Das v. IRobot Corporation et al

Filing 64

Judge William G. Young: ORDER entered. MEMORANDUM AND ORDER (Sonnenberg, Elizabeth)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________
)
)
)
)
)
Plaintiff,
)
)
v.
)
)
IROBOT CORPORATION,
)
COLIN M. ANGLE, and
)
JULIE ZEILER,
)
Defendants.
)
___________________________________)
PREMCA EXTRA INCOME FUND LP,
individually and on behalf of
all others similarly situated,

YOUNG, D.J.

CIVIL ACTION
NO. 24-11158-WGY

January 27, 2025
MEMORANDUM AND ORDER

I. INTRODUCTION
For the reasons stated below, defendants iRobot Corporation
(“iRobot” or “the Company”), Colin M. Angle (“Angle”) and Julie
Zeiler’s (“Zeiler”) Motion to Dismiss Premca Extra Income Fund’s
(“Premca”) First Amended Complaint, ECF No. 50, is hereby
ALLOWED and this action is DISMISSED with prejudice.
II.

BACKGROUND
A.

Procedural History

In this putative class action, Premca filed a First Amended
Complaint, First Am. Compl. Violations of Fed. Securities Laws
(“First Amended Complaint” or “FAC”), ECF No. 47, against

iRobot, Angle, and Zeiler (collectively “the Defendants”).

The

Defendants move to dismiss the First Amended Complaint pursuant
to Rule 12(b)(6) of the Federal Rules of Civil Procedure,
supported by a memorandum of law.

Defs.’ Mot. Dismiss Am.

Compl., ECF No. 50; Mem. Law Supp. Defs.’ Mot. Dismiss Am.
Compl. (“iRobot Mem.”), ECF No. 51.
exhibits.

The motion is supported by

App. Public Rs. Cited Mem. Law Supp. Defs.’ Mot.

Dismiss Am. Compl. (“iRobot Exhibits” or “iRobot Exs.”), ECF No.
52.

Premca filed a memorandum of law in opposition.

Pls.’

Opp’n Defs.’ Mot. Dismiss (“Premca Opp’n”), ECF No. 59.
Defendants filed a reply.

The

Reply Supp. Defs.’ Mot. Dismiss

(“Reply”), ECF No. 60.
The parties presented oral arguments at a hearing on
October 28, 2024.

See Elec. Clerk Notes, ECF No. 61; Mot.

Dismiss Tr., ECF No. 62.

The Court took the matter under

advisement. Id.
B.

Facts Alleged in the First Amended Complaint1
1. Merger Regulation Background in the United States
and the European Union

When companies intend to merge, they must file a premerger
notification report with the United States Federal Trade
Commission’s (“FTC”) Bureau of Competition.

FAC ¶ 29.

The facts are taken virtually verbatim from the First
Amended Complaint for completeness, but are not quoted for
readability.
1

[2]

Submission of the report triggers a 30-day waiting period before
the parties are allowed to effect the merger.

Id.

If the FTC

determines during that period that further inquiry is necessary,
the FTC issues a request for additional information and
documentary material (a “Second Request”).

Id. ¶ 31.

A Second

Request extends the waiting period for a specified period of
time, providing the FTC with the opportunity to analyze the
information and to take appropriate action before a transaction
is consummated.

Id.

If the FTC believes that a proposed

transaction may substantially lessen competition, the agency may
seek an injunction in federal district court to block the
transaction.

Id.

In 2022, the FTC issued Second Requests in 0.8% of cases.
Id. ¶ 32.

If the FTC determines that a merger is likely to

create anticompetitive effects, the FTC will attempt to
negotiate remedies with the merging parties to reduce or
eliminate such effects.

Id. ¶ 33.

Throughout the FTC’s review

of a potential transaction, the FTC Bureau of Competition
remains in regular contact with the merging companies.

Id.

In the European Union (“EU”), part of the EU’s executive
body, the European Commission (“EC”), regulates mergers.
34.

Id. ¶

Under Council Regulation (EC) No. 139/2004 (the “Merger

Regulation”) the EC only examines mergers with an EU dimension
that reach certain turnover (revenue) thresholds.
[3]

Id. ¶¶ 34-35.

If the merging companies exceed the turnover thresholds outlined
in the European Commission’s Merger Regulation, then it conducts
a full investigation.

Id. ¶ 36.

The first step for any EU merger is for merging parties to
notify the EC.

Id. ¶ 37.

The EC then has 25 working days to

analyze the proposed merger during the first phase of the
investigation (“Phase I”).

Id. ¶ 38.

More than 90% of all

cases are resolved in Phase I, generally without any requested
alterations to the proposed merger.

Id.

A Phase I review

generally will consist of requests for information from the
merging companies and questionnaires to competitors and/or
customers seeking their views on the merger.

Id.

The European

Commission keeps the merging companies informed about the
progress of the Phase I analysis and, toward the end of Phase I,
holds a “state-of-play meeting” with the merging companies where
the European Commission informs the companies of the results of
the investigation.

Id.

Similar to the FTC process, if the

European Commission has competition concerns, the merging
companies are able to offer remedies, which can extend the Phase
I deadline.

Id.

At the end of Phase I, the proposed merger is

either cleared, or the EC will open a Phase II investigation
(“Phase II”).

Id.

Phase II is a more intensive analysis.

Id. at ¶ 39.

A

Phase II review generally involves more extensive information
[4]

gathering, including companies’ internal documents, extensive
economic data, more detailed questionnaires to market
participants, and/or on-site visits.

Id.

A Phase II review

also analyzes claimed efficiencies which the companies assert
could be obtained by the proposed merger.

Id.

Similar to the

Phase I review, the EC updates the merging companies regularly
about the process.

Id.

If the EC concludes that the proposed

merger will likely impede competition, it sends a statement of
objections to the merging companies, informing them of the EC’s
preliminary conclusions.

Id.

The merging companies then have

the right to respond to a statement of objections in writing,
consult the European Commission’s case file, and request an oral
hearing conducted independently by a competition hearing
officer.

Id.

Following a Phase II investigation, the European Commission
will (1) unconditionally clear the proposed merger to proceed,
(2) approve the merger subject to remedies, or (3) prohibit the
merger if no adequate remedies to the competition concerns have
been proposed by the merging parties.

Id. ¶ 41.

In 2022, only

8 EC mergers, or 2.1%, involved a Phase II investigation.

Id. ¶

40.
2. iRobot Background
iRobot was founded in 1990 by Angle, Helen Greiner and
Rodney Brooks with a focus on developing and manufacturing
[5]

military and domestic robots.

Id. ¶ 45.

By early 2016,

iRobot’s revenue was generated solely by its domestic line of
robotic vacuum cleaners (“RVCs”), mainly the Roomba.

Id. ¶ 48.

After rapidly rising to the top of the RVC market, iRobot’s
dominant market share declined steadily beginning in 2014
through 2020.

Id. ¶ 49.

The COVID-19 pandemic briefly stemmed Roomba’s decline.
Id. ¶ 50.

The pandemic bump soon waned, however, and iRobot’s

revenue dropped almost as fast as it initially rose.

Id. ¶ 52.

In the quarters leading up to the merger with Amazon (“the
Merger”), iRobot’s revenue and margins declined consistently.
Id. ¶ 53.
3. August 2022 –- The Merger is Announced
On August 5, 2022, iRobot announced its Merger with Amazon
through a press release and filed with the SEC in a Form 8-K,
stating:
Today Amazon (NASDAQ:AMZN) and iRobot (NASDAQ:IRBT)
announced that they have entered into a definitive
merger agreement under which Amazon will acquire
iRobot. . . . Amazon will acquire iRobot for $61 per
share in an all-cash transaction valued at
approximately $1.7 billion, including iRobot’s net
debt. Completion of the transaction is subject to
customary closing conditions, including approval by
iRobot’s shareholders and regulatory approvals. On
completion, Colin Angle will remain as CEO of iRobot.
Id. ¶ 63.

[6]

The Amazon/iRobot merger agreement (“Merger Agreement”) was
filed with the 8K, dated August 4, 2022.

Id. ¶ 64.

The Merger

Agreement provided that iRobot and Amazon would notify each
other if any government entity made a request or commenced a
proceeding related to the Merger, and would keep each other
informed about the status of any governmental request.

Id. ¶

64.
The Merger Agreement also stated, among other things, that
iRobot and Amazon would use “reasonable best efforts” to
complete the Merger and to obtain regulatory clearance and
resolve regulatory objections, supply as promptly as reasonably
practicable any additional information and documentary material
requested or required, and contest any proceedings challenging
the Merger.

Id. ¶ 66.

On August 5, 2022, iRobot separately filed a Form 8-K to
announce its second quarter 2022 financial results.

Id. ¶ 67.

In that Form 8-K, iRobot announced that revenue for Q2 2022 was
over $100,000,000 less than Q2 2021.

Id.

This poor financial

news, however, was offset by iRobot’s announcement of the Merger
with Amazon, blunting its impact.

Id.

According to

Confidential Witness 2 (“CW2”),2 iRobot stopped hosting earnings

iRobot employed CW2 from June 2017 to December 2023,
first as a Senior Tax Manager for Global Finance, then during
the Class Period as the Director of Global Finance. FAC ¶ 69.
As the Director of Global Finance, CW2 reported directly to
2

[7]

calls at Zeiler’s direction because it was in such a bad
financial situation that it did not want to discuss its
forecasts.

Id. ¶ 70.

On August 10, 2022, iRobot filed its Form 10-Q with the SEC
for the second quarter of fiscal year 2022, which ended July 2,
2022 (the “Q2 2022 Form 10-Q”).
Q was signed by Zeiler.

Id.

Id. ¶ 71.

The Q2 2022 Form 10-

While these statements are not

within the class period, iRobot discussed the Merger and its
contingencies, stating, in relevant part:
The Merger is conditioned upon, among other things,
the approval of the Merger Agreement by the Company’s
stockholders, the expiration of the applicable waiting
period (and any extension thereof) under the HartScott-Rodino Antitrust Improvements Act of 1976, as
amended, certain other approvals, clearances or
expirations of waiting periods under other antitrust
laws and foreign investment laws, and other customary
closing conditions.
Id.
The Q2 2022 Form 10-Q also discussed the risks related to
the Merger, and stated, in relevant part:
On August 4, 2022, we entered into the Merger
Agreement with Amazon and Merger Sub, providing for
the acquisition of iRobot by Amazon. Completion of the
Merger is subject to the satisfaction of various
conditions, including (1) the adoption of the Merger
Agreement by a majority of the holders of the
Zeiler, who in turn reported to Angle. Id. CW2’s job
responsibilities included serving as the finance lead for
mergers and acquisitions. Id. In 2023, CW2’s responsibilities
largely involved iRobot’s global real estate. CW2 attended
monthly Senior Leadership Team Meetings with the iRobot
executive team, including Angle and Zeiler. Id.
[8]

outstanding shares of our common stock, (2) the
expiration or early termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and certain
other approvals, clearances or expirations of waiting
periods under other antitrust laws and foreign
investment laws, (3) the absence of any order,
injunction or law prohibiting the consummation of the
Merger, (4) the accuracy of the other party’s
representations and warranties, subject to certain
materiality standards set forth in the Merger
Agreement, (5) compliance in all material respects
with the other party’s obligations under the Merger
Agreement, and (6) no Material Adverse Effect (as
defined in the Merger Agreement) having occurred since
the date of the Merger Agreement that is continuing.
There is no assurance that all of the various
conditions will be satisfied, or that the Merger will
be completed on the proposed terms, within the
expected timeframe, or at all. Furthermore, there are
additional inherent risks in the Merger, including the
risks detailed below.
***
The Merger may be delayed, and may ultimately not
be completed, due to a number of factors, including:
• the failure to obtain the approval of the
Merger Agreement by our stockholders;
• the failure to obtain regulatory approvals from
various governmental entities (or the imposition of
any conditions, limitations or restrictions on such
approvals);
• potential future stockholder litigation and
other legal and regulatory proceedings, which could
delay or prevent the Merger; and
• the failure to satisfy the other conditions to
the completion of the Merger, including the
possibility that a Material Adverse Effect on our
business would permit Amazon not to close the Merger.
If the Merger does not close, our business and
stockholders would be exposed to additional risks,
including:
• to the extent that the current market price of
our common stock reflects an assumption that the
Merger will be completed, the price of our common
stock could decrease if the Merger is not completed;
• investor confidence could decline, stockholder
litigation could be brought against us, relationships
[9]

with existing and prospective customers, distributors,
retailers, service providers, investors, lenders and
other business partners may be adversely impacted, we
may be unable to retain key personnel, and
profitability may be adversely impacted due to costs
incurred in connection with the pending Merger;
• the requirement that we pay a termination fee
of $56.0 million if the Merger Agreement is terminated
in certain circumstances, including by the Company to
enter into a superior proposal or by Amazon because
the Board withdraws its recommendation in favor of the
Merger.
Id. ¶ 72.
After the Merger was announced, antitrust experts
anticipated stiff opposition from the FTC, and privacy activists
mobilized to oppose the Merger, sending an open letter to the
FTC to express their concerns two days after iRobot filed a
proxy statement with the FTC on September 7, 2022.
76.

Id. ¶¶ 74,

Lawmakers in the United States also expressed opposition to

the Merger due to concerns about competition in the home
robotics market, Amazon’s history of anti-competitive practices,
and threats to consumer privacy.

Id. ¶ 78.

4. September 2022 –- The FTC’s Second Request
On September 19, 2022, the FTC sent a Second Request
concerning the Merger.

Id. ¶ 77.

iRobot’s public filings in

the latter half of 2022 repeated the same risk warnings as
before when discussing the Merger’s regulatory prospects.

[10]

Id. ¶

79.

During the latter half of 2022, iRobot’s financial

situation worsened.3

Id.

¶ 80.

5. Early 2023 -– EC’s Interest in the Merger
As 2023 began, the EC intensified its scrutiny of the
Merger.

Id. ¶ 82.

This enhanced scrutiny followed an

investigation by MIT Technology Review, published in December
2022, that detailed how a development version of a Roomba being
tested by paid volunteers had captured intimate images. Id.; see
Javier Espinoza & Dave Lee, EU set to investigate Amazon’s
$1.7bn purchase of Roomba-maker, Fin. Times (Feb. 15, 2023),
https://www.ft.com/content/b05a1260-ee5a-4ac8-9a34-31cdb8104cf1.
In a direct response to the privacy concerns sparked by the MIT
Technology Review investigation, regulators sent Amazon a series
of detailed questions about the proposed transaction.

FAC ¶ 82.

This move was seen as a prelude to a formal probe by the
European Commission.

Id.

According to Confidential Witness 1 (“CW1”), iRobot’s
Director of FP&A, Supply Chain and Digital Business from
November 2021 until April 2024, iRobot missed internal sales
forecasts for 18 months starting around the time the Merger was
announced. FAC ¶¶ 55-56. CW1 stated that iRobot had extremely
aggressive sales projections, but lacked a concrete plan to
achieve those sales, and that Zeiler instituted this aggressive
approach. Id. ¶ 56. CW1 further stated that the Roomba was no
longer competitive and remained a high-end product that
consumers did not want to purchase compared to lower-priced
models. Id.
3

[11]

According to Premca, because the Merger Agreement included
a provision mandating that iRobot and Amazon would notify each
other if any government entity made a request or commenced a
proceeding related to the Merger, iRobot must have been aware of
the EC’s questions sent to Amazon.

Id.

According to Premca,

iRobot refused to inform investors of the EC’s actions or the
increased scrutiny that the Merger was facing when it submitted
its filings on iRobot’s fourth quarter and full-year 2022
financial results between February 13 and February 14, 2023.
Id. ¶ 84.
6. The Class Period Begins -– February 13, 2023
On February 13, 2023, iRobot filed its Form 8-K with the
following risk disclosures:
Important risk factors that may cause such a
difference include, but are not limited to: (i) the
ability of the parties to consummate the proposed
transaction with Amazon.com, Inc in a timely manner or
at all; (ii) the satisfaction (or waiver) of closing
conditions to the consummation of the proposed
transaction; (iii) potential delays in consummating
the proposed transaction; (iv) the ability of the
Company to timely and successfully achieve the
anticipated benefits of the proposed transaction; (v)
the occurrence of any event, change or other
circumstance or condition that could give rise to the
termination of the merger agreement; (vi) the impact
of the COVID-19 pandemic and the current conflict
between the Russian Federation and Ukraine on the
Company’s business and general economic conditions;
(vii) the Company’s ability to implement its business
strategy; (viii) significant transaction costs
associated with the proposed transaction; (ix)
potential litigation relating to the proposed
transaction; (x) the risk that disruptions from the
[12]

proposed transaction will harm the Company’s business,
including current plans and operations; (xi) the
ability of the Company to retain and hire key
personnel; (xii) potential adverse reactions or
changes to business relationships resulting from the
announcement or completion of the proposed
transaction; (xiii) legislative, regulatory and
economic developments affecting the Company’s
business; (xiv) general economic and market
developments and conditions; (xv) the evolving legal,
regulatory and tax regimes under which the Company
operates; (xvi) potential business uncertainty,
including changes to existing business relationships,
during the pendency of the merger that could affect
the Company’s financial performance; (xvii)
restrictions during the pendency of the proposed
transaction that may impact the Company’s ability to
pursue certain business opportunities or strategic
transactions; (xviii) unpredictability and severity of
catastrophic events, including, but not limited to,
acts of terrorism or outbreak of war or hostilities,
(xviv) current supply chain challenges including
current constraints in the availability of certain
semiconductor components used in our products; (xx)
the financial strength of our customers and retailers;
(xxi) the impact of tariffs on goods imported into the
United States; and (xxii) competition, as well as the
Company’s response to any of the aforementioned
factors.
Id. ¶ 86 (“Statement No. 1”).
Premca alleges that the above statements were materially
false or misleading when made because the statements failed to
disclose the following purportedly material adverse information
necessary to make the statement not misleading:
(a) the European Commission had increased its
scrutiny of the Merger after the MIT exposé in
December 2022 and sent Amazon detailed questions over
the Merger which were not resolved, increasing the
regulatory threat to the Merger;

[13]

(b) regulators had expressed concern that the
Merger would allow Amazon and iRobot to exercise
significant control over the RVC market, threatening
competition;
(c) the Merger faced significant resistance from
regulators at the FTC and European Commission due to
antitrust and privacy concerns that were expressed to
Merger participants and known internally at iRobot,
making its approval unlikely;
(d) Amazon, with iRobot’s knowledge, was not
cooperating with governmental regulators, and instead
had refused to respond to the regulatory requests for
information, thereby increasing the likelihood that
regulators would oppose the Merger;
(e) as a result of all the foregoing, iRobot
materially understated the regulatory threat to the
Merger;
Id. ¶ 87.
On February 14, 2023, iRobot filed its Form 10-K with the
SEC for its fourth quarter and full-year 2022 financial results,
ended December 31, 2022 (the “2022 Form 10-K”).
2022 Form 10-K was signed by Angle.

Id.

Id. ¶ 88.

The

Therein, the Company

discussed the Merger and, in a purported “carbon-copy” statement
of risks compared to previous SEC disclosures.
(“Statement No. 2”), 89 (“Statement No. 3”).

Id. ¶¶ 88

Appended as

exhibits to the 2022 Form 10-K were signed certifications by
Zeiler and Angle.

Id. ¶ 91 (“Statement No. 4”).

According to Premca, the 2022 Form 10-K statements were
materially false or misleading when made because:
(1) iRobot and Amazon were not “work[ing]
cooperatively” with governmental regulators, but
[14]

instead taking an adversarial approach and refusing to
provide requested information or answer regulators’
questions; and
(2) the statements omitted to disclose the
following material adverse information necessary to
make the statements made not misleading: (a) the
European Commission had increased its scrutiny of the
Merger after the MIT exposé in December 2022 and sent
Amazon detailed questions over the Merger which were
not resolved, increasing the regulatory threat to the
Merger; (b) regulators had expressed concern that the
Merger would allow Amazon and iRobot to exercise
significant control over the RVC market, threatening
competition; (c) the Merger faced significant
resistance from regulators at the FTC and European
Commission due to antitrust and privacy concerns that
were expressed to Merger participants and known
internally at iRobot, making its approval unlikely;
(d) Amazon, with iRobot’s knowledge, was not
cooperating with governmental regulators, and instead
had refused to respond to the regulatory requests for
information, thereby increasing the likelihood that
regulators would oppose the Merger.
Id. ¶¶ 90, 92.

Despite iRobot’s poor quarter, the Company’s

stock price remained steady.

Id. ¶ 93.

7. Amazon, Purportedly with iRobot’s Knowledge,
Engages in a Strategy of Obstruction and NonCooperation
On March 20, 2023, Politico reported on the FTC’s
investigations into Amazon, including on its proposed Merger
with iRobot, and stated that the FTC was weighing whether to
challenge the Merger and was leaning towards suing to stop the
Merger.

Id. ¶ 94.

While the FTC had not yet decided whether to

sue to block the Merger, the article cited FTC staff raising
competition and privacy concerns.

[15]

Id.

Notably, despite iRobot

and Amazon’s commitment in the Merger Agreement to use
“reasonable best efforts” to obtain regulatory clearance and to
“supply as promptly as reasonably practicable any additional
information and documentary material” requested or required, the
article reported that Amazon had been “largely unresponsive to
the FTC’s investigation” and “refus[ed] to turn over information
requested by the FTC.”
unnamed sources.

Id.

This article relied entirely on

Id.

Premca asserts that pursuant to the Merger Agreement and
its commitment for Amazon and iRobot to share information
related to governmental requests about the Merger, iRobot would
have known about both the FTC’s requests and Amazon’s refusal to
cooperate.

FAC ¶ 94.

Neither company admitted to the facts

asserted in the Politico article, and Amazon claimed it was, in
fact, cooperating.

Id.

Sometime in May 2023, according to CW2, at a Senior
Leadership Team Meeting with Angle and Zeiler, iRobot’s Chief
Legal Officer, Glen Weinstein (“Weinstein”), announced to iRobot
employees that European Commission regulators had asked Amazon
for information on how its search engine worked, due to
antitrust concerns over Amazon boosting its own products at the
expense of competitors, and Amazon steadfastly refused to
cooperate with regulators’ requests.

[16]

Id. ¶ 95.

On May 9, 2023, iRobot filed a Form 8-K announcing its
first quarter 2023 financial results.

Id. ¶ 96.

In that Form

8-K, iRobot informed investors that the Company’s revenue
continued to decline. Id.

The May 9th Form 8-K did not disclose

any increase in regulatory risks, instead repeating the same
“boilerplate” risk warnings that were issued in August 2022
after the Merger was announced.

Id. ¶ 97 (“Statement No. 5”).

According to Premca, these statements were materially false or
misleading when made because they failed to disclose the
following material adverse information necessary to make the
statements not misleading:
(a) the European Commission and FTC had taken concrete
steps to increase their scrutiny of the Merger,
including sending Amazon detailed questions and
requests for information over the Merger which were
not resolved, increasing the regulatory threat to the
Merger;
(b) regulators had expressed concern that the Merger
would allow Amazon and iRobot to exercise significant
control over the RVC market, threatening competition;
(c) the Merger faced significant resistance from
regulators at the FTC and European Commission due to
antitrust and privacy concerns that were expressed to
Merger participants and known internally at iRobot,
making its approval unlikely;
(d) Amazon, with iRobot’s knowledge, was not
cooperating with governmental regulators, and instead
had refused to respond to the regulatory requests for
information, thereby increasing the likelihood that
regulators would oppose the Merger[.]
Id. ¶ 98.

[17]

On May 9, 2023, iRobot also filed its Form 10-Q with the
SEC for the first quarter of fiscal year 2023, ended April 1,
2023 (the “Q1 2023 Form 10-Q”).
signed by Zeiler.

The Q1 2023 Form 10-Q was

Id. ¶ 99 (“Statement No. 6”).

Appended as

exhibits to the Q1 2023 Form 10-Q were signed certifications by
Zeiler and Angle.

Id ¶ 102 (“Statement No. 7”).

Premca asserts that the above statements were materially
false or misleading when made because:
(1) iRobot and Amazon were not “work[ing]
cooperatively” with governmental regulators, but
instead taking an adversarial approach in refusing to
provide requested information or answer regulators’
questions; and
(2) the statements omitted to disclose the following
material adverse information necessary to make the
statements made not misleading:
(a) the European Commission and FTC had taken
concrete steps to increase their scrutiny of the
Merger, including sending Amazon detailed
questions and requests for information over the
Merger which were not resolved, increasing the
regulatory threat to the Merger;
(b) regulators had expressed concern that the
Merger would allow Amazon and iRobot to exercise
significant control over the RVC market,
threatening competition;
(c) the Merger faced significant resistance from
regulators at the FTC and European Commission due
to antitrust and privacy concerns that were
expressed to Merger participants and known
internally at iRobot, making its approval
unlikely;
(d) Amazon, with iRobot’s knowledge, was not
cooperating with governmental regulators, and
[18]

instead had refused to respond to the regulatory
requests for information, thereby increasing the
likelihood that regulators would oppose the
Merger[.]
Id. ¶¶ 100, 103.
According to Premca, despite iRobot issuing another quarter
of poor results, the Company’s stock price remained artificially
high because investors expected the Merger’s approval.
104.

Id. ¶

According to one analyst report, the stock remained in

“limbo” as the FTC evaluated the Merger.

Id. (citation

omitted).
8. The Purported True Risk of Amazon’s Non-Cooperation
and Regulatory Disapproval Starts to Be Revealed as
the EC Announces a Full-Scale Investigation
On June 1, 2023, almost a year after iRobot announced its
Merger with Amazon, the companies officially notified the EC of
the Merger.

Id. ¶ 105.

its Phase I review.

Shortly thereafter, the EC initiated

Id.

On June 16, 2023, Reuters reported that the Merger was
cleared to proceed by the United Kingdom.

Id. ¶ 106.

The

article quoted the defendant Angle as confirming that “both
companies are continuing to work cooperatively with other
relevant regulators in their review of the merger.”
(“Statement No. 8”).

Id.

News of the United Kingdom’s Competition

and Markets Authority (“UK CMA”) clearance was almost
immediately undercut by commentators at the time.

[19]

Id. ¶ 108.

On June 22, 2023, shortly after markets opened, news
outlets reported that the EC was planning to launch a full-scale
investigation into the Merger.

Id. ¶ 109.

iRobot’s stock price

fell from $49.66 by $5.17, or 10.4%, to a low of $44.49, before
rebounding to close at $45.41 on June 22, 2023.

Id. ¶ 110.

Premca, however, claims that iRobot shares continued trading at
artificially inflated prices throughout the remainder of the
Class Period due to the Defendants’ continued misstatements and
omissions concerning the Merger, Amazon and iRobot’s
interactions with regulators, and the Merger’s true regulatory
prospects.

Id.

On July 6, 2023, the EC issued a press release confirming
that it had initiated a Phase II review of the Merger.

Id. ¶

111.
9. iRobot’s Financial Issues Require Additional Credit
and a Modification to the Merger Agreement
On July 24, 2023, iRobot filed a Form 8-K announcing that
it had entered into a credit agreement with TCG Senior Funding
L.L.C. for a loan of $200,000,000.

Id. ¶ 112.

The credit

agreement was necessary because of iRobot’s continued dwindling
cash reserves and delay in the Merger’s regulatory approval.
Id.
On July 25, 2023, iRobot and Amazon issued a joint press
release (the “Modified Merger Announcement”) “announc[ing] that

[20]

they [had] agreed to amend the existing terms of their merger
agreement to reflect a change to the price per share” whereby
“Amazon [would] pay $51.75 per share revised from $61.00 per
share” (the “Amended Merger Agreement”).

Id. ¶ 113.

The

Modified Merger Announcement purportedly downplayed the European
Commission’s investigation into the Merger, stating, in relevant
part, that “[c]ompletion of the transaction remains subject to
customary closing conditions, including regulatory approvals and
approval of the amended merger agreement by iRobot’s
stockholders”; and that “Amazon and iRobot are working
cooperatively with the relevant regulators in their review of
the merger.”

Id. (“Statement No. 9”).

10. Amazon and iRobot Begin to Halt Integration
Meetings
Right after the Merger was announced, Amazon and iRobot
began to conduct monthly (and sometimes weekly) meetings to
address integration.

Id. ¶ 116.

The two companies had separate

meetings for nine different work streams, including finance,
production, research and development, and real estate.

Id.

CW2

routinely attended the monthly real estate integration meeting.
Id.

According to that confidential witness, however, in August

2023, shortly after the EC announced its formal probe of the
Merger, the real estate integration meetings ceased.

[21]

Id.

Confidential Witness 3 (“CW3”)4 purportedly “corroborated” CW2,
apparently in reference to CW2’s statement that real estate
integration meetings had stopped.

Id. ¶ 118.

According to CW3,

employees in iRobot’s software engineering department stopped
working on all integration matters with Amazon in August 2023.
Id.
At the same time that Amazon and iRobot were supposedly
closing down integration meetings, according to CW3, Weinstein
stated during a meeting with Angle, Zeiler, and other iRobot
executives that Amazon was refusing to cooperate with the EU
Commission.

Id. ¶ 119.

Specifically, Weinstein announced that

the EC had requested information about how Amazon’s search
engine worked, in order to determine whether Amazon was favoring
its internal products to the detriment of competition, but
Amazon refused to cooperate or share that information.

Id.

Nevertheless, when speaking with investors, the Defendants
failed to disclose this purportedly heightened risk.

Id.

Premca claims that although the purported refusal to cooperate
threatened Merger approval, the Defendants continued to “parrot”

iRobot employed CW3 from April 2021 to May 2024 as a
director-level employee. FAC ¶ 117. CW3’s job responsibilities
included overseeing the Company’s user experience and software
design. Id.
4

[22]

their expectation that regulators would approve the Merger, and
mislead investors about cooperation.

Id.

On August 8, 2023, iRobot filed a Form 8-K, announcing its
second quarter 2023 financial results.

Id. ¶ 120.

iRobot

informed investors of its amendment to the Merger Agreement to
lower the acquisition price.

Id. (“Statement No. 10”).

When discussing risks with the Company, iRobot restated the
“carbon-copy” risks that it had used since the beginning of the
Class Period.

Id. ¶ 122 (“Statement No. 11”).

That same day, iRobot also filed its Form 10-Q with the SEC
for the second quarter of fiscal year 2023, which ended July 1,
2023 (the “Q2 2023 Form 10-Q”).
12”).

Id. ¶ 124.

(“Statement No.

When discussing the risks to the iRobot, iRobot repeated

the same risk warnings that it had used right after the Merger
was announced.

Id. ¶ 126 (“Statement No. 13”).

Appended as

exhibits to the Q2 2023 Form 10-Q were signed certifications by
Zeiler and Angle.

Id. ¶ 128 (“Statement No. 14”).

According to Premca, the August 8, 2023 statements were
materially false and/or misleading when made because the
statements omitted to disclose the following material adverse
information necessary to make the statements made not
misleading:
(a) the European Commission and FTC had taken concrete
steps to increase their scrutiny of the Merger,
including sending Amazon detailed questions and
[23]

requests for information over the Merger which were
not resolved, increasing the regulatory threat to the
Merger;
(b) regulators had expressed concern that the Merger
would allow Amazon and iRobot to exercise significant
control over the RVC market, threatening competition;
(c) the Merger faced significant resistance from
regulators at the FTC and European Commission due to
antitrust and privacy concerns that were expressed to
Merger participants and known internally at iRobot,
making its approval unlikely;
(d) Amazon, with iRobot’s knowledge, was not
cooperating with governmental regulators, and instead
had refused to respond to the regulatory requests for
information, thereby increasing the likelihood that
regulators would oppose the Merger;
(e) Amazon and iRobot ceased holding integration
meetings between the companies, indicating an
increased pessimism over the Merger receiving
regulatory approval[.]
Id. ¶¶ 123, 125, 127, & 129.
On August 24, 2023, iRobot filed a definitive proxy
statement (the “Modified Merger Proxy Statement”) with the SEC
on Form DEFM14A, signed by Angle, in connection with the Amended
Merger Agreement.

Id. ¶ 130.

The Modified Merger Proxy

Statement used substantially similar language as the original
Proxy Statement.

Id. (“Statement No. 15”).

According to Premca, the above statements were materially
false and/or misleading when made because:
(1) iRobot and Amazon did not subjectively expect that
the Merger would receive all regulatory approvals, as
reflected in their decision to cease many integration
activities;
[24]

(2) iRobot had no reasonable basis that the Merger
would be approved, since it and Amazon ceased
“work[ing] cooperatively” with governmental regulators
and adopted an adversarial approach, refusing to
provide requested information or answer regulators’
questions;
(3) “intensifying competitive conditions” did not
support Merger, but instead, regulators had expressed
concerns over the Merger worsening competitive
conditions; and
(4) the statements omitted to disclose the following
material adverse information necessary to make the
statements made not misleading: (a) the European
Commission and FTC had taken concrete steps to
increase their scrutiny of the Merger, including
sending Amazon detailed questions and requests for
information over the Merger which were not resolved,
increasing the regulatory threat to the Merger; (b)
regulators had expressed concern that the Merger would
allow Amazon and iRobot to exercise significant
control over the RVC market, threatening competition;
(c) the Merger faced significant resistance from
regulators at the FTC and European Commission due to
antitrust and privacy concerns that were expressed to
Merger participants and known internally at iRobot,
making its approval unlikely; (d) Amazon, with
iRobot’s knowledge, was not cooperating with
governmental regulators, and instead had refused to
respond to the regulatory requests for information,
thereby increasing the likelihood that regulators
would oppose the Merger; (e) Amazon and iRobot ceased
holding integration meetings between the companies,
indicating an increased pessimism over the Merger
receiving regulatory approval[.]
Id. ¶ 132.
In addition, the Modified Merger Proxy Statement told
investors that Company management’s and the Board’s review of
“intensifying competitive conditions” in iRobot’s market weighed
in favor of the Merger’s approval.
[25]

Id. ¶ 131 (“Statement No.

16.”).

On October 12, 2023, iRobot shareholders voted in favor

of the Merger.

Id.

On August 29, 2023, the EC suspended the Merger’s Phase II
deadline so that regulators could obtain additional information
on the Merger.

Id. ¶ 133.

The EC ultimately gained the

requested information and formally restarted the clock on its
Phase II investigation of the Merger on October 19, 2023, and
set a deadline of February 14, 2024 to decide whether or not to
approve the Merger.

Id.

11. In Fall 2023, the Merger’s Failure to Obtain
Regulatory Approval Purportedly Appears Likely to
iRobot Executives
According to CW2, in September 2023, during monthly Senior
Leadership Team Meetings, iRobot executives internally
formulated plans for the business without the Merger.
134.

Id. ¶

This allegedly reflected a growing understanding within

the Company that the Merger was unlikely to be approved by
regulators.

Id.

Further, in August 2023, the long-time Amazon executive who
led Amazon’s push for the Merger, Senior Vice President of
Devices and Services Dave Limp, announced his plans to leave
Amazon.

Id. ¶ 135.

In September 2023, it was announced that he

would be replaced by Panos Panay (“Panay”), who was less
supportive of the Merger.

Id.

Panay took full control as

Amazon’s Senior Vice President of Devices and Services by
[26]

October 2023.

Id.

At that time, all remaining integration

meetings between Amazon and iRobot ceased.

Id.

According to Confidential Witness 4 (“CW4”),5 who attended
weekly and monthly integration meetings, by October 2023 all
integration meetings between iRobot and Amazon had stopped,
indicating that iRobot no longer believed that the Merger would
receive regulatory approval.

Id. ¶ 137.

On November 7, 2023, iRobot filed its Form 10-Q with the
SEC for the third quarter of fiscal year 2023, which ended
September 30, 2023 (the “Q3 2023 Form 10-Q”).
(“Statement No. 17”).

Id. ¶ 138

Further, when discussing the risks to the

Merger, the Company used the same language it had used
throughout the Class Period with little alteration.
(“Statement No. 18”).

Id. ¶ 140

Appended as exhibits to the Q3 2023 Form

10-Q were signed certifications by Zeiler and Angle.

Id. ¶ 142

(“Statement No. 19”).
According to Premca, these statements were materially false
or misleading when made because the statements omitted to
disclose the following material adverse information necessary to
make the statements made not misleading:

iRobot employed Confidential Witness 4 (“CW4”) as a
Senior Project Manager between June 2020 and May 2024. FAC ¶
136. CW4’s job responsibilities included overseeing iRobot’s
then-burgeoning subscription business and assisting with
iRobot’s mergers and acquisitions. Id.
5

[27]

(a) the European Commission and FTC had taken concrete
steps to increase their scrutiny of the Merger,
including sending Amazon detailed questions and
requests for information over the Merger which were
not resolved, increasing the regulatory threat to the
Merger;
(b) regulators had expressed concern that the Merger
would allow Amazon and iRobot to exercise significant
control over the RVC market, threatening competition;
(c) the Merger faced significant resistance from
regulators at the FTC and European Commission due to
antitrust and privacy concerns that were expressed to
Merger participants and known internally at iRobot,
making its approval unlikely;
(d) Amazon, with iRobot’s knowledge, was not
cooperating with governmental regulators, and instead
had refused to respond to the regulatory requests for
information, thereby increasing the likelihood that
regulators would oppose the Merger;
(e) Amazon and iRobot ceased holding integration
meetings between the companies, indicating an
increased pessimism over the Merger receiving
regulatory approval;
(f) iRobot began, for the first time, to formulate
alternative plans for the Company in September 2023 in
preparation for the Merger to be rejected by
regulators[.]
Id. ¶¶ 139, 141, 143.
12. The Purported “Full Truth” is Gradually Revealed
On November 27, 2023, the European Commission issued a
press release, entitled “Commission sends Amazon Statement of
Objections over proposed acquisition of iRobot,” describing its
objections to the merger.

Id. ¶ 144.

In response, iRobot filed

a Form 8-K on the same day announcing the same and relating the

[28]

relevant timeline.

Id. ¶ 145 (“Statement No. 20”).

iRobot

again repeated the same risk warnings that it had used
throughout the Class Period.

Id. ¶ 146 (“Statement No. 21”).

According to Premca, these statements were false and/or
misleading when made because they failed to disclose the
following material adverse information necessary to make the
statements not misleading:
(a) regulators had expressed concern that the Merger
would allow Amazon and iRobot to exercise significant
control over the RVC market, threatening competition;
(b) the Merger faced significant resistance from
regulators at the FTC and European Commission due to
antitrust and privacy concerns that were expressed to
Merger participants and known internally at iRobot,
making its approval unlikely; (c) Amazon, with
iRobot’s knowledge, was not cooperating with
governmental regulators, and instead had refused to
respond to the regulatory requests for information,
thereby increasing the that regulators would oppose
the Merger; (d) Amazon and iRobot ceased holding
integration meetings between the companies, indicating
an increased pessimism over the Merger receiving
regulatory approval; (e) iRobot began, for the first
time, to formulate alternative plans for the Company
in September 2023 in preparation for the Merger to be
rejected by regulators; (f) Amazon did not plan to
offer any concessions to regulators in order to
appease their objections to the Merger, increasing the
likelihood that regulators would oppose the Merger[.]
Id. ¶ 147.

Upon news of the EC’s objections, iRobot’s

stock price fell 26%, to a low of $31.13 before rebounding
to close at $34.35 on November 27, 2023.

Id. ¶ 148.

On December 12, 2023, it was announced that Amazon would
defend the Merger at a closed European Commission hearing on
[29]

December 18, 2023.

Id. ¶ 149.

According to Premca, pursuant to

the Merger Agreement’s cooperation provision, iRobot would have
been informed of Amazon’s plans for the December 18, 2023
hearing, coordinated strategy, and been debriefed on the hearing
itself.

Id.

On January 10, 2024, during intraday trading hours, news
outlets reported that Amazon refused to offer concessions to
address concerns raised by the European Commission.

Id. ¶ 150.

One such article published that day by Politico, entitled
“Amazon skips concessions to EU on iRobot deal,” reported, in
relevant part:
Amazon didn’t offer concessions to the European
Commission to try to garner approval for its planned
$1.4 billion takeover of robot vacuum cleaner maker
iRobot.
The European Union’s webpage on the deal shows
that the companies didn’t make an offer by the end of
the day on Wednesday, its last chance to tackle
European Union objections that Amazon could hamper
rival vacuum cleaners’ sales on Amazon’s online
marketplace. Regulators have said the sales platform
is a particularly important sales channel for the
product.
* * *
iRobot’s [CEO Defendant] Angle said in a
statement that the company “continues to work
cooperatively with the [European Commission] and other
regulators in their review of the merger . . . We
remain excited about the opportunity to work together
with Amazon to continue innovating, bringing valuable
products to customers and making their lives easier.”

[30]

Id. ¶ 150 (“Statement No. 22”).

According to Premca, the above

statements were materially false or misleading when made
because:
(1) contrary to Angle’s statements, the companies were
not working cooperatively with regulators, but instead
refusing to respond to regulators’ investigation and
requests for information, and refused to offer any
concessions to regulators; and
(2) the statements omitted to disclose the following
material adverse information necessary to make the
statements made not misleading: (a) regulators had
expressed concern that the Merger would allow Amazon
and iRobot to exercise significant control over the
RVC market, threatening competition; (b) the Merger
faced significant resistance from regulators at the
FTC and European Commission due to antitrust and
privacy concerns that were expressed to Merger
participants and known internally at iRobot, making
its approval unlikely; (c) Amazon, with iRobot’s
knowledge, was not cooperating with governmental
regulators, and instead had refused to respond to the
regulatory requests for information, thereby
increasing the likelihood that regulators would oppose
the Merger; (d) Amazon and iRobot ceased holding
integration meetings between the companies, indicating
an increased pessimism over the Merger receiving
regulatory approval; (e) iRobot began, for the first
time, to formulate alternative plans for the Company
in September 2023 in preparation for the Merger to be
rejected by regulators; (f) Amazon refusal to offer
any concessions to regulators in order to appease
their objections to the Merger significantly
increasing the likelihood that regulators would oppose
the Merger[.]
Id. ¶ 151.
On this news, iRobot’s stock price fell from $36.99 by
$7.99, or 21.6%, to $29, before rebounding to close at $29.75
per share on January 10, 2024.

Id. ¶ 152.

[31]

On January 11, 2024, the EU Competition Commissioner
Margaret Vestager confirmed to Bloomberg that no concessions
were offered with respect to the Merger.

Id. ¶ 153.

On January 18, 2024, during post-market hours, the Wall
Street Journal published an article (the “WSJ Article”) entitled
“EU Commission Intends to Block Amazon’s iRobot Acquisition,”
which stated, in relevant part:
The European Union’s competition watchdog intends
to block Amazon’s $1.7 billion bid to purchase Roomba
maker iRobot, people familiar with the matter said.
Competition officials from the European
Commission, the bloc’s executive body, met Thursday
with representatives from Amazon to discuss the deal,
one of those people said. Amazon was told during the
meeting that the deal was likely to be rejected, the
person said. Amazon declined to comment.
The plan to reject the deal would still need
formal approval from the commission’s 27 top political
leaders before a final decision can be issued.
Historically, that process is unlikely to overrule a
recommendation from the bloc’s competition
commissioner, Margrethe Vestager. The commission has
a Feb. 14 deadline for its final decision.
Id. ¶ 154.
Also on January 18, 2024, during post-market hours,
Bloomberg published an article entitled “Amazon’s $1.4 Billion
iRobot Deal to Be Blocked by EU Antitrust Watchdog” (the
“Bloomberg Article”), which corroborated the findings of the
earlier WSJ Article.

Id. ¶ 155.

[32]

The next day, during intraday trading hours, Bloomberg
updated the Bloomberg Article, reporting that the FTC was
drafting a lawsuit to block the Merger, stating, in relevant
part:
The deal is likely to face opposition in the US as
well. According to people familiar with the matter,
the [FTC] has been drafting a lawsuit that would seek
to block the acquisition. The FTC’s three
commissioners haven’t yet voted on a challenge nor had
a final meeting with Amazon to discuss the potential
case, said the people, who asked not to be named
discussing an ongoing probe.
Id. ¶ 156.
On January 24, 2024, representatives from iRobot attended a
closed meeting with the FTC.

Id. ¶ 158.

No details emerged

from the meeting at the time, but it was later revealed that
Amazon also attended a meeting with the FTC around the same time
in which the FTC informed Amazon that it planned to vote to sue
to block the Merger.

Id.

Either at its own meeting with the

FTC or, pursuant to the Merger Agreement’s cooperation
provision, through communication with Amazon, the Defendants
were allegedly informed that the FTC would oppose the Merger.
Id.
On January 29, 2024, during pre-market hours, Amazon and
iRobot issued a joint press release entitled “Amazon and iRobot
Agree to Terminate Pending Acquisition,” announcing their entry

[33]

“into a mutual agreement” to terminate the Merger.
Specifically, that press release stated, in relevant part:
Today Amazon . . . and iRobot . . . announced
that they have entered into a mutual agreement to
terminate their previously announced acquisition
agreement, originally signed on August 4, 2022, under
which Amazon would have acquired iRobot for cash
consideration.
* * *
The companies have signed a termination agreement
that resolves all outstanding matters from the
transaction, including Amazon paying iRobot the
previously agreed upon termination fee.
Id. ¶ 159.
Pursuant to the Merger Agreement, iRobot received a cash
infusion in the form of a $94,000,000 termination fee from
Amazon.

Id. ¶ 160.

Also on January 29, 2024, during pre-market hours, iRobot
issued a press release entitled “iRobot Announces Operational
Restructuring Plan to Position Company for the Future,” which,
among other things, reported that the Company would reduce its
workforce by “approximately 350 employees, which represents 31
percent of the Company’s workforce as of December 30, 2023,” and
that, “[a]s part of this workforce reduction, iRobot expects to
record restructuring charges totaling between $12 million and
$13 million, primarily for severance and related costs, over the
first two quarters of 2024, with the majority of the
restructuring charges anticipated in the first quarter of 2024.”
The same press release also disclosed that “[c]oncurrent with
[34]

the implementation of its operational restructuring plan . . .
[Defendant] Angle, Chairman of the Board . . . and CEO, has
stepped down as Chairman and CEO.”

Id. ¶ 161.

Later that same day, Reuters published an article entitled
“Amazon, Roomba-parent iRobot abandon $1.4 billion merger deal,”
which revealed, inter alia, that FTC staff had notified Amazon
the week before that it planned to block the Merger, stating, in
relevant part:
Separately, the [FTC] was poised to reject
Amazon’s deal before the companies announced they were
abandoning it, a source told Reuters.
* * *
The FTC staff met with Amazon last week to inform
them they planned to recommend the commission vote to
sue to block the acquisition, the source added, saying
the commission was set to hold a final meeting on
Monday with Amazon before the commission could have
voted to approve a legal challenge to the merger.
Id. ¶ 162.
III. ANALYSIS
A.

Motion to Dismiss Standard and Securities Act Pleading
Standards

In order to withstand a motion to dismiss, Premca’s FAC
must “state a claim upon which relief can be granted.”
Civ. P. 12(b)(6).

Fed. R.

That is, Premca’s FAC must include sufficient

factual allegations that, accepted as true, “state a claim to
relief that is plausible on its face.”
Twombly, 550 U.S. 544, 570 (2007).

Bell Atlantic Corp. v.

Under this standard, the

Court must “accept well-pleaded factual allegations in [Premca’s
[35]

FAC] as true and view all reasonable inferences in [its] favor.”
Zhou v. Desktop Metal, Inc., 120 F. 4th 278, 287 (1st Cir. Oct.
28, 2024) (quoting ACA Financial Guaranty Corp. v. Advest, Inc.,
512 F.3d 46, 58 (1st Cir. 2008)).

The Court does not, however,

“draw unreasonable inferences or credit bald assertions [or]
empty conclusions,”

Guilfoile v. Shields, 913 F.3d 178, 186

(1st Cir. 2019) (quoting Theriault v. Genesis HealthCare LLC,
890 F.3d 342, 348 (1st Cir. 2018)), and disregards allegations
that “merely offer legal conclusions couched as fact or
threadbare recitals of the elements of a cause of action,”
Ocasio-Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir.
2011) (cleaned up).

As set forth below, “[b]ecause [Premca]

brought federal securities fraud claims, several additional
legal standards apply.”

Zhou, 120 F. 4th at 287.

“To state a claim under section 10(b), [the FAC] must
allege: ‘(1) a material misrepresentation or omission; (2)
scienter; (3) a connection with the purchase or sale of a
security; (4) reliance; (5) economic loss; and (6) loss
causation.’”

Quinones v. Frequency Therapeutics, Inc., 106 F.

4th 177, 182 (1st Cir. 2024) (quoting In re Biogen Inc. Sec.
Litig., 857 F.3d 34, 41 (1st Cir. 2017)).

“Further, under Rule

9(b) [of the Federal Rules of Civil Procedure], as with all
fraud claims, [Premca] is required to plead the circumstances of
the securities fraud with particularity. . . . And, under the
[36]

[Private Securities Litigation Reform Act (“PSLRA”), 15 U.S.C. §
78u-4, Premca] must ‘specify each statement alleged to have been
misleading [and] the reason or reasons why the statement is
misleading.’”

Zhou, 120 F. 4th at 287 (quoting ACA Fin. Guar.

Corp., 512 F.3d at 58).

The First Circuit “has been notably

strict and rigorous in applying the Rule 9(b) standard in
securities fraud actions.”

Greebel v. FTP Software, Inc., 194

F.3d 185, 193 (1st Cir. 1999) (citing Maldonado v. Dominguez,
137 F.3d 1, 9 (1st Cir. 1998)).

Rule 9(b) provides that “[i]n

all averments of fraud or mistake, the circumstances
constituting fraud or mistake shall be stated with
particularity.

Malice, intent, knowledge, and other condition

of mind of a person may be averred generally.” Fed. R. Civ. P.
9(b).

This Circuit has interpreted Rule 9(b) to require

“specification of the time, place, and content of an alleged
false representation.”

Greebel, 194 F.3d at 193 (quoting

McGinty v. Beranger Volkswagen, Inc., 633 F.2d 226, 228 (1st
Cir. 1980)).
Here, iRobot successfully challenges elements one (falsity)
and two (scienter).

iRobot Mem. 2-3.

Both elements are

addressed below.
B.

Material Misrepresentation/Omission Element

“The securities statutes seek to maintain public confidence
in the marketplace.”

Dura Pharmaceuticals, Inc. v. Broudo, 544
[37]

U.S. 336, 345 (2005).

Securities statutes “make the . . .

actions available, not to provide investors with broad insurance
against market losses, but to protect them against those
economic losses that misrepresentations actually cause.”

Hill

v. Gozani, 638 F.3d 40, 53-54 (1st Cir. 2011) (alterations in
original) (quoting Dura Pharm., 544 U.S. at 345).

“To survive a

motion to dismiss, [Premca] ‘must show that defendants made a
materially false or misleading statement or omitted to state a
material fact necessary to make a statement not misleading.’”
Quinones v. Frequency Therapeutics, Inc., 665 F. Supp. 3d 156,
167 (D. Mass. 2023) (quoting Ganem v. InVivo Therapeutics
Holdings Corp., 845 F.3d 447, 454 (1st Cir. 2017)).

The

pleading standard is stiff, requiring that Premca “specify each
statement alleged to have been misleading [and] the reason or
reasons why the statement is misleading.’”

Id. at 168

(alteration in original) (quoting Ganem, 845 F.3d at 455).
“Importantly, section 10(b) and Rule 10b-5 only prohibit
omissions that engender ‘half-truths.’”

Zhou, 120 F. 4th at 292

(quoting Macquarie Infrastructure v. Moab Partners, L. P., 601
U.S. 257, 263 (2024)).

Indeed, “section 10(b) and Rule 10b-5

‘do not create an affirmative duty to disclose any and all
material information.’”

Id. (quoting Matrixx Initiatives, Inc.

v. Siracusano, 563 U.S. 27, 44 (2011)).

Said another way, “[a]n

omission, even if material, is actionable only if it ‘renders
[38]

affirmative statements made misleading.’”

Id. (quoting

Macquarie Infrastructure, 601 U.S. at 265).

As to materiality,

“a fact or omission is material if a ‘reasonable investor would
have viewed it as having significantly altered the total mix of
information made available.’”

Id. (quoting Ponsa-Rabell v.

Santander Sec. LLC, 35 F. 4th 26, 33 (1st Cir. 2022)).
iRobot categorizes the 22 alleged statements identified
above into five somewhat overlapping groups, four of which are
analyzed here:
(1)

statements that iRobot and Amazon were “working
cooperatively” with regulators (Statement Nos. 2
(FAC ¶ 88), 6 (FAC ¶ 99), 8 (FAC ¶ 106), 9 (FAC ¶
113), 15 (FAC ¶ 130), and 22 (FAC ¶ 150));

(2)

statements describing the status of the Merger
and the antitrust reviews (Statement Nos. 2 (FAC
¶ 88), 5 (FAC ¶ 97), 6 (FAC ¶ 99), 9 (FAC ¶ 113),
10 (FAC ¶ 120), 12 (FAC ¶ 124), 15 (FAC ¶ 130),
16 (FAC ¶ 131); 17 (FAC ¶ 138), 18 (FAC ¶ 140),
and 20 (FAC ¶ 145));

(3)

risk factor disclosures about the Merger
(Statement Nos. 1 (FAC ¶ 86), 3 (FAC ¶ 89), 5
(FAC ¶ 97), 11 (FAC ¶ 122), 13 (FAC ¶ 126), 15
(FAC ¶ 130), 18 (FAC ¶ 140), and 21 (FAC ¶ 146));

(4)

Sarbanes-Oxley Act (“SOX”) certifications
(Statement Nos. 4 (FAC ¶ 91), 7 (FAC ¶ 102), 14
(FAC ¶ 128), and 19 (FAC ¶ 142)).

iRobot Mem. 8 (citing FAC ¶¶ 86-150).6

Although iRobot argues that certain statements are
optimistic and forward-looking statements about the Merger are
not actionable as opinion or under the PSLRA’s safe harbor
provision, the Court need not evaluate reach these issues
because “this Court concludes that the facts alleged in the
6

[39]

1.

Cooperation with Regulators Statements

Premca argues that statements relating to cooperation with
regulators are, in general, actionable, citing Ho v. Duoyuan
Glob. Water, Inc., 887 F. Supp. 2d 547, 571–72 (S.D.N.Y. 2012)
(finding actionable claims based on misrepresentations of “full”
cooperation with audit), and Special Situations Fund III, L.P.
v. American Dental Partners, Inc., 775 F. Supp. 2d 227, 241–42
(D. Mass. 2011) (finding actionable claims based on
misrepresentation that defendants’ conduct toward business
partner had not changed).

Premca Opp’n 8-9.

There is no real

dispute that claims concerning cooperation in a merger could be
actionable in theory.

Premca’s claim is that iRobot was aware

that Amazon was, from the outset and through the Class Period,
not cooperating with regulators in the face of increasing
regulatory and public pressure against the Merger, and that
therefore its SEC filings and public statements at issue here
were false or misleading.

Id.

iRobot argues that the allegations based on cooperation
statements (Statement Nos. 2 (FAC ¶ 88), 6 (FAC ¶ 99), 8 (FAC ¶
106), 9 (FAC ¶ 113), 15 (FAC ¶ 130), and 22 (FAC ¶ 150)) are
[FAC] do not plausibly show that the defendants made materially
false or misleading statements or omissions, nor do they
establish a strong inference of scienter.” Brill v. Invivyd,
Inc., No. 1:23-CV-10254-JEK, 2024 WL 4228832, at *7 (D. Mass.
Sept. 18, 2024) (Kobick, J.).

[40]

unsupported by plausibly pleaded facts, supported by
confidential witnesses whose allegations fail under the “hard
look” that the First Circuit prescribes, and supported by
speculative news articles.

iRobot Mem. 9.

As an initial matter, the parties devote much argument to
the definition of the word “cooperation.”
13; Reply 1-3.

See Premca Opp’n 9-

Premca claims that arguments about the

definition of cooperation result in a fact question that must be
resolved at the merits stage.

Premca Opp’n 9 (citing Gerneth v.

Chiasma, Inc., 2018 WL 935418, at *5 (D. Mass. Feb. 15, 2018)
(Casper, J.) (noting, regarding a dispute as to the materiality
of a regulator’s reservations, that “the Court cannot consider
that disputed issue of fact on a motion to dismiss”)).

To be

sure, “cooperate,” “cooperation,” “cooperative,” and “working
cooperatively” have meanings that are highly context-dependent.
Nevertheless, in the context of an antitrust regulator’s review
of a merger, iRobot is correct to observe, relying on the FTC
merger guidance materials, that “working cooperatively” or
“cooperation” is not equivalent to the “total capitulation”
definition argued for by Premca.

Reply 1.

The Court, however, need not get into the definitional
weeds as to cooperation, because it is the paucity of plausibly
pleaded facts, not the definition of “cooperation,” that makes
the FAC deficient.

As iRobot persuasively argues, “[t]he
[41]

failure to allege particularized facts supporting falsity is not
an evidentiary matter, but is instead a facial pleading
deficiency under the PSLRA and Rule 9(b).”

Reply 6.

Premca’s

pleading problem is that it identifies discrete, though
imprecise, points in time that Amazon purportedly did not
provide certain information to the EC, without any context
behind the request or the refusal that would make the alleged
lack of “cooperation” grounds for an action of fraud.
EC Cooperation
Premca argues that the following virtually identical
statements indicate a lack of cooperation by Amazon:
(1)

a June 16, 2023 statement attributed to Angle in a
Reuters article discussing the UK CMA’s approval of
the Merger in which he said that “both companies are
continuing to work cooperatively with other relevant
regulators in their review of the merger” (Statement
No. 8, FAC ¶ 106);

(2)

a July 25, 2023 statement in a iRobot and Amazon joint
press release that said “Amazon and iRobot are working
cooperatively with the relevant regulators in their
review of the merger” (Statement No. 9, FAC ¶ 113);
and

(3)

a January 10, 2024 statement attributed to Angle in a
Politico article in which he said “the [C]ompany
‘continues to work cooperatively with the [European
Commission] and other regulators in their review of
the merger.’” (Statement No. 22, FAC ¶ 150).

iRobot Mem. 10.

Premca relies on two confidential witnesses –-

CW2 and CW3 -- to support its cooperation claims.
119.

[42]

FAC ¶¶ 95,

Confidential witnesses are permissible, of course, but they
must be buttressed by other plausibly pleaded facts.

The First

Circuit cautions against reliance on confidential witnesses.
New Jersey Carpenters Pension & Annuity Funds v. Biogen IDEC
Inc., 537 F.3d 35, 51 (1st Cir. 2008) (“We have never said a
complaint would survive if it were based only on confidential
source allegations.

Indeed, we have said there must be a hard

look at such allegations to evaluate their worth.”).

The First

Circuit’s standard for the use of confidential sources is as
follows:
[W]here plaintiffs rely on confidential personal
sources but also on other facts, they need not name
their sources as long as the latter facts provide an
adequate basis for believing that the defendants'
statements were false. Moreover, even if personal
sources must be identified, there is no requirement
that they be named, provided they are described in the
complaint with sufficient particularity to support the
probability that a person in the position occupied by
the source would possess the information alleged. In
both of these situations, the plaintiffs will have
pleaded enough facts to support their belief, even
though some arguably relevant facts have been left
out.
Id. at 51 (emphasis added) (quoting In re Cabletron Sys., Inc.,
311 F.3d 11, 29 (1st Cir. 2002)).

The Court must weigh a

variety of factors in making its determination: “When
allegations depend in part on confidential sources, a court
‘evaluat[es], inter alia, [ ] the level of detail provided by
the confidential sources, the corroborative nature of the other

[43]

facts alleged (including from other sources), the coherence and
plausibility of the allegations, the number of sources, the
reliability of the sources, and similar indicia.’”

City of

Miami Fire Fighters’ & Police Officers’ Ret. Tr. v. Cerence
Inc., No. 22-CV-10321-ADB, 2024 WL 1258149, at *13 (D. Mass.
Mar. 25, 2024) (Burroughs, J.) (emphasis added) (quoting N.J.
Carpenters Pensions & Annuity Funds, 537 F.3d at 51).
factors are not exclusive.

These

While confidential witnesses are not

required to “recall all possible details from their former
positions,” in order “[f]or the Court to consider and credit
[CW] allegations, [the] allegations cannot merely be ‘conclusory
allegations of fraud, but specific descriptions of the precise
means through which it occurred, provided by persons said to
have personal knowledge of them.’”

Collier v. ModusLink Glob.

Sols., Inc., 9 F. Supp. 3d 61, 71 (D. Mass. 2014) (Casper, J.)
(quoting In re Cabletron Sys., Inc., 311 F.3d at 30).
As for Premca’s Amazon-non-cooperation-theory, Premca’s two
confidential witnesses do not provide sufficient, plausibly
pleaded facts in a level of detail and with a level of coherence
to support an inference that Amazon was not working
cooperatively with regulators, or that iRobot was reckless with
respect to such knowledge or had knowledge of purported noncooperation when any of the referenced cooperation statements
were made.
[44]

As the First Circuit requires, this Court must look closely
at the statements, and how the FAC’s allegations are presented.
Even crediting, without ruling, that the Confidential Witnesses
were sufficiently identified or positioned within iRobot, the
two Confidential Witnesses –- CW2 and CW3 –- provide a handful
of sentences, untethered from the time, duration, and scope of
the purported lack of cooperation.

See FAC ¶¶ 95, 119.

Indeed,

if these confidential witnesses were as well-positioned as
Premca claims, they would presumably know actual facts which
would paint a complete picture without resort to broad
characterization by Premca’s counsel.
Here, CW2’s and CW3’s statements are sparse in this regard,
backfilled by Premca’s surmise and conjecture.

It is not clear,

moreover, where these two CWs’ factual allegations end and
Premca’s characterization begins.

Take CW2, at FAC ¶ 95:

In May 2023, according to CW2, at a Senior Leadership
Team Meeting with Angle and Zeiler, iRobot’s Chief
Legal Officer, Glen Weinstein (“Weinstein”), announced
to iRobot employees that European Commission
regulators asked Amazon for information on how its
search engine worked, due to antitrust concerns over
Amazon boosting its own products at the expense of
competitors, and Amazon steadfastly refused to
cooperate with regulators’ requests. Thus, in the
Spring of 2023, iRobot had actual knowledge that,
contrary to the Company’s public statements to
investors, Amazon was not cooperating with regulators
and instead ignoring their requests for information to
review the Merger.

[45]

FAC ¶ 95; see also id. ¶ 167.

This is the entirety of CW2’s

information related to Amazon’s purported non-cooperation.

The

first sentence is at least somewhat factual -– iRobot’s CLO
announced at a May 2023 meeting that Amazon had refused to
provide certain information to the EC.

Save for the CLO’s

statement, though, this allegation adds little because it is
entirely silent as to context.

That is, there are no plausibly

pleaded facts surrounding Amazon’s refusal to cooperate with an
unspecified request by the EC at an unknown time, and for an
unknown duration.

The second sentence, moreover, is not a

reasonable inference from the first, and appears to be Premca’s
speculation.

That is, a vague, one-time instance of non-

cooperation does not logically lead to a reasonable inference
that Amazon was not cooperating with regulators at all times or
at any particular time relevant to statements made by iRobot.
Further, CW2’s information does not tie to any particular false
or misleading statement or support an inference of knowledge of
falsity when made -– even if Angle and Zeigler were present at a
meeting sometime in May 2023.
Turning to CW3 at FAC ¶ 119, the same problem is evident:
[A]ccording to CW 3, Weinstein admitted during a
meeting with Angle, Zeiler, and other iRobot
executives [in the late Summer of 2023] that Amazon
was refusing to cooperate with the EU Commission.
Specifically, Weinstein announced that the European
Commission had requested information about how
Amazon’s search engine worked, in order to determine
[46]

whether Amazon was favoring its internal products to
the detriment of competition, but Amazon refused to
cooperate or share that information.
FAC ¶ 119; see also id. ¶ 168.

Here, the pleading deficiency is

structurally the reverse of CW2’s statements; that is, the first
sentence relies on the second sentence to lead to the broad,
unsupported conclusion contained in the first.

Again, a CW in

this position would likely have at least some other facts.
This not a mere pleading oversight: tellingly, Premca is
able to draft complete, straight-forward, declarative statements
about allegations made by confidential witnesses without spin,
conjecture, and speculation.

For example, as to CW2, relating

to earnings calls, CW2 recounts that “iRobot stopped hosting
earnings calls [at Zeiler’s direction] because it was in such a
bad financial situation that it did not want to discuss its
forecasts.”

FAC ¶ 70.

In stark contrast to CW2 and CW3’s statements concerning
the Chief Legal Officer’s announcement, CW1’s statements
similarly provide plausibly pleaded allegations, though on a
different topic:
According to CW1, iRobot missed internal sales
forecasts for 18 months starting around the time the
Merger was announced. CW1 stated that iRobot had
extremely aggressive sales projections but lacked a
concrete plan to achieve those sales. According to
CW1, Zeiler instituted this aggressive approach. CW1
further stated that the Roomba was no longer
competitive and remained a high-end product that

[47]

consumers did not want to pay for compared to lowerpriced models.
FAC ¶ 56.

The difference between CW2 and CW3’s allegations on

the one hand, and CW1’s allegations on the other, further
confirms that, at least on this record, Premca’s allegations
lack sufficient particularity to permit a reasonable inference
that Amazon was being uncooperative with regulators, and
certainly do not support any allegations of falsity of
statements relating to cooperation when made.

See In re Boston

Sci. Corp. Sec. Litig., 646 F. Supp. 3d 249, 279 (D. Mass. 2022)
(Woodlock, J.) (rejecting confidential witness statements that
lacked sufficient particularity); LSI Design & Integration Corp.
v. Tesaro, Inc., No. 18-CV-12352-LTS, 2019 WL 5967994, at *4 (D.
Mass. Nov. 13, 2019) (Sorokin, J.); cf. Collier, 9 F. Supp. 3d
at 67-68, 70-73 (analyzing sufficiently pleaded confidential
witness statements).

Indeed, Premca’s claim that iRobot is

engaging in “tunnel vision,” Premca Opp’n 11 (quoting Hill v.
State St. Corp., No. 09cv12146-NG, 2011 WL 3420439, at *13 (D.
Mass. Aug. 3, 2011)), and that it need not produce “even more
details of Amazon’s obstruction,” because “the information [CW 2
and CW3] provide was exactly as discussed internally in
corporate meetings”, id. (citing FAC ¶¶ 95, 119), is mere
deflection.

[48]

Premca’s reliance on Collier is misplaced.
11.

Premca Opp’n

In that case, Judge Casper expressed doubt that CWs need

recall “all possible details from their former positions.”
Collier, 9 F. Supp. 3d at 73.

This Court agrees; however, there

must be sufficient, particularized detail to support the
inferences claimed.

Collier is distinguishable.

There, the CWs

had fulsome fact-based allegations: one recalled specific
conversations with the defendants, and another recalled her
termination after raising accounting inconsistencies.
72.

Id. at

Premca’s reliance on Washtenaw Cnty. Emps.’ Ret. Sys. v.

Talbots, Inc., No. 11-10186-NMG, 2013 WL 5348569, at *10 (D.
Mass. Sept. 23, 2013) (Gorton, J.), is also unpersuasive.

In

that case, the level of detail provided by the confidential
witnesses included specific questions placed to, and answers by,
individual defendants, going to the heart of the fraud.

Id.

With respect to non-cooperation with the EC, Premca also
relies on a February 15, 2023 Financial Times Article, iRobot
Exs., Ex. 8, Feb. 15, 2023 Fin. Times Article, ECF No. 52-8,
that describes the EC’s gearing up for a review of the proposed
merger, and sending questions to Amazon, FAC ¶¶ 82-83.

iRobot

argues that the article’s sources are anonymous, that it lacks
particularity, and that the article does not corroborate the
specific statement at issue because the article discusses
privacy concerns as opposed to Amazon’s search engine.
[49]

iRobot

Mem. 13.

iRobot cites In re Optionable Sec. Litig., 577 F.

Supp. 2d 681, 690 (S.D.N.Y. 2008) (finding newspaper article
relying on anonymous source insufficiently reliable and
specific); Plumbers & Steamfitters Loc. 773 Pension Fund v.
Canadian Imperial Bank of Com., 694 F. Supp. 2d 287, 300-01
(S.D.N.Y. 2010) (rejecting speculative media reports as
insufficiently particularized) as persuasive authority.

Id.

These cases, though not entirely on point, provide some insight.
Premca distinguishes these cases based upon the specifics of the
news reports.

Premca Opp’n 13-14.

There is, of course, no dispute that the Court may consider
news articles, but the Court is not required blindly to accept
them as fact.

As the Defendants point out in reply, not all

news articles are the same, and cases where news articles are
found acceptable typically feature articles that identify
sources, quote the defendants, or reference other evidence.
Reply 6-7 (citing Matrixx Initiatives, Inc., 563 U.S. at 34
(2011); Aldridge v. A.T. Cross Corp., 284 F.3d 72, 79-80 (1st
Cir. 2002); City of Warren Police & Fire Ret. Sys. v. World
Wrestling Ent. Inc., 477 F. Supp. 3d 123, 133 (S.D.N.Y. 2020);
In re Vivendi Universal, S.A., 381 F. Supp. 2d 158, 180
(S.D.N.Y. 2003); Godinez v. Alere Inc., 272 F. Supp. 3d 201, 208
(D. Mass. 2017) (Saris,J.)).

[50]

Even were the news articles otherwise sufficient, the
articles speak to vague concerns by regulators.

Nothing in

these articles signals that regulators had taken a final
position, nor expresses that that position had been communicated
to Amazon or iRobot.

Further, even were iRobot aware of these

news reports, iRobot is “not obligated to respond to every
potentially disparaging news story or to rebut the musings of
the financial press.”

Plumbers & Steamfitters, 694 F. Supp. 2d

at 300 (citing In re Omnicom Group, Inc. Sec. Litig., 597 F.3d
501, 514 (2d Cir.2010) (“Firms are not required by the
securities laws to speculate about distant, ambiguous, and
perhaps idiosyncratic reactions by the press or even by
directors.”); Hershfang v. Citicorp, 767 F.Supp. 1251, 1259
(S.D.N.Y.1991) (“Plaintiffs have stitched together a patchwork
of newspaper clippings and proclaimed the result a tale of
securities fraud. . . . Read as a whole, the complaint creates
the strong impression that when [the defendant] announced a cut
in dividends, plaintiff’s counsel simply stepped to the nearest
computer console, conducted a global Nexis search, [and] pressed
the ‘Print’ button.”)).
Articles discussing regulators’ concerns or that they were
gearing up for an investigation of a merger really say nothing
more than what was obvious to all investors at that time.
Premca has in effect “stitched together a patchwork of newspaper
[51]

clippings and proclaimed the result a tale of securities fraud.”
Hershfang, 767 F.Supp. at 1259.

Taken together, Premca’s press

reports by themselves lack foundational reliability and do not
indicate one way or the other whether the merger was expected to
succeed or whether there was an unusual level of scrutiny.

Most

importantly, they are untethered to any particular statement by
the Defendants.
Finally, iRobot argues that Angle’s statement in a January
10, 2024, Politico article that the “company” continued to work
with regulators does not refer to Amazon, but rather, to iRobot.
Mem. 14.

This is persuasive; indeed, Angle as CEO of iRobot

would not be expected to be commenting on Amazon’s conduct, and
the word “company” is not attributed to Angle as a quote, but
rather to the author of the Politico article.

Josh Sisco &

Aoife White, Amazon skips concessions to EU on iRobot deal,
Politico (Jan. 10, 2024),
https://www.politico.eu/article/amazon-dodges-concessions-toappease-eu-on-irobot-deal/.

No one has provided a copy of

Angle’s actual statement, and its placement in the article
supports only an inference that Angle was speaking with respect
to iRobot, not Amazon.

Statement No. 22 is therefore neither

false nor misleading.

[52]

FTC Cooperation Statements
Three of the statements pertain to Amazon’s purported lack
of cooperation with the FTC, Statement Nos. 2 (FAC ¶ 88), 6 (FAC
¶ 99), 15 (FAC ¶ 130), relying solely on a Politico article,
Josh Sisco, Washington prepares for war with Amazon, Politico
(Mar. 20, 2023), https://www.politico.com/news/2023/03/20/ftcamazon-irobot-antitrust-00087711.

iRobot argues that the

Politico article, although it does address the iRobot merger, is
more broadly focused on Amazon’s cooperation with multiple FTC
investigations.

iRobot Mem. 9-10; see Sisco, Washington

prepares, supra (“Amazon has been largely unresponsive to the
FTC’s investigations so far, refusing to turn over information
requested by the FTC, some of the people said.”) (emphasis
added)).

As iRobot argues, the Politico article is largely

nonspecific, and does not provide a reliable basis to assert
that Amazon was being uncooperative with the FTC specifically
relating to the Merger.

iRobot Mem. 9-10; Reply 6.

Indeed, the

same sufficiency problems that plagued CW2 and CW3’s statements
persist in this article as well.
2. Merger Status and Regulatory Reviews
These statements refer to iRobot’s 8-K, 10-Q, and 10-K
forms filed between February 13, 2023 and November 27, 2023,
which provided investors with updates as to the status of the
Merger and stated the risks related to it in general terms.
[53]

See

Statement Nos. 2 (FAC ¶ 88), 5 (FAC ¶ 97), 6 (FAC ¶ 99), 9 (FAC
¶ 113), 10 (FAC ¶ 120), 12 (FAC ¶ 124), 15 (FAC ¶ 130), 17 (FAC
¶ 138), 18 (FAC ¶ 140), and 20 (FAC ¶ 145).

iRobot cabins

Premca’s claim that the statements were misleading as follows:
(i) the “European Commission and FTC had taken
concrete steps to increase their scrutiny of the
Merger, including sending Amazon detailed questions
and requests for information over the Merger which
were not resolved, increasing the regulatory threat to
the Merger”; (ii) “Amazon and iRobot ceased holding
integration meetings between the companies, indicating
an increased pessimism over the Merger receiving
regulatory approval”; and (iii) “iRobot began, for the
first time, to formulate alternative plans for the
Company in September 2023 in preparation for the
Merger to be rejected by regulators.” (See, e.g., FAC
¶¶ 100, 114, 132, 139.)
iRobot Mem. 15.

Premca’s arguments are bit more broad,

essentially claiming that iRobot “consistently painted
regulatory approval as a when-not-if-proposition, despite
knowing undisclosed material facts” otherwise.

Premca Opp’n. 14

Premca claims that iRobot knew of regulatory objections, noncooperation of the Merger participants, iRobot’s expectation
that the Merger would fail, cessation of integration meetings,
and the iRobot’s contingency planning .

Id. at 14-15.

First, the allegations that iRobot ignored increasing
regulatory risk is primarily supported by vague news articles
that are largely unremarkable.

At the same time, merger status

updates were timely and fulsome.

See e.g., FAC ¶¶ 88, 97, 99,

113, 120, 124, 130, 138, 140, and 145.
[54]

Premca’s noncooperation

argument fails for the same reasons identified above.
Section III.B.1, supra.

See

Again, identifying (at most) two

instances of purported non-cooperation over a year-long period
is simply insufficient to plead that any of the updates and
regulatory statements were false when made.
As for the cessation of integration meetings and
contingency planning, once again, the Court needs to scrutinize
the sources of information as to these allegations.

Here, the

statements from CW2, CW3, and CW4 allege that iRobot beginning
in August 2023 began suspending integration meetings with
Amazon, and that by October 2023, it had halted “all”
integration meetings.

FAC ¶¶ 9, 115-19, 137, 165.

As iRobot

points out, Premca makes no argument about express statements
regarding sufficiency of integration; rather, the cessation of
the meetings allegedly signaled “increased pessimism over the
Merger receiving regulatory approval,” which the form statements
then allegedly misrepresented.

iRobot Mem. 16 (citing FAC ¶¶

120-21, 123-27, 129-30, 138-40, 145).
The allegations that are based on confidential witnesses
fail at a pleading level.

Turning first to CW2, at FAC ¶ 134,

the allegations are as follows:
According to CW2, in September 2023, during monthly
Senior Leadership Team Meetings, iRobot executives
internally formulated plans for the business without
the Merger. This reflected a growing understanding

[55]

within the Company that the Merger was unlikely to be
approved by regulators.
FAC ¶ 134 (emphasis added).

Similar to Premca’s confidential

witness allegations relating to cooperation, see Section
III.B.1, supra, the first sentence provides no context as to why
the plans were formulated, the scope of the plans, or any other
contextual information that a confidential witness attending
these meetings would likely possess.

The second sentence is

also unclear as to whether it is to be attributed to CW2, or is
merely Premca’s argument.

For example, the second sentence’s

use of the word “reflected” is speculative and muddies the
water.

On its face, it is pleaded plausibly that CW2 claims

that contingency plans for the business to operate without the
merger were formulated, but absent any factual context, the
allegation is insufficient to establish the further inference
that iRobot expected the Merger to fail.
Turning to CW4, at FAC ¶ 137 the allegations are as
follows:
According to CW4, who attended weekly and monthly
integration meetings, by October 2023, all integration
meetings between iRobot and Amazon had stopped,
indicating that the Company no longer believed that
the Merger would receive regulatory approval.
FAC ¶ 137 (emphasis added).

Again, the fact asserted by CW4 is

the cessation of meetings; then the allegation pivots to the

[56]

word “indicating,” which introduces a speculative statement.7
From the drafting of the FAC, CW4 has failed plausibly to plead
personal knowledge of iRobot’s belief concerning the approval.
As for the updates, Premca argues that even if technically
true (which it does not concede), the omission of known adverse
information renders the updates misleading.

Premca Opp’n 15.

Premca spotlights Glazer Cap. Mgmt., L.P. v. Forescout Techs.,
Inc., 63 F. 4th 747 (9th Cir. 2023), in which the Ninth Circuit
rejected language describing hypothetical risks as to
information the company already knew.
4th at 778-79).

Id. (citing Glazer, 63 F.

Glazer, however, is inapposite.

There, the

defendant company had actual knowledge that the counterpart
company to the merger was considering bailing out of the merger
process, but that fact was omitted from communications conveying
expectations that the merger would close.
778-79.

Glazer, 63 F. 4th at

The allegations here are not nearly so robust.

Cf. In

re Coinbase Glob., Inc. Sec. Litig., No. 2:22-CV-04915
(BRM)(LDW), 2024 WL 4053009, at *13 (D.N.J. Sept. 5, 2024)
(observing that, while defendant company was not required to
speculate about regulator’s activity, its own internal processes
directly contradicted its representations about the possibility

The Court presumes without ruling that the FAC
sufficiently alleges that CW4 would be in a position to know
about “all” integration meetings. See FAC ¶ 136.
7

[57]

of regulatory action); In re Sprint Corp. Sec. Litig., 232 F.
Supp. 2d 1193, 1219 (D. Kan. 2002) (observing that defendants
were informed by regulators that merger investigation would be
suspended, suggesting serious problems).
In sum, iRobot has the better of the argument here.

Premca

cobbles together loose public information with unfocused
confidential witness statements intertwined with argument, to
present a scenario of fraud.

Indeed, the confidential witnesses

do not allege that the Merger was somehow in trouble, or the
reasons for the cessation of integration meetings or the
contingency planning.

“Like Conan Doyle’s dog that did not

bark, this silence says much.”

Quinones, 106 F.4th at 183.

3. Risk Factor Disclosures
The First Circuit analyzes misleading risk disclosures as
follows:
[W]e can understand the contours of what makes a risk
so great that it is akin to the Grand Canyon (and
therefore a disclosure is misleading if it frames the
risk as merely hypothetical) and what makes a
situation merely risky (i.e., simply a ditch). A
securities fraud defendant is at the edge of the Grand
Canyon where the alleged risk had a “near certainty”
of causing “financial disaster” to the company. Of
course, the defendant company must have understood the
near certainty of the risk at the time it made the
statements at issue.
Karth v. Keryx Biopharmaceuticals, Inc., 6 F.4th 123, 137–38
(1st Cir. 2021) (citations omitted).

A Grand Canyon event, for

example, “is often evidenced by a company’s frenzied,
[58]

underhanded efforts ‘to keep the house of cards standing.’”

Id.

at 138 (quoting In re Cabletron Sys., Inc., 311 F.3d at 24).
Similarly, “[i]f a company is ‘desperate[ly]’ working to
‘protect itself’ from rapidly approaching harm, then it is at
the edge of the Grand Canyon and must warn investors of an
imminent cliff.”

Id. (quoting Tutor Perini Corp. v. Banc of Am.

Sec. LLC, 842 F.3d 71, 88-91 (1st Cir. 2016)).

These factors

are not plausibly pleaded in the FAC.
The risk-factor disclosures, while characterized as
“boilerplate,” “hypothetical,” and “carbon-copy,” are here
nonetheless sufficient in light of the plausibly pleaded facts
in the FAC.

See Statement Nos. 1 (FAC ¶ 86), 3 (FAC ¶ 89), 5

(FAC ¶ 97), 11 (FAC ¶ 122), 13 (FAC ¶ 126), 15 (FAC ¶ 130), 18
(FAC ¶ 140), and 21 (FAC ¶ 146).

Indeed, as iRobot argues, the

disclosures were accurate and “tailored and repeatedly updated
throughout the Class Period as iRobot navigated the
uncertainties around the regulators’ ongoing review of the
Merger.”

iRobot Mem. 18; see also Reply 10-12.

The FAC’s

allegations do not demonstrate that risk had begun to
materialize or that there was near certainty of risk at the time
of the disclosures.

Id.

Premca asserts that the disclosures

did not accurately update investors because: (1) communications
from regulators raised concerns that made approval from
regulators unlikely; (2) Amazon and iRobot were not cooperating
[59]

with regulators; and (3) the merger prospects were so poor that
iRobot was preparing for the merger’s abandonment.

Premca Opp’n

18.
While the Court agrees with Premca that iRobot was not
entitled to “misrepresent Merger risks,” what emerges from the
few well-pleaded factual allegations in the FAC is run-of-themill merger processes updated through disclosure and appropriate
risk-disclosure language, not a “whitewash.”

Premca Opp’n 18

(quoting Tutor Perini Corp., 842 F.3d at 91).
There are no communications from the regulators that
approval of the Merger was unlikely.

For example, to the extent

that regulators sought a Second Request (FTC), began a Phase 2
investigation (EC), or filed a Notice of Objections (EC), there
is no dispute that information was timely and publicly
disclosed.

Premca describes such actions as somehow increasing

the likelihood of the failure of the Merger.

There is, again, a

lack of factual allegation as to what the regulators were doing
or not doing, and although not necessary, it is telling that
not a single confidential witness from Amazon provides
information as to what happened.

As for iRobot’s confidential

witnesses, CW2, CW3, and CW 4 fail to make sufficient, plausibly
pleaded allegations to support fraud.8

To use the First

As mentioned above, CW1 has little to add other than that
iRobot was having financial trouble. See FAC ¶¶ 55-56.
8

[60]

Circuit’s analogy, the FAC might paint a picture of a ditch, but
it is certainly no “Grand Canyon.”

The FAC bootstraps its own

characterizations of the few facts into a narrative that is, on
this record, not pleaded plausibly, i.e., that requires
unreasonable inferences to be made.
4. Sarbanes-Oxley Certifications
The claims relating to the Sarbanes-Oxley certifications
made by Angle and Zeiler (Statement Nos. 4 (FAC ¶ 91), 7 (FAC ¶
102), 14 (FAC ¶ 128), and 19 (FAC ¶ 142)) fail for the same
reasons set forth above.

Namely, there are insufficient

allegations that the statements made by Angle and Zeiler were
knowingly false or misleading when signed.
C.

Premca Fails to Establish a Strong Inference of
Scienter

Even if any of the above statements were false or
misleading, Premca has failed to establish a strong inference of
scienter as required under the PSLRA.

See Salim v. Mobile

Telesystems PJSC, No. 19-CV-1589(AMD)(RLM), 2021 WL 796088, at
*12 (E.D.N.Y. Mar. 1, 2021) (considering scienter elements even
in the absence of misrepresentations), aff’d, No. 21-839-CV,
2022 WL 966903 (2d Cir. Mar. 31, 2022).

“To support a finding

of scienter under the PSLRA, a complaint must state with
particularity facts giving rise to a strong inference that the
defendant . . . either . . . consciously intended to defraud, or

[61]

that they acted with a high degree of recklessness.”

Quinones,

106 F.4th at 182 (citation and internal quotation marks
omitted).
As this Court recently wrote about the applicable PSLRA
pleading standard:
Congress has heightened the pleading standard for
scienter allegations in private enforcement actions.
S.E.C. v. Sharp, 2022 WL 4085676 (D. Mass. 2022)
(citing Merrill Lynch, Pierce, Fenner & Smith, Inc. v.
Dabit, 547 U.S. 71, 81 (2006)). The reasons
underlying this important legislative intervention
were described in Galileo:
In particular, Congress sought to reform
private securities litigation to discourage
unmeritorious class actions, including
actions brought because of a decline in
stock prices. The aims of the PSLRA are
three-fold: (1) to encourage the voluntary
disclosure of information by corporate
issuers; (2) to empower investors so that
they -- not their lawyers -- exercise
primary control over private securities
litigation; and (3) to encourage plaintiffs’
lawyers to pursue valid claims and
Defendants to fight abusive claims. The
PSLRA seeks to curtail the filing of abusive
lawsuits at the pleading stage of litigation
by establishing uniform and stringent
pleading requirements.
In re Galileo Corp. S’holders Litig., 127 F. Supp. 2d
251, 260 (D. Mass. 2001) (Lindsay, J.).
Specifically, the pleaded facts must give rise to
a “strong” inference of scienter. Tellabs, Inc. v.
Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
This means that the complaint must “with respect to
each act or omission . . . 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); see also In re Boston
[62]

Scientific Corp. Secs. Litig., 686 F.3d [21,] 30 [(1st
Cir. 2012)]. “It does not suffice that a reasonable
factfinder plausibly could infer from the complaint’s
allegations the requisite state of mind.” Tellabs,
551 U.S. at 314. Instead, the inference of scienter
must be “cogent and at least as compelling as any
other opposing inference of nonfraudulent intent.”
Id. at 328.
Quinones, 665 F. Supp. 3d at 173-174 (parallel citations
omitted).
In affirming this Court, the First Circuit recently
restated the high scienter pleading requirements.

“The PSLRA

dictates that to survive a motion to dismiss, ‘[a]n inference of
scienter’ must be ‘cogent and at least as compelling as any
opposing inference one could draw from the facts alleged.’”
Quinones, 106 F. 4th at 184 (alteration in original) (quoting In
re Genzyme Corp. Sec. Litig., 754 F.3d 31, 40 (1st Cir. 2014)).
In that case, in the context of a motion to dismiss, the First
Circuit succinctly restated the standard under Fed. R. Civ. P.
9(b) and the PSLRA as follows:
To support a finding of scienter under the PSLRA,
a complaint must “state with particularity facts
giving rise to a strong inference that the defendant .
. . either . . . consciously intended to defraud, or
that they acted with a high degree of recklessness.” A
“strong” inference is “more than merely ‘reasonable’
or ‘permissible’ -- it must be cogent and compelling,
thus strong in light of other explanations.”
Quinones, 106 F.4th at 182 (citations omitted).

“Recklessness

in this context means ‘a highly unreasonable omission, involving
not merely simple, or even inexcusable[ ] negligence, but an
[63]

extreme departure from the standards of ordinary care, and which
presents a danger of misleading buyers or sellers that is either
known to the defendant or is so obvious the actor must have been
aware of it.’”

In re Biogen Inc. Sec. Litig., 193 F. Supp. 3d

5, 44 (D. Mass. 2016) (Saylor, J.), aff’d, 857 F.3d 34 (1st Cir.
2017) (quoting Mississippi Pub. Emps.’ Ret. Sys. v. Boston Sci.
Corp. II, 649 F.3d 5, 20 (1st Cir.2011)).

A high burden indeed.

Scienter is a holistic concept and “need not be
irrefutable, i.e., of the ‘smoking-gun’ genre, or even the ‘most
plausible of competing inferences.’”

Tellabs, 551 U.S. at 323-

324 (quoting Fidel v. Farley, 392 F.3d 220, 227 (6th Cir.
2004)).

Nevertheless, as here, where the FAC is largely “devoid

of any direct-evidence allegations, the indirect-evidence
allegations in the [FAC] will need to do more work to carry the
burden of raising a ‘strong inference of scienter’ on their
own.”

Shash v. Biogen, Inc., 84 F. 4th 1, 16 (1st Cir. 2023)

(quoting Brennan v. Zafgen, Inc., 853 F.3d 606, 615 n.8 (1st
Cir. 2017)).

“Certainly while ‘[e]ach individual fact about

scienter may provide only a brushstroke,’ . . . [the Court’s]
obligation [is] to consider ‘the resulting portrait.’” Quinones,
106 F. 4th at 184 (quoting Local No. 8 IBEW Ret. Plan & Tr. v.
Vertex Pharms., Inc., 838 F.3d 76, 81 (1st Cir. 2016)).

As the

First Circuit points out, “[a]t the same time plaintiffs cannot
amalgamate a series of sketchy brushstrokes and call it a van
[64]

Gogh.”

Id.

Indeed, “competing inferences should be weighed

against plaintiffs’ preferred interpretation of the facts.”
Fin. Guar. Corp., 512 F.3d at 59.

ACA

“While it may be unusual for

courts to weigh competing inferences from facts, Congress
mandated this review in the PSLRA.”

Id.

“When there are

equally strong inferences for and against scienter, ‘the draw is
awarded to the plaintiff.’”

Pizzuto v. Homology Medicines.,

Inc., No. 1:23-CV-10858-AK, 2024 WL 1436025, at *15 (Kelley, J.)
(quoting City of Dearborn Heights Act 345 Police & Fire Ret.
Sys. v. Waters Corp., 632 F.3d 751, 757 (1st Cir. 2011)).

In

the end, “[t]here is no one-size-fits-all way of analyzing
securities fraud cases; rather, [the Court must] take a ‘“factspecific approach” that proceeds case by case.’”

Karth, 6 F.

4th at 134 (quoting In re Cabletron Sys., Inc., 311 F.3d at 38).
Premca repackages many of the FAC’s misrepresentation
allegations into additional allegations of scienter.
165-188.

FAC ¶¶

Ultimately, Premca’s news articles and four

confidential witness statements, even if taken as true, do not
meet the rigorous standards of Rule 9(b) and the scienter
requirement of the PSLRA.
First, as for the confidential witnesses, CW1 is relatively
the most reliable, but least important, confidential witness,
establishing nothing more than that iRobot was having difficulty
making its product appealing.

As for the remaining confidential
[65]

witnesses, the Court has already dealt with the anemic
allegations made by CW2, CW3 and CW4, and the pleading problems
associated with them.

See Section III.B.1, supra.

Second, the press articles do not paint a picture of fraud.
For the most part, the press articles fret over well-known
privacy issues relating to Amazon that were apparently subject
to scrutiny by regulators in the United States and Europe.

The

content of the articles is also relatively murky; while there is
much conjecture about scrutiny of the Merger by regulators, it
is all based upon anonymous sourcing and speculation as to
merger investigations.

“Although a plaintiff may use such

sources in pleadings, ‘the news articles cited still must
indicate particularized facts about a defendant’s conduct in
order to support [the] claims.’”

Plumbers & Steamfitters, 694

F. Supp. 2d at 300 (alteration in original) (quoting Miller v.
Lazard, Ltd., 473 F.Supp.2d 571, 586 (S.D.N.Y. 2007));

Brennan

v. Zafgen, Inc., 199 F. Supp. 3d 444, 451–52 (D. Mass. 2016)
(Saylor, J.) (“[T]he complaint’s circumstantial allegations
concerning scienter -- a patchwork of scientific literature and
unsuspicious insider sales -- are insufficient to support a
strong inference of defendants’ ‘conscious intent to defraud or
high degree of recklessness.’” (quoting ACA Fin. Guar. Corp.,
512 F.3d at 58)), aff’d, 853 F.3d 606 (1st Cir. 2017).
absence of plausibly pleaded facts concerning internal
[66]

In the

knowledge, Premca is left asserting that iRobot, itself, should
have speculated about the merger’s success based upon
anonymously sourced press articles.

“The securities laws do not

require -- and good business practice does not suggest -- that
[companies] respond to every warble of the 24–hour news cycle.”
Id. at 301.
Third, Premca’s reliance on executives’ high level of
access and the Merger Agreement’s cooperation provision is, as
iRobot argues, a dressed-up “must have known” claim.
Mem. 24.

Premca argues that the Merger Agreement, along with

“multiple facts,” demonstrate actual knowledge.
25.

iRobot

Premca Opp’n

Stripped of any supporting plausibly pleaded facts from the

confidential witnesses relating to the merger, the claims of
knowledge through access to information by iRobot’s executives,
even including the Merger Agreement, are “tantamount to the
‘scienter by status’ theory, which has been ‘uniformly rejected’
and which cannot sustain a showing of scienter here.”

State

Teacher Ret. Sys. of Ohio v. Charles River Lab’ys Int’l, Inc.,
No. 23-CV-11132-DJC, 2024 WL 3258293, at *16 (D. Mass. July 1,
2024) (Casper, J.) (quoting City of Fort Lauderdale Police &
Firefighters’ Ret. Sys. v. Pegasystems, Inc., 683 F. Supp. 3d
120, 132 (D. Mass. 2023)) (citing Lirette v. Shiva Corp., 27 F.
Supp. 2d 268, 283 (D. Mass. 1998)).

Indeed, the allegations

relying on the Merger Agreement reflect the speculative nature
[67]

of this type of allegation.

See FAC ¶ 149 (“Pursuant to the

Merger Agreement’s cooperation provision, iRobot would have been
informed of Amazon’s plans for the December 18, 2023 hearing,
coordinated strategy, and been debriefed on the hearing itself.”
(emphasis added)); FAC ¶ 158 (“Either at its own meeting with
the FTC or, pursuant to the Merger Agreement’s cooperation
provision, through communication with Amazon, Defendants were
informed that the FTC would oppose the Merger.” (emphasis
added)); FAC ¶ 165 (“Defendants iRobot, Angle and Zeiler had
access to information about, and according to the Merger
Agreement, received actual knowledge of, Amazon’s refusal to
cooperate with regulators.”)9; FAC ¶ 166 (“[P]ursuant to the
Merger Agreement’s cooperation provision, Amazon would have told
iRobot’s executives –- which included Angle and Zeiler -– about
every interaction with both FTC and European Commission
regulators.” (emphasis added)).
Fourth, as for “core operations,” the First Circuit has not
determined the contours of this doctrine.
Sec. Litig., 857 F.3d at 44.

See In re Biogen Inc.

Even though such operations are,

and are here, considered in the calculus, courts “have been

This allegation apparently relates to CW2 and CW3’s
allegations that iRobot’s Chief Legal Officer referenced an
instance of Amazon’s failure to provide information to the
European Commission, which are analyzed above as insufficiently
pleaded. See Section III.B.1.a, supra.
9

[68]

hesitant to apply significant weight to ‘core operations’
allegations without other significant evidence of a defendant’s
intent or recklessness, or a ‘plus factor.’”

Leung v. Bluebird

Bio, Inc., 599 F. Supp. 3d 49, 66 (D. Mass. 2022) (Casper, J.)
(quoting In re Biogen Inc. Sec. Litig., 193 F. Supp. 3d at 51).
While the Merger was a critical transaction to iRobot, there is
an absence of the plus factor here typically necessary to
support an inference of scienter.

In re iRobot Corp. Sec.

Litig., 527 F. Supp. 3d 124, 141 (D. Mass. 2021) (Casper, J.)
(discussing cases involving “plus factors”).

Rather, the claims

that iRobot must have been aware of Amazon’s uncooperative
approach are unsupported by plausibly pleaded facts.
Accordingly, this factor has little impact on scienter.
Fifth, Angle’s resignation and the timing of that
resignation are similarly without effect.

As iRobot argues,

Angle stayed on as a director after resigning as Chief Executive
Officer until May 2024, and as a senior advisor to iRobot while
it found a new CEO.

iRobot Mem. 27 (citing iRobot Exs., Ex. 23,

Jan. 29, 2024 Form 8-K 26, ECF No. 52-23).

Premca’s focus on

Angle’s resignation also ignores any mention of Zeiler.
Premca cites to cases where the timing of the resignation
was tied directly to the purported fraud.

See, e.g., Collier, 9

F. Supp. 3d at 65-66, 76 (discussing resignations after audit
committee findings and restatement of company financials).
[69]

This

is not a situation where an officer or director was pushed out
of the company after an internal investigation, findings of
fraud or misfeasance.

While Angle may have resigned as a result

of the Merger’s not going through, there is no linkage to any
fraud by Angle.

Angle’s resignation, although it occurred at

the same time as the merger termination, does not weigh
significantly in favor of scienter.

See Metzler Asset Mgmt.

GmbH v. Kingsley, 305 F. Supp. 3d 181, 219 (D. Mass. 2018)
(Saylor,J.) (“The complaint fails to plead with any
particularity that [the defendant’s] employment was terminated
because of [the subject of the alleged fraud].”), aff’d, 928
F.3d 151 (1st Cir. 2019).

Without more, there is nothing

suspicious about Angle’s resigning as CEO, while staying on as a
director until May 2024 and assisting iRobot with finding a
replacement.

See In re iRobot Corp. Sec. Litig., 527 F. Supp.

3d at 140-41 (“[T]here is nothing inherently suspicious about ‘a
COO resigning to become a CEO’ of another company.

Absent any

further particularized allegations, other than the timing of
aligning with alleged corrective disclosures, the complaint
fails to allege sufficient facts to show that [the executives’]
departures were tied to their knowledge or even participation in
the alleged fraud.” (citation omitted)); see also In re Hertz
Glob. Holdings Inc., 905 F.3d 106, 119 (3d Cir. 2018)
(“[P]leading scienter requires more than pleading a link between
[70]

bad news and an executive’s resignation.

Changes in leadership

are only to be expected when leadership fails.

That is not, in

itself, a symbol of fraud.”); Ezzes v. Vintage Wine Ests., Inc.,
No. 2:22-CV-01915-GMN-DJA, 2024 WL 895018, at *14-15 (D. Nev.
Mar. 1, 2024) (finding that transition from CEO to Executive
Chairman of the Board of Directors by one officer and transition
from CFO to Executive Vice President, and then resignation, by
another do not support strong inference of scienter); In re
Intel Corp. Sec. Litig., No. 5:20-CV-05194-EJD, 2023 WL 2767779,
at *24 (N.D. Cal. Mar. 31, 2023) (“Such departures are hardly
uncharacteristic since ‘[m]ost major stock losses are often
accompanied by management departures.’” (alteration in original)
(quoting In re CornerStone Propane Partners, L.P. Sec. Litig.,
355 F. Supp. 2d 1069, 1093 (N.D. Cal. 2005))), aff’d, No. 2315695, 2024 WL 1693340 (9th Cir. Apr. 19, 2024).
Sixth, Angle’s statements at FAC ¶¶ 177-80 are insufficient
to demonstrate a strong inference of scienter.

Here, the

temporal proximity of the June 16, 2023 and January 10, 2024
general statements of cooperation and optimism to the eventual
failure of the Merger is not supported by other plausibly
pleaded allegations sufficient to raise that inference.
Seventh, the SOX certifications are insufficient insofar as
the few plausibly pleaded factual allegations fail to suggest

[71]

with any particularity that the statements were false or false
when made.
Eighth, Premca’s generalized and indirect assertions of
financial motive are insufficient.

“When financial incentives

to exaggerate earnings go far beyond the usual arrangements of
compensation based on the company’s earnings, they may be
considered among other facts to show scienter.”
F.3d at 83.

Aldridge, 284

The Merger Agreement’s “Golden Parachute

Compensation” package itself, which simply incentivized
completion of the Merger, did not operate as a motivating factor
artificially to keep share prices high.

See FAC ¶¶ 174-76.

There was no special financial benefit to the Defendants for the
Merger to reach fruition other than a seemingly customary
compensation package, and no indication of why artificially
inflating stock prices would make the Merger more likely to
succeed with regulators.

On this record, and in the absence of

any on point authority, iRobot’s alleged financial motive adds
little to the scienter analysis.
Finally, stepping back and assessing the few plausibly
pleaded allegations holistically, a non-culpable inference is
more compelling than Premca’s largely conclusory narrative of
fraud.

Weighing the competing theories here, the more

compelling inference drawn from the facts alleged is that iRobot
provided consistent updates of the Amazon/iRobot merger that
[72]

ultimately failed as a result of regulatory resistance.

Indeed,

“[o]ften in cases where the scienter pleading standard is
satisfied, the complaint ‘contains clear allegations of
admissions, internal records or witnessed discussions suggesting
that at the time they made the statements claimed to be
misleading, the defendant officers were aware that they were
withholding vital information or at least were warned by others
that this was so.’”

Brill, 2024 WL 4228832, at *11 (quoting In

re Boston Sci. Corp. Sec. Litigation, 686 F.3d 21, 31 (1st Cir.
2012)).
IV.

That is not present here.

SECTION 14(A) CLAIM
Premca’s Count III attempts to bring a proxy claim under

Section 14(a) of the Securities Exchange Act.

“Section 14(a)

seeks to ‘prevent management or others from obtaining
authorization for corporate action by means of deceptive or
inadequate disclosure in proxy solicitation.’”10

10

Winters v.

Section 14(a) of the Act provides, in pertinent part:
It shall be unlawful for any person . . . in
contravention of such rules and regulations as the
Commission may prescribe as necessary or appropriate in
the public interest or for the protection of investors,
to solicit or to permit the use of his name to solicit
any proxy or consent or authorization in respect of any
security (other than an exempted security) registered
pursuant to section 78l of this title.

15 U.S.C. § 78n(a)(1).
[73]

Stemberg, 529 F. Supp. 2d 237, 252 (D. Mass. 2008) (quoting J.I.
Case Co. v. Borak, 377 U.S. 426, 431 (1964)).

In turn, “SEC

Rule 14a-9, promulgated pursuant to Section 14(a) of the
Exchange Act, prohibits solicitation by means of a proxy
statement containing ‘any statement which, at the time and in
the light of the circumstances under which it is made . . .
omits to state any material fact necessary in order to make the
statements therein not false or misleading.’”

Vardakas v.

American DG Energy Inc., No. 17-CV-10247-LTS, 2018 WL 1141360,
at *2 (D. Mass. Mar. 2, 2018) (Sorokin, J.) (citing 17 C.F.R. §
240.14a-9(a)).11
iRobot argues that the FAC “fails to adequately allege a
material misrepresentation.”

iRobot Mem. 29 (citing In re

Analogic Corp. S’holder Litig., NO. 18-cv-11301-ADB, 2019 WL
4804800, at *8-10 (D. Mass. Sept. 30, 2019)); see In re Analogic

11

Rule 14a-9(a) provides, in pertinent part:
No solicitation subject to this regulation shall be made
by means of any proxy statement, form of proxy, notice of
meeting or other communication, written or oral,
containing any statement which, at the time and in the
light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or
which omits to state any material fact necessary in order
to make the statements therein not false or misleading or
necessary to correct any statement in any earlier
communication with respect to the solicitation of a proxy
for the same meeting or subject matter which has become
false or misleading.

17 C.F.R. § 240.14a–9(a).
[74]

Corp, 2019 WL 4804800, at *7 (“To prevail on a claim under
Section 14(a), a plaintiff must show: (1) the proxy statement
contained a material misstatement or omission, that (2) caused
plaintiff's injury, and (3) that the proxy solicitation was an
essential link in the accomplishment of the transaction.”).
Premca’s claim attempts to carve out a negligence claim
under Section 14(a) to avoid the more rigorous pleading
requirements of a Section 10(b) claim, claiming that Count III
does not “sound in fraud” nor allege that iRobot or Angle acted
“with scienter or fraudulent intent.”

FAC ¶ 215.

While the

First Circuit has not ruled on this tactic, iRobot cites to
persuasive authority that, “[w]hen plaintiffs assert Section
14(a) claims grounded in alleged fraudulent conduct, they are
subject to heightened pleading requirements, even if they
disclaim reliance on a fraud theory.”

In re JP Morgan Chase

Sec. Litig., 363 F. Supp. 2d 595, 636 (S.D.N.Y. 2005) (citation
omitted); see In re Meta Materials Inc. Sec. Litig., No. 21-CV7203(CBA)(JRC), 2023 WL 6385563, at *22 n.18 (E.D.N.Y. Sept. 29,
2023).
So it is here.

Premca ignores that it has incorporated

every allegation in the FAC into Count III.

See FAC ¶ 214

(“Lead plaintiff repeats and re-alleges each and every
allegation contained in the foregoing paragraphs as if fully set
forth herein.”).

Premca then tries to limit the effect of the
[75]

rest of the FAC by claiming that Count III, somehow, “does not
sound in fraud.”

See id. ¶ 215.

Premca then attempts to

delimit the claim to one that iRobot was “at least negligent in
filing the Modified Merger Proxy Statement.”

Id. ¶ 218

(emphasis added).
The FAC, as a whole, is grounded in fraud, and therefore
Count III fails for the same reasons as the Rule 10(b)-5 claim.
Proceeding with 84 pages and 213 paragraphs of an amended
complaint on a theory of “wrongful acts and omissions,”

FAC ¶

16, where jurisdiction was premised solely on securities fraud,
see FAC ¶ 17 (“The claims asserted herein arise under and
pursuant to Sections 10(b) and 20(a) of the Exchange Act (15
U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated
thereunder by the SEC (17 C.F.R. § 240.10b-5)”), with a Section
20(a) claim, Count II, premised on the securities fraud
allegations, and without a hint of the word negligence until
Count III, demonstrates that in substance the claim is based in
fraud, even though Premca disclaims reliance on fraud.

Cf.

Sharma v. Rent the Runway, Inc., No. 22-CV-06935(OEM)(VMS), 2024
WL 4287229, at *8 (E.D.N.Y. Sept. 25, 2024) (upholding Section
11 claim where complaint made clear throughout that the action
sounded only in negligence).

[76]

V. SECTON 20(A) CLAIM
Premca argues that its Section 20(a) claim in Count II
survives because the Section 10(b) claim survives, apparently
abandoning a Section 20 claim under Section 14(a).

“The plain

terms of section 20(a) indicate that it only creates liability
derivative of an underlying securities violation.”

ACA Fin.

Guar. Corp., 512 F.3d at 67 (citing 15 U.S.C. § 78t(a)).
parties agree on this point.

The

iRobot Mem. 30; Premca Opp’n 29.

Accordingly, because Premca “did not state any claims under
section 10(b), [its] derivative section 20(a) claims also fail.”
Zhou, 120 F. 4th at 296 (citing Fire & Police Pension Ass’n of
Colo. v. Abiomed, Inc., 778 F.3d 228, 246 (1st Cir. 2015)).
VI.

THE ACTION IS DISMISSED WITH PREJUDICE
The Court dismisses this action with prejudice.

Alleging

securities fraud is serious business, and the pleading process
ought not be used as a trial balloon, with repeated bites at the
apple ensuing at the motion to dismiss stage.

To the contrary,

Congress envisioned the PSLRA to raise the standard, striking a
delicate balance between the need to curb vexatious litigation
and protecting the public from fraud.12

The Court recognizes

The Legislative History of the PSLRA confirms the
delicate balance Congress envisioned in its passage:
12

The overriding purpose of our Nation’s securities
laws is to protect investors and to maintain
confidence in the securities markets, so that our
[77]

national savings, capital formation and investment may
grow for the benefit of all Americans.
The private securities litigation system is too
important to the integrity of American capital markets
to allow this system to be undermined by those who
seek to line their own pockets by bringing abusive and
meritless suits. Private securities litigation is an
indispensable tool with which defrauded investors can
recover their losses without having to rely upon
government action. Such private lawsuits promote
public and global confidence in our capital markets
and help to deter wrongdoing and to guarantee that
corporate officers, auditors, directors, lawyers and
others properly perform their jobs. This legislation
seeks to return the securities litigation system to
that high standard.
Congress has been prompted by significant
evidence of abuse in private securities lawsuits to
enact reforms to protect investors and maintain
confidence in our capital markets. The House and
Senate Committees heard evidence that abusive
practices committed in private securities litigation
include: (1) the routine filing of lawsuits against
issuers of securities and others whenever there is a
significant change in an issuer’s stock price, without
regard to any underlying culpability of the issuer,
and with only faint hope that the discovery process
might lead eventually to some plausible cause of
action; (2) the targeting of deep pocket defendants,
including accountants, underwriters, and individuals
who may be covered by insurance, without regard to
their actual culpability; (3) the abuse of the
discovery process to impose costs so burdensome that
it is often economical for the victimized party to
settle; and (4) the manipulation by class action
lawyers of the clients whom they purportedly
represent. These serious injuries to innocent parties
are compounded by the reluctance of many judges to
impose sanctions under Federal Rule of Civil Procedure
11, except in those cases involving truly outrageous
misconduct. At the same time, the investing public
and the entire U.S. economy have been injured by the
unwillingness of the best qualified persons to serve
on boards of directors and of issuers to discuss
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that the First Circuit has expressed its “discomfort” with
dismissals with prejudice at the motion to dismiss stage and has
“emphatically reiterate[d] that the PSLRA does not require that
orders of dismissal be with prejudice.”

In re Genzyme Corp.

publicly their future prospects, because of fear of
baseless and extortionate securities lawsuits.
In these and other examples of abusive and
manipulative securities litigation, innocent parties
are often forced to pay exorbitant “settlements.”
When an insurer must pay lawyers’ fees, make
settlement payments, and expend management and
employee resources in defending a meritless suit, the
issuers' own investors suffer. Investors always are
the ultimate losers when extortionate “settlements”
are extracted from issuers.
This Conference Report seeks to protect
investors, issuers, and all who are associated with
our capital markets from abusive securities
litigation. This legislation implements needed
procedural protections to discourage frivolous
litigation. It protects outside directors, and others
who may be sued for non-knowing securities law
violations, from liability for damage actually caused
by others. It reforms discovery rules to minimize
costs incurred during the pendency of a motion to
dismiss or a motion for summary judgment. It protects
investors who join class actions against lawyer-driven
lawsuits by giving control of the litigation to lead
plaintiffs with substantial holdings of the securities
of the issuer. It gives victims of abusive securities
lawsuits the opportunity to recover their attorneys'
fees at the conclusion of an action. And it
establishes a safe harbor for forward looking
statements, to encourage issuers to disseminate
relevant information to the market without fear of
open-ended liability.
H.R. Rep. No. 104-369, at 31-32 (1995), as reprinted in 1995
U.S.C.C.A.N. 730-31.
[79]

Sec. Litig., 754 F.3d at 47.

“This is particularly so in light

of the fact that the PSLRA is a tool designed to curb vexatious
litigation, not a mechanism for denying bona fide claimants
their day in court.”

Id. (citing Tellabs, 551 U.S. at 320); see

also Belizan v. Hershon, 434 F.3d 579, 584 (D.C. Cir. 2006)
(“[H]ad the Congress wished to make dismissal with prejudice the
norm, and to that extent supersede the ordinary application of
Rule 15(a), we would expect the text of the PSLRA so to
provide.”).

While a dismissal with prejudice is not required by

Congress, the First Circuit also has recognized that in
appropriate cases it is “certainly within the bounds of the
district court’s discretion to dismiss with prejudice.”

In re

Genzyme Corp. Sec. Litig., 754 F.3d at 47.
This Court does not hesitate liberally to allow leave to
file a motion for leave to amend when warranted and requested.
See Fed. R. Civ. P. 15(a).

Notwithstanding that “the PSLRA has

not modified the liberal amendment policy of Rule 15(a),” In re
Genzyme Corp. Securities Litig., 754 F.3d at 47, however, that
policy has limits.
Here, the complaint has already been amended once.

The

Court took this matter under advisement, but was crystal clear
that it wanted all of the relevant information before it to make
a decision under the heightened pleading standards of the PSLRA.
The parties were invited to submit any further information while
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the Court undertook writing this memorandum and order, with no
deadline imposed other than the uncertainty of the Court’s
issuance of this decision:
[THE COURT:] I do want to say one thing. This has
been well-briefed and well-argued and the Court
appreciates that. I have -- within the past year in
another PSLRA case, I have, um, allowed a motion to
dismiss and then, with the addition of additional
data, I had to eat what I had said and in part anyway
reverse my earlier ruling. I don't want to do that.
I expect I have everything, and if there’s anything
else that this argument or the briefs have raised that
is not before the Court, I expect to see it so that
when I do rule, um, that that ruling will stand.
October 28, 2024 Hr’g Tr. 18-19, ECF No. 62; see Oklahoma
Firefighters Pension & Ret. Sys. v. Biogen, Inc., No. 22-10200WGY, 2024 WL 3178638, at *5 (D. Mass. Mar. 19, 2024) (partially
allowing Rule 59 motion, but “not[ing] [that] the gamesmanship
of plaintiff's counsel in failing initially to put their best
foot forward has caused unwarranted delay in this case and a
squandering of judicial resources that could better have been
used on other matters”).

Nothing further was filed –- either in

support of the FAC, or, for example, a timely motion to amend
the complaint under Rule 15.

This indicates to the Court that

Premca has already put its best foot forward: it had nothing
further to elucidate from its confidential witnesses, nor any
new information from its investigation of the facts.

See

Hensley v. Imprivata, Inc., 260 F. Supp. 3d 101, 126 (D. Mass.
2017) (Sorokin, J.) (dismissing claim with prejudice where
[81]

“Plaintiff was ‘put on notice of the deficiencies in the
[Amended Complaint] by the motion[s] to dismiss,’ but did not
claim he ‘had something relevant to add’ to address those
deficiencies” (alteration in original) (quoting Abiomed, 778
F.3d at 247)).

In the absence of newly discovered information,

amendment based upon the record appears futile.

Rather, it

incentivizes plaintiffs to file voluminous, narrative
complaints, with legal argument and conclusion disguised as
fact, being interwoven with few plausibly pleaded factual
allegations.

As the First Circuit explained when denying a

late-filed motion to amend:
The plaintiffs argue that in the end, they were
entitled to wait and see if their amended complaint
was rejected by the district court before being put to
the costs of filing a second amended complaint. They
claim this would promote efficiency in the judicial
system. Plaintiffs have it exactly backwards -- their
methodology would lead to delays, inefficiencies, and
wasted work. The plaintiffs do not get leisurely
repeated bites at the apple, forcing a district judge
to decide whether each successive complaint was
adequate under the PSLRA. Plaintiffs may not, having
the needed information, deliberately wait in the wings
for a year and a half with another amendment to a
complaint should the court hold the first amended
complaint was insufficient. Such an approach would
impose unnecessary costs and inefficiencies on both
the courts and party opponents.
ACA Fin. Guar. Corp., 512 F.3d at 57; see Abiomed, 778 F.3d at
247 (“We wish to discourage this practice of seeking leave to
amend after the case has been dismissed”).

Congress has imposed

a purposefully high -- but not impossible -- bar at the pleading
[82]

stage under the PSLRA.

Premca’s cobbling together a few vague

news articles and four confidential witnesses, most of whom had
sparse and facially incomplete information, fails to meet this
bar.
VII. CONCLUSION
For the aforementioned reasons, iRobot’s motion to dismiss
this action, ECF No. 50, is hereby ALLOWED, and this action is
DISMISSED with prejudice.

The Clerk is directed to enter a

separate order of dismissal with prejudice.13
SO ORDERED.
/s/ William G. Young
WILLIAM G. YOUNG
JUDGE
of the
UNITED STATES14

The separate order of dismissal entered
contemporaneously with this Memorandum and Order constitutes a
final judgment for purposes of appeal, and post-judgment relief
under Rule 59 and 60 of the Federal Rules of Civil Procedure.
See Quinones v. Frequency Therapeutics, Inc., 347 F.R.D. 560,
563 n.2 (D. Mass. 2024).
13

This is how my predecessor, Peleg Sprague (D. Mass 18411865), would sign official documents. Now that I’m a Senior
District Judge I adopt this format in honor of all the judicial
colleagues, state and federal, with whom I have had the
privilege to serve over the past 46 years.
14

[83]