The United Association National Pension Fund is seeking additional discovery in a securities class action accusing Ernie Garcia III of helping inflate Carvana’s stock price while his father, Ernest Garcia II, sold approximately $3.6 billion in shares. Plaintiffs allege that false and misleading financial statements issued between May 2020 and July 2022 artificially boosted stock prices, benefiting insider sales. Carvana’s stock declined sharply in May 2022, dropping 18% and prompting layoffs of more than 2,500 employees, followed by an additional 1,500 layoffs in November 2022.
With the April class certification deadline approaching, plaintiffs are seeking communications related to Garcia III’s knowledge of or benefit from his father’s sales, arguing he stood to inherit proceeds through a family trust. Carvana disputes the claim, asserting the sales were made individually and that extensive discovery has already produced no evidence of misconduct. U.S. Magistrate Judge John Z. Boyle said he will review trust documents before ruling and ordered a discovery compromise allowing plaintiffs to request specific batches of emails. The parties also continue to dispute access to records from Securities and Exchange Commission investigations in 2019 and 2025, which plaintiffs say are relevant to the case.
This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.
