BlackBerry loses bid to dismiss BlackBerry 10 lawsuit in NY, fall trial possible

By Jonathan Stempel

NEW YORK (Reuters) – A U.S. judge on Monday rejected BlackBerry Ltd’s bid to dismiss a long-running lawsuit claiming it defrauded shareholders by inflating the success and profitability of its BlackBerry 10 smartphones, and said the class-action case could go to trial this fall.

U.S. District Judge Colleen McMahon in Manhattan said “genuine issues of material fact” remained in dispute in the more than eight-year-old case, including over BlackBerry’s accounting, and that “battle-of-the-experts” issues precluded her from ruling for one side or the other.

While the BlackBerry 10 won positive reviews from critics, the public preferred Android-based smartphones and Apple Inc’s iPhone, eventually leading to BlackBerry’s 2016 decision to stop making phones.

Shareholders accused the Waterloo, Ontario-based company, which now focuses on cybersecurity, of concealing BlackBerry 10’s true sales prospects in public statements during 2013, resulting in an inflated share price.

McMahon said that while criminal trials will maintain precedence over civil trials in her courthouse during the COVID-19 pandemic, she would “prioritize” the BlackBerry case because of its age.

The judge said her “best guess” was a trial could begin in September or October.

BlackBerry and its lawyers did not immediately respond to requests for comment. The shareholders’ lawyers did not immediately respond to similar requests.

Other defendants include former BlackBerry Chief Executive Thorsten Heins, former Chief Financial Officer Brian Bidulka and former Chief Legal Officer Steve Zipperstein.

In her 24-page decision, McMahon did strike four alleged BlackBerry misstatements from the case, saying the shareholders waited too long to object to them.

The case is Pearlstein v BlackBerry Ltd, U.S. District Court, Southern District of New York, No. 13-07060.

(Reporting by Jonathan Stempel; Editing by Sandra Maler)