Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_17-cv-05828/USCOURTS-cand-3_17-cv-05828-1/pdf.json

Nature of Suit Code: 850
Nature of Suit: Securities, Commodities, Exchange
Cause of Action: 15:77 Securities Fraud

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United States District Court

Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

GREGORY WOCHOS,

Plaintiff,

v.

TESLA, INC., et al.,

Defendants.

Case No. 17-cv-05828-CRB 

ORDER GRANTING MOTION TO 

DISMISS AND GRANTING IN 

PART AND DENYING IN PART 

REQUESTS FOR JUDICIAL 

NOTICE

This case consists of a securities action against Tesla, Inc., in which a purported 

class of plaintiff shareholders (“Plaintiffs”) alleges that Tesla and its officers1

(“Defendants”) misled the market regarding the progress of production on the “Model 3.” 

The Second Amended Complaint (“SAC”) mostly retreads the same ground as the 

previous Complaint, but adds allegations that Defendants made statements that, it urges, 

were false as to the then-current state of affairs, and so not forward-looking statements.

See Opp. (Dkt. 54) at xi. Defendants have moved to dismiss the SAC. MTD (Dkt. 49).

Like the First Amended Complaint (“FAC”), the SAC fails because the statements it 

identifies were not false, or were forward-looking and accompanied by meaningful 

qualifications. The Court thus GRANTS the Motion to Dismiss. Further, because the 

Court concludes that any further amendment would be futile, the SAC is DISMISSED 

WITH PREJUDICE AND WITHOUT LEAVE TO AMEND.

In addition, both parties request judicial notice of a variety of documents that Tesla 

filed with the SEC, public statements that Tesla made, news reports on Tesla, and Tesla’s 

 

1 Tesla CEO Elon R. Musk and CFO Deepak Ahuja. Second Amended Complaint ¶¶ 41–42.

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stock information. Def. Request for Jud. Notice (Dkt. 51); Pl. Resp. to Def. Request for 

Jud. Notice & Pl. Request for Jud. Notice (Dkt. 56). As the Court did before, see Order 

Dismissing Complaint with Leave to Amend (“Order”) at 3–4, the Court considers the 

parties’ proffered statements for the sole purpose of determining what representations 

Tesla made to the market, not for the truth of any facts asserted. The Court also does not 

take judicial notice of the issues of scienter, as the Court has no cause to reach that 

question. The Court thus GRANTS IN PART AND DENIES IN PART the Parties’ 

Requests for Judicial Notice.

I. BACKGROUND

The Court assumes the parties’ familiarity with the factual background of this case 

as described in this Court’s Order on the previous Motion to Dismiss. Order at 2, 5–9. 

The Court granted the first Motion to Dismiss with leave to amend because, “while 

Plaintiffs claim that Tesla and its officers . . . fell short of their production goals, a firm’s 

failure to meet projections is only actionable if the firm did not accompany those 

projections with meaningful qualifications. Because Plaintiffs fail to allege that 

Defendants made any projections that were not so qualified, their claims fail.” Id. at 1.

To support the claim that Defendants misled investors about Tesla’s progress in 

producing the Model 3, the SAC newly alleges that Defendants communicated to the 

public in the spring and summer of 2017 that it had a planned timeline for the automated 

production of the Model 3 by the end of 2017 and that that plan was on track. SAC ¶¶ 19–

28, 124–26, 132–37, 239–48; Opp. at vii. Despite these statements, Plaintiffs urge, Tesla 

was not “on track” with that plan, and thus was conveying materially false statements to 

investors. Opp. at vii. The specifics of those allegations are discussed below. 

II. REQUEST FOR JUDICIAL NOTICE

In reviewing a motion to dismiss, a district court is usually limited to the facts stated 

in the complaint. Arpin v. Santa Clara Valley Transp. Agency, 261 F.3d 912, 925 (9th Cir. 

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2001). “A court may, however, consider certain materials—documents attached to the 

complaint, documents incorporated by reference in the complaint, or matters 

of judicial notice—without converting the motion to dismiss into a motion for summary 

judgment.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). Courts may take 

judicial notice of facts that are “not subject to reasonable dispute” because they (1) are 

“generally known within the trial court’s territorial jurisdiction,” or (2) “can be accurately 

and readily determined from sources whose accuracy cannot reasonably be questioned.” 

Fed. R. Evid. 201(b). The Court previously granted Defendants’ motion to take judicial 

notice of certain statements Tesla made to the market that were not included in the FAC 

for the limited purpose of determining what Tesla’s representations in fact were. Order at 

1, 3–4.

Defendants again ask the Court to take judicial notice as well as incorporate by 

reference thirty-five documents that contain public statements made by Tesla and its 

officers regarding Model 3 production. Request for Jud. Notice at 9; see also Bretan Decl. 

Exh. (Dkt. 50-1). Plaintiffs, again, object to the Court taking judicial notice of the truth of 

any information contained in the judicially noticed documents. Pl. Response to Def.

Request for Jud. Notice (Dkt. 56) at 5–9. They argue that judicial notice of these 

documents is inappropriate because the Court “cannot assume the truth of statements in 

those documents where ‘such assumptions only serve to dispute facts stated in [the] well 

pleaded complaint.’” Id. at 6 (quoting Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 

1003 (9th Cir. 2018)). They do not, however, “oppose judicial notice of the statements 

contained therein for the limited purpose of noting that the statements were actually made 

at the time and in the manner described in the SAC.” Id. at 4. Plaintiffs also submit their

own request for judicial notice as to three additional statements that Tesla filed with the 

SEC in 2018. Id. at 9–10; see also Goldberg Decl. (Dkt. 55).

Defendants’ Exhibits 1–15, 17–19, 21–25, 33, and 34–36, and Plaintiffs’ three

exhibits are all documents that Tesla filed with the United States Securities and Exchange 

Commission or earnings conference call transcripts. Bretan Decl; Goldberg Decl. The 

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Court has already determined that these categories of documents are “appropriate subjects 

of judicial notice” because, “[g]iven that Tesla publicly filed these documents, their 

accuracy cannot reasonably be questioned.” Order at 4; see also Fed. R. Evid. 201(b); 

Khoja, 899 F.3d at 1003 (publicly-disclosed reports may be properly subject to judicial 

notice); Dreiling v. Am. Exp. Co., 458 F.3d 942, 946 n.2 (9th Cir. 2006) (SEC filings 

properly subject to judicial notice). The Court thus considers these documents for the sole 

purpose of determining what representations Tesla made to the market. The Court does

not take notice of the truth of any of the facts asserted in these documents.

The Court also takes notice of the articles and reports incorporated by reference in 

the SAC, which Defendants have included in their request for Judicial Notice. Bretan 

Decl. Exh. 26–31. Plaintiffs do not oppose judicial notice of these statements for the 

limited purpose of determining what statements Tesla made to the market. Pl. Resp. to 

Def. Request for Jud. Notice & Pl. Request for Jud. Notice at 4. The Court thus takes 

judicial notice of these exhibits for this limited purpose. The Court declines to take 

judicial notice of the remainder of Defendants’ exhibits because they are not relevant to the 

Court’s analysis below. See Bretan Decl. Exh. 32.

III. MOTION TO DISMISS

Defendants have filed a Motion to Dismiss the SAC. There are four main points of 

dispute: (1) whether the SAC adequately pleads falsity, (2) whether the SAC adequately 

pleads scienter, (3) whether the SAC adequately pleads loss causation, and (4) whether the 

SAC adequately pleads control person liability. As with the Order Granting the FAC, this 

Motion will be granted on the issue of falsity without reaching the issues of scienter or loss 

calculation because Plaintiffs have failed to plead any material misstatement that was not 

accompanied by meaningful qualification. See Order at 1. The parties also dispute 

whether, if the Motion is granted, Plaintiffs should be given leave to amend. Because the 

Court determines that further amendment would be futile, the Court denies leave to amend.

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A. Legal Standard

To withstand a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), a 

complaint must contain “a short and plain statement of the claim showing that the pleader 

is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Dismissal may be based on either “the lack of 

a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal 

theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). The facts 

pleaded must make the claim “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 570 (2007). “Threadbare recitals of the elements of a cause of action, supported 

by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal, 556 U.S. 662, 678 

(2009). In addition, claims of securities fraud must be pled with particularity. Fed. R. Civ. 

P. 9(b); 15 U.S.C. § 78u-4(b)(1).

Following dismissal, a court “should liberally allow a party to amend its pleading.” 

Sonoma Cty. Ass’n of Retired Emps. v. Sonoma Cty., 708 F.3d 1109, 1117 (9th Cir. 

2013). However, a court need not grant leave to amend if there is no set of facts under 

which the plaintiff can state a valid and sufficient claim. DCD Programs, Ltd. v. Leighton, 

833 F.2d 183, 188 (9th Cir. 1987).

Plaintiffs’ claims arise under §§ 10(b) and 20(a) of the Securities Exchange Act of 

1934 and SEC Rule 10b-5. SAC Counts I, II; 15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5. 

Section 10(b) makes it unlawful “to use or employ in connection with the purchase or sale 

of any security . . . any manipulative or deceptive device or contrivance in contravention 

of” SEC rules. 15 U.S.C. § 78j(b). Rule 10b-5 proscribes, in connection with the purchase 

or sale of any security, (1) employing any device, scheme, or artifice to defraud; 

(2) making a material misstatement or omission; or (3) engaging in any act, practice, or 

course of business which operates or would operate a fraud or deceit upon any person. 17 

C.F.R. § 240.10b-5. To state a claim under § 10(b) and Rule 10b-5, a plaintiff must allege 

“(1) a misrepresentation or omission of (2) material fact (3) made with intent (4) on which 

the plaintiff justifiably relied (5) that proximately caused the alleged loss.” Binder v. 

Gillespie, 184 F.3d 1059, 1063 (9th Cir. 1999). Section 20(a) provides for joint and 

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several liability for violations of securities laws. See City of Royal Oak Ret. Sys. v. 

Juniper Networks, Inc., 880 F. Supp. 2d 1045, 1070 (N.D. Cal. 2012).

The Private Securities Litigation Reform Act of 1995 (“PSLRA”) imposes strict 

pleading requirements on a plaintiff. First, a plaintiff must identify “each statement 

alleged to have been misleading” and “the reason or reasons why [that statement was] 

misleading.” 15 U.S.C. § 78u-4(b)(1). If an allegation is based on omitted facts, a plaintiff 

must show that it “would have been viewed by the reasonable investor as having 

significantly altered the ‘total mix’ of information made available.” Matrixx Initiatives, 

Inc. v. Siracusano, 563 U.S. 27, 38 (2011) (quoting Basic v. Levinson, 485 U.S. 224, 231–

31 (1988)). This falsity requirement must be plead with particularity. Zucco Partners, 

LLC v. Digimarc Corp., 552 F.3d 981, 990 (9th Cir. 2009), as amended (Feb. 10, 2009).

In addition, the PSLRA carves out a safe harbor from liability for statements that 

are identified as “forward-looking” and are “accompanied by meaningful cautionary 

statements.” 15 U.S.C. § 78u-5(c)(1)(A)(i). A forward-looking statement is “any 

statement regarding (1) financial projections, (2) plans and objectives of management for 

future operations, (3) future economic performance, or (4) the assumptions ‘underlying or 

related to’ any of these issues.” No. 84 Employer-Teamster Joint Council Pension Trust 

Fund v. Am. W. Holding Corp., 320 F.3d 920, 936 (9th Cir. 2003). A projection may 

contain an implied factual misstatement where (1) the speaker does not actually believe the 

statement, (2) there is no reasonable basis to believe the statement is true, or (3) the 

speaker is aware of undisclosed facts that seriously undermine the statement’s accuracy. 

Provenz v. Miller, 102 F.3d 1478, 1487 (9th Cir. 1996).

B. Falsity

Plaintiffs argue that the SAC sufficiently alleges that Defendants made statements 

that are “provably false”—that is, statements about the state of the world as it was at the 

time the statements were made, not projections about the future. See Mot. at xi. In 

support of their argument that the SAC adequately pleads falsity, Plaintiffs point to the 

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following statements:

1. “May statements”

a. In a May 3, 2017, filing with the SEC, Tesla stated that “[p]reparations at our 

production facilities are on track to support the ramp of Model 3 production 

to 5,000 vehicles per week at some point in 2017, and to 10,000 vehicles per 

week at some point in 2018.” SAC ¶ 238.

b. “In a May 10, 2017 10-Q for the first quarter of 2017 . . . the Company told 

investors that, regarding activity in the first quarter of 2017, that ‘[w]e have 

started the installation of Model 3 manufacturing equipment at the Fremont 

Factory and Gigafactory 1, and we are on-track for start of Model 3 

production in July 2017.’” SAC ¶ 19; see also id. ¶¶ 119, 134, 247 (same 

alleged statement).

2. “August statements”

a. During a conference call on August 2, 2017, Musk stated that “[a]nd we 

remain – we believe on track to achieve a 5,000 unit week by the end of this 

year,” SAC ¶¶ 128, 260, and that Tesla was “making great progress on the 

battery front.” Id. ¶ 262.

b. That same day, August 2, 2017, Tesla filed a Second Quarter 2017 Update 

with the SEC, which stated that “[b]ased on our preparedness at this time, we 

are confident we can produce just over 1,500 vehicles in Q3, and achieve a 

run rate of 5,000 vehicles per week by the end of 2017.” SAC ¶¶ 127, 258.

c. In another SEC filing on August 4, 2017, Tesla stated that “[w]hile we 

currently believe that our progress at Gigafactory 1 will allow us to reach our 

production targets, our ultimate ability to do so will require us to resolve the 

types of challenges that are typical of a production ramp, such as those that 

we have experienced to date, including at Gigafactory 1.” SAC ¶ 268.

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1. The May Statements

Plaintiffs argue that the May statements conveyed to the market that “best-case, 

Tesla required ten to eleven months from the beginning of installation to mass production.” 

Opp. at 4–5. Plaintiffs further allege that, despite that representation, Tesla did not start 

installing “automated production equipment” in early May 2017. Opp. at 5; SAC ¶¶ 248. 

“As of May 3, 2017, therefore, Tesla could not reach mass production of the Model 3 until, 

at earliest, March, 2018.” Id. at 5 (citing SAC ¶¶ 21, 178). So, Plaintiffs urge, Tesla’s 

statements in May 2017 that it was “on track” to begin production were materially false. 

Id.

In rejecting a version of this argument before, this Court determined that statements 

that Tesla was “on track” “fall solidly within the category of forward-looking statements 

regarding plans and objectives for future operations” because, “[w]ere the Court to adopt 

Plaintiffs’ conclusion, the distinction between present statements and forward-looking 

statements would collapse.” Order at 9–10 (citing No. 84 Employer-Teamster Joint 

Council Pension Tr. Fund, 320 F.3d at 937); see also Norfolk Cty. Ret. Sys. v. Solazyme, 

Inc., 2018 WL 3126393, at *3 (N.D. Cal. June 26, 2018) (statement that company was “on 

track” was forward looking). It also determined that Tesla’s statements about its progress 

towards reaching its production goals were accompanied by meaningful cautionary 

statements. See 15 U.S.C. § 78u-5(c)(1)(B); Order at 10–13.

Plaintiffs argue that that holding does not control the SAC because the newlyalleged May statements “informed investors both that installation of automated equipment 

would take at least four to five months . . . and the ramp up from the start of automated

production to mass production would take six months.” Opp. at 4. This was inconsistent, 

Plaintiffs urge, with Tesla’s “Plan” at that point in time.

According to Plaintiffs, Defendants had a plan to mass produce the Model 3 by 

December 2017. Opp. at 4. Plaintiffs’ basis for the claim that Tesla had a plan to being 

mass production around December 2017 is that a former employee, FE1, had told Musk 

that automated production before then would be impossible. SAC ¶ 17; Opp. at 6 n.25, 19

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Plaintiffs argue that Defendants “verbalized” that plan, which “confirmed FE1’s 

production plan timeline” by announcing in May that they had “started the installation of 

Model 3 manufacturing equipment at the Fremont Factory and Gigafactory 1, and we are 

on-track for start of Model 3 production in July 2017.” SAC ¶¶ 18–19. So, on Plaintiffs’ 

view, the May “on track” statements are not forward-looking because they are descriptive 

of Tesla’s “Plan” at the time, which had a much longer timeline for automated production.

There are at least two problems with this argument. First, Plaintiffs’ assertion about 

the existence of a “Plan” is entirely specious. There are no allegations that the timeline 

FE1 told Musk in 2016 was Tesla’s actual timeline—or “Plan.” Plaintiffs do not allege 

that Defendants actually made statements telling the public or investors about this abovedescribed “Plan” to begin mass automated production in December. Reply at vii, 1–2; see 

also generally Breton Decl. Exhs. Nor do they identify any evidence that Tesla was 

operating under the timeline that FE1 suggested. See generally FAC; Opp. All that 

Plaintiffs offer are the May statements, which support only a conclusion that Tesla had a 

plan to “start Model 3 production in July 2017.” SAC ¶ 119. Those statements say 

nothing about production goals for the end of 2017 or Tesla’s timeline for automated

production.

Pointing to the statements that Tesla was “on track” for July 2017, Plaintiffs further 

argue only that “[i]t is unreasonable to infer anything other than that this sentence is telling 

investors that production in July will be automated,” and “Plaintiffs are entitled, as a 

matter of law, to [the] inference” that Defendants had adopted FE1’s statements in 2016 

about the feasibility of a timeline for full automated assembly line production as Tesla’s 

own timeline Plan. Opp. at xii n.10. To the contrary, however, it is unclear how 

statements that Tesla was “on track” to start Model 3 production in July 2017 could be 

read as “tying July automated production to the ability to mass produce in 2017.” Opp. at 

10. The May statements do not say that Tesla was going to have the ability to mass 

produce Model 3s, only that it was on track to start production in July. Moreover, contrary 

to Plaintiffs’ contention that the May statements were “telling investors” that July 

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production would be automated, Musk told investors in a May 4, 2016, earnings 

conference call that “[n]ow, will we actually be able to achieve volume production on July 

1 next year? Of course not.” Bretan Decl. Exh. 2 and 4. Thus, although reasonable 

inferences must be taken in favor of Plaintiffs at this stage, Telesaurus VPC, LLC v. 

Power, 623 F.3d 998, 1003 (9th Cir. 2010) (quoting Iqbal, 556 U.S. at 678), these 

statements do not support a reasonable inference that Defendants had adopted FE1’s 

claims about Tesla’s timeline, nor that Tesla told investors that it had done so. And the 

Court need not accept “unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 

1049, 1055 (9th Cir. 2008).

That leads to the second key problem with Plaintiffs’ argument: It conflates 

production with automated mass production. The SAC repeatedly alleges that when 

Defendants referred to the initial production of the Model 3 in July 2017, Defendants 

meant “automated production.” See SAC ¶ 20; Opp. at ix. But the May statements that 

Plaintiffs identify mention only “production,” not “automated production” or even “mass 

production.” See FAC ¶¶ 19, 119, 134, 238, 247; Opp. at vii. Plaintiffs point to no 

evidence that Tesla made representations about “automated” production. See Reply at 3 

(citing Bretan Decl. Exh. 16 at 2) (footnote omitted). In fact, at the July 28 handover 

event, Tesla displayed an S-curve graphic showing volume production first occurring in 

the October 2017 timeframe. Id. There is thus simply no reason to infer that by 

“production,” Tesla actually meant “automated production.” So Plaintiffs’ arguments that 

the May statements were demonstrably false when they were uttered because they were 

descriptive of Tesla’s ability at that point to have automated production up and running by 

July 2017 or that they were false because they were inconsistent with a plan to have 

automated production in December 2017 are simply unsupported by Plaintiffs’ own 

allegations. Tesla’s statements cannot be taken to refer to the then-current state of affairs, 

because the statements do not contain allegations that can “demonstrably be proven false,” 

Westley v. Oclaro, Inc., 897 F. Supp. 2d 902, 918 (N.D. Cal. 2012), on reconsideration in 

part (Jan. 10, 2013). These statements are thus, as in the FAC, properly understood as 

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forward-looking.

The question then, as with the FAC, is whether the statements are “accompanied by 

meaningful cautionary statements” that would land them within the PSLRA’s safe harbor 

provision. 15 U.S.C. § 78u-5(c)(1)(A)(i); Opinion at 9. On that issue, this Court has 

already held that Tesla did make meaningful cautionary statements. Order at 6–11. Nor 

do Plaintiffs now offer any argument to the contrary. See generally Opp. Thus, Plaintiffs 

have not met the falsity standard as to the May statements.

2. August Statements

Plaintiffs also point to statements in early August 2017, that Tesla believed it was 

“on track to achieve a 5,000 unit week by the end of this year,” SAC ¶¶ 128, 260; was 

“making great progress on the battery front,” id. ¶ 262; that it was, “[b]ased on [its] 

preparedness at this time, . . . confident [it could] produce just over 1,500 vehicles in Q3, 

and achieve a run rate of 5,000 vehicles per week by the end of 2017,” id. ¶¶ 127, 258; and 

that “[w]hile we currently believe that our progress at Gigafactory 1 will allow us to reach 

our production targets, our ultimate ability to do so will require us to resolve the types of 

challenges that are typical of a production ramp, such as those that we have experienced to 

date, including at Gigafactory 1.” SAC ¶ 268.

These allegations are identical to those Plaintiffs made in their FAC. FAC ¶¶ 111, 

117–98, 225–27, 235. The Court found that these statements were all forward-looking and 

accompanied by meaningful cautionary statements. Order at 9–10. Plaintiffs offer no 

argument that that conclusion does not fully control here. See generally Opp.2 So, as 

 

2

 In a footnote and a parenthetical, Plaintiffs point to a statement made at a launch event on July 

28, 2017 that Tesla had made “50 production cars” that month. SAC ¶ 24; Opp. at 3, 7 n.28. 

Plaintiffs allege that “[p]roduction car[]” is “a term of art in the automotive industry, a fact Musk, 

the CEO of a car-making company, knew. A ‘production car’ is produced by automation, such 

that all vehicles are identical, and offered for sale to the public. Thus, Musk told the world that the 

[] cars sold to buyers had been produced on an automated line in July,” id., but in fact the cars 

made in July had been built by hand. SAC ¶¶ 25, 125. Plaintiffs argue that “the most reasonable 

inference to draw is that Musk was stating that Tesla had built 50 cars using automated processes,” 

which “was a lie.” Opp. at 7 n.28. 

Defendants correctly point out that Plaintiff offers no basis for its statement that 

“production car” is a term of art, and, even if it were, Defendants also indicated in their public 

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before, the August statements have not met the falsity standard.

Because none of Plaintiffs’ new allegations alter this Court’s previous Order’s 

reasoning that the Plaintiffs have failed to meet the falsity requirement because all of the 

challenged statements were forward-looking and accompanied by meaningful cautionary 

qualifications, Order at 9–13, Plaintiffs’ claims once again fail. As this Court noted the 

first time around, “Federal securities laws do not punish companies for failing to achieve 

their targets.” Order at 1. And, like in the previous Order, because Plaintiffs have not 

alleged sufficient facts to meet the falsity standard, the Court need not address scienter or 

loss causation.

C. Leave to Amend

The final issue is whether or not to grant Plaintiffs leave to amend their Complaint. 

Such leave is to be given “liberally,” Sonoma Cty. Ass’n of Retired Employees v. Sonoma 

Cty., 708 F.3d 1109, 1117 (9th Cir. 2013), but it may be withheld where “there is strong 

evidence of ‘undue delay, bad faith or dilatory motive on the part of the movant, repeated 

failure to cure deficiencies by amendments previously allowed, undue prejudice to the 

opposing party by virtue of allowance of the amendment, [or] futility of amendment, etc.’” 

Id. (quoting Foman v. Davis, 371 U.S. 178, 182 (1962)).

Plaintiffs argue that if the Motion is granted, it should be with leave to amend. But 

they point to nothing that would affect the foregoing analysis. Rather, they seek leave to 

amend to include evidence of an HBO interview that Musk did in which he said that Tesla 

was near “death” because of its liquidity crisis, Opp. at viii n.2, and evidence of an 

Offering Circular, which Plaintiffs argue “provides Tesla motive to lie during the Class 

Period about their failure to meet their Plan’s July 2017 benchmarks,” id. at xii n.11. 

Neither of these proposed allegations is relevant to the falsity analysis, and they would not 

 

disclosures that their facilities were not fully automated at the time. Bretan Decl. Exh. 19 at 32, 

41–42; Mot. at 15; Reply at 6–7. And so it is unreasonable to infer from Tesla’s statement at the 

July launch event that Tesla was representing that it had a fully completed automated assembly 

line. See Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007) (“[U]nreasonable inferences . . . 

are insufficient to defeat a motion to dismiss.).

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