HUANG v. SONUS NETWORKS, INC. et al

Filing 62

Judge George A. O'Toole, Jr: OPINION AND ORDER entered granting 48 Motion to Dismiss (Halley, Taylor)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 16-10657-GAO
RICHARD SOUSA, individually and on behalf of all others similarly situated,
Plaintiff,
v.
SONUS NETWORKS, INC., RAYMOND P. DOLAN, and MARK T. GREENQUIST,
Defendants.

OPINION AND ORDER
June 6, 2017
O’TOOLE, D.J.
This putative class action alleges securities fraud by Sonus Networks, Inc. and two
individual executives of the company, Raymond A. Dolan, Sonus’s Chief Executive Officer, and
Mark T. Greenquist, Sonus’s Chief Financial Officer. In Count I of the First Amended Class Action
Complaint (dkt. no. 42), the plaintiff 1 alleges violations by all defendants of Section 10(b) of the
Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) (“Exchange Act”), and related Rule 10b–5,
17 C.F.R. § 240.10b–5. Count II alleges violations of Section 20(a) of the Exchange Act, 15 U.S.C.
§ 78t(a), by the individual defendants. The plaintiff contends that class members were harmed
when they purchased Sonus’s common stock at prices that were artificially inflated by the
defendants’ materially false and misleading statements concerning its revenue projection for the
first quarter of 2015 (“Q1 2015”).

1

The current named lead plaintiff, Richard Sousa, was appointed in 2015 in the place of the
original named plaintiff, Ming Huang, shortly before the action was transferred from the District
of New Jersey to this Court.

The defendants have jointly moved to dismiss the Amended Complaint. For the reasons set
forth herein, their motion to dismiss is GRANTED.
I.

Factual Background 2
The plaintiff alleges the following:
Sonus is a Massachusetts-headquartered company that provides hardware and software-

based tools to help businesses secure their internet and communication infrastructures. As the
industry has shifted toward wireless communications, Sonus has focused its business on softwarebased products.
Sonus has a sales force that sells its products directly to customers, and it also receives
sales support from regional channel partners. Quarterly, Sonus prepares a revenue forecast, which
relies on sales force members’ projected sales. To formulate those projections, each sales force
member forecasts both a “commit number,” the sales goal expected to be reached for the relevant
period, as well as a “stretch number,” representing a best-case scenario. (First Am. Class Action
Compl. ¶ 34 [hereinafter Am. Compl.].) There is no allegation concerning the quantitative distance
between the “commit” and “stretch” projections.
Throughout the year, sales force members track their sales by means of an internal software
program called Salesforce. The Amended Complaint alleges that, in general, sales employees have
daily contact with customers and are rigorous about submitting updates to Salesforce to track their
progress toward their sales targets.

2

Unless otherwise noted, the factual allegations outlined here are set forth in the Amended
Complaint and the documents incorporated by reference therein. The Amended Complaint
includes allegations from seven former Sonus employees, who are referred to as “FE1” through
“FE7.” It appears that five of these individuals left Sonus before the class period, and the remaining
two left in early 2015.
2

The Amended Complaint alleges three ways in which defendants Dolan and Greenquist
kept abreast of Sonus’s progress toward its revenue goal during the class period. First, they had
access to Salesforce and in fact accessed it during the class period. Second, sales personnel
provided regular progress reports to management, and the content of those reports was
communicated to defendants Dolan and Greenquist on a weekly basis. Third, defendant Dolan at
times took an active role in driving revenue by accompanying sales personnel to customer
meetings, including large customers like AT&T, and by himself conducting contract negotiations.
In July 2014, Sonus hired a new Vice President of Worldwide Sales, Michael Swade.
Swade implemented an “immediate change” to Sonus’s revenue forecasting policy: Sonus began
including more stretch numbers in the quarterly revenue forecasts. 3 (See Am. Compl. ¶ 36.) The
Amended Complaint alleges that employees were pressured to submit their stretch numbers as
commit numbers, and those who refused to do so, such as FE6, were fired.
The Amended Complaint alleges that Sonus made materially false and misleading
statements at two points during the class period, first on October 23, 2014, and later on February
18, 2015.
A.

The October 23, 2014 Earnings Call

On October 23, 2014, the first day of the claimed class period, Sonus disclosed during an
earnings call with analysts and investors its revenue forecast for Q1 2015. Defendant Greenquist
stated: “[W]e are also comfortable with the current consensus estimates for the first quarter of next
year of $74 million in revenue and a penny of non-GAAP EPS.” (Am. Compl. ¶ 40.) The reference

3

The Amended Complaint does not allege the percentage of the forecast that was based on stretch
numbers versus commit numbers. Nor, as noted above, is there any specific allegation of the
magnitude of any difference between stretch and commit projections. In any event, both numbers
when made were projections as to potential future results, and not verifiable computations of actual
results.
3

to “consensus estimates” can fairly be understood to be to estimates made by investment analysts
external to Sonus.
The Amended Complaint alleges that this disclosure was materially false and misleading
because all customer commitments for Q1 2015 had substantially been made at the time of the
earnings call, so that the defendants then had “complete visibility into first quarter, 2015,
revenues.” (Id. ¶ 38.) Specifically, the Amended Complaint alleges that the defendants knew that
large customers in the industry had moved toward longer decision cycles for their purchases, and
thus had set their budgets for the coming year by October of the preceding year. Furthermore, it is
alleged that the defendants, who were closely monitoring Sonus’s sales, knew that Sonus would
not be able to meet the stretch numbers included in the Q1 2015 revenue projection.
B.

The February 18, 2015 Press Release and Earnings Call

On February 18, 2015, Sonus issued a press release, which was also attached as an exhibit
to Sonus’s SEC Form 8-K, which reiterated the previous Q1 2015 forecast. The same day, in an
earnings call discussing the results for the fourth quarter of 2014 (“Q4 2014”), defendant
Greenquist stated: “Now, looking at Q1, we expect revenue to be approximately $74 million.”
(Am. Compl. ¶ 43.) Greenquist further noted:
[O]ur first quarter is more backend loaded than the past few years but the revenue
is also far more diversified. In short, we’re not dependent upon a single large deal
in the quarter. Instead, we have a number of good sized deals in our funnel that we
expect to close over the next few weeks.
(Id.)
The Amended Complaint alleges that these statements were materially false and misleading
because, at various points during Q4 2014 and Q1 2015, sales personnel expressed doubts as to
their ability to reach the stretch numbers included in the Q1 2015 revenue forecast. It further
alleges that defendants Dolan and Greenquist knew that a big miss was imminent because they
4

accessed Salesforce regularly, received weekly updates from Swade, who passed along the
misgivings of sales personnel, and because defendant Dolan was personally involved in closing
deals with customers. It is also alleged that the defendants knew of doubts as to whether a large
client, AT&T, would conclude a purchase during Q1 2015.
For substantially the same reasons, the Amended Complaint further alleges that cautionary
risk disclosures made during the February call (as during the October call) were themselves
materially misleading, and therefore not meaningful so as to preclude liability. 4
C.

The Announcement of the Shortfall and Post-Class Period Statements

About five weeks after the February call, on March 24, 2015, the last day of the alleged
class period, Sonus issued a press release that revealed a dramatic revenue shortfall for Q1 2015
compared to projections. Rather than the forecasted $74 million in revenue, Sonus actually took
in only about $50 million. Upon announcement of the miss, Sonus shares dropped from $13.16
per share to $8.70 per share.

4

These risk disclosure statements were made by Sonus’s Vice President of Investor Relations,
who at the beginning of both earnings calls stated:
As shown on slide 2, please note that during this call, we will make forwardlooking statements regarding items such as future market opportunities and the
company’s financial outlook. Actual events or financial results may differ
materially from these forward-looking statements and are subject to various risks
and uncertainties including without limitation, economic conditions, market
acceptance of our products and services, the timing of revenue recognition,
difficulties leveraging market opportunities, the impact of restructuring activities,
and our ability to realize the benefits of acquisition.
A discussion of these and other factors that may affect future results is
contained in our most recent Form 10-Q filed with the SEC and in today’s earnings
release, both of which are available on our web site. While we may elect to update
or revise forward-looking statements at some point, we specifically disclaim any
obligation to do so.
(See id. ¶¶ 45, 46.)
5

During an April 22, 2015, earnings call, Sonus representatives explained that the failure to
close deals from “four of our largest customers” led to a $12 million shortfall, with the remainder
of the shortfall due to “a large number of mid-size deals” having failed to be closed during the
quarter. (See Am. Compl. ¶ 54.) The Amended Complaint alleges that this statement contradicted
the February representation that the Q1 2015 projection was not dependent on a single large deal.
(See id. ¶¶ 43, 54.)
II.

Discussion
A.

Legal Standard

The defendants have moved to dismiss the Amended Complaint for failure to state a claim
upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6) and
the Private Securities Litigation Reform Act (“PSLRA”). For Rule 12(b)(6) purposes, in assessing
the sufficiency of the Amended Complaint, the Court accepts all well-pled factual allegations as
true. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). In general, to
survive a Rule 12(b)(6) motion, the supporting factual allegations must make each claim “plausible
on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation and internal quotation marks
omitted). However, to state a claim for securities fraud under Section 10(b) and Rule 10b–5, a
plaintiff must adequately plead: (1) a material 5 misrepresentation or omission; (2) scienter, or a
wrongful state of mind; (3) a connection with the purchase or sale of a security; (4) reliance; (5)
economic loss; and (6) loss causation. In re Stone & Webster, Inc., Sec. Litig., 414 F.3d 187, 193
(1st Cir. 2005) (citing Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341–42 (2005) (internal
quotation marks omitted)).

5

A fact is considered material if a reasonable investor would regard the fact as “significantly
alter[ing] the total mix of information made available.” Basic Inc. v. Levinson, 485 U.S. 224, 231–
32 (1988) (citations and internal quotation marks omitted).
6

In a securities case alleging fraud, the plaintiff must additionally satisfy the heightened
pleading standards of Federal Rule of Civil Procedure 9(b) and of the PSLRA. Greebel v. FTP
Software, Inc., 194 F.3d 185, 193 (1st Cir. 1999). The PSLRA requires a plaintiff to “specify each
statement alleged to have been misleading, [and] the reason or reasons why the statement is
misleading.” 15 U.S.C. § 78u–4(b)(1); accord Fire & Police Pension Ass’n of Colo. v. Abiomed,
Inc., 778 F.3d 228, 240 (1st Cir. 2015). The PSLRA also “imposes a rigorous pleading standard
on allegations of scienter.” Fire & Police Pension Ass’n of Colo., 778 F.3d at 240
(quoting ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 58 (1st Cir. 2008) (internal quotation
marks omitted)). The complaint must “state with particularity facts giving rise to a strong inference
that the defendant acted with the required state of mind.” 15 U.S.C. § 78u–4(b)(2)(A).
B.

Section 10(b) Claims

Evaluation of the defendants’ motion requires analysis of the specific statements (or
omissions) the plaintiff alleges to have been fraudulent under Section 10(b) and Rule 10b–5. See In
re Bos. Tech., Inc. Sec. Litig., 8 F. Supp. 2d 43, 55 (D. Mass. 1998).
i.

The October Statement

The defendants argue that defendant Greenquist’s October 2014 statement that
management was “comfortable with” outside analysts’ Q1 2015 revenue forecast for Sonus was
not misleading because it was merely non-actionable corporate puffery. “[C]ourts routinely have
declined to impose liability where company officers simply express their ‘comfort’ with analysts’
estimates.” Carney v. Cambridge Tech. Partners, Inc., 135 F. Supp. 2d 235, 253 (D. Mass. 2001)
(citing Colby v. Hologic, Inc., 817 F. Supp. 204, 212–13 (D. Mass. 1993)); see also Shaw v. Dig.
Equip. Corp., 82 F.3d 1194, 1218 (1st Cir. 1996), superseded by statute 15 U.S.C. § 78u–4(b)(2),

7

as recognized in Plumbers’ Union Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp.,
632 F.3d 762, 772 (1st Cir. 2011).
The plaintiff counters that the statement is actionable in light of the Supreme Court’s
decision in Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, which
found that an opinion statement may nevertheless be misleading to an ordinary investor if the
speaker either did not in fact hold the stated opinion, or omitted material facts that, if known by
investors, would lead them to doubt the reliability of the stated opinion. 6 135 S. Ct. 1318, 1328–
29 (2015). I conclude that the plaintiff has failed to sufficiently allege that Greenquist’s “comfort
statement” fits into either Omnicare exception.
First, the plaintiff has not adequately alleged that in October 2014 the defendants were not
in fact “comfortable” with analysts’ $74 million revenue estimate for Q1 2015, though they told
the market otherwise.
The plaintiff cites FE3, a former Senior Director of Communications Channel employed
by Sonus from 2011 to 2013, who stated that Sonus’s customers set their quarter-by-quarter
budgets for the coming year by October of the preceding year. The plaintiff also cites FE7, a
Regional Sales Director employed by Sonus from 2008 to 2013, who stated that once a sales
employee included a sale to a large customer in their “commit number,” given large customers’
lengthy decision cycles, rarely would such a sale fail to close. Therefore, the plaintiff alleges, the
defendants must have known that the Q1 2015 projection was false at the time defendant
Greenquist made his October 2014 “comfort statement.”

6

While Omnicare involved a claim under Section 11 of the Securities Act of 1933, the Supreme
Court noted that its analysis was not unique to Section 11. Id. at 1330. I therefore assume that it
applies to the claims made here.
8

The allegations of these former employees are not enough to meet the PSLRA’s heightened
pleading standard. Notably, the uncertainty alleged in the Amended Complaint as to the timing of
an expected purchase by a large customer, AT&T, tends to bely the claim that the defendants had
complete visibility into Q1 2015 as of October 2014. (See Am. Compl. ¶¶ 37, 39, 44(d), 48(c).)
On the one hand, the Amended Complaint seems to suggest that revenue projections could be made
on the basis of customer budgets firmly set by October; on the other hand, it seems to recognize
that there could be contingencies, such as whether or when a sale to AT&T might be finalized, that
could affect the certainty with which projections could be made. In this circumstance, a “musthave-known” inference is insufficiently supported by specific factual allegations.
In any event, without more detail, this allegation is too sweeping to support an inference
that the defendants themselves were not in fact “comfortable” with analysts’ Q1 2015 projection
in October 2014, so as to make such a statement misleading. The projections referred to in the
statement were, after all, not internal projections but rather the “current consensus estimates” of
outside analysts, presumably formulated on publicly available data. It is of course possible that the
defendants knew non-public information that would have made expression of comfort with those
external projections misleading, but the Amended Complaint falls short of alleging the necessary
specifics. For example, it fails to include any specifics as to how the defendants’ projection was
calculated, what stretch numbers were included, what the variance between commit and stretch
numbers aggregated to, and so on.
The plaintiff also relies on former sales employees’ statements, which were allegedly made
known to the defendants, that they would fail to reach their stretch numbers included in the Q1
2015 forecast and that Sonus would therefore fail to achieve the Q1 2015 revenue forecast. But
this again merely layers one generalized allegation upon another generalized allegation. Without

9

details as to the amount of stretch included in the forecast or how many sales employees reported
they would fail to reach their stretch numbers, a fact finder could not draw a strong inference that
the defendants’ expressed “comfort” with the analysts’ consensus was disingenuous and
purposefully or recklessly misleading. It is important to remember that the projection was not about
the quarter in which the October earnings call occurred, when failures to meet projected targets
might be ongoing and therefore more or less measurable, but rather were projections about a future
quarter. Projections by members of the sales force would be subject to the same endemic
uncertainty about future events as projections by management.
The factual allegations of the Amended Complaint are insufficient to warrant invocation
of the first Omnicare qualification on the opinion rule. The allegations are simply too vague to
support a strong inference that the defendants knew that they would be unable to meet the
expressed projections for Q1 2015 and thus knew that the opinion expressed in the October
statement was false and fraudulent.
As to the second Omnicare qualification, the plaintiff has also failed to adequately allege
that the defendants’ October 2014 statement was misleading for omitting material facts about how
the opinion was formed. As the Court in Omnicare recognized, “[a]n opinion statement . . . is not
necessarily misleading when an issuer knows, but fails to disclose, some fact cutting the other
way,” because “opinions sometimes rest on a weighing of competing facts.” 135 S. Ct. at 1329.
Again, the Amended Complaint relies only on general allegations of what the defendants must
have known about the data supporting (or not) the projections, and general allegations of this sort
are not enough. See Ezra Charitable Tr. v. Tyco Int’l, Ltd., 466 F.3d 1, 6 (1st Cir. 2006); Coyne v.
Metabolix, Inc., 943 F. Supp. 2d 259, 266 (D. Mass. 2013). Especially when accompanied by

10

cautionary statements, 7 a summary expression of comfort with the analysts’ forecast cannot,
without specific factual allegations undercutting the genuineness of that opinion, reasonably
support an inference of an intent to mislead.
The plaintiff’s attempted reliance on the Omnicare qualifications is not persuasive, and the
October statement expressing comfort with analysts’ Q1 2015 revenue forecast is properly
assessed as non-actionable corporate puffery. 8
ii.

The February Statements

The allegations in the Amended Complaint regarding the February statements, in which
Sonus announced that it expected Q1 2015 revenue of approximately $74 million, rely in large
part on the same facts alleged regarding the October statement. The plaintiff also points to FE6’s
firing in December 2014 (allegedly for refusing to include in her commit number sales that were
not going to close in Q1 2015) as evidence that the defendants knew the Q1 2015 forecast to be
incorrect as of the following February. The Amended Complaint additionally alleges that by
February sales personnel were expressing concerns about whether the AT&T deal would in fact
close in Q1 2015. With respect to these allegations, the Amended Complaint again most clearly
falls short because of the insufficiency of any allegations of scienter.
“[A] plaintiff may satisfy the scienter requirement with a showing of either conscious intent
to defraud or a ‘high degree of recklessness.’” ACA Fin., 512 F.3d at 58 (quoting Aldridge v. A.T.

7

At the beginning of the earnings call in which the statement expressing comfort with consensus
estimates was made, a Sonus representative identified risks and uncertainties, including “economic
conditions, market acceptance of our products and services, the timing of revenue recognition,
[and] difficulties leveraging market opportunities.” (Am. Compl. ¶ 45 (emphasis added).)
8
In the alternative, the defendants argue that the statement is protected by the PSLRA’s safe harbor
provision for forward-looking statements. See 15 U.S.C. § 78u–5. The plaintiff’s argument in
response fails for the reason discussed above—failure to adequately plead that “the maker of the
statements had actual knowledge [they were] false or misleading.” Greebel, 194 F.3d at
201 (citing 15 U.S.C. § 78u–5(c)(1)(B)).
11

Cross Corp., 284 F.3d 72, 82 (1st Cir. 2002)). To do this, a “plaintiff may combine various facts
and circumstances indicating fraudulent intent—including those demonstrating motive and
opportunity—to satisfy the scienter requirement.” In re Cabletron Sys., Inc., 311 F.3d 11, 39 (1st
Cir. 2002) (citations and quotations omitted).
The First Circuit has set out a non-exhaustive list of indicia often relied upon to support a
strong inference of scienter. See Greebel, 194 F.3d at 196. Even taking a generous view of the
Amended Complaint, at most three of the Greebel factors are relevant here: divergence between
internal reports and external statements, closeness in time of an allegedly fraudulent statement or
omission and the later disclosure of inconsistent information, and disregard of the most current
factual information before making statements.
While the presence of these factors “provides some circumstantial factual support to be
taken into account in determining whether the complaint pleads an adequate basis for inferring
defendants’ culpable knowledge,” Shaw, 82 F.3d at 1225, the alleged facts and circumstances on
which the Amended Complaint here relies are too general to support the requisite strong inference
with respect to the February disclosures.
The Amended Complaint is vague as to when the defendants became aware of facts that
should have made them aware of the falseness of their optimistic statements, a circumstance found
to weigh against a finding of a strong inference of scienter in In re Ariad Pharmaceuticals., Inc.
Securities Litigation, 842 F.3d 744, 754 (1st Cir. 2016). The complaint alleges only that the
defendants closely monitored Sonus’s sales, “were regularly updated” on the discussions at sales
meetings, and that the information from weekly sales meetings “was reported to [d]efendants.”
(See Am. Compl. ¶¶ 44(c), (d).)

12

The Amended Complaint also lacks details as to the degree by which sales forecasts were
allegedly inflated, and thus the extent of any foreseeable shortfall. A vague assertion that
defendants must have known something by virtue of their position of authority does not suffice to
adequately allege a strong inference of scienter. See Orton v. Parametric Tech. Corp., 344 F. Supp.
2d 290, 306 (D. Mass. 2004). Just as in Orton, the plaintiff’s narrative here, derived largely from
unnamed former sales representatives and managers, is “spotty and vague.” See id. at 307. The
absence of key details “is indicative of the excessive generality of these allegations.” Greebel, 194
F.3d at 204.
Furthermore, while proof of motive is not required to make out a claim under Section 10(b),
courts often look to a defendant’s possible motive for making a materially false or misleading
representation in assessing allegations of scienter. See In re Cabletron Sys., Inc., 311 F.3d at 39.
The plaintiff has not alleged any of the telltale motives that have been found to strengthen
an inference of scienter, such as insider stock sales or financial incentives far beyond the usual
compensation packages. See Greebel, 194 F.3d at 196; Brennan v. Zafgen, Inc., 199 F. Supp. 3d
444, 468 (D. Mass. 2016) (noting further that typical “incentives to increase a company’s earnings
and stock price exist for almost every executive at every company, especially . . . technology
companies” and thus fail to raise a strong inference of scienter). It is at least on the surface
implausible, and thus inconsistent with a strong inference of scienter, to conclude that the
defendants would intentionally make a revenue projection in February that they knew to be likely
wrong, with the almost certain prospect of having to publicly correct the projection just a little
over a month later. As the First Circuit noted in Local No. 8 IBEW Retirement Plan & Trust v.
Vertex Pharmaceuticals., Inc., “several facts strongly suggest that [the defendant] had no motive
to ignore an error that was obvious and that would therefore soon become known.” 838 F.3d 76,

13

84 (1st Cir. 2016). Such conduct might be consistent with fingers-crossed wishful thinking, but
that is quite a different mental state than the scienter required to support a cause of action for
securities fraud.
Here, as in Vertex, it would clearly have been better for Sonus to announce a modified
projection in February to prepare the market for the foreboding bad news rather than to stick with
what was looming as an inflated projection, only to shortly thereafter have to confess not just error,
but substantial error, thereby risking harm to “the company’s credibility and its reputation for
competence.” Id.
That the defendants erred with respect to the Q1 2015 projection is clear. However, under
the admonition against finding fraud by hindsight, general allegations “that defendants knew
earlier what later turned out badly” are not sufficient to plead scienter. Ezra Charitable Tr., 466
F.3d at 6 (quoting Gross v. Summa Four, Inc., 93 F.3d 987, 991 (1st Cir. 1996)); see also Serabian
v. Amoskeag Bank Shares, Inc., 24 F.3d 357, 361 (1st Cir. 1994) (“predictions about the future
that prove to be off the mark likewise are immunized unless plaintiffs meet their burden of
demonstrating intentional deception”). Without a strong inference of scienter, the plaintiff has not
alleged an actionable Section 10(b) claim. 9
C.

Section 20(a) Claims Against the Individual Defendants

Count II of the Amended Complaint alleges violations of Section 20(a) of the Exchange
Act, which provides a cause of action against any individual who exerts direct or indirect control
over a corporation that acts in violation of the securities laws. See 15 U.S.C. § 78t(a). Where, as

9

The defendants raise two additional grounds for dismissal not discussed herein: failure to plead
loss causation and protection under the PSLRA’s safe harbor. However, because the plaintiff has
not adequately pled scienter, these grounds for dismissal need not be addressed.
14

here, the complaint fails to adequately plead an underlying violation of the securities laws, the
Section 20(a) claims must also be dismissed. Greebel, 194 F.3d at 207.
D.

Leave to Amend

The plaintiff has requested, in a footnote on the final page of the opposition to the
defendants’ motion to dismiss, leave to amend the complaint “[i]n the event the Court is inclined
to grant Defendants’ Motion to Dismiss.” (Pl.’s Mem. in Opp. to Defs.’ Mot. to Dismiss 21 n.15
(dkt. no. 51).)
The plaintiff has already been granted leave to amend once. The original Complaint was
filed on April 6, 2015, the current lead plaintiff was appointed on June 5, 2015, and an Amended
Complaint was filed on May 4, 2016. Accordingly, the plaintiff had approximately eleven months
between the filing of the initial complaint and the Amended Complaint to thoroughly investigate
the claims alleged. Furthermore, the plaintiff was put on notice of the deficiencies in the Amended
Complaint by the motion to dismiss, but has made no suggestion that new information has been
discovered such that amendment would not be futile.
Under these circumstances, dismissal with prejudice is appropriate and the plaintiff’s
request to be allowed to replead is denied. See ACA Fin., 512 F.3d at 57 (rejecting plaintiffs’
argument that district court erred in denying leave to amend because “[p]laintiffs took no action to
add new allegations” in response to defendants’ motion to dismiss, and noting that allowing such
a practice would “lead to delays, inefficiencies, and wasted work”).

15

III.

Conclusion
In light of the foregoing, the defendants’ Motion to Dismiss (dkt. no. 48) is GRANTED.

This action is dismissed in its entirety.
It is SO ORDERED.
/s/ George A. O’Toole, Jr.
United States District Judge

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