UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA 

CASE NO. 9:20-cv-81063-RS 

STEVE HARTEL, Individually and on 

Behalf of All Others Similarly Situated, 

Plaintiff, 

v. 

THE GEO GROUP, INC., et al., 

Defendants. 

_____________________________________/ 

DEFENDANTS’ MOTION TO DISMISS 

LEAD PLAINTIFFS’ CONSOLIDATED CLASS ACTION AMENDED COMPLAINT 

AND INCORPORATED MEMORANDUM OF LAW 

AKERMAN LLP

Three Brickell City Centre 

98 Southeast Seventh Street 

Suite 1100 

Miami, FL 33131 

Telephone: (305) 374-5600 

Facsimile: (305) 374-5095 

Brian P. Miller, Esq. 

Florida Bar No. 0980633 

brian.miller@akerman.com

Samantha J. Kavanaugh, Esq. 

Florida Bar No. 0194662 

samantha.kavanaugh@akerman.com 

Counsel for Defendant The GEO Group, Inc.

GUNSTER, YOAKLEY & STEWART, P. A.

600 Brickell Avenue, 35th Floor 

Miami, FL 33131 

Telephone: (305) 376-6000 

Facsimile: (786) 425-4090 

William K. Hill, Esq. 

Florida Bar Number: 747180 

whill@gunster.com

George S. LeMieux, Esq. 

Florida Bar Number: 16403 

glemieux@gunster.com

Ernest “EJ” A. Cox IV, Esq. 

Florida Bar Number: 124652 

ecox@gunster.com

Counsel for Defendants George C. Zoley, 

Brian R. Evans, J. David Donahue, and 

Ann M. Schlarb

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Pursuant to Fed. R. Civ. P. 9(b), 12(b)(6), and the Private Securities Litigation Reform Act, 

15 U.S.C. § 78u-4(b) (“PSLRA”), Defendants The GEO Group (“GEO”), George Zoley, Brian 

Evans, David Donahue, and Ann Schlarb (collectively, “Individual Defendants”) move to dismiss 

the Consolidated Class Action Amended Complaint (“Amended Complaint” or “Am. Compl.”). 

INTRODUCTION 

In this putative securities class action, Plaintiffs originally seized on a drop in GEO’s stock 

price caused by an announcement in the summer of 2020 by GEO’s competitor that the other 

company was decreasing its dividend payment going forward. Plaintiffs then manufactured a claim 

that GEO had misled the marketplace about the potential effects of COVID-19 on its facilities and 

business. Of course, it was no mystery that infections could arise in facilities where prisoners, 

detainees, or probationers are necessarily kept in close quarters together. That is the nature of 

GEO’s business. GEO promptly disclosed this risk and outlined the steps it was taking to comply 

with evolving CDC guidelines. 

Defendants moved to dismiss the original complaint pointing out its gross deficiencies. The 

Court granted the motion to dismiss without prejudice so Plaintiffs could voluntarily amend. But, 

the Amended Complaint does nothing to fix the obvious problems with Plaintiffs’ claims regarding 

GEO’s public disclosures about the effect of the COVID-19 pandemic on its business. GEO’s 

public statements about its efforts to address the pandemic were truthful (Plaintiffs do not even 

seriously contend to the contrary) and remain immunized by the PSLRA’s safe harbor for forwardlooking statements. And the decline in GEO’s stock price at the end of the class period bears 

absolutely no causal connection to any prior disclosures about COVID-19. 

Apparently recognizing these problems, Plaintiffs have now decided to expand the class 

period and try a “kitchen-sink” approach, complaining about every bit of bad news about GEO in 

the last few years. The Amended Complaint is long on words, but woefully short on substance. 

Plaintiffs try to tie all of these disparate and factually unconnected threads together by 

arguing that the denouement occurred on August 6, 2020, when GEO announced it had made a 

prudent decision to reduce its dividend going forward and pay down indebtedness. The stock price 

declined slightly upon this announcement. Plaintiffs would have this Court believe that 

announcement suddenly “revealed” all of GEO’s prior misdeeds and business difficulties that had 

been “hidden” from the market. This fatally flawed notion is the crux of their claim, and cannot 

survive a motion to dismiss. 

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The Amended Complaint suffers from multiple legal problems that require dismissal. First,

GEO’s public statements that Plaintiffs gripe about are largely forward-looking statements and 

statements of puffery or corporate optimism that are legally protected under the federal securities 

laws. Second, most of what Plaintiffs complain was hidden actually was in the public domain, 

either through affirmative disclosure by GEO or in the numerous press articles, lawsuits, and 

announcements by third parties that Plaintiffs liberally sprinkle throughout their complaint. Third, 

there is no causal nexus between the alleged misrepresentations and the eventual announcement 

of GEO’s intent to reduce dividends and repay debt. Fourth, the complaint does not even come 

close to alleging scienter with the requisite heightened particularity. And, fifth, the claims against 

the Individual Defendants fail. This time, dismissal must be with prejudice. 

FACTUAL BACKGROUND 

A. The Amended Complaint’s Allegations.1

This is a putative securities class action brought against GEO, one of the nation’s largest 

operators of correctional facilities and community reentry services pursuant to contracts with 

government agencies, under Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 

(“Exchange Act”), on behalf of a putative class of all purchasers of GEO’s common stock between 

November 7, 2018 and August 5, 2020. Plaintiffs’ Amended Complaint also asserts claims against 

the Individual Defendants for control-person liability under Section 20(a) of the Exchange Act. 

Filed in response to the Court’s Order on the Prior Motion to Dismiss [ECF No. 20, ¶ 11], 

Plaintiffs’ Amended Complaint alleges that GEO made materially false and misleading statements 

and/or omissions in various SEC disclosures and earnings calls during the purported class period. 

Plaintiffs take a shotgun approach, alleging that statements related to almost every aspect of GEO’s 

business––including quality of operations, corporate social responsibility, competitive strengths, 

business strategies, health and safety, sources of financing, dividend expectations, and COVID-19 

procedures––were false and misleading. Am. Compl. ¶¶ 106-201. Plaintiffs claim the “full truth” 

was ultimately “revealed” on August 6, 2020, when GEO announced it would be reducing its 

quarterly dividend by nearly 30%, resulting in a 7% drop in the GEO Group stock price. Id. ¶ 217. 

But, similar to the original Complaint, Plaintiffs ignore GEO’s highly relevant risk 

disclosures and meaningful cautionary statements from the same SEC filings they cherry-pick to 

1

 We assume the Court’s familiarity with the overview of GEO’s business in Defendants’ Motion 

to Dismiss Plaintiff’s Class Action Complaint (the “Prior Motion to Dismiss”) [ECF No. 6]. 

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give an appearance of misrepresentations. Those disclosures warned of the precise business risks 

that could cause a stock price drop, which Plaintiffs now accuse GEO of “concealing,” including: 

 GEO’s dividend payments may fluctuate, are not guaranteed, and are based on a number 

of factors; 

 the nature of its business exposes GEO to various types of legal claims, the results of which 

can never be predicted with certainty; 

 GEO may face the need for additional capital and there can be no assurance that any such 

financing or refinancing would be available on terms equal to or more favorable than 

current financing terms – or at all; and 

 there were risks associated with the termination of, non-renewal of, or competitive re-bid 

of government contracts, as well as the public and government’s acceptance of publicprivate partnerships in general. 

With respect to the emergence of the unprecedented COVID-19 pandemic, the SEC filings further 

cautioned, inter alia, that: 

 GEO is unable to predict the impact that the COVID-19 pandemic will have on its financial 

condition, results of operations and cash flows due to numerous uncertainties; 

 GEO experienced the transmission of COVID-19 at a number of its facilities in the second 

quarter of 2020; 

 if GEO is unable to mitigate the transmission of COVID-19 at its facilities it could 

experience a material adverse effect on its financial position, results of operations and cash 

flows; and 

 although GEO is unable to predict the duration or scope of the COVID-19 pandemic or 

estimate the extent of the negative financial impact to its operating results, an extended 

period of depressed economic activity necessitated to combatting the disease, and the 

severity and duration of the related global economic crisis will adversely impact its future 

financial performance. 

When Plaintiffs’ selective references to GEO’s SEC filings and earnings calls are placed 

in their proper context within the myriad meaningful risk disclosures, it is clear that Plaintiffs’ 

claims are nothing more than a strike suit aimed to capitalize on the convergence of a difficult 

political climate and a global pandemic of unprecedented scale. 

B. The Amended Complaint Omits Highly Material Disclosures Concerning GEO’s 

Business, Finances and Stock Price.2

The following meaningful risk disclosures and cautionary statements are highly material 

and dispositive of Plaintiffs’ claims. Yet Plaintiffs omit reference to these disclosures. 

2

 The Court may consider GEO’s entire SEC filings––including all risk disclosures and cautionary 

statements––during the purported class period to determine the sufficiency of Plaintiffs’ Amended 

Complaint. See Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1287 (11th Cir. 1999); see also 15 

U.S.C. § 78u-5(e) (court may consider “any cautionary statement accompanying the forwardCase 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 4 of 23
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1. GEO Explicitly Disclosed Risks Associated With Its Dividend Payments. 

Throughout the years, GEO’s SEC filings explicitly warned that dividend distribution 

levels were subject to change, and set forth the factors that would affect dividend levels: 

Our cash distributions are not guaranteed and may fluctuate.

A REIT generally is required to distribute at least 90% of its REIT taxable income 

to its shareholders. Our board of directors, in its sole discretion, will determine on 

a quarterly basis the amount of cash to be distributed to our shareholders based 

on a number of factors including, but not limited to, our results of operations, 

cash flow and capital requirements, economic conditions, tax considerations, 

borrowing capacity and other factors, such as debt covenant restrictions that 

may impose limitations on cash payments and plans for future acquisitions 

and divestitures. Consequently, our distribution levels may fluctuate. 

Ex. G, 2018 10-K, p. 30 (emphasis added)3; see also Ex. A, 3Q18 10-Q, p. 18, 49. 

2. GEO Explicitly Disclosed Risks Associated With Litigation. 

GEO likewise warned about its exposure to significant litigation risks, disclosed pending 

litigation and significant events therein, and explicitly warned that the result of legal claims could 

not be predicted with certainty, but could materially affect GEO: 

The nature of the Company’s business exposes it to various types of thirdparty legal claims or litigation against the Company, including, but not limited 

to, civil rights claims relating to conditions of confinement and/or 

mistreatment, . . . . The Company does not expect the outcome of any pending 

claims or legal proceedings to have a material adverse effect on its financial 

condition, results of operations or cash flows. However, the results of these claims 

or proceedings cannot be predicted with certainty, and an unfavorable 

resolution of one or more of these claims or proceedings could have a material 

adverse effect on the Company’s financial condition, results of operations or 

cash flows. 

Ex. A, 3Q18 10-Q, p. 30 (emphasis added); see also Ex. G, 2018 10-K, p. 25-26, 42. 

3. GEO Explicitly Disclosed Risks Associated With the Ongoing Need for 

Financing. 

GEO warned investors that they may face the need for additional capital and that, “[t]here 

can be no assurance that any such financing or refinancing would be available to us on terms equal 

to or more favorable than our current financing terms, or at all.” Ex. A, 3Q18 10-Q, pp. 46, 61. 

looking statement, which are not subject to material dispute, cited by the defendant”). Defendants 

are filing these SEC filings concurrently, with highlighting for the Court’s convenience. 

3

 References to Exhibits are to the exhibits to the Notice of Filing [ECF No. 37]. The page number 

references are to the pdf page. 

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4. GEO Explicitly Disclosed Risks Associated With the Termination, NonRenewal or Competitive Re-Bids of Contracts, as Well as Government and 

Public Acceptance of Public-Private Partnerships. 

GEO warned investors about the risks associated with the termination, non-renewal, or rebids of contracts, and disclosed the percentage of its contracts that were subject to renewals: 

We are subject to the loss of our facility management contracts, due to 

terminations, non-renewals or competitive re-bids, which could adversely affect 

our results of operations and liquidity, including our ability to secure new facility 

management contracts from other government customers. 

We are exposed to the risk that we may lose our facility management contracts 

primarily due to one of three reasons: (i) the termination by a government 

customer with or without cause at any time; (ii) the failure by a customer to 

exercise its unilateral option to renew a contract with us upon the expiration 

of the then current term; or (iii) our failure to win the right to continue to 

operate under a contract that has been competitively re-bid in a procurement 

process upon its termination or expiration. . . . If government agencies were to 

use these provisions to terminate, or renegotiate the terms of their agreements with 

us, our financial condition and results of operations could be materially 

adversely affected.

Ex. G, 2018 10-K, p. 36 (emphasis added); see also id. p. 23. This included a disclosure that GEO 

partners with a limited number of governmental customers who account for a significant portion 

of its revenues, and that those “partners may in the future choose to undertake a review of their 

utilization of privately operated facilities, or may cancel or decide not to renew our existing 

contracts with them. The loss of, or a significant decrease in, our current contracts with the BOP, 

ICE, the U.S. Marshals Service, the State of Florida or any other significant customers could 

seriously harm our financial condition and results of operations.” Id. at p. 38. GEO also disclosed 

that growth was dependent on, inter alia, “governmental and public acceptance of public-private 

partnerships.” Id. at p. 37; see also id. at p. 39, 40. 

5. GEO Explicitly Disclosed Risks Associated with COVID-19. 

GEO’s 2019 10-K for the period ending December 31, 2019 provided a non-exhaustive list 

of risk factors it could face in its business operations, including an explicit warning related to 

pandemic outbreaks: 

As owner and operator of secure facilities, processing centers and community 

reentry centers with operations in many states throughout the United States and 

multiple foreign countries, we are subject to numerous risks outside of our control, 

including risks arising from natural disasters, pandemic outbreaks and other 

global health emergencies . . . or similar disruptions that could materially 

adversely affect our business and financial performance. Such occurrences can 

result in . . . disruption of our operations, require the evacuation of detainees 

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or our personnel, and require the adoption of specific health protocols or 

treatments to safeguard the health of our detainees or personnel. Although it is 

not possible to predict such events or their consequences, these events could 

materially adversely affect our reputation, business and financial condition.

Ex. T, 2019 10-K, p. 36 (emphasis added). 

Once it became known that the novel coronavirus was spreading throughout the world and 

in the United States, GEO’s 2020 first quarter (“Q1”) Form 10-Q provided numerous disclosures 

and cautionary statements related to COVID-19. The “Risks and Uncertainties” section warned 

about the risks of GEO’s inability to mitigate the transmission of COVID-19 in its facilities: 

The Company is closely monitoring the impact of the COVID-19 pandemic on all 

aspects of its business and geographies, including how it will impact those entrusted 

in its care and governmental partners. While the Company did not incur significant 

disruptions during the three months ended March 31, 2020 from the COVID-19 

pandemic, it is unable to predict the impact that the COVID-19 pandemic will 

have on its financial condition, results of operations and cash flows due to 

numerous uncertainties.

... 

Additionally, the Company has experienced the transmission of COVID-19 at a 

small number of our facilities in the second quarter of 2020. If the Company is 

unable to mitigate the transmission of COVID-19 at its facilities it could 

experience a material adverse effect on its financial position, results of operations 

and cash flows. Although the Company is unable to predict the duration or scope 

of the COVID-19 pandemic or estimate the extent of the negative financial impact 

to its operating results, an extended period of depressed economic activity 

necessitated to combating the disease, and the severity and duration of the related 

global economic crisis will adversely impact its financial performance. 

Exhibit X, 2020 Q1 Form 10-Q, at p. 7 (emphasis added). 

Further, in the “2020 Developments” section of the 2020 Q1 Form 10-Q, GEO included a 

paragraph on COVID-19, warning about GEO’s inability to predict the impact of COVID-19 on 

its financial condition, results of operations and cash flows. The “Outlook” and “Economic 

Impact” sections of this SEC report contained additional warnings regarding the economic impacts 

of COVID-19 on GEO’s operations. Id. at pp. 36, 46. And, the Form 10-Q supplemented GEO’s 

2019 Form 10-K with risks associated with the outbreak of COVID-19. Id. at p. 50. 

Plaintiffs also allege that GEO failed to affirmatively disclose that its COVID-19 response 

procedures were purportedly inadequate, which subjected residents of GEO’s facilities to health 

risks, and consequently made GEO vulnerable to financial and/or “reputational harm.” Am. 

Compl. ¶ 197. Yet, in addition to specifically outlining its COVID-19 response procedures––

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following guidance from the CDC4––GEO’s SEC filings explicitly warned its shareholders about 

the risks associated with such reputational harm relating to the alleged or perceived conditions of 

its private correctional facilities. In its 2019 10-K at page 35, Ex. T, under the heading “[a]dverse 

publicity may negatively impact our ability to retain existing contracts and obtain new contracts,” 

GEO included the following cautionary statement: 

Any negative publicity about an escape, riot, other disturbance, death or injury of a 

detainee, or perceived conditions and access to health care and other services 

at a facility, including any work program at a facility, under a public-private 

partnership ... may result in publicity adverse to us and public-private 

partnerships in general. Any of these occurrences or continued trends ... could 

have a material adverse effect on our business.

In addition to these specific disclosures,5 GEO warns that: “The risks described below are 

not the only risks we face. Additional risks not currently known to us or those we currently deem 

to be immaterial may also materially and adversely affect our business operations.” Ex. G, 2018 

10-K, p. 28 (italics in original). These detailed and prominently featured disclosures placed 

Plaintiffs––and every GEO shareholder––on notice of the exact types of risks to GEO’s stock price 

that Plaintiffs now claim they were unaware of. See Argument § B.2, infra, for further discussion. 

ARGUMENT 

A. The PSLRA Imposes Heightened Pleading Standards. 

In order to state a viable claim for securities fraud under Section 10(b) and Rule 10b-5 of 

the Exchange Act, plaintiffs are required to allege: (1) a misstatement or omission; (2) of a material 

fact; (3) made with scienter; (4) on which the Plaintiff justifiably relied; and (5) that proximately 

caused the Plaintiff’s injury. Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1281 (11th Cir. 1999); 

see also Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1236-37 (11th Cir. 2008). 

In an effort to stem the rampant tide of abusive securities litigation, and dispose of nonmeritorious securities fraud claims at the pleading stage, the PSLRA significantly heightened the 

pleading standards for Section 10(b) claims. Bryant, 187 F.3d at 1281. The PSLRA imposes two 

key requirements and provides that, if they are not satisfied, “the court shall, on the motion of any 

4

See Statement issued by GEO on its website entitled “GEO Group Has Taken Comprehensive Steps 

to Address and Mitigate the Risks of COVID-19 to Those in Our Care and Our Employees” (“COVID19 Response Statement” attached as Ex. AA). 

5

 Similar disclosures to the ones cited above can be found in GEO’s SEC filings and earnings calls 

throughout the class period, highlighted copies of which are attached to the Notice of Filing 

contemporaneously filed with this motion (ECF No. 37]. 

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defendant, dismiss the complaint.” 15 U.S.C. § 78u-4(b)(3)(A) (emphasis added). 

First, Plaintiffs are required to “specify each statement alleged to have been misleading, 

the reason or reasons why the statement is misleading, and if an allegation regarding the statement 

or omission is made on information and belief,... [to] state with particularity all facts on which 

that belief is formed.” Id. § 78u-4(b)(1). Second, Plaintiffs are required “with respect to each act 

or omission alleged . . . [to] state with particularity facts giving rise to a strong inference that the 

defendant acted with the required state of mind.” Id. § 78u-4(b)(2) (emphasis added). To satisfy 

this standard, all of the facts alleged, taken together, must give rise to an inference of scienter that 

is “cogent and at least as compelling as any opposing inference of nonfraudulent intent.” Tellabs, 

Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (2007). 

Section 10(b) claims are also subject to Rule 9(b), which requires plaintiffs to plead 

“(1) precisely what statements were made in which documents or oral representations . . ., and 

(2) the time and place of each such statement and the person responsible for making . . . same, and 

(3) the content of such statements and the manner in which they misled the plaintiff, and (4) what 

the defendants obtained as a consequence of the fraud.” Ziemba v. Cascade Int’l, Inc., 256 F.3d 

1194, 1202 (11th Cir. 2001). 

In sum, to survive a motion to dismiss a claim brought under §10(b) and Rule 10b-5, the 

plaintiffs must satisfy, “(1) the federal notice pleading requirements; (2) the special fraud pleading 

requirements found in [FRCP 9(b)]; and (3) the additional pleading requirements imposed by the 

[PSLRA].” FindWhat Investor Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011). 

B. Plaintiffs Fail to State a Claim Under Section 10(b) Or Rule 10b-5. 

The Amended Complaint fails to plead actionable misstatements, a strong inference of 

scienter, or loss causation under the applicable standards, and should therefore be dismissed.

1. Plaintiffs Merely Rehash Prior Dismissed Claims. 

Plaintiffs’ Amended Complaint relies on the same types of allegations previously rejected 

by Judge Middlebrooks in 2017 in an earlier securities class action against GEO. See Mulvaney v. 

GEO Grp., Inc., 237 F. Supp. 3d 1308 (S.D. Fla. 2017). In Mulvaney, the plaintiffs alleged that 

GEO made misrepresentations to investors over a four-year period regarding the conditions of 

their facilities, GEO’s compliance with contractual requirements, the efficiency of GEO’s 

operations, and GEO’s long-standing partnerships with certain federal agencies. The relied-upon 

statements were allegedly shown to be untrue by a Department of Justice (“DOJ”) Office of 

Inspector General (“OIG”) Report which cited to safety and security concerns in certain GEO 

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Group facilities, and a subsequent memorandum issued by the DOJ to the Acting Director of the 

Bureau of Prisons asking him to begin the process of ending the use of privately operated prisons. 

That announcement caused a 39.58% drop in GEO’s share price. Id. at 1315-16. Just like here, the 

Mulvaney plaintiffs relied on prisoner lawsuits, fines imposed on GEO, public sentiment, and news 

articles to weave a narrative in support of their claims. 

That narrative failed. Judge Middlebrooks dismissed the Mulvaney complaint after finding 

that it failed to plead false or misleading statements and failed to state with particularity facts 

giving rise to a strong inference that the defendants acted with the required state of mind. Id. at 

1326. While the Amended Complaint cites to more recent statements in GEO’s public filings, it 

takes the exact same approach taken in Mulvaney, and the result should be no different here.

2. GEO’s Forward-Looking Statements Are Not Actionable. 

Much of the Amended Complaint is barred by the PSLRA safe harbor for forward-looking 

statements. In each of GEO’s pertinent earnings calls, investors were cautioned that: 

[M]uch of the information we will discuss today, including the answers we may 

give in response to your questions, may include forward-looking statements 

regarding our beliefs and current expectations with respect to various matters. 

These forward-looking statements are intended to fall within the Safe Harbor 

provisions of the securities laws. Our actual results may differ materially from 

those in the forward-looking statements as a result of various factors contained 

in our [SEC] filings, including the Forms 10-K, 10-Q and 8-K reports. 

See, e.g., Ex. B, 3Q-18 Earnings Call (Nov. 7, 2018) at p. 2. GEO’s Form 10-K’s and 10-Q’s 

during the putative class period also cautioned that: 

“Forward-looking” statements are any statements that are not based on historical 

information. Statements other than statements of historical facts included in this 

report, including, without limitation, statements regarding our future financial 

position, business strategy, budgets, projected costs and plans and objectives of 

management for future operations, are “forward-looking” statements. Forwardlooking statements generally can be identified by the use of forward-looking 

terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” 

“believe,” “seek,” “estimate” or “continue” or the negative of such words or 

variations of such words and similar expressions. These statements are not 

guarantees of future performance and involve certain risks, uncertainties and 

assumptions, which are difficult to predict. Therefore, actual outcomes and 

results may differ materially from what is expressed or forecasted in such 

forward-looking statements and we can give no assurance that such forwardlooking statements will prove to be correct.

Ex. A, 3Q18 10-Q at p. 46; see also Ex. G, 2018 10-K at p. 86-87. As stated above, the SEC filings 

list the specific risks, uncertainties, and assumptions which bespoke caution as to any reliance on 

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those forward-looking statements; precisely the types of risks Plaintiffs now say they were not 

made aware of. Plaintiffs nevertheless attempt to rely on such forward-looking statements to plead 

their securities claim. See, e.g., Am. Compl. ¶ 119 (“We believe, we have adequately accounted 

for known legal cases . . .); ¶ 135 (“We expect to continue to enjoy access to cost effective capital 

to support the expansion of our high quality services.”); ¶ 151 (“our annual dividend payments, 

which we expect to remain unchanged”) (emphases changed). 

These forward-looking statements are subject to the PSLRA’s safe harbor provisions. The 

statute expressly defines certain statements as forward-looking, such as the statements about 

dividends, capital struct, and future operations Plaintiffs complain about here. 15 U.S.C. § 78u5(i)(1). A defendant may avoid liability for any forward-looking statement that is false or 

misleading if the statement is “identified as a forward-looking statement, and is accompanied by 

meaningful cautionary statements identifying important factors that could cause actual results to 

differ materially from those in the forward-looking statement.” 15 U.S.C. § 78u-5(c)(1)(A)(i)); see 

also Philadelphia Fin’l Mgmt. of San Francisco, LLC v. DJSP Enterps., Inc., 572 Fed. Appx. 713, 

717-18 (11th Cir. 2014); Harris v. Ivax Corp., 182 F.3d 799, 807 (11th Cir. 1999) (cautionary 

language adequate where “it tells the reader in detail what kind of misfortunes could befall the 

company and what the effect could be” even if it does not “explicitly mention the factor that 

ultimately belies [the] forward-looking statement”); Maeve Inv. Co. Ltd. P’ship v. Teekay Corp.,

No. C16-1908MJP, 2017 WL 5158059, at *5 (W.D. Wash. Nov. 7, 2017) (“statements regarding 

future dividends and access to funding were forward-looking”); In re Mako Surgical Corp., 2013 

WL 2145661, at *6 (S.D. Fla. May 15, 2013) (“[w]e anticipate that our positive results in 2011 

will carry forward into 2012” was forward-looking). GEO’s forward-looking statements were 

accompanied by the meaningful cautionary statements set forth in detail above, and therefore are 

not actionable.6

3. Most of Plaintiffs’ Claims are Based on Non-Actionable Puffery, Statements 

of Corporate Optimism, or Opinion. 

The bulk of Plaintiffs’ allegations are based on statements that are characterized under the 

law as puffery, corporate optimism, or opinion. These types of statements are not actionable 

because reasonable investors do not rely on them. See In re Royal Caribbean Cruises Ltd. 

6

 Where the alleged fraud is grounded on forward looking statements, dismissal is required 

regardless of the state of mind of the speaker, be it negligent, reckless, or even knowing. Edward 

J. Goodman Life Income Trust v. Jabil Circuit, Inc., 594 F.3d 783, 795 (11th Cir. 2010). 

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Securities Litig., 2013 WL 3295951, at *12 (S.D. Fla. Apr. 19, 2013) (holding that “[a] statement 

that is vague, generalized, or ‘mere corporate puffery’ is immaterial because a reasonable investor 

would not base a decision on such statements,”); Philadelphia Fin. Mgmt. of San Francisco v. 

DJSP Enters., Inc., 2011 WL 4591541, at *14, 17 (S.D. Fla. Sept. 30, 2011) (statements about the 

“efficiency” and “accuracy” of operations and that company was “well positioned” were “nonactionable ‘puffery’”); Mulvaney, 237 F. Supp. 3d at 1322 (“only material misrepresentations or 

omissions are actionable.”); Bhatt v. Tech Data Corp., 2018 WL 6504375, at *4 (M.D. Fla. 2018) 

(citing In re Winn-Dixie Stores, Inc. Sec. Litig., 531 F. Supp. 2d 1334, 1343-44 (M.D. Fla. 2007)). 

The Dividend Reduction/Access to Future Capital. The gravamen of the Amended 

Complaint is that Defendants failed to apprise investors that GEO’s dividend was at risk of being 

reduced due to various operational issues and public scrutiny. See, e.g., Am. Compl. ¶ 109 (“Zoley 

boasted that GEO’s ‘dividend is supported by stable and predictable operational cash flows.’”); 

see also id. ¶¶ 110, 114-15, 132-33, 151. Over and over, courts have rejected similar attempts to 

turn a dividend reduction into a private securities claim. See, e.g., Walker v. L Brands, Inc., No. 

2:19-CV-3186, 2020 WL 6118467, at *2 (S.D. Ohio Oct. 16, 2020); Maeve Inv. Co. Ltd. P’ship v. 

Teekay Corp., No. C16-1908 MJP, 2017 WL 5158059, at *1 (W.D. Wash. Nov. 7, 2017); In re 

Int’l Bus. Machines Corp. Sec. Litig., 163 F.3d 102, 105 (2d Cir. 1998); Genna v. Potts, No. CIV.A. 

HAR 94-3260, 1995 WL 222043, at *1 (D. Md. Apr. 13, 1995). This argument, alone, disposes 

of most of Plaintiffs’ claims, and clearly requires dismissal. 

In Walker, plaintiff alleged that “in an effort to artificially inflate L Brands common stock, 

Defendants misleadingly trivialized the risk that the Company may need to cut its dividend.” 2020 

WL 6118467, at *2. Like here, the plaintiff highlighted language used in L Brands’ SEC filings 

and earnings calls that cash flows and cash balances indicated that the company could “sustain the 

dividend;” that “the dividend is very safe;” and that “we’re confident that we can maintain the 

dividend.” Id. at *3-6. The Walker court held that such statements constituted “soft information, 

as opposed to present fact, [and] . . . too vague to be considered material . . . .” Id. at *10. 

The Walker court contrasted the plaintiff’s allegations with those in In re Gen. Elec. Co. 

Secs. Litig., 857 F. Supp. 2d 367 (S.D.N.Y. 2012), where defendant’s optimistic statements were 

worded as specific guarantees or promises: “The Board has approved management’s plan to 

maintain the current dividend through ‘09 even in these relatively uncertain economic times at 

$1.24 a share.” Id. at 380. GEO made no similar statements. The Amended Complaint cites GEO’s 

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 12 of 23
12

announcements of the specific dividend declared for each quarter, which were true disclosures. 

Plaintiffs do not claim otherwise; instead, they complain about soft predictions of future ability to 

pay dividends, like disclosures deemed insufficient to support claims in Walker and the cases cited 

above. 

Because the statements at issue here are in the nature of predictive opinion, they are 

actionable only if they are both subjectively and objectively false––that is, only (1) if the speaker 

did not genuinely hold the opinion and (2) the opinion lacked a reasonable basis. Cf. Omnicare, 

Inc. v. Laborers Dist. Council Const. Ind. Pension Fund, 575 U.S. 175, 189-90 (2015) (“a sincere 

statement of pure opinion is not an ‘untrue statement of material fact’”). Plaintiffs fail to allege 

that GEO or its relevant executives, did not believe the opinions expressed or that the opinions 

lacked any reasonable basis at the time they were made. See Belmont Holdings Corp. v. Sun Trust 

Banks, Inc., No. 1:09-cv-1185-WSD, 2010 WL 3545389, at *6 (N.D. Ga. Sept. 10, 2010) 

(dismissing claim “[a]bsent an allegation that Defendants did not believe the statements”); Genna, 

1995 WL 222043, at *4 (statement that “we continue to feel that the current monthly dividend 

level of $0.26 per share will be sustained through 1994” and other optimistic statements were 

“mere expressions of optimism and too indefinite to be considered material”). 

The Quality of GEO’s Services. Although the exact same tactic failed in Mulvaney, 

Plaintiffs rely on statements regarding the quality of services provided by GEO, GEO’s efficiency 

and ability to reduce costs for its clients, and the comprehensiveness of its service offerings as a 

basis for their claims. See, e.g., Am. Compl. ¶ 107 (“high quality services” and “operation of stateof-the-art facilities providing services in safe, secure and humane environments”); ¶ 127 (“our size 

and breadth of service offerings enable us to generate economies of scale which maximize our 

efficiencies and allow us to pass along cost savings”); ¶¶ 128, 140. These types of statements are 

routinely held not actionable. See Mulvaney, 237 F. Supp. 3d at 1320-21; Philadelphia Fin. Mgmt., 

2011 WL 4591541, at *14, 17 (statements about the “efficiency” and “accuracy” of operations and 

that company was “well positioned” were “non-actionable ‘puffery’”). 

The Stability of Customer Partnerships. Plaintiffs also attempt to rely on statements about 

the stability of GEO’s public-private partnerships with their clients. In paragraph 142, for example, 

Plaintiffs state that during an earnings call, Defendant Donahue commented on a ten-year contract 

for GEO to continue to operate a facility in New York. Donahue stated, “We believe this renewed 

contract is indicative of the stability of our long-standing customer partnerships as our Queens 

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 13 of 23
13

Facility has been in operation since the 1990s.” (emphasis added). Plaintiffs, unable to demonstrate 

the falsity of Donahue’s statement, contend that his “belief” about the “stability” of customer 

partnerships was misleading because it did not disclose that certain other contracts with other 

customers were “at risk.” Am Compl. ¶ 143. Courts have consistently found such statements to be 

non-actionable in securities fraud cases. See, e.g., Livingston v. Cablevision Sys. Corp., 966 F. 

Supp. 2d 208, 220 (E.D.N.Y. 2013) (COO’s belief that decrease in sales and increase in customer 

disconnects was an anomaly not related to a new competitor was non-actionable opinion, 

particularly in light of truthful disclosures in financial statements); Ladmen Partners, Inc. v. 

Globalstar, Inc., No. 07 CIV. 0976 (LAP), 2008 WL 4449280, at *13 (S.D.N.Y. Sept. 30, 2008) 

(belief that Company could retain existing customers and attract new customers was nonactionable expression of corporate optimism); In re MobileMedia Sec. Litig., 28 F. Supp. 2d 901, 

938 (D.N.J. 1998) (statement that Company “will continue to provide the best in customer service” 

is immaterial puffery). 

The Effect of COVID-19. Plaintiffs continue to allege that GEO’s statements about its 

response to the unprecedented COVID-19 pandemic were false, and that this was “revealed” when 

the Intercept published an article about one GEO facility on June 17, 2020. Am. Compl. ¶¶ 192-

197, 212. But, they have added nothing to correct the deficiencies outlined in the Prior Motion to 

Dismiss. Plaintiffs do not allege that any of the historical statements of fact about cases at GEO’s 

facilities, or its compliance with evolving CDC guidance, or anything in GEO’s COVID-19 

Response Statement were in any way false or inaccurate as a factual matter. That cases of COVID19 occurred in GEO facilities, or that inmates previously contracted other infections and needed 

to be quarantined, does not mean that GEO failed to take appropriate steps to address the pandemic. 

This is the slimmest reed imaginable upon which to hang a securities fraud claim. Plaintiffs also 

fail to allege any facts to show that Defendants did not in fact believe the opinions expressed about 

COVID-19, or that the opinions lacked any reasonable basis. See Belmont Holdings, 2010 WL 

3545389, at *6 (dismissing claim “[a]bsent an allegation that Defendants did not believe the 

statements”). 

4. The “Truth on the Market” Doctrine Bars Plaintiffs’ Claims. 

Just as statements of corporate optimism, or “puffery,” are not actionable, so too are alleged 

misstatements when the market already knows the truth. See, e.g., Wallace v. Sys. & Computer 

Tech. Corp., 1997 WL 602808 (E.D. Pa. Sept. 23, 1997) (“If the market has become aware of the 

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14

allegedly concealed information, the facts allegedly omitted by the defendant would already be 

reflected in the stock’s price and the market would not be misled.”); In re Stac Elecs. Sec. Litig., 

89 F.3d 1399, 1409 (9th Cir. 1996) (“To prevail on [a fraud on the market] theory, a plaintiff must 

demonstrate that a particular statement, when read in light of all the information then available to 

the market, or a failure to disclose particular information, conveyed a false or misleading 

impression.”). A truth-on-the-market defense may be granted on a motion to dismiss “where the 

company’s SEC filings or other documents disclose the very information necessary to make their 

public statements not misleading.” Wallace, 1997 WL 602808, at *10. Thus, even if this Court 

accepts Plaintiffs’ characterization of GEO’s specific public statements as inaccurate or 

incomplete, Plaintiffs’ claims still fail because the market had access to all of the public 

information cited in the Amended Complaint, which renders those statements immaterial. 

Plaintiffs allege that GEO’s stock traded in an efficient market. Am. Compl. ¶ 242. 

Plaintiffs were adequately informed of the risks of pending lawsuits, public scrutiny, inspector 

general reports, divestitures from the stock, political decisions to exit private partnerships, and the 

loss of capital from certain banks. Plaintiffs admit that those matters were widely discussed in 

GEO’s SEC filings, the press, and the public domain. See, e.g., Id. ¶¶ 7, 10-12, 14, 19, 21, 53, 57 

n.6, 58, 60-62. GEO itself disclosed much of what Plaintiffs complain about, such as the lawsuits 

filed against GEO, banking decisions, and COVID infections. See, e.g., id. ¶¶ 112, 123, 144, 146-

47, 157, 162, 168, 179, 192-95; see also Notice of Filing [ECF No. 37] (with highlighted 

disclosures). These disclosures are fatal to all of Plaintiffs’ claims since it is axiomatic that “[a] 

Plaintiff fails to plead an actionable § 10(b) claim predicated on the concealment of information if 

that information was, in fact, disclosed.” Decker v. Massey-Ferguson, Ltd., 681 F.2d 111, 116-17 

(2d Cir. 1982). Much of this was in the public domain even before the class period began. See Am. 

Compl. ¶¶ 112 (wage claim cases filed in 2014 and 2017); ¶¶ 6-7 (activism campaigning banks to 

stop funding private detention industry beginning in April 2018); see also Mulvaney, 237 F. Supp. 

3d at 1311 (2016 allegations about GEO’s operations similar to those Plaintiffs now claim to have 

been recently “revealed”). Because “the information that defendants are alleged to have withheld 

from or misrepresented to the market has entered the market through other channels, the market 

will not have been misled, and ... plaintiffs’ claims ... will fail.” In re Stac Elecs. Sec. Litig., 89 

F.3d at 1409 (citation omitted). 

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15

5. Plaintiffs Have Not Adequately Pled Falsity of GEO Statements. 

Plaintiffs have failed to adequately allege, with particularity, why GEO’s statements they 

rely upon were false or misleading. Instead, Plaintiffs repeatedly quote selectively copied portions 

of GEO’s public filings and earnings calls, and then present unrelated reasons purportedly showing 

the falsity of the referenced statement. Plaintiffs attach a 25-page “Appendix” to the Amended 

Complaint with all of the alleged misrepresentations (which Defendants address one-by-one in 

Exhibit BB filed herewith). However, when this Court parses each of those disclosures––as it must 

on a motion to dismiss––it will find that Plaintiffs’ arguments of falsity do not withstand scrutiny. 

The pattern repeats throughout the lengthy Amended Complaint. For example, in paragraph 

125, Plaintiffs focus on statements in the 2018 10-K that GEO received certain accreditations. 

Paragraph 126 purports to demonstrate why those representations were false or misleading, but the 

reasons provided (reports about conditions at two facilities, the affirmance of a class certification 

case, and a fine paid in relation to one facility) do not actually show that GEO did not have the 

accreditations it claimed to have. See also Am. Compl. ¶¶ 149-50, 164-65, 174-75, 190-91. 

Similarly, Plaintiffs highlight statements made by various GEO executives that GEO had, 

and expected to continue having, access to cost-effective capital. See, e.g., Am. Compl. ¶¶ 135-

36. Plaintiffs claim those statements are false by pointing to decisions made by certain “big banks” 

who, under the weight of political pressure, publicly announced they would later divest from the 

private detention industry by not renewing certain credit facilities. See id. ¶ 137. But the potential 

future divestiture by certain banks from their long-standing relationships with GEO does not 

demonstrate (a) that GEO knew when the prior statements were made that unannounced 

divestitures would occur, or (b) that GEO did not have access to other cost-effective capital from 

different sources, including other large financial institutions. See In re Centerline Holdings Sec. 

Litig., 678 F. Supp. 2d 150, 158 (S.D.N.Y. 2009) (failed to show inference of scienter regarding 

statement of no “concern about access to capital”). 

Plaintiffs’ reliance on SOX certifications also fails. See Am. Compl. ¶¶ 130-31, 181-82. 

“[T]here is nothing in either the [Exchange Act] or the Sarbanes-Oxley Act and implementing 

regulations that authorizes plaintiffs to base a claim for securities fraud on an alleged misstatement 

in a Sarbanes-Oxley certification.” In re Silicon Storage Tech., Inc., Sec. Litig., 2007 WL 760535, 

at *17 (N.D. Cal. 2007). SOX certifications are insufficient to serve as a basis for a 10(b) claim. 

See In re KBR, Inc. Sec. Litig., CV H-17-1375, 2018 WL 4208681, at *8 (S.D. Tex. Aug. 31, 2018) 

(statements contained in SOX certifications not actionable under 10(b) where the allegations do 

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16

not challenge the content of the certifications themselves). Relatedly, SOX certifications do not 

even give rise to an inference of scienter except in very limited circumstances, not applicable here. 

See Garfield v. NDC Health Corp., 466 F.3d 1255, 1265-66 (11th Cir. 2006) (SOX certification 

can only be probative of scienter if signatory was severely reckless that the financial statements 

contained material misstatements or omissions). No material misrepresentations or omissions in 

GEO’s financial statements are alleged. 

Finally, Plaintiffs cite repeatedly to GEO’s disclosures about pending lawsuits, e.g., Am. 

Compl. ¶¶ 112, 123, 144, claiming that those statements were misleading because they warned 

that “The Company has not recorded an accrual relating to these matters at this time, as a loss is 

not considered probable nor reasonably estimable at this stage of the lawsuit,” and that “The 

Company does not expect the outcome of any pending claims or legal proceedings to have a 

material adverse effect on its financial condition, results of operations or cash flows.” E.g., id. 

¶ 144. Plaintiffs claim that these statements were false because Defendant Zoley wrote to ICE and 

requested that the DOJ take over the defense costs of the lawsuits and reimburse GEO for its 

previously incurred costs. Id. ¶ 145. But, Plaintiffs do not allege that GEO failed to disclose or 

misstated the actual costs of defense incurred during any particular reporting cycle, or violated any 

GAAP principles in its method of accounting for such expenses.7 Plaintiffs also rely on a letter 

Senator Warren wrote to the SEC about these same issues and urged the SEC to investigate GEO. 

But, the existence of a pending investigation––not even alleged by Plaintiffs––is not a basis to find 

fraud as to the matter under investigation. See Meyer v. Greene, 710 F.3d 1189, 1200 (11th Cir. 

2013) (“the commencement of an SEC investigation, without more, is insufficient to constitute a 

corrective disclosure for purposes of § 10(b)”). A letter written by a politician asking for an 

investigation to be commenced provides even less of a basis. 

6. Plaintiffs Fail to Sufficiently Plead Loss Causation. 

Plaintiffs also fail to sufficiently plead that the alleged misstatements caused their losses. 

See Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 342-47 (2005); see also 15 U.S.C. §78u-4(b)(4); 

Robbins v. Koger Prop., Inc., 116 F.3d 1441, 1447 (11th Cir. 1997). Even in a fraud-on-the-market 

case like this one, “the Plaintiffs must prove not only that a fraudulent misrepresentation artificially 

7

 Defendants’ fully disclosed decision not to accrue a reserve does not give rise to a material 

misrepresentation as a matter of law. See Luna v. Marvell Tech. Grp. Ltd, No. 15-CV-05447-

RMW, 2016 WL 5930655, at *7 (N.D. Cal. Oct. 12, 2016) (accrual not required under GAAP even 

after company had judgment entered against it in litigation).

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17

inflated the security’s value but also that ‘the fraud-induced inflation that was baked into the 

Plaintiffs’ purchase price was subsequently removed from the stock’s price, thereby causing losses 

to the Plaintiffs.’” Meyer, 710 F.3d at 1195. This loss causation requirement can be satisfied by 

pleading the existence of a corrective disclosure that purportedly revealed new information about 

the alleged fraud to the market and caused a price drop. See Sapssov v. Health Mgmt. Assocs., Inc., 

608 F. App’x 855 (11th Cir. 2015) (holding that loss causation was inadequately pleaded under 

fraud-on-the-market doctrine where plaintiffs relied on an OIG investigation, whistleblower case, 

and equity analyst’s report, none of which disclosed actual wrongdoing or qualified as a corrective 

disclosure establishing causal link for loss). 

Plaintiffs fail to make a showing of proximate cause, nor can they given the truthful nature 

of GEO’s alleged misrepresentations and the risk disclosures in its public filings. Plaintiffs’ claim 

is that the reduction of GEO’s dividend was a corrective disclosure that revealed the “full truth.” 

But, the Amended Complaint makes clear that the various operational, financial, political, and 

pandemic-related risks that Plaintiffs claim led to GEO’s decision to reduce its dividend were wellknown. No new information was revealed when GEO announced a dividend reduction and the 

stock price declined. 

7. Plaintiffs Fail to Plead a Strong Inference of Scienter. 

Although Plaintiffs’ failure to plead actionable misstatements or loss causation is sufficient 

to dismiss the Amended Complaint, their claims independently fail because they do not raise a 

strong inference of scienter. Plaintiffs must, “with respect to each act or omission 

alleged . . ., state with particularity facts giving rise to a strong inference that the defendant acted 

with the required state of mind.” 15 U.S.C. § 78u-4(b)(2)(A) (emphasis added); see also Tellabs, 

551 U.S. at 314. To determine whether scienter allegations are sufficient, a court “must engage in 

a comparative evaluation; it must consider, not only inferences urged by the plaintiff . . . but also 

competing inferences rationally drawn from the facts alleged.” Id. The Amended Complaint must 

satisfy this standard with particular allegations that each defendant acted knowingly or in a 

severely reckless manner. See Druskin v. Answerthink, Inc., 299 F. Supp. 2d 1307, 1323 (S.D. Fla. 

2004) (citing Bryant, 187 F.3d at 1283-87); Exchange Act § 21D(b)(2), 15 U.S.C. § 78u-4(b)(2). 

“[A]llegations of motive and opportunity to commit fraud, standing alone, are insufficient to 

establish scienter in this Circuit.” Bryant, 187 F.3d at 1285. Rather, the standard is “severe 

recklessness”: “those highly unreasonable omissions or misrepresentations that involve not 

merely simple or even inexcusable negligence, but an extreme departure from the standards of 

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 18 of 23
18

ordinary care, and that present a danger of misleading buyers or sellers which is either known to 

the defendants or is so obvious that the defendants must have been aware of it.” Ziemba., 256 F.3d 

at 1202 (citation omitted); In re Sunstar Sec. Healthcare Litig., 173 F. Supp. 2d 1315, 1319 (M.D. 

Fla. 2001). In short, a complaint must explain the “why” of alleged securities fraud. E.g., In re 

Rexall Sundown, Inc. Sec. Litig., 2000 WL 33539428, *3 (S.D. Fla. Mar. 29, 2000). 

The Amended Complaint does not even come close to alleging a “strong inference” of 

scienter, requiring dismissal. Plaintiffs rest on nothing but the insufficient scienter allegation that, 

“[g]iven the high-profile sources of the scrutiny, GEO’s leadership—including its CEO, CFO, 

SVPs, and Presidents of subsidiaries—were aware of those facts (or severely reckless in purposely 

ignoring those facts).” Am Compl. ¶ 220; see also id. ¶¶ 39-42. 

Numerous courts have rejected this type of “they must have known” allegation. “[M]ere 

allegations that Defendants held senior management positions, had access to inside information, 

and therefore must have known of the falsity of certain statements is insufficient to plead scienter.” 

Hubbard v. BankAtlantic Bancorp, Inc., 625 F. Supp. 2d 1267, 1286 (S.D. Fla. 2008) (quoting In 

re Smith Gardner Sec. Litig., 214 F. Supp. 2d 1291, 1303 (S.D. Fla. 2002)); In re Criimi Mae, Inc. 

Sec. Litig., 94 F. Supp. 2d. 652, 661 (D. Md. 2000) (allegations that individual defendants 

controlled a company’s day-to-day operations, signed public filings with the SEC and were “privy 

to confidential proprietary information” held insufficient to plead scienter). Plaintiffs’ scienter 

allegations are exactly the type of allegations that have consistently been found to be insufficient 

to support a strong inference of scienter under the PSLRA. Moreover, with respect to matters such 

as Plaintiffs’ reliance on lawsuits disclosed in GEO’s public filings and the decisions by banks not 

to finance the company going forward, GEO’s disclosure of that unfavorable information weighs 

against an inference of scienter. See In re BellSouth Corp. Securities Litig., 355 F. Supp. 2d 1350, 

1375 (N.D. Ga. 2005) (“BellSouth’s full disclosure of the Florida late fee proceedings at all 

relevant times further discredits that Defendants acted with scienter.”).

The scienter allegations also are deficient in failing to allege an inference of scienter as to 

each Defendant. The PSLRA requires a complaint to state with particularity facts giving rise to a 

strong inference that each separate defendant acted with scienter with respect to each act or 

omission alleged. See Smith Gardner, 214 F. Supp. 2d at 1303 (citing In re Sunbeam Sec. Litig., 

89 F. Supp. 2d 1326, 1341 (S.D. Fla. 1999)). Plaintiffs fail to allege a scintilla of fact that 

Defendants had knowledge of any alleged fraud. They refer to no alleged e-mails, memos, 

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 19 of 23
19

meetings, or other evidence that could give rise to an inference of scienter. Plaintiffs also fail to 

show how Defendants allegedly stood to personally gain by their alleged fraud. Nothing here 

logically points to an inference of fraud. The more plausible inference is that GEO was addressing, 

and promptly disclosing, any challenges it faced in its business, such as relations with lenders, 

government customers, new legislation, and the COVID pandemic. Plaintiffs’ generalized scienter 

allegations are plainly inadequate under the demanding PSLRA and Tellabs standard.8

C. Count II Fails to State a Section 20(a) Claim Against the Individual Defendants.

First, because Plaintiffs do not state a cause of action for a primary violation of the 

Exchange Act, Count II for secondary, “control person” liability also fails. Section 20(a) of the 

Exchange Act imposes liability on certain “control persons” for primary violations of Section 10(b) 

by a “person liable,” i.e., the issuer of securities. See Laperriere v. Vesta Ins. Group, Inc., 526 F. 

3d 715, 721 (11th Cir. 2008). To state a claim, a plaintiff must plead a primary violation in 

compliance with the PSLRA and Rule 9(b). See In re Royal Caribbean Cruises, 2013 WL 3295951 

at *19 (dismissing Section 20(a) claim where plaintiffs failed to state a claim under Section 10(b)); 

Mizzaro, 544 F. 3d at 1255 (same). Here, because Plaintiffs have not adequately pled a primary 

violation by GEO, the Section 20(a) claim against the Individual Defendants necessarily fails as 

well. See Mulvaney, 237 F. Supp. 3d at 1326. 

Plaintiffs’ Section 20(a) claim also fails because Plaintiffs do not sufficiently plead that 

any of the Individual Defendants had the power to control GEO’s business affairs, generally, or 

the dissemination of the purportedly false and misleading statements alleged, specifically. Control 

requires that an individual be in “the possession, direct or indirect, of the power to direct or cause 

the direction of the management and policies of a person, whether through ownership of voting 

securities, by contract, or otherwise.” Laperriere, 526 F.3d at 723 (quotation omitted). A plaintiff 

must do more than restate a legal conclusion of control. In re Smith Barney Transfer Agent Litig., 

884 F. Supp. 2d 152, 166 (S.D.N.Y. 2012) (“[C]onclusory allegations of control are insufficient 

as a matter of law.”); In re Global Crossing, Ltd., Sec. Litig., No. 02 Civ. 910 (GEL), 2005 WL 

1907005, at *12 (S.D.N.Y. Aug. 8, 2005). 

8

 Plaintiffs’ sole attempt to specify a writing by one of the Defendants relates to Zoley’s letter to 

ICE requesting that the agency assist GEO with the costs of defending the work program cases in 

Colorado, Washington, and California. Am. Compl. ¶ 7. But, Plaintiffs fail to demonstrate scienter 

because they have not alleged that GEO’s disclosure about the accounting method used to disclose 

legal costs, or the amount reflected in each financial statement, was in any way inaccurate. 

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 20 of 23
20

The Amended Complaint fails to allege facts to support that each Individual Defendant 

asserted control for purposes of Section 20(a) liability. Rather, the Amended Complaint lumps 

them together by means of boilerplate allegations that they “participated in the operation and 

management of GEO, and conducted and participated, directly and indirectly, in the conduct of 

GEO’s business affairs.” Am. Compl. ¶ 256. Plaintiffs then make the conclusory statement that 

“[b]ecause of their positions of control and authority as senior officers, the Individual Defendants 

were able to, and did, control the contents of the various reports, press releases and public filings 

which GEO disseminated in the marketplace during the Class Period concerning the Company’s 

business, operational and accounting policies.” Am. Compl. ¶ 258. 

Rather than cite facts sufficient to plead control, the sparse allegations include routine 

involvement in earnings calls, signing various SEC filings, inexplicable references to forwardlooking statements, and rote recitals of the individuals’ roles at GEO. Plaintiffs’ shotgun pleading 

contains numerous “allegations” identifying public statements made by the Individual Defendants, 

but statements alone, without specific control, are insufficient to plead a Section 20(a) claim. 

Notably, the two newly added Individual Defendants, Donahue and Schlarb, did not even sign the 

SEC filings. Exs. A-Z. By improperly lumping all of the Individual Defendants together, the 

Amended Complaint fails to allege specific facts sufficient to establish that any of them effectively 

“controlled” GEO with respect to the alleged “primary violation” or “acted recklessly in failing to 

do what they could have done to prevent the primary violation.” Laperriere, 526 F.3d at 725. At 

most, the Individual Defendants are alleged to have done their jobs on behalf of the corporate 

defendant. 

CONCLUSION

For all of the foregoing reasons, Defendants respectfully request that Plaintiffs’ Amended 

Complaint be dismissed in its entirety, this time with prejudice.9

9

 This is the second complaint filed in this action. If Plaintiffs’ claims are dismissed, the Court 

should find that any further amendment would be futile and the Amended Complaint should be 

dismissed with prejudice. See In re Royal Caribbean Cruises Ltd. Sec. Litig., 2013 WL 3295951, 

at *19; Harris, 182 F.3d at 807-08 (affirming dismissal of securities class action and denial of 

leave to amend); PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 700 (6th Cir. 2004) (“[T]he 

purpose of the PSLRA would be frustrated if district courts were required to allow repeated 

amendments to complaints filed under the PSLRA”). 

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 21 of 23
REQUEST FOR HEARING UNDER L.R. 7.1(b) 

Defendants respectfully request oral argument on the merits of the instant motion. The 

motion presents intricate and complicated legal issues related to Plaintiffs’ claims that are brought 

under the Securities Exchange Act of 1934. Defendants believe that a hearing on the motion, which 

would permit an opportunity for the Court to inquire of counsel, would significantly enhance the 

Court’s decision-making process. Plaintiffs’ Amended Complaint, which attempts to assert a broad 

class action, is extensive: it contains 260 numbered paragraphs and specifies more than sixty 

statements it alleges to be false or misleading that span a period of nearly two years. Oral argument 

will permit the parties to discuss these allegations in greater depth than space permits in the written 

briefing. Further, a hearing will enable the parties to fully illuminate the application of the 

numerous authorities to the facts alleged here. Defendants anticipate that the ruling on the instant 

motion will be cited by future litigants and trust that a hearing will be helpful to the Court’s 

consideration of this complex area of law. Defendants estimate that one hour would be sufficient 

for oral argument. 

Dated: December 18, 2020 

Respectfully submitted, 

AKERMAN LLP

Three Brickell City Centre 

98 Southeast Seventh Street 

Suite 1100 

Miami, FL 33131 

Telephone: (305) 374-5600 

Facsimile: (305) 374-5095 

By: /s/ Brian P. Miller 

Brian P. Miller, Esq. 

Florida Bar No. 0980633 

brian.miller@akerman.com

Samantha J. Kavanaugh, Esq. 

Florida Bar No. 0194662 

samantha.kavanaugh@akerman.com 

Counsel for Defendant The GEO Group, Inc.

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 22 of 23
GUNSTER, YOAKLEY & STEWART, P. A. 

600 Brickell Avenue, 35th Floor 

Miami, FL 33131 

Telephone: (305) 376-6000 

Facsimile: (786) 425-4090 

By: /s/ William K. Hill 

William K. Hill, Esq. 

Florida Bar Number: 747180 

Primary: whill@gunster.com

Secondary: mmotola@gunster.com

George S. LeMieux, Esq. 

Florida Bar Number: 16403 

Primary: glemieux@gunster.com

Secondary: alevene@gunster.com

Secondary: eservice@gunster.com

Ernest “EJ” A. Cox IV, Esq. 

Florida Bar Number: 124652 

Primary: ecox@gunster.com

Secondary: mmargolese@gunster.com

Counsel for Defendants George C. Zoley, 

Brian R. Evans, J. David Donahue, and 

Ann M. Schlarb

Case 9:20-cv-81063-RS Document 36 Entered on FLSD Docket 12/18/2020 Page 23 of 23