Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03547/USCOURTS-cand-3_14-cv-03547-7/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

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOSEPH CURRY, et al.,

Plaintiffs,

v.

YELP INC., et al.,

Defendants.

Case No. 14-cv-03547-JST 

ORDER DENYING MOTION FOR 

LEAVE TO FILE MOTION FOR 

RECONSIDERATION

Re: ECF No. 52

Lead Plaintiff City of Miami Fire Fighters’ and Police Officers’ Retirement Trust and

Plaintiff Joseph Curry (collectively, “Plaintiffs”) have filed a motion for leave to file a motion for 

reconsideration. ECF No. 52. The motion argues that this Court’s April 21, 2015 order granting 

Defendants’ motion to dismiss the consolidated class action complaint, ECF No. 48, contained 

several manifest errors justifying reconsideration pursuant to Civil Local Rule 7-9(b)(3). 

Rule 7-9(b)(3) states that “[a] manifest failure by the Court to consider material facts or 

dispositive legal arguments which were presented to the Court before such interlocutory order” 

can form the basis for a reconsideration motion. Nonetheless, much of Plaintiffs’ motion concerns 

arguments that were not presented to the Court during its consideration of the motion to dismiss, 

specifically arguments relating to the Supreme Court’s decision in Matrixx Initiatives, Inc. v. 

Siracusano, ___ U.S. ___, 131 S. Ct. 1309, 1324 (2011). Plaintiffs did not even cite Matrixx in 

their opposition. See ECF No. 39. Moreover, Matrixx is not a change of law, having been 

decided in 2011. 

Even if Plaintiffs’ arguments relating to Matrixx were properly before the Court, however,

those arguments would not compel the Court to reconsider its order. Like the Court’s order, 

Matrixx applies the materiality standard of whether “a reasonable investor would have viewed the 

nondisclosed information as having significantly altered the ‘total mix’ of information made 

Case 3:14-cv-03547-JST Document 54 Filed 05/12/15 Page 1 of 3
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United States District Court

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available.” Matrixx, 131 S. Ct. 1309, 1321 (2011) (emphasis in original) (citations and quotations 

omitted); accord ECF No. 48 at 9. In Matrixx, the defendants had withheld, or failed to disclose, 

complaints by physicians and users claiming that defendants’ over-the-counter cold remedy 

caused anosmia. Matrixx, 131 S. Ct. at 1324. Although defendants were aware of these claims, 

they did not disclose the existence of the claims or the related litigation to investors. Id. at 1315. 

The defendants argued that this failure to disclose the existence of the complaints was not material 

because the volume of the complaints was not “statistically significant” and thus did not prove 

causation. Id. at 1315. The Court disagreed, noting “that medical professionals and regulators act 

on the basis of evidence of causation that is not statistically significant,” and therefore “it stands to 

reason that in certain cases reasonable investors would as well.” Id. at 1321. 

Plaintiffs’ motion alleges the Court’s order was in manifest error because it required “a 

numerical threshold or a critical mass of facts to allege material falsity,” ECF No. 52 at 6, an 

approach the Matrixx Court rejected. But the Court’s order did not hold that the complaints had to 

be statistically significant before Yelp was required to disclose the existence of the complaints. 

Instead, the Court concluded that the Yelp Defendants had not concealed the existence of the 

complaints, because they had acknowledged in their Registration Statement that “[n]egative 

publicity could adversely affect our reputation and brand,” specifically noting previous media 

reports of allegations that Yelp “manipulates [] reviews, rankings and ratings in favor of our 

advertisers and against non-advertisers,” ECF No. 35-1 at 16, and that “various businesses have 

sued us alleging that we manipulate Yelp reviews in order to coerce them and other businesses to 

pay for Yelp advertising (one such suit was voluntarily dismissed and two others were conciliated 

and recently dismissed with prejudice, although the plaintiffs are seeking an appeal).” Id. at 12. 

Accordingly, the disclosure of the existence of the FTC complaints did not significantly alter the 

total mix of available information available to reasonable investors, because, unlike the Matrixx

defendants, defendants here had already informed investors of the existence of such complaints 

and even of the pending litigation concerning the complaints. 

The Court’s order allowed that Yelp’s disclosure of the existence of the complaints 

coupled with Yelp’s continued denial of the allegations contained in the complaints could have 

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been shown to be materially false if the complaints had been so corroborative or numerous as to 

indicate that Yelp’s previous denials were likely to have been false. Id. at 14-16. But the Court 

examined the disclosed complaints, as presented by Plaintiffs, and concluded that nothing revealed 

in those complaints altered the total mix of information available to investors, to whom Yelp had 

already disclosed the existence of similar allegations. Id. This is not inconsistent with Matrixx, 

because Matrixx did not concern a defendant’s acknowledgement of customer complaints and 

denial of their veracity, but rather involved a defendant’s failure to disclose the existence of 

customer complaints to investors. 

Plaintiffs’ motion for leave to file a motion for reconsideration is denied. 

IT IS SO ORDERED.

Dated: May 12, 2015

______________________________________

JON S. TIGAR

United States District Judge

Case 3:14-cv-03547-JST Document 54 Filed 05/12/15 Page 3 of 3