Case 4:18-cv-01792-HSG Document 159 Filed 05/26/20 Page 1 of 4
`
`
`
`
`
`Orin Snyder (pro hac vice)
`osnyder@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`200 Park Avenue
`New York, NY 10166-0193
`Telephone: 212.351.4000
`Facsimile: 212.351.4035
`
`Brian M. Lutz (SBN 255976)
`blutz@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`555 Mission Street, Suite 3000
`San Francisco, CA 94105-0921
`Telephone: 415.393.8200
`Facsimile: 415.393.8306
`
`Attorneys for Nominal Defendant Facebook, Inc.,
`and Defendants Mark Zuckerberg, Sheryl
`Sandberg, David Wehner, Jan Koum, Peter Thiel,
`Marc Andreessen, Kenneth Chenault, Jeffrey
`Zients, Peggy Alford, Susan Desmond-Hellman,
`Reed Hastings, and Erskine Bowles
`
`Joshua S. Lipshutz (SBN 242557)
`jlipshutz@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036-5306
`Telephone: 202.955.8500
`Facsimile: 202.467.0539
`
`Paul J. Collins (SBN 187709)
`pcollins@gibsondunn.com
`GIBSON, DUNN & CRUTCHER LLP
`1881 Page Mill Road
`Palo Alto, CA 94304-1211
`Telephone: 650.849.5300
`Facsimile: 650.849.5333
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`
`IN RE FACEBOOK, INC. DERIVATIVE
`PRIVACY LITIGATION
`
`
`This Document Relates To:
`
`ALL ACTIONS
`
`
`
`
`
`
`
`
`
`
`LEAD CASE NO. 4:18-CV-01792-HSG
`
`ASSOCIATED CASES: NOS. 4:18-CV-01834-
`HSG, 4:18-CV-01893-HSG, 4:18-CV-01929-
`HSG, 4:18-CV-02011-HSG
`
`DEFENDANTS’ PARTIAL OPPOSITION
`TO PLAINTIFFS’ REQUEST FOR
`JUDICIAL NOTICE IN SUPPORT OF
`PLAINTIFFS’ OPPOSITION TO
`DEFENDANTS’ MOTIONS TO DISMISS
`
`Hearing:
`Date: June 25, 2020
`Time: 2:00 P.M.
`Location: Courtroom 2, 4th Floor
`Judge: Hon. Haywood S. Gilliam, Jr.
`
`Date First Action Filed: March 22, 2018
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Gibson, Dunn &
`Crutcher LLP
`
`
`OPPOSITION TO PLAINTIFFS’ REQUEST FOR JUDICIAL NOTICE
`LEAD CASE NO. 4:18-CV-01792-HSG
`
`

`

`Case 4:18-cv-01792-HSG Document 159 Filed 05/26/20 Page 2 of 4
`
`
`
`Defendants oppose Plaintiffs’ request for judicial notice (“RJN”) of excerpts of Facebook’s
`SEC filings (Plaintiffs’ Exhibits 1-11), which Plaintiffs seek in an improper attempt to cure their
`deficient insider trading allegations. Defendants do not oppose Plaintiffs’ RJN with respect to
`Plaintiffs’ Exhibits 12-14.
`“In determining the propriety of a Rule 12(b)(6) dismissal, a court may not look beyond a
`complaint to a plaintiff’s moving papers, such as a memorandum in opposition to a defendant’s motion
`to dismiss,” or “take into account additional facts asserted” in an opposing memorandum, because
`“such memoranda do not constitute pleadings under Rule 7(a).” Schneider v. California Dep’t of Corr.,
`151 F.3d 1194, 1197 n.1 (9th Cir. 1998) (citation omitted). Plaintiffs therefore cannot attempt to correct
`pleading deficiencies by submitting new “allegations made in an opposition to a motion to dismiss.”
`Sheski v. Shopify (USA) Inc., 2020 WL 2474421, at *4 n.2 (N.D. Cal. May 13, 2020) (Gilliam, J.). This
`Court has repeatedly refused to allow plaintiffs to avoid dismissal by seeking judicial notice of new
`facts in opposition papers. See Motha v. Time Warner Cable Inc., 2016 WL 7034039, at *2 & n.1
`(N.D. Cal. Dec. 2, 2016) (Gilliam, J.) (declining plaintiff’s request to take judicial notice of “documents
`related to facts not raised in the operative complaint”); Parsons v. Alameda Cty. Sheriff Dep’t, 2016
`WL 1258590, at *6 (N.D. Cal. Mar. 31, 2016) (Gilliam, J.) (disregarding “additional claims regarding
`the specifics” of the alleged misconduct, raised for the first time in plaintiff’s opposition).
`Although SEC filings ordinarily are subject to judicial notice because their accuracy can be
`“readily determined” from reliable sources (see Reply ISO Def’s RJN at 3), Plaintiffs here seek judicial
`notice of Exhibits 1-11 in an improper attempt to insert additional, new allegations that appear nowhere
`in the First Amended Consolidated Shareholder Derivative Complaint (“FAC”). Under these
`circumstances, judicial notice of Facebook’s SEC filings is inappropriate.
`As the Individual Defendants pointed out in their Motion to Dismiss, Plaintiffs do not even try
`to allege contemporaneous trading for their Section 10(b) insider trading claim, in part because they
`failed to allege the specific dates on which Facebook repurchased shares. Dkt. 145 at 24-25. Plaintiffs
`now try to correct that deficiency by seeking judicial notice of 11 Facebook SEC filings that purport to
`list the dates and volume of Facebook’s share repurchases. See Pl’s Opp. at 22-24 (citing Exhibits 1-
`11 in an attempt to describe the dates on which Facebook made share repurchases, and then spending
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Gibson, Dunn &
`Crutcher LLP
`
`1
`OPPOSITION TO PLAINTIFFS’ REQUEST FOR JUDICIAL NOTICE
`LEAD CASE NO. 4:18-CV-01792-HSG
`
`

`

`Case 4:18-cv-01792-HSG Document 159 Filed 05/26/20 Page 3 of 4
`
`
`over two pages trying to justify why the absence of those dates from the FAC does not doom Plaintiffs’
`insider trading claim); see also Pl’s RJN at 4 (admitting that Plaintiffs seek to use Exhibits 1-11 to
`show the dates on which “Facebook repurchased shares”). This is improper. This “Court cannot
`consider … more detailed facts in [Plaintiffs’] opposition[] beyond those included” in the FAC “as they
`relate to the dates of Defendants’ conduct.” Magney v. Cty. of Humboldt, 2018 WL 1156817, at *4 &
`n.6 (N.D. Cal. Mar. 5, 2018) (Gilliam, J.); see also In re Am. Apparel, Inc. S’holder Deriv. Litig., 2012
`WL 9506072, at *37 (C.D. Cal. July 31, 2012) (denying judicial notice of facts concerning the timing
`of stock purchases because those details were omitted from the complaint, and doing otherwise would
`be noticing “the contents of documents outside the complaint for the truth of the matters stated
`therein”); In re Accuray, Inc. S’holder Deriv. Litig., 757 F. Supp. 2d 919, 926 (N.D. Cal. 2010) (same).
`By attempting to add allegations to their pleading in this fashion, Plaintiffs are essentially conceding
`that their insider trading allegations are inadequate.1
`Plaintiffs cannot attempt to cure the deficiencies in their pleading by inserting new allegations
`through an improper request for judicial notice in opposition to Defendants’ motion to dismiss. But
`even if they could, that still would not rectify the errors with Plaintiffs’ insider trading claims, which
`are independently deficient because Plaintiffs (1) fail to adequately plead that the Individual
`Defendants’ sales are suspicious in light of their trading history, and (2) cannot overcome the fact that
`the Individual Defendants made those trades pursuant to Rule 10b5-1 trading plans established before
`the alleged misstatements. See Individual Def’s Reply Mem. at 15; Dkt. 145 at 24-25 & n.8.
`This Court should deny Plaintiffs’ request for judicial notice of Exhibits 1-11 for the purpose
`of proving the dates on which Facebook executed share repurchases.
`
`Dated: May 26, 2020
`
`
`
`
`
`GIBSON, DUNN & CRUTCHER LLP
`
`By:
`
` /s/ Orin Snyder
`Orin Snyder
`
`
`
`
`
`
` 1 Plaintiffs do not request that the Court deem these excerpts of SEC filings incorporated by reference
`into the FAC, nor would doing so be proper in this context. The incorporation by reference doctrine
`exists to “prevent[] plaintiffs from selecting only portions of documents that support their claims,
`while omitting portions of those very documents that weaken—or doom—their claims.” Khoja v.
`Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018) (emphasis added), cert. denied
`sub nom. Hagan v. Khoja, 139 S. Ct. 2615 (2019).
`2
`OPPOSITION TO PLAINTIFFS’ REQUEST FOR JUDICIAL NOTICE
`LEAD CASE NO. 4:18-CV-01792-HSG
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Gibson, Dunn &
`Crutcher LLP
`
`

`

`Case 4:18-cv-01792-HSG Document 159 Filed 05/26/20 Page 4 of 4
`
`
`
`200 Park Avenue
`New York, N.Y. 10166-0193
`Tel: 212.351.4000
`Fax: 212.351.4035
`osnyder@gibsondunn.com
`
`Joshua S. Lipshutz
`1050 Connecticut Avenue, N.W.
`Washington, D.C. 20036-5306
`Tel: 202.955.8500
`Fax: 202.467.0539
`jlipshutz@gibsondunn.com
`
`Brian M. Lutz
`555 Mission Street
`Suite 3000
`San Francisco, CA 94105-0921
`Tel: 415.393.8200
`Fax: 415.374.8306
`blutz@gibsondunn.com
`
`Paul J. Collins
`1881 Page Mill Road
`Palo Alto, CA 94304-1211
`Tel: 650.849.5300
`Fax: 650.849.5333
`pcollins@gibsondunn.com
`
`Attorneys for Nominal Defendant
`Facebook, Inc., and Defendants Mark
`Zuckerberg, Sheryl Sandberg, David
`Wehner, Jan Koum, Peter Thiel, Marc
`Andreesen, Kenneth Chenault, Jeffrey
`Zients, Peggy Alford, Susan Desmond-
`Hellman, Reed Hastings, and Erskine
`Bowles
`
`1 2 3 4 5 6 7 8 9
`
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Gibson, Dunn &
`Crutcher LLP
`
`3
`OPPOSITION TO PLAINTIFFS’ REQUEST FOR JUDICIAL NOTICE
`LEAD CASE NO. 4:18-CV-01792-HSG
`
`