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ORDER GRANTING IN PART AND DENYING IN

PART PLAINTIFFS’ MOTION FOR JUDICIAL NOTICE

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

_______________________________________)

 ) Master File No. C06-794RSL

In re F5 NETWORKS, INC. DERIVATIVE )

LITIGATION. ) ORDER GRANTING IN PART AND 

) DENYING IN PART PLAINTIFFS’

) MOTION FOR JUDICIAL NOTICE

)

_______________________________________)

This matter comes before the Court on “Plaintiffs’ Request for Judicial Notice” (Dkt.

#54). In support of their “Opposition to Nominal Defendant F5 Networks, Inc.’s Motion to

Dismiss for Failure to Make Demand,” (Dkt. #53) plaintiffs request that the Court take judicial

notice of: (1) F5 Networks, Inc.’s Form 10-K/A filed with the SEC on December 12, 2006 for

the period ended September 30, 2005 (“the F5 2005 10-K/A”); (2) historical stock prices for F5

Networks, Inc. from May 1, 2006 to May 31, 2006, as reported on Yahoo.com (the “F5 stock

prices”); (3) a Wall Street Journal article by Charles Forelle & James Bandler, The Perfect

Payday – Some CEOs reap millions by landing stock options when they are most valuable; Luck

– or something else?, Wall St. J., March 18, 2006, at A1 (the “Wall Street Journal article”); and

(4) a Merrill Lynch report entitled “Options Pricing – Hindsight is 20/20,” dated May 22, 2006

(the “Merrill Lynch report”).

In response, nominal defendant F5 Networks, Inc. (“F5”) and individual defendants

Amdahl, Eames, Hull, Hussey, McAdam, Reinland, Reiter, and Rodriguez do not oppose the

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 In its motion to dismiss, nominal defendant F5 also relies extensively on SEC filings and F5’s

historical stock prices. See Dkt. #49, #59.

ORDER GRANTING IN PART AND DENYING IN

PART PLAINTIFFS’ MOTION FOR JUDICIAL NOTICE -2-

Court taking judicial notice of the 2005 F5 10-K/A, or the F5 stock prices, but they do assert that

“the Court should not take judicial notice of (i.e., accept as true for purposes of [the Motion to

Dismiss for Failure to Make Demand (Dkt. #59)]) the underlying ‘facts’ that support the studies’

[the Wall Street Journal article and the Merrill Lynch report] conclusions or the conclusions

themselves.” See Dkt. #59 (Reply to Motion to Dismiss) at n.1; Dkt. #58. 

Rule 201 of the Federal Rules of Evidence, which governs judicial notice, states in part: 

“A judicially noticed fact must be one not subject to reasonable dispute in that it is . . . capable

of accurate and ready determination by resort to sources whose accuracy cannot reasonably be

questioned.” Fed. R. Evid. 201(b). On a motion to dismiss, the Court may take judicial notice

of SEC filings. See Dreiling v. Am. Express Co., 458 F.3d 942, 946 n.2 (9th Cir. 2006) (stating

that the court may “consider documents referred to in the complaint or any matter subject to

judicial notice, such as SEC filings.”); In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986

(9th Cir. 1999) (affirming district court’s consideration of SEC filings on a motion to dismiss). 

Given this authority, and the fact that defendants do not oppose judicial notice,1

 the Court

GRANTS plaintiffs’ motion with respect to the 2005 F5 10-K/A. 

Stock prices of publically traded companies are subject to judicial notice. See In re

Merck & Co., Sec. Litig., 432 F.3d 261, 264 n.3 (3d Cir. 2005) (“We can take judicial notice of

Merck’s stock prices even on a motion to dismiss because these facts are not subject to

reasonable dispute [and are] capable of accurate and ready determination by resort to a source

whose accuracy cannot be reasonably questioned.”) (quotation marks and citation omitted);

Plevy v. Haggerty, 38 F. Supp. 2d 816, 821 (C.D. Cal. 1998) (“[T]he stock price of a publically

traded company is proper subject matter for judicial notice”). Therefore, given this authority

and the fact that defendants do not oppose judicial notice, the Court GRANTS plaintiffs’ motion

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ORDER GRANTING IN PART AND DENYING IN

PART PLAINTIFFS’ MOTION FOR JUDICIAL NOTICE -3-

with respect to F5’s stock prices.

The incorporation by reference doctrine “permits a district court to consider documents

whose contents are alleged in a complaint and whose authenticity no party questions, but which

are not physically attached to the plaintiff’s pleading.” In re Silicon Graphics Inc. Sec. Litig.,

183 F.3d at 986 (internal quotation and alteration omitted). In this case, the contents of the Wall

Street Journal article were alleged in the Complaint and accordingly, the Court will consider the

article because its authenticity has not been questioned. See Dkt. #39 (Complaint) at ¶4. 

Therefore, plaintiffs’ motion with respect to the Wall Street Journal article is GRANTED.

In response to defendant F5’s motion to dismiss for failure to make demand (Dkt. #53),

plaintiffs contend they used the “same tools” as applied in the Merrill Lynch report to support

the backdating allegations in the derivative complaint. See Dkt. #53 at 15. While the Court

takes judicial notice of the fact that the Merrill Lynch report was published, the Court does not

take judicial notice of the Merrill Lynch report’s conclusions or the methodology used to arrive

at the conclusions because under Fed. R. Evid. 201, these are subject to reasonable dispute. 

 In their response to defendant’s motion to dismiss, plaintiffs relied on both the Wall

Street Journal article and the Merrill Lynch report for their contention that they incorporated the

“same tools” used in these publications. See Dkt. #53 at 15. The Court’s refusal to judicially

notice the conclusions or methodology in the Merrill Lynch report, therefore, is not in any way

outcome determinative in this matter given the Court’s consideration of the Wall Street Journal

article under the incorporation by reference doctrine. For these reasons, plaintiffs’ motion with

regard to the Merrill Lynch report is GRANTED IN PART AND DENIED IN PART.

DATED this 1st day of August, 2007.

A

Robert S. Lasnik

United States District Judge 

Case 2:06-cv-00794-RSL Document 67 Filed 08/01/07 Page 3 of 3