Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_02-cv-01486/USCOURTS-cand-4_02-cv-01486-126/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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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

IN RE JDS UNIPHASE CORPORATION

SECURITIES LITIGATION

 /

No. C 02-1486 CW

FINAL JURY

INSTRUCTIONS

DUTY OF THE JURY

Members of the Jury: Now that you have heard all of the

evidence, it is my duty to instruct you as to the law of the case.

A copy of these instructions will be sent with you to the jury room

when you deliberate. You should discard the preliminary

instructions; these instructions control and you need not concern

yourselves with differences between them and the preliminary

instructions. You must not infer from these instructions or from

anything I may say or do as indicating that I have an opinion

regarding the evidence or what your verdict should be.

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It is your duty to find the facts from all the evidence in the

case. To those facts you will apply the law as I give it to you.

You must follow the law as I give it to you whether you agree with

it or not. And you must not be influenced by any personal likes or

dislikes, opinions, prejudices, or sympathy. That means that you

must decide the case solely on the evidence before you. You will

recall that you took an oath to do so.

In following my instructions, you must follow all of them and

not single out some and ignore others; they are all important.

Burden of Proof

When a party has the burden of proof on any claim or defense

by a preponderance of the evidence, it means you must be persuaded

by the evidence that the claim or affirmative defense is more

likely true than false. You should base your decision on all of

the evidence, regardless of which party presented it.

What Is Evidence

The evidence you are to consider in deciding what the facts

are consists of:

1. the sworn testimony of any witness, whether from the

witness stand, video deposition or deposition transcripts

that are read aloud;

2. the exhibits which are received into evidence; and

3. any facts to which the lawyers have agreed.

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What is Not Evidence

In reaching your verdict, you may consider only the testimony

and exhibits received into evidence. Certain things are not

evidence, and you may not consider them in deciding what the facts

are. I will list them for you:

1. Arguments and statements by lawyers are not evidence. 

The lawyers are not witnesses. What they have said in their

opening statements, their closing arguments, and at other times is

intended to help you interpret the evidence, but it is not

evidence. If the facts as you remember them differ from the way

the lawyers have stated them, your memory of them controls.

2. Questions and objections by lawyers are not evidence.

Attorneys have a duty to their clients to object when they believe

a question is improper under the rules of evidence. 

3. Testimony that has been excluded or stricken, or that you

have been instructed to disregard, is not evidence and must not be

considered. In addition sometimes testimony and exhibits are

received only for a limited purpose; where I have given a limiting

instruction, you must follow it.

4. Anything you may have seen or heard when the court is not

in session is not evidence. You are to decide the case solely on

the evidence received at the trial.

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Emails and Documents as Evidence

During the course of trial you have seen emails and other

documents addressed to and from various people. In some instances,

an email or other document was admitted because it was relevant to

the knowledge or the state of mind of the writer or recipient of

the email or other document.

You should keep in mind that not all emails are relevant to

the knowledge or state of mind of every Individual Defendant. In

particular, unless Plaintiffs have shown by a preponderance of the

evidence that a particular Individual Defendant did see an email or

document, or was otherwise made aware of its contents, that email

or other document is not admissible against a defendant who didn't

write or receive the email or document.

Charts and Summaries Not Received in Evidence

Certain charts and summaries that have not been received in

evidence have been shown to you in order to help explain the

evidence in the case. They are not themselves evidence or proof of

any facts. If they do not correctly reflect the evidence in the

case, you should disregard these demonstrative exhibits and

determine the facts from the underlying evidence.

Charts and Summaries Received in Evidence

Other charts and summaries have been received into evidence to

illustrate information brought out in the trial. Charts and

summaries are only as good as the underlying evidence that supports

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them. You should, therefore, give them only such weight as you

think the underlying evidence deserves.

Direct and Circumstantial Evidence

Evidence may be direct or circumstantial. Direct evidence is

direct proof of a fact, such as testimony by a witness about what

that witness personally saw or heard or did. Circumstantial

evidence is proof of one or more facts from which you could find

another fact. You should consider both kinds of evidence. The law

makes no distinction between the weight to be given to either

direct or circumstantial evidence. It is for you to decide how

much weight to give to any evidence.

Credibility of Witnesses

In deciding the facts in this case, you may have to decide

which testimony to believe and which testimony not to believe. You

may believe everything a witness says, or part of it, or none of

it. 

In considering the testimony of any witness, you may take into

account:

1. the opportunity and ability of the witness to see or hear

or know the things testified to;

2. the witness's memory;

3. the witness's manner while testifying;

4. the witness's interest in the outcome of the case and any

bias or prejudice;

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5. whether other evidence contradicted the witness's 

testimony;

6. the reasonableness of the witness's testimony in light of

all the evidence; and

7. any other factors that bear on believability.

The weight of the evidence as to a fact does not necessarily

depend on the number of witnesses who testify about it.

Representation of Witnesses

You have heard testimony from certain non-party witnesses that

JDSU has paid for their attorney fees to prepare for testimony in

this case, including at depositions. You should be aware that

California law requires companies such as JDSU to pay the legal

expenses for a lawyer that current or former employees choose, if

the expenses are incurred in direct consequence of the discharge of

their duties. In addition, JDSU's own corporate bylaws, which

predate this litigation, mandate that the company pay the legal

fees for current and former employees in connection with testifying

during litigation.

You have heard testimony from certain non-party witnesses that

they have been, or are, represented by Morrison & Foerster or

Heller Ehrman, counsel for certain Defendants in this action. 

There is nothing improper about Morrison & Foerster or Heller

Ehrman representing these individuals. 

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There is also nothing improper about parties and witnesses

consulting with their attorneys before they testify.

Deposition Testimony

When a person was unavailable to testify at trial, the

deposition or portions of the deposition of that person was used at

the trial. A deposition is the sworn testimony of a witness taken

before trial. The witness is placed under oath to tell the truth

and lawyers for each party may ask questions. The questions and

answers are recorded, and often, as in this case, the entire

deposition is recorded on videotape. 

 Deposition testimony is entitled to the same consideration and

is to be judged, insofar as possible, in the same way as if the

witness had been present to testify.

Opinion Evidence, Expert Witnesses

You have heard testimony from persons who, because of

education or experience, were permitted to state opinions and the

reasons for those opinions.

Opinion testimony should be judged just like any other

testimony. You may accept it or reject it, and give it as much

weight as you think it deserves, considering the witness's

education and experience, the reasons given for the opinion and all

the other evidence in the case.

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Parties and Claims

I will first give you a summary of each side's position in

this case. I will then tell you what each side must prove to win

on each of its claims or defenses. 

Plaintiffs claim to have suffered a loss caused by Defendants'

alleged violation of the federal securities laws. The securities

laws govern the buying and selling of securities, such as stocks

and bonds. Plaintiffs have brought claims under Sections 10(b),

14(a), 20 and 20A of the Securities Exchange Act of 1934. Some of

the claims apply to all Defendants, while other claims apply to

some Defendants and not others. You must consider whether

Plaintiffs have proved each claim separately and you must also

consider each claim against each Defendant separately. 

On any claim, if you find that each of the elements on which

Plaintiffs have the burden of proof has been proved, your verdict

should be for Plaintiffs on that claim, unless you also find that

any Defendant has proved a defense, in which event your verdict

should be for that Defendant on that claim.

Verdict Table

You will have a Verdict Table on which you will indicate your

findings. You will also have a Verdict Questions Form, with

instructions and questions to guide you through the process of

filling out the Verdict Table. 

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Section 10(b) of the Securities Exchange Act

False or Misleading Statements

Plaintiffs contend that JDSU, Straus, Muller, Abbe and

Kalkhoven violated Section 10(b) of the Securities Exchange Act of

1934 by making various false or misleading statements. 

To establish their claim under Section 10(b), Plaintiffs bear

the burden of proving all of the following elements by a

preponderance of the evidence:

1. in connection with the purchase or sale of a security

registered on a national securities exchange, the

defendant made a misstatement or omitted information

necessary under the circumstances to prevent the

statement from being misleading;

2. the misstatement or omitted information was material;

3. the defendant acted with a particular state of mind,

which is called scienter and which will be defined below;

and

4. Plaintiffs suffered damages as a result.

Liability of JDSU under Section 10(b)

JDSU is a corporation. A corporation acts through its

officers. Therefore, if any Individual Defendants violated Section

10(b), JDSU will also be liable.

Misstatement or Omission

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 A misstatement is a statement that was false or misleading

when it was made. An omission is a failure to disclose a fact that

needed to be disclosed to keep the statements that were actually

made from being misleading.

Predictions About the Future and Forward-Looking Statements

Under Section 10(b), a prediction about the future constitutes

a material misstatement or omission if: 

1. the person who made the prediction did not genuinely

believe it;

2. the person who made the prediction had no reasonable

basis for the belief; or

3. the person who made the prediction was aware of

undisclosed facts tending to seriously undermine the

accuracy of the statement. 

Evidence that the prediction turned out to be incorrect does

not prove that it was a material misstatement when it was made.

Opinions

Under Section 10(b), a statement of opinion or belief is false

if the opinion or belief is not honestly held when the statement is

made. A person who states an opinion or belief that he honestly

holds is not liable under Section 10(b) merely because the opinion

turns out to be incorrect.

Materiality

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A factual representation concerning a security is material if

there is a substantial likelihood a reasonable investor would

consider the fact important in deciding whether or not to buy, sell

or exchange that security.

An omission concerning a security is material if a reasonable

investor would have regarded what was not disclosed to him or her

as having significantly altered the total mix of information he or

she took into account in deciding whether to buy, sell or exchange

the security. A failure to disclose information is not material

if, at the time of the omission, the information was available to

the market and to investors by other sources.

You must decide whether something was material based on the

circumstances as they existed at the time of the statement or

omission.

This definition also applies to Plaintiffs' Section 20A

insider trading claims discussed below.

Meaningful Cautionary Statements

A defendant cannot be held liable for a forward-looking

statement if it was accompanied by cautionary statements that

relate directly to the subject matter of the forward-looking

statement. 

In addition, a defendant cannot be held liable for a forwardlooking statement if the defendant identifies important factors

that could cause actual results to differ materially from those in

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the challenged statement. If the forward-looking statement is

oral, such as during a conference call, the identification of these

factors can be made by reference to readily available documents

that contain them. If the forward-looking statement is made in

writing, the document itself must identify these factors.

With respect to the forward-looking statements only, the

Verdict Questions Form and Verdict Table will ask you to find

whether Plaintiffs have proved that such cautionary statements were

not made.

Substantial Involvement

Individual Defendants can be held liable for making a

statement, not only for uttering or writing words, but also by

being substantially involved in the preparation of the statement. 

Substantial involvement can include speaking, writing, editing,

drafting, preparing, approving or signing a statement. The Verdict

Table will identify, in most cases, which Individual Defendant or

Defendants actually made the statements and ask you to find whether

additional Defendants were substantially involved in the

preparation of the statement. 

Scienter

To satisfy the third element of their Section 10(b) claim,

Plaintiffs bear the burden of proving by a preponderance of the

evidence that Defendants acted with a particular state of mind,

which is called scienter.

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You will be asked if Plaintiffs have proved that Defendants

acted with actual knowledge that each challenged statement was

materially false when made. If you find that actual knowledge was

not proven, you will also be asked, for the statements that are not

forward-looking statements, if Plaintiffs proved that Defendants

acted with deliberate recklessness. The Verdict Table will

indicate which statements are in this category. A defendant acts

with deliberate recklessness when his actions (i) are an extreme

departure from the standards of ordinary care and (ii) present a

danger of misleading investors that is either known to the author

or speaker or is so obvious that he must be aware of it.

An honest or good faith belief on the part of an Individual

Defendant that a statement is true is inconsistent with a finding

that he acted with scienter in making that statement.

Stock Sales as Evidence of Scienter

Stock sales may be used as evidence of scienter if the sales

are dramatically out of line with prior trading practices and made

at times calculated to maximize personal benefit from undisclosed

inside information. In making this determination, you should

consider whether the Individual Defendant's trading patterns are

consistent with prior periods and whether the Individual Defendant

retained possession of a large portion of his shares.

Loss Causation

To satisfy the fourth element of their Section 10(b) claim,

Plaintiffs bear the burden of proving by a preponderance of the

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evidence that the misstatements or omissions caused Plaintiffs to

suffer an economic loss.

To establish causation, Plaintiffs must prove that the alleged

misrepresentation or omission played a substantial part in causing

the loss Plaintiffs suffered. 

Plaintiffs must prove that the misstatement or omission

concealed something from the market, and that as a result JDSU's

stock price was higher than it would have been without the material

misstatement or omission. Plaintiffs must also prove that, when

the concealed information was revealed, it negatively and

substantially affected the value of JDSU stock.

Exchange Act Section 20 

Control Person Liability

Under Section 20 of the Securities Exchange Act of 1934, a

defendant may be liable, even if he did not make a statement and

was not substantially involved in the preparation of the statement,

if the defendant had the authority to control the person who did

make the statement.

Plaintiffs claim that the Individual Defendants are

controlling persons and are therefore liable under this Section for

all violations of Section 10(b). On this claim, Plaintiffs have

the burden of proving by a preponderance of the evidence that:

1. there was a violation of Section 10(b);

2. an Individual Defendant directly or indirectly controlled

the person who made the challenged statement; and

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3. directly or indirectly induced the person to make the

statement.

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Defense to Section 20 Control Person Liability

Each of the Individual Defendants contends that, based on a

good faith defense, he is not liable to Plaintiffs for statements

he did not make, even if he was a controlling person. 

In order to establish a good faith defense to control person

liability, an Individual Defendant has the burden of proving two

elements by a preponderance of the evidence:

1. the Individual Defendant did not directly or indirectly

induce the violation; and

2. the Individual Defendant acted in good faith.

If you find that an Individual Defendant proved both of these

elements, your verdict should be for that Defendant. If you find

that the Individual Defendant failed to prove either or both of

these elements, your verdict should be against that Defendant. 

Section 10(b) and Section 20 Damages for 

False or Misleading Statements

If you find that Plaintiffs have proven, by a preponderance of

the evidence, that one or more of the challenged statements caused

a loss, then you must determine the amount of damages, if any,

Plaintiffs have suffered. First, you will be asked to determine

which method of calculating damages is most accurate. You have

heard testimony regarding dollar inflation and percentage

inflation. 

Then, depending on the method you select, you will be asked to

determine the dollar amount or percentage, if any, by which JDSU's

stock price was inflated due to each statement that you find false

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or misleading and the amount, if any, by which that inflation was

later reduced by corrective disclosures. 

You may award only actual damages in an amount which will

reasonably and fairly compensate Plaintiffs for the economic losses

they sustained. Your award must be based on evidence and not upon

speculation, guesswork or conjecture. Plaintiffs have the burden

of proving damages by a preponderance of the evidence.

Section 10(b) and Section 20 Damages Tables

The Verdict Questions Form includes two tables for findings

regarding Section 10(b) and Section 20 damages. If you determine

that one or more of the challenged statements caused a loss, you

will fill in one of those tables, depending on your decision of

which method of calculating damages is most accurate. The table

for the dollar inflation method includes the price per share of

JDSU stock on various dates to assist you in determining dollar

inflation.

Section 14(a) of the Securities Act 

Misstatement in a Proxy Statement for Merger

The SDL subclass of Plaintiffs contends that Defendants Straus

and Muller violated Section 14(a) of the Securities Exchange Act of

1934. This claim is not brought against JDSU, Abbe or Kalkhoven. 

This claim relates to a document known as the November 17,

2000 SDL Amended Registration Statement and Amended

Proxy-Prospectus. The challenged statement within that document is

Statement 10 in the Table of Challenged Statements.

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To establish their claim under Section 14(a), Plaintiffs bear

the burden of proving all of the following elements by a

preponderance of the evidence:

1. Defendants Straus and/or Muller made a misstatement or

omitted information necessary to prevent the statement

from being misleading;

2. the misstatement or omitted information was material;

3. the material misstatement or omission was the result of

knowing, reckless or negligent conduct on the part of

those Defendants; 

4. the statement was an essential link in the accomplishment

of the JDSU-SDL merger; and

5. Plaintiffs suffered damages as a result of the material

misstatement or omission.

You will have already determined whether Plaintiffs proved

elements one, two and five when completing the Verdict Table. You

will be asked to make a finding on the third and fourth elements.

Knowing, Reckless or Negligent Conduct

You will have already determined on the Verdict Table whether

Defendants Straus and Muller acted knowingly or recklessly in

connection with Statement 10. You will be asked to determine

whether they acted negligently. A defendant acts negligently when

he fails to act with ordinary or reasonable care; that is, he does

something that a reasonably prudent person would not do under

circumstances similar to those shown by the evidence or when he

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fails to do something that a reasonably prudent person would do

under circumstances similar to those shown by the evidence.

Section 14(a) Damages for

Misstatement in a Proxy Statement for Merger

The measure of damages under Section 14(a) is the same as the

measure of damages under Section 10(b).

Section 20A of the Securities Exchange Act 

Insider Trading

It is a violation of Section 20A for a corporate insider to

sell stock while in knowing possession of material, non-public

information. That is because a corporate insider with access to

such information by virtue of his relationship to the corporation

has a duty to the shareholders to abstain from trading while in

possession of such material, non-public information or to disclose

such information prior to trading.

In order to find for Plaintiffs on these claims, you must find

that they proved by a preponderance of the evidence each of the

following elements:

1. an Individual Defendant sold JDSU stock

2. using material, non-public information

3. causing Plaintiffs to suffer financial damages.

There is a presumption that an individual who decides to sell

stock while in possession of material, non-public information used

that information in making the decision to sell. If you find that

a defendant has disproved this presumption, you must find in favor

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of that defendant on this claim.

A person who is a former insider who uses material, non-public

information, that he obtained when he was an insider, in deciding

to sell stock can also be held liable for insider trading. 

Section 20A of the Securities Exchange Act 

Trading on Inside Information

 A person who receives material, non-public information from

a corporate insider, and who knows or should have known that the

corporate insider has breached a fiduciary duty to the shareholders

by disclosing the information to the person, has a duty to the

shareholders of a corporation not to trade on material, non-public

information. 

In order to find for Plaintiffs on an insider trading claim

related to a person who has received information from a current

insider, you must find that they proved by a preponderance of the

evidence these elements:

1. the person received from a current insider, information

he knew to be material and non-public;

2. the person knew that the current insider was breaching

his or her fiduciary duty to the shareholders by

disclosing the non-public information to the former

insider;

3. the person sold stock using this material, non-public

information, causing Plaintiffs to suffer damages.

Again, there is a presumption that a person who decides to

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sell stock while in possession of material non-public information

used the information in making the decision to sell. If you find

that a defendant has disproved this presumption, you must find in

favor of that defendant on this claim.

Section 20A Damages for Trading on Inside Information

If you find by a preponderance of the evidence that Plaintiffs

have proven all elements of any of their claims for trading on

inside information, you will be required to determine the amount of

financial damages suffered.

The damages on Plaintiffs' claims for trading on inside

information are measured by the difference between the price at

which the Individual Defendant sold the stock and the price at

which the stock would have traded that day had the material, nonpublic information that was in the defendant's possession been

publicly disclosed. As with the Section 10(b) false or misleading

statement damages, you will be asked to determine the damages

either as dollar inflation or as percentage inflation based on your

determination of which method is most accurate.

Again, you may award only actual damages in an amount which

will reasonably and fairly compensate Plaintiffs for the economic

losses they sustained. Your award must be based on evidence and

not upon speculation, guesswork or conjecture. Plaintiffs have the

burden of proving damages by a preponderance of the evidence.

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Section 20A Inside Information Damages Tables

The Verdict Questions Form includes two sets of tables for

findings regarding Section 20A inside information damages. If you

determine that one or more of the Individual Defendants sold shares

using material, non-public information, you will fill in one set of

those tables, depending on your decision of which method of

calculating damages is most accurate. The table for the dollar

inflation method includes the price per share of JDSU stock on

various dates to assist you in determining dollar inflation.

Duty to Deliberate

When you begin your deliberations, you should elect one member

of the jury as your presiding juror. That person will preside over

the deliberations and speak for you here in court.

You will then discuss the case with your fellow jurors to

reach agreement if you can do so. Your answer to each question on

the verdict form must be unanimous.

Each of you must decide the case for yourself, but you should

do so only after you have considered all of the evidence, discussed

it fully with the other jurors, and listened to the views of your

fellow jurors.

Do not hesitate to change your opinion if the discussion

persuades you that you should. Do not come to a decision simply

because other jurors think it is right. 

It is important that you attempt to reach a unanimous verdict

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but, of course, only if each of you can do so after having made

your own conscientious decision. Do not change an honest belief

about the weight and effect of the evidence simply to reach a

verdict.

Use of Notes

Some of you have taken notes during the trial. Whether or not

you took notes, you should rely on your own memory of what was

said. Notes are only to assist your memory. You should not be

overly influenced by the notes.

Communication with Court

If it becomes necessary during your deliberations to

communicate with me, you may send a note through the marshal,

signed by your presiding juror or by one or more members of the

jury. No member of the jury should ever attempt to communicate

with me except by a signed writing; I will communicate with any

member of the jury on anything concerning the case only in writing,

or here in open court. If you send out a question, I will consult

with the parties before answering it, which may take some time. 

You may continue your deliberations while waiting for the answer to

any question. Remember that you are not to tell anyone—including

me—how the jury stands, numerically or otherwise, until after you

have reached a unanimous verdict or have been discharged. Do not

disclose any vote count in any note to the court.

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Return of Verdict

A verdict form has been prepared for you. After you have

reached unanimous agreement on a verdict, your presiding juror will

fill in the form that has been given to you, sign and date it, and

advise the court that you are ready to return to the courtroom.

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