Matrixx’s own SEC filings,” shareholders claimed, “from late 2003 through October 2004 Matrixx has been sued by approximately 284 individuals in 19 different lawsuits alleging that Zicam caused damage to their sense of smell.”
In reversing the lower court dismissal of the Zicam class action lawsuit, one of the three judges, Judge Tashima noted that there was a strong “inference” that top company offiicials knew about the Zicam lawsuits and failed to disclose such to shareholders.