`
`
`
`
`
`No. 20-15638
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`
`
`
`
`In re ALPHABET INC. SECURITIES LITIGATION
`STATE OF RHODE ISLAND, Office of the Rhode Island Treasurer on behalf of
`the Employees’ Retirement System of Rhode Island; Lead Plaintiff, Individually
`and On Behalf of All Others Similarly Situated,
`Plaintiff – Appellant,
`
`v.
`ALPHABET INC., LAWRENCE E. PAGE, SUNDAR PICHAI, RUTH M.
`PORAT, GOOGLE LLC, KEITH P. ENRIGHT and JOHN KENT WALKER, JR.,
`
`Defendants – Appellees.
`
`
`
`
`
`
`
`
`On Appeal from the United States District Court,
`Northern District of California, No. 4:18-cv-06245-JSW,
`The Honorable Jeffrey S. White
`
`
`
`DEFENDANTS-APPELLEES’ MOTION TO STAY THE MANDATE
`PENDING FILING OF A PETITION FOR A WRIT OF CERTIORARI
`
`
`IGNACIO E. SALCEDA
`BENJAMIN M. CROSSON
`BETTY CHANG ROWE
`STEPHEN B. STRAIN
`EMILY PETERSON
`WILSON SONSINI GOODRICH &
`ROSATI
`Professional Corporation
`650 Page Mill Road
`Palo Alto, CA 94304-1050
`Telephone: (650) 493-9300
`Facsimile:
`(650) 565-5100
`Email:
`isalceda@wsgr.com
`Attorneys for Defendants-Appellees
`
`NEAL K. KATYAL
`CATHERINE E. STETSON
`HOGAN LOVELLS US LLP
`555 13th Street, N.W.
`Washington, D.C. 20004
`Telephone: (202) 637-5600
`Facsimile: (202) 637-5910
`Email: neal.katyal@hoganlovells.com
`
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 2 of 18
`
`
`
`CORPORATE DISCLOSURE STATEMENT
`
`Pursuant to Federal Rule of Appellate Procedure 26.1, Defendants-Appellees
`
`Alphabet Inc. (“Alphabet”) and Google LLC (“Google”) certify as follows:
`
`Google is a subsidiary of XXVI Holdings Inc., which is a subsidiary of
`
`Alphabet. Alphabet has no parent corporation, and no publicly held corporation
`
`owns 10% or more of Alphabet’s stock.
`
`
`
`
`
`
`
`i
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 3 of 18
`
`
`
`TABLE OF CONTENTS
`
`Page
`INTRODUCTION ..................................................................................................... 1
`LEGAL STANDARD ................................................................................................ 2
`BACKGROUND ....................................................................................................... 3
`ARGUMENT ............................................................................................................. 5
`I.
`The Petition Will Raise Questions of Law of Exceptional
`Importance, Warranting a Stay of the Mandate. ................................... 5
`There is Good Cause for Granting the Stay, Which Would Not
`Result in Undue Delay. ......................................................................... 9
`CONCLUSION ........................................................................................................ 11
`CERTIFICATE OF SERVICE
`
`
`
`II.
`
`
`
`ii
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 4 of 18
`
`TABLE OF AUTHORITIES
`
`CASES
`
`
`
`Page(s)
`
`Axon Enter. Inc. v. FTC,
`No. 20-15662, 2021 U.S. App. LEXIS 11803 (9th Cir. Apr. 21,
`2021) ................................................................................................................ 9
`Basic Inc. v. Levinson,
`485 U.S. 224 (1988)..................................................................................... 4, 7
`Bondali v. Yum!Brands, Inc.,
`620 F. App’x 483 (6th Cir. 2015) (unpublished) .................................... 5, 7, 8
`Bryant v. Ford Motor Co.,
`886 F.2d 1526 (9th Cir. 1989) ......................................................................... 2
`Campbell v. Wood,
`20 F.3d 1050 (9th Cir. 1994) (en banc) ........................................................... 2
`Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A.,
`511 U.S. 164 (1994)......................................................................................... 4
`Chadbourne & Parke LLP v. Troice,
`571 U.S. 377 (2014)....................................................................................... 10
`Chiarella v. United States,
`445 U.S. 222 (1980)......................................................................................... 4
`Dang v. Samsung Elecs. Co.,
`15-16768 (9th Cir. Mar. 31, 2017), ECF No. 35 ....................................... 9, 10
`Dura Pharma. Inc. v. Broudo,
`544 U.S. 336 (2005)....................................................................................... 10
`Howard v. Arconic Inc.,
`395 F. Supp. 3d 516 (W.D. Pa. 2019) ............................................................. 8
`
`
`
`iii
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 5 of 18
`
`
`
`In re ChannelAdvisor Corp. Sec. Litig.,
`No. 15-cv-00307-F, 2016 WL 1381772 (E.D.N.C. Apr. 6,
`2016), aff’d, Dice v. ChannelAdvisor Corp.,
`671 F. App’x 111 (4th Cir. 2016) (unpublished) ............................................ 8
`In re Marriott Int’l, Inc. Customer Data Security Breach Litig.,
`No. 19-MD-2879, 2021 WL 2407518 (D. Md. June 11, 2021) ...................... 8
`In re Rigel Pharm., Inc. Sec. Litig.,
`697 F.3d 869 (9th Cir. 2012) ........................................................................... 4
`In re Volkswagen “Clean Diesel” Mktg., No. 18-15937, 2020 U.S.
`App. LEXIS 28152 (9th Cir. Sept. 30, 2020) .................................................. 9
`Indiana Pub. Ret. Sys. v. Pluralsight, Inc.,
`No. 119CV00128JNPDBP, 2021 WL 1222290
`(D. Utah Mar. 31, 2021) .................................................................................. 8
`Janus Capital Grp., Inc. v. First Derivative Traders,
`564 U.S. 135 (2011)....................................................................................... 10
`Martin v. GNC Holdings, Inc.,
`No 15-cv-01522, 2017 WL 3974002 (W.D. Pa. Sept. 8, 2017),
`aff’d, 757 F. App’x 151 (3d Cir. 2018) ........................................................... 8
`Matrixx Initiatives, Inc. v. Siracusano,
`563 U.S. 27 (2011)..................................................................................passim
`Patel v. Facebook, Inc., No. 18-15982, 2019 U.S. App. LEXIS 32518
`(9th Cir. Oct. 30, 2019) .................................................................................... 9
`Ronconi v. Larkin,
`253 F.3d 423 (9th Cir. 2001) ........................................................................... 6
`Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
`551 U.S. 308 (2007)....................................................................................... 10
`TSC Indus., Inc. v. Northway, Inc.,
`426 U.S. 438 (1976)............................................................................. 1, 2, 6, 7
`United States ex rel. Campie v. Gilead Sci. Inc.,
`15-16380 (9th Cir. Oct. 4, 2017), ECF No. 100 .............................................. 9
`
`
`
`iv
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 6 of 18
`
`
`
`United States ex rel. Chandler v. Cook Cty.,
`282 F.3d 448 (7th Cir. 2002) (Ripple, J., in chambers) ................................. 10
`United States v. Pete,
`525 F.3d 844 (9th Cir. 2008) ........................................................................... 2
`RULES
`Ninth Cir. R. 41-1 ........................................................................................ 1, 2, 9, 11
`Fed. R. App. P. 41(b) ................................................................................................. 1
`Fed. R. App. P. 41(d) ............................................................................................. 1, 9
`Fed. R. App. P. 41(d)(1) .................................................................................... 2, 5, 9
`Sup. Ct. R. 10(a) ......................................................................................................... 7
`Sup. Ct. R. 10(c) ......................................................................................................... 7
`
`
`
`
`
`v
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 7 of 18
`
`
`
`INTRODUCTION
`The panel’s decision reversing the dismissal of this 10b-5 securities case
`
`raises important questions of law, including the continued viability within this circuit
`
`of the Supreme Court’s rule that public companies have no “affirmative duty to
`
`disclose any and all material information.” Matrixx Initiatives, Inc. v. Siracusano,
`
`563 U.S. 27, 44-45 (2011); see also TSC Indus., Inc. v. Northway, Inc., 426 U.S.
`
`438, 448-49 (1976). Given the importance of the issues, Defendants respectfully
`
`move this Court, pursuant to Fed. R. App. P. 41(d) and Ninth Circuit Rule 41-1, to
`
`stay the appellate mandate for 90 days pending the filing of a petition for certiorari
`
`in the Supreme Court. Relief is requested by July 30, 2021, the date on which this
`
`Court’s mandate would ordinarily issue. See Fed. R. App. P. 41(b).
`
`Under Ninth Circuit Rule 41-1, this Court grants requests for a stay pending
`
`a petition for certiorari unless the petition “would be frivolous or filed merely for
`
`delay.” Plainly that is not the case here. Defendants’ petition for certiorari will
`
`present “substantial question[s]” concerning the interpretation of the securities laws.
`
`Fed. R. App. P. 41(d). According to the panel, if a company’s “business model is
`
`based on trust,” it must disclose historical problems that have already been
`
`remediated, even in the absence of related false or misleading statements. Op. 27,
`
`ECF No. 42-1. That ruling not only conflicts with the decisions of the Supreme
`
`Court and other circuits, but has dramatic practical implications for every publicly
`
`
`
`1
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 8 of 18
`
`
`
`traded company, which will inevitably feel compelled to “bury the shareholders in
`
`an avalanche of trivial information.” TSC, 426 U.S. at 448-49.
`
`Further, there is good cause for granting a stay, which will both serve the
`
`interest of judicial economy and conserve resources that otherwise would be spent
`
`on discovery, motion practice, and preparation for a highly complicated securities
`
`trial. A stay is therefore warranted. See Fed. R. App. P. 41(d)(1); Ninth Cir. R. 41-1.
`
`LEGAL STANDARD
`Under Federal Rule of Appellate Procedure 41(d)(1), motions to stay the
`
`mandate pending a petition for certiorari “must show that the petition would present
`
`a substantial question and that there is good cause for a stay.” A Rule 41 stay motion
`
`is therefore much different than the standard stay request; indeed, under Ninth
`
`Circuit Rule 41-1, this Court should grant such a request unless “the petition for
`
`certiorari would be frivolous or filed merely for delay.”
`
`“A party seeking a stay of the mandate following this court’s judgment need
`
`not demonstrate that exceptional circumstances justify a stay.” Bryant v. Ford Motor
`
`Co., 886 F.2d 1526, 1528 (9th Cir. 1989); accord Campbell v. Wood, 20 F.3d 1050,
`
`1051 (9th Cir. 1994) (en banc) (“[O]rdinarily a party need not demonstrate that
`
`exceptional circumstances justify a stay of the mandate.”). Thus, it is “often the
`
`case” that this Court will stay the appellate mandate when a party seeks Supreme
`
`Court review (United States v. Pete, 525 F.3d 844, 850 (9th Cir. 2008)), and this
`
`
`
`2
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 9 of 18
`
`
`
`Court has frequently granted stays in similar circumstances. See infra at 9-10
`
`(collecting authorities).
`
`BACKGROUND
`Plaintiff’s complaint generally alleges that two Form 10-Qs filed by Alphabet
`
`were misleading because they failed to disclose a fully-remediated software “Bug”
`
`within the Google+ social network. The district court dismissed the complaint on
`
`two independent grounds—falsity and scienter. As the court explained, there is no
`
`legal “support for the position that a remediated technological problem which is no
`
`longer extant must be disclosed in the company’s future-looking disclosures.” Order
`
`Granting Mot. to Dismiss at 5, ECF No. 82. The court also held that Plaintiff failed
`
`to allege falsity as to other challenged statements. Id. at 6.
`
`The panel reversed on both falsity and scienter, reasoning that the complaint
`
`plausibly alleged that the purported omission of the Bug (or other unspecified
`
`“security vulnerabilities”) made those statements materially misleading (Op. 24)
`
`because Alphabet “knew that those risks had materialized”—even though they had
`
`been remediated (id. at 27; see id. at 24). In so holding, however, the panel focused
`
`exclusively on the supposed materiality of the Bug and “other security
`
`vulnerabilities,” skipping over the threshold question of whether Alphabet had any
`
`duty to disclose that information. See id. at 18-20, 23-29. The panel failed to engage
`
`with the undisputed fact that the Bug had been remediated before the Form 10-Q
`
`
`
`3
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 10 of 18
`
`
`
`statements were made, and that Alphabet had not otherwise made affirmative
`
`statements on those issues. According to the panel, “[g]iven that Google’s business
`
`model is based on trust, the material implications of a bug … were not eliminated
`
`merely by plugging the hole in Google+’s security.” Id. at 27.
`
`The panel’s decision to reverse on that basis cannot be squared with either the
`
`text of Section 10(b) or the Supreme Court’s repeated and emphatic instruction that
`
`public companies do not have an “affirmative duty to disclose any and all material
`
`information.” Matrixx, 563 U.S. at 44-45; accord Chiarella v. United States, 445
`
`U.S. 222, 228 (1980) (omission actionable only where duty to disclose arises from
`
`specific relationship between two parties); see Op. 27. “The materiality of
`
`information is different from the issue of whether a statement is false or misleading.”
`
`In re Rigel Pharm., Inc. Sec. Litig., 697 F.3d 869, 880 n.8 (9th Cir. 2012). Disclosure
`
`is required “only when necessary ‘to make … statements made, in light of the
`
`circumstances under which they were made, not misleading.’” Matrixx, 563 U.S. at
`
`44; Basic Inc. v. Levinson, 485 U.S. 224, 239 n.17 (1988) (omissions are not
`
`actionable absent a duty to disclose). As the Supreme Court has put it, Section 10(b)
`
`may be “a catchall provision, but what it catches must be fraud. When an allegation
`
`of fraud is based upon nondisclosure, there can be no fraud absent a duty to speak.”
`
`Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164,
`
`174 (1994) (quoting Chiarella, 445 U.S. at 234-35).
`
`
`
`4
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 11 of 18
`
`
`
`In direct contravention of that rule, the panel’s decision manufactures a novel,
`
`free-standing duty that virtually all publicly traded companies must disclose all prior
`
`security vulnerabilities, even when they have been resolved and even when the
`
`company made no affirmative statements on the subject. The decision also conflicts
`
`with the Sixth Circuit’s holding that risk disclosures are prospective and do not
`
`mislead about a company’s current state of affairs because such statements are
`
`intended to speak on future harms. Bondali v. Yum!Brands, Inc., 620 F. App’x 483,
`
`490 (6th Cir. 2015) (unpublished).
`
`I.
`
`ARGUMENT
`The Petition Will Raise Questions of Law of Exceptional Importance,
`Warranting a Stay of the Mandate.
`Because the panel’s decision conflicts with both Supreme Court and circuit
`
`precedent on the scope of Section 10(b) liability, it raises questions of exceptional
`
`importance that easily satisfy the requirement that the eventual petition present a
`
`“substantial question.” Fed. R. App. P. 41(d)(1). Under the panel’s new rule, every
`
`public company whose “business model is based on trust” (Op. 27) will be subjected
`
`to an affirmative duty to disclose any and all problems it has experienced—even if
`
`the problems no longer exist at the time of disclosure, and even if the relevant public
`
`statements are neither false nor misleading. That novel ruling directly conflicts with
`
`the Supreme Court’s clear instruction that Section 10(b) and Rule 10b-5(b) “do not
`
`create an affirmative duty to disclose any and all material information.” Matrixx,
`
`
`
`5
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 12 of 18
`
`
`
`563 U.S. at 44-45. It also threatens to eliminate Section 10(b)’s requirement that a
`
`statement must be “known to be false or misleading at the time” it is made. Ronconi
`
`v. Larkin, 253 F.3d 423, 430 (9th Cir. 2001).
`
`The panel’s decision threatens to usher in endless and sprawling securities
`
`litigation based on a wide-ranging affirmative duty to disclose that contradicts the
`
`Supreme Court’s rulings in TSC and Matrixx, among other cases (see supra at 1-2).
`
`It is difficult to identify a business, regardless of industry, whose ultimate success in
`
`the marketplace is not fundamentally “based on trust.” Under the panel’s rule, then,
`
`every company must determine ex ante whether a particular issue relates to the
`
`“trust” the company has with its consumers—and disclose it if so, regardless of
`
`whether or not non-disclosure would make any particular statement false.
`
`Given the potential litigation risks attendant with non-disclosure under the
`
`panel’s rule, the likely result is public disclosure of every issue a business faces
`
`during the course of its ordinary operations, however quickly addressed and however
`
`fully resolved. As this Court put it in Ronconi, “[p]roblems and difficulties are the
`
`daily work of business people.” 253 F.3d at 434. The panel’s decision would
`
`encourage management to disclose any and all “problems”—regardless of whether
`
`they are remediated or material—for “fear of exposing itself to substantial liability,”
`
`resulting in “bury[ing] the shareholders in an avalanche of trivial information.” TSC,
`
`426 U.S. at 448-49. That is the very result that the Supreme Court has repeatedly
`
`
`
`6
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 13 of 18
`
`
`
`counseled against. See Matrixx, 563 U.S. at 38 (“We were ‘careful not to set too
`
`low a standard of materiality,’ for fear that management would ‘bury the
`
`shareholders in an avalanche of trivial information’”) (citations omitted); Basic, 485
`
`U.S. at 231 (same); TSC, 426 U.S. at 448-49 (same). A rule that effectively ties
`
`materiality to whether a business is “based on trust,” as the panel adopted here,
`
`“set[s] too low a standard of materiality,” in direct conflict with multiple Supreme
`
`Court decisions. Basic, 485 U.S. at 231. The petition for certiorari will thus present
`
`a substantial question concerning the conflict between the panel decision and
`
`Supreme Court precedent, a traditional ground for granting certiorari under Supreme
`
`Court Rule 10(c). See Sup. Ct. R. 10(c) (when determining whether to grant a
`
`petition for writ of certiorari, the Court considers whether the decision “has decided
`
`an important federal question in a way that conflicts with relevant decisions of this
`
`Court”).
`
`When reaching this extraordinary result, moreover, the panel expressly
`
`refused to follow the Sixth Circuit’s reasoning that risk disclosures are not a basis
`
`for a Section 10(b) claim because they “are inherently prospective in nature” and
`
`“are not meant to educate investors on what harms are currently affecting the
`
`company.” Bondali, 620 F. App’x at 491. Under Supreme Court Rule 10(a),
`
`conflicts among the federal courts of appeals are yet another traditional basis for
`
`granting certiorari. The panel gave no substantive reason for disagreeing with
`
`
`
`7
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 14 of 18
`
`
`
`Bondali—which has been followed by numerous district courts in at least four other
`
`jurisdictions. See In re Marriott Int’l, Inc. Customer Data Security Breach Litig.,
`
`No. 19-MD-2879, 2021 WL 2407518, at *25 (D. Md. June 11, 2021) (“To the extent
`
`Plaintiff alleges that Marriott’s risk factor disclosures were misleading about its
`
`current state of cybersecurity, those allegations fail because the risk factor
`
`disclosures are not intended to educate investors about harms currently affecting the
`
`company”); Indiana Pub. Ret. Sys. v. Pluralsight, Inc., No. 119CV00128JNPDBP,
`
`2021 WL 1222290, at *13-15 (D. Utah Mar. 31, 2021) (finding that a risk disclosure
`
`about the company’s expansion of sales investments was not actionable and rejecting
`
`plaintiff’s argument that the risk “had already materialized”); Howard v. Arconic
`
`Inc., 395 F. Supp. 3d 516, 554-55 (W.D. Pa. 2019) (risk statements “‘are not meant
`
`to educate investors on what harms are currently affect-ing the company’”); Martin
`
`v. GNC Holdings, Inc., No 15-cv-01522, 2017 WL 3974002, at *9 n.13 (W.D. Pa.
`
`Sept. 8, 2017) (finding challenged risk disclosure was forward-looking), aff’d, 757
`
`F. App’x 151 (3d Cir. 2018); In re ChannelAdvisor Corp. Sec. Litig., No. 15-cv-
`
`00307-F, 2016 WL 1381772, at *5-6 (E.D.N.C. Apr. 6, 2016), aff’d, Dice v.
`
`ChannelAdvisor Corp., 671 F. App’x 111 (4th Cir. 2016) (unpublished). No other
`
`circuit has declined to follow the Sixth Circuit.
`
`
`
`8
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 15 of 18
`
`
`
`In sum, the petition clearly both will present multiple “substantial question[s]”
`
`of law, thus satisfying Federal Rule of Appellate Procedure 41(d)(1), and will not be
`
`“frivolous,” thus satisfying Circuit Rule 41-1.
`
`II. There is Good Cause for Granting the Stay, Which Would Not Result in
`Undue Delay.
`Given the pretrial posture of this litigation and the critical legal issues raised
`
`by the panel’s decision, there is good cause for staying the mandate. See Fed. R.
`
`App. P. 41(d). If this litigation is not put on hold pending Defendants’ petition for
`
`certiorari, the parties will begin to incur the substantial costs associated with
`
`discovery, pretrial motions, and trial preparation in this complex securities case.
`
`None of those costs will be incurred if the Supreme Court grants certiorari and
`
`reverses, thereby reinstating the district court’s dismissal of the complaint.
`
`Recognizing that fact, this Court has routinely granted motions to stay the mandate
`
`pending petitions for certiorari in response to a showing that denying the motion
`
`would result in a substantial waste of resources associated with preparing for further
`
`proceedings
`
`in
`
`the district court.
`
` See Axon Enter.
`
`Inc. v. FTC,
`
`No. 20-15662, 2021 U.S. App. LEXIS 11803 (9th Cir. Apr. 21, 2021); In re
`
`Volkswagen “Clean Diesel” Mktg., No. 18-15937, 2020 U.S. App. LEXIS 28152
`
`(9th Cir. Sept. 30, 2020); Patel v. Facebook, Inc., No. 18-15982, 2019 U.S. App.
`
`LEXIS 32518 (9th Cir. Oct. 30, 2019); United States ex rel. Campie v. Gilead Sci.
`
`Inc., 15-16380 (9th Cir. Oct. 4, 2017), ECF No. 100; Dang v. Samsung Elecs. Co.,
`9
`
`
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 16 of 18
`
`
`
`15-16768 (9th Cir. Mar. 31, 2017), ECF No. 35; see also United States ex rel.
`
`Chandler v. Cook Cty., 282 F.3d 448, 451 (7th Cir. 2002) (Ripple, J., in chambers)
`
`(staying mandate and noting “injury that [defendant] could suffer if it is required to
`
`prepare for trial before the Supreme Court takes action”).
`
`For its part, the Supreme Court frequently grants certiorari in securities cases
`
`of this nature at the motion to dismiss phase. See, e.g., Chadbourne & Parke LLP
`
`v. Troice, 571 U.S. 377, 386 (2014) (reviewing Fifth Circuit’s reversal of district
`
`court’s dismissal of securities case); Janus Capital Grp., Inc. v. First Derivative
`
`Traders, 564 U.S. 135, 140-41 (2011) (reviewing Fourth Circuit’s reversal of district
`
`court’s dismissal of securities case); Matrixx, 563 U.S. at 37 (reviewing Ninth
`
`Circuit’s reversal of district court’s dismissal of securities case); Tellabs, Inc. v.
`
`Makor Issues & Rights, Ltd., 551 U.S. 308, 317-18 (2007) (reviewing Seventh
`
`Circuit's partial reversal of district court of securities case); Dura Pharma. Inc. v.
`
`Broudo, 544 U.S. 336, 340 (2005) (reviewing Ninth Circuit reversal of district court
`
`of securities case).
`
`Staying the mandate will also prevent the district court from expending
`
`judicial resources on proceedings that may ultimately be rendered unnecessary by
`
`the Supreme Court’s ruling. And a stay for the relatively brief period allotted to file
`
`a petition will not unfairly prejudice the plaintiff, who will either avoid expending
`
`
`
`10
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 17 of 18
`
`
`
`its resources on unnecessary proceedings or face only a brief pause before the case
`
`proceeds in the district court.
`
`CONCLUSION
`Defendants’ petition for certiorari will present plainly substantial legal
`
`questions. See Fed. R. App. P. 41. There can be no reasonable argument that the
`
`petition will be “frivolous or filed merely for delay.” Ninth Cir. R. 41-1. Thus, this
`
`Court should stay the mandate pending the Supreme Court’s resolution of the
`
`petition.
`
`Dated: July 28, 2021
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Respectfully submitted,
`
`WILSON SONSINI GOODRICH & ROSATI
`Professional Corporation
`
`By: /s/ Benjamin M. Crosson
`
`Benjamin M. Crosson
`
`Attorneys for Defendants-Appellees
`
`
`
`
`
`11
`
`
`
`Case: 20-15638, 07/28/2021, ID: 12186131, DktEntry: 47, Page 18 of 18
`
`
`
`CERTIFICATE OF SERVICE
`
`U.S. Court of Appeals Docket Number: 20-15638
`
`
`
`I hereby certify that I electronically filed the foregoing DEFENDANTS-
`
`APPELLEES’ MOTION TO STAY THE MANDATE PENDING FILING OF A
`
`PETITION FOR A WRIT OF CERTIORARI with the Clerk of the Court for the
`
`United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF
`
`system on July 28, 2021.
`
`I certify that all participants in the case are registered CM/ECF users and that
`
`service will be accomplished by the appellate CM/ECF system.
`
`
`
`
`
` /s/ Purita Marquez
`
`Purita Marquez
`
`
`
`
`
`
`
`