Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_02-cv-01486/USCOURTS-cand-4_02-cv-01486-98/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:78m(a) Securities Exchange Act

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United States District Court

For the Northern District of California

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Plaintiffs do not oppose Defendants' motion with respect to

statements twenty-nine and fifty-one. The Court grants Defendants'

motion for reconsideration and grants summary judgment with respect

to these statements.

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

In re JDS UNIPHASE CORPORATION

SECURITIES LITIGATION

 /

No. C 02-1486 CW

ORDER GRANTING

DEFENDANTS'

MOTION FOR

PARTIAL

RECONSIDERATION

IN PART AND

DENYING IT IN

PART

On September 14, 2007 the Court entered an order granting in

part and denying in part Defendants JDS Uniphase Corporation (JDS),

Jozef Straus, Anthony R. Muller and Charles Abbe's motion for leave

to file a motion for partial reconsideration of the Court's August

24, 2007 order on their motion for summary judgment. Defendants

have filed their motion seeking reconsideration of the Court's

order with respect to Plaintiffs' § 20A claims against Mueller and

Abbe and the Court's ruling on statements twenty-nine, forty-four

and fifty-one. Lead Plaintiff Connecticut Retirement Plans and

Trust Funds has filed a partial opposition1 and submitted a

separate letter indicating various corrections to the August 24,

2007 order. The matter were submitted on the papers. Having

Case 4:02-cv-01486-CW Document 1543 Filed 09/27/07 Page 1 of 5
United States District Court

For the Northern District of California

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considered the parties' papers and the evidence cited therein, the

Court GRANTS in part Defendants' motion for partial reconsideration

and DENIES it in part.

I. Section 20A Claims Against Muller and Abbe

Defendants argue that the Court mistakenly denied summary

judgment to Muller and Abbe on Plaintiffs' Securities Exchange Act

§ 20A claims because the Court granted summary judgment on all of

the statements made by Muller and Abbe prior to the time of the

allegedly improper sales. Section 20A claims "require a predicate

violation of a securities law, contemporaneous trading of defendant

and plaintiff, and a profit gain or loss." Howard v. Hui, 2001

U.S. Dist. LEXIS 15443, at *19 (N.D. Cal.), citing 15 U.S.C. 

§ 78t-1(a)-(b). However, as Plaintiffs' point out, their § 10(b)

insider trading claims against Muller and Abbe are sufficient to

serve as the predicate violation. See Johnson v. Aljian, 490 F.3d

778, 781-82 (9th Cir. 2007). 

Although the Court clearly granted Defendants leave to file a

motion for reconsideration only in relation to Plaintiffs' § 20A

claims, Defendants argue for the first time in their reply in

support of their motion for reconsideration that they moved for

reconsideration of the Court's order with respect to Plaintiffs' 

§ 10(b) insider trading claim in addition to the § 20A claims. 

However, Defendants did not include any argument regarding § 10(b)

in their motion for leave to file their motion for reconsideration

or in their motion for reconsideration. See Motion for Leave to

File Motion for Reconsideration at 5 (citing cases regarding § 20A

cases); Motion for Reconsideration at 4 (same). 

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United States District Court

For the Northern District of California

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Defendants now seek to raise arguments about whether

Plaintiffs plead a § 10(b) insider trading claim at all, and the

strength of such a claim, that they failed to raise in their motion

for summary judgment, their motion for leave to file a motion for

reconsideration or their motion for reconsideration. Nevertheless,

the Court finds that Plaintiffs did plead a § 10(b) insider trading

claim when they alleged that Defendants' conduct "enable[d] the

Individual Defendants to unload more than $500 million of company

stock at inflated prices." SACC ¶ 394(iv). 

Further, in denying Defendants' motion for summary judgment on

Plaintiffs' insider trading claims, the Court noted the existence

of triable questions of fact with respect to whether three

statements made prior to the allegedly improper sales were false or

misleading. Section 10(b) is "violated when a corporate insider

trades in the securities of his corporation on the basis of

material nonpublic information." United States v. O'Hagan, 521

U.S. 643, 651 (1997). This does not require that the insider make

any false or misleading statements. That there are triable

questions of fact with respect to the false or misleading nature of

other JDS executives' public statements supports a finding of

triable questions of fact with respect to whether Muller and Abbe,

the Chief Financial Officer and Chief Operating Officers of JDS,

had material nonpublic information when they sold stock. 

Defendants' motion for reconsideration is denied with respect to

Plaintiffs' insider trading claims against Muller and Abbe.

II. Statement Forty-Four

In its order on Defendants' motion for summary judgment, the

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Court did not specifically rule on statement forty-four, which 

asserts:

Strong demand for virtually all our optical components

and modules products combined with the increased

operations resulting from our acquisitions completed

subsequent to December 31, 1999 contributed to the

increases in gross profit.

Hrvatin Declaration, Exhibit 19 at 13. Defendants argue that

summary judgment should have been granted because this is a

"historical statement[] regarding demand for JDS's products in

calendar year 2000." Order at 14. Plaintiffs counter that the

statement "relates to the reasons for increased profits in 2000,

not to demand." Opposition at 5. 

The Court's finding with respect to the technical veracity of

Defendants' statements regarding demand in 2000 applies to this

statement. Even though the Court did not grant summary judgment

with respect to Plaintiffs' accounting claims based on the accuracy

of JDS's reporting of its profits in calendar year 2000, this

statement does not call into question the amount of JDS's gross

profits in 2000. The Court grants Defendants' motion for

reconsideration and grants summary judgment with respect to

statement forty-four.

III. Plaintiffs' September 20, 2007 Letter

Plaintiffs submitted a letter to the Court indicating various

corrections to the August 24, 2007 order, to which Defendants did

not object. Although a letter to the Court is not the correct way

to seek relief, see Civil Local Rule 7-1, the Court makes the

follow corrections to its August 24, 2007 order: 

(1) Page 1, line 24 should read "Jozef" instead of "Josef."

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United States District Court

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(2) Page 2, line 20 should read "effective May 17, 2000"

instead of "in late September, 1999."

(3) Page 7, line 8 should read "The Court granted Lead

Plaintiffs' motion for class certification on December

21, 2005."

(4) Page 19, line 14 should read "in the October 26, 2000

conference call" instead of "in the same conference

call."

(5) Page 20, line 21 should read "June 30, 2001" instead of

"June 30, 2000."

(6) The sentence beginning on Page 31, line 8 should read "On

January 17, 2000, JDS and E-TEK announced their agreement

to merge by exchanging 2.2 shares of JDS stock for each

common share and outstanding option of E-TEK."

(7) Page 42, footnote 12, line 22 should read "questioned"

instead of "requested."

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendants' motion

for reconsideration in part and DENIES it in part (Docket. No.

1445).

IT IS SO ORDERED.

Dated: 9/27/07 

CLAUDIA WILKEN

United States District Judge

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