Free Proposed Order - District Court of California - California

Case 4:07-cv-05111-CW

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Filed 06/27/2008

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1 SARA B. BRODY (Bar No. 130222) CAROL LYNN THOMPSON (Bar No. 148079) 2 CECILIA Y. CHAN (Bar No. 240971) MATTHEW D. THURLOW (Bar No. 243470) 3 HELLER EHRMAN LLP 333 Bush Street 4 San Francisco, CA 94104-2878 Telephone: (415) 772-6000 5 Facsimile: (415) 772-6268 [email protected] 6 [email protected] [email protected] 7 [email protected] 8 Attorneys for Defendants SONIC SOLUTIONS, DAVID C. HABIGER, 9 ROBERT J. DORIS, A. CLAY LEIGHTON, MARY C. SAUER, MARK ELY, ROBERT M. GREBER, 10 PETER J. MARGUGLIO and R. WARREN LANGLEY 11 12 13 14 15 CITY OF WESTLAND POLICE AND FIRE RETIREMENT SYSTEM AND PLYMOUTH 16 COUNTY RETIREMENT SYSTEM, On Behalf of Themselves and All Others Similarly 17 Situated, 18 19 v. Plaintiff, UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Case No.: C 07-5111(JSW) CLASS ACTION [PROPOSED] ORDER GRANTING DEFENDANTS' SUPERSEDING MOTION TO DISMISS THE [CORRECTED] CONSOLIDATED CLASS ACTION COMPLAINT Date: Time: Crtrm: Trial Date: September 5, 2008 9:00 a.m. 2 None Set

20 SONIC SOLUTIONS, DAVID C. HABIGER, ROBERT J. DORIS, A. CLAY LEIGHTON, 21 MARY C. SAUER, MARK ELY, ROBERT M. GREBER, PETER J. MARGUGLIO and R. 22 WARREN LANGLEY, 23 24 25 26 27 28 Defendants.

The Honorable Jeffrey S. White

[PROPOSED] ORDER GRANTING DEFENDANTS' SUPERSEDING MOTION TO DISMISS CASE NO.: C 07-5111(JSW)

Case 4:07-cv-05111-CW

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1

Defendants Sonic Solutions, David C. Habiger, Robert J. Doris, A. Clay Leighton,

2 Mary C. Sauer, Mark Ely, Robert M. Greber, Peter J. Marguglio and R. Warren Langley's 3 ("Defendants") Superseding Motion to Dismiss the [Corrected] Consolidated Class Action 4 Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure came on for 5 hearing on September 5, 2008, at 9:00 a.m. in this Court. Counsel for Defendants and for 6 Plaintiffs were in attendance and presented oral arguments. Having considered the parties' 7 papers filed in support of and in opposition to the motion, oral argument, and other 8 pleadings and papers on file herein, the Court finds the following: 9 1. With respect to the first cause of action for violation of Section 10(b) of the

10 Securities Exchange Act of 1934 (the "Exchange Act"), Plaintiffs fail to plead facts giving 11 rise to a "cogent and compelling" inference of scienter on the part of any Individual 12 Defendant, as required by Tellabs, Inc. v. Makor Issues & Rights, Ltd., 127 S. Ct. 2499, 13 2510 (2007). Because Plaintiffs have failed to plead scienter as to any of the Individual 14 Defendants, they also fail to plead scienter as to the Company. As to Defendants Ely, 15 Greber, Langley, and Marguglio, Plaintiffs also fail to attribute any misstatement to them 16 because the Complaint does not allege with the required particularity that these Defendants 17 participated in the preparation of the challenged statements. Nor has the Complaint 18 successfully alleged that these Defendants participated in a scheme to be held liable under 19 the theory of "scheme" liability. 20 2. With respect to the second cause of action for violation of Section 14(a) of the

21 Exchange Act, to the extent that this claim is based on Sonic's 2003 and 2004 proxy 22 statements, it is time barred because these proxy statements were issued more than three 23 years before this lawsuit was filed. As to the 2005 proxy statement, the Complaint fails to 24 plead an "essential link" between any alleged misstatement and any injury to investors or 25 plead any facts raising a "strong inference of negligence" on the part of the Defendants. 26 3. With respect to the third cause of action for violation of Section 20(a) of the

27 Exchange Act, Defendants are not liable as control persons because Plaintiffs have failed to 28 plead a predicate violation of the federal securities laws. Moreover, Plaintiffs have failed to 1
[PROPOSED] ORDER GRANTING DEFENDANTS' SUPERSEDING MOTION TO DISMISS CASE NO.: C 07-5111(JSW)

Case 4:07-cv-05111-CW

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1 plead with particularity facts establishing that any of the Individual Defendants exercised 2 control over the Company. 3 4. With respect to the fourth cause of action for violation of Section 20A of the

4 Exchange Act, Defendants are not liable for the insider trading claims because Plaintiffs 5 have failed to plead a predicate violation of the federal securities law. In addition, Plaintiffs 6 have not alleged that they purchased Sonic securities contemporaneously with the purported 7 sales of Defendants Sauer, Ely, Marguglio, Langley, and Greber. 8 IT IS THEREFORE ORDERED that Defendants' Superseding Motion to Dismiss

9 is GRANTED, and the Complaint is dismissed without leave to amend. 10 11 12 13 14 15 16 17 18
SF 1463391 v1

IT IS SO ORDERED. DATED: ______________

The Honorable Jeffrey S. White UNITED STATES DISTRICT JUDGE

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[PROPOSED] ORDER GRANTING DEFENDANTS' SUPERSEDING MOTION TO DISMISS CASE NO.: C 07-5111(JSW)