Sating v. Rayonier Inc. et al
Filing
102
ORDER denying 85 , 86 , 87 , and 88 Defendants' motions to dismiss 84 Lead Plaintiffs' amended complaint; finding as moot 89 Lead Plaintiffs' motion to strike. Defendants shall file their answers to the amended complai nt by 6/23/16. The parties shall file a joint case management report by 7/29/16. A discovery and case scheduling conference is SET for 9/1/16 at 10:00 A.M. in Courtroom 10D, United States Courthouse, 300 North Hogan Street, Jacksonville, Florida. See Order for further details. Signed by Judge Timothy J. Corrigan on 5/20/2016. (SEJ)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
In re Rayonier Inc. Securities
Litigation
Case No. 3:14-cv-1395-J-32JBT
ORDER
In this consolidated private securities fraud class action, Defendants Rayonier,
Inc., Lynn Wilson, Hans Vanden Noort, and Paul Boynton move for the second time to
dismiss the case on the grounds that Lead Plaintiffs Pension Trust Fund for Operating
Engineers and the Lake Worth Firefighters’ Pension Trust Fund have failed to
adequately plead their claims under the various applicable pleading standards. (Docs.
85, 86, 87, 88). The Court earlier granted Defendants’ first motions to dismiss the
consolidated class action complaint and allowed Lead Plaintiffs leave to amend. (Doc.
80). Defendants argue that Lead Plaintiffs have again failed to adequately plead that
the allegedly fraudulent statements were false or misleading when made and were
made with scienter. Lead Plaintiffs respond that they have more than met their
heightened pleading obligations. (Doc. 90). Defendants filed a joint reply in support of
their motions. (Doc. 92).
In addition, Lead Plaintiffs filed a motion to strike the declaration of a
(formerly) confidential witness, arguing that Defendants improperly submitted a
declaration that cannot be considered at the pleadings stage.1 (Doc. 89). Defendants
1
In that declaration, Larry Davis (referred to as “CW5”) recants several key
jointly responded (Doc. 91), and, with the Court’s leave, Lead Plaintiffs replied (Doc.
95). On April 20, 2016, the Court held a hearing on all pending motions. (Doc. 101).
Even after hearing from both parties on the motion to strike, the precise
circumstances of Davis’s discussions with Lead Plaintiffs’ counsel and the
circumstances under which he provided the information in his declaration to
Defendants remain matters of debate. To support their argument that the Court
should consider Davis’s declaration, Defendants cite Campo v. Sears Holdings Corp.,
371 F. App’x 212 (2d Cir. 2010), in which (in dicta in a footnote) the Second Circuit
affirmed a district court’s decision to consider a confidential witness declaration in
conjunction with a motion to dismiss. However, having carefully reviewed Campo and
the related authority Defendants provided, the Court is unpersuaded that considering
the declaration or ordering that Davis be deposed is the proper course of action at this
time. Prevailing Eleventh Circuit case law seems to prohibit the Court from
considering Davis’s declaration without converting the motion to dismiss into a motion
for summary judgment, a course of action neither party requests. Trustmark Ins. Co.
v. ESLU, Inc., 299 F.3d 1265, 1267 (11th Cir. 2002) (“Whenever a judge considers
matters outside the pleadings in a 12(b)(6) motion, that motion is thereby converted
into a Rule 56 Summary Judgment motion.”). In addition, at the hearing, Lead
Plaintiffs’ counsel certified under Federal Rule of Civil Procedure 11 that they have a
“hundred percent” good faith basis to maintain Davis’s allegations as alleged in the
amended complaint. (Doc. 99 at 66).
statements attributed to him in the amended complaint. (Doc. 85-2).
2
Even taking into account the heightened pleading standards under the Private
Securities Litigation Reform Act and Eleventh Circuit precedent, the Court finds that
Lead Plaintiffs have met those pleading standards and will therefore deny Defendants’
motions to dismiss.2 Of course, the Court expresses no view of the ultimate merit of
Lead Plaintiffs’ claims.
Accordingly, it is hereby
ORDERED:
1.
Defendants Rayonier, Wilson, Vanden Noort, and Boynton’s motions to
dismiss (Docs. 85, 86, 87, 88) the Amended Consolidated Class Action Complaint (Doc.
84) are DENIED.
2.
Lead Plaintiffs’ motion to strike the declaration of a confidential witness
(Doc. 89) is MOOT.
3.
Defendants shall file their answers to the amended complaint by June
23, 2016.
4.
The parties may initiate discovery.
5.
The parties shall file a joint case management report, with specific
deadlines for all case events, and a detailed discovery plan by July 29, 2016.
6.
A discovery and case scheduling conference is SET for September 1,
2016 at 10:00 A.M. before the undersigned in Courtroom 10D, United States
Courthouse, 300 North Hogan Street, Jacksonville, Florida.3 The parties should be
In so doing, the Court is skeptical regarding the viability of the allegations
about merchantable timber inventory.
2
3
All persons entering the Courthouse must present photo identification to
3
prepared to discuss, among other things, the scope of discovery, the merchantable
timber inventory issue, and whether it is appropriate to delay class certification
practice pending a decision on any potential motions for summary judgment.
DONE AND ORDERED in Jacksonville, Florida the 20th day of May, 2016.
sj
Copies to:
Counsel of record
Court Security Officers. Although cell phones, laptop computers, and similar electronic
devices generally are not permitted in the building, attorneys may bring those items
with them upon presentation to Court Security Officers of proof of membership in The
Florida Bar or an Order of special admission pro hac vice.
4
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