Schipper v. Cisco Systems, Inc. et al

Filing 92

ORDER by Judge ARMSTRONG denying 89 Motion for Extension of Time to Amend (lrc, COURT STAFF) (Filed on 4/16/2013)

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UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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OAKLAND DIVISION

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In re CISCO SYSTEMS INC. SECURITIES

Case No: C 11-1568 SBA

10 LITIGATION
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This Document Relates To All Actions.
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ORDER DENYING PLAINTIFFS’
ADMINISTRATIVE MOTION FOR
AN EXTENSION OF TIME TO
FILE SECOND AMENDED
COMPLAINT

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Dkt. 89
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This is a consolidated securities fraud class action under the Securities Exchange Act

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of 1934 brought against Cisco Systems, Inc., and two of its executives, John Chambers and

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Frank Calderoni. On April 5, 2013, the Court entered its Order granting Defendants’

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motion to dismiss the Consolidated Amended Complaint (“Amended Complaint”) with

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leave to amend. Dkt. 88. Among other things, the Court found that the Amended

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Complaint failed to satisfy the heightened pleading requirements of Federal Rule of Civil

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Procedure 9(b) and the Private Securities Litigation Reform Act (“PSLRA”), 15 U.S.C.

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§ 78u-4(b). The Court gave Plaintiffs twenty-one days (i.e., until April 26, 2013) to file a

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Second Amended Complaint.1 Pursuant to Civil Local Rule 6-3, Plaintiffs have now filed

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an administrative motion requesting a thirty-day extension to file their amended pleading.

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Dkt. 89. Defendants have timely filed an opposition to the motion. Dkt. 90.

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The Order was filed on March 29, 2013, and entered into the civil docket on April
5, 2013. See In re Cisco Sys. Sec. Litig., No. C 11-1568 SBA, 2013 WL 1402788 (N.D.
28 Cal. Mar. 29, 2013).
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Civil Local Rule 6-3 requires that the movant establish, inter alia, “the reasons for

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the requested enlargement or shortening of time” as well as “the substantial harm or

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prejudice that would occur if the Court did not change the time[.]” In effort to make such a

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showing, Plaintiffs present three reasons for the proposed extension which are discussed

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seriatim.

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First, Plaintiffs contend that they need additional time to file a Second Amended

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Complaint “so that [they] may thoroughly review and digest” the Court’s ruling, which

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“directs plaintiffs to plead scienter and falsity with the requisite particularity and consider

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eliminating repetitive allegations.” See Pls.’ Mot. at 3, Dkt. 89. The Court finds Plaintiffs’

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purported justification unpersuasive. The Court ruling succinctly and systematically

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identifies the deficiencies in the pleadings, based on well settled Supreme Court and Ninth

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Circuit authority, as well as decisions by this Court, interpreting the PSLRA.2 As such, the

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Order should be easy to “digest” by any competent attorney who regularly practices in the

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area of securities litigation.

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Second, Plaintiffs claim that they need additional time to “renew [their] prior

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investigation” in attempt to secure new evidence to support their showing of falsity and

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scienter. See Mot. at 3. In particular, Plaintiffs posit that given the amount of time that has

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elapsed since the filing of the Amended Complaint, “more former Cisco employees may

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now be willing to come forward with facts corroborating plaintiffs’ allegations and other

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facts corroborating plaintiffs’ allegations may have come to light.” Id. (emphasis added).

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As an initial matter, Plaintiffs’ apparent belief that an extension of time will yield more

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evidence to justify their claims is entirely unsupported and speculative. Indeed, given that

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Plaintiffs already have had almost a year to investigate their claims, their assertion that

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Notably, the Court’s 27-page Order is approximately one-fifth the length of the
Amended Complaint and around the same length as the moving and opposition papers filed
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additional time will yield additional, probative information is, at best, wishful thinking.3

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Perhaps more fundamentally, under Rule 11 of the Federal Rules of Civil Procedure,

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Plaintiffs were required to have completed their investigation before filing suit, not after.

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See Christian v. Mattel, Inc., 286 F.3d 1118, 1127 (9th Cir. 2002) (noting that under Rule

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11, “[t]he attorney has a duty prior to filing a complaint . . . to conduct a reasonable factual

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investigation”) (emphasis added). If Plaintiffs lacked the requisite information to allege

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their claims in the manner required by the PSLRA and Rule 9(b) when they filed suit, they

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should not have sued Defendants in the first instance.

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Third, Plaintiffs argue that they need additional time to prepare a Second Amended

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Complaint because “one of the two attorneys” assigned to the case is going on maternity

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leave (Maureen Mueller) and the other attorney (Chris Seefer) is occupied with other cases.

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Mot. at 3. Ms. Mueller and Mr. Seefer are with the law firm of Robbins Geller Rudman &

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Dowd LLP (“Robbins Geller”), which was appointed as lead counsel upon motion of

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Plaintiffs. See Pls’ Mot. for Consolidation, Appointment of Lead Plaintiff and Approval of

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Selection of Counsel, Dkt. 37; Order ¶ 4, Dkt. 57. The Firm Resume filed in support of that

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motion states that “Robbins Geller Rudman & Dowd LLP . . . is a 180-lawyer firm with

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offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C.,

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Philadelphia and Atlanta[.]” McCormick Decl. Ex. E at 1, Dkt. 38-5. Thus, it is clear that

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Robbins Geller has an ample number of attorneys to assist Plaintiffs in meeting the deadline

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to file a Second Amended Complaint. The Court also notes that in addition to Ms. Mueller

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and Mr. Seefer, at least two other attorneys from Robbins Geller have filed pleadings in this

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action. In view of these resources, Plaintiffs’ assertion regarding the difficulties arising

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from the unavailability of Ms. Mueller and Mr. Geller rings hollow.

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The Class Period originally ran from May 12, 2010 to February 9, 2011. Compl.
¶ 1, Dkt. 1. Fifty days elapsed from the end of the Class Period until Plaintiffs filed their
Complaint on March 31, 2011. Another 297 days elapsed from March 31, 2011 until
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Plaintiffs had 346 days to investigate the factual bases of their claims and to prepare their
28 Amended Complaint.
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Finally, the Court finds that granting Plaintiffs’ request would be prejudicial to

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Defendants. The purpose of the PSLRA is “to deter the filing of so-called strike suits—

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frivolous securities class actions that put defendants to the unappealing choice of settling

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claims, however meritless, or risking extravagant discovery and trial costs.” Freeman Inv.,

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L.P. v. Pacific Life Ins. Co., 704 F.3d 1110, 1114 (9th Cir. 2013). To that end, the

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PSLRA’s heightened requirements serve “to weed out meritless lawsuits at the pleading

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stage.” In re Immune Response Sec. Litig., 375 F. Supp. 2d 983, 1016 n.11 (S.D. Cal.

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2005). Extending Plaintiffs’ deadline to file a Second Amended Complaint so that they can

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“renew” their investigation contravenes the goals of the PSLRA, particularly in light of the

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ample amount of time Plaintiffs already have had to investigate their claims prior to filing

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their Amended Complaint.

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For the reasons stated above,

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IT IS HEREBY ORDERED THAT Plaintiffs’ Motion for an Extension of Time to

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File Second Amended Complaint is DENIED. This Order terminates Docket 89.
IT IS SO ORDERED.
Dated: April 16, 2013

_____________________________
SAUNDRA BROWN ARMSTRONG
United States District Judge

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