Adobe Inc. has once again prevailed in court after a Manhattan federal judge refused to let investors revive a proposed class action accusing the software giant of misleading shareholders about competition from Figma Inc. ahead of its abandoned $20 billion acquisition.

U.S. District Judge John G. Koeltl ruled Friday that the investors’ latest bid to amend their complaint “recites exactly the same alleged false and misleading statements” as their previously dismissed filing — merely adding a new set of claims that still fail to meet the legal bar.

Court Rejects “Market Illusion” Argument

The investors’ fresh theory centered on Adobe’s total addressable market (TAM) — an estimate of potential revenue if the company captured its entire market. They argued Adobe had inflated this figure by including Figma’s market segment, misleading shareholders about its growth prospects.

Judge Koeltl, however, dismantled that reasoning.

“The plaintiffs’ argument fails because it erroneously assumes that Adobe’s TAM estimates reflect the share of the market Adobe might actually capture,” he wrote.

The judge pointed to Adobe’s 2018 revenue of $9 billion against a projected TAM of $128 billion for 2022, saying no “reasonable investor” would interpret that as Adobe claiming it could capture ten times its revenue within four years.

Fallout From the Figma Acquisition

Investors alleged that Adobe secretly sought to buy out Figma to neutralize a competitive threat to products like Photoshop, Illustrator, and Adobe XD — and ultimately paid a “shocking” $20 billion, the largest deal of its kind.

After the acquisition was announced, Adobe’s market value reportedly plunged by $30 billion, signaling investors’ loss of confidence in the company’s growth strategy. The plaintiffs claimed this drop revealed Adobe’s vulnerability in the design software market.

However, regulators — including the U.K. Competition and Markets Authority and the U.S. Department of Justice — later applied intense antitrust scrutiny, leading Adobe to abandon the acquisition altogether.

No Actionable Misstatements, Court Says

When dismissing the original complaint in March, Judge Koeltl found the plaintiffs failed to show any misleading statements or concrete losses tied to Figma’s competition. He reiterated that stance Friday, stating that “the plaintiffs have not alleged that competition from Figma caused any lost sales or decline in revenue.”

Counsel for Adobe declined to comment on the decision. Attorneys for the investors did not respond to requests for comment.

Legal Teams

The investors are represented by Robbins Geller Rudman & Dowd LLP and Pomerantz LLP, while Adobe is defended by Latham & Watkins LLP.