Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_03-cv-05642/USCOURTS-cand-5_03-cv-05642-0/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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Case No. C-03-5642-JF (HRL)

ORDER GRANTING MOTION FOR RECONSIDERATION

(JFLC2)

**E-Filed on 5/25/05**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

IN RE REDBACK NETWORKS, INC.

SECURITIES LITIGATION.

_________________________________________

THIS DOCUMENT RELATES TO ALL

ACTIONS.

Case Number C-03-5642-JF (HRL)

ORDER GRANTING MOTION FOR

RECONSIDERATION

On January 21, 2005, the Court issued an order dismissing Plaintiffs’ claims with leave to

amend as to certain defendants and without leave to amend as to others (“January 21 Order”). 

Plaintiffs seek reconsideration of the dismissal without leave to amend as to one defendant,

Randall Kruep (“Kruep”), on the ground that newly discovered evidence has revealed facts that

could be added to the complaint and that would be sufficient to state a § 10(b) claim against

Kruep. Plaintiffs emphasize that they are not requesting reconsideration of Kruep’s dismissal,

but rather are requesting reconsideration of the Court’s denial of leave to amend.

The Court dismissed Plaintiffs’ claims against Kruep because there were no allegations

that he made any of the allegedly false or misleading statements underpinning Plaintiffs’ fraud on

the market theory. January 21 Order at 7-8. In doing so, the Court expressly adopted the

reasoning of a factually similar case, In re Homestore.com, Inc. Sec. Litig., 252 F.Supp.2d 1018

(C.D. Cal. 2003), and quoted the following language from that case:

Case 5:03-cv-05642-JF Document 185 Filed 05/25/05 Page 1 of 4
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Case No. C-03-5642-JF (HRL)

ORDER GRANTING MOTION FOR RECONSIDERATION

(JFLC2)

Essentially what plaintiff alleges is a scheme to make a deceptive statement or

material omission. Yet the principal “wrong” alleged under the rule is the

statement, not the scheme. Therefore, it is appropriate to require defendants in

this case to be connected in some material way to the drafting of the statements

made to the investing public. 

Id. at 1041.

Plaintiffs assert that new evidence indicates that Kruep was materially connected to the

drafting of statements made to the investing public, i.e., that Kruep provided and certified false

information for publication in Redback’s press releases, financial statements and SEC filings. 

Defendants assert that the new evidence does not demonstrate that Kruep personally made any of

the allegedly false or misleading statements to the public, and that as a result any amendment

would be futile. However, based upon the reasoning set forth in Homestore and adopted by this

Court, Plaintiffs could make out a viable § 10(b) claim against Kruep if he was sufficiently

involved in the drafting of statements released to the public, even if he did not make the

statements personally. 

Plaintiffs have provided an adequate explanation as to why the evidence in question could

not have been discovered earlier in the exercise of due diligence. Accordingly, for good cause

shown, the Court GRANTS Plaintiffs’ motion for reconsideration of the January 21 Order insofar

as that Order dismisses Kruep without leave to amend. Plaintiffs shall file any amended

pleading, setting forth all relevant allegations as to Kruep, within thirty days after service of this

Order. The Court’s ruling on Plaintiffs’ motion for reconsideration is without prejudice to

Kruep’s filing of a motion to dismiss on the basis of failure to state a claim or other appropriate

ground. 

IT IS SO ORDERED. 

DATED: 5/25/05

/s/ (electronic signature authorized) 

__________________________________

JEREMY FOGEL

United States District Judge

Case 5:03-cv-05642-JF Document 185 Filed 05/25/05 Page 2 of 4
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Case No. C-03-5642-JF (HRL)

ORDER GRANTING MOTION FOR RECONSIDERATION

(JFLC2)

This Order has been served upon the following persons:

Eric J. Belfi ebelfi@murrayfrank.com

Luke O Brooks lukeb@mwbhl.com, e_file_sd@lerachlaw.com;e_file_sf@lerachlaw.com

Merrill G. Emerick memerick@afelaw.com,

Frederick Sexton Fields ffields@cpdb.com

Marc L. Godino service@braunlawgroup.com

Michael M. Goldberg info@glancylaw.com

Stuart M. Grant sgrant@gelaw.com, cmarks@gelaw.com

Robert S. Green CAND.USCOURTS@CLASSCOUNSEL.COM

Cameron Powers Hoffman choffman@wsgr.com,

Robert A. Jigarjian CAND.USCOURTS@CLASSCOUNSEL.COM

Betsy C. Manifold manifold@whafh.com

Marlon Quintanilla Paz pazm@sec.gov, marlonpaz@vzavenue.net

Rachele R. Rickert rickert@whafh.com

Darren J. Robbins e_file_sd@lerachlaw.com, e_file_sf@lerachlaw.com

John P. Stigi , III jstigi@wsgr.com

Lauren E. Wagner lwagner@gelaw.com,

sgrant@gelaw.com;jkairis@gelaw.com;cmarks@gelaw.com;kwierzel@gelaw.com;mswift@gela

w.com

LaShann M. DeArcy

Cravath Swaine & Moore LLP

825 Eighth Avenue

New York, NY 10019

Charles H. Dufresne

Abbey Gardy, LLP

212 East 39th Street

New York, NY 10016

Case 5:03-cv-05642-JF Document 185 Filed 05/25/05 Page 3 of 4
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Case No. C-03-5642-JF (HRL)

ORDER GRANTING MOTION FOR RECONSIDERATION

(JFLC2)

David Garden

Mark C. Gardy

Abbey Gardy, LLP

212 East 39th Street

New York, NY 10016

John C. Kairis

Grant & Eisenhofer P.A.

Chase Manhattan Centre

1201 North Market Street

Wilmington, DE 19801

Kimberly L. Wierzel

Grant & Eisenhofer P.A.

Chase Mangattan Centre

1201 North Market Street

Wilmington, DE 19801

Case 5:03-cv-05642-JF Document 185 Filed 05/25/05 Page 4 of 4