Opinion
JORDAN ETH, JUDSON E. LOBDELL, MORRISON & FOERSTER LLP, San Francisco, California, Attorneys for Defendants, MARRONE BIO INNOVATIONS, INC., PAMELA G. MARRONE, JAMES B. BOYD, DONALD J. GLIDEWELL, ELIN MILLER, RANJEET BHATIA, PAMELA CONTAG, TIM FOGARTY, LAWRENCE HOUGH, JOSEPH HUDSON, LES LYMAN, RICHARD ROMINGER, SHAUGN STANLEY, SEAN SCHICKEDANZ.
Michael J. McGaughey, Palo Alto, CA, Lawrence M. Rolnick, (pro hac vice), Steven M. Hecht, (pro hac vice), Thomas E. Redburn, Jr., (pro hac vice), Lowenstein Sandler LLP, New York, NY, Roseland, NJ, Counsel for Lead Plaintiffs Special Situations Fund III QP, L.P. and Special Situations Cayman Fund, L.P.
Jonathan C. Sandler, BROWNSTEIN HYATT FARBER SCHRECK LLP, Los Angeles, CA, Counsel for Defendant Hector Absi.
CONSOLIDATED CLASS ACTION STIPULATION AND ORDER (1) SETTING TIME FOR FILING OF AMENDED CONSOLIDATED CLASS ACTION COMPLAINT AND (2) ESTABLISHING BRIEFING SCHEDULE FOR RESPONSIVE MOTION(S)
MORRISON C. ENGLAND, Jr., Chief District Judge.
Lead Plaintiffs Special Situations Fund III QP, L.P. and Special Situations Cayman Fund, L.P. ("Lead Plaintiffs") and Defendants Marrone Bio Innovations, Inc. ("MBII" or "the Company"), Pamela G. Marrone, James B. Boyd, Donald J. Glidewell, Hector Absi, Elin Miller, Ranjeet Bhatia, Pamela Contag, Tim Fogarty, Lawrence Hough, Joseph Hudson, Les Lyman, Richard Rominger, Shaugn Stanley, and Sean Schickedanz (collectively, "Defendants"), by and through their respective counsel hereby recite and stipulate, subject to the approval of the Court, the following as concerns (1) the filing of the initial consolidated class action complaint (the "Consolidated Complaint") and the amended consolidated class action complaint (the "Amended Consolidated Complaint"), and (2) the briefing schedule for any responsive motions.
RECITALS
WHEREAS Lead Plaintiffs filed a class action complaint on November 3, 2014 [Docket No. 1], alleging that Defendants engaged in conduct that violates the federal securities laws, specifically Sections 11 and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934;
WHEREAS the claims in this action are subject to the Private Securities Litigation Reform Act of 1995 (the "PSLRA");
WHEREAS counsel for Defendants accepted service of the initial complaint on Defendants' behalf, and the parties entered into a stipulation continuing the date by which Defendants must answer or otherwise respond to the complaint until after the Court issued an order pursuant to the PSLRA appointing lead plaintiff(s) and lead counsel [Docket No. 13];
WHEREAS the parties further stipulated that counsel for Defendants would meet and confer with the Court-appointed lead counsel within twenty (20) days following the Court's order appointing lead plaintiff(s) and lead counsel, to determine (i) whether the lead plaintiff(s) will file a Consolidated Complaint, (ii) establish a common response date for all defendants, including a briefing schedule on anticipated motions to dismiss, and (iii) establish a date by which to provide the Court with a Joint Status Report;
WHEREAS by Order dated February 13, 2015 [Docket No. 18], this Court consolidated the actions denominated as Martinelli v. Marrone Bio Innovations, Inc., No. 2:14-cv-2055-MCE-KJN, Sausman v. Marrone Bio Innovations, Inc., No. 2:14-cv-2072-MCE-KJN, Chen v. Marrone Bio Innovations, Inc., 2:14-cv-2105-MCE-KJN, Oldham v. Marrone Bio Innovations, Inc., 2:14-cv-2130-MCE-KJN, and Special Situations Fund III QP, L.P. v. Marrone Bio Innovations, Inc., No. 2:14-cv-2571-MCE-KJN, designating No. 2:14-cv-2571 as the Master File and administratively closing all of the other consolidated cases;
WHEREAS by that same Order, the Court appointed Special Situations Fund III QP, L.P. and Special Situations Cayman Fund, L.P. as Lead Plaintiffs, and Lowenstein Sandler LLP as Lead Counsel;
WHEREAS MBII has previously announced that the independent Audit Committee investigation of certain revenue recognition issues is substantially completed, and that, in light of the Audit Committee's findings, MBII's management is evaluating the necessity, nature and scope of any restatements to any of MBII's financial statements previously filed with the Securities and Exchange Commission ("SEC") (the "Financial Statement Review");
WHEREAS Lead Plaintiffs intend to file a Consolidated Complaint, and Defendants have indicated that they intend to move to dismiss the Consolidated Complaint pursuant to Fed.R.Civ.P. 12 and any other applicable law;
WHEREAS pursuant to the PSLRA, 15 U.S.C. § 78u-4(b)(3)(B), all discovery in this consolidated class action is automatically stayed by operation of law;
WHEREAS by Order dated April 16, 2015 [Docket No. 27], this Court directed Lead Plaintiffs to file and serve the Consolidated Complaint no later than thirty (30) days after MBII announces the results of the Financial Statement Review and, if MBII does not announce the results of the Financial Statement Review by May 13, 2015, file and serve the Consolidated Complaint no later than June 1, 2015;
WHEREAS on April 23, 2015, MBII announced that (i) its Audit Committee concluded, after consultation with management, that certain financial statements should no longer be relied upon, and (ii) although the Company expects to restate certain of its previously filed financial statements, the Company's evaluation process is ongoing and, accordingly, the Company cannot at this time provide an estimate of the timing, extent, or effect of such restatement (the "Restatement(s)");
WHEREAS the Restatement(s) may impact the allegations in the Consolidated Complaint;
WHEREAS although Lead Plaintiffs may properly file the Consolidated Complaint at any time, undersigned counsel agree that the interests of justice would be best served by an order directing Lead Plaintiffs to file the Consolidated Complaint after MBII announces the results of the Restatement(s), so as to avoid the expense and delay that would be incurred by further amending the Consolidated Complaint should the Restatement(s) be announced while Defendants' anticipated motion(s) to dismiss are being briefed;
WHEREAS by Order dated June 4, 2015 [Docket No. 33], this Court directed Lead Plaintiffs to file and serve the Consolidated Complaint no later than sixty (60) days after MBII announces the Restatement(s);
WHEREAS notwithstanding the foregoing, Lead Plaintiffs expect to file an initial Consolidated Complaint on or about September 3, 2015 in order to preserve certain claims from expiration under any applicable statutes of limitation, which will be further amended by the Amended Consolidated Complaint no later than sixty (60) days after MBII announces the Restatement(s).
WHEREAS, given Lead Plaintiffs' intent to amend the initial Consolidated Complaint by filing the Amended Consolidated Complaint, the parties agree that defendants need not respond to the initial Consolidated Complaint. Defendants expressly preserve and do not waive any and all defenses.
STIPULATION
THEREFORE, IT IS HEREBY STIPULATED AND AGREED by Lead Plaintiffs and Defendants, through their respective counsel of record, as follows:
1. Lead Plaintiffs will file and serve an initial Consolidated Complaint on or about September 3, 2015 asserting, among other things, certain claims under Section 11 of the Securities Act of 1933. Such complaint shall be amended by the subsequent filing of the Amended Consolidated Complaint contemplated herein.
2. Defendants shall have no obligation to respond to such initial Consolidated Complaint.
3. Lead Plaintiffs shall file and serve the Amended Consolidated Complaint no later than sixty (60) days after MBII announces the Restatement(s).
4. Defendants shall file and serve any responsive pleading(s) or motion(s) to dismiss no later than sixty (60) days after the filing and service of the Amended Consolidated Complaint.
5. If a motion to dismiss is filed, Lead Plaintiffs shall file and serve their opposition brief(s) no later than forty-five (45) days after Defendants file and serve their motion(s) to dismiss.
6. Defendants shall file and serve their reply(ies) in further support of the motion(s) to dismiss no later than twenty-one (21) days after Lead Plaintiffs file and serve their opposition brief(s).
7. In the event Defendants' motion(s) to dismiss are denied in whole or in part, Lead Plaintiffs and Defendants shall meet and confer within forty-five (45) days of the Court's disposition of Defendants' motion(s) to dismiss to address the discovery-related topics set forth in the Court's Order Requiring Joint Status Report and will thereafter submit to the Court a Rule 26(f) discovery plan consistent with that Order.
ORDER
Pursuant to the above stipulation, it is hereby ordered as follows:
1. Lead Plaintiffs will file and serve an initial Consolidated Complaint on or about September 3, 2015 asserting, among other things, certain claims under Section 11 of the Securities Act of 1933. Such complaint shall be amended by the subsequent filing of the Amended Consolidated Complaint contemplated herein.
2. Defendants shall have no obligation to respond to such initial Consolidated Complaint.
3. Lead Plaintiffs shall file and serve the Amended Consolidated Complaint no later than sixty (60) days after MBII announces the Restatement(s).
4. Defendants shall file and serve any responsive pleading(s) or motion(s) to dismiss no later than sixty (60) days after the filing and service of the Amended Consolidated Complaint.
5. If a motion to dismiss is filed, Lead Plaintiffs shall file and serve their opposition brief(s) no later than forty-five (45) days after Defendants file and serve their motion(s) to dismiss.
6. Defendants shall file and serve their reply(ies) in further support of the motion(s) to dismiss no later than twenty-one (21) days after Lead Plaintiffs file and serve their opposition brief(s).
7. In the event Defendants' motion(s) to dismiss are denied in whole or in part, Lead Plaintiffs and Defendants shall meet and confer within forty-five (45) days of the Court's disposition of Defendants' motion(s) to dismiss to address the discovery-related topics set forth in the Court's Order Requiring Joint Status Report and will thereafter submit to the Court a Rule 26(f) discovery plan consistent with that Order.
IT IS SO ORDERED.