Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_02-cv-01486/USCOURTS-cand-4_02-cv-01486-97/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

ORDER DENYING

PLAINTIFFS'

CROSS-MOTION FOR

PARTIAL SUMMARY

JUDGMENT

On August, 24, 2007 the Court entered an order granting in

part and denying in part the motion for summary judgment by

Defendants JDS Uniphase Corporation (JDS), Josef Straus, Anthony R.

Muller and Charles Abbe, granting in part and denying in part

Defendant Kevin Kalkhoven's motion for summary judgment and

deferring ruling on Lead Plaintiff Connecticut Retirement Plans and

Case 4:02-cv-01486-CW Document 1519 Filed 09/25/07 Page 1 of 3
United States District Court

For the Northern District of California

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Trust Funds' cross-motion for partial summary judgment. The Court

instructed the parties to submit further briefing on Plaintiffs'

argument that Defendants had not met their burden of showing that

the decline in JDS's stock value was based on some event

independent of the alleged misrepresentations for purposes of their

section 11 claims and should therefore be precluded from raising a

negative causation defense at trial. Having considered the

parties' papers, including the parties' supplemental briefing, the

evidence cited therein and oral argument on the motions, the Court

DENIES Plaintiffs' cross-motion for partial summary judgment.

In deferring judgment on Plaintiffs' cross-motion, the Court

allowed Defendants to file an expert declaration providing analysis

to support their defense that some or all of the loss related to

Plaintiffs' section 11 claims was caused by factors other than the

alleged misleading statements. Section 11 provides a remedy for

any person acquiring a security based on a "registration statement

[that] contained an untrue statement of a material fact or omitted

to state a material fact required to be stated therein or necessary

to make the statements therein not misleading." 15 U.S.C. 

§ 77k(a). Plaintiffs' remaining claims based on allegedly false or

misleading registration statements all concern representations

regarding JDS's good will. 

Defendants provide an expert declaration opining that "JDSU's

potential goodwill write-down disclosed on April 24, 2001 was

neither different from what was expected nor did it (in and of

itself) have implications for future cash flows." Kleidon

Declaration ¶ 25. The expert cites various analysts opining that

Case 4:02-cv-01486-CW Document 1519 Filed 09/25/07 Page 2 of 3
United States District Court

For the Northern District of California

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the predicted write-down of good will was not a significant

indicator of the company's future performance. See id. at ¶ 28. 

Similarly, Defendants' expert declares, "Finance theory

demonstrates that the disclosure regarding the actual goodwill

write-down [in July, 2001] would not contribute" to the subsequent

drop in JDS's stock price and cites analysts stating an expectation

that the write-down should have "no impact to the earnings power of

the company" and therefore "little trading impact associated with

[it]." Id. at ¶¶ 31, 33. Further, Defendants' expert cites

various other factors, including "rapidly changing industry

conditions" as the cause of the stock price decline. Id. at ¶ 34. 

 Defendants' expert's opinion is sufficient to establish that

there is a triable question of fact with respect to Defendants'

negative causation defense. Plaintiffs' cross-motion for partial

summary judgment is DENIED (Docket No. 1194).

IT IS SO ORDERED.

Dated: 9/25/07 

CLAUDIA WILKEN

United States District Judge

Case 4:02-cv-01486-CW Document 1519 Filed 09/25/07 Page 3 of 3