A First-Of-Its-Kind Denial of Class Certification in Enovix’s Securities Class Action

On April 21, 2026, Quinn Emanuel secured a decisive victory for battery-maker Enovix Corporation and its officers and directors, defeating class certification in a securities fraud action. 

In a carefully reasoned 22-page order, Senior Judge Susan Illston of the U.S. District Court for the Northern District of California denied certification of a proposed class of all purchasers of Enovix common stock over a two-year class period.  The precedent-setting decision applied the Supreme Court’s 2021 Goldman Sachs decision and found that the sole alleged misstatement remaining in the case had not actually impacted Enovix’s stock price.  This marks the first denial of class certification based on Goldman in the Ninth Circuit.  It is only the third such decision nationwide, out of about 40 analogous efforts to defeat class certification on Goldman grounds.

The dispute centered on factory acceptance testing (“FAT”) of equipment from a Chinese supplier, Yinghe, for Enovix’s first battery manufacturing line in Fremont, California (“Fab-1”).  Plaintiffs alleged that the Yinghe equipment never passed FAT and that Enovix—constrained by COVID-19 travel restrictions—waived FAT requirements before delivery to California, rendering later statements which failed to explain these issues false or misleading.  Plaintiffs pointed to three subsequent stock drops on November 1, 2022, January 3, 2023, and October 3, 2023—after which Enovix’s market capitalization decreased by approximately $2.25 billion—as purported corrective disclosures revealing the “truth.” 

Quinn Emanuel replaced prior counsel after Judge Illston permitted three alleged misstatements to survive the pleading stage.  Quinn Emanuel soon identified crucial deficiencies in Plaintiffs’ theory of falsity for two of those three statements and moved for partial judgment on the pleadings under Rule 12(c).  The briefing demonstrated how Plaintiffs had concealed the central problems with their case through cherry-picked quotations and omissions in their pleadings, and why the full context required judgment for Defendants.  Judge Illston granted Enovix’s motion in its entirety.  As noted in analysis by Law360, this victory was one of just four across 18 analogous motions over the past two years. 

Following the 12(c) victory, and with only a single misstatement left, Quinn Emanuel proceeded to oppose class certification.  In depositions, Quinn Emanuel secured concessions that a November 7, 2022 press release had revealed the allegedly omitted information, and when it did the stock price rose.  Through expert analysis by Professor Chris James, aided by Cornerstone Research, Quinn Emanuel demonstrated that no securities analysts had discussed the alleged misstatement or linked it to the alleged corrective disclosures.  Quinn Emanuel also delved deep into the structure of Enovix’s novel battery factory to explain to the Court how it operated, and ultimately marshalled all of these points to demonstrate that there was a complete mismatch between the alleged misstatement and the purported corrective disclosures.

Judge Illston agreed. She concluded that Defendants demonstrated that the alleged misstatement had no price impact, and therefore rebutted the Basic presumption of reliance. Without the presumption, each plaintiff would have to prove individual reliance, making class treatment impossible.  Though Plaintiffs relied heavily on the Ninth Circuit’s September 2025 Zillow decision—its first addressing mismatch under Goldman, in which it endorsed certification —Judge Illston correctly found the case before her was different, as the purported corrective disclosures in Zillow had brought to light the same information alleged to have made Zillow’s earlier statements misleading.  Judge Illston thus denied class certification in its entirety.

These rare back-to-back victories represent a significant achievement in securities defense litigation.  From the outset, Quinn Emanuel progressively narrowed and undermined plaintiffs’ case, reducing an action targeting three alleged misstatements and over $2 billion in market losses to a case concerning one alleged misstatement that cannot proceed as a class action.