A judge in a US court has dismissed a lawsuit against Lululemon Athletica that accused the company of duping its shareholders by concealing certain defects in some of its yoga pants.

The law suit resulted in an expensive recall and caused the retailer's stock price to fall in the stock market. Investors have accused the company of not disclosing that its black Luon yoga pants were too sheer, it had quality control issues and covered its inability to address shortfalls.

They also accused the Vancouver, British Columbia-baesd company of using discounts to boost market share and was hiding its plans to replace the then chief executive, Christine Day.

U. S. District Judge Katherine Forrest in Manhattan said in a draft decision that was released on Friday that the statements made by the company about the superior quality of Lululemon's products were neither intended to mislead nor untrue when they were made.

The lawsuit was filed after the customers discovered that the pants had Lululemon's proprietary Luon fabric that is see-through when worn. The lawsuit resulted in a recall in March 2013 and a loss of $2 billion of market value for the company.