GERALD FORSYTHE, individually and on behalf of all others similarly situated v. Teva Pharmaceutical Industries Ltd

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________________
No. 23-8050
_______________________
GERALD FORSYTHE, individually and on behalf of all
others
similarly situated
v.
TEVA PHARMACEUTICAL INDUSTRIES LTD; EREZ
VIGODMAN; EYAL DESHEH; ROBERT KOREMANS;
MICHAEL DERKACZ; KARE SCHULTZ; MICHAEL
MCCLELLAN; BRENDAN O’GRADY,
Petitioners
_______________________
On Petition for Permission to Appeal
Pursuant to Federal Rule of Civil Procedure 23(f)
from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 2-20-cv-04660
District Judge: The Honorable Karen S. Marston
__________________________
Submitted Under Third Circuit L.A.R. 34.3
December 4, 2023

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Before: SHWARTZ, CHUNG, and SMITH, Circuit Judges.
(Filed: May 16, 2024)
Melissa Blanco
Mathieu Shapiro
Obermayer Rebmann Maxwell & Hippel
1500 Market Street
Centre Square West, 34th Floor
Philadelphia, PA 19102
James P. Smith, III
Kerry C. Donovan
Winston & Strawn
200 Park Avenue
New York, NY 10166
Daniel M. Blouin, Esq.
Linda T. Coberly, Esq.
Winston & Strawn
35 W Wacker Drive
46th Floor
Chicago Il 60601
Counsel for Defendants - Petitioners
Robert W. Killorin
Faruqi & Faruqi
3565 Piedmont Road NE
Building Four
Suite 380
Atlanta, GA 30305

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Timothy J. Peter
Faruqi & Faruqi
Suite 1550
1617 John F. Kennedy Boulevard
Suite 1550
Philadelphia, PA 19103
James M. Wilson, Jr.
Faruqi & Faruqi
685 Third Avenue
26th Floor
New York, NY 10017
Counsel for Lead Plaintiff - Respondent Gerald Forsythe
____________________
OPINION OF THE COURT
____________________
SMITH, Circuit Judge.
Teva Pharmaceuticals Industries Ltd. and several of its
officers (“Teva”) seek our permission to appeal the District
Court’s Order granting class certification. Teva argues that
interlocutory review is proper under Federal Rule of Civil
Procedure 23(f)1 because the Petition presents a novel legal
1 Fed. R. Civ. P. 23(f) specifies that:
A court of appeals may permit an appeal from an order
granting or denying class-action certification under this
rule, but not from an order under Rule 23(e)(1). A party

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issue, the resolution of which will advance the development of
class certification jurisprudence in securities cases, and
because the District Court erred in its predominance analysis
with respect to Lead Plaintiff Gerald Forsythe’s proposed class
wide damages methodology. Because the securities issue does
not relate directly to the requirements that must be met for class
certification, and as we agree with the District Court’s
predominance analysis, interlocutory review is not appropriate.
We will deny the Petition.
I. BACKGROUND
Forsythe asserted claims under Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934 (the “Exchange Act”)
on behalf of himself and a putative class of “all those who
purchased or otherwise acquired Teva securities between”
October 29, 2015, and August 18, 2020. Appendix (“A”)-86-
87, A-605. He alleged damages resulting from misstatements
and omissions by Teva and its officers related to Copaxone, a
must file a petition for permission to appeal with the
circuit clerk within 14 days after the order is entered, or
within 45 days after the order is entered if any party is
the United States, a United States agency, or a United
States officer or employee sued for an act or omission
occurring in connection with duties performed on the
United States’ behalf. An appeal does not stay
proceedings in the district court unless the district judge
or the court of appeals so orders.

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drug manufactured by Teva which is used to treat multiple
sclerosis.2
As relevant to this petition, Teva’s shares are dual listed
on the New York Stock Exchange (“NYSE”) and the Tel Aviv
Stock Exchange (“TASE”). Shares purchased on the NYSE are
referred to as “American Depository Shares” (“ADSs”) and the
shares purchased on the TASE are termed “ordinary shares.”
Pet. at 9; Halman Aldubi Provident & Pension Funds Ltd. v.
Teva Pharms. Indus. Ltd., No. CV 20-4660-KSM, 2023 WL
7285167, at *1 (E.D. Pa. Nov. 3, 2023). Each ADS is
equivalent to one ordinary share.
Teva and its officers filed a motion to dismiss, which
the District Court granted as to one individual officer and
denied as to Teva and the remaining named officer-defendants.
The Court then granted Forsythe’s motion for class
certification.3 In doing so, and as relevant here, the Court
2 The allegedly false and misleading statements related to
Copaxone’s market share, Teva’s supposed compliance with
federal law, and a program which assists patients in obtaining
insurance coverage for the drug.
3 The District Court defined the class, A-605, as:
All persons or entities who purchased or otherwise
acquired Teva securities between October 29, 2015 and
August 18, 2020, inclusive, and were damaged thereby.
Excluded from the Class are the Defendants; the
officers, directors, and affiliates of Teva, at all relevant
times; Teva’s employee retirement or benefit plan(s)
and their participants or beneficiaries to the extent they

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analyzed Morrison v. National Australia Bank, Ltd., 561 U.S.
247 (2010), and rejected Teva’s assertion that the class
definition should exclude purchasers of ordinary shares. The
Court also rejected Teva’s argument that Plaintiff could not
satisfy Rule 23(b)(3)’s predominance requirement. Teva now
petitions for permission to appeal pursuant to Rule 23(f).
Teva first argues that the District Court’s conclusion as
to Morrison erroneously resolves a novel and unsettled
question of law and “open[s] the door to courts . . . applying . .
. U.S. securities laws extraterritorially” in a manner that will,
“[a]t best, . . . sow significant confusion,” and at worst, “call[]
into question Morrison[] . . . itself.” Pet. at 11. Teva also
challenges the Court’s predominance analysis, asserting that
the Court’s reasoning as to Forsythe’s damages model would
render leading case law “a nullity” and perpetuate existing
“confusion among the lower courts.” Pet. at 19.4
II. DISCUSSION
purchased or acquired Teva securities through any such
plan(s); any entity in which Defendants have or had
controlling interest; immediate family members of any
excluded person; and the legal representatives, heirs,
successors, or assigns of any excluded person or entity.
4 The District Court had jurisdiction pursuant to Section 27 of
the Exchange Act, 15 U.S.C. § 78aa(a), and 28 U.S.C. § 1331.
We have “broad discretion to grant or deny timely petitions for
interlocutory review under Rule 23(f) and 28 U.S.C. §
1292(e).” Wolff v. Aetna Life Ins. Co., 77 F.4th 164, 171 (3d
Cir. 2023).

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Generally, we have jurisdiction only over appeals from
final judgments. See 28 U.S.C. § 1291. There are, however,
exceptions to this general principle.5 These exceptions are
narrow, and the “very narrowness of appellate jurisdiction is
designed to discourage piecemeal litigation.” In re NFL
Players Concussion Injury Litig., 775 F.3d 570, 575 (3d Cir.
2014) (internal citation omitted). Rule 23(f) provides a narrow
avenue for parties seeking to appeal grants or denials of class
action certification. But to understand the scope of Rule 23(f),
one must first understand its historical evolution.6
5 Consider: 28 U.S.C. §1292(a) (granting appellate jurisdiction
over certain types of interlocutory orders); 28 U.S.C. § 1292(b)
(allowing a district court to certify an order involving a
“controlling question of law as to which there is substantial
ground for difference of opinion” and where “immediate
appeal from the order may materially advance the ultimate
termination of the litigation”); Fed. R. Civ. P. 54(b) (permitting
a district court to certify “a final judgment as to one or more,
but fewer than all, claims or parties” for appellate review);
Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546
(1949) (permitting immediate appeal of an otherwise non-final
collateral order under certain circumstances).
6 As Chief Justice Warren aptly explained, appellate
jurisdiction “is dependent upon authority expressly conferred
by statute,” and the “jurisdictional statutes prevailing at any
given time are so much a product of the whole history of both
growth and limitation of federal-court jurisdiction . . . [that]
they have always been interpreted in the light of that history.”
Carroll v. United States, 354 U.S. 394, 399 (1957).

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Before the enactment of Rule 23(f), it was well settled
that class certification decisions were not appealable final
orders under 28 U.S.C. § 1291. Sullivan v. Pacific Indem. Co.,
566 F.2d 444, 445 (3d Cir. 1977). “Appellate courts were
generally reluctant to grant interlocutory review of class
certification orders,” and those courts that did so granted
review employing a variety of devices only in rare
circumstances. In re NFL, 775 F.3d at 576.7 Over time,
however, and as class-action litigation developed after the
1966 adoption of modern Rule 23, it became clear that serious
reforms were needed to permit appellate review of class-action
certification decisions.8
Rule 23(f) represented a “sea change.”9 Added in 1998
to provide a form of interlocutory review over class-action
certification decisions, Rule 23(f) was introduced because “the
7 One such example was the use of mandamus under the All
Writs Act, 28 U.S.C. § 1651(a). See In Re Rhone-Poulenc
Rorer, Inc., 51 F.3d 1293 (7th Cir. 1995). Consider also the
exercise of jurisdiction after a district court certified the non-
final, interlocutory order for appellate review pursuant to 28
U.S.C. § 1292(b). See Castano v. American Tobacco Co., 84
F.3d 734 (5th Cir. 1996). Use of the writ was “extraordinary,”
and the invocation of § 1292(b) was “rare.” In re NFL, 775
F.3d at 576.
8 See Robert H. Klonoff, The Decline of Class Actions, 90
WASH. U. L. REV. 729, 739 (2013).
9 ROBERT H. KLONOFF, CLASS ACTIONS AND OTHER MULTI-
PARTY LITIGATION: CASES & MATERIALS 697 (4th ed. 2017).

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class-action certification decision [itself] is often decisive as a
practical matter.” In re NFL, 775 F.3d at 577 (internal citation
and quotation marks omitted). Crucially, 23(f) was designed to
permit appeal in the sole discretion of the court of appeals. This
“unfettered discretion whether to permit the appeal [is] akin to
the discretion exercised by the Supreme Court in acting on a
petition for certiorari.” Fed. R. Civ. P. 23(f) advisory
committee’s notes (1998 amendments). The Advisory
Committee on Civil Rules envisioned that the courts of appeals
would “develop standards for granting review that reflect the
changing areas of uncertainty in class litigation.” Id. Our Court
did so.
In Newton v. Merrill Lynch, Pierce, Fenner & Smith,
Inc., 259 F.3d 154, 163-69 (3d Cir. 2001), as amended (Oct.
16, 2001), we set forth broad principles to guide our
interpretation of Rule 23(f), while also clarifying the standard
under which we would review a decision granting or denying
class certification. And in Rodriguez v. Nat’l City Bank, 726
F.3d 372 (3d Cir. 2013), we clarified the five circumstances
under which appellate review of an order granting or denying
class certification may be appropriate. These include: (1) when
denial of certification effectively terminates the litigation
because the value of each plaintiff’s claim is outweighed by the
costs of stand-alone litigation; (2) when class certification risks
placing inordinate pressure on defendants to settle; (3) when
an appeal implicates novel or unsettled questions of law; (4)
when the district court’s class certification determination was
erroneous; and (5) when the appeal might facilitate
development of the law on class certification. Id. at 376-77.
But interlocutory review is not appropriate in every
circumstance “when an appeal implicates novel or unsettled

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questions of law.” Id. at 377. It is true that this Court has
exercised its discretion under Rule 23 using a “more liberal
standard” than other courts of appeals. Laudato v. EQT Corp.,
23 F.4th 256, 260 (3d Cir. 2022) (citing Rodriguez). However,
the Advisory Committee made clear that though “[p]ermission
to appeal may be granted or denied on [any] basis . . . the court
. . . finds persuasive,” such “[p]ermission is mostly likely to be
granted when the certification decision turns on a novel or
unsettled question of law.” Fed. R. Civ. P. 23(f) advisory
committee’s notes (1998 amendments) (emphasis added). This
language clearly distinguishes such scenarios from those in
which the underlying litigation turns on a novel or unsettled
question of law. Those questions are usually best resolved
through dispositive motions, including motions for partial
summary judgment.
We thus reiterate that permission to appeal should be
granted where the certification decision itself under Rule 23(a)
and (b) turns on a novel or unsettled question of law, not simply
where the merits of a particular case may turn on such a
question. That approach is consistent with the narrow focus of
interlocutory review intended by the drafters of Rule 23(f). It
also adheres to the Supreme Court’s guidance. See Amgen Inc.
v. Conn. Ret. Plans & Trust Funds, 568 U.S. 455, 466 (2013)
(“[m]erits questions may be considered to the extent — but
only to the extent — that they are relevant to determining
whether the Rule 23 prerequisites for class certification are
satisfied”) (citing, among others, Advisory Committee’s 2003
Note on subd. (c)(1) of Fed. Rule Civ. Proc. 23, 28 U.S.C.
App., p. 144 (“[A]n evaluation of the probable outcome on the
merits is not properly part of the certification decision.”)

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(alteration in original)). And it is also in line with approaches
taken by our sister circuits.10
***
We turn to Teva’s petition. Teva first challenges the
District Court’s conclusion that the class definition should
include purchasers of ordinary shares purchased on the TASE.
Teva states that “the only way a holder of . . . ordinary shares
could be part of the class would be if they engaged in a
domestic transaction.” Pet. at 9 (cleaned up). Further, Teva
asserts that this case differs from other cases involving
“holders of TASE-traded ordinary shares” because there is no
corresponding claim asserted here “under . . . Israeli securities
10 See, e.g., Postawko v. Mo. Dep’t of Corr., 910 F.3d 1030,
1037 (8th Cir. 2018) (citing to Amgen); Stockwell v. City and
Cnty. of San Francisco, 749 F.3d 1107, 1113 (9th Cir. 2014)
(“[C]ourts must consider merits issues only as necessary to
determine a pertinent Rule 23 factor . . . [and] the limitation on
consideration of the merits to the relevant class certification
questions is of jurisdictional significance.”); CGC Holding
Co., LLC v. Broad & Cassel, 773 F.3d 1076, 1096 (10th Cir.
2014) (“[A] Rule 23 interlocutory appeal permits us to consider
the merits of the class’s claims only to the extent that they
overlap with the Rule 23 factors.”); Regents of the Univ. of Cal.
v. Credit Suisse First Boston, 482 F.3d 372, 381 and 381 n.11
(5th Cir. 2007); In re Lorazepam & Clorazepate Antitrust
Litigation, 289 F.3d 98, 106 (D.C. Cir. 2002) (“[R]eview is
inappropriate [where] arguments . . . are unrelated to class
certification.”); Waste Mgmt. Holdings, Inc. v. Mowbray, 208
F.3d 288, 293-294 (1st Cir. 2000); Prado-Steiman v. Bush, 221
F.3d 1266, 1275-76 (11th Cir. 2000).

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laws . . . alongside Exchange Act claims.” Pet. at 10. Teva
contends that, in deciding the issue of whether to “include
TASE purchasers in class actions against Israeli issuers absent
an Israeli law claim,” the District Court “opened the door to
courts . . . applying the U.S. securities laws extraterritorially to
transactions involving securities of a foreign issuer on a foreign
exchange based on the extent to which” the foreign securities
regime “defers to or mirrors the U.S. law[,]” rather than on
“whether or not any domestic transaction is involved.” Pet. at
10-11. Doing so, according to Teva, risks “sow[ing] significant
confusion” and may “call[] into question Morrison’s holding
itself[.]” Pet. at 11.
The Supreme Court concluded in Morrison that Section
10(b) does not provide an extraterritorial cause of action. 561
U.S. at 267 (a plaintiff can allege a Section 10(b) violation
based only on “transactions in securities listed on domestic
exchanges, and domestic transactions in other securities”). But
Morrison did not consider the applicability of Section 10(b) to
dual-listed securities, and the District Court acknowledged as
much. See A-566-68 (“[f]ew courts have addressed whether
Morrison should apply to cases involving the dual-listing
arrangement with Israel’s TASE in the traditional class
certification context,” and “Morrison did not consider the
applicability of Section 10(b) . . . [to] a security dual-listed
between the United States and Israel”); Halman Aldubi
Provident & Pension Funds Ltd., 2023 WL 7285167, at *8-9.
Here, Teva’s challenge amounts to a request to define
— at the class certification stage — the reach of Section 10(b)
of the Securities Exchange Act with respect to dual-listed
securities. But “to ask what conduct § 10(b) reaches . . . is a
merits question.” Morrison, 561 U.S. at 254. Novel as it may

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be, any question of whether or how Section 10(b) applies to
dual-listed securities does not directly relate to the
requirements of Rule 23(a) or (b), and thus need not be decided
at the class certification stage. Review under 23(f) is therefore
not appropriate.
Teva also challenges the District Court’s predominance
analysis. In essence, Teva argues that Forsythe’s proposed
class wide damages methodology is inconsistent with its theory
of liability. See Pet. at 15 (contending that “the [D]istrict
[C]ourt certified a class based on a methodology that measures
damages as a whole, without attributing damages to any one
particular theory”) (cleaned up). We disagree.
Under Rule 23(b)(3), damages must be “susceptible of
measurement across the entire class.” Comcast Corp. v.
Behrend, 569 U.S. 27, 35 (2013). This means that, at “the class-
certification stage . . . any model supporting a plaintiff’s
damages case must be consistent with its liability case[.]” Id.
(internal citation and quotation marks omitted). The plaintiff in
Comcast provided one integrated damages model that
encompassed four theories of liability. Id. at 37. But the
plaintiff could not parse out the damages attributable to the
only theory remaining in the case. Id. Because that remaining
theory raised class wide questions that were not relevant to the
other three theories of injury, the plaintiff’s damages model did
not match the remaining theory and the Court reversed the
certification of the class. Id. at 37-38.11
11 We recently applied Comcast in the securities context, albeit
in a non-precedential ruling. See Univ. of Puerto Rico Ret. Sys.
v. Lannett Co., No. 21-3150, 2023 WL 2985120, at *4 (3d Cir.

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Here, the District Court concluded that Forsythe’s
proposed damages model was consistent with his theory of
liability. The Court reasoned that the three “categories of
misstatements identified by [Forsythe] ultimately reach the
same theory of the case,” namely that “[d]efendants made
material misrepresentations and omissions[,] that [these]
misrepresentations [artificially inflated] Teva’s stock price[,]
and [that] the stock price declined when the truth emerged[,]
causing financial loss to [Forsythe] and the class.” A-594
(cleaned up) (internal citation omitted); Halman Aldubi
Provident & Pension Funds Ltd., 2023 WL 7285167, at *21.
The Court concluded that the proposed damages model — an
event study — is consistent with this theory, and noted that any
questions of “loss causation” or the “disaggregati[on of]
confounding factors to prove economic loss” need not be
determined at the class certification stage. A-598-99 (internal
citation omitted).
We agree with the District Court. As a starting point,
“[d]efendants agree that [a model] like the one proposed by
[Forsythe] is a common methodology in securities cases.” A-
598. And we perceive no error in the Court’s assessment of
Forsythe’s proposed damages model and its relation to the
Apr. 18, 2023) (unpublished). Unlike the Comcast plaintiff, the
Lannett plaintiff had only one liability theory and one damages
theory, id. at *3-4, and this liability theory “pair[ed] properly”
with the “single, long-accepted damages theory,” id. at *4. We
therefore affirmed the District Court’s order certifying the
class.

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proposed theory of liability.12 We also stress that Comcast
poses a low bar to class certification. See, e.g., Reyes v.
Netdeposit, LLC, 802 F.3d 469, 485 (3d Cir. 2015) (“it is
important for the [d]istrict [c]ourt to remember that an inability
to calculate damages on a class wide basis will not, on its own,
bar certification[,]” and a court “errs when it holds a plaintiff
seeking class certification to a higher standard of proof than
proof by a preponderance of the evidence”).13
For all of the foregoing reasons, we will deny the
Petition.
12 We reject petitioner’s attempt to recast the asserted
categories of misstatements as distinct theories of liability. The
District Court properly determined that even though it
dismissed one of three categories of misstatements which
“reach[ed] the same theory” of liability, “those misstatements
[were] part of the same, single theory of liability” and said
theory remained viable. A-594, A-596.
13 See also Strougo v. Barclays PLC, 312 F.R.D. 307, 313
(S.D.N.Y. 2016) (“Issues and facts surrounding damages have
rarely been an obstacle to establishing predominance in section
10(b) cases.”) (citations omitted).

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