Chung v. Eargo securities class action: the claims and how it ended

Where the Eargo case stands on 23 October 2026

The Eargo securities class action is over. Chung v. Eargo, Inc., No. 3:21-cv-08597, was a proposed investor suit before Judge Charles R. Breyer in the Northern District of California. He granted the defendants' motion to dismiss on 31 August 2023 (docket entry 126), and judgment followed on 12 October 2023 (entry 128). The lead plaintiffs filed a notice of appeal on 10 November 2023. According to the docket as last retrieved, a Ninth Circuit memorandum was entered on 10 January 2025 (entry 131), and law-firm and press summaries report that it affirmed the dismissal.

No class was certified, no settlement appears in the entries retrieved, and no claim form exists.

How the case began

Eargo sold a small, nearly invisible hearing aid, and its shares traded on Nasdaq under the ticker EAR after an initial public offering on or around 15 October 2020. On 4 November 2021, Alden Chung filed the first complaint, naming Eargo, Inc. and two of its executives, Christian Gormsen and Adam Laponis. Six days later a second investor suit, IBEW Local 353 Pension Plan v. Eargo, Inc., No. 3:21-cv-08747, was filed in the same court and assigned to the same judge. Its docket cites the Securities Act of 1933, and it widened the list of defendants to include directors and the banks that underwrote the offering.

The two suits ran together. The motion to dismiss was later briefed against a consolidated amended complaint, and the lead plaintiffs of record in the appeal were Xiaobin Cai and IBEW Local 353 Pension Plan. That is why appellate summaries call the matter Cai v. Eargo while the district docket still carries the Chung name.

What the complaint alleged

Investors alleged that Eargo's insurance customers were not the dependable source of revenue the company described. As summarised by the plaintiffs' counsel, the complaint says insurers would not cover claims for the product at the level Eargo told the market, and that a substantial portion of claims submitted to its largest third-party payer were improper and likely to draw regulatory scrutiny. From that, the complaint says, positive statements about the business and its 2021 financial guidance were misleading.

The pleading was split in two. Claims under the Securities Act of 1933 targeted the IPO prospectus, including its language on revenue recognition, risk factors and growth, and a statement that the company assessed insurance eligibility. Claims under the Securities Exchange Act of 1934 targeted later public statements, among them remarks describing a carrier's audit as routine. These are allegations as pleaded, and the courts did not accept them.

The class period

The class as pleaded ran from 15 October 2020, the IPO, through 22 September 2021, inclusive. A securities class period marks the window in which the stock was bought at a price the complaint says was inflated by the alleged misstatements. It closes on the date the price is said to have corrected. A reader checking whether the case ever covered a purchase can compare the purchase date with that window, though with a dismissal in place the question carries no consequence now.

The ruling and the appeal

Defendants moved to dismiss on 21 April 2023 (entry 111). Plaintiffs filed their opposition on 26 May and defendants replied on 23 June. The August hearing was vacated, a stipulation reset the hearing to 29 September 2023, and the court ruled on the papers on 31 August. Plaintiffs did not seek another round of amendments, according to the appellate summary, and appealed.

The Ninth Circuit's unpublished memorandum, as reported by the firm A&O Shearman, reasoned that insurers had reimbursed claims for years before the challenged statements, so the theory rested on hindsight. It treated the growth statements as puffery or optimism, found the risk disclosures adequate, and held that the plaintiffs had not pleaded the strong inference of intent that the Exchange Act claims require. It also noted that the chief executive and chief financial officer had increased their shareholdings during the class period.

How a case like this moves

Securities suits follow a fixed sequence under the Private Securities Litigation Reform Act: a notice invites investors to seek lead-plaintiff status, the court picks one, the lead plaintiff files a consolidated complaint, and the defendants move to dismiss before any discovery. The general mechanics of a class action lawsuit are explained on a separate page. Here the process ended at the pleading stage, which is the usual place for it to end or be tested.

A comparable investor case with a different outcome is the Revance securities litigation, where the Ninth Circuit appeal was dismissed in view of a contemplated settlement. The tracker also lists a biotech IPO case against Silverback Therapeutics that ended in a dismissal with prejudice.

What the docket does not show

The entries retrieved stop at the Ninth Circuit memorandum of 10 January 2025. No petition for rehearing or for review by the Supreme Court appears in them, and Eargo's later corporate history is outside this record. The full list of entries is on the CourtListener docket, where entry 126 holds the dismissal order.