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Sable Offshore Corp. et al\n\n\n Present: The Honorable STEPHEN V. WILSON, United States District Judge\n Daniel Tamayo c/s 2-23-2026\n Deputy Clerk Court Reporter\n\n Attorney(s) Present for Plaintiff(s): Attorney(s) Present for Defendant(s):\n Daniel Tyre-Karp Colleen C. Smith\n Kristin Nicole Murphy\n Lauren Barnette\n\n Proceedings: ZOOM - MOTION to Dismiss Case (Second Amended Class\n Action Complaint) filed by Defendants [81]\n\n Case called. The Court having carefully considered the papers and the evidence\nsubmitted by the parties, and having heard the oral argument of counsel, hereby takes the\nmotion under submission.\n\n\n\n\n : 40\nCV-90 (12/02) CIVIL MINUTES - GENERAL Initials of Deputy Clerk DTA\n\f","ocr_status":2,"date_upload":"2026-03-12T09:03:33.311368-07:00","document_number":"87","attachment_number":null,"pacer_doc_id":"031047088381","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Dismiss Case AND Motion Hearing","acms_document_guid":""}],"date_created":"2026-02-25T13:03:49.622167-08:00","date_modified":"2026-10-15T07:01:31.855685-07:00","date_filed":"2026-02-23","time_filed":null,"entry_number":87,"recap_sequence_number":"2026-02-23.001","pacer_sequence_number":310,"description":"MINUTES OF ZOOM - MOTION to Dismiss Case (Second Amended Class Action Complaint) filed by Defendants 81 held before Judge Stephen V. Wilson. Case called. 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Smith (SBN 231216)\n 2 colleen.smith@lw.com\n 3 12670 High Bluff Drive\n San Diego, CA 92130\n 4 Telephone: (858) 523-5400\n 5 Kristin N. Murphy (SBN 268285)\n 6 kristin.murphy@lw.com\n 650 Town Center Drive, 20th Floor\n 7 Costa Mesa, CA 92626\n Telephone: (714) 540-1235\n 8\n Counsel for Defendants Sable Offshore Corp.,\n 9 James C. Flores, and Gregory D. Patrinely\n 10\n UNITED STATES DISTRICT COURT\n 11 CENTRAL DISTRICT OF CALIFORNIA\n 12\n TRACY JOHNSON, Individually and on\n 13 behalf of all others similarly situated, Case No. 2:25-cv-06869-SVW-PVC\n 14 DEFENDANTS SABLE OFFSHORE\n Plaintiff, CORP., JAMES C. FLORES, AND\n 15 GREGORY D. PATRINELY\u2019S\n v. REPLY IN SUPPORT OF MOTION\n 16 TO DISMISS SECOND AMENDED\n SABLE OFFSHORE CORP., JAMES C. CLASS ACTION COMPLAINT\n 17\n FLORES, and GREGORY D. CLASS ACTION\n 18 PATRINELY,\n 19 Defendants. Judge: Hon. Stephen V. Wilson\n 20 Hearing Date: February 9, 2026\n Time: 1:30 p.m.\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 2 of 19 Page ID\n #:2152\n\n 1 TABLE OF CONTENTS\n 2\n Page\n 3\n I. INTRODUCTION .......................................................................................... 1\n 4\n II. ARGUMENT ................................................................................................. 1\n 5\n 6 A. The Opposition Confirms No Falsity................................................... 1\n\n 7 1. No Falsity for Restart Statements (Stmts. 1, 2, 5, 8,\n 11) .............................................................................................. 1\n 8\n 9 2. No Falsity for Repair & Permit Statements (Stmts.\n 3, 10, 12-15) ............................................................................... 4\n 10\n 3. No Falsity for Litigation Opinions (Stmts. 7, 15-\n 11\n 18) .............................................................................................. 5\n 12\n 4. No Falsity for Hunterbrook Opinion (Stmt. 19) ........................ 6\n 13\n B. The Opposition Confirms No Scienter ................................................ 7\n 14\n 15 1. Plaintiffs Do Not Establish a Core Operations\n Inference .................................................................................... 8\n 16\n 2. Plaintiffs Do Not Plead Knowledge of Contrary\n 17\n Information ................................................................................ 9\n 18\n 3. Plaintiffs Do Not Plead Particularized Motive .......................... 9\n 19\n 20 4. The More Compelling Inference is Good Faith ...................... 10\n\n 21 C. The Opposition Confirms No Loss Causation ................................... 11\n 22 III. CONCLUSION ............................................................................................ 12\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n i DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 3 of 19 Page ID\n #:2153\n\n 1 TABLE OF AUTHORITIES\n 2\n Page(s)\n 3\n CASES\n 4\n Anshen v. Facebook,\n 5\n 2017 WL 5635021 (C.D. Cal. Oct. 4, 2017) .................................................. 9, 11\n 6\n Bray v. Rocket Lab USA, Inc.,\n 7 2025 WL 3688815 (C.D. Cal. Nov. 7, 2025) ................................................... 7, 8\n 8\n Brody v. Transitional Hosps. Corp.,\n 9 280 F.3d 997 (9th Cir. 2002) ................................................................................ 2\n 10 Bueno v. St. Jude Med., Inc.,\n 11 2013 WL 12142536 (C.D. Cal. Sept. 24, 2013) ................................................... 1\n 12 Glazer Cap. Mgmt., L.P. v. Forescout Techs., Inc.,\n 63 F.4th 747 (9th Cir. 2023) ............................................................................. 4, 7\n 13\n 14 Glazer Cap. Mgmt., LP v. Magistri,\n 549 F.3d 736 (9th Cir. 2008) ................................................................................ 5\n 15\n Habelt v. iRhythm Techs., Inc.,\n 16\n 2022 WL 971580 (N.D. Cal. Mar. 31, 2022) ..................................................... 11\n 17\n Hershewe v. JOYY Inc.,\n 18 2021 WL 6536670 (C.D. Cal. Nov. 5, 2021) ....................................................... 8\n 19\n In re BofI Holding, Inc. Sec. Litig.,\n 20 977 F.3d 781 (9th Cir. 2020) .............................................................................. 12\n 21 In re Daou Sys. Inc.,\n 22 411 F.3d 1006 (9th Cir. 2005) .............................................................................. 7\n 23 In re Dermtech, Inc. Sec. Litig.,\n 24 2024 WL 4941026 (S.D. Cal. Dec. 2, 2024) ...................................................... 10\n\n 25 In re Dermtech, Inc. Sec. Litig.,\n 2025 WL 1618193 (S.D. Cal. June 5, 2025) ........................................................ 3\n 26\n 27 In re Herbalife, Ltd. Sec. Litig.,\n 2015 WL 12732428 (C.D. Cal. Mar. 27, 2015) ................................................. 12\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n ii DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 4 of 19 Page ID\n #:2154\n\n 1 In re NVIDIA Corp. Sec. Litig.,\n 2 768 F.3d 1046 (9th Cir. 2014) .............................................................................. 8\n\n 3 In re PG&E Corp. Sec. Litig.,\n 2025 WL 2781745 (N.D. Cal. Sept. 30, 2025)..................................................... 5\n 4\n 5 In re Semtech Corp.,\n 2025 WL 2884810 (C.D. Cal. Oct. 7, 2025) ...................................................... 10\n 6\n In re VeriFone Holdings, Inc. Sec. Litig.,\n 7\n 704 F.3d 694 (9th Cir. 2012) ................................................................................ 9\n 8\n Loritz v. Exide Techs.,\n 9 2013 WL 12134142 (C.D. Cal. Dec. 19, 2013) ................................................... 3\n 10\n Maeve Inv. Co. v. Teekay Corp.,\n 11 2017 WL 5158059 (W.D. Wash. Nov. 7, 2017) .................................................. 8\n 12 Matrixx Initiatives, Inc. v. Siracusano,\n 13 563 U.S. 27 (2011) ............................................................................................... 2\n 14 Mihaylov v. Tattooed Chef, Inc.,\n 2024 WL 6901294 (C.D. Cal. Dec. 11, 2024) ..................................................... 8\n 15\n 16 N.M. State Inv. Council v. Ernst & Young LLP,\n 641 F.3d 1089 (9th Cir. 2011) .............................................................................. 9\n 17\n 18 Nguyen v. Radient Pharms. Corp.,\n 2011 WL 13141630 (C.D. Cal. Oct. 26, 2011) .................................................. 10\n 19\n Okla. Firefighters Pension & Ret. Sys. v. Ixia,\n 20 50 F. Supp. 3d 1328 (C.D. Cal. 2014) .................................................................. 4\n 21\n Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund,\n 22 575 U.S. 175 (2015) ............................................................................................. 4\n 23 Petersen v. Stem, Inc.,\n 24 2024 WL 4602710 (N.D. Cal. Aug. 30, 2024) ..................................................... 6\n 25 Prodanova v. H.C. Wainwright & Co.,\n 26 LLC, 993 F.3d 1097 (9th Cir. 2021) .................................................................. 10\n\n 27 Rok v. Identiv, Inc.,\n 2017 WL 35496 (N.D. Cal. Jan. 7, 2017) .......................................................... 11\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n iii DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 5 of 19 Page ID\n #:2155\n\n 1 Rubke v. Capitol Bancorp Ltd.,\n 2 551 F.3d 1156 (9th Cir. 2009) .......................................................................... 5, 6\n\n 3 Sneed v. Talphera, Inc.,\n 147 F.4th 1123 (9th Cir. 2025) ............................................................................. 9\n 4\n 5 South Ferry LP v. Killinger,\n 542 F.3d 776 (9th Cir. 2008) ................................................................................ 9\n 6\n Stephens v. Maplebear Inc.,\n 7\n 2025 WL 1359125 (N.D. Cal. May 9, 2025) ....................................................... 7\n 8\n Studen v. Funko, Inc.,\n 9 2024 WL 2209686 (W.D. Wash. May 16, 2024) ................................................. 7\n 10\n Tapia v. Wells Fargo Bank, N.A.,\n 11 2015 WL 4650066 (C.D. Cal. Aug. 4, 2015) ....................................................... 5\n 12 Thant v. Rain Oncology Inc.,\n 13 2025 WL 588994 (N.D. Cal. Feb. 24, 2025) ........................................................ 2\n 14 Webb v. Solarcity Corp.,\n 884 F.3d 844 (9th Cir. 2018) .......................................................................... 9, 10\n 15\n 16 Welgus v. Trinet Grp., Inc.,\n 2017 WL 6466264 (N.D. Cal. Dec. 18, 2017) ..................................................... 3\n 17\n 18 Yaron v. Intersect ENT, Inc.,\n 2020 WL 6750568 (N.D. Cal. June 19, 2020) ................................................... 12\n 19\n Zucco Partners, LLC v. Digimarc Corp.,\n 20 552 F.3d 981 (9th Cir. 2009) .............................................................................. 11\n 21\n STATUTES\n 22\n 15 U.S.C. \u00a7 78u-4(b)(1) ............................................................................................. 1\n 23\n 24 RULES\n\n 25 Fed. R. Civ. P. 9(b) .................................................................................................. 11\n 26 17 C.F.R. 240.10b-5(b) .............................................................................................. 2\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n iv DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 6 of 19 Page ID\n #:2156\n\n 1 I. INTRODUCTION\n 2 Plaintiffs\u2019 Opposition confirms that the Complaint fails to state a claim.\n 3 Plaintiffs abandon the Complaint\u2019s core theory of fraud, conceding that Sable\u2019s\n 4 report that it had \u201cbegun flowing oil production\u201d at the beginning of the Class Period\n 5 was accurate. Plaintiffs also do not respond to multiple, reinforcing arguments\n 6 explaining why none of the Complaint\u2019s alleged misstatements is actionable under\n 7 established PSLRA authorities. Indeed, Plaintiffs fail to even address more than\n 8 thirty cases Defendants cited, including seventeen published Ninth Circuit opinions.\n 9 For scienter, Plaintiffs rely primarily on an argument that scienter is inferred\n 10 because the statements relate to Sable\u2019s \u201ccore operations\u201d\u2014a theory the Complaint\n 11 does not plead\u2014and on generic motive allegations. Courts routinely reject the\n 12 speculative, abstract scienter arguments Plaintiffs offer.\n 13 For loss causation, Plaintiffs agree that they must plead \u201cthat the decline in\n 14 stock price was proximately caused by a revelation of fraudulent activity.\u201d Opp. 21.\n 15 But they do not argue that any fraud was revealed on any date.\n 16 II. ARGUMENT\n 17 A. The Opposition Confirms No Falsity\n 18 1. No Falsity for Restart Statements (Stmts. 1-2, 5, 8, 11)\n 19 Plaintiffs originally alleged that statements that Sable \u201crestarted production\u201d\n 20 in May 2025 were false because \u201cSable had not restarted oil production.\u201d \u00b6\u00b6 63, 69.\n 21 Plaintiffs now concede that these statements may be \u201cliterally true.\u201d Opp. 6. So\n 22 Plaintiffs pivoted to two theories of falsity that do not appear in the Complaint: that\n 23 Sable\u2019s oil flow was \u201cnothing more than a minor, mandatory test,\u201d id. 4; and that\n 24 Sable\u2019s statements created a \u201cfalse impression\u201d that it would \u201cimminently begin\n 25 selling oil,\u201d id. 6. Under the PSLRA, which requires the \u201ccomplaint\u201d to specify \u201cthe\n 26 reason or reasons why the statement is misleading,\u201d these new theories are\n 27 impermissible. 15 U.S.C. \u00a7 78u-4(b)(1); see Bueno v. St. Jude Med., Inc., 2013 WL\n 28 12142536, at *3 (C.D. Cal. Sept. 24, 2013) (\u201cIt is axiomatic that a complaint may\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 1 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 7 of 19 Page ID\n #:2157\n\n 1 not be amended by briefs in opposition to a motion to dismiss.\u201d).\n 2 In any event, the new theories also fail on the merits. Plaintiffs source their\n 3 claim that Sable\u2019s oil flow was just a \u201cminor\u201d test to Lt. Governor Kounalakis, who\n 4 wrote that she was \u201cinformed\u201d by her staff that the oil flow was \u201cthe result of well-\n 5 testing procedures.\u201d \u00b6 72. Even if the Court credited this pleading method, Plaintiffs\n 6 identify no contradiction with what was disclosed. Sable told investors that it had\n 7 been \u201ctesting wells \u2026 throughout May 2025.\u201d Ex. 7 at 429. It also reported that it\n 8 \u201cinitiated the flow of oil production from six wells\u201d at a rate of \u201c~6,000 barrels of\n 9 oil per day,\u201d id., consistent with the Kounalakis letter, which went on to confirm that\n 10 Sable had \u201cinitiat[ed] \u2026 oil flow through the offshore pipeline,\u201d \u00b6 72.\n 11 Plaintiffs also allege that Sable\u2019s statements created a \u201cfalse impression\u201d that\n 12 it would \u201cimminently begin selling oil.\u201d Opp. 6. Plaintiffs cannot explain how\n 13 statements that Sable initiated oil flow to a storage facility created a misleading\n 14 impression about the future.1 The theory has three flaws.\n 15 First, Plaintiffs would create a disclosure standard under which public\n 16 companies like Sable cannot report a factual development without discussing a host\n 17 of additional details about the status of repairs, testing, permits, approvals, and\n 18 litigation. Opp. 4-5. This is not the law. \u201c[Section] 10(b) and Rule 10b\u20135(b) do not\n 19 create an affirmative duty to disclose any and all material information.\u201d Matrixx\n 20 Initiatives, Inc. v. Siracusano, 563 U.S. 27, 44-45 (2011); see Brody v. Transitional\n 21 Hosps. Corp., 280 F.3d 997, 1005 (9th Cir. 2002) (\u201cOften, a statement will not\n 22 mislead even if it is incomplete\u2026\u201d). \u201c[S]ilence, absent a duty to disclose, is not\n 23 1\n By contrast, Statements 4 and 9 are forward-looking statements about Sable\u2019s\n 24 projected oil production and sales timeline. Plaintiffs state, with no analysis, that\n these and other forward-looking statements are actionable, but they do not dispute\n 25 that both independent prongs of the PSLRA safe harbor are met for each statement,\n Mot. 10-12. See Opp. 14 n.6 (citing Thant v. Rain Oncology Inc., 2025 WL 588994,\n 26 at *6 (N.D. Cal. Feb. 24, 2025)). Thant did not even address the safe harbor, instead\n holding that statements about a Phase 3 drug trial were misleading for omitting that\n 27 the drug did not meet consensus criteria to bypass Phase 2. 2025 WL 588994, at *6.\n To the extent Plaintiffs meant to analogize to the portion of the May 19 Press\n 28 Release\u2019s title about \u201cAnticipated Oil Sales,\u201d that relates to Statement 4 in the body\n of the Press Release and is likewise a protected forward-looking statement.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 2 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 8 of 19 Page ID\n #:2158\n\n 1 misleading \u2026\u201d Loritz v. Exide Techs., 2013 WL 12134142, at *1 (C.D. Cal. Dec.\n 2 19, 2013) (Wilson, J.) (citation omitted).\n 3 Second, Plaintiffs do not identify any material information that was concealed.\n 4 Sable disclosed at the time that it had \u201ctesting\u201d to finish and \u201cpermits\u201d to obtain, Ex.\n 5 7 at 429-30, it disclosed disputes involving the Coastal Commission, Fire Marshal,\n 6 and Water Board, Ex. 8 at 446-48, 450-52, and once it believed it completed repairs\n 7 under the Consent Decree, it disclosed that to investors, too, Ex. 7 at 429.\n 8 Third, even if Sable was \u201ctriumphant[]\u201d and \u201cexcited\u201d as it spoke about this\n 9 development and its \u201cprospects for the future,\u201d Opp. 4; Ex. 7 at 429, that is not\n 10 securities fraud. Plaintiffs may contend that the tone was too optimistic given\n 11 regulatory roadblocks, but they cannot base their claim on a theory that \u201csuggests\n 12 that \u2018every General who has lost a battle was making false statements saying that\n 13 they were going to win the battle.\u2019\u201d Welgus v. Trinet Grp., Inc., 2017 WL 6466264,\n 14 at *11 (N.D. Cal. Dec. 18, 2017). And Sable never said that it was going to \u201cwin the\n 15 battle.\u201d It warned that \u201cinitial timing and production estimates\u201d were \u201cfor illustrative\n 16 purposes only\u201d and \u201cinherently uncertain due to a number of factors outside Sable\u2019s\n 17 control.\u201d Ex. 7 at 430-431; see Ex. 8 at 456 (\u201cno assurance that we will be successful\n 18 in satisfying the remainder of the requirements\u201d), 459.2 That commercial restart was\n 19 later delayed, as warned, is irrelevant.\n 20 This is not a case where Plaintiffs and Defendants offer competing\n 21 interpretations. Opp. 6-7.3 Viewing the language of the restart statements in context,\n 22 see id. 6, confirms they are not actionable.4\n 23\n 2\n 24 These disclosures contradict Plaintiffs\u2019 baseless accusations that Sable told\n investors \u201cstate and local regulators could be safely ignored,\u201d Opp. 1, and merely\n 25 disclosed \u201cgeneral warnings that the Company\u2019s plans might not succeed,\u201d id. 7.\n 3\n 26 See In re Dermtech, Inc. Sec. Litig., 2025 WL 1618193, at *4 (S.D. Cal. June 5,\n 2025) (finding falsity adequately pleaded based on competing \u201cplausible theories\n 27 about how a reasonable investor would interpret \u2018broader payer coverage\u2019\u201d).\n 4\n Plaintiffs also do not dispute that documents attached to the Motion are subject to\n 28 judicial notice or incorporated by reference. Opp. 3 n.2. A number of these\n contradict the conclusory allegations and drafting errors in the Complaint.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 3 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 9 of 19 Page ID\n #:2159\n\n 1 2. No Falsity for Repair & Permit Statements (Stmts. 3, 10, 12-15)\n 2 Plaintiffs argue that Statements 3, 10, and 12-15\u2014about Sable\u2019s belief that it\n 3 had completed repairs required by the Consent Decree and did \u201cpermitted\u201d work\u2014\n 4 are not opinions. But Plaintiffs provide no support for their say-so that these were\n 5 \u201cnot opinions.\u201d Opp. 9. They do not contest that opinion statements \u201creflect the\n 6 speaker\u2019s assessment\u201d of underlying facts and often require the \u201cweighing of\n 7 competing facts,\u201d Mot. 14, 16, which perfectly captures Sable\u2019s assessment that it\n 8 had completed repairs required by a complex legal document, including those that\n 9 the County confirmed were \u201cauthorized by the existing permits\u201d it previously issued.\n 10 Plaintiffs do not argue that the opinions were not subjectively believed or that\n 11 they contained any misrepresented facts. See Omnicare, Inc. v. Laborers Dist.\n 12 Council Constr. Indus. Pension Fund, 575 U.S. 175, 185-91 (2015). Instead,\n 13 Plaintiffs argue that if these statements are opinions, they are actionable because\n 14 they did not \u201c\u2018fairly align\u2019 with information Defendants possessed at the time they\n 15 made the statements,\u201d purportedly under the third Omnicare prong. Opp. 10 (citing\n 16 Glazer Cap. Mgmt., L.P. v. Forescout Techs., Inc., 63 F.4th 747, 771 (9th Cir. 2023)).\n 17 For statements that Sable had completed repairs in May (Stmts. 3, 10, 13-15),\n 18 Plaintiffs offer no analysis of what information contradicted these statements.\n 19 Plaintiffs repeat that the Fire Marshal said (in October) that it \u201cidentified\u201d an unmet\n 20 requirement, Opp. 9, but do not contest that the Complaint fails to plead facts about\n 21 the state of play when Sable made the statements, Mot. 15. Plaintiffs also concede\n 22 that the Complaint contains insufficient details about the Fire Marshal letter, which\n 23 Plaintiffs improperly try to remedy by citing a link to the letter. See Opp. 8 n.3; see\n 24 also Okla. Firefighters Pension & Ret. Sys. v. Ixia, 50 F. Supp. 3d 1328, 1350 (C.D.\n 25 Cal. 2014) (\u201cPlaintiffs cannot utilize the documents to amend the complaint and\n 26 defeat defendants\u2019 motions to dismiss.\u201d). Thus, even if Statements 3, 10, and 13-15\n 27 are analyzed under falsity standards for non-opinion statements, they come up short.\n 28 Plaintiffs focus on Statement 12, that all Sable\u2019s work was \u201cfully permitted\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 4 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 10 of 19 Page ID\n #:2160\n\n 1 and approved.\u201d Opp. 9. Their basis for arguing that this was false (or, if it is an\n 2 opinion, actionable) is repeating the positions of the Water Board and the Coastal\n 3 Commission\u2014ignoring that for the latter, Sable spoke based on the County\u2019s\n 4 confirmation that \u201crepair work is authorized by the existing permits.\u201d Mot. 16\n 5 (citing Ex. 4 at 327). But even the allegedly contrary \u201cinformation Defendants\n 6 possessed at the time\u201d was disclosed to investors, so it is unclear what Plaintiffs\n 7 claim was omitted. See Ex. 8 at 446-47 (disclosing the Coastal Commission cease\n 8 and desist order); id. at 450 (disclosing the Water Board\u2019s notices of violation). See\n 9 Rubke v. Capitol Bancorp, Ltd., 551 F.3d 1156, 1163 (9th Cir. 2009) (it is \u201cpointless\n 10 and costly to compel firms to reprint information already in the public domain.\u201d).\n 11 Plaintiffs rely on inapt cases analyzing statements about compliance with\n 12 specific laws and regulations, which did not address whether statements were\n 13 opinions under the Omnicare framework. Opp. 9.5 And none addressed situations\n 14 like Sable\u2019s, where it not only assessed competing facts associated with a complex\n 15 permitting scheme but also made the bases for its opinions clear to the public.\n 16 3. No Falsity for Litigation Opinions (Stmts. 7, 15-18)\n 17 For Statements 7 and 15-18, Plaintiffs mostly paraphrase the Complaint (and\n 18 make no argument at all about Statement 6).6 Opp. 10-12. Plaintiffs cite no cases\n 19 holding that positive comments about ongoing litigation were securities fraud, and\n 20 fail to address cases where courts dismissed similar statements (including near-\n 21 identical statements that litigation was \u201cwithout merit\u201d). Mot. 14, 15 n.6.\n 22 Plaintiffs argue in conclusory fashion that if these statements are opinions, the\n 23 opinions again did not \u201c\u2018fairly align\u2019 with information Defendants possessed at the\n 24\n 5\n See, e.g., Glazer Cap. Mgmt., LP v. Magistri, 549 F.3d 736, 742 (9th Cir. 2008)\n 25 (specific allegations by SEC that company violated securities laws); In re PG&E\n 26 complianceLitig.,\n Corp. Sec. 2025 WL 2781745, at *17 (N.D. Cal. Sept. 30, 2025) (regulatory\n statements were allegedly contradicted by \u201cthousands of violations,\u201d and\n 27 6no government agencies told company that it was in compliance with the law).\n The Opposition does not address (and thus concedes) that Statements 6 and 7 are\n 28 puffery. \u201c[A]ny objection to the motion to dismiss\u201d these statements is \u201cwaived.\u201d\n Tapia v. Wells Fargo Bank, N.A., 2015 WL 4650066, at *2 (C.D. Cal. Aug. 4, 2015).\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 5 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 11 of 19 Page ID\n #:2161\n\n 1 time they made the statements\u201d under the third Omnicare prong. Opp. 12. Here too\n 2 Plaintiffs fail to \u201cadequately identify the information they assert did not align with\n 3 the defendants\u2019 representations.\u201d Petersen v. Stem, Inc., 2024 WL 4602710, at *9\n 4 (N.D. Cal. Aug. 30, 2024). If it is the court rulings themselves, they were \u201cin the\n 5 public domain,\u201d Rubke, 551 F.3d at 1163, for investors to assess.\n 6 Statements about the expected impact of the Coastal Commission litigation\n 7 rulings (Stmts. 15, 17-18) were not misleading because Sable had announced it had\n 8 already completed its repairs. Mot. 14. Plaintiffs argue that the Coastal Commission\n 9 rulings also stopped \u201congoing maintenance\u201d but fail to plead any outstanding\n 10 maintenance work or even how maintenance differs from repairs. Opp. 11. As Sable\n 11 explained in the very statement Plaintiffs challenge, the May 28 preliminary\n 12 injunction was about \u201cmaintenance and repair\u201d work, and \u201c[a]s of this morning, that\n 13 work \u2026 has been successfully completed.\u201d \u00b6 81 (emphasis added). For the opinion\n 14 that the June 3 State Waivers TRO would not impact Sable\u2019s \u201cpreparations for\n 15 restarting the flow of oil,\u201d \u00b6 81 (emphasis added), the Opposition has nothing to offer\n 16 except that the accurate statement was \u201ctoo cute by half.\u201d Opp. 11. There is nothing\n 17 \u201ccute\u201d about examining the text of a statement to determine whether Plaintiffs have\n 18 plausibly pleaded that it misled investors, and this one did not.\n 19 4. No Falsity for Hunterbrook Opinion (Stmt. 19)\n 20 Plaintiffs do not challenge that Statement 19\u2014Sable\u2019s comment to\n 21 Hunterbrook that \u201cbased upon information provided to us we believe that the alleged\n 22 recording was either AI generated or otherwise altered\u201d\u2014is a pure opinion statement\n 23 subject to the Omnicare framework. Plaintiffs\u2019 Complaint fails to plead with\n 24 particularity that (1) the speaker did not hold the opinion at the time it was offered,\n 25 (2) the statement contained an embedded false statement, or (3) the statement\n 26 omitted a material fact. Mot. 13-14 (citing Stmt. 19), 16 (citing \u00b6\u00b6 90-91). Plaintiffs\u2019\n 27 entire allegation of falsity is that \u201ccontrary to Defendants\u2019 representations, the\n 28 Hunterbrook report\u201d was, according to Plaintiffs, \u201caccurate[].\u201d \u00b6 91. This allegation\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 6 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 12 of 19 Page ID\n #:2162\n\n 1 pleads nothing about the unidentified Sable speaker\u2019s belief about the alleged\n 2 recording in the Hunterbrook report and pleads no facts to undercut the speaker\u2019s\n 3 belief that the recording was not authentic.\n 4 As with the other opinions, Plaintiffs concede in the Opposition that the\n 5 Complaint fails to plead facts to support liability under the first or second Omnicare\n 6 prongs. It instead argues the third \u201comissions\u201d prong is met because the statement\n 7 \u201cimplies that Defendants conducted an investigation\u201d into the recording when they\n 8 allegedly had not. Opp. 13. But the Complaint pleads no facts as to whether an\n 9 investigation was conducted, rendering the Opposition pure hypothesis. See\n 10 Stephens v. Maplebear Inc., 2025 WL 1359125, at *6 (N.D. Cal. May 9, 2025)\n 11 (rejecting similar omissions theory where plaintiffs have not \u201cpled much about the\n 12 investigation that Instacart executives did or did not conduct when forming those\n 13 opinions\u201d). Plaintiffs also suggest that the opinion on the recording was somehow\n 14 \u201cfalse\u201d because Sable announced days later that its Board formed a Special\n 15 Committee to investigate the Hunterbrook report\u2019s allegations. Opp. 13. But even\n 16 if Statement 19 \u201creflected facts that later proved untrue,\u201d about the recording, \u201c\u2018an\n 17 investor cannot state a claim by alleging only that an opinion was wrong.\u2019\u201d Studen\n 18 v. Funko, Inc., 2024 WL 2209686, at *15 (W.D. Wash. May 16, 2024) (\u201c[T]he words\n 19 \u2018I believe\u2019 themselves admit [] that possibility, thus precluding liability for an untrue\n 20 statement of fact.\u201d).\n 21 B. The Opposition Confirms No Scienter\n 22 Plaintiffs misstate the scienter standard and cite law that has been overruled.\n 23 It is no longer the case that falsity and scienter \u201care generally strongly inferred from\n 24 the same set of facts\u201d or that the PSLRA allows a \u201cunitary inquiry.\u201d Opp. 14 (citing\n 25 In re Daou Sys. Inc., 411 F.3d 1006, 1015 (9th Cir. 2005)); see Forescout Techs., 63\n 26 F.4th at 766 (noting that \u201cthe combined approach\u201d in Daou \u201cwas abrogated by\n 27 subsequent Supreme Court decisions\u201d). Rather, scienter must be independently\n 28 pleaded \u201cwith particularity \u2018with respect to each act or omission.\u2019\u201d Bray v. Rocket\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 7 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 13 of 19 Page ID\n #:2163\n\n 1 Lab USA, Inc., 2025 WL 3688815, at *2 (C.D. Cal. Nov. 7, 2025).\n 2 1. Plaintiffs Do Not Establish a Core Operations Inference\n 3 Because the Complaint does not allege specific facts showing scienter,\n 4 Plaintiffs pivot in the Opposition to arguing that scienter may be imputed because\n 5 the statements at issue concern Sable\u2019s \u201ccore operations.\u201d Opp. 14-16. The Court\n 6 may disregard this theory because the Complaint does not plead it. See Hershewe v.\n 7 JOYY Inc., 2021 WL 6536670, at *10 (C.D. Cal. Nov. 5, 2021) (court \u201cneed not\n 8 consider\u201d a \u201ccore operations\u201d theory first introduced in the opposition brief).\n 9 In any event, \u201cabsent some additional allegation of specific information\n 10 conveyed to management and related to the fraud or other allegations supporting\n 11 scienter, the core operations inference will generally fall short.\u201d In re NVIDIA Corp.\n 12 Sec. Litig., 768 F.3d 1046, 1063 (9th Cir. 2014) (internal quotation marks omitted).\n 13 Plaintiffs do not argue that the Complaint pleads such allegations. They argue\n 14 instead that it would be \u201cabsurd\u201d to suggest Sable\u2019s CEO and CFO lacked\n 15 knowledge of information that contradicted public statements, because the Santa\n 16 Ynez Unit was \u201cSable\u2019s only assets\u201d and \u201cdetermined the fate of the Company.\u201d\n 17 Opp. 15. Courts repeatedly reject an \u201cabsurdity\u201d theory merely because a company\u2019s\n 18 existence depends on one product or business line. See NVIDIA, 768 F.3d at 1064\n 19 (rejecting core operations despite defect in \u201cflagship product\u201d); Mihaylov v.\n 20 Tattooed Chef, Inc., 2024 WL 6901294, at *7 (C.D. Cal. Dec. 11, 2024) (rejecting\n 21 theory that company \u201conly had one business segment\u201d so \u201ceveryone would have\n 22 been aware of, or recklessly disregarded, everything that related to that\u201d segment).\n 23 The Complaint is also deficient because it \u201cfails to specify exactly what the\n 24 \u2018relevant fact\u2019 is that it would be absurd to suggest that [] management was unaware\n 25 of.\u201d Maeve Inv. Co. v. Teekay Corp., 2017 WL 5158059, at *5 (W.D. Wash. Nov.\n 26 7, 2017). Plaintiffs argue only the Individual Defendants must have known about\n 27 \u201crepair, maintenance, and regulatory hurdles of the pipelines\u201d and \u201cprogress and\n 28 setbacks in obtaining regulatory approvals\u201d in the six-month Class Period. Opp. 15,\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 8 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 14 of 19 Page ID\n #:2164\n\n 1 16. The Ninth Circuit rejects allegations of imputed knowledge of far more specific\n 2 \u201crelevant facts.\u201d See Webb v. Solarcity Corp., 884 F.3d 844, 857 (9th Cir. 2018) (no\n 3 \u201calleged facts supporting the inference\u201d that an accounting error \u201cwas so dramatic\n 4 that it would be absurd\u201d to conclude Defendants \u201cdid not know that something was\n 5 wrong\u201d). Plaintiffs\u2019 citations show extreme, specific \u201crelevant facts\u201d not present\n 6 here. Opp. 15-16 (citing cases alleging, e.g., one of company\u2019s three revenue\n 7 streams collapsed; thousands of regulatory violations that could bankrupt company;\n 8 important agreement CEO was briefed on, with no core operations). See also Sneed\n 9 v. Talphera, Inc., 147 F.4th 1123, 1134 (9th Cir. 2025) (core operations applies only\n 10 where falsity of the challenged statements \u201cis patently obvious\u201d).\n 11 This Court should reject the \u201cexceedingly rare\u201d core operations theory, South\n 12 Ferry LP v. Killinger, 542 F.3d 776, 786 n.3 (9th Cir. 2008), as it has done in the\n 13 past, see Anshen v. Facebook, 2017 WL 5635021, at *3 (C.D. Cal. Oct. 4, 2017).\n 14 2. Plaintiffs Do Not Plead Knowledge of Contrary Information\n 15 Scienter is sometimes pleaded by specific allegations of contemporaneous\n 16 reports or data that contradict public statements and that Defendants had \u201caccess\u201d\n 17 to. Opp. 16-17 (citing cases). The Court may easily disregard this argument here,\n 18 because Plaintiffs do not allege what reports or data existed, let alone that any\n 19 Defendant had access to them. See also In re VeriFone Holdings, Inc. Sec. Litig.,\n 20 704 F.3d 694, 708-709 (9th Cir. 2012) (specific facts that executives made\n 21 \u201caccounting adjustments\u201d); N.M. State Inv. Council v. Ernst & Young LLP, 641 F.3d\n 22 1089, 1095-96 (9th Cir. 2011) (auditor\u2019s knowledge of backdated option). Plaintiffs\n 23 do not dispute that an executive\u2019s title or involvement in operations does not support\n 24 scienter, or that the Complaint lacks scienter allegations for Patrinely. Mot. 18.7\n 25 3. Plaintiffs Do Not Plead Particularized Motive\n 26 A complaint cannot rely on \u201cmere motive and opportunity\u201d but Plaintiffs\n 27\n 7\n 28 Plaintiffs also abandon the theory that the Hunterbrook Short Report supports\n scienter, and have therefore waived that argument.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 9 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 15 of 19 Page ID\n #:2165\n\n 1 boldly state \u201cDefendants Had Motive and Opportunity to Commit Fraud.\u201d Opp. 17.\n 2 Plaintiffs hypothesize an exception to well-established Ninth Circuit law that\n 3 conducting an equity offering does not show scienter, because they argue that Sable\n 4 was in \u201cexistential cris[i]s.\u201d Opp. 18. There is no such exception. Countless cases\n 5 rejecting theories of scienter based on \u201croutine corporate objectives\u201d also note the\n 6 importance of a company\u2019s stock offering to its ongoing existence. See Webb, 884\n 7 F.3d at 854 (\u201csuccessful IPO\u201d was allegedly needed \u201cto generate badly needed\n 8 cash\u201d); In re Dermtech, Inc. Sec. Litig., 2024 WL 4941026, at *12 (S.D. Cal. Dec.\n 9 2, 2024) (offering was \u201ccritical to \u2018ke[ep] the lights on\u2019\u201d and \u201cavoid bankruptcy\u201d).\n 10 Plaintiffs\u2019 citations are not to the contrary. In In re Semtech Corp., the court\n 11 agreed that an alleged desire to conduct a stock offering to solve a debt problem that\n 12 had become an \u201cexistential threat\u201d would not \u201cwithout more\u201d show a strong\n 13 inference of scienter. 2025 WL 2884810, at *10 (C.D. Cal. Oct. 7, 2025). The court\n 14 found scienter pleaded only through additional facts that a director suspiciously\n 15 resigned just before, and the company changed its public statements soon after, the\n 16 offering. Id. In Nguyen v. Radient Pharms. Corp., 2011 WL 13141630, at *6 (C.D.\n 17 Cal. Oct. 26, 2011) (which predated Webb), the plaintiffs pleaded that the company\n 18 was \u201cin litigation with investors for either being in default or breach of its financing\n 19 obligations\u201d and announced a clinical study that did not exist days before the\n 20 company completed its \u201clargest offering ever.\u201d Id. at *1-2, *6.\n 21 As Plaintiffs do not dispute, \u201cthe lack of a plausible motive certainly makes it\n 22 much less likely that a plaintiff can show a strong inference of scienter.\u201d Prodanova\n 23 v. H.C. Wainwright & Co., 993 F.3d 1097, 1108 (9th Cir. 2021).\n 24 4. The More Compelling Inference is Good Faith\n 25 Plaintiffs argue that \u201cDefendants fail to offer any competing non-fraudulent\n 26 inference\u201d and disregarded the Court\u2019s duty to conduct a \u201cholistic\u201d review, Opp. 14,\n 27 19. Neither is true. See Mot. 19-20.\n 28 Plaintiffs posit that the \u201cmore plausible inference is that Sable repeatedly\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 10 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 16 of 19 Page ID\n #:2166\n\n 1 misled investors and state regulators in a desperate attempt to keep the Company\n 2 afloat until it could be saved by the federal government,\u201d Opp. 21, as if it is plausible\n 3 that Sable knew how the federal government would later act.8 See Habelt v. iRhythm\n 4 Techs., Inc., 2022 WL 971580, at *16-18 (N.D. Cal. Mar. 31, 2022) (rejecting\n 5 \u201cguiding theory of the entire complaint\u201d that \u201cDefendants had knowledge that their\n 6 efforts\u201d in an \u201cunpredictable\u201d regulatory process were \u201cdestined to fail\u201d); see also\n 7 Anshen, 2017 WL 5635021, at *3 (rejecting that \u201cFacebook hires smart people so a\n 8 mistake of this magnitude can be explained only by intentional fraud\u201d). Plaintiffs\n 9 cannot infer fraud based on the fact that Sable at times disagreed with its litigation\n 10 adversaries, defended its positions, and offered the public its opinions on the\n 11 expected impact of court rulings. Opp. 20-21.\n 12 \u201c[A] comprehensive perspective \u2026 cannot transform a series of inadequate\n 13 allegations into a viable inference of scienter.\u201d Zucco Partners, LLC v. Digimarc\n 14 Corp., 552 F.3d 981, 1008 (9th Cir. 2009).\n 15 C. The Opposition Confirms No Loss Causation\n 16 The Opposition does not try to defend the Complaint\u2019s wholesale failure to\n 17 map the connections between the nineteen alleged misstatements and six corrective\n 18 disclosures. Nor does it address the absence of pleaded facts that certain disclosures\n 19 were even publicized during the trading day for which the Complaint asserts a loss.\n 20 Instead of responding to arguments why each corrective disclosure fails to meet the\n 21 pleading standards, the Opposition once again merely repeats quotes from the\n 22 Complaint. Opp. 22-23. Rule 9(b) demands more than res ipsa loquitur.\n 23 May 28 Letter: While it is true that a corrective disclosure may sometimes\n 24 originate from a \u201cknowledgeable third part[y]\u201d like a \u201creporter\u201d or \u201cwhistleblower,\u201d\n 25\n 8\n 26 Plaintiffs argue that Sable \u201cmisled the Water Board\u201d about \u201cwaste discharges,\u201d\n Opp. 18-21; \u00b6\u00b6 51-56, but the \u201cfacts alleged must support an inference of an intent\n 27 to defraud the plaintiffs rather than some other group.\u201d Rok v. Identiv, Inc., 2017 WL\n 35496, at *11 (N.D. Cal. Jan. 7, 2017). Moreover, the Complaint pleads that Sable\n 28 acknowledged to the Water Board certain incorrect determinations, \u00b6 56, a perfect\n example of the non-fraudulent \u201cengaging with regulators\u201d discussed in the Motion.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 11 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 17 of 19 Page ID\n #:2167\n\n 1 Opp. 22, Plaintiffs do no work to explain how the criticism of a politician meets the\n 2 legal standards for loss causation. See, e.g., In re Herbalife, Ltd. Sec. Litig., 2015\n 3 WL 12732428, at *7 (C.D. Cal. Mar. 27, 2015) (senator \u201ccommunicating concerns\n 4 about Herbalife\u2019s practices\u201d did not \u201cconstitute a corrective disclosure\u201d).\n 5 May 28, June 3, October 15 Rulings: Plaintiffs do not explain how temporary,\n 6 forward-looking orders in litigation involving complex administrative issues made\n 7 \u201cthe truth bec[o]me known\u201d about more than a dozen alleged misstatements. In re\n 8 BofI Holding, Inc. Sec. Litig., 977 F.3d 781, 790 (9th Cir. 2020).\n 9 November 4 Vote: Recognizing that the Supervisors\u2019 vote does not qualify\n 10 as a traditional disclosure, Plaintiffs instead argue that it \u201cwas a materialization of\n 11 the risk of Sable\u2019s repeated dishonest interactions with regulators.\u201d Opp. 23-24.\n 12 This theory requires pleading that Defendants concealed risks\u2014not that disclosed\n 13 risks came to pass. See Yaron v. Intersect ENT, Inc., 2020 WL 6750568, at *8 (N.D.\n 14 Cal. June 19, 2020). The Complaint does not allege how Sable\u2019s regulatory\n 15 \u201cstrategy\u201d\u2014which played out in public fora\u2014was somehow concealed. Sable also\n 16 repeatedly disclosed that it depended on \u201cnumerous other governmental authorities\u201d\n 17 approval and that it might \u201cbe unable to obtain required permits.\u201d Ex. 8 at 457, 459.\n 18 That a disclosed risk came to pass is not loss causation.\n 19 October 31 and November 3 News: Plaintiffs ignore that the announcement\n 20 of an investigation, without more, cannot serve as a corrective disclosure in the Ninth\n 21 Circuit. See Mot. 23-24. They argue that a short-seller report is not barred from\n 22 being a corrective disclosure, but disregard Ninth Circuit authorities rejecting loss\n 23 causation allegations based on reports by self-interested short-sellers that are not\n 24 plausibly perceived by the market as \u201crevealing the falsity of [] prior misstatements.\u201d\n 25 In re BofI, 977 F.3d at 797. Plaintiffs do not otherwise explain how the alleged\n 26 disclosure of Sable\u2019s alleged new equity raising goals corrected any prior statements.\n 27 III. CONCLUSION\n 28 The Complaint should be dismissed with prejudice.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 12 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 18 of 19 Page ID\n #:2168\n\n 1 Dated: January 26, 2026 Respectfully submitted,\n 2 LATHAM & WATKINS LLP\n 3 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 4 650 Town Center Drive, 20th Floor\n Costa Mesa, CA 92626\n 5 Telephone: (714) 540-1235\n 6 Email: kristin.murphy@lw.com\n\n 7 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 8 San Diego, CA 92130\n Telephone: (858) 523-5400\n 9 Email: colleen.smith@lw.com\n 10 Counsel for Defendants\n Sable Offshore Corp., James C.\n 11 Flores, and Gregory D. Patrinely\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 13 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 84 Filed 01/26/26 Page 19 of 19 Page ID\n #:2169\n\n 1 CERTIFICATE OF COMPLIANCE\n 2 The undersigned counsel of record for Defendants Sable Offshore Corp.,\n 3 James C. Flores, and Gregory D. Patrinely certifies that this brief contains 12 pages,\n 4 which:\n 5 __ complies with the word limit of L.R. 11-6.1.\n 6 X complies with the page limit set by court order dated August 4, 2025 (Dkt.\n 7 No. 10).\n 8\n 9 Dated: January 26, 2026 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 10 650 Town Center Drive, 20th Floor\n 11 Costa Mesa, CA 92626\n Telephone: (714) 540-1235\n 12 Email: kristin.murphy@lw.com\n 13 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 14 San Diego, CA 92130\n Telephone: (858) 523-5400\n 15 Email: colleen.smith@lw.com\n 16 Counsel for Defendants\n 17 Sable Offshore Corp., James C.\n Flores, and Gregory D. Patrinely\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 14 DEFENDANTS\u2019 REPLY IN SUPPORT OF MOTION\n TO DISMISS SECOND AMENDED COMPLAINT\n\f","ocr_status":2,"date_upload":"2026-05-15T02:39:08.521986-07:00","document_number":"84","attachment_number":null,"pacer_doc_id":"031046840959","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Reply (Motion related)","acms_document_guid":""}],"date_created":"2026-01-26T20:33:03.481611-08:00","date_modified":"2026-02-10T08:16:37.083486-08:00","date_filed":"2026-01-26","time_filed":"20:29:54","entry_number":84,"recap_sequence_number":"2026-01-26.001","pacer_sequence_number":302,"description":"REPLY in Support of NOTICE OF MOTION AND MOTION to Dismiss Case (Second Amended Class Action Complaint) 81 filed by Defendants James C. Flores, Gregory D. Patrinely, Sable Offshore Corp.. (Murphy, Kristin) (Entered: 01/26/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/450103323/","id":450103323,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/464913452/","id":464913452,"tags":[],"absolute_url":"/docket/70941407/83/tracy-johnson-v-sable-offshore-corp/","date_created":"2026-01-13T00:04:03.465719-08:00","date_modified":"2026-02-10T08:16:37.053913-08:00","sha1":"a34452d0bbba664d970f752672442b430057cc21","page_count":33,"file_size":394269,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.83.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.83.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 1 of 33 Page ID\n #:2118\n\n\n\n 1\n Laurence M. Rosen, Esq. (SBN 219683)\n 2 THE ROSEN LAW FIRM, P.A.\n\n 3 Email: lrosen@rosenlegal.com\n 355 South Grand Avenue, Suite 2450\n 4 Los Angeles, CA 90071\n\n 5 Telephone: (213) 785-2610\n\n 6 Counsel for Lead Plaintiff and the Class\n\n 7\n\n 8 [Additional Counsel on Signature Page]\n 9\n UNITED STATES DISTRICT COURT\n10 CENTRAL DISTRICT OF CALIFORNIA\n11\n TRACY JOHNSON, Individually and On Case No: 2:25-cv-06869-SVW-PVC\n12 Behalf of All Others Similarly Situated,\n13 CLASS ACTION\n Plaintiff,\n14\n PLAINTIFFS\u2019 MEMORANDUM\n15 v. OF LAW IN OPPOSITION TO\n DEFENDANTS\u2019 MOTION TO\n16\n SABLE OFFSHORE CORP., JAMES C. DISMISS SECOND AMENDED\n17 FLORES, and GREGORY D. CLASS ACTION COMPLAINT\n PATRINELY,\n18\n JUDGE: Hon. Stephen V. Wilson\n19 Defendants. DATE: February 9, 2026\n TIME: 1:30 p.m.\n20\n\n21\n\n22\n\n23\n\n24\n\n25\n\n26\n\n27\n\n28\n\n\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 2 of 33 Page ID\n #:2119\n\n\n\n 1 TABLE OF CONTENTS\n 2\n I. INTRODUCTION..............................................................................................................1\n 3 II. FACTUAL BACKGROUND ............................................................................................1\n 4 A. Sable\u2019s Business......................................................................................................1\n 5 B. Sable\u2019s Immense Regulatory Hurdles ..................................................................2\n 6 III. ARGUMENT ......................................................................................................................3\n 7 A. The SAC Adequately Pleads That Defendants Made Material\n 8 Misrepresentations .................................................................................................3\n 9 1. The May 19 Press Release and May 22 Prospectus Misled\n\n10 Investors ......................................................................................................4\n\n11 2. Defendants Repeatedly Misled Investors About Sable\u2019s Repair\n\n12 Work and Its Permits to Conduct Such Work ........................................8\n\n13 3. Defendants Misled Investors By Downplaying the Impact of\n\n14 Sable\u2019s Legal and Regulatory Problems ................................................10\n 4. Defendants Misled Investors About Hunterbrook................................12\n15\n B. Plaintiffs Adequately Allege Scienter .................................................................14\n16\n 1. Core Operations Establishes Strong Inference of Scienter ..................14\n17\n 2. Defendants Knew Or Had Access To Contrary Information ..............16\n18\n 3. Defendants Had Motive and Opportunity to Commit Fraud ..............17\n19\n a. Defendants Inflated Stock Price Before Secondary\n20\n Offerings .......................................................................................17\n21\n 4. The Inference of Scienter Is At Least As Compelling as\n22\n Defendants\u2019 Suggested Inference............................................................19\n23\n C. Plaintiffs Adequately Allege Loss Causation.....................................................21\n24\n D. Plaintiffs Adequately Allege Control Person Liability .....................................24\n25\n IV. CONCLUSION ................................................................................................................24\n26\n\n27\n\n28\n\n -i-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 3 of 33 Page ID\n #:2120\n\n\n\n 1 TABLE OF AUTHORITIES\n Page(s)\n 2\n\n 3 Cases\n\n 4 AMI - Gov't Emps. Provident Fund Mgmt. Co. Ltd. v. Alphabet Inc.,\n 2025 WL 899959 (N.D. Cal. Mar. 24, 2025) ........................................................ 15\n 5\n\n 6 Ashcroft v. Iqbal,\n 556 U.S. 662 (2009) ................................................................................................ 3\n 7\n\n 8 Axonic Cap. LLC v. Gateway One Lending & Fin.,\n 2019 WL 4138024 (C.D. Cal. May 22, 2019)....................................................... 20\n 9\n\n10 Azar v. Yelp, Inc.,\n\n11\n 2018 WL 6182756 (N.D. Cal. Nov. 27, 2018) ...................................................... 16\n\n12 Berson v. Applied Signal Tech., Inc.,\n\n13\n 527 F.3d 982 (9th Cir. 2008) ....................................................................... 7, 16, 17\n\n14 Blake v. Canoo Inc.,\n\n15\n 2025 WL 2992263 (C.D. Cal. Oct. 22, 2025) ................................................. 15, 16\n\n16 Dura Pharm., Inc. v. Broudo,\n\n17\n 544 U.S. 336 (2005) .......................................................................................... 4, 22\n\n18 Glazer Cap. Mgmt., L.P. v. Forescout Techs., Inc.,\n\n19 63 F.4th 747 (9th Cir. 2023) ............................................................................ 10, 12\n\n20 Glazer Cap. Mgmt., LP v. Magistri,\n\n21 549 F.3d 736 (9th Cir. 2008) ................................................................................... 9\n\n22 Gompper v. VISX, Inc.,\n\n23 298 F.3d 893 (9th Cir. 2002) ................................................................................... 8\n\n24 In re Amgen Sec. Litig.,\n\n25 2014 WL 12585809 (C.D. Cal. Aug. 4, 2014) ...................................................... 22\n\n26 In re BofI Holding, Inc. Sec. Litig.,\n\n27 977 F.3d 781 (9th Cir. 2020) ........................................................................... 22, 23\n\n28\n\n - ii -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 4 of 33 Page ID\n #:2121\n\n\n\n 1\n In re BofI Holding, Inc. Sec. Litig.,\n 2017 WL 2257980 (S.D. Cal. May 23, 2017) ....................................................... 25\n 2\n\n 3 In re Convergent Techs. Sec. Litig.,\n 948 F.2d 507 (9th Cir. 1991) ................................................................................... 6\n 4\n\n 5 In re Daou Sys., Inc.,\n 411 F.3d 1015 (9th Cir. 2005) ............................................................................... 14\n 6\n\n 7 In re Dermtech, Inc. Sec. Litig.,\n 2025 WL 1618193 (S.D. Cal. June 5, 2025) ........................................................... 6\n 8\n 9 In re Genius Brands Int'l, Inc. Sec. Litig.,\n 97 F.4th 1171 (9th Cir. 2024) ................................................................................ 24\n10\n\n11 In re Gilead Scis. Sec. Litig.,\n 536 F.3d 1049 (9th Cir. 2008) ........................................................................... 3, 22\n12\n\n13 In re Montage Tech. Grp. Ltd. Sec. Litig.,\n 78 F. Supp. 3d 1215 (N.D. Cal. 2015)................................................................... 16\n14\n\n15 In re PG&E Corp. Sec. Litig.,\n 2025 WL 2781745 (N.D. Cal. Sept. 30, 2025)................................................ 10, 16\n16\n\n17 In re Rigel Pharms., Inc. Sec. Litig.,\n 697 F.3d 869 (9th Cir. 2012) ................................................................................. 19\n18\n\n19 In re Semtech Corp.,\n 2025 WL 2884810 (C.D. Cal. Oct. 7, 2025) ......................................................... 18\n20\n\n21 In re VeriFone Holdings, Inc. Sec. Litig.,\n 704 F.3d 694 (9th Cir. 2012) ........................................................................... 15, 20\n22\n\n23 In re WageWorks, Inc., Sec. Litig.,\n 2020 WL 2896547 (N.D. Cal. June 1, 2020) ........................................................ 24\n24\n\n25 Khoja v. Orexigen Therapeutics, Inc.,\n 899 F.3d 988 (9th Cir. 2018) ................................................................................... 3\n26\n\n27 Lambert v. Baker Tilly Hong Kong Ltd.,\n 2016 WL 6272465 (C.D. Cal. May 23, 2016)....................................................... 22\n28\n\n - iii -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 5 of 33 Page ID\n #:2122\n\n\n\n 1\n Lloyd v. CVB Fin. Corp.,\n 811 F.3d 1200 (9th Cir. 2016) ............................................................................... 22\n 2\n\n 3 Lopez v. Smith,\n 203 F.3d 1122 (9th Cir. 2000) ............................................................................... 25\n 4\n\n 5 Matrixx Initiatives, Inc. v. Siracusano,\n 563 U.S. 27 (2011) .................................................................................................. 4\n 6\n\n 7 New Mexico State Inv. Council v. Ernst & Young LLP,\n 641 F.3d 1089 (9th Cir. 2011) ............................................................................... 20\n 8\n 9 Nguyen v. Radient Pharms. Corp.,\n 2011 WL 13141630 (C.D. Cal. Oct. 26, 2011) ..................................................... 19\n10\n\n11 Nursing Home Pension Fund, Loc. 144 v. Oracle Corp.,\n 380 F.3d 1226 (9th Cir. 2004) ............................................................................... 17\n12\n\n13 Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund,\n 575 U.S. 175 (2015) .................................................................................... 4, 10, 14\n14\n\n15 Osher v. JNI Corp.,\n 183 F. App\u2019x 604 (9th Cir. 2006) .......................................................................... 25\n16\n\n17 Prodanova v. H.C. Wainwright & Co., LLC,\n 993 F.3d 1097 (9th Cir. 2021) ............................................................................... 15\n18\n\n19 Reese v. Malone,\n 747 F.3d 557 (9th Cir. 2014) ............................................................................. 9, 17\n20\n\n21 Roberti v. OSI Sys., Inc.,\n 2015 WL 1985562 (C.D. Cal. Feb. 27, 2015) ....................................................... 17\n22\n\n23 S. Ferry LP, No. 2 v. Killinger,\n 542 F.3d 776 (9th Cir. 2008) ................................................................................. 20\n24\n\n25 S.E.C. v. Platforms Wireless Int\u2019l Corp.,\n 559 F. Supp. 2d 1091 (S.D. Cal. 2008) ................................................................. 17\n26\n\n27 Schueneman v. Arena Pharms., Inc.,\n 840 F.3d 698 (9th Cir. 2016) ................................................................................. 14\n28\n\n - iv -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 6 of 33 Page ID\n #:2123\n\n\n\n 1\n Sneed v. Talphera, Inc.,\n 147 F.4th 1123 (9th Cir. 2025) ................................................................................ 7\n 2\n\n 3 Starr v. Baca,\n 652 F.3d 1202 (9th Cir. 2011) ................................................................................. 7\n 4\n\n 5 Tellabs, Inc. v. Makor Issues & Rights, Ltd.,\n 551 U.S. 308 (2007) .................................................................................... 3, 14, 20\n 6\n\n 7 Thant v. Rain Oncology Inc.,\n 2025 WL 588994 (N.D. Cal. Feb. 24, 2025) ....................................................... 7, 8\n 8\n 9 Vess v. Ciba-Geigy Corp. USA,\n 317 F.3d 1097 (9th Cir. 2003) ................................................................................. 4\n10\n\n11 Webb v. Solarcity Corp.,\n 884 F.3d 844 (9th Cir. 2018) ................................................................................. 18\n12\n Statutes\n13\n\n14 15 U.S.C. \u00a7 78u-4(b)(1)(B) ......................................................................................... 4\n\n15\n\n16\n\n17\n\n18\n\n19\n\n20\n\n21\n\n22\n\n23\n\n24\n\n25\n\n26\n\n27\n\n28\n\n -v-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 7 of 33 Page ID\n #:2124\n\n\n\n 1 I. INTRODUCTION\n 2 Defendants Sable Offshore Corp. (\u201cSable\u201d or the \u201cCompany\u201d), CEO James\n 3 Flores, and CFO Gregory Patrinely misled investors throughout the Class Period\n\n 4 (May 19, 2025 to November 4, 2025) about Sable\u2019s progress in restarting commercial\n\n 5 oil production off the coast of Santa Barbara ten years after a disastrous oil spill.\n\n 6 Defendants began the Class Period by creating the false impression that it restarted\n\n 7 oil production and would soon begin selling oil, but it was just a ruse to inflate Sable\u2019s\n\n 8 stock price for a secondary offering three days later. Over the following five months,\n 9 Defendants continued to insist that oil sales were just around the corner, state and\n\n10 local regulators could be safely ignored, Sable had completed necessary repairs and\n\n11 obtained necessary permits, and adverse legal decisions would have no effect on the\n\n12 resumption of oil sales.\n\n13 Through a series of corrective disclosures, investors learned the truth: Sable\n14 had not finished its repairs, had been violating state laws while ignoring regulators,\n\n15 and the adverse court decisions precluded oil sales. To top it off, CEO Flores told a\n\n16 select group of investors that the Company needed to raise hundreds of millions of\n\n17 dollars by the end of the year, the Company falsely claimed a leaked recording of the\n\n18 call was fake, and Defendants finally came clean with another equity raise.\n\n19 Plaintiffs adequately allege each element of securities fraud, and the Court\n20 should deny Defendants\u2019 Motion (ECF 81, the \u201cMotion\u201d).\n\n21 II. FACTUAL BACKGROUND\n22 A. Sable\u2019s Business\n23 On May 19, 2015, an underground oil pipeline in Santa Barbara County\n24 ruptured, spilling over 120,000 gallons of crude oil. \u00b618.1 The oil spill was\n\n25 California\u2019s worst since the 1960s. After ExxonMobil spent nearly a decade trying to\n\n26\n\n27 1 Unless otherwise stated, all paragraph (\u201c\u00b6\u201d) references are to Plaintiffs\u2019 Second\n28 Amended Class Action Complaint for Violation of the Federal Securities Laws\n (\u201cSAC\u201d), and all internal citations and quotations are omitted.\n -1-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 8 of 33 Page ID\n #:2125\n\n\n\n 1 obtain the permits to restart production, it sold the offshore oil platforms and the\n\n 2 onshore processing facility and onshore and offshore pipelines (the \u201cSYU Assets\u201d)\n\n 3 to Sable. \u00b6\u00b619-23. Sable borrowed the vast majority of the purchase price from\n\n 4 Exxon, and Exxon could retake ownership if Sable failed to restart production by\n\n 5 2026. \u00b6\u00b624-25.\n\n 6 B. Sable\u2019s Immense Regulatory Hurdles\n 7 Sable faced significant operational and federal, state, and local regulatory\n 8 hurdles before it could restart oil production.\n 9 In February 2025, the Santa Barbara County Board of Supervisors (\u201cCounty\n10 Board\u201d) voted 2-2 to deny the transfer of pipeline operation permits from Exxon to\n\n11 Sable. \u00b6\u00b628-29. Sable sued in federal court, and the Board eventually denied the\n\n12 transfer again in November 2025. \u00b6\u00b630-32.\n\n13 The California Coastal Commission issued a Notices of Violation against\n14 Sable in September 2024 and February 2025, finding that Sable was engaging in\n\n15 construction activities without a permit in violation of the California Coastal Act and\n\n16 Santa Barbara County\u2019s Local Coastal Program. \u00b6\u00b633-34. After being ignored, the\n\n17 Coastal Commission issued a cease a desist order and eventually successfully sued to\n\n18 enforce the order. \u00b6\u00b635-40.\n\n19 Sable also required approval from the California Office of State Fire Marshal\n20 before restarting use of the onshore pipelines. \u00b641. An April 2025 lawsuit by\n\n21 environmentalists led to an injunction prohibiting Sable from restarting use of the\n\n22 onshore pipelines. \u00b6\u00b644-47. In October 2025, the Fire Marshal found that Sable had\n\n23 yet to complete the required repairs for restart. \u00b649.\n\n24 On October 3, 2025, the California Regional Water Quality Control Board (the\n25 \u201cWater Board\u201d) filed a civil complaint against Sable alleging \u201cnumerous violations\n\n26 of its obligation to notify the Regional Water Board of proposed waste discharges\n\n27 and obtain the appropriate regulatory requirements, thereby preventing the Regional\n\n28\n -2-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 9 of 33 Page ID\n #:2126\n\n\n\n 1 Water Board from assuring best management practices are employed to avoid,\n\n 2 minimize and mitigate impacts to water quality.\u201d \u00b6\u00b651-55.\n\n 3 III. ARGUMENT\n 4 Courts assess Rule 12(b)(6) motions by considering the complaint 2 in its\n 5 entirety, \u201caccept[ing] all factual allegations . . . as true\u201d and construing them in the\n\n 6 light most favorable to plaintiff. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551\n\n 7 U.S. 308, 322 (2007). A complaint should not be dismissed if it contains a \u201csufficient\n\n 8 factual matter [that], accepted as true, \u2018state[s] a claim to relief that is plausible on its\n 9 face.\u2019\u201d See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Courts must be mindful that\n\n10 \u201ca district court ruling on a motion to dismiss is not sitting as a trier of fact\u201d and \u201c[a]\n\n11 well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof\n\n12 of those facts is improbable, and that a recovery is very remote and unlikely.\u201d In re\n\n13 Gilead Scis. Sec. Litig., 536 F.3d 1049, 1057 (9th Cir. 2008).\n\n14 A plaintiff asserting claims asserted under Section 10(b) of the Securities\n15 Exchange Act must plead six elements: a misrepresentation or omission of material\n\n16 fact, scienter, a connection with the purchase of sale of a security, reliance, economic\n\n17 loss, and loss causation. Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 341\u201342 (2005).\n\n18 Defendants challenge only falsity, scienter, and loss causation.\n\n19\n A. The SAC Adequately Pleads That Defendants Made Material\n Misrepresentations\n20\n To plead falsity under the PSLRA, a plaintiff must \u201cspecify each statement [or\n21\n omission] alleged to have been misleading [and] the reason or reasons why the\n22\n statement [or omission] is misleading.\u201d 15 U.S.C. \u00a7 78u-4(b)(1)(B). The allegations\n23\n\n24 Defendants ask that the Court take judicial notice of certain documents. ECF 82. To\n 2\n\n the extent the Court takes notice of these documents, it may only take notice of the\n25 fact that statements in those documents were made, and any attempt by Defendants\n\n26 to use these exhibits to defeat Plaintiffs\u2019 adequately pled claims is improper and\n highly discouraged by the Ninth Circuit. See Khoja v. Orexigen Therapeutics, Inc.,\n27 899 F.3d 988, 998 (9th Cir. 2018) (recognizing a \u201cconcerning pattern in securities\n\n28 cases\u201d by defendants to improperly exploit judicial notice \u201cto defeat what would\n otherwise constitute adequately stated claims at the pleading stage\u201d).\n -3-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 10 of 33 Page ID\n #:2127\n\n\n\n 1 must identify who made the allegedly misleading statements and what statements\n\n 2 were misleading, state where and when the statements were made, and explain why\n\n 3 the statements were misleading. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097,\n\n 4 1106 (9th Cir. 2003).\n\n 5 \u201cDisclosure [of material information] is required\u2026 when necessary \u2018to\n 6 make\u2026 statements made, in the light of the circumstances under which they were\n\n 7 made, not misleading.\u2019\u201d Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 44\n\n 8 (2011). \u201c[L]iteral accuracy is not enough: An issuer must as well desist from\n 9 misleading investors by saying one thing and holding back another.\u201d Omnicare, Inc.\n\n10 v. Laborers Dist. Council Const. Indus. Pension Fund, 575 U.S. 175, 192 (2015).\n\n11 The SAC meets these criteria and adequately pleads falsity.\n12 1. The May 19 Press Release and May 22 Prospectus Misled\n Investors\n13\n On May 19, 2025 \u2013 the ten year anniversary of the disastrous 2015 Refugio Oil\n14\n Spill \u2013 Sable announced that the restart of oil production and the imminent\n15\n resumption of oil sales. \u00b658. In a press release entitled \u201cSable Offshore Corp. Reports\n16\n Restart of Oil Production at the Santa Ynez Unit and Anticipated Oil Sales from the\n17\n Las Flores Pipeline System in July 2025\u201d, Sable triumphantly declared that \u201cas of\n18\n May 15, 2025, [Sable] has restarted production [] and has begun flowing oil\n19\n production to Las Flores Canyon.\u201d \u00b6\u00b658-59. Importantly, the press release stated that\n20\n \u201cSable has now completed its anomaly repair program on the Onshore Pipeline as\n21\n specified by the Consent Decree\u201d and that \u201cSable expects to fill the ~540,000 barrels\n22\n of crude oil storage capacity at LFC by the middle of June 2025 and subsequently\n23\n recommence oil sales in July 2025.\u201d \u00b6\u00b659-60.\n24\n This announcement materially misled investors by creating the false\n25\n impression that Sable was ramping up oil production and would soon begin to sell\n26\n oil. \u00b663. Unbeknownst to investors, the \u201cflowing oil production\u201d was nothing more\n27\n than a minor, mandatory test. \u00b672. Moreover, Sable was not about to recommence oil\n28\n -4-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 11 of 33 Page ID\n #:2128\n\n\n\n 1 sales: it had not finished its repair work or testing, it had not received the permits to\n\n 2 perform the work, and it had not received the required approvals from necessary\n\n 3 regulators. \u00b663. Indeed, regulators had repeatedly informed Sable that it lacked the\n\n 4 necessary permits to complete its repairs or restart production. \u00b6\u00b633-38; 51-54. The\n\n 5 Coastal Commission issued Notices of Violation against Sable in September 2024\n\n 6 and February 2025 detailing Sable\u2019s illegal and unpermitted construction activities\n\n 7 on the pipelines. \u00b6\u00b633-34. After Sable refused to cooperate, the Coastal Commission\n\n 8 issued a cease and desist order requiring Sable to halt all relevant repair and\n 9 maintenance work. \u00b6\u00b637. Sable also had no ability to obtain the necessary Final\n\n10 Development Permits, which the County Board had refused to transfer from Exxon\n\n11 to Sable in February 2025. \u00b6\u00b6 28-29.\n\n12 Just as Defendants had planned, the misleading press release inflated Sable\u2019s\n13 stock price by over 14 percent, closing at $33.02 on May 19, 2025. \u00b664. Sable quickly\n\n14 shifted to the second step of its plan: conducting a secondary with an inflated share\n\n15 price to raise about $250 million. \u00b666; see also ECF 81-10 at 2. The May 22, 2025\n\n16 Prospectus for Sable\u2019s secondary offering repeated the same misleading statements\n\n17 that Sable made in the May 19 press release. \u00b6\u00b667-68.\n\n18 On May 23, 2025, Eleni Kounalakis, the Lieutenant Governor of California\n19 and chair of the California State Lands Commission, wrote a letter (the \u201cMay 23\n\n20 Letter\u201d) to Sable\u2019s Vice President of Environmental & Government Affairs, Steve\n\n21 Rusch stating that Sable\u2019s press release \u201cmischaracterize[d] the nature of recent\n\n22 activities, causing significant public confusion and raising questions regarding\n\n23 Sable\u2019s intentions.\u201d \u00b6\u00b670-72. Lt. Gov. Kounalakis continued, explaining that Sable\u2019s\n\n24 press release \u201calso implies that Sable has restarted operations at the Santa Ynez Unit\u201d\n\n25 despite the fact that \u201cthe limited volume oil flows are the result of well-testing\n\n26 procedures required by the Bureau of Safety and Environmental Enforcement prior\n\n27 to restart and \u201cdo not constitute a resumption of commercial production or a full\n\n28 restart of the SYU.\u201d \u00b672. Importantly, Lt. Gov Kounalakis concluded that\n -5-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 12 of 33 Page ID\n #:2129\n\n\n\n 1 \u201c[c]haracterizing testing activities as a restart of operations is not only misleading\n\n 2 but also highly inappropriate \u2013 particularly given that Sable has not obtained the\n\n 3 necessary regulatory approvals to fully resume operations at SYU.\u201d Id. (emphasis\n\n 4 added).\n\n 5 The Motion asserts that the challenged statements in the May 19 press release\n 6 and May 22 Prospectus were not misleading because Sable did, in fact, conduct a\n\n 7 well test on May 15, 2025. Motion at 9-10. But even if Defendants\u2019 statements were\n\n 8 literally true, they are still actionable because they created a false impression. See,\n 9 e.g., In re Dermtech, Inc. Sec. Litig., 2025 WL 1618193, at *4 (S.D. Cal. June 5,\n\n10 2025) (\u201c[A]n issuer\u2019s public statements cannot be analyzed in complete isolation.\n\n11 Some statements, although literally accurate, can become, through their context and\n\n12 manner of presentation, devices which mislead investors. For that reason, the\n\n13 disclosure required by the securities laws is measured not by literal truth, but by the\n\n14 ability of the material to accurately inform rather than mislead prospective buyers.\u201d)\n\n15 (quoting In re Convergent Techs. Sec. Litig., 948 F.2d 507, 512 (9th Cir. 1991), as\n\n16 amended on denial of reh\u2019g (Dec. 6, 1991)). The SAC plausibly alleges that a\n\n17 reasonable investor could have interpreted these statements to mean that Sable would\n\n18 continue producing oil and imminently begin selling oil. \u00b663.\n\n19 The Motion correctly notes that a court must \u201cexamine \u2018the context\n20 surrounding the statement\u2019 to \u2018decide whether a misstatement or omission can\n\n21 mislead\u2019\u201d. Motion at 10 (quoting Sneed v. Talphera, Inc., 147 F.4th 1123, 1131 (9th\n\n22 Cir. 2025)). But the Motion then fails to grapple with the actual context surrounding\n\n23 these statements. Defendants did not merely announce that Sable had completed a\n\n24 well test; they announced that Sable had restarted oil production, finished its anomaly\n\n25 repairs, would fill its onshore tanks by mid-June; and would begin selling oil in July.\n\n26 \u00b6\u00b658-62. A reasonable investor could understand these statements, in context, to\n\n27 mean that Sable had reached a new milestone and would imminently begin selling\n\n28 oil. Indeed, the press release quoted Defendant Flores as stating that \u201c[t]his milestone\n -6-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 13 of 33 Page ID\n #:2130\n\n\n\n 1 achievement is a result of a tremendous amount of effort from all of Sable\u2019s\n\n 2 employees, contractors, Board of Directors, stakeholders, and suppliers.\u201d ECF 81-9.\n\n 3 A reasonable investor could plausibly interpret these announcements, taken together,\n\n 4 as something more than a well-test.\n\n 5 The Motion also contends that the statements were not misleading because\n 6 Sable warned investors that \u201cenvironmental groups could \u2018be successful in delaying\n\n 7 or preventing us from obtaining the required approvals through litigation\u2019 and that\n\n 8 \u201cthere was \u2018no assurance that the necessary permits will be obtained\u2019\u201d. Motion at 10.\n 9 But general warnings that the Company\u2019s plans might not succeed are insufficient.\n\n10 See Thant v. Rain Oncology Inc., 2025 WL 588994, at *6 (N.D. Cal. Feb. 24, 2025)\n\n11 (denying dismissal of claim concerning literally true statement about drug trial \u2013\n\n12 despite the fact that the defendant \u201crepeatedly and emphatically disclosed that its\n\n13 Phase 3 trial might fail\u201d because of atypically high risk that the trial would fail).\n\n14 Finally, the Court need only decide whether Plaintiffs\u2019 proposed interpretation\n15 is plausible, not whether Plaintiffs\u2019 interpretation is more plausible than Defendants\u2019\n\n16 interpretation. See Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011) (\u201cIf there are\n\n17 two alternative explanations, one advanced by defendant and the other advanced by\n\n18 plaintiff, both of which are plausible, plaintiff's complaint survives a motion to\n\n19 dismiss under Rule 12(b)(6).\u201d); Berson v. Applied Signal Tech., Inc., 527 F.3d 982,\n\n20 986 (9th Cir. 2008) (reversing dismissal of 10(b) claim where the plaintiffs\u2019\n\n21 interpretation of a challenged statement was \u201cjust as likely\u201d as the defendants\u2019\n\n22 interpretation); Thant v. Rain Oncology Inc., 2025 WL 588994, at *6 (N.D. Cal. Feb.\n\n23 24, 2025) (\u201cwhen there are multiple plausible interpretations, the obligation to draw\n\n24 inferences in favor of plaintiffs mean that courts must choose the interpretation most\n\n25 favorable to plaintiffs\u201d). At the pleading stage, a court can only weigh competing\n\n26 inferences when evaluating scienter \u2013 not falsity. See Gompper v. VISX, Inc., 298\n\n27 F.3d 893, 897 (9th Cir. 2002).\n\n28\n -7-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 14 of 33 Page ID\n #:2131\n\n\n\n 1\n 2. Defendants Repeatedly Misled Investors About Sable\u2019s\n Repair Work and Its Permits to Conduct Such Work\n 2\n Defendants repeatedly misled investors by stating that (i) Sable had completed\n 3\n all of the repair work and testing necessary to restart the operation of the onshore\n 4\n pipelines and begin selling oil; and (ii) all of the repair and maintenance work Sable\n 5\n performed was fully permitted and approved. At the start of the Class Period, on May\n 6\n 19, 2025, Sable told investors that it \u201ccompleted its anomaly repair program on the\n 7\n Onshore Pipeline as specified by the Consent Decree.\u201d \u00b659; see also \u00b668 (same\n 8\n statement in May 22, 2025 Prospectus). On May 23, 2025, Courthouse News\n 9\n published a statement by a Sable spokesperson stating that \u201c[a]ll the work Sable has\n10\n performed is fully permitted and approved.\u201d \u00b662. On May 28, 2025, Sable stated that\n11\n it had \u201csuccessfully hydrotested all segments of [the onshore pipeline), satisfying the\n12\n final operational condition to restart of the Onshore Pipeline\u201d and that \u201cno more\n13\n repairs are required to the Onshore Pipelines prior to restart.\u201d \u00b6\u00b680-81.\n14\n These statements materially misled investors: Sable had not completed its\n15\n required repair work or testing, and Sable did not have the necessary permits to\n16\n complete the repair work. First, as explained above, the Coastal Commission\n17\n repeatedly informed Sable that it was performing unpermitted repair and maintenance\n18\n work and issued a cease and desist order in April 2025 requiring Sable to halt its\n19\n unpermitted work and immediately seek the required permits. Second, the Water\n20\n Board repeatedly also repeatedly informed Sable from November 2024 through April\n21\n 2025 that Sable was engaged in unpermitted pipeline repairs. \u00b6\u00b653-57. Third, the Fire\n22\n Marshal confirmed in a letter to Sable on October 22, 2025 that Sable still had not\n23\n completed the anomaly repairs required under the Consent Decree. \u00b649. 3\n24\n\n25 3 The full letter, which is incorporated into the SAC by reference, is available at\n\n26 https://s202.q4cdn.com/300304768/files/doc_news/2025/10/OSFM-Letter-to-\n Sable.pdf. The letter explains that Sable failed to meet an anomaly repair required\n27 under item 9 of the State Waivers concerning a 180-day repair condition for tool\n\n28 sizing and tolerance. Letter at 1-2 (\u201cThe State Waivers require all such anomalies to\n be remediated, including tool tolerance. According to OSFM records, Sable has not\n -8-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 15 of 33 Page ID\n #:2132\n\n\n\n 1 The Motion states that the SAC fails to allege how the repairs remained\n 2 unfinished. Motion at 12. This assertion is nonsensical given that the Motion later\n\n 3 concedes that \u201cPlaintiffs allege that the Fire Marshal (in October 2025) \u2018identified a\n\n 4 Requirement\u2019 that Sable had not yet met before the Fire Marshal could approve\n\n 5 Sable\u2019s Restart Plan.\u201d Motion at 15.\n\n 6 Alternatively, the Motion contends that the challenged statements that Sable\u2019s\n 7 repairs were both completed and fully permitted were \u201cinactionable statements of\n\n 8 opinion.\u201d Motion at 15. The Motion is mistaken \u2013 the challenged statements are not\n 9 opinions, and they are actionable even if they were opinions.\n\n10 First, Sable\u2019s statement that \u201c[a]ll the work Sable has performed is fully\n11 permitted and approved\u201d (\u00b662) is a statement of fact, not a statement of opinion.\n\n12 Courts. It is black letter law in this Circuit that \u201c[s]tatements of legal compliance are\n\n13 pled with adequate falsity when documents detail specific violations of law that\n\n14 existed at the time the warranties were made.\u201d Reese v. Malone, 747 F.3d 557, 578\n\n15 (9th Cir. 2014), overruled by City of Dearborn Heights Act 345 Police & Fire Ret.\n\n16 Sys. v. Align Tech., Inc., 856 F.3d 605 (9th Cir. 2017); see also Glazer Cap. Mgmt.,\n\n17 LP v. Magistri, 549 F.3d 736, 742 (9th Cir. 2008) (falsity adequately pleaded for the\n\n18 defendant\u2019s statement that it was \u201cin compliance in all material respects with the\n\n19 provisions of Section 13(b) of the Exchange Act\u201d because the complaint cited a later\n\n20 SEC cease and desist order stating that company violated Section 13(b) of the\n\n21 Exchange Act). The recent decision in In re PG&E Corp. Sec. Litig., 2025 WL\n\n22 2781745, at *17 (N.D. Cal. Sept. 30, 2025) is particularly instructive. In PG&E, the\n\n23 plaintiffs challenged statements that \u201cPG&E meets or exceeds regulatory\n24 requirements\u201d and that \u201cPG&E follows all applicable federal and state vegetation\n\n25 clearance requirements.\u201d Id. The court found that these statements were not non-\n\n26 actionable statements of opinion; they were objectively verifiable statements of fact.\n\n27\n\n28 satisfied this condition in the State Waivers. The above findings alone and the\n inconsistencies with the State Waiver requirements prevent restart under the law.\u201d\n -9-\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 16 of 33 Page ID\n #:2133\n\n\n\n 1 Id. Further, the court found that the complaint adequately alleged they were\n\n 2 materially misleading because PG&E was later found to have been violating\n\n 3 applicable regulations throughout the class period. Id. The same is true, here. The\n\n 4 Coastal Commission and Water Board repeatedly informed Sable that it was\n\n 5 performing unpermitted repair work. \u00b6\u00b633-38, 51-57. Further, Judge Anderle granted\n\n 6 the Coastal Commission\u2019s application for a preliminary injunction, finding that the\n\n 7 Commission presented evidence that \u201cthat Sable has not obtained a [permit] for\n\n 8 Sable\u2019s repair and maintenance activities\u201d and \u201cthat Sable has continued its repair\n 9 and maintenance activities notwithstanding the [cease and desist order].\u201d \u00b639. In\n\n10 October, Judge Anderle again ruled that Sable\u2019s work was unpermitted and had not\n\n11 been authorized by the County\u2019s 1986 permit. \u00b640.\n\n12 Second, even if these statements were opinions, they would still be actionable\n13 because they did not \u201cfairly align\u201d with information Defendants possessed at the time\n\n14 they made the statements. Glazer Cap. Mgmt., L.P. v. Forescout Techs., Inc., 63 F.4th\n\n15 747, 764 (9th Cir. 2023) (\u201cThese concrete assurances did not \u2018fairly align[ ] with the\n\n16 information in [defendant\u2019s] possession at the time\u2019 and are therefore actionable\u201d)\n\n17 (quoting Omnicare, Inc. v. Laborers Dist. Council Const. Indus. Pension Fund, 575\n\n18 U.S. 175, 188-89 (2015)).\n\n19 3. Defendants Misled Investors By Downplaying the Impact of\n Sable\u2019s Legal and Regulatory Problems\n20\n On May 28, 2025, Judge Thomas P. Anderle granted the Coastal\n21\n Commission\u2019s application for a preliminary injunction, which enforced the\n22\n Commission\u2019s April 10 cease and desist order. \u00b639. The order enjoined Sable from\n23\n continuing its unpermitted maintenance and repair activities on the onshore pipelines.\n24\n and enjoins Sable\u2019s ongoing repair and maintenance work in violations of the Coastal\n25\n Act. \u00b674. In response to the May 28 order, Sable\u2019s Steve Rusch stated that the\n26\n decision \u201chas no bearing on Sable\u2019s plans to recommence oil sales by July.\u201d \u00b681.\n27\n\n28\n - 10 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 17 of 33 Page ID\n #:2134\n\n\n\n 1 On June 3, 2025, Judge Donna Geck issued a temporary restraining order\n 2 preventing the Fire Marshal from granting further authorizations and prohibiting\n\n 3 Sable from restarting use of the pipelines. \u00b6\u00b646, 78. In response, Rusch stated on\n\n 4 behalf of Sable that \u201c[t]he court decision does not impede Sable\u2019s preparations for\n\n 5 restarting the flow of oil. Restart of the Las Flores Pipeline System is governed by a\n\n 6 federal consent decree.\u201d \u00b681.\n\n 7 These statements materially misled investors because the rulings materially\n 8 impacted Sable\u2019s ability to start using the onshore pipelines and begin oil sales. Judge\n 9 Anderle\u2019s ruling prohibited Sable from performing ongoing maintenance or repairs\n\n10 on the pipelines, which would inevitably delay any planned oil sales. \u00b682. Further,\n\n11 Rusch, himself, submitted a declaration in opposition to the Coastal Commission\n\n12 injunction stating that granting the injunction would cause Sable irreparable harm by\n\n13 preventing it from performing ongoing maintenance or repairs. \u00b678; ECF 81-14 at 4. 4\n\n14 The Motion contends that this statement was true because Sable had already finished\n\n15 its repair work. Motion at 13, 14. Tellingly, the Motion is silent about the ongoing\n\n16 maintenance, which Sable would need to perform in order to actually operate the\n\n17 pipelines. \u00b678. The Motion also asserts that the June 3 Order \u2013 which prevented Sable\n\n18 from restarting use of the pipelines \u2013 did not \u201cimpede Sable\u2019s preparations for\n\n19 restarting the flow of oil\u201d through those same pipelines. Motion at 14-15. The Motion\n\n20 is too cute by half.5\n\n21\n\n22\n The SAC mistakenly alleged that Rusch issued this declaration in the Fire Marshall\n 4\n\n litigation. As the Motion correctly notes, Rusch issued the declaration in the Coastal\n23 Commission litigation. Motion at 13 & n.4.\n\n24 The Motion asserts in a footnote that its misstatements were \u201creasonable\u201d because\n 5\n\n a federal agency purported to approve it restart plan after the Class Period. Motion at\n25 15 & n.8. But the federal agency endorsed none of Sable\u2019s actual alleged\n\n26 misstatements, and Judge Donna Geck has already declined to lift the injunction\n blocking Sable from restarting the onshore pipelines. See\n27 https://www.independent.com/2026/01/07/santa-barbara-judge-keeps-sable-\n\n28 injunction-in-place-as-company-confirms-no-oil-in-pipelines/. At the hearing, an\n attorney for Sable represented that each day Judge Geck\u2019s June 3, 2025 injunction\n - 11 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 18 of 33 Page ID\n #:2135\n\n\n\n 1 On October 15, 2025, Judge Thomas held that the Coastal Commission had\n 2 not abused its discretion in issuing the April 10 Orders. Judge Anderle found that,\n\n 3 contrary to Sable\u2019s assertions, Sable\u2019s development work was not authorized by a\n\n 4 1986 permit from the County and that the CCC had the authority to find that Sable\n\n 5 was in violation of the Coastal Act and to issue a cease and desist order given the\n\n 6 County\u2019s failure to act on Sable\u2019s violations. \u00b683. In response, Sable issued a press\n\n 7 release stating that \u201cthe ruling would have no impact on the resumption of petroleum\n\n 8 transportation through the Las Flores Pipeline System.\u201d The press release also quoted\n 9 Defendant Flores stating that the ruling \u201chas no impact on Sable\u2019s business strategy\n\n10 of either resuming petroleum transportation through the Las Flores Pipeline System\n\n11 or selling its Santa Ynez Unit production through an OS&T.\u201d \u00b685.\n\n12 Similarly to the May 28 Order, the October 15 Order continued to preclude\n13 Sable from performing the necessary repairs or maintenance to restart or operate the\n\n14 pipelines. Even if these statements were opinions \u2013 which they are not \u2013 they would\n\n15 still be actionable because they did not \u201cfairly align\u201d with information Defendants\n\n16 possessed at the time they made the statements. Glazer Cap. Mgmt., L.P. v. Forescout\n\n17 Techs., Inc., 63 F.4th 747, 764 (9th Cir. 2023).\n\n18\n 4. Defendants Misled Investors About Hunterbrook\n On October 31, 2025, Hunterbrook Media (\u201cHunterbrook\u201d) reported that\n19\n Defendant Flores \u201ctold a select group of investors in October that the company would\n20\n likely have to raise up to $200 million in equity by the end of 2025.\u201d \u00b688. The\n21\n company had not publicly disclosed that Sable required an imminent equity raise\n22\n which would dilute the value of existing shares. Id. Hunterbrook published a 38-\n23\n minute recording of the conversation between Defendant Flores and investors. On the\n24\n recording, Flores stated \u201cWe\u2019re supposed to be on production in September, right?\n25\n We\u2019re not gonna be on production in September, so we\u2019re gonna have to bridge a\n26\n\n27 remains in place costs the Houston-based company millions. At the time, Sable\n\n28 assured investors that the injunction \u201cdoes not impede Sable\u2019s preparations for\n restarting the flow of oil.\u201d \u00b681.\n - 12 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 19 of 33 Page ID\n #:2136\n\n\n\n 1 little to the financing. We\u2019ll need some type of injection somewhere in the $100 to\n\n 2 $150 to $200 million dollar range.\u201d Id.\n\n 3 Later that day, the Company falsely denied the Hunterbrook report. Sable\n 4 stated to Hunterbrook that \u201cbased upon information provided to us we believe that\n\n 5 the alleged recording was either AI generated or otherwise altered.\u201d \u00b690.\n\n 6 The Motion asserts, without explanation, that the SAC fails to allege how this\n 7 statement is actionable. Motion at 16. But the SAC plainly alleges that the statement\n\n 8 was false because Hunterbrook accurately reported that Defendant Flores was\n 9 selectively providing material non-public information to investors and that Sable\n\n10 imminently needed to raise to hundreds of millions of dollars to continue operations.\n\n11 \u00b691. On November 3, 2025, the Company issued a press release effectively\n\n12 confirming the Hunterbrook report. \u00b692. The press release disclosed that Sable had\n\n13 entered into an amended loan agreement with ExxonMobil that would become\n\n14 effective once the company raises at least $225 million in equity contributions. Id.\n\n15 The press release further stated that the amendment extends the maturity date of the\n\n16 loan by one year, to March 31, 2027, and increases the annual interest rate for the\n\n17 loan from ten percent to fifteen percent. Id. Further, the Company announced that\n\n18 \u201cthe Company\u2019s Board of Directors formed a Special Committee of independent\n\n19 directors to undertake an independent investigation of the allegations contained in an\n\n20 October 31, 2025 report published by Hunterbrook, which contains audio recording\n\n21 of a call that took place in October 2025.\u201d Id.\n\n22 As the Supreme Court explained in Omnicare, a statement of opinion is\n23 actionable if it omits facts \u201cfor example, the fact that the speaker failed to conduct\n\n24 any investigation\u2014that rebut the recipient's predictable inference.\u201d Omnicare, 575\n\n25 U.S., at 191. Defendants\u2019 statement that \u201cwe believe that the alleged recording was\n\n26 either AI generated or otherwise altered\u201d implies that Defendants conducted an\n\n27 investigation. Had Sable performed even a minimal amount diligence \u2013 including\n\n28 asking Defendant Flores about the recording \u2013 they would have learned that the\n - 13 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 20 of 33 Page ID\n #:2137\n\n\n\n 1 recording was real and that Sable did need to raise hundreds of millions of dollars,\n\n 2 just as they publicly announced a few days later. \u00b692. 6\n\n 3 B. Plaintiffs Adequately Allege Scienter\n 4 Plaintiffs allege facts raising a strong inference of scienter, which not only\n 5 includes knowledge, \u201cbut also deliberate recklessness.\u201d Schueneman v. Arena\n\n 6 Pharms., Inc., 840 F.3d 698, 705 (9th Cir. 2016). The \u201cinquiry . . . is whether all of\n\n 7 the facts alleged, taken collectively, give rise to a strong inference of scienter, not\n\n 8 whether any individual allegation, scrutinized in isolation, meets that standard.\u201d\n 9 Tellabs, 551 U.S. at 322\u2013 23. A \u201cstrong inference\u201d is raised when \u201ca reasonable\n\n10 person would deem the inference of scienter cogent and at least as compelling as any\n\n11 plausible opposing inference\u201d of nonfraudulent intent. Id. at 310. The scienter\n\n12 inference \u201cneed not be irrefutable . . . or even the most plausible,\u201d and no \u201csmoking-\n\n13 gun\u201d is required. Id. at 324\u201326. \u201c\u2018[F]alsity and scienter in private securities fraud\n\n14 cases are generally strongly inferred from the same set of facts,\u2019 and the two\n\n15 requirements may be combined into a unitary inquiry under the PSLRA.\u201d In re\n\n16 Capstone Turbine Corp. Sec. Litig., 2018 WL 836274, at *5 (C.D. Cal. Feb. 9,\n\n17 2018) (citing In re Daou Sys., Inc., 411 F.3d 1006, 1015 (9th Cir. 2005)).\n\n18 Crucially, Defendants fail to offer any competing non-fraudulent inference.\n19 Instead of identifying any plausible innocent explanation, Defendants improperly\n\n20 seek to \u201cattack individual allegations in isolation,\u201d which \u201ccannot overcome the\n\n21 overwhelming evidence drawn from a holistic view.\u201d In re VeriFone Holdings, Inc.\n\n22 Sec. Litig., 704 F.3d 694, 710 (9th Cir. 2012).\n\n23 1. Core Operations Establishes Strong Inference of Scienter\n24 \u201cThe core operations theory . . . presumes that \u2018corporate officers have\n25 knowledge of the critical core operation of their companies.\u201d Prodanova v. H.C.\n\n26 6 The Motion\u2019s assertion that projected actions are inactionable under safe harbor (Motion at 10-\n\n27 11) is wrong. See, e.g., Rain Oncology, 2025 WL 588994, at *6 (statement that \u201cwe anticipate\n commencing a pivotal Phase 3 trial in LPS in the second half of 2021\u201d was literally true, but\n28 misleading because it omitted failure to satisfy Phase 2 bypass criteria\u201d).\n - 14 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 21 of 33 Page ID\n #:2138\n\n\n\n 1 Wainwright & Co., LLC, 993 F.3d 1097, 1111 (9th Cir. 2021). \u201cThere are three\n\n 2 circumstances under which core operations allegations can support a strong inference\n\n 3 of scienter: (1) when they, along with other allegations, support a cogent and\n\n 4 compelling inference of scienter, (2) when they are themselves particular and suggest\n\n 5 that the defendants had actual access to the disputed information, and (3) in the rare\n\n 6 circumstances when they are not particularized, but the nature of the relevant fact is\n\n 7 of such prominence that it would be absurd to suggest that management was without\n\n 8 knowledge of the matter.\u201d Blake v. Canoo Inc., 2025 WL 2992263, at *15 (C.D. Cal.\n 9 Oct. 22, 2025) (quoting Prodanova, 993 F.3d at 1111).\n\n10 Here, it would be absurd to suggest that Defendants Flores and Patrinely were\n11 unaware of repair, maintenance, and regulatory hurdles of the pipelines. Defendants\n\n12 are experienced oil executives (\u00b6\u00b6101, 103) who formed Sable for one purpose: to\n\n13 acquire the SYU Assets, repair the pipelines, and obtain regulatory approval to restart\n\n14 the pipelines and oil production (\u00b623). These assets were Sable\u2019s only assets. \u00b697.\n\n15 The status of Sable\u2019s repairs to the pipeline, the requirements of the Consent\n16 Decree, and Sable\u2019s regulatory battles with the Coastal Commission, the Water\n\n17 Board, environmental groups, the County Board, and the Fire Marshal were all well\n\n18 known facts to Sable\u2019s management because they determined the fate of the\n\n19 Company. See AMI - Gov't Emps. Provident Fund Mgmt. Co. Ltd. v. Alphabet Inc.,\n\n20 2025 WL 899959, at *6 (N.D. Cal. Mar. 24, 2025), motion to certify appeal denied,\n\n21 2025 WL 2578281 (N.D. Cal. Sept. 5, 2025) (\u201cBecause the FAN Agreement was\n\n22 \u2018existential\u2019 to Google in 2017, it is a fair inference that the CEO of Google\u2014who\n\n23 admits that he reviews \u2018at a high level [ ] all the important decisions\u2019 Google makes\u2014\n\n24 would have been aware of the basic terms of the FAN Agreement at the time it was\n\n25 being negotiated.\u201d). Courts have found a strong inference of scienter based on the\n\n26 core operations theory in less obvious situations. See Berson v. Applied Signal Tech.,\n\n27 Inc., 527 F.3d 982, 987, 989 (9th Cir. 2008) (finding it \u201chard to believe that [the CEO\n\n28 and CFO] would not have known about stop-work orders that allegedly halted tens\n - 15 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 22 of 33 Page ID\n #:2139\n\n\n\n 1 of millions of dollars of the company\u2019s work\u201d); Blake v. Canoo Inc., 2025 WL\n\n 2 2992263, at *16 (C.D. Cal. Oct. 22, 2025) (core operations pled where \u201callegations\n\n 3 regarding the importance of the engineering services pipeline to Canoo's three-\n\n 4 pronged, phased go-to-market strategy, it would be absurd to suggest that the\n\n 5 Individual Defendants, Kranz, Balciunas, and Aquila, were not aware of the collapse\n\n 6 of the pipeline in December 2020\u201d); In re PG&E Corp. Sec. Litig., 2025 WL\n\n 7 2781745, at *21 (N.D. Cal. Sept. 30, 2025) (\u201cthe Officer Defendants must have\n\n 8 known of a prominent issue like wildfire regulatory violations that would expose\n 9 PG&E to severe financial penalties and potentially threaten its viability as a going\n\n10 concern\u201d); Azar v. Yelp, Inc., 2018 WL 6182756, at *20 (N.D. Cal. Nov. 27, 2018)\n\n11 (allegations showing that local advertising program was \u201ca central component of\n\n12 Yelp\u2019s operations\u201d and was \u201cprominent enough that it would be absurd to suggest\n\n13 that top management was unaware of the\u201d adverse facts); In re Montage Tech. Grp.\n\n14 Ltd. Sec. Litig., 78 F. Supp. 3d 1215, 1227 (N.D. Cal. 2015) (\u201cit would be absurd to\n\n15 suggest\u201d that management did not know their largest distributor was a related party,\n\n16 where their transactions accounted for 71% of the company\u2019s revenue).\n\n17 In short, Sable\u2019s progress and setbacks in obtaining regulatory approvals \u201cwere\n18 prominent enough that it would be absurd to suggest that top management was\n\n19 without knowledge of the matter.\u201d Berson v. Applied Signal Tech., Inc., 527 F.3d\n\n20 982, 989 (9th Cir. 2008).7\n\n21\n 2. Defendants Knew Or Had Access To Contrary Information\n \u201cThe most direct way to show both that a statement was false when made and\n22\n that the party making the statement knew that it was false is via contemporaneous\n23\n reports or data, available to the party, which contradict the statement.\u201d Nursing Home\n24\n Pension Fund, Loc. 144 v. Oracle Corp., 380 F.3d 1226, 1230 (9th Cir. 2004). The\n25\n SAC alleges that Defendants knew or were reckless in not knowing about the\n26\n\n27 7 The SAC adequately alleges scienter against Sable because \u201c[t]he scienter of a\n\n28 corporation can be imputed from that of its officers.\u201d S.E.C. v. Platforms Wireless\n Int\u2019l Corp., 559 F. Supp. 2d 1091, 1096 (S.D. Cal. 2008).\n - 16 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 23 of 33 Page ID\n #:2140\n\n\n\n 1 regulatory hurdles Sable faced or that their statements would mislead investors.\n\n 2 In the Ninth Circuit, \u201can assertion that defendants were unaware of the alleged\n 3 issues can be \u2018directly contradicted by the fact that [they] specifically addressed it in\n\n 4 [their] statement[s].\u2019\u201d Roberti v. OSI Sys., Inc., 2015 WL 1985562, at *12 (C.D. Cal.\n\n 5 Feb. 27, 2015) (quoting Reese, 747 F.3d at 571). \u201cBy making \u2018detailed factual\n\n 6 statement [s], contradicting important data to which [the Individual Defendants] had\n\n 7 access, a strong inference arises that [they] knowingly misled the public as to its clear\n\n 8 meaning.\u2019\u201d Here, Defendant Flores and the Company repeatedly issued detailed\n 9 statements minimizing Sable\u2019s regulatory hurdles and legal setbacks.\n\n10 Sable\u2019s term loan agreement from ExxonMobil requires that Defendant Flores\n11 remain \u201cdirectly and actively involved in the day-to-day management\u201d of Sable. The\n\n12 Company\u2019s 2025 Proxy Statement stated: \u201cThe board of directors believes that Mr.\n\n13 Flores\u2019 knowledge of the daily operations of and familiarity with the Company and\n\n14 industry put him in the best position to provide leadership to the board of directors\n\n15 on setting the agenda, emerging issues facing the Company and the upstream oil and\n\n16 gas industry, and strategic opportunities.\u201d \u00b6101.\n\n17 3. Defendants Had Motive and Opportunity to Commit Fraud\n a. Defendants Inflated Stock Price Before\n18\n Secondary Offerings\n19\n The Company has no revenue or cash flows from its operations, nor will it\n20\n generate any revenue or cash flows from its operations until it restarts production of\n21\n the SYU Assets. The Company has experienced losses from operations and has had\n22\n negative cash flows from operations since its inception and will continue to incur\n23\n losses until it can restart production of the SYU Assets. Accordingly, the Company\n24\n was entirely reliant on its cash on hand and capital raises to continue its operations.\n25\n Defendants misled investors about the true state of Sable\u2019s operations and regulatory\n26\n compliance to artificially inflate its stock price at the time of its equity raises.\n27\n The recent decision in In re Semtech Corp., 2025 WL 2884810, at *10 (C.D.\n28\n Cal. Oct. 7, 2025) is instructive. In Semtech, the plaintiffs alleged scienter \u201cprimarily\u201d\n - 17 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 24 of 33 Page ID\n #:2141\n\n\n\n 1 by pointing to the defendant\u2019s \u201csignificant debt position that it substantially solved\n\n 2 with a stock offering.\u201d Id. The court agreed, finding that the plaintiffs alleged a strong\n\n 3 inference of scienter, in large part, by alleging that the defendant\u2019s \u201cdebt had become\n\n 4 an \u2018existential threat,\u2019 and Defendants \u2018sought to delay the release of the bad news\n\n 5 that Semtech's FY2026 ACC revenue opportunity had evaporated until after a\n\n 6 planned December 2024 public offering of stock.\u2019\u201d Id. Defendants did the same here\n\n 7 \u2013 issuing a misleading press release touting that Sable had restarted oil production\n\n 8 just three days before issuing a secondary offering raising $250 million.\n 9 The Motion asserts that courts cannot find an inference of scienter based on\n10 public offerings. Motion at 18. Defendants misunderstand the case law. The cases the\n\n11 Motion cites do not involve companies in existential crises. See Webb v. Solarcity\n\n12 Corp., 884 F.3d 844, 856 (9th Cir. 2018) (\u201cWe also credit the allegation that there is\n\n13 a strong incentive to present an appearance of profitability and to keep stock prices\n\n14 high in the months immediately preceding and following a company's IPO\u201d, but\n\n15 \u201cmotive to boost the company\u2019s profitability and stock prices in the months\n\n16 surrounding the company's IPO are not \u2018specific\u2019 or \u2018particularized,\u2019 as our\n\n17 precedents require\u201d); In re Rigel Pharms., Inc. Sec. Litig., 697 F.3d 869, 884 (9th Cir.\n\n18 2012) (no scienter merely because the defendants \u201cwere seeking a partner and were\n\n19 planning to raise capital in a stock offering\u201d). In contrast, \u201ca demonstration of a desire\n\n20 to raise company financing, combined with the \u2018red flags\u2019 of a company's financial\n\n21 condition, is sufficient to plead scienter.\u201d Nguyen v. Radient Pharms. Corp., 2011\n\n22 WL 13141630, at *6 (C.D. Cal. Oct. 26, 2011).\n\n23 Finally, the Wall Street Journal reported that Flores\u2019s venture paid $204\n24 million in cash out of the total $1.1 billion Sable was expected to pay to ExxonMobil\n\n25 for the SYU Assets and that Flores would \u201cmake tens of millions of dollars if he can\u201d\n\n26 restart the commercial oil sales. \u00b6102.\n\n27 Sable also faced another deadline that existentially threatened the Company.\n28 On August 1, 2024, the Fire Marshal granted Sable\u2019s request to extend the deadline\n - 18 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 25 of 33 Page ID\n #:2142\n\n\n\n 1 to complete its implementation of the Restart Plans to July 1, 2025. \u00b643.In granting\n\n 2 the extension, the Fire Marshal stated that \u201c[i]t is imperative that [Sable] successfully\n\n 3 completes the proposed retrofit construction by this new deadline.\u201d Id. The Water\n\n 4 Board\u2019s complaint states that Sable management intentionally misled the Water\n\n 5 Board as a stalling tactic so that it could meet the July 1, 2025 deadline: \u201cAt the time\n\n 6 of its inadequate submissions in March and April of 2025, Sable management knew\n\n 7 full well additional excavation and repair work would be ongoing. However, instead\n\n 8 of identifying sites where Sable was planning to carry out activities that could affect\n 9 water quality, as required by the Section 13267 Order, Sable chose to limit its\n\n10 response to work done as of the March 10, 2025 due date of the Technical Report\n\n11 (which ironically was not met). This cynical approach to the Regional Water\n\n12 Board\u2019s regulatory permitting requirements was obviously taken to avoid any\n\n13 potential delay in getting the sites permitted and any associated Regional Water\n\n14 Board review that might impact the July 1, 2025 deadline for Sable\u2019s completion\n\n15 of repairs imposed by the Fire Marshal.\u201d \u00b654. (emphasis added)\n\n16 4. The Inference of Scienter Is At Least As Compelling as\n Defendants\u2019 Suggested Inference\n17\n The SAC pleads a strong inference of scienter. However, even if each\n18\n individual scienter allegations are insufficient, the Court must \u201cconduct a \u2018holistic\u2019\n19\n review of the same allegations to determine whether the insufficient allegations\n20\n combine to create a strong inference of intentional conduct or deliberate\n21\n recklessness.\u201d New Mexico State Inv. Council v. Ernst & Young LLP, 641 F.3d 1089,\n22\n 1095 (9th Cir. 2011) (reversing dismissal and finding a strong inference of scienter).\n23\n The holistic review must consider even \u201c[v]ague or ambiguous allegations\u201d because\n24\n \u201cfederal courts certainly need not close their eyes to circumstances that are probative\n25\n of scienter viewed with a practical and common-sense perspective.\u201d S. Ferry LP, No.\n26\n 2 v. Killinger, 542 F.3d 776, 784 (9th Cir. 2008).\n27\n\n28\n - 19 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 26 of 33 Page ID\n #:2143\n\n\n\n 1 Defendants impermissibly contest scienter by attacking each scienter\n 2 allegation in isolation. Motion at 17-19. The Supreme Court has explicitly rejected\n\n 3 this type of argument, holding that \u201cthe court\u2019s job is not to scrutinize each allegation\n\n 4 in isolation but to assess all the allegations holistically.\u201d Tellabs, 551 U.S. at 326.\n\n 5 \u201cViewed in isolation, any one allegation may not compel an inference of scienter.\n\n 6 However, when we consider the allegations holistically, the inference that\n\n 7 [defendants] were deliberately reckless as to the truth of their financial reports and\n\n 8 related public statements is at least as compelling as any opposing inference.\u201d\n 9 VeriFone, 704 F.3d at 698\u201399 (overturning district court\u2019s dismissal and finding\n\n10 scienter); see also Axonic Cap. LLC v. Gateway One Lending & Fin., 2019 WL\n\n11 4138024, at *11 (C.D. Cal. May 22, 2019) (\u201calthough no one allegation, standing\n\n12 alone, is sufficient to create a strong inference of scienter, a \u201cholistic\u201d review of the\n\n13 same allegations does create a strong inference of intentional conduct or deliberate\n\n14 recklessness\u201d).\n\n15 Defendants do not, and cannot, suggest any non-fraudulent inference to\n16 compete with the strong inference of fraud pleaded by the SAC. The Motion asserts\n\n17 that the non-fraudulent inference is that \u201cSable believed in its plans but faced\n\n18 disappointing, unexpected third-party developments\u201d and that \u201c[a]t each step, Sable\n\n19 kept investors informed, including advising potential investors of the risks inherent\n\n20 to its business.\u201d Motion at 19-20. But Sable repeatedly misled investors about the\n\n21 significance of those \u201cdisappointing\u201d developments, including telling investors that\n\n22 the May 28, June 3, and October 15 court decisions would have no effect on Sable\u2019s\n\n23 planned restart. \u00b6\u00b6\n\n24 The Motion also claims that Sable \u201copenly engaged with regulators.\u201d The SAC\n25 is replete with allegations showing that Sable repeatedly ignored and misled\n\n26 regulators. Sable ignored the Coastal Commission\u2019s notices of violation and cease\n\n27 and desist orders. \u00b6\u00b633-40. Sable also misled the Water Board about its compliance,\n\n28 providing \u201cincomplete information with little meaningful detail regarding the\n - 20 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 27 of 33 Page ID\n #:2144\n\n\n\n 1 extensive excavation, repair and backfilling conducted as part of the Repair Plan.\u201d \u00b6\u00b6\n\n 2 52-53. The Water Board determined that Sable\u2019s response \u201cmade clear it did not\n\n 3 perform meaningful assessment of the environmental impact of its excavation\n\n 4 campaign\u201d despite assurances otherwise. \u00b6\u00b651-56.\n\n 5 Sable\u2019s repeated bad faith interactions with regulators ultimately convinced\n 6 one of their allies on the County Board to switch his vote against transferring permits\n\n 7 to Sable. \u00b693. Supervisor Steve Lavagnino, who previously voted in favor of\n\n 8 transferring the permits to Sable in February 2025, voted against the transfer. Id.\n 9 Lavagnino explained that he changed his mind because of Sable\u2019s repeated refusal to\n\n10 cooperate with regulators and follow the law \u2013 which Sable had repeatedly, and\n\n11 falsely, denied. As the Santa Maria Sun reported: \u201c[T]he landscape has changed\n\n12 dramatically since February,\u201d he said during the hearing. \u201cTo me, the following are\n\n13 facts, not emotions: Since February, Sable has been charged criminally 21 times, with\n\n14 five of those charges being felonies. I have many friends in the oil industry, and I will\n\n15 continue to support efforts to access our natural resources, but it has to be done\n\n16 responsibly by operators who put safety above profits,\u201d Lavagnino said. \u201cThe\n\n17 evidence in this case is overwhelming. There is something wrong with the strategy\n\n18 of Sable\u2019s leadership. Trying to simply bulldoze through the permitting process has\n\n19 not been helpful and is not the way we expect businesses in Santa Barbara County to\n\n20 conduct themselves.\u201d Id.\n\n21 The more plausible inference is that Sable repeatedly misled investors and state\n22 regulators in a desperate attempt to keep the Company afloat until it could be saved\n\n23 by the federal government.\n\n24 C. Plaintiffs Adequately Allege Loss Causation\n25 To plead loss causation, the Supreme Court simply requires \u201csome indication\n26 of the loss and the causal connection\u201d to the alleged fraud. Dura Pharms., Inc. v.\n\n27 Broudo, 544 U.S. 336, 347 (2005). Plaintiffs need only allege that the decline in stock\n\n28 price was proximately caused by a revelation of fraudulent activity rather than by\n - 21 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 28 of 33 Page ID\n #:2145\n\n\n\n 1 changing market conditions, changing investor expectations, or other unrelated\n\n 2 factors. Lambert v. Baker Tilly Hong Kong Ltd., 2016 WL 6272465, at *2 (C.D. Cal.\n\n 3 May 23, 2016). \u201c[S]o long as the complaint alleges facts that, if taken as true,\n\n 4 plausibly establish loss causation, a Rule 12(b)(6) dismissal is inappropriate.\u201d In re\n\n 5 Gilead, 536 F.3d at 1057. In fact, \u201c[t]he misrepresentation need not be the sole reason\n\n 6 for the decline in value of the securities, but it must be a \u2018substantial cause.\u2019\u201d Id. at\n\n 7 1055. A corrective disclosure need not be a mirror image of the earlier representation.\n\n 8 In re BofI Holding, Inc. Sec. Litig., 977 F.3d 781, 791 n.3 (9th Cir. 2020). \u201cThe\n 9 ultimate issue is whether the defendant\u2019s misstatement, as opposed to some other fact,\n\n10 foreseeably caused the plaintiff\u2019s loss.\u201d Lloyd v. CVB Fin. Corp., 811 F.3d 1200,\n\n11 1210 (9th Cir. 2016). \u201cA plaintiff may also establish loss causation by alleging that\n\n12 the defendant's misrepresentations concealed a risk that materialized and played some\n\n13 part in diminishing the value of the security.\u201d In re Amgen Sec. Litig., 2014 WL\n\n14 12585809, at *20 (C.D. Cal. Aug. 4, 2014).\n\n15 The SAC alleges that each of the alleged corrective disclosures are directly tied\n16 to the alleged misstatements and omissions. The Motion fails to undermine these\n\n17 allegations.\n\n18 First, the Motion baselessly asserts that the corrective disclosures fail because\n19 several come from third parties rather than directly from Sable. Motion at 20.\n\n20 Tellingly, The Motion does not cite to any authority to support this assertion. \u201c[A]\n\n21 corrective disclosure need not consist of an admission of fraud by the defendant or a\n\n22 formal finding of fraud by a government agency\u201d and \u201ccan instead come from any\n\n23 source, including knowledgeable third parties such as whistleblowers, analysts, or\n\n24 investigative reporters.\u201d In re BofI Holding, Inc. Sec. Litig., 977 F.3d 781, 790 (9th\n\n25 Cir. 2020).\n\n26 Second, the Motion contends the May 28 letter from Lt. Governor Kounalakis\n27 is not corrective because it merely \u201cconfirmed Sable had restarted oil production.\u201d\n\n28 Motion at 20-21. The letter explicitly explains the misleading impression left by\n - 22 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 29 of 33 Page ID\n #:2146\n\n\n\n 1 Sable\u2019s May 19 press release, stating that the \u201cpress release appears to\n\n 2 mischaracterize the nature of recent activities, causing significant public confusion\n\n 3 and raising questions regarding Sable\u2019s intentions\u201d by implying \u201cthat Sable has\n\n 4 restarted operations, despite the reality that \u201cthe limited volume oil flows are the\n\n 5 result of well-testing procedures required by the Bureau of Safety and Environmental\n\n 6 Enforcement prior to restart.\u201d The letter explicitly states that \u201c[c]haracterizing testing\n\n 7 activities as a restart of operations is not only misleading but also highly\n\n 8 inappropriate.\u201d\n 9 Third, the Motion asserts that the May 28, June 3, and October 15 court rulings\n10 were not corrective disclosures because they were merely \u201cbad news.\u201d Motion at 21-\n\n11 23. The May 28 ruling held that the Coastal Commission had presented prima facie\n\n12 evidence that Sable was performing unpermitted work, which directly corrected\n\n13 Sable\u2019s May 23 statement that \u201c[a]ll the work Sable has performed is fully permitted\n\n14 and approved.\u201d \u00b662, 76. As the May 28, 2025 Investing.com article stated: \u201cDespite\n\n15 Sable\u2019s claims that the work was authorized under existing permits from the County\n\n16 of Santa Barbara, the court found a prima facie case for the Coastal Commission,\n\n17 indicating that the activities constituted a violation of the Coastal Act.\u201d \u00b676. The\n\n18 October 15 ruling further established that Sable had ignored regulatory orders and\n\n19 performed unpermitted work. \u00b6\u00b683-84. The June 3 order, preventing the Fire Marshal\n\n20 from granting authorizations and Sable from restarting the pipelines, corrected\n\n21 Sable\u2019s statements that the lawsuit was without merit and that its anomaly repair\n\n22 program was complete. \u00b6\u00b659, 62, 78.\n\n23 Fourth, the November 4 corrective disclosure was a materialization of the risk\n24 of Sable\u2019s repeated dishonest interactions with regulators \u2013 of which Sable repeatedly\n\n25 both denied both the existence and the consequences. \u00b6\u00b693, 96 (\u201cThe evidence in this\n\n26 case is overwhelming. There is something wrong with the strategy of Sable\u2019s\n\n27 leadership. Trying to simply bulldoze through the permitting process has not been\n\n28 helpful and is not the way we expect businesses in Santa Barbara County to conduct\n - 23 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 30 of 33 Page ID\n #:2147\n\n\n\n 1 themselves.\u201d); see also In re WageWorks, Inc., Sec. Litig., 2020 WL 2896547, at *5\n\n 2 (N.D. Cal. June 1, 2020) (\u201cunder a \u2018materialization of the risk\u2019 theory, plaintiff may\n\n 3 allege that \u2018the very facts about which defendant lied\u2019 caused the injuries. Any kind\n\n 4 of proximate cause satisfies this requirement\u201d).\n\n 5 Finally, the October 31 and November 3 reports were both corrective. \u00b6\u00b6 88-\n 6 89, 92. The October 31 Hunterbrook Report showed that Sable\u2019s need to raise\n\n 7 additional equity contradicted Defendants\u2019 repeated claims that regulatory and\n\n 8 judicial orders concerning the Company\u2019s ability to make repairs and restart\n 9 production would have an effect on the Company\u2019s ability to timely resume\n\n10 commercial sales. \u00b688. The November 3 press release confirmed the Hunterbrook\n\n11 report and revealed that Sable\u2019s October 31 statement denying the Hunterbrook report\n\n12 was false. \u00b692. The Motion claims that short seller reports cannot serve as corrective\n\n13 disclosures; this is not true. See In re Genius Brands Int'l, Inc. Sec. Litig., 97 F.4th\n\n14 1171, 1187 (9th Cir. 2024) (short seller report was corrective disclosure).\n\n15 D. Plaintiffs Adequately Allege Control Person Liability\n16 Plaintiffs have adequately pleaded control person liability under Section 20(a)\n17 by alleging primary violations and that Defendants were in positions of control. \u00b6\u00b621-\n\n18 23; see In re BofI Holding, Inc. Sec. Litig., 2017 WL 2257980, at *21 (S.D. Cal. May\n\n19 23, 2017).\n\n20 IV. CONCLUSION\n21 The Motion should be denied in its entirety. Alternatively, if the Court grants\n22 any portion of the Motion, Plaintiff respectfully requests leave to amend. 8\n\n23 Dated: January 12, 2026 THE ROSEN LAW FIRM, P.A.\n24\n\n25 8 See Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (holding that leave to\n\n26 amend should be freely granted unless \u201cthe pleading could not possibly be cured by\n the allegation of other facts\u201d); Osher v. JNI Corp., 183 F. App\u2019x 604, 605 (9th Cir.\n27 2006) (\u201c[l]eave to amend is to be granted with extreme liberality in securities fraud\n\n28 cases, because the heightened pleading requirements imposed by the PSLRA are so\n difficult to meet\u201d).\n - 24 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 31 of 33 Page ID\n #:2148\n\n\n\n 1\n /s/ Daniel Tyre-Karp\n Daniel Tyre-Karp (pro hac vice)\n 2 275 Madison Ave., 40th Floor\n 3 New York, NY 10016\n Telephone: (212) 686-1060\n 4 Facsimile: (212) 202-3827\n 5 Email: dtyrekarp@rosenlegal.com\n\n 6\n\n 7 Laurence M. Rosen (SBN 219683)\n 355 South Grand Avenue, Suite 2450\n 8 Los Angeles, CA 90071\n 9 Telephone: (213) 785-2610\n Facsimile: (213) 226-4684\n10 Email: lrosen@rosenlegal.com\n11\n Lead Counsel for Plaintiffs\n12\n\n13\n\n14\n\n15\n\n16\n\n17\n\n18\n\n19\n\n20\n\n21\n\n22\n\n23\n\n24\n\n25\n\n26\n\n27\n\n28\n - 25 -\n PLAINTIFFS\u2019 MEMORANDUM IN OPPOSITION TO DEFENDANTS\u2019 MOTION TO DISMISS\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 32 of 33 Page ID\n #:2149\n\n\n\n 1 CERTIFICATE OF SERVICE\n 2 I hereby certify that on January 12, 2026, I authorized the electronic filing of\n 3 the foregoing with the Clerk of the Court using the CM/ECF system which will send\n\n 4 notification of such filing to the e-mail addresses denoted on the attached Electronic\n\n 5 Mail Notice List, and I hereby certify that I caused to be mailed the foregoing\n\n 6 document or paper via the United States Postal Service to the non-CM/ECF\n\n 7 participants indicated on the attached Manual Notice List.\n\n 8 I certify under penalty of perjury under the laws of the United States of\n 9 America that the foregoing is true and correct.\n\n10\n\n11\n Dated: January 12, 2026 /s/ Daniel Tyre-Karp\n Daniel Tyre-Karp\n12\n\n13\n\n14\n\n15\n\n16\n\n17\n\n18\n\n19\n\n20\n\n21\n\n22\n\n23\n\n24\n\n25\n\n26\n\n27\n\n28 - 26 -\n CERTIFICATE OF SERVICE\n\f Case 2:25-cv-06869-SVW-PVC Document 83 Filed 01/12/26 Page 33 of 33 Page ID\n #:2150\n\n\n\n 1\n CERTIFICATE OF COMPLIANCE\n\n 2 The undersigned counsel of record for Lead Plaintiff Jimmy Cleveland White and\n\n 3\n named plaintiffs Tracy Johnson and Jake Stewart certifies that this brief contains 24\n 4\n\n 5 pages, which:\n\n 6 __ complies with the word limit of L.R. 11-6.1.\n\n 7\n X complies with the page limit set by court order dated August 4, 2025 (Dkt. No.\n 8\n 9 10).\n\n10\n\n11 Dated: January 12, 2026 /s/ Daniel Tyre-Karp\n Daniel Tyre-Karp\n12\n\n13\n\n14\n\n15\n\n16\n\n17\n\n18\n\n19\n\n20\n\n21\n\n22\n\n23\n\n24\n\n25\n\n26\n\n27\n\n28 - 27 -\n CERTIFICATE OF SERVICE\n\f","ocr_status":2,"date_upload":"2026-01-13T13:10:27.691475-08:00","document_number":"83","attachment_number":null,"pacer_doc_id":"031046736333","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Response in Opposition to Motion","acms_document_guid":""}],"date_created":"2026-01-13T00:04:03.424626-08:00","date_modified":"2026-02-10T08:16:37.033155-08:00","date_filed":"2026-01-12","time_filed":"23:51:45","entry_number":83,"recap_sequence_number":"2026-01-12.001","pacer_sequence_number":299,"description":"OPPOSITION to NOTICE OF MOTION AND MOTION to Dismiss Case (Second Amended Class Action Complaint) 81 filed by Plaintiffs Tracy Johnson, Jake Stewart, Movant Jimmy Cleveland White. (Tyre-Karp, Daniel) (Entered: 01/12/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/449325712/","id":449325712,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/464116520/","id":464116520,"tags":[],"absolute_url":"/docket/70941407/81/tracy-johnson-v-sable-offshore-corp/","date_created":"2026-01-05T23:31:12.351789-08:00","date_modified":"2026-02-15T02:50:30.624881-08:00","sha1":"7eb3f8a1c274732fbb1f9e74f9d3176f86f0361c","page_count":36,"file_size":371189,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.81.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.81.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 1 of 36 Page ID\n #:1416\n\n 1 LATHAM & WATKINS LLP\n Colleen C. Smith (SBN 231216)\n 2 colleen.smith@lw.com\n 3 12670 High Bluff Drive\n San Diego, CA 92130\n 4 Telephone: (858) 523-5400\n 5 Kristin N. Murphy (SBN 268285)\n 6 kristin.murphy@lw.com\n 650 Town Center Drive, 20th Floor\n 7 Costa Mesa, CA 92626\n Telephone: (714) 540-1235\n 8\n Counsel for Defendants Sable Offshore Corp.,\n 9 James C. Flores, and Gregory D. Patrinely\n 10\n UNITED STATES DISTRICT COURT\n 11 CENTRAL DISTRICT OF CALIFORNIA\n 12\n TRACY JOHNSON, Individually and on\n 13 behalf of all others similarly situated, Case No. 2:25-cv-06869-SVW-PVC\n 14 DEFENDANTS SABLE OFFSHORE\n Plaintiff, CORP., JAMES C. FLORES, AND\n 15 GREGORY D. PATRINELY\u2019S\n v. NOTICE OF MOTION AND\n 16 MOTION TO DISMISS SECOND\n SABLE OFFSHORE CORP., JAMES C. AMENDED CLASS ACTION\n 17 COMPLAINT; MEMORANDUM OF\n FLORES, and GREGORY D. POINTS AND AUTHORITIES\n 18 PATRINELY,\n CLASS ACTION\n 19 Defendants.\n 20 Judge: Hon. Stephen V. Wilson\n 21 Hearing Date: February 9, 2026\n Time: 1:30 p.m.\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 2 of 36 Page ID\n #:1417\n\n 1 TO ALL PARTIES AND THEIR COUNSEL OF RECORD:\n 2 PLEASE TAKE NOTICE THAT on February 9, 2026, at 1:30 p.m., or at such\n 3 later date and time as the Court may order, in the Courtroom of the Honorable\n 4 Stephen V. Wilson, Courtroom 10A, United States District Court, Central District\n 5 of California, located at the First Street Courthouse, 350 W. 1st Street, 10th Floor,\n 6 Los Angeles, California 90012, Defendants Sable Offshore Corp., James C. Flores,\n 7 and Gregory D. Patrinely will, and hereby do, move for an Order dismissing the\n 8 Second Amended Class Action Complaint (the \u201cComplaint,\u201d Dkt. No. 77). This\n 9 Motion is made pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6) and\n 10 the Private Securities Litigation Reform Act, on the grounds that the Complaint fails\n 11 to state a claim upon which relief can be granted.\n 12 This Motion is made following the conference of counsel pursuant to Local\n 13 Rule 7-3, which took place on December 15, 2025, and is based on this Notice of\n 14 Motion and Motion, the accompanying Memorandum of Points and Authorities,\n 15 Request for Judicial Notice, Declaration of Kristin N. Murphy, and exhibits thereto,\n 16 the Court\u2019s record on this matter, the arguments of counsel, and other evidence and\n 17 argument that may be presented prior to the Court\u2019s decision.\n 18\n 19 Dated: January 5, 2026\n 20 LATHAM & WATKINS LLP\n 21 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 22 650 Town Center Drive, 20th Floor\n Costa Mesa, CA 92626\n 23 Telephone: (714) 540-1235\n 24 Email: kristin.murphy@lw.com\n\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 1 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 3 of 36 Page ID\n #:1418\n\n 1 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 2 San Diego, CA 92130\n Telephone: (858) 523-5400\n 3 Email: colleen.smith@lw.com\n 4 Counsel for Defendants\n 5 Sable Offshore Corp., James C.\n Flores, and Gregory D. Patrinely\n 6\n 7\n 8\n 9\n 10\n 11\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 2 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 4 of 36 Page ID\n #:1419\n\n 1 TABLE OF CONTENTS\n 2\n Page\n 3\n I. INTRODUCTION .......................................................................................... 1\n 4\n II. BACKGROUND ............................................................................................ 2\n 5\n 6 A. Sable Purchases and Repairs Oil-Related Assets in Santa\n Barbara ................................................................................................. 2\n 7\n B. Legal Battles Emerge About Restarting the Onshore\n 8\n Pipelines ............................................................................................... 3\n 9\n C. Sable Begins Flowing Oil and Updates Its Investors .......................... 4\n 10\n D. Sable Suffers Unexpected Setbacks ..................................................... 5\n 11\n 12 E. A Short Seller Issues a Report and Other Developments\n Occur .................................................................................................... 6\n 13\n III. LEGAL STANDARD .................................................................................... 7\n 14\n 15 IV. ARGUMENT ................................................................................................. 8\n 16 A. Plaintiffs Fail to Plead Falsity .............................................................. 8\n 17 1. No Falsity for Statements About Restarting Oil\n 18 Production (Stmts. 1-2, 5, 8, and 11) ......................................... 9\n 19 2. No Falsity for Projections About Production,\n 20 Which Are Protected by the Safe Harbor (Stmts. 4\n and 9) ....................................................................................... 10\n 21\n 3. No Falsity for Statements About Repairs and Tests\n 22 (Stmts. 3, 10, 13-15) ................................................................ 12\n 23\n 4. No Falsity for Opinions and Puffery Statements\n 24 (Stmts. 3, 6-7, 10, 12-19) ......................................................... 13\n 25 B. Plaintiffs Fail to Plead Scienter.......................................................... 16\n 26\n 1. No Scienter Based on \u201cMere Motive and\n 27 Opportunity\u201d ............................................................................ 17\n 28 2. No Scienter Based on Public Offerings ................................... 18\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n i MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 5 of 36 Page ID\n #:1420\n\n 1 3. No Scienter Based on Title and Day-to-Day\n 2 Operations ................................................................................ 18\n\n 3 4. No Scienter Based on the Hunterbrook Short\n Report ...................................................................................... 19\n 4\n 5 5. The Non-Culpable Inference Is Far More\n Compelling .............................................................................. 19\n 6\n C. Plaintiffs Fail to Plead Loss Causation .............................................. 20\n 7\n 8 1. No Loss Causation from the Letter on May 28,\n 2025 ......................................................................................... 20\n 9\n 2. No Loss Causation from Developments on May\n 10\n 28, June 3, October 15, and November 4, 2025 ...................... 21\n 11\n 3. No Loss Causation on October 31 and November\n 12 3, 2025 ..................................................................................... 23\n 13\n V. CONCLUSION ............................................................................................ 25\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n ii MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 6 of 36 Page ID\n #:1421\n\n 1 TABLE OF AUTHORITIES\n 2\n Page(s)\n 3\n CASES\n 4\n Adamo v. Nextdoor Holdings, Inc.,\n 5\n 2025 WL 3238205 (N.D. Cal. Nov. 20, 2025) ................................................... 17\n 6\n Anshen v. Facebook,\n 7 2017 WL 5635021 (C.D. Cal. Oct. 4, 2017) ...................................................... 20\n 8\n Applestein v. Medivation, Inc.,\n 9 561 Fed. Appx. 598 (9th Cir. 2014) ................................................................... 17\n 10 Dura Pharms., Inc. v. Broudo,\n 11 544 U.S. 336 (2005) ............................................................................................. 1\n 12 Espy v. J2 Glob.,\n 99 F.4th 527 (9th Cir. 2024) ............................................................................... 21\n 13\n 14 Grobler v. Neovasc Inc.,\n 2016 WL 6897760 (D. Mass. Nov. 22, 2016) .................................................... 15\n 15\n Hamano v. Activision Blizzard, Inc.,\n 16\n 2019 WL 7882076 (C.D. Cal. Oct. 17, 2019) .................................................... 17\n 17\n Hoang v. ContextLogic, Inc.,\n 18 2023 WL 6536162 (N.D. Cal. Mar. 10, 2023) ................................................... 22\n 19\n In re BofI Holding, Inc. Sec. Litig.,\n 20 302 F. Supp. 3d 1128 (S.D. Cal. 2018) ........................................................ 14, 15\n 21 In re BofI Holding, Inc. Sec. Litig.,\n 22 977 F.3d 781 (9th Cir. 2020) ........................................................................ 21, 23\n 23 In re Cisco Sys. Inc. Sec. Litig.,\n 24 2013 WL 1402788 (N.D. Cal. Mar. 29, 2013) ................................................... 12\n\n 25 In re Cloudera, Inc. Sec. Litig.,\n 121 F.4th 1180 (9th Cir. 2024) ................................................................. 8, 10, 25\n 26\n 27 In re Cutera Sec. Litig.,\n 610 F.3d 1103 (9th Cir. 2010) ............................................................................ 11\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n iii MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 7 of 36 Page ID\n #:1422\n\n 1 In re Hansen Nat. Corp. Sec. Litig.,\n 2 527 F. Supp. 2d 1142 (C.D. Cal. 2007) .............................................................. 19\n\n 3 In re Illumina, Inc. Sec. Litig.,\n 2025 WL 2739655 (S.D. Cal. Sept. 26, 2025) ................................................... 20\n 4\n 5 In re Nektar Therapeutics Sec. Litig.,\n 34 F.4th 828 (9th Cir. 2022) ..................................................................... 7, 23, 25\n 6\n In re NVIDIA Corp. Sec. Litig.,\n 7\n 768 F.3d 1046 (9th Cir. 2014) ............................................................................ 16\n 8\n In re Philip Morris,\n 9 89 F.4th 408 (2d Cir. 2023) .......................................................................... 14, 15\n 10\n In re Sorrento Therapeutics, Inc. Sec. Litig.,\n 11 97 F.4th 634 (9th Cir. 2024) ............................................................................... 10\n 12 In re Splash Tech. Holdings, Inc. Sec. Litig.,\n 13 160 F. Supp. 2d 1059 (N.D. Cal. 2001) ............................................................. 11\n 14 In re Worlds of Wonder Sec. Litig.,\n 35 F.3d 1407 (9th Cir. 1994) .............................................................................. 20\n 15\n 16 Karam v. Corinthian Colls., Inc.,\n 2012 WL 8499135 (C.D. Cal. Aug. 20, 2012) ................................................... 18\n 17\n 18 Loos v. Immersion Corp.,\n 762 F.3d 880 (9th Cir. 2014) ........................................................................ 20, 24\n 19\n Markette v. XOMA Corp.,\n 20 2017 WL 4310759 (N.D. Cal. Sept. 28, 2017)................................................... 14\n 21\n Metzler Inv. GMBH v. Corinthian Colls., Inc.,\n 22 540 F.3d 1049 (9th Cir. 2008) ............................................................ 7, 12, 16, 18\n 23 Mineworkers\u2019 Pension Scheme v. First Solar Inc.,\n 24 881 F.3d 750 (9th Cir. 2018) ........................................................................ 21, 23\n 25 Nguyen v. Endologix, Inc.,\n 26 962 F.3d 405 (9th Cir. 2020) .............................................................................. 19\n\n 27 Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension Fund,\n 575 U.S. 175 (2015) ............................................................................... 13, 15, 16\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n iv MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 8 of 36 Page ID\n #:1423\n\n 1 Or. Pub. Emps. Ret. Fund v. Apollo Grp. Inc.,\n 2 774 F.3d 598 (9th Cir. 2014) .......................................................................... 8, 20\n\n 3 Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc.,\n 2012 WL 1868874 (N.D. Cal. May 22, 2012) ................................................... 18\n 4\n 5 Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc.,\n 759 F.3d 1051 (9th Cir. 2014) ...................................................................... 11, 15\n 6\n Prodanova v. H.C. Wainwright & Co., LLC,\n 7\n 993 F.3d 1097 (9th Cir. 2021) ...................................................................... 17, 20\n 8\n In re Rigel Pharms. Inc. Sec. Litig.,\n 9 697 F.3d 869, 884 (9th Cir. 2012) ...................................................................... 18\n 10\n Rok v. Identiv, Inc.,\n 11 2017 WL 35496 (N.D. Cal. Jan. 4, 2017) .......................................................... 24\n 12 Rubke v. Capitol Bancorp Ltd.,\n 13 551 F.3d 1156 (9th Cir. 2009) ............................................................................ 15\n 14 Sneed v. Talphera, Inc.,\n 147 F.4th 1123 (9th Cir. 2025) ....................................................................... 8, 10\n 15\n 16 Sprewell v. Golden State Warriors,\n 266 F.3d 979 (9th Cir. 2001) .............................................................................. 13\n 17\n 18 Teamsters Loc. 617 Pension & Welfare Funds v. Apollo Grp., Inc.,\n 2011 WL 1253250 (D. Ariz. Mar. 31, 2011) ....................................................... 9\n 19\n Tellabs, Inc. v. Makor Issues & Rts., Ltd.,\n 20 551 U.S. 308 (2007) ..................................................................................... 16, 19\n 21\n Wallack v. Idexx Laboratories, Inc.,\n 22 2013 WL 1562523 (S.D. Cal. Apr. 11, 2013) .................................................... 21\n 23 Webb v. SolarCity Corp.,\n 24 884 F.3d 844 (9th Cir. 2018) ........................................................................ 16, 18\n 25 Wenzel v. Semiconductor Mfg. Int\u2019l Corp.,\n 26 2021 WL 12312024 (C.D. Cal. Nov. 18, 2021) ................................................. 22\n\n 27 Weston Fam. P\u2019ship LLLP v. Twitter, Inc.,\n 29 F.4th 611 (9th Cir. 2022) ........................................................................... 8, 11\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n v MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 9 of 36 Page ID\n #:1424\n\n 1 Zamir v. Bridgepoint Educ., Inc.,\n 2 2018 WL 1258108 (S.D. Cal. Mar. 12, 2018) .................................................... 19\n\n 3 Zucco Partners, LLC v. Digimarc Corp.,\n 552 F.3d 981 (9th Cir. 2009) ........................................................................ 18, 25\n 4\n 5 STATUTES\n\n 6 15 U.S.C.\n \u00a7 78t .................................................................................................................... 25\n 7\n \u00a7 78u-4(b)(1)................................................................................................... 8, 13\n 8 \u00a7 78u-4(b)(2)(A) ................................................................................................... 8\n \u00a7 78u-5(c)(1) ....................................................................................................... 11\n 9\n 10 RULES\n 11 Fed. R. Civ. P. 12(b)(6) ............................................................................................. 7\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n vi MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 10 of 36 Page ID\n #:1425\n\n 1 I. INTRODUCTION\n 2 On May 19, 2025, Sable Offshore announced that it had begun flowing oil\n 3 from its offshore platform near Santa Barbara, California to its onshore storage and\n 4 processing facility. This was an important step in Sable\u2019s ongoing effort to re-\n 5 commercialize an oil field unit that had not transported petroleum for ten years.\n 6 Weeks later, Sable encountered unexpected hurdles. In a case involving the Coastal\n 7 Commission, a judge issued a preliminary injunction barring future development\n 8 work; in another case, a judge temporarily restrained the fire marshal from issuing\n 9 Sable further authorizations. The Santa Barbara County Board of Supervisors then\n 10 voted against transferring permits from the unit\u2019s prior owner to Sable.\n 11 Unsurprisingly, the market reacted negatively to these new developments\n 12 which introduced potential additional delays, costs, and litigation. But these stock\n 13 drops based on bad news were not securities fraud. Securities laws do not \u201cprovide\n 14 investors with broad insurance against market losses.\u201d Dura Pharms., Inc. v.\n 15 Broudo, 544 U.S. 336, 345 (2005). Congress enacted the Private Securities\n 16 Litigation Reform Act (\u201cPSLRA\u201d) to bar cases like this one, where investors rely on\n 17 fraud-by-hindsight to try to recover for the downside risk of their investments. Here,\n 18 Plaintiffs fail to plead the required elements of falsity, scienter, and loss causation.\n 19 Falsity. Plaintiffs\u2019 core theory is that \u201ccontrary to Defendants\u2019\n 20 representations, Sable had not restarted oil production.\u201d \u00b6 69. A conclusory, one-\n 21 sentence denial fails to plead falsity as a matter of law. Plaintiffs even concede the\n 22 accuracy of Sable\u2019s May 19 statement when they acknowledge that Sable initiated\n 23 \u201climited volume oil flows\u201d from its offshore platform, exactly as it told investors.\n 24 \u00b6 72. Stripped of this headline allegation, Plaintiffs attempt to cobble together a\n 25 theory of fraud from unsupported accusations that Sable \u201cmisled investors about the\n 26 regulatory hurdles the company faced, the status of its repairs, and its timeline for\n 27 restarting oil production and recommencing commercial sales.\u201d \u00b6 57. But Plaintiffs\n 28 do not plead particularized facts showing that any statement was false or misleading\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 1 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 11 of 36 Page ID\n #:1426\n\n 1 when made. Other statements can be dismissed for the additional (independent)\n 2 reasons that they are forward-looking, puffery, or opinions that are not actionable.\n 3 Scienter. Plaintiffs\u2019 scienter allegations\u2014that Defendants intended to\n 4 deceive investors or acted deliberately recklessly\u2014are thinner still. Plaintiffs ask\n 5 the Court to infer that Defendants must have intentionally misled the market because\n 6 they were under \u201cexistential pressure\u201d to restart oil production. \u00b6\u00b6 98, 100. But the\n 7 Ninth Circuit consistently rejects such speculative, unsupported theories. Despite\n 8 the high pleading standard for fraud, Plaintiffs allege no contemporaneous facts\n 9 suggesting that any Defendant knew that a statement was false or misleading. To\n 10 the contrary, the pleaded facts show that Sable was engaging with regulators,\n 11 litigating novel administrative issues, and adjusting its business strategy as\n 12 circumstances evolved. Viewed holistically, the more cogent inference is\n 13 non\u2011culpable: Defendants believed in their plans, communicated risks to the market,\n 14 and reported developments to investors as they occurred.\n 15 Loss Causation. Plaintiffs also fail to plead loss causation with the necessary\n 16 specificity. Plaintiffs allege that Sable\u2019s stock price dropped after a variety of\n 17 regulatory, litigation, and political setbacks, not after any revelation of fraud.\n 18 When Defendants pointed out these fatal defects in their motion to dismiss the\n 19 first amended complaint, Plaintiffs chose not to oppose and instead filed this\n 20 marginally different second amended complaint. This Complaint\u2014Plaintiffs\u2019 third\n 21 attempt to state a claim\u2014continues to fall far short of what the PSLRA and Rule\n 22 9(b) require. The Complaint should be dismissed, this time with prejudice.\n 23 II. BACKGROUND\n 24 A. Sable Purchases and Repairs Oil-Related Assets in Santa Barbara\n 25 In February 2024, Sable bought three types of oil-related assets from Exxon\n 26 Mobil located in or near Santa Barbara, California. \u00b6\u00b6 9, 23-24.\n 27 1. Offshore Leases and Other Assets (the Santa Ynez Unit): The Santa Ynez Unit\n 28 consists of offshore drilling platforms in federal waters and related wells,\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 2 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 12 of 36 Page ID\n #:1427\n\n 1 pipelines, and facilities. \u00b6\u00b6 9, 19; see Ex. 1 at 11.\n 2\n 2. Onshore Storage & Processing (Las Flores Canyon): Oil is flowed from the\n 3 offshore drilling platforms via pipeline to Sable\u2019s onshore facility in Las\n 4 Flores Canyon for processing. \u00b6\u00b6 23, 59; Ex. 1 at 11.\n 5\n 3. Onshore Pipelines (the Las Flores Pipelines): After processing, the onshore\n 6 Las Flores Pipelines are intended to transport oil to inland pipeline\n infrastructure that further transports oil to refineries. \u00b6\u00b6 19, 68; Ex. 1 at 11.\n 7\n 8 Exxon Mobil loaned Sable $623 million to fund this deal. \u00b6 25. If Sable did\n 9 not \u201cRestart Production\u201d by March 1, 2026, Exxon Mobil could retake ownership of\n 10 the assets. \u00b6\u00b6 25-26; see also Ex. 2 at 176 (defining \u201cRestart Production\u201d as \u201cninety\n 11 (90) days after the resumption of actual production from [the Santa Ynez Unit]\u201d).\n 12 After the deal closed, Sable undertook repair and maintenance work as\n 13 needed. \u00b6\u00b6 42, 59, 68; see Exs. 3, 4. Most of the work focused on repairing the\n 14 onshore Las Flores Pipelines. See id. In 2015, one location along the Las Flores\n 15 Pipelines ruptured, resulting in an oil spill. See \u00b6 18. The pipelines\u2019 prior owner\n 16 entered into a consent decree with the United States and the State of California\n 17 (\u201cConsent Decree\u201d). See \u00b6 21; Ex. 3. The Consent Decree provided a path to resume\n 18 petroleum transportation through the Las Flores Pipelines. Ex. 3, App\u2019x B, D. It\n 19 required that the pipelines\u2019 owner repair \u201canomalies\u201d1 along the pipelines and to\n 20 submit a \u201cRestart Plan\u201d confirming that all repairs were complete. Ex. 3 at 261-62,\n 21 276-283; see \u00b6 41. As the new owner, Sable began certain pipeline repair work.\n 22 B. Legal Battles Emerge About Restarting the Onshore Pipelines\n 23 As Sable drew closer to resuming oil production from the Santa Ynez Unit,\n 24 multiple organizations sued to try to prevent (or postpone) Sable\u2019s efforts.\n 25 The California Coastal Commission Litigation: Plaintiffs allege that the\n 26 California Coastal Commission regulates activities associated with the Las Flores\n 27\n 1\n 28 A pipeline anomaly refers to a pipeline segment that \u201cdeviat[es] from its original\n configuration,\u201d often because of metal losses. Ex. 4 at 286; Ex. 3 at 263.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 3 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 13 of 36 Page ID\n #:1428\n\n 1 Pipelines. \u00b6 27. The Commission issued notices starting in September 2024\n 2 claiming that Sable\u2019s anomaly repair and other work violated the California Coastal\n 3 Act. \u00b6\u00b6 33-36. On February 18, 2025, Sable sought declaratory relief that the\n 4 Commission lacked authority to issue the notices because, in part, the Commission\n 5 delegated authority to regulate the activities associated with repairs to Santa Barbara\n 6 County, and the County informed Sable that its \u201c\u2018anomaly repair work\u2019 . . . is\n 7 authorized by [Sable\u2019s] existing permits.\u201d Ex. 4 at 287-88, 327-28; see also \u00b6 76.\n 8 The Commission then issued a cease and desist order\u2014purportedly \u201crequiring Sable\n 9 to halt all repair and maintenance work that requires coastal development permits\u201d\u2014\n 10 and in April moved for a preliminary injunction to enforce its order. \u00b6\u00b6 37-39.\n 11 The State Waivers Litigation: On April 15, 2025, environmental groups filed\n 12 two lawsuits against the Office of the State Fire Marshal (which the Complaint\n 13 alleges had to approve the \u201cRestart Plan\u201d for the onshore pipelines, \u00b6 42) and others,\n 14 naming Sable as the real party in interest. See \u00b6 46; Exs. 5-6. These plaintiffs\n 15 alleged that the Fire Marshal improperly approved certain \u201cState Waivers\u201d without\n 16 allowing for sufficient public notice and without conducting an adequate\n 17 environmental review under the California Environmental Quality Act (\u201cCEQA\u201d).\n 18 \u00b6\u00b6 44, 46; Exs. 5-6. The plaintiffs asked the court to enjoin the restart of the onshore\n 19 pipelines and require more public hearings and CEQA review. Exs. 5-6.\n 20 Development Permit Application: Exxon Mobil transferred various permits to\n 21 Sable as part of the asset sale. See \u00b6 28; Ex. 2 at 122. Santa Barbara County\u2019s\n 22 Planning Commission approved the transfer, but environmental groups appealed that\n 23 approval to the Santa Barbara County Board of Supervisors. \u00b6 29.2\n 24 C. Sable Begins Flowing Oil and Updates Its Investors\n 25 On May 15, 2025, Sable began flowing oil produced at one of its offshore\n 26 platforms to its onshore storage and processing facility at Las Flores Canyon. See\n 27 \u00b6\u00b6 58-59; Ex. 7 at 429. On May 19, Sable reported this development in a press\n 28 2\n Plaintiffs reference other litigation but fail to plead its relevance. \u00b6\u00b6 50-56.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 4 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 14 of 36 Page ID\n #:1429\n\n 1 release with a headline starting: \u201cSable Offshore Corp. Reports Restart of Oil\n 2 Production at the Santa Ynez Unit.\u201d \u00b6 58; see Ex. 7 at 429. Sable reported the flow\n 3 rate of oil and disclosed projections about the future of its wells. \u00b6 60; Ex. 7 at 429.\n 4 Sable reported that, while it had \u201ccompleted its anomaly repair program on\n 5 the Onshore Pipeline[s] as specified by the Consent Decree,\u201d the onshore Las Flores\n 6 Pipelines had not yet been fully tested. \u00b6 59; see Ex. 7 at 429 (as of May 19 only\n 7 \u201c[s]even of the eight sections of the Onshore Pipeline[s] have been successfully\n 8 hydrotested\u201d). As a result, Sable was \u201cflowing oil production to Las Flores Canyon,\u201d\n 9 but not transporting oil beyond its storage and processing facility through the\n 10 onshore Las Flores Pipelines. Id. Sable\u2019s press release made clear that Sable had\n 11 not begun selling oil: \u201cThe [Santa Ynez Unit] assets discussed in this press release\n 12 have not sold commercial quantities of [oil] since . . . June of 2015 . . .\u201d Id. at 430.\n 13 It also warned that \u201c[t]here can be no assurance that the necessary permits will be\n 14 obtained that would allow the Onshore Pipeline[s] to recommence transportation and\n 15 allow the [Santa Ynez Unit] assets to recommence sales.\u201d Id.\n 16 On May 22, 2025, Sable issued a prospectus for a public stock offering, which\n 17 reiterated that Sable \u201cinitiated oil production from six wells. . . at [the Santa Ynez\n 18 Unit]\u201d and \u201cbegan flowing oil production to Las Flores Canyon.\u201d \u00b6\u00b6 67-68; Ex. 8\n 19 at 444. Given that Sable restarted production, it said it expected its loan with Exxon\n 20 Mobil would mature in early 2026. \u00b6 68; Ex. 8 at 456. The May 22 prospectus\n 21 repeated that Sable \u201ccompleted its anomaly repair program on the Onshore Pipeline\n 22 as specified by a Consent Decree.\u201d \u00b6 68; Ex. 8 at 445. Like the May 19 press release,\n 23 the prospectus contained robust risk factors and warnings. Ex. 8 at 456-465.\n 24 On May 28, 2025, Sable filed a Form 8-K reporting that it completed the final\n 25 hydrotest for the onshore Las Flores Pipelines. \u00b6 80; Ex. 13. Sable told investors\n 26 that \u201cno more repairs are required to the Onshore Pipelines prior to restart.\u201d Id.\n 27 D. Sable Suffers Unexpected Setbacks\n 28 Plaintiffs allege that on May 28, 2025, the public learned of a letter sent by\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 5 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 15 of 36 Page ID\n #:1430\n\n 1 Eleni Kounalakis, California Lt. Governor and California State Lands Commission\n 2 chair, to Sable. See \u00b6\u00b6 70-71. The letter acknowledged \u201coil flows\u201d from the Santa\n 3 Ynez Unit and reported Kounalakis\u2019s understanding that the flows resulted from\n 4 \u201cwell-testing procedures.\u201d \u00b6 72. It expressed \u201cconcerns\u201d about the May 19 press\n 5 release and asserted that parts were \u201cmisleading\u201d because Sable had \u201cnot obtained\n 6 the necessary regulatory approvals to fully resume operations.\u201d Id.\n 7 In the ensuing days and weeks, Sable confronted setbacks in its ongoing\n 8 litigation. Also on May 28, 2025 (soon after Sable finished repairs required by the\n 9 Consent Decree and the final hydrotest), the Coastal Commission Litigation court\n 10 issued a preliminary injunction that stopped \u201cSable from continuing any\n 11 development associated with the return to service of the Las Flores Pipelines . . .\u201d\n 12 \u00b6\u00b6 39, 74-76. On June 3, 2025, the State Waivers Litigation court issued a temporary\n 13 restraining order that prevented the Fire Marshal \u201cfrom granting further\n 14 authorizations and preventing Sable from restarting use of the pipelines.\u201d \u00b6 78.\n 15 Sable had finished repairing and testing the onshore pipelines as of May 28,\n 16 so it explained to the public that the injunction had \u201cno bearing on Sable\u2019s plans to\n 17 recommence oil sales by July.\u201d \u00b6 81; see \u00b6\u00b6 85. In September 2025, Sable submitted\n 18 to the Fire Marshal updates to its 2024 Restart Plan. \u00b6 48; see Ex. 1 at 14.\n 19 E. A Short Seller Issues a Report and Other Developments Occur\n 20 On October 31, 2025, Hunterbrook Media\u2014an organization that self-\n 21 identifies as an affiliate of short sellers who seek to profit from corporate\n 22 misfortunes\u2014published an article about Sable (\u201cHunterbrook Short Report\u201d). \u00b6 88;\n 23 Ex. 9 at 557-59. The Hunterbrook Short Report published what it characterized as\n 24 a leaked audio recording involving Sable CEO James Flores and a \u201cselect group of\n 25 investors\u201d from October, allegedly concerning Sable\u2019s need for an equity infusion,\n 26 and argued that such \u201cselective disclosures potentially violate\u201d SEC rules. \u00b6\u00b6 88,\n 27 104; see Ex. 9 at 541. Hunterbrook Media disclaimed any \u201crepresentation regarding\n 28 the completeness or timeliness\u201d of the information it reported, and it noted that the\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 6 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 16 of 36 Page ID\n #:1431\n\n 1 information it sourced from third parties \u201chas not been independently verified, and\n 2 its accuracy or completeness is not guaranteed.\u201d Ex. 9 at 559.\n 3 On November 3, 2025, Sable issued a press release with three updates. \u00b6 92;\n 4 see Ex. 10. First, Sable announced that its Board of Directors formed a Special\n 5 Committee to \u201cundertake an independent investigation of the allegations contained\n 6 in\u201d the Hunterbrook Short Report. \u00b6 92; Ex. 10 at 565. Second, Sable announced\n 7 that it amended the loan agreement with Exxon Mobil, and that the amendment\n 8 would be effective after Sable raised additional capital. Id. Third, Plaintiffs allege\n 9 Sable announced that it was \u201cno longer pursuing use of the [onshore] pipelines as its\n 10 primary course for delivering oil,\u201d and would instead pursue an \u201c\u2018Offshore Storage\n 11 and Treating Vessel\u2019 strategy.\u201d \u00b6 92. Plaintiffs allege that the next day, on\n 12 November 4, 2025, the Santa Barbara County Supervisors voted to \u201cdeny the transfer\n 13 of permits from ExxonMobil to Sable,\u201d and one supervisor criticized Sable. \u00b6 93.\n 14 In December 2025 (after the class period ended), Sable disclosed in an SEC\n 15 filing that the federal government determined that the Las Flores Pipelines are\n 16 interstate pipelines and therefore subject to \u201cexclusive [federal] regulatory\n 17 authority.\u201d Ex. 15 at 623, 629. Sable disclosed in a subsequent filing that the federal\n 18 government approved Sable\u2019s Restart Plan for the onshore pipelines. Ex. 16 at 637.\n 19 III. LEGAL STANDARD\n 20 \u201cTo plead a claim under \u00a7 10(b) and rule 10b-5, a plaintiff must allege: \u2018(1) a\n 21 material misrepresentation or omission [falsity]; (2) scienter; (3) a connection\n 22 between the misrepresentation or omission and the purchase or sale of a security;\n 23 (4) reliance; (5) economic loss; and (6) loss causation.\u2019\u201d In re Nektar Therapeutics\n 24 Sec. Litig., 34 F.4th 828, 835 (9th Cir. 2022). Under the PSLRA, \u201cplaintiffs in\n 25 private securities fraud class actions face formidable pleading requirements to\n 26 properly state a claim and avoid dismissal under Fed. R. Civ. P. 12(b)(6).\u201d Metzler\n 27 Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1054-55 (9th Cir. 2008).\n 28 Plaintiffs must \u201cspecify each statement alleged to have been misleading [and] the\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 7 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 17 of 36 Page ID\n #:1432\n\n 1 reason or reasons why the statement is misleading\u201d and \u201cstate with particularity facts\n 2 giving rise to a strong inference that the defendant acted with the required state of\n 3 mind.\u201d 15 U.S.C. \u00a7\u00a7 78u-4(b)(1)(B), (2)(A). Similarly, Rule 9(b)\u2019s \u201cheightened\n 4 pleading requirements\u201d mean that Plaintiffs must allege each element of falsity,\n 5 scienter, and loss causation with particularity. See Or. Pub. Emps. Ret. Fund v.\n 6 Apollo Grp. Inc., 774 F.3d 598, 604-05 (9th Cir. 2014).\n 7 IV. ARGUMENT\n 8 Plaintiffs\u2019 central theory is that \u201cSable had not restarted oil production\u201d when\n 9 it said it had. \u00b6 63. But Plaintiffs articulate no facts in support of that theory.\n 10 Instead, they chronicle a set of regulatory and litigation \u201churdles\u201d and \u201csetback[s]\u201d\n 11 Sable encountered after it began flowing oil from the Santa Ynez Unit to its onshore\n 12 storage and processing facility in May 2025. \u00b6\u00b6 27, 75. Facing and promptly\n 13 reporting unexpected challenges and developments is not securities fraud.\n 14 A. Plaintiffs Fail to Plead Falsity\n 15 The PSLRA \u201cprescribes an \u2018exacting\u2019 standard, under which a \u2018litany of\n 16 alleged false statements, unaccompanied by the pleading of specific facts indicating\n 17 why those statements were false,\u2019 is insufficient.\u201d In re Cloudera, Inc. Sec. Litig.,\n 18 121 F.4th 1180, 1187 (9th Cir. 2024). \u201cFor a statement to be false or misleading, it\n 19 must \u2018directly contradict what the defendant knew at that time\u2019 or \u2018omit[] material\n 20 information.\u2019\u201d Weston Fam. P\u2019ship LLLP v. Twitter, Inc., 29 F.4th 611, 619 (9th\n 21 Cir. 2022). The Court must also \u201clook at \u2018the context surrounding the statement,\u2019\u201d\n 22 because a \u201creasonable investor cares about a statement\u2019s \u2018surrounding text, including\n 23 hedges, disclaimers, and apparently conflicting information.\u2019\u201d Sneed v. Talphera,\n 24 Inc., 147 F.4th 1123, 1131 (9th Cir. 2025).\n 25 Plaintiffs challenge nineteen statements made between May 19 and October\n 26 31, 2025. None is actionable because Plaintiffs fail to plead particularized facts\n 27 showing that any of the nineteen statements was false or misleading. Two statements\n 28 (Stmts. 4 and 9) also fail to state a claim because they fall within the PSLRA\u2019s safe\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 8 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 18 of 36 Page ID\n #:1433\n\n 1 harbor for forward-looking statements. And twelve statements (Stmts. 3, 6, 7, 10,\n 2 12-19) are opinion statements or puffery that are not adequately pleaded as false.\n 3 1. No Falsity for Statements About Restarting Oil Production\n (Stmts. 1-2, 5, 8, and 11)\n 4\n 5 Sable disclosed on May 19, 2025 that it \u201crestarted production at the Santa\n 6 Ynez Unit\u201d and had \u201cbegun flow[ing] oil production to Las Flores Canyon,\u201d the\n 7 onshore storage facility. See \u00b6\u00b6 58-59 (Stmts. 1-2); see also \u00b6 61 (Stmt. 5) (Sable\n 8 \u201cis proud to have safely and responsibly achieved first production\u201d). Three days\n 9 later, on May 22, Sable reiterated in its prospectus that it had \u201cinitiated oil\n 10 production\u201d from the Santa Ynez Unit and \u201cbegan flowing oil production to Las\n 11 Flores Canyon\u201d at a rate of about \u201c6,000 barrels of oil per day.\u201d Id. \u00b6 67 (Stmt. 8);\n 12 see also \u00b6 68 (Stmt. 11) (part of risk factor stating \u201crestart of production on May 15\u201d\n 13 was \u201cexpected\u201d to trigger the maturity date for Sable\u2019s loan from Exxon Mobil).\n 14 Plaintiffs do not plead facts showing that any of these statements was false or\n 15 misleading. The Complaint contains no allegations that oil was not flowing from\n 16 Sable\u2019s offshore platform to onshore storage, no allegations that Sable\u2019s wells were\n 17 off when Sable said they were on, and no factual allegations that Sable\u2019s statements\n 18 were false. Indeed, Plaintiffs acknowledge that there were \u201climited volume oil\n 19 flows\u201d starting on May 15, \u00b6 72, which is what Sable told investors when it stated it\n 20 had begun flowing oil to its storage facility at a specified rate. See Ex. 7 at 429 (only\n 21 6 of 102 wells initiated production; only 1 of 3 platforms initiated production).\n 22 Rather than plead contradictory facts, Plaintiffs present the Court with the\n 23 bare conclusion that \u201cSable had not restarted oil production.\u201d \u00b6\u00b6 63, 69. \u201cRote\n 24 repetition of [a] conclusory allegation . . . does not satisfy the PSLRA\u2019s particularity\n 25 requirement.\u201d Teamsters Loc. 617 Pension & Welfare Funds v. Apollo Grp., Inc.,\n 26 2011 WL 1253250, at *24 (D. Ariz. Mar. 31, 2011). Plaintiffs do not allege how\n 27 Sable\u2019s activities were not a \u201cRestart of Oil Production,\u201d either under an ordinary\n 28 meaning or as that term is understood by the market and in the industry. \u00b6 58. See\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 9 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 19 of 36 Page ID\n #:1434\n\n 1 Cloudera, 121 F.4th at 1189 (if relevant terms \u201clack a plain or ordinary meaning,\u201d\n 2 plaintiff must \u201c\u2018plead facts\u2019 supporting his definitions of those terms\u201d).\n 3 The May 19 press release and May 22 prospectus both made clear that\n 4 additional tests, approvals, and steps were necessary before Sable could fully resume\n 5 production and begin selling oil. It is of no moment that Plaintiffs allege that\n 6 \u201cpending lawsuits\u201d could prove \u201cconsequential to Sable\u2019s ability to restart\n 7 production\u201d or that Sable \u201clacked the necessary permits to . . . restart production\u201d\n 8 \u00b6 63, as these allegations do not contradict what Sable said: that it had begun flowing\n 9 oil to its onshore storage facility. Sable in fact warned investors that environmental\n 10 groups could \u201cbe successful in delaying or preventing us from obtaining the required\n 11 approvals through litigation.\u201d Ex. 8 at 459. Sable also warned that there was \u201cno\n 12 assurance that the necessary permits will be obtained\u201d that would allow the \u201cassets\n 13 to recommence sales.\u201d Ex. 7 at 430. The Ninth Circuit\u2019s reminder to examine \u201cthe\n 14 context surrounding the statement\u201d to \u201cdecide whether a misstatement or omission\n 15 can mislead\u201d is especially apt here in showing that Sable\u2019s disclosures were accurate.\n 16 Sneed, 147 F.4th at 1131; see also In re Sorrento Therapeutics, Inc. Sec. Litig., 97\n 17 F.4th 634, 641-42 (9th Cir. 2024) (affirming dismissal when \u201c[a] fair reading of the\n 18 press release and the articles\u201d showed only promising experimental results).\n 19 2. No Falsity for Projections About Production, Which Are\n Protected by the Safe Harbor (Stmts. 4 and 9)\n 20\n 21 Plaintiffs next challenge projections in the May 19 press release and May 22\n 22 prospectus: (1) Sable\u2019s projection that it \u201cexpects to fill the ~540,000 barrels of crude\n 23 oil storage capacity at [Las Flores Canyon] by the middle of June 2025\u201d; (2) that\n 24 Sable expected to \u201crecommence oil sales in July 2025\u201d; and (3) that Sable \u201cexpects\n 25 to initiate production from the [two] additional [offshore platforms] . . . in July 2025\n 26 and August 2025.\u201d \u00b6 60 (Stmt. 4), \u00b6 67 (Stmt. 9). Plaintiffs contend that such\n 27 completion dates were \u201cimplausible.\u201d \u00b6 63.\n 28 These projections are quintessential forward-looking statements protected by\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 10 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 20 of 36 Page ID\n #:1435\n\n 1 the PSLRA\u2019s statutory safe harbor. 15 U.S.C. \u00a7 78u-5(c)(1). The PSLRA provides\n 2 that forward-looking statements cannot support a fraud claim if either (1) the\n 3 statements are identified as forward-looking and accompanied by meaningful\n 4 cautionary language, or (2) \u201cthe plaintiff fails to show that the statement was made\n 5 with actual knowledge that it was false or misleading.\u201d Weston Fam. P\u2019ship, 29\n 6 F.4th at 620. Sable\u2019s projections fall within both safe harbor provisions.\n 7 A projection is \u201cby definition a forward-looking statement.\u201d In re Cutera Sec.\n 8 Litig., 610 F.3d 1103, 1111 (9th Cir. 2010). And Sable told investors that its\n 9 \u201cexpectations\u201d are \u201c\u2018forward-looking statements\u2019 within the meaning of the\n 10 [PSLRA]\u201d in both its May 2025 press release and prospectus. Ex. 7 at 430; see Ex. 8\n 11 at 439. Sable\u2019s projections included meaningful cautionary statements. Sable stated\n 12 that \u201cregulatory changes,\u201d \u201clitigation,\u201d and its \u201cability to comply with laws and\n 13 regulations\u201d could cause its \u201c[a]ctual results [to] differ materially from those\n 14 described in the forward-looking statements.\u201d Ex. 7 at 430; see also Ex. 8 at 456\n 15 (\u201cno assurance that we will be successful in . . . recommenc[ing] oil sales in a timely\n 16 manner\u201d), 459 (environmental litigation risk factor). These statements foreclose\n 17 liability under Ninth Circuit law. See, e.g., Police Ret. Sys. of St. Louis v. Intuitive\n 18 Surgical, 759 F.3d 1051, 1059 (9th Cir. 2014) (affirming dismissal of forward-\n 19 looking statements accompanied by less specific warnings than Sable\u2019s). Even\n 20 absent this language, the safe harbor would still apply because Plaintiffs fail to plead\n 21 \u201cin \u2018great detail\u2019 specific facts sufficient to demonstrate a strong inference that\n 22 defendants made the forward-looking statements . . . with actual knowledge that they\n 23 were false.\u201d In re Splash Tech. Holdings, Inc. Sec. Litig., 160 F. Supp. 2d 1059,\n 24 1071 (N.D. Cal. 2001); see infra \u00a7 IV.B (failure to plead scienter).\n 25 Claims based on Statements 4 and 9 also fail because Plaintiffs have pleaded\n 26 no contradictory facts. Plaintiffs contend that Sable\u2019s projections were \u201cimplausible\n 27 because Sable had not finished its repairs, obtained the necessary permits, or\n 28 resolved outstanding litigation.\u201d \u00b6 63. Plaintiffs fail to specify how unspecified\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 11 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 21 of 36 Page ID\n #:1436\n\n 1 repairs or permits related to the challenged projections. Nor do Plaintiffs explain\n 2 how \u201coutstanding litigation\u201d undercut Sable\u2019s projections. \u00b6 63. When Sable made\n 3 its projections, no courts had issued rulings on the preliminary injunction or\n 4 temporary restraining order that Plaintiffs claim would affect Sable\u2019s future\n 5 operations. See In re Cisco Sys. Inc. Sec. Litig., 2013 WL 1402788, at *6 (N.D. Cal.\n 6 Mar. 29, 2013) (requiring challenged statements to be \u201cfalse or misleading when\n 7 made\u201d); see also \u00b6\u00b6 75-78 (PI and TRO issued on May 28 and June 3).3\n 8 3. No Falsity for Statements About Repairs and Tests\n (Stmts. 3, 10, 13-15)\n 9\n 10 Similarly, Plaintiffs fail to plead facts showing that statements about Sable\u2019s\n 11 pipeline repairs and tests were false. In the May press release and prospectus, Sable\n 12 told investors that it had \u201ccompleted its anomaly repair program on the Las Flores\n 13 Onshore Pipeline as specified by the Consent Decree.\u201d \u00b6 59 (Stmt. 3); \u00b6 68\n 14 (Stmt. 10). On May 28, 2025, Sable stated that it had \u201csuccessfully hydrotested\u201d the\n 15 Las Flores Pipelines, \u201csatisfying the final operational condition to restart of the\n 16 Onshore Pipeline as outlined in the Consent Decree,\u201d and that \u201cno more repairs are\n 17 required\u201d under the Consent Decree. \u00b6 80 (Stmts. 13, 14); \u00b6 81 (Stmt. 15) (similar).\n 18 Plaintiffs do not allege how these statements were false or misleading.\n 19 Plaintiffs instead provide a conclusory denial of each without alleging specific,\n 20 contradictory facts. See \u00b6 63 (\u201cSable had not finished its repairs\u201d); \u00b6 82 (\u201cSable had\n 21 not (and still has not) completed its required repairs\u201d). There are no allegations that\n 22 Sable failed its hydrotest, and no explanation of what repairs remain unfinished.\n 23 Plaintiffs cannot satisfy the PSLRA\u2019s requirement that plaintiffs \u201cspecify . . . the\n 24 reason or reasons why the statement is misleading,\u201d by simply disagreeing with\n 25 Defendants. 15 U.S.C. \u00a7 78u-4(b)(1)(B); see Metzler, 540 F.3d at 1070 (\u201cvague\u201d\n 26 \u201cexplanation of how and why the statements were false\u201d is insufficient).\n 27\n 3\n 28 Plaintiffs do not challenge the portion of Statement 11 about the \u201cexpected\u201d impact\n of oil restart, but in any event this is also a protected forward-looking statement.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 12 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 22 of 36 Page ID\n #:1437\n\n 1 In a paragraph about the June 3, 2025 ruling in the State Waivers Litigation,\n 2 Plaintiffs attempt a \u201cgotcha\u201d by purporting to cite a declaration from Sable\u2014stating\n 3 a temporary restraining order would force Sable to \u201cshut down repair and\n 4 maintenance activities\u201d\u2014presumably as evidence that Sable\u2019s earlier statements that\n 5 it \u201ccompleted\u201d repairs were false. \u00b6 78 (citing Ex. 12 at 577). But the Complaint\n 6 misleadingly omits that the declaration describing Sable\u2019s ongoing \u201crepair and\n 7 maintenance activities\u201d was filed in April 2025 (a month before the Class Period)\n 8 when Sable\u2019s repair work was underway. Ex. 12 at 574, 577.4 Then in May 2025,\n 9 Sable reported that it completed the repairs required by the Consent Decree. \u00b6\u00b6 59,\n 10 80. While the Court must accept Plaintiffs\u2019 well-pleaded allegations as true, the\n 11 Court is \u201cnot required to accept as true conclusory allegations which are contradicted\n 12 by documents referred to in the complaint.\u201d Sprewell v. Golden State Warriors, 266\n 13 F.3d 979, 988 (9th Cir. 2001) (internal citation omitted). The Court should reject\n 14 Plaintiffs\u2019 misleading suggestion that Sable\u2019s declaration supports that repairs were\n 15 unfinished as of June.\n 16 4. No Falsity for Opinions and Puffery Statements (Stmts. 3, 6-\n 7, 10, 12-19)\n 17\n 18 Many statements should also be dismissed because they are inactionable\n 19 opinion statements. The Supreme Court set forth stringent pleading requirements\n 20 when a plaintiff alleges that an opinion is false or misleading. See Omnicare, Inc. v.\n 21 Laborers Dist. Council Constr. Indus. Pension Fund, 575 U.S. 175 (2015). To\n 22 challenge an opinion statement, Plaintiffs must allege: (1) that the speaker\n 23 subjectively did not hold the stated opinion at the time the statement was made;\n 24 (2) that the statement contained an embedded statement of fact that was false; or\n 25 (3) the statement omitted a material fact necessary not to make the opinion statement\n 26 misleading. Id. at 185-91. This is \u201cno small task for an investor.\u201d Id. at 194.\n 27 4\n Plaintiffs also incorrectly state this declaration was filed in the State Waivers\n 28 Litigation. \u00b6 78. It was not. It was filed in the Coastal Commission Litigation in\n connection with an unrelated motion. Ex. 12.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 13 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 23 of 36 Page ID\n #:1438\n\n 1 Statements 3, 6-7, 10, and 12-19 represent Sable\u2019s opinions because they\n 2 \u201cinherently reflect the speaker\u2019s assessment of and judgment about the underlying\n 3 circumstances.\u201d See Markette v. XOMA Corp., 2017 WL 4310759, at *4 (N.D. Cal.\n 4 Sept. 28, 2017); see In re Philip Morris Int\u2019l Inc., 89 F.4th 408, 418 (2d Cir. 2023)\n 5 (\u201clanguage like \u2018we believe\u2019 or \u2018we think\u2019 is sufficient \u2013 not necessary \u2013 to render a\n 6 statement one of opinion.\u201d). Plaintiffs fail to plead that any of these opinion\n 7 statements is actionable under Omnicare, and these statements should be dismissed.\n 8 Relationship with Regulators (Stmt. 6) and Pending Litigation (Stmts. 7,\n 9 15-18): These statements reflect Sable\u2019s positive reflection on regulatory bodies\n 10 (Stmt. 6), its \u201cposition\u201d that litigation against it was \u201cwithout merit\u201d (Stmt. 7), and\n 11 its genuine belief that court decisions would not impact its \u201cplans,\u201d \u201cpreparations,\u201d\n 12 \u201cresumption of petroleum transportation,\u201d or \u201cstrategy\u201d (Stmts. 15-18). Plaintiffs\n 13 do not allege that Sable did not hold these opinions or that they contain omitted facts.\n 14 Ninth Circuit courts regularly find similar statements inactionable as opinions. See,\n 15 e.g., In re BofI Holding, Inc. Sec. Litig., 302 F. Supp. 3d 1128, 1147 (S.D. Cal. 2018)\n 16 (favorable description of litigation is \u201cprototypical opinion-based puffery\u201d), rev\u2019d\n 17 and remanded on other grounds, 977 F.3d 781 (9th Cir. 2020) (affirming dismissal\n 18 of statements about \u201cgreat regulatory relations\u201d because those \u201cvague assurances\n 19 reflect [defendant\u2019s] opinions and predictions, which are not actionable\u201d).\n 20 Plaintiffs also do not allege the falsity of these statements. They plead no\n 21 facts contradicting Sable\u2019s description of the Coastal Commission Litigation as not\n 22 impacting Sable\u2019s plans, when, as Sable disclosed, it had already completed its\n 23 repairs when it made these statements. See, e.g., Ex. 14 at 619 (\u201cThe anomaly repair\n 24 program . . . was completed in May 2025 . . .\u201d).5 Nor do Plaintiffs plead facts to\n 25 contradict Sable\u2019s view that a temporary order in the State Waivers Litigation would\n 26 5\n Plaintiffs confuse the Coastal Commission Litigation and the State Waivers\n 27 Litigation when they argue that the May 28 preliminary injunction in the former\n \u201cprevented Sable from restarting the pipelines.\u201d \u00b6 82. This is inconsistent with the\n 28 facts the Complaint pleads about the May 28 PI, which related to alleged \u201cviolations\n of the Coastal Act,\u201d \u00b6\u00b6 39, 74-76, not \u201crestarting the pipelines.\u201d \u00b6 82; cf. \u00b6 47.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 14 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 24 of 36 Page ID\n #:1439\n\n 1 not \u201cimpede Sable\u2019s preparations\u201d for commercial production and that Restart was\n 2 governed by the Consent Decree. \u00b6 81 (emphasis added); see also \u00b6 82 (no\n 3 allegations about how Statement 16 was false or misleading). Plaintiffs plead that\n 4 the State Waivers Litigation court confirmed the next month that the restart could\n 5 occur once certain conditions were met. \u00b6 47.6\n 6 Two statements are also inactionable puffery: Sable\u2019s CEO\u2019s comment that\n 7 Sable was \u201cvery grateful for the cooperation and partnership from [its] local\n 8 community and regulatory bodies,\u201d (Stmt. 6), and a spokesperson\u2019s description of\n 9 lawsuits as \u201cwithout merit,\u201d (Stmt. 7). These are optimistic statements that cannot\n 10 be objectively verified and therefore cannot support a fraud claim. See Intuitive\n 11 Surgical, 759 F.3d at 1060 (\u201c\u2018feel good\u2019 speak\u201d is \u201cnon-actionable puffing\u201d); In re\n 12 BofI, 302 F. Supp. 3d at 1147 (dismissing challenges to similar statements).7\n 13 Repairs Complete (Stmts. 3, 10, 13-15) and Authorized by Permits (Stmt. 12):\n 14 Sable\u2019s claims that it had completed the repairs and tests required by the Consent\n 15 Decree also reflect its opinions. Plaintiffs\u2019 allegations do not contradict Sable\u2019s\n 16 genuine belief that it had completed the repairs required by the Consent Decree.\n 17 Although Plaintiffs allege that the Fire Marshal (in October 2025) \u201cidentified a\n 18 requirement\u201d that Sable had not yet met before the Fire Marshal could approve\n 19 Sable\u2019s Restart Plan, \u00b6 49, that says nothing about whether (in May 2025 when Sable\n 20 made the challenged statements) Sable believed it had completed repairs required by\n 21 the Consent Decree.8 See Omnicare, 575 U.S. at 186 (sincere opinion is not\n 22\n 6\n 23 Statements about litigation (including describing litigation as \u201cwithout merit\u201d) are\n also forward-looking and inactionable. See Grobler v. Neovasc Inc., 2016 WL\n 24 6897760, at *3 (D. Mass. Nov. 22, 2016) (stating litigation was \u201cwithout merit\u201d and\n \u201cbaseless\u201d was \u201cundoubtedly forward-looking\u201d prediction that \u201ccould only be\n 25 invalidated by reference to the ultimate outcome\u201d). And the court orders were \u201cin\n the public domain,\u201d making Sable\u2019s opinions about those rulings inactionable. See\n 26 Rubke v. Capitol Bancorp Ltd., 551 F.3d 1156, 1162-63 (9th Cir. 2009).\n 7\n 27 Statement 5 (that Sable was \u201cproud\u201d) is also inactionable puffery.\n 8\n The federal government subsequently approved Sable\u2019s Restart Plan. Ex. 16; cf.\n 28 Philip Morris, 89 F.4th at 414 (when a challenged opinion \u201cis ultimately endorsed\n by\u201d a government agency \u201csuch statements are per se reasonable\u201d) (cleaned up).\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 15 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 25 of 36 Page ID\n #:1440\n\n 1 actionable \u201cregardless whether an investor can ultimately prove the belief wrong\u201d).\n 2 As for Sable\u2019s opinion about its permits, Plaintiffs have likewise not alleged facts\n 3 that would meet the Omnicare requirements, nor that would otherwise show falsity.\n 4 While Plaintiffs allege that \u201c[r]egulators had repeatedly informed Sable\u201d that it\n 5 lacked permits, Plaintiffs simultaneously acknowledge that Santa Barbara County\n 6 told Sable that its repair work \u201cwas authorized under existing permits\u201d and that Sable\n 7 repeatedly explained its belief that the Coastal Commission lacked permitting\n 8 authority over its repair and maintenance activities. \u00b6\u00b6 69, 76, 83; Ex. 4 at 327 (letter\n 9 from County stating Sable\u2019s \u201crepair work is authorized by the existing permits\u201d).\n 10 An opinion is not misleading just because the defendant \u201cknows, but fails to disclose,\n 11 some fact cutting the other way. Reasonable investors understand that opinions\n 12 sometimes rest on a weighing of competing facts.\u201d Omnicare, 575 U.S. at 189-90.\n 13 Hunterbrook Recording (Stmt. 19): Plaintiffs do not allege how Sable\u2019s\n 14 opinion that \u201cwe believe that the alleged recording was either AI generated or\n 15 otherwise altered\u201d is actionable. See \u00b6 90 (emphasis added).\n 16 Plaintiffs fail to plead facts that any of these statements are contradicted by\n 17 information known to Defendants at the time they were made. See \u00b6\u00b6 63, 69, 82,\n 18 87, 91. Claims based on each of these statements should be dismissed.\n 19 B. Plaintiffs Fail to Plead Scienter\n 20 The Complaint should also be dismissed for the additional and independent\n 21 reason that Plaintiffs fail to plead scienter\u2014that is, \u201cintent to deceive, manipulate,\n 22 or defraud\u201d or \u201cdeliberate recklessness.\u201d Webb v. SolarCity Corp., 884 F.3d 844,\n 23 851 (9th Cir. 2018); see In re NVIDIA Corp. Sec. Litig., 768 F.3d 1046, 1053 (9th\n 24 Cir. 2014) (\u201cthe standard for recklessness is actually much closer to one of intent\u201d).\n 25 Plaintiffs must plead a \u201cstrong inference\u201d of scienter that is \u201ccogent and at least as\n 26 compelling as any opposing inference of nonfraudulent intent.\u201d Tellabs, Inc. v.\n 27 Makor Issues & Rts., Ltd., 551 U.S. 308, 314 (2007). And Plaintiffs must allege\n 28 \u201ccontemporaneous\u201d information, not hindsight. See Metzler, 540 F.3d at 1066; see\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 16 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 26 of 36 Page ID\n #:1441\n\n 1 also Adamo v. Nextdoor Holdings, Inc., 2025 WL 3238205, at *4 (N.D. Cal. Nov.\n 2 20, 2025) (no \u201cspecific \u2018contemporaneous statements or conditions\u2019\u201d established\n 3 scienter). Rather than plead particularized allegations supported by confidential\n 4 employee witness statements, internal reports, or other contemporaneous facts, the\n 5 Complaint provides a grab-bag of conclusory, unsupported scienter allegations.\n 6 \u00b6\u00b6 97-104. Each scienter theory fails. See Hamano v. Activision Blizzard, Inc., 2019\n 7 WL 7882076, at *3 (C.D. Cal. Oct. 17, 2019) (Wilson, J.) (\u201cInferring scienter from\n 8 these sparse allegations would require impermissible speculation.\u201d).\n 9 1. No Scienter Based on \u201cMere Motive and Opportunity\u201d\n 10 Plaintiffs primarily rest their scienter theory on baseless speculation: that\n 11 because Sable faced \u201cexistential pressure\u201d to restart operations at its \u201csole asset\u201d\n 12 before Exxon Mobil could foreclose on its loan, the Court should infer that\n 13 Defendants intentionally misled the market about Sable\u2019s operations and progress.\n 14 \u00b6\u00b6 97-98, 100. The Ninth Circuit has consistently held that to \u201cmeet the PSLRA\u2019s\n 15 high burden for pleading scienter, a complaint cannot rely on \u2018mere motive and\n 16 opportunity.\u2019\u201d Prodanova v. H.C. Wainwright & Co., LLC, 993 F.3d 1097, 1108\n 17 (9th Cir. 2021). But that is what the Complaint offers: a theory that Defendants must\n 18 have acted with scienter because they were allegedly under \u201cpressure.\u201d This\n 19 \u201centirely speculative\u201d inference \u201cdoes not rise to the required strong inference.\u201d\n 20 Applestein v. Medivation, Inc., 561 Fed. Appx. 598, 601 (9th Cir. 2014).\n 21 The Complaint lacks any of the hallmarks of specific motive allegations that\n 22 courts have found may support an inference of scienter. It does not plead that any\n 23 defendant sold shares \u201cbefore the company discloses negative information,\u201d or\n 24 indeed any stock sales at all. Prodanova, 993 F.3d at 1108. Instead, Plaintiffs allege\n 25 in conclusory terms that the \u201cWall Street Journal reported that Flores would \u2018make\n 26 tens of millions of dollars if he can\u2019 restart the commercial oil sales.\u201d \u00b6 102. The\n 27 Ninth Circuit rejects this argument: \u201cIf simple allegations of pecuniary motive were\n 28 enough to establish scienter, virtually every company in the United States . . . could\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 17 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 27 of 36 Page ID\n #:1442\n\n 1 be forced to defend securities fraud actions.\u201d Zucco Partners, LLC v. Digimarc\n 2 Corp., 552 F.3d 981, 1005 (9th Cir. 2009) (cleaned up); see also Police Ret. Sys. of\n 3 St. Louis v. Intuitive Surgical, Inc., 2012 WL 1868874, at *23 (N.D. Cal. May 22,\n 4 2012) (\u201csheer fact that Defendants had performance-based compensation packages\n 5 does not support an inference of scienter\u201d), aff\u2019d, 759 F.3d 1051 (9th Cir. 2014).\n 6 2. No Scienter Based on Public Offerings\n 7 Plaintiffs also argue that one can infer that Statements 1-7 were made with\n 8 scienter because Defendants wanted to raise Sable\u2019s stock price before the May 22\n 9 public offering (or other offerings, which are not identified). \u00b6\u00b6 65, 99. Allegations\n 10 of \u201croutine corporate objectives such as the desire to obtain good financing\u201d are \u201cnot\n 11 \u2018specific\u2019 or \u2018particularized\u2019\u201d enough to establish a strong inference of scienter.\n 12 Webb, 884 F.3d at 856. \u201c[T]o hold otherwise would support a finding of scienter for\n 13 any company that seeks to enhance its business prospects.\u201d In re Rigel Pharms. Inc.\n 14 Sec. Litig., 697 F.3d 869, 884 (9th Cir. 2012); Webb, 884 F.3d at 856 (\u201cSurely every\n 15 company that goes public wants to . . . maintain a high share price afterward in order\n 16 to finance acquisitions and expand.\u201d).\n 17 3. No Scienter Based on Title and Day-to-Day Operations\n 18 Plaintiffs also cannot establish a strong inference of scienter merely by\n 19 alleging that Flores, Sable\u2019s CEO, had \u201ca comprehensive understanding of Sable\u2019s\n 20 regulatory hurdles and operations\u201d and played a role in \u201cday-to-day management\u201d\n 21 of Sable. \u00b6 101. \u201c[C]orporate management\u2019s general awareness of the day-to-day\n 22 workings of the company\u2019s business does not establish scienter\u2014at least absent\n 23 some additional allegation of specific information conveyed to management and\n 24 related to the fraud.\u201d Metzler, 540 F.3d at 1068; see Karam v. Corinthian Colls.,\n 25 Inc., 2012 WL 8499135, at *12 (C.D. Cal. Aug. 20, 2012) (rejecting scienter\n 26 allegations that \u201cDefendants knew of the alleged fraud by virtue of their positions\u201d\n 27 and \u201chad an incentive to commit fraud\u201d based on the \u201cexecutive compensation\n 28 structure\u201d). And Plaintiffs link no specific scienter allegations to CFO Patrinely.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 18 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 28 of 36 Page ID\n #:1443\n\n 1 4. No Scienter Based on the Hunterbrook Short Report\n 2 The third-party allegation by Hunterbrook that Flores \u201cpotentially violate[d]\n 3 Regulation FD\u201d by \u201cregularly shar[ing] material non-public information with\n 4 selective investors\u201d is not \u201csupportive of scienter.\u201d \u00b6 104. No case law supports that\n 5 an amorphous third-party accusation of \u201cpotential\u201d violations of SEC rules\u2014from\n 6 an author who made \u201c[n]o representation regarding the completeness or timeliness\n 7 of this information,\u201d Ex. 9 at 559\u2014is sufficient to plead scienter with particularity.\n 8 Even when allegations of SEC rule violations come from the SEC itself, that has\n 9 been insufficient to plead scienter. See Zamir v. Bridgepoint Educ., Inc., 2018 WL\n 10 1258108, at *17 (S.D. Cal. Mar. 12, 2018) (\u201cseveral district courts have found the\n 11 existence of an investigation, standing alone, insufficient to support scienter\u201d); In re\n 12 Hansen Nat. Corp. Sec. Litig., 527 F. Supp. 2d 1142, 1162 (C.D. Cal. 2007) (\u201cthe\n 13 mere existence of [an] investigation cannot support any inferences of wrongdoing or\n 14 fraudulent scienter on the part of [a] company or its senior management\u201d).\n 15 5. The Non-Culpable Inference Is Far More Compelling\n 16 When viewed as a whole, the \u201cplausible, nonculpable explanations\u201d far\n 17 outweigh any possible inference of fraud. Tellabs, 551 U.S. at 324. The Ninth\n 18 Circuit has rejected a theory of scienter based on allegations, like these, that\n 19 defendants knew a milestone was unachievable, or at least unachievable \u201con the\n 20 timeline defendants were telling the market,\u201d in order to \u201ckeep the stock price high\n 21 for a time and then face the inevitable fallout.\u201d Nguyen v. Endologix, Inc., 962 F.3d\n 22 405, 415 (9th Cir. 2020). That theory \u201cdoes not make a whole lot of sense.\u201d Id.\n 23 Even when viewed in the light most favorable to Plaintiffs, their allegations\n 24 show that Sable believed in its plans but faced disappointing, unexpected third-party\n 25 developments while working in a highly regulated, politically polarizing industry.\n 26 Sable adjusted its strategy in response to evolving circumstances, as it openly\n 27 engaged with regulators and litigated novel administrative issues. At each step,\n 28 Sable kept investors informed, including advising potential investors of the risks\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 19 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 29 of 36 Page ID\n #:1444\n\n 1 inherent to its business. See In re Worlds of Wonder Sec. Litig., 35 F.3d 1407, 1425\n 2 (9th Cir. 1994) (\u201cdetailed risk disclosure . . . negates an inference of scienter\u201d). That\n 3 is exactly what a public company and its executives are supposed to do. Plaintiffs\u2019\n 4 theory that these facts show an intent to mislead the market is \u201cdivorced from\n 5 common experience.\u201d Prodanova, 993 F.3d at 1107.\n 6 C. Plaintiffs Fail to Plead Loss Causation\n 7 \u201cRule 9(b) applies to all elements of a securities fraud action, including loss\n 8 causation.\u201d Anshen v. Facebook, 2017 WL 5635021, at *4 (C.D. Cal. Oct. 4, 2017)\n 9 (Wilson, J.) (quoting Apollo, 774 F.3d at 605)). Where, as here, Plaintiffs try to\n 10 show loss causation through purported corrective disclosures, Plaintiffs must plead\n 11 with particularity that \u201cthe defendant\u2019s fraud was \u2018revealed to the market and caused\n 12 the resulting losses.\u2019\u201d Loos v. Immersion Corp., 762 F.3d 880, 887 (9th Cir. 2014).\n 13 Plaintiffs do not meet this standard. To start, Plaintiffs do not \u201cspecify which\n 14 misrepresentations the [] disclosures supposedly correct, leaving it to Defendants\n 15 and this Court to guestimate the connections,\u201d which on its own is \u201cgrounds for\n 16 dismissal.\u201d In re Illumina, Inc. Sec. Litig., 2025 WL 2739655, at *3 (S.D. Cal. Sept.\n 17 26, 2025); see \u00b6\u00b6 70-96. Instead, they allege a mashup of alleged partial revelations\n 18 followed by alleged misstatements with no cohesive through-line.\n 19 There are also fundamental flaws with Plaintiffs\u2019 six corrective disclosure\n 20 dates. The Complaint alleges only one date on which Sable issued an allegedly\n 21 corrective statement. On the other dates, it alleges third parties made unproven\n 22 accusations or the public learned of litigation and local government developments,\n 23 and Sable\u2019s stock price dropped \u201con this news.\u201d \u00b6\u00b6 77, 79, 84, 89, 94. None of these\n 24 dates qualifies as a loss-causing event that could support alleged securities fraud.\n 25 1. No Loss Causation from the Letter on May 28, 2025\n 26 Plaintiffs allege that the \u201ctruth\u201d supposedly began to emerge on May 28, 2025,\n 27 when the contents of the letter from Lt. Governor Kounalakis to Sable expressing\n 28 \u201cserious concerns\u201d about Sable\u2019s May 19 press release were supposedly published.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 20 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 30 of 36 Page ID\n #:1445\n\n 1 \u00b6\u00b6 71-73.9 This was not a corrective disclosure.\n 2 While critical in tone, this letter did not correct any statements in the May 19\n 3 press release (or May 22 prospectus). The letter instead confirmed that Sable had\n 4 restarted oil production, which Kounalakis characterized as \u201climited volume oil\n 5 flows.\u201d \u00b6 72. She alleged that Sable had failed to \u201ctimely communicate these\n 6 activities\u201d in light of its obligation to tell Commission staff \u201cbefore initiating any oil\n 7 flow through the offshore pipeline,\u201d id., which would make no sense if (as the\n 8 Complaint alleges) \u201cSable had not restarted oil production,\u201d \u00b6 63. Cf. Mineworkers\u2019\n 9 Pension Scheme v. First Solar Inc., 881 F.3d 750, 753 (9th Cir. 2018) (plaintiffs\n 10 must trace their loss \u201cback to \u2018the very facts about which the defendant lied\u2019\u201d).\n 11 The letter merely expressed concerns and warned future actions could\n 12 jeopardize Sable\u2019s lease, but this \u201cgeneralized criticism\u201d is not a corrective\n 13 disclosure. Espy v. J2 Glob., 99 F.4th 527, 541 (9th Cir. 2024) (third party report\n 14 criticizing defendants\u2019 accounting was \u201cuntethered from [plaintiff\u2019s] allegations in\n 15 the second amended complaint\u201d). The letter noted there had not been a \u201cresumption\n 16 of commercial production or a full restart\u201d of the Santa Ynez Unit, but Sable already\n 17 made these facts clear in the press release and prospectus. \u00b6 72 (emphasis altered);\n 18 see supra Section V.A.4. Cf. In re BofI Holding, Inc. Sec. Litig., 977 F.3d 781, 794\n 19 (9th Cir. 2020) (\u201cA corrective disclosure, though, must by definition reveal new\n 20 information to the market that has not yet been incorporated into the price.\u201d).\n 21 2. No Loss Causation from Developments on May 28, June 3,\n October 15, and November 4, 2025\n 22\n 23 The Complaint fares no better in its allegations about May 28, June 3,\n 24 October 15, and November 4. Plaintiffs allege that on these dates, the public learned\n 25 of court rulings and a county supervisor vote affecting Sable. A \u201csimple revelation\n 26\n 9\n 27 Plaintiffs allege \u201c[u]pon information and belief,\u201d the letter was published on May\n 28, citing no source. \u00b6 71. \u201cAllegations \u2018based on information and belief usually do\n 28 not satisfy the degree of particularity required under Rule 9(b).\u2019\u201d Wallack v. Idexx\n Laboratories, Inc., 2013 WL 1562523, at *6 (S.D. Cal. Apr. 11, 2013).\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 21 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 31 of 36 Page ID\n #:1446\n\n 1 of \u2018bad news\u2019 does not establish loss causation.\u201d Wenzel v. Semiconductor Mfg. Int\u2019l\n 2 Corp., 2021 WL 12312024, at *10 (C.D. Cal. Nov. 18, 2021).\n 3 May 28, 2025 and October 15, 2025: Plaintiffs alleges that the court in the\n 4 Coastal Commission Litigation issued a preliminary injunction on May 28 to enforce\n 5 the Commission\u2019s cease and desist order for alleged violations of the Coastal Act.\n 6 \u00b6\u00b6 39, 74-75. The injunction was a \u201csetback\u201d in Sable\u2019s ongoing \u201clegal battle with\n 7 the state regulator.\u201d \u00b6 75. It enjoined Sable \u201cfrom continuing\u201d maintenance and\n 8 repair activities that the Complaint alleges were \u201cunpermitted.\u201d \u00b6 74 (emphasis\n 9 added); \u00b6 76. But it by no means revealed that \u201cSable Offshore\u2019s claim to have\n 10 restarted production in California was false.\u201d \u00b6 75.\n 11 Nor did the issuance of the preliminary injunction reveal as false Sable\u2019s\n 12 statement that it \u201ccompleted its anomaly repair program on the Onshore Pipeline[s].\u201d\n 13 See (Stmts. 3, 10). As the Complaint pleads, the preliminary injunction \u201ccould\n 14 impact Sable\u2019s ability to do future repairs.\u201d \u00b6 75 (emphasis added). Likewise, the\n 15 court\u2019s ruling on October 15 that the Commission \u201chad not abused its discretion\u201d in\n 16 issuing the prior cease and desist order did not correct any statements. \u00b6 83. The\n 17 May and October rulings came out against Sable\u2019s \u201cclaims that the [repair and\n 18 maintenance] work was authorized under existing permits\u201d\u2014a position that\n 19 Plaintiffs admit \u201cfollow[ed] confirmation from the County.\u201d \u00b6 76. That finding did\n 20 not render false any prior statements that Sable believed that all work was permitted.\n 21 June 3, 2025: Similarly, the temporary restraining order in the State Waivers\n 22 Litigation was not a corrective disclosure (nor do Plaintiffs even identify what it\n 23 corrected). \u00b6 78. The order temporarily prevented the Fire Marshal \u201cfrom granting\n 24 further authorizations\u201d about the onshore pipelines and prevented Sable \u201cfrom\n 25 restarting use of the pipelines.\u201d Id. (emphasis added). This was another adverse\n 26 development in ongoing litigation between Sable and environmental groups. But\n 27 \u201c[t]o be corrective, the disclosure must \u2018relate back to the misrepresentation and not\n 28 to some other negative information about the company.\u2019\u201d Hoang v. ContextLogic,\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 22 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 32 of 36 Page ID\n #:1447\n\n 1 Inc., 2023 WL 6536162, at *27 (N.D. Cal. Mar. 10, 2023).\n 2 November 4, 2025: Finally, the Santa Barbara County Supervisors vote on\n 3 November 4, 2025 \u201cto deny the transfer of permits from ExxonMobil to Sable\u201d was\n 4 not a corrective disclosure. \u00b6 93.10 Plaintiffs do not even try to allege what earlier\n 5 alleged misstatements this event supposedly corrected, nor how a vote by\n 6 government actors could correct a company\u2019s statements.\n 7 Court rulings and a vote by a county board are the ultimate examples of\n 8 unpredictable events. Plaintiffs cannot rely on these developments to show that the\n 9 \u201cdefendant\u2019s misstatement, as opposed to some other fact, foreseeably caused the\n 10 plaintiff\u2019s loss.\u201d First Solar, 881 F.3d at 753 (emphasis added and internal citation\n 11 omitted). It was not foreseeable that courts would rule or supervisors would vote as\n 12 they did, nor do Plaintiffs plead any facts that these events corrected prior statements.\n 13 3. No Loss Causation on October 31 and November 3, 2025\n 14 The news events on October 31 and November 3 were also not corrective\n 15 disclosures. These came in the last week of the alleged class period, but Plaintiffs\n 16 fail to specify which challenged statements in the prior six months were corrected.\n 17 On October 31, Hunterbrook Media purported to publish a leaked recording\n 18 of a call involving CEO Flores and certain investors, in which Flores allegedly\n 19 discussed Sable\u2019s need to raise up to $200 million in additional equity by 2025. \u00b6 88;\n 20 Ex. 9. The Ninth Circuit has repeatedly rejected corrective disclosures based on\n 21 third-party short-seller articles that \u201cincluded disclaimers from the authors stating\n 22 that they made \u2018no representation as to the accuracy or completeness of the\n 23 information set forth in this article.\u2019\u201d In re BofI, 977 F.3d at 797; see Ex. 9 at 559\n 24 (same language by Hunterbrook); Nektar, 34 F.4th at 840 (the \u201cnature of the report\u201d\n 25 means that \u201cit is not plausible that the market would perceive\u201d a short seller\u2019s\n 26 allegations as \u201crevealing false statements\u201d). Even if this were not the case, that\n 27\n 10\n 28 Plaintiffs have not alleged that the November 4 vote occurred during trading hours\n such that it could have affected the closing stock price that day. \u00b6 93.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 23 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 33 of 36 Page ID\n #:1448\n\n 1 Hunterbrook alleged \u201cpotential violations\u201d of SEC rules was also not corrective.\n 2 The \u201cannouncement of an investigation, without more, is insufficient to establish\n 3 loss causation,\u201d because \u201cit simply puts investors on notice of a potential future\n 4 disclosure of fraudulent conduct.\u201d Loos, 762 F.3d at 890.\n 5 Sable\u2019s Board then promptly formed a Special Committee to investigate the\n 6 allegations in the Hunterbrook Short Report. This did not \u201ceffectively confirm[]\u201d\n 7 the Hunterbrook allegations, \u00b6 92, nor does it qualify as a disclosure corrective of\n 8 anything. See Rok v. Identiv, Inc., 2017 WL 35496, at *17-18 (N.D. Cal. Jan. 4,\n 9 2017) (disclosure that company had \u201cformed a Special Committee to investigate\u201d a\n 10 former employee\u2019s complaint \u201cdoes not support loss causation because it merely\n 11 announced an internal investigation\u201d).\n 12 Nor did references to Sable\u2019s alleged financing needs in the Hunterbrook\n 13 Short Report on October 31 or Sable\u2019s November 3 press release about amending\n 14 the Exxon Mobil loan reveal fraud. As Plaintiffs acknowledge, the additional equity\n 15 needs were prompted by unexpected delays to the project. See \u00b6 88. Plaintiffs fail\n 16 to explain how these changing circumstances corrected any prior alleged\n 17 misstatements. They perplexingly allege that the alleged revelation of additional\n 18 equity needs \u201ccontradicted Defendants\u2019 repeated claims that regulatory and judicial\n 19 orders concerning the Company\u2019s ability to make repairs and restart production\n 20 would have an effect on the Company\u2019s ability to timely resume commercial sales,\u201d\n 21 but they do not point to any statements by Defendants that said this. Id. (emphasis\n 22 added). The Complaint fails to plead how a statement allegedly made in an undated\n 23 October call about a need to \u201cbridge a little to the financing,\u201d id., corrects any\n 24 challenged statements\u2014including that the October 15 ruling would not impact\n 25 Sable\u2019s \u201cbusiness strategy\u201d of \u201cthe resumption of petroleum transportation\u201d (Stmts.\n 26 16, 17), much less statements made months earlier in May and June.\n 27 Sable\u2019s statement in the November 3 Press Release that it was \u201cactively\n 28 evaluating and pursuing\u201d an offshore storage and treating strategy for the Santa Ynez\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 24 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 34 of 36 Page ID\n #:1449\n\n 1 Unit, Ex. 10 at 565, likewise did not correct any prior statements. Sable had\n 2 previously told investors that this was one of two options it was considering.\n 3 \u00b6\u00b6 85-86; see Ex. 11 at 571. The announcement that Sable then viewed offshore\n 4 storage and treating as its \u201cmain path,\u201d Ex. 10 at 565, was a change in business\n 5 strategy, not a revelation of fraud. See Cloudera, 121 F.4th at 1189 (\u201cstatements\n 6 made at the end of the class period about the challenges [the company] had faced\u201d\n 7 \u201cdo not by themselves \u2018make the earlier, cheerier statement a falsehood\u2019\u201d).\n 8 Finally, the Complaint\u2019s allegations cannot be saved by reframing them as a\n 9 \u201czone of risk\u201d theory\u2014that is, that \u201cthe market became aware of [] previously\n 10 undisclosed risks and/or these risks materialized,\u201d causing losses. \u00b6 96. The Ninth\n 11 Circuit has not adopted this theory of loss causation. Nektar, 34 F.4th at 838 n.6.\n 12 The Ninth Circuit has \u201ccontinued to require securities fraud plaintiffs to allege that\n 13 the defendant lied about \u2018the very facts\u2019 causing the plaintiffs\u2019 losses.\u201d Id. (\u201cit is\n 14 unclear in any event that courts employing the \u2018zone of risk\u2019 theory require any lesser\n 15 showing\u201d). But in any event, Plaintiffs do not plead any undisclosed risks; to the\n 16 contrary, and as discussed, Sable disclosed a myriad of risks. That is proper\n 17 disclosure, not fraud.11\n 18 V. CONCLUSION\n 19 This is Plaintiffs\u2019 third attempt to state a claim. They continue to provide the\n 20 Court with conclusory, error-ridden pleadings that fall far short of the pleading\n 21 standard. Because Plaintiffs \u201cfailed to add the requisite particularity,\u201d the Court\n 22 should dismiss with prejudice. Zucco, 552 F.3d at 1007 (affirming denial of further\n 23 leave to amend where \u201cdeficiencies in [the] Second Amended Complaint\u201d were \u201c\u2018a\n 24 strong indication that the plaintiffs have no additional facts to plead\u2019\u201d).\n 25\n 26\n 27\n 11\n 28 Because Plaintiffs fail to plead a primary violation of section 10(b), the section\n 20(a) claims also fail. See 15 U.S.C. \u00a7 78t; Zucco, 552 F.3d at 990.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 25 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 35 of 36 Page ID\n #:1450\n\n 1 Dated: January 5, 2026 Respectfully submitted,\n 2 LATHAM & WATKINS LLP\n 3 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 4 650 Town Center Drive, 20th Floor\n Costa Mesa, CA 92626\n 5 Telephone: (714) 540-1235\n 6 Email: kristin.murphy@lw.com\n\n 7 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 8 San Diego, CA 92130\n Telephone: (858) 523-5400\n 9 Email: colleen.smith@lw.com\n 10 Counsel for Defendants\n Sable Offshore Corp., James C.\n 11 Flores, and Gregory D. Patrinely\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 26 MOTION TO DISMISS SECOND AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 81 Filed 01/05/26 Page 36 of 36 Page ID\n #:1451\n\n 1 CERTIFICATE OF COMPLIANCE\n 2 The undersigned counsel of record for Defendants Sable Offshore Corp.,\n 3 James C. Flores, and Gregory D. Patrinely certifies that this brief contains 25 pages,\n 4 which:\n 5 __ complies with the word limit of L.R. 11-6.1.\n 6 X complies with the page limit set by court order dated August 4, 2025 (Dkt.\n 7 No. 10).\n 8\n 9 Dated: January 5, 2026 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 10 650 Town Center Drive, 20th Floor\n 11 Costa Mesa, CA 92626\n Telephone: (714) 540-1235\n 12 Email: kristin.murphy@lw.com\n 13 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 14 San Diego, CA 92130\n Telephone: (858) 523-5400\n 15 Email: colleen.smith@lw.com\n 16 Counsel for Defendants\n 17 Sable Offshore Corp., James C.\n Flores, and Gregory D. Patrinely\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n\nATTORNEYS AT LAW\n 27\n\f","ocr_status":2,"date_upload":"2026-02-11T02:13:23.428212-08:00","document_number":"81","attachment_number":null,"pacer_doc_id":"031046680303","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Dismiss Case","acms_document_guid":""}],"date_created":"2026-01-05T23:31:12.302725-08:00","date_modified":"2026-02-10T08:16:36.940371-08:00","date_filed":"2026-01-05","time_filed":"23:25:05","entry_number":81,"recap_sequence_number":"2026-01-05.001","pacer_sequence_number":294,"description":"NOTICE OF MOTION AND MOTION to Dismiss Case (Second Amended Class Action Complaint) filed by Defendants James C. Flores, Gregory D. Patrinely, Sable Offshore Corp.. Motion set for hearing on 2/9/2026 at 01:30 PM before Judge Stephen V. Wilson. (Attachments: # 1 Appendix A Challenged Statements, # 2 Declaration of Kristin N. Murphy, # 3 Exhibit 1, # 4 Exhibit 2, # 5 Exhibit 3, # 6 Exhibit 4, # 7 Exhibit 5, # 8 Exhibit 6, # 9 Exhibit 7, # 10 Exhibit 8, # 11 Exhibit 9, # 12 Exhibit 10, # 13 Exhibit 11, # 14 Exhibit 12, # 15 Exhibit 13, # 16 Exhibit 14, # 17 Exhibit 15, # 18 Exhibit 16, # 19 Declaration of Lauren C. Barnett of Compliance with Local Rule 7-3, # 20 Proposed Order) (Murphy, Kristin) (Entered: 01/05/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/449325709/","id":449325709,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/464116517/","id":464116517,"tags":[],"absolute_url":"/docket/70941407/82/tracy-johnson-v-sable-offshore-corp/","date_created":"2026-01-05T23:31:11.501687-08:00","date_modified":"2026-05-18T07:54:13.793331-07:00","sha1":"a7c4c7ab08ace37b0b8d47c5d9454e0e159621db","page_count":10,"file_size":235678,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.82.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.82.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 1 of 10 Page ID\n #:2106\n\n 1 LATHAM & WATKINS LLP\n Colleen C. Smith (SBN 231216)\n 2 colleen.smith@lw.com\n 3 12670 High Bluff Drive\n San Diego, CA 92130\n 4 Telephone: (858) 523-5400\n 5 Kristin N. Murphy (SBN 268285)\n 6 kristin.murphy@lw.com\n 650 Town Center Drive, 20th Floor\n 7 Costa Mesa, CA 92626\n Telephone: (714) 540-1235\n 8\n Counsel for Defendants Sable Offshore Corp.,\n 9 James C. Flores, and Gregory D. Patrinely\n 10\n UNITED STATES DISTRICT COURT\n 11 CENTRAL DISTRICT OF CALIFORNIA\n 12\n TRACY JOHNSON, Individually and on\n 13 behalf of all others similarly situated, Case No. 2:25-cv-06869-SVW-PVC\n 14 DEFENDANTS SABLE OFFSHORE\n Plaintiff, CORP., JAMES C. FLORES, AND\n 15 GREGORY D. PATRINELY\u2019S\n v. REQUEST FOR JUDICIAL NOTICE\n 16 AND INCORPORATION BY\n SABLE OFFSHORE CORP., JAMES C. REFERENCE IN SUPPORT OF\n 17 MOTION TO DISMISS SECOND\n FLORES, and GREGORY D. AMENDED CLASS ACTION\n 18 PATRINELY, COMPLAINT\n 19 Defendants.\n Judge: Hon. Stephen V. Wilson\n 20 Hearing Date: February 9, 2026\n 21 Time: 1:30 p.m.\n\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 2 of 10 Page ID\n #:2107\n\n 1 I. INTRODUCTION\n 2 Defendants Sable Offshore Corp. (\u201cSable\u201d), James C. Flores, and Gregory D.\n 3 Patrinely (together, \u201cDefendants\u201d) respectfully request that the Court consider\n 4 sixteen documents submitted in connection with their Motion to Dismiss the Second\n 5 Amended Class Action Complaint (\u201cMotion\u201d) and attached to the\n 6 contemporaneously filed Declaration of Kristin N. Murphy (\u201cMurphy Declaration\u201d\n 7 or \u201cMurphy Decl.\u201d). These materials are incorporated by reference into the Second\n 8 Amended Class Action Complaint (\u201cComplaint\u201d), Dkt. No. 77, subject to judicial\n 9 notice under Rule 201 of the Federal Rules of Evidence, or both.\n 10 1. Exhibit 1 is a true and correct excerpted copy of the Form 10-K for the\n 11 fiscal year ended December 31, 2024, Sable filed with the Securities\n 12 and Exchange Commission (\u201cSEC\u201d) on March 17, 2025, and publicly\n available at https://www.sec.gov/Archives/edgar/data/1831481/00018\n 13\n 3148125000016/socc-20241231.htm.\n 14\n 2. Exhibit 2 is a true and correct excerpted copy of a Form 8-K, including\n 15\n excerpted exhibits, Sable filed with the SEC on February 14, 2024, and\n 16 publicly available at https://www.sec.gov/ix?doc=/Archives/edgar/data\n 17 /1831481/000119312524036506/d737623d8k.htm.\n 18 3. Exhibit 3 is a true and correct copy of a Consent Decree entered into\n 19 by the United States, the State of California, Plains Pipeline, L.P., and\n 20 Plains All American Pipeline, L.P., and Plains Pipeline, L.P., filed on\n March 13, 2020, in the United States District Court for the Central\n 21 District of California, Case No. 2:20-cv-02415, Docket No. 6-1, and\n 22 publicly available on the Environmental Protection Agency\u2019s website\n 23 at https://www.epa.gov/sites/default/files/2020-03/documents/plainsall\n americanpipelinelp.pdf.\n 24\n 25 4. Exhibit 4 is a true and correct excerpted copy of the complaint filed by\n Sable et al. against the California Coastal Commission, which in turn\n 26\n attached as Exhibit E to the complaint a letter from Lisa Plowman,\n 27 Director of Planning and Development for Santa Barbara County to\n 28 Steve Rusch, Sable\u2019s Vice President of Environmental &\n\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 1 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 3 of 10 Page ID\n #:2108\n\n 1 Governmental Affairs, on February 12, 2025, in the Superior Court of\n 2 the State of California for the County of Santa Barbara, filed on\n February 18, 2025, Case No. 25CV00974.\n 3\n 4 5. Exhibit 5 is a true and correct excerpted copy of the complaint filed by\n 5 the Center for Biological Diversity et al. against the California\n Department of Forestry and Fire Protection, the Office of the State Fire\n 6 Marshal, and Daniel Berlant, in his official capacity as State Fire\n 7 Marshal, on April 15, 2025, in the Superior Court of the State of\n 8 California for the County of Santa Barbara, Case No. 25CV02244.\n\n 9 6. Exhibit 6 is a true and correct excerpted copy of the complaint filed by\n 10 Environmental Defense Center et al. against the California Department\n of Forestry and Fire Protection, the Office of the State Fire Marshal,\n 11\n and Daniel Berlant, in his official capacity as State Fire Marshal, on\n 12 April 15, 2025, in the Superior Court of the State of California for the\n 13 County of Santa Barbara, Case No. 25CV02247.\n 14 7. Exhibit 7 is a true and correct excerpted copy of a Form 8-K attaching\n 15 a press release Sable filed with the SEC on May 19, 2025, and publicly\n 16 available at https://www.sec.gov/ix?doc=/Archives/edgar/data/183148\n 1/000119312525122079/d943067d8k.htm.\n 17\n 18 8. Exhibit 8 is a true and correct copy of a Rule 424(b)(5) Prospectus\n Supplement Sable filed with the SEC on May 22, 2025, and publicly\n 19\n available at https://www.sec.gov/Archives/edgar/data/1831481/00016\n 20 2828025027257/final424b5-takedown2025.htm.\n 21\n 9. Exhibit 9 is a true and correct copy of an article by Hunterbrook Media\n 22 titled \u201cExclusive: Exxon Spinout Sable Leaked Key Info to Investor\n 23 Including Golfer Phil Mickelson\u201d dated October 31, 2025, and publicly\n available at https://hntrbrk.com/sable-2/.\n 24\n 25 10. Exhibit 10 is a true and correct copy of a Form 8-K attaching a press\n 26 release Sable filed with the SEC on November 3, 2025, and publicly\n available at https://www.sec.gov/ix?doc=/Archives/edgar/data/183148\n 27 1/000183148125000092/socc-20251103.htm.\n 28\n\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 2 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 4 of 10 Page ID\n #:2109\n\n 1 11. Exhibit 11 is a true and correct copy of a Form 8-K attaching a press\n 2 release Sable filed with the SEC on September 29, 2025, and publicly\n available at https://www.sec.gov/ix?doc=/Archives/edgar/data/183148\n 3\n 1/000183148125000071/socc-20250929.htm.\n 4\n 5 12. Exhibit 12 is a true and correct copy of a declaration of Steve Rusch in\n support of Sable\u2019s opposition to the California Coastal Commission\u2019s\n 6 ex parte application seeking a temporary restraining order to enforce a\n 7 cease-and-desist order, filed on April 17, 2025, in the Superior Court of\n 8 the State of California for the County of Santa Barbara, Case No.\n 25CV02244.\n 9\n 10 13. Exhibit 13 is a true and correct copy of a Form 8-K Sable filed on May\n 28, 2025,1 and publicly available at https://www.sec.gov/ix?doc=/\n 11\n Archives/edgar/data/1831481/000183148125000042/socc-20250527.\n 12 htm.\n 13\n 14. Exhibit 14 is a true and correct copy of a Form 8-K attaching a press\n 14 release Sable filed with the SEC on October 15, 2025, and publicly\n 15 available at https://www.sec.gov/ix?doc=/Archives/edgar/data/183148\n 16 1/000183148125000081/socc-20251015.htm.\n\n 17 15. Exhibit 15 is a true and correct copy of a Form 8-K attaching a letter\n 18 from the United States Department of Transportation Pipeline and\n Hazardous Materials Safety Administration Sable filed with the SEC\n 19\n on December 17, 2025, and publicly available at https://www.sec.\n 20 gov/ix?doc=/Archives/edgar/data/1831481/000183148125000137/soc\n 21 c-20251217.htm.\n 22 16. Exhibit 16 is a true and correct copy of a Form 8-K attaching a letter\n 23 from the United States Department of Transportation Pipeline and\n Hazardous Materials Safety Administration Sable filed with the SEC\n 24\n on December 23, 2025, and publicly available at https://www.sec.gov\n 25 /ix?doc=/Archives/edgar/data/1831481/000183148125000143/socc-\n 26 20251222.htm.\n 27\n 28\n 1\n The Complaint incorrectly states this 8-K was filed on May 27, 2025. See \u00b6 80.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 3 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 5 of 10 Page ID\n #:2110\n\n 1 Each of these documents may be considered by the Court. First, Exhibits 3,\n 2 7-10, and 12-14 are incorporated by reference into the Complaint. Second, each\n 3 Exhibit is properly subject to judicial notice under Federal Rule of Evidence 201\n 4 because each is a matter of public record and otherwise publicly available, and each\n 5 can be accurately and readily determined from sources whose accuracy cannot be\n 6 reasonably questioned.\n 7 II. LEGAL STANDARD\n 8 When resolving a motion to dismiss a complaint under the Private Securities\n 9 Litigation Reform Act, this Court \u201cmust consider the complaint in its entirety, as\n 10 well as other sources courts ordinarily examine when ruling on Rule 12(b)(6)\n 11 motions to dismiss, in particular, documents incorporated into the complaint by\n 12 reference, and matters of which a court may take judicial notice.\u201d Tellabs, Inc. v.\n 13 Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007). In other words, the Court may\n 14 consider documents beyond the four corners of the Complaint to rule on Defendants\u2019\n 15 Motion if the document is either: (i) incorporated by reference into the complaint; or\n 16 (ii) capable of judicial notice. See id.; see also Wochos v. Tesla, Inc., 985 F.3d 1180,\n 17 1185 (9th Cir. 2021) (\u201cWe may also consider \u2018materials incorporated into the\n 18 complaint by reference\u2019 and any \u2018matters of which we may take judicial notice.\u2019\u201d);\n 19 Diaz v. N. Dynasty Minerals Ltd., 2019 WL 1873291, at *3 (C.D. Cal. Feb. 22, 2019)\n 20 (\u201cThe Supreme Court has explicitly noted the importance of considering such\n 21 materials in evaluating a securities complaint.\u201d).\n 22 III. ARGUMENT\n 23 A. Exhibits 3, 7-10, and 12-14 are Incorporated by Reference\n 24 A document is incorporated by reference \u201cif the plaintiff refers extensively to\n 25 the document or the document forms the basis of plaintiff\u2019s claim.\u201d Khoja v.\n 26 Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018). Even when not\n 27 extensively referenced, a document may still be incorporated by reference if the\n 28 plaintiff\u2019s \u201cclaim necessarily depend[s] on [the document].\u201d Id. A document\n\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 4 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 6 of 10 Page ID\n #:2111\n\n 1 incorporated by reference is treated as \u201cpart of the complaint, and thus [the Court]\n 2 may assume that its contents are true for the purposes of a motion to dismiss under\n 3 Rule 12(b)(6).\u201d Daniels-Hall v. Nat\u2019l Educ. Ass\u2019n, 629 F.3d 992, 998 (9th Cir. 2010)\n 4 (internal citation omitted). Incorporating documents by reference prevents plaintiffs\n 5 from \u201conly [citing] portions of documents that support their claims, while omitting\n 6 portions\u201d that undermine their claims. Khoja, 899 F.3d at 1002.\n 7 Here, Exhibits 3, 7-10, and 12-14 meet these standards:\n 8 \u2022 Exhibit 3 (the Consent Decree) is necessarily relied on and extensively\n 9 referenced. Exhibit 3 is the Consent Decree involving the United States,\n 10 California, various state and federal agencies, and Plains All American Pipeline,\n L.P. (the previous owner of Sable\u2019s onshore pipelines). Plaintiffs challenge\n 11\n Sable\u2019s statement that it \u201ccompleted its anomaly repair[s] . . . as specified by a\n 12 Consent Decree,\u201d \u00b6 68, and the Consent Decree is therefore necessary to evaluate\n 13 Sable\u2019s challenged statements. The Consent Decree is also extensively\n referenced throughout the Complaint. See \u00b6\u00b6 21, 41-42, 59, 68, 80-82.\n 14\n 15 \u2022 Exhibits 7, 8, and 13-14 (documents containing challenged statements) are\n 16 necessarily relied on and extensively referenced. Exhibit 7 is a Form 8-K\n Sable filed on May 19, 2025 that attaches a press release with challenged\n 17\n statements. \u00b6\u00b6 58-61. Exhibit 8 is a prospectus Sable filed on May 22, 2025 that\n 18 contains challenged statements. \u00b6\u00b6 66-68. Exhibit 13 is a Form 8-K Sable filed\n 19 on May 28, 2025 that contains challenged statements. \u00b6 80. And Exhibit 14 is a\n Form 8-K that Sable Filed on October 15, 2025 that attaches a press release with\n 20\n challenged statements. \u00b6\u00b6 85-87. Because each of these documents contains a\n 21 challenged statement, Plaintiffs necessarily rely on these documents and the\n 22 Court may consider them when ruling on a motion to dismiss. Garcia v. J2 Glob.,\n 23 Inc., 2021 WL 1558331, at *5 (C.D. Cal. Mar. 5, 2021) (incorporating by\n reference an 8-K that contained \u201cmisrepresentations or omissions that form the\n 24 basis of Plaintiff\u2019s claim\u201d). And the Complaint extensively references Exhibits 7\n 25 (\u00b6\u00b6 57-61), 8 (\u00b6\u00b6 66-68), and 14 (\u00b6\u00b6 85-87). See Khoja, 899 F.3d at 1003.\n 26\n \u2022 Exhibits 9 and 10 (documents containing alleged corrective disclosures) are\n 27 extensively referenced and necessarily relied on. Exhibit 9 is a news article\n 28 published by Hunterbrook Media on October 31, 2025, containing alleged\n corrective disclosures and an additional challenged statement. \u00b6\u00b6 88-91.\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 5 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 7 of 10 Page ID\n #:2112\n\n 1 Exhibit 10 is a Form 8-K filed on November 3, 2025, attaching a press release\n 2 containing alleged corrective disclosures. \u00b6 92. Because these documents\n contain alleged corrective disclosures, Plaintiffs necessarily rely on these\n 3\n documents and the Court may consider them when ruling on a motion to dismiss.\n 4 Evanston Police Pension Fund v. McKesson Corp., 411 F. Supp. 3d 580, 593\n 5 (N.D. Cal. 2019) (incorporating by reference \u201cnews articles the [complaint]\n 6 identifies as corrective disclosures\u201d); Garcia, 2021 WL 1558331, at *5\n (incorporating by reference documents that allegedly \u201crevealed the truth\u201d\n 7\n because they \u201cform[ed] the basis of Plaintiff\u2019s claim\u201d).\n 8\n \u2022 Exhibit 12 (a declaration filed in another court case) is necessarily relied on.\n 9\n Exhibit 12 is a declaration signed by Steve Rusch and filed on April 17, 2025, in\n 10 the Coastal Commission Litigation.2 Ex. 12; see \u00b6 78. The Complaint describes\n 11 a June 3, 2025 temporary restraining order in the State Waivers Litigation,3 and\n 12 alleges that \u201cSable had opposed the temporary restraining order. Steve Rusch,\n Sable\u2019s Vice President, Regulatory & Environmental Affairs, stated in a sworn\n 13 declaration to the court . . . \u2018[i]f a TRO is issued, [Sable] will be forced to shut\n 14 down repair and maintenance activities, which will require [Sable] to incur\n 15 significant economic damages.\u2019\u201d \u00b6 78. But Plaintiffs quote from the wrong\n declaration. The quoted language appears in a declaration Mr. Rusch signed two\n 16\n months before the TRO issued and in a different court case. Compare \u00b6 78, with\n 17 Ex. 12 (quoted language appears in Mr. Rusch\u2019s April 17, 2025 declaration filed\n 18 in the Coastal Commission Litigation). The incorporation by reference doctrine\n prevents plaintiffs from \u201cselecting only portions of documents that support their\n 19\n claims, while omitting portions of those very documents that weaken\u2014or\n 20 doom\u2014their claims.\u201d Khoja, 899 F.3d at 1002. Plaintiffs purport to quote from\n 21 a sworn declaration but \u201comitt[ed]\u201d two facts that \u201cdoom\u201d their claims: the date\n 22 on which it was signed, and the court in which it was filed. See \u00b6 78; Ex. 12. The\n Court should consider Exhibit 12 incorporated by reference to prevent this\n 23 method of pleading. See Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir. 1998)\n 24\n 25\n 2\n 26 Sable Offshore Corp. v. Cal. Coastal Comm\u2019n, No. 25CV00974 (Santa Barbara\n Cnty. Super. Ct.) (\u201cCoastal Commission Litigation\u201d).\n 27 3 Env\u2019t Def. Ctr v. Cal. Dep\u2019t of Forestry & Fire Prot., No. 25CV02247 (Santa\n 28 Barbara Cnty. Super. Ct.); Ctr. for Biological Diversity v. Cal. Dep\u2019t of Forestry &\n Fire Prot., No. 25CV02244 (Santa Barbara Cnty. Super. Ct.) (\u201cState Waivers\n Litigation\u201d).\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 6 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 8 of 10 Page ID\n #:2113\n\n 1 (plaintiff cannot survive motion to dismiss by \u201comitting references to documents\n 2 upon which their claims are based\u201d).\n 3 B. All Exhibits are Properly Subject to Judicial Notice\n 4 Courts may take judicial notice of matters that are \u201cnot subject to reasonable\n 5 dispute\u201d because they are (1) \u201cgenerally known\u201d; or (2) can be \u201cdetermined from\n 6 sources whose accuracy cannot reasonably be questioned.\u201d Fed. R. Evid. 201(b).\n 7 The documents submitted in connection with Defendants\u2019 Motion may be\n 8 considered by the Court because each document is also subject to judicial notice.\n 9 Exhibits 1-16 are SEC filings, documents filed in State or Federal court, or news\n 10 articles published online. Each document is publicly available, and each can be\n 11 accurately and readily determined from sources whose accuracy cannot reasonably\n 12 be questioned. See Fed. R. Evid. 201(b); Khoja, 899 F.3d at 999 (\u201cJudicial notice\n 13 under Rule 201 permits a court to notice an adjudicative fact if it is \u2018not subject to\n 14 reasonable dispute.\u2019\u201d (quoting Fed. R. Evid. 201(b))).\n 15 SEC Filings (Exhibits 1-2, 7-8, 10-11, and 13-16). Courts routinely take\n 16 judicial notice of public SEC filings in connection with motions to dismiss in\n 17 securities class action cases. See Metzler Inv. GMBH v. Corinthian Colls. Inc., 540\n 18 F.3d 1049, 1064 n.7 (9th Cir. 2008) (holding SEC filings are subject to judicial\n 19 notice); In re YogaWorks, Inc. Sec. Litig., 2020 WL 2549290, at *1 n.1 (C.D. Cal.\n 20 Apr. 23, 2020) (taking judicial notice of SEC filings); In re Toyota Motor Corp., 785\n 21 F. Supp. 2d 883, 902 (C.D. Cal. 2011) (courts are permitted \u201cto judicially notice\n 22 SEC filings\u201d). Exhibits 1-2, 7-8, 10-11, and 13-16 are Form 8-Ks, a Prospectus, and\n 23 a Form 10-K filed with the SEC. These documents are publicly available on the\n 24 SEC\u2019s website. None is subject to reasonable dispute, and each is capable of\n 25 accurate and ready determination via the SEC\u2019s public website at\n 26 www.sec.gov/edgar. The Court should therefore take judicial notice of \u201cwhat\n 27 statements the documents contain.\u201d Troy Grp., Inc. v. Tilson, 364 F. Supp. 2d 1149,\n 28 1152 (C.D. Cal. 2005); see also Patel v. Parnes, 253 F.R.D. 531, 546 (C.D. Cal.\n\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 7 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 9 of 10 Page ID\n #:2114\n\n 1 2008) (explaining that judicial notice of SEC filings is proper \u201cfor the purpose of\n 2 determining what statements the documents contain\u201d).\n 3 Court Pleadings and Orders (Exhibits 3-6, and 12). Courts may take\n 4 judicial notice of \u201cundisputed matters of public record, including documents on file\n 5 in federal or state courts.\u201d Harris v. Cnty. of Orange, 682 F.3d 1126, 1132 (9th Cir.\n 6 2012) (internal citation omitted); see also United States v. Black, 482 F.3d 1035,\n 7 1041 (9th Cir. 2007) (\u201c[Courts] may take notice of proceedings in other courts.\u201d)\n 8 Exhibit 3 is a consent decree filed in federal court.4 Exhibits 4-6 are complaints filed\n 9 in Santa Barbara Superior Court, some of which attached exhibits in support of the\n 10 allegations. Exhibit 12 is a declaration filed in Santa Barbara Superior Court. Each\n 11 is publicly available, and the Court should take judicial notice that these court filings\n 12 exist and contain the information referenced within. See Reyn\u2019s Pasta Bella, LLC v.\n 13 Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006) (taking judicial notice of\n 14 \u201cpleadings, memoranda, [and] expert reports\u201d filed in a different case);\n 15 Swartzendruber v. Colony Cap., Inc., 2020 WL 7754008, at *3 (C.D. Cal. Dec. 10,\n 16 2020); see also Gammel v. Hewlett-Packard Co., 2013 WL 1947525, at *5 (C.D.\n 17 Cal. May 8, 2013) (taking judicial notice of the existence and content of court filings,\n 18 but not that the allegations within those filings were true).\n 19 News Articles and Online Publications (Exhibit 9). Courts may take\n 20 judicial notice of publicly available news articles when the news articles are offered\n 21 for the fact that they were publicly available and contain the statements therein. See,\n 22 e.g., Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th\n 23 Cir. 2010) (taking judicial notice of \u201cthe fact that various newspapers, magazines,\n 24 and books have published information . . . as an indication of what information was\n 25\n 4\n 26 it The court may also take judicial notice of Exhibit 3, the Consent Decree, because\n is a public document on the Environmental Protection Agency\u2019s website.\n 27 Available at, https://www.epa.gov/sites/default/files/2020-03/documents/plainsall\n americanpipelinelp.pdf; see Ariz. Libertarian Party v. Reagan, 798 F.3d 723, 727\n 28 n.3 (9th Cir. 2015) (\u201cWe may take judicial notice of \u2018official information posted on\n a governmental website, the accuracy of which is undisputed\u201d) (internal quotes\n omitted).\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 8 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f Case 2:25-cv-06869-SVW-PVC Document 82 Filed 01/05/26 Page 10 of 10 Page ID\n #:2115\n\n 1 in the public realm at the time\u201d) (cleaned up); Ardolino v. Mannkind Corp., 2016\n 2 WL 4505172, at *4 (C.D. Cal. Aug. 23, 2016) (\u201cFederal courts routinely take judicial\n 3 notice of press releases, news articles, SEC filings, and conference call transcripts\n 4 cited in securities complaints.\u201d). Exhibit 9 is an article published by Hunterbrook\n 5 Media and available online. It is judicially noticeable to establish that the statements\n 6 in the article were publicly available.\n 7 IV. CONCLUSION\n 8 Defendants respectfully request that the Court consider Exhibits 1-16 in\n 9 assessing Defendants\u2019 Motion.\n 10\n 11 Dated: January 5, 2026 Respectfully submitted,\n 12 LATHAM & WATKINS LLP\n 13 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 14 650 Town Center Drive, 20th Floor\n Costa Mesa, CA 92626\n 15 Telephone: (714) 540-1235\n 16 Email: kristin.murphy@lw.com\n\n 17 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 18 San Diego, CA 92130\n Telephone: (858) 523-5400\n 19 Email: colleen.smith@lw.com\n 20 Counsel for Defendants\n Sable Offshore Corp., James C.\n 21 Flores and Gregory D. Patrinely\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n\n CASE NO. 2:25-cv-06869-SVW-PVC\nATTORNEYS AT LAW\n 9 REQUEST FOR JUDICIAL NOTICE ISO MOT. TO\n DISMISS SECOND AM. CLASS ACTION COMPL.\n\f","ocr_status":2,"date_upload":"2026-05-15T02:39:08.505669-07:00","document_number":"82","attachment_number":null,"pacer_doc_id":"031046680337","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"For Judicial Notice","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/479328753/","id":479328753,"tags":[],"absolute_url":"/docket/70941407/82/1/tracy-johnson-v-sable-offshore-corp/","date_created":"2026-05-15T02:39:08.657513-07:00","date_modified":"2026-05-18T05:27:53.067481-07:00","sha1":"e8c14ff55e2dfde36ef70ac32ba13de090eec601","page_count":2,"file_size":140682,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.82.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.82.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 2:25-cv-06869-SVW-PVC Document 82-1 Filed 01/05/26 Page 1 of 2 Page ID\n #:2116\n\n 1\n 2\n 3\n 4\n 5\n 6\n 7\n 8 UNITED STATES DISTRICT COURT\n 9 CENTRAL DISTRICT OF CALIFORNIA\n 10\n TRACY JOHNSON, Individually and on\n 11 behalf of all others similarly situated, Case No. 2:25-cv-06869-SVW-PVC\n 12 [PROPOSED] ORDER\n Plaintiff, GRANTING DEFENDANTS\n 13 SABLE OFFSHORE CORP.,\n v. JAMES C. FLORES, AND\n 14 GREGORY D. PATRINELY\u2019S\n SABLE OFFSHORE CORP., JAMES C. REQUEST FOR JUDICIAL\n 15 FLORES, and GREGORY D. NOTICE AND INCORPORATION\n BY REFERENCE IN SUPPORT\n 16 PATRINELY, OF MOTION TO DISMISS\n SECOND AMENDED CLASS\n 17 Defendants. ACTION COMPLAINT\n 18 Hon. Stephen V. Wilson\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n\n CASE NO. 2:25-cv-06869-SVW-PVC\n [PROPOSED] ORDER GRANTING RJN\n ISO MOT. TO DISMISS SECOND AM. COMPL.\n\fCase 2:25-cv-06869-SVW-PVC Document 82-1 Filed 01/05/26 Page 2 of 2 Page ID\n #:2117\n\n 1 This matter is before the Court on Defendants Sable Offshore Corp., James\n 2 C. Flores, and Gregory D. Patrinely\u2019s Request for Judicial Notice and Incorporation\n 3 by Reference in Support of the Motion to Dismiss the Second Amended Class\n 4 Action Complaint (\u201cRequest for Judicial Notice\u201d). After consideration of the briefs\n 5 and arguments of counsel and all other matters presented, the Court concludes that\n 6 Defendants\u2019 Request for Judicial Notice should be granted.\n 7 Accordingly, IT IS HEREBY ORDERED that the Request for Judicial\n 8 Notice is GRANTED, and the Court will consider Exhibits 1-16.\n 9\n 10 IT IS SO ORDERED.\n 11\n 12 Dated: __________________, 2026\n HON. STEPHEN V. WILSON\n 13 UNITED STATES DISTRICT JUDGE\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n\n CASE NO. 2:25-cv-06869-SVW-PVC\n 1 [PROPOSED] ORDER GRANTING RJN\n ISO MOT. TO DISMISS SECOND AM. COMPL.\n\f","ocr_status":2,"date_upload":"2026-05-15T02:39:11.838422-07:00","document_number":"82","attachment_number":1,"pacer_doc_id":"031046680338","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Proposed Order","acms_document_guid":""}],"date_created":"2026-01-05T23:31:11.457079-08:00","date_modified":"2026-02-10T08:16:36.988000-08:00","date_filed":"2026-01-05","time_filed":"23:29:49","entry_number":82,"recap_sequence_number":"2026-01-05.002","pacer_sequence_number":296,"description":"REQUEST FOR JUDICIAL NOTICE re NOTICE OF MOTION AND MOTION to Dismiss Case (Second Amended Class Action Complaint) 81 filed by Defendants James C. Flores, Gregory D. Patrinely, Sable Offshore Corp.. (Attachments: # 1 Proposed Order)(Murphy, Kristin) (Entered: 01/05/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/449149124/","id":449149124,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/463934497/","id":463934497,"tags":[],"absolute_url":"/docket/70941407/80/tracy-johnson-v-sable-offshore-corp/","date_created":"2026-01-03T14:04:56.242505-08:00","date_modified":"2026-02-10T08:16:36.915846-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"80","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2026-01-03T14:04:56.209548-08:00","date_modified":"2026-02-10T08:16:36.894431-08:00","date_filed":"2025-12-12","time_filed":null,"entry_number":80,"recap_sequence_number":"2025-12-12.001","pacer_sequence_number":null,"description":"(IN CHAMBERS) ORDER DEEMING DEFENDANTS MOTION TO DISMISS AS MOOT (Dkt. No. 73 ) by Judge Stephen V. Wilson: In light of the Second Amended Complaint (Dkt. No. 77 ), which the Court finds was filed as a matter of course, Defendants Motion to Dismiss is DENIED as MOOT, and the hearing scheduled for 1/5/2026, is hereby VACATED. Furthermore, the Court ORDERS the Defendant to file an Answer or Motion to Dismiss in response to the second amended complaint by January 5, 2026. SO ORDERED. THERE IS NO PDF DOCUMENT ASSOCIATED WITH THIS ENTRY. (dta) TEXT ONLY ENTRY (Entered: 12/12/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/449149123/","id":449149123,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/463934496/","id":463934496,"tags":[],"absolute_url":"/docket/70941407/70/tracy-johnson-v-sable-offshore-corp/","date_created":"2026-01-03T14:04:55.269162-08:00","date_modified":"2026-02-10T08:16:36.458215-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"70","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2026-01-03T14:04:55.210563-08:00","date_modified":"2026-02-10T08:16:36.433915-08:00","date_filed":"2025-11-06","time_filed":null,"entry_number":70,"recap_sequence_number":"2025-11-06.001","pacer_sequence_number":null,"description":"ORDER by Judge Stephen V. Wilson: granting 69 Non-Resident Attorney Daniel Tyre-Karp APPLICATION to Appear Pro Hac Vice on behalf of Movant Jimmy Cleveland White, designating Laurence Rosen as local counsel. THERE IS NO PDF ASSOCIATED WITH THIS ENTRY(aus) (Entered: 11/06/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/447096444/","id":447096444,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/461837746/","id":461837746,"tags":[],"absolute_url":"","date_created":"2025-12-12T14:37:40.662920-08:00","date_modified":"2025-12-12T14:37:40.698401-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Text Only Scheduling Notice","acms_document_guid":""}],"date_created":"2025-12-12T14:37:40.373319-08:00","date_modified":"2025-12-12T14:37:40.373334-08:00","date_filed":"2025-12-12","time_filed":"14:09:12","entry_number":null,"recap_sequence_number":"2025-12-12.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/446700911/","id":446700911,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/461432514/","id":461432514,"tags":[],"absolute_url":"/docket/70941407/79/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-12-09T22:02:38.603505-08:00","date_modified":"2026-02-10T08:16:36.869663-08:00","sha1":"3871db4b3340bda034a18c8d6fee830b05ab1b09","page_count":6,"file_size":208395,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.79.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.79.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 2:25-cv-06869-SVW-PVC Document 79 Filed 12/09/25 Page 1 of 6 Page ID\n #:1410\n\n\n\n\n 1 Laurence M. Rosen (SBN 219683)\n THE ROSEN LAW FIRM, P.A.\n 2\n 355 South Grand Avenue, Suite 2450\n 3 Los Angeles, CA 90071\n 4 Telephone: (213) 785-2610\n Facsimile: (213) 226-4684\n 5 Email: lrosen@rosenlegal.com\n 6\n Counsel for Plaintiffs\n 7\n 8 UNITED STATES DISTRICT COURT\n CENTRAL DISTRICT OF CALIFORNIA\n 9\n 10\n 11 TRACY JOHNSON, Individually and No. 2:25-CV-06869-SVW\n on behalf of all others similarly situated,\n 12 REPLY IN FURTHER\n 13 Plaintiff, SUPPORT OF PLAINTIFFS\u2019\n NOTICE OF INTENT TO FILE\n 14 v. SECOND AMENDED\n 15 COMPLAINT\n SABLE OFFSHORE CORP., JAMES C.\n 16\n FLORES, GREGORY D. PATRINELY, CLASS ACTION\n 17 J.P. MORGAN SECURITIES LLC,\n JEFFERIES LLC, TD SECURITIES\n 18\n (USA) LLC, THE BENCHMARK\n 19 COMPANY, LLC, JOHNSON RICE &\n 20 COMPANY, L.L.C., PEP ADVISORY\n LLC, ROTH CAPITAL PARTNERS,\n 21 LLC, and TUOHY BROTHERS\n 22 INVESTMENT RESEARCH, INC.,\n 23 Defendants.\n 24\n 25\n 26\n 27\n 28\n 29 REPLY IN FURTHER SUPPORT OF NOTICE OF\n 30 INTENT TO FILE SECOND AMENDED COMPLAINT\n\fCase 2:25-cv-06869-SVW-PVC Document 79 Filed 12/09/25 Page 2 of 6 Page ID\n #:1411\n\n\n\n 1 On December 4, 2025, Plaintiffs filed a notice (ECF 76) (\u201cNotice\u201d) stating\n 2 that they would file a Second Amended Complaint (\u201cSAC\u201d) as a matter of course,\n 3 as permitted by Federal Rule of Civil Procedure 15(a)(1), in lieu of responding to\n 4 Defendants\u2019 motion to dismiss. On December 8, 2025, Plaintiffs filed the SAC.\n 5 ECF 77. The SAC was timely served and filed under Rule 15(a)(1) because it was\n 6 served withing 21 days of Defendants\u2019 Rule 12(b) motion to dismiss (ECF 73).\n 7 Rule 15(a) provides:\n 8\n (1) Amending as a Matter of Course. A party may amend its pleading\n 9 once as a matter of course within:\n 10\n (A) 21 days after serving it, or\n 11\n (B) if the pleading is one to which a responsive pleading is\n 12\n required, 21 days after service of a responsive pleading or 21\n 13 days after service of a motion under Rule 12(b), (e), or (f),\n 14 whichever is earlier.\n\n 15 (2) Other Amendments. In all other cases, a party may amend its\n pleading only with the opposing party's written consent or the court's\n 16\n leave. The court should freely give leave when justice so requires.\n 17\n Fed. R. Civ. P. 15(a).\n 18\n As Plaintiffs explained in the Notice, the fact that Plaintiffs previously\n 19\n served an amended complaint (ECF 71) pursuant to Rule 15(a)(2) did not exhaust\n 20\n Plaintiffs\u2019 right to serve an amended complaint pursuant to Rule 15(a)(1). Notice\n 21\n at 1-2 (citing Ramirez v. Cnty. of San Bernardino, 806 F.3d 1002, 1007 (9th Cir.\n 22\n 2015)). The filing of the SAC superseded the FAC and mooted Defendants\u2019 motion\n 23\n to dismiss. See Notice at 3.\n 24\n 25 Defendants\u2019 response to the Notice (ECF 78) (\u201cResponse\u201d) asserts that the\n\n 26 SAC is \u201cfacially defective\u201d because Plaintiffs already exhausted their Rule\n\n 27 15(a)(1) amendment when they filed the FAC. Response at 2. Specifically, the\n\n 28 Response claims that \u201cPlaintiffs never requested from the Court, and the Court\n 29 1\n REPLY IN FURTHER SUPPORT OF NOTICE OF\n 30 INTENT TO FILE SECOND AMENDED COMPLAINT\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 79 Filed 12/09/25 Page 3 of 6 Page ID\n #:1412\n\n\n\n 1 never granted, leave to file the First Amended Complaint.\u201d Id., at 1. Defendants\n 2 are wrong, and the Response misapplies the law and misstates the facts.\n 3 As the procedural background makes clear, the Court granted Plaintiffs leave\n 4 to file the FAC. On July 28, 2025, Tracy Johnson filed the initial complaint in this\n 5 action. ECF 1. On September 5, 2025, the parties filed a stipulation extending\n 6 Defendants\u2019 time to respond to the initial complaint. ECF 13. The stipulation stated\n 7 that \u201c[w]ithin fourteen (14) days of the Court\u2019s appointment of the Lead Plaintiff\n 8 and Lead Counsel, the court-approved Lead Counsel and counsel for Defendants\n 9 will meet and confer and submit a proposed schedule for the filing of an amended\n 10\n or consolidated complaint or designating the operative complaint and Defendants\u2019\n 11\n response.\u201d Id., at 3-4. On September 23, 2025, the Court so-ordered the Stipulation.\n 12\n ECF 35.\n 13\n At the October 27, 2025 hearing, the Court appointed Jimmy Cleveland\n 14\n White as Lead Plaintiff and the Rosen Law Firm, P.A. (\u201cRLF\u201d) as Lead Counsel.\n 15\n ECF 66. At the hearing, RLF stated that the next step will be \u201cto confer with\n 16\n Defendants and set a schedule for the briefing or for the filing of an amended\n 17\n complaint and briefing a motion to dismiss.\u201d Tr. at 20:1-6. The Court indicated that\n 18\n there was no need for the parties to meet and confer and that Defendants should\n 19\n file their motion to dismiss the initial complaint within 14 days. Id., at 22:10-18.\n 20\n Counsel for Defendants stated \u201cI believe the newly appointed lead plaintiff intends\n 21\n 22 to file an amended complaint,\u201d and RLF confirmed that it intended to file an\n\n 23 amended complaint. Id., at 22:19-23. The Court asked RLF about the substance of\n\n 24 its intended amendment and when Lead Plaintiff intended to file the amended\n 25 complaint. Id., at 22:14 to 23:14. RLF stated \u201c[w]e\u2019re hoping to get 30 days to\n 26 file,\u201d and the Court responded \u201cI\u2019ll give you 14 days.\u201d Id., at 23:15-20.\n 27\n 28\n 29 2\n REPLY IN FURTHER SUPPORT OF NOTICE OF\n 30 INTENT TO FILE SECOND AMENDED COMPLAINT\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 79 Filed 12/09/25 Page 4 of 6 Page ID\n #:1413\n\n\n\n 1 On October 27, 2025, the Court entered a minute order granting Plaintiffs\n 2 leave to file the FAC. ECF 66 (\u201cThe Plaintiff has 14 days from this Order\n 3 (November 10, 2025) to file their Amended Complaint.\u201d). Plaintiff timely filed the\n 4 FAC on November 10, 2025. ECF 71.\n 5 First, as a matter of law, Plaintiffs cannot have filed the FAC as a matter of\n 6 right under Rule 15(a)(1) because the Court gave Plaintiffs less time to file the\n 7 FAC than Rule 15(a)(1)(B) requires. Under Rule 15(a)(1)(B), Plaintiffs had the\n 8 right to file an amended complaint within 21 days of Defendants filing a responsive\n 9 pleading or a motion to dismiss the initial complaint. Defendants had not yet filed\n 10\n any responsive pleading or motion as of October 27, 2025, which means Plaintiffs\n 11\n had at least 21 days from that date to amend as of right. The Court gave Plaintiffs\n 12\n only 14 days to file the FAC, and the Court cannot reduce Plaintiffs\u2019 time to file as\n 13\n afforded by the Federal Rules. C.f. Lambert v. Nutraceutical Corp., 783 F. App\u2019x\n 14\n 720, 722 (9th Cir. 2019) (\u201cwhatever the scope of this inherent power [of federal\n 15\n courts to formulate procedural rules], it does not include the power to develop rules\n 16\n that circumvent or conflict with the Federal Rules.\u201d) (quoting United States v. W.R.\n 17\n Grace, 526 F.3d 499, 511 (9th Cir. 2008)). Accordingly, the October 27 Order\n 18\n cannot have been the Court setting a deadline for Plaintiffs to file the FAC as of\n 19\n right under Rule 15(a)(1) and must have been the Court granting Plaintiffs leave to\n 20\n amend under Rule 15(a)(2). Defendants do not \u2013 and cannot \u2013 argue that filing an\n 21\n 22 amended complaint pursuant to Rule 15(a)(2) exhausted their right to later file an\n\n 23 amended complaint pursuant to Rule 15(a)(1).1\n\n 24\n 25 1 The Response mistakenly relies on the inapposite decision in Neyra v. Mercedes-Benz USA,\n\n LLC, 2022 WL 19432589, at *1-*3 (C.D. Cal. May 24, 2022). Response at 2. In Neyra, the court\n 26 held that the plaintiff\u2019s first amended complaint was filed as of right because the plaintiff filed\n 27 the complaint without advising the court that it intended to amend and without any input or\n guidance from the court. Id. Here, Plaintiffs discussed the substance of the proposed amendment\n 28 with the Court, and the Court gave Plaintiffs leave to file an amended complaint within 14 days.\n\n 29 3\n REPLY IN FURTHER SUPPORT OF NOTICE OF\n 30 INTENT TO FILE SECOND AMENDED COMPLAINT\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 79 Filed 12/09/25 Page 5 of 6 Page ID\n #:1414\n\n\n\n 1 Second, the context of the October 27 hearing makes clear that the Court\n 2 granted Plaintiffs leave to amend. The Court asked Plaintiffs about the substance\n 3 of the proposed amendment, which would be irrelevant if Plaintiffs were amending\n 4 as of right. After RLF explained the contours of the proposed amendment, the\n 5 Court said \u201cI\u2019ll give you 14 days.\u201d A common sense interpretation of \u201cgive\u201d is the\n 6 granting of leave.\n 7 Finally, in the event the Court does find that Plaintiffs require leave of the\n 8 Court to file the SAC, Plaintiffs respectfully request permission to move for leave\n 9 to file the SAC. \u201c[T]he underlying purpose of Rule 15\u201d is \u201cto facilitate decision on\n 10\n the merits rather than on the pleadings or technicalities.\u201d DCD Programs, Ltd. v.\n 11\n Leighton, 833 F.2d 183, 186 (9th Cir. 1987). In the Ninth Circuit, \u201cthe policy of\n 12\n freely granting leave to amend should \u2018be applied with extreme liberality.\u2019\u201d City\n 13\n of Fernley v. Conant, 2023 WL 2549792, at *2 (9th Cir. Mar. 17, 2023)\n 14\n (quoting Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir.\n 15\n 2003)). Here, Plaintiffs have not acted in bad faith or with undue delay, Defendants\n 16\n would not face any substantial prejudice, and the SAC is not futile. See, e.g.,\n 17\n Molina v. Rite Aid, 2019 WL 121194, at *1 (C.D. Cal. Jan. 7, 2019) (Wilson, J.)\n 18\n (\u201cGiven the liberal policy regarding Rule 15 amendments, the fact that this case is\n 19\n in its early stages, and the fact that Plaintiff filed this motion only days after he lost\n 20\n his ability to amend as a matter of course under Federal Rule of Civil Procedure\n 21\n 22 15(a)(1)(B), the Court GRANTS Plaintiff's motion for leave to file an amended\n\n 23 complaint and accepts Plaintiff's proposed First Amended Complaint as the First\n\n 24 Amended Complaint.\u201d).\n 25\n 26 Dated: December 10, 2025 THE ROSEN LAW FIRM, P.A.\n /s/ Daniel Tyre-Karp\n 27\n Daniel Tyre-Karp (pro hac vice)\n 28\n 29 4\n REPLY IN FURTHER SUPPORT OF NOTICE OF\n 30 INTENT TO FILE SECOND AMENDED COMPLAINT\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 79 Filed 12/09/25 Page 6 of 6 Page ID\n #:1415\n\n\n\n 1 275 Madison Ave., 40th Floor\n New York, NY 10016\n 2 Telephone: (212) 686-1060\n 3 Facsimile: (212) 202-3827\n Email: dtyrekarp@rosenlegal.com\n 4\n 5 Laurence M. Rosen (SBN 219683)\n 355 South Grand Avenue, Suite 2450\n 6 Los Angeles, CA 90071\n 7 Telephone: (213) 785-2610\n Facsimile: (213) 226-4684\n 8\n Email: lrosen@rosenlegal.com\n 9\n 10 Lead Counsel for Plaintiffs\n\n 11\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n 29 5\n REPLY IN FURTHER SUPPORT OF NOTICE OF\n 30 INTENT TO FILE SECOND AMENDED COMPLAINT\n 31\n\f","ocr_status":2,"date_upload":"2025-12-12T09:51:56.803210-08:00","document_number":"79","attachment_number":null,"pacer_doc_id":"031046512621","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Reply","acms_document_guid":""}],"date_created":"2025-12-09T22:02:38.546985-08:00","date_modified":"2026-02-10T08:16:36.850520-08:00","date_filed":"2025-12-09","time_filed":"21:47:37","entry_number":79,"recap_sequence_number":"2025-12-09.001","pacer_sequence_number":288,"description":"REPLY filed by Plaintiffs Tracy Johnson, Jake Stewart, Movant Jimmy Cleveland White to Notice (Other) 76, Reply (Motion related), 78 (Tyre-Karp, Daniel) (Entered: 12/09/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/446567601/","id":446567601,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/461295966/","id":461295966,"tags":[],"absolute_url":"/docket/70941407/78/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-12-08T23:31:47.361184-08:00","date_modified":"2026-02-10T08:16:36.828100-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"78","attachment_number":null,"pacer_doc_id":"031046503547","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Reply (Motion related)","acms_document_guid":""}],"date_created":"2025-12-08T23:31:47.331435-08:00","date_modified":"2026-02-10T08:16:36.809430-08:00","date_filed":"2025-12-08","time_filed":"23:29:12","entry_number":78,"recap_sequence_number":"2025-12-08.002","pacer_sequence_number":285,"description":"REPLY in Support of NOTICE OF MOTION AND MOTION to Dismiss Amended Class Action Complaint 73 and Response to Plaintiffs' Notice of Intent to File Second Amended Complaint filed by Defendants James C. Flores, Gregory D. Patrinely, Sable Offshore Corp.. (Murphy, Kristin) (Entered: 12/08/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/446434853/","id":446434853,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/461159985/","id":461159985,"tags":[],"absolute_url":"/docket/70941407/77/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-12-08T02:34:04.676075-08:00","date_modified":"2026-02-10T08:16:36.776166-08:00","sha1":"8b2251216f8a00e05fa1e5c569a1d7feebec5301","page_count":36,"file_size":423637,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.77.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.77.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 1 of 36 Page ID\n #:1370\n\n\n\n\n 1 Laurence M. Rosen (SBN 219683)\n THE ROSEN LAW FIRM, P.A.\n 2\n 355 South Grand Avenue, Suite 2450\n 3 Los Angeles, CA 90071\n 4 Telephone: (213) 785-2610\n Facsimile: (213) 226-4684\n 5 Email: lrosen@rosenlegal.com\n 6\n Counsel for Plaintiffs\n 7\n 8 UNITED STATES DISTRICT COURT\n CENTRAL DISTRICT OF CALIFORNIA\n 9\n 10\n 11 TRACY JOHNSON, Individually and No. 2:25-CV-06869-SVW\n on behalf of all others similarly situated,\n 12 SECOND AMENDED CLASS\n 13 Plaintiff, ACTION COMPLAINT FOR\n VIOLATIONS OF THE\n 14 v. FEDERAL SECURITIES LAWS\n 15\n SABLE OFFSHORE CORP., JAMES C. CLASS ACTION\n 16\n FLORES, GREGORY D. PATRINELY,\n 17 J.P. MORGAN SECURITIES LLC, JURY TRIAL DEMANDED\n JEFFERIES LLC, TD SECURITIES\n 18\n (USA) LLC, THE BENCHMARK\n 19 COMPANY, LLC, JOHNSON RICE &\n 20 COMPANY, L.L.C., PEP ADVISORY\n LLC, ROTH CAPITAL PARTNERS,\n 21 LLC, and TUOHY BROTHERS\n 22 INVESTMENT RESEARCH, INC.,\n 23 Defendants.\n 24\n 25\n 26\n 27\n 28\n 29 SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 2 of 36 Page ID\n #:1371\n\n\n\n 1 Lead Plaintiff Jimmy Cleveland White and named plaintiffs Tracy Johnson\n 2 and Jake Stewart (\u201cPlaintiffs\u201d), individually and on behalf of all other persons\n 3 similarly situated, by Plaintiffs\u2019 undersigned attorneys, for Plaintiffs\u2019 complaint\n 4 against Defendants (defined below), alleges the following based upon personal\n 5 knowledge as to Plaintiffs and Plaintiffs\u2019 own acts, and information and belief as\n 6 to all other matters, based upon, among other things, the investigation conducted\n 7 by and through Plaintiffs\u2019 attorneys, which included, among other things, a review\n 8 of the Defendants\u2019 public documents, public filings, wire and press releases\n 9 published by and regarding Sable Offshore Corp. (\u201cSable\u201d or the \u201cCompany\u201d),\n 10\n media reports, regulatory documents, and information readily obtainable on the\n 11\n Internet. Plaintiffs believe that substantial evidentiary support will exist for the\n 12\n allegations set forth herein after a reasonable opportunity for discovery. 1\n 13\n I. NATURE OF THE ACTION\n 14\n 1. This is a class action on behalf of persons or entities who purchased\n 15\n or otherwise acquired publicly traded Sable securities between May 19, 2025 and\n 16\n November 4, 2025, both dates inclusive (the \u201cClass Period\u201d). Plaintiffs seek to\n 17\n recover compensable damages caused by Defendants\u2019 violations of the federal\n 18\n securities laws under the Securities Exchange Act of 1934 (the \u201cExchange Act\u201d).\n 19\n II. JURISDICTION AND VENUE\n 20\n 2. The claims asserted herein arise under and pursuant to Sections 10(b)\n 21\n 22 and 20(a) of the Exchange Act (15 U.S.C. \u00a7\u00a7 78j(b) and 78t(a)) and Rule 10b-5\n\n 23 promulgated thereunder by the SEC (17 C.F.R. \u00a7 240.10b-5).\n\n 24 3. This Court has jurisdiction over the subject matter of this action\n 25 pursuant to 28 U.S.C. \u00a7 1331 and Section 27 of the Exchange Act (15 U.S.C.\n 26 \u00a778aa).\n 27\n 1\n 28 Unless otherwise specified, all emphasis is added.\n 29 1\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 3 of 36 Page ID\n #:1372\n\n\n\n 1 4. Venue is proper in this judicial district pursuant to 28 U.S.C. \u00a7\n 2 1391(b) and Section 27 of the Exchange Act (15 U.S.C. \u00a7 78aa(c)), as the alleged\n 3 misstatements entered and the subsequent damages took place in this judicial\n 4 district.\n 5 5. In connection with the acts, conduct and other wrongs alleged in this\n 6 complaint, Defendants (defined below), directly or indirectly, used the means and\n 7 instrumentalities of interstate commerce, including but not limited to, the United\n 8 States mails, interstate telephone communications and the facilities of the national\n 9 securities exchange.\n 10\n III. PARTIES\n 11\n 6. Lead Plaintiff Jimmy Cleveland White purchased Sable securities\n 12\n during the Class Period and was economically damaged thereby. His PSLRA\n 13\n certification was previously filed with the Court and is incorporated by reference\n 14\n herein.\n 15\n 7. Named plaintiff Tracy Johnson purchased Sable securities during the\n 16\n Class Period and was economically damaged thereby. Her PSLRA certification\n 17\n was previously filed with the Court and is incorporated by reference herein.\n 18\n 8. Named plaintiff Jake Stewart purchased Sable securities during the\n 19\n Class Period and was economically damaged thereby. His PSLRA certification was\n 20\n previously filed with the Court and is incorporated by reference herein.\n 21\n 22 9. Defendant Sable operates in the offshore drilling business and seeks\n\n 23 to extract oil from the Santa Ynez field in federal waters off the Coast of California.\n\n 24 Pertinent to those activities is an offshore facility owned by Defendants at Las\n 25 Flores Canyon in Santa Barbara County, California. Sable is incorporated in\n 26 Delaware, and its principal executive offices are located at 845 Texas Avenue,\n 27 Suite 2920, Houston, Texas 77002.\n 28\n 29 2\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 4 of 36 Page ID\n #:1373\n\n\n\n 1 10. Sable\u2019s common stock trades on the New York Stock Exchange (the\n 2 \u201cNYSE\u201d) under the ticker symbol \u201cSOC\u201d.\n 3 11. Defendant James C. Flores (\u201cFlores\u201d) served as the Company\u2019s Chief\n 4 Executive Officer (\u201cCEO\u201d) and Chairman of the Board of Directors (the \u201cBoard\u201d)\n 5 at all relevant times.\n 6 12. Defendant Gregory D. Patrinely (\u201cPatrinely\u201d) served as the\n 7 Company\u2019s Chief Financial Officer (\u201cCFO\u201d) at all relevant times.\n 8 13. Defendants Flores and Patrinely are collectively referred to herein as\n 9 the \u201cIndividual Defendants.\u201d\n 10\n 14. Each of the Individual Defendants:\n 11\n (a) directly participated in the management of the Company;\n 12\n (b) was directly involved in the day-to-day operations of the Company at\n 13\n the highest levels;\n 14\n (c) was privy to confidential proprietary information concerning the\n 15\n Company and its business and operations;\n 16\n (d) was directly or indirectly involved in drafting, producing, reviewing\n 17\n and/or disseminating the false and misleading statements and information\n 18\n alleged herein;\n 19\n (e) was directly or indirectly involved in the oversight or implementation\n 20\n of the Company\u2019s internal controls;\n 21\n 22 (f) was aware of or recklessly disregarded the fact that the false and\n\n 23 misleading statements were being issued concerning the Company; and/or\n\n 24 (g) approved or ratified these statements in violation of the federal\n 25 securities laws.\n 26 15. The Company is liable for the acts of the Individual Defendants and\n 27 its employees under the doctrine of respondeat superior and common law\n 28\n 29 3\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 5 of 36 Page ID\n #:1374\n\n\n\n 1 principles of agency because all of the wrongful acts complained of herein were\n 2 carried out within the scope of their employment.\n 3 16. The scienter of the Individual Defendants and other employees and\n 4 agents of the Company is similarly imputed to Sable under respondeat superior\n 5 and agency principles.\n 6 17. Sable and the Individual Defendants are collectively referred to as the\n 7 \u201cDefendants.\u201d\n 8 IV. SUBSTANTIVE ALLEGATIONS\n 9 A. Background\n 10\n 18. On May 19, 2015, an underground oil pipeline in Santa Barbara\n 11\n County ruptured, spilling over 120,000 gallons of crude oil. Over 20,000 gallons\n 12\n of crude oil spilled into the Pacific Ocean, creating an offshore oil slick covering\n 13\n more than nine square miles and killing hundreds of marine wildlife. The oil spill\n 14\n was California\u2019s worst since the 1960s.\n 15\n 19. ExxonMobil had used the ruptured pipeline to help transport oil from\n 16\n their offshore oil platforms \u2013 located 5 to 10 miles off the coast of Santa Barbara\n 17\n County \u2013 to inland refineries. Without a pipeline to transport the oil, ExxonMobil\n 18\n was forced to halt its operations at the three offshore oil platforms.\n 19\n 20. In 2018, a Santa Barbara County jury found Plains All American\n 20\n Pipeline L.P. \u2013 the operator of the ruptured pipeline \u2013 guilty of a felony and eight\n 21\n 22 misdemeanors in connection with its failure to properly maintain the pipeline.\n\n 23 21. In 2020, Plains entered into a consent decree with the U.S.\n\n 24 Department of Justice, Environmental and Natural Resources Division, the U.S.\n 25 Department of Transportation, Pipeline and Hazardous Materials Safety\n 26 Administration, the EPA, CDFW, the California Department of Parks and\n 27 Recreation, the California State Lands Commission, the California Department of\n 28\n 29 4\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 6 of 36 Page ID\n #:1375\n\n\n\n 1 Forestry and Fire Protection\u2019s Office of the State Fire Marshal, Central Coast\n 2 Regional Water Quality Control Board, and Regents of the University of California\n 3 (the \u201cConsent Decree\u201d).\n 4 22. After the Santa Barbara County Board of Supervisors refused to grant\n 5 ExxonMobil permits to transport the oil by truck, an ExxonMobil subsidiary\n 6 acquired the still-damaged oil pipeline in October 2022.\n 7 23. Sable, led by CEO Jim Flores, was initially formed as several special\n 8 purpose entities for the purpose of evaluating the opportunity to acquire the\n 9 offshore oil platforms and the onshore processing facility and pipelines (the \u201cSYU\n 10\n Assets\u201d).\n 11\n 24. In November 2022, Exxon agreed to sell the SYU Assets to Sable for\n 12\n $643 million. The deal closed in February 2024.\n 13\n 25. To fund the purchase, Exxon extended a $623 million term loan to\n 14\n Sable. The loan required Sable to pay a percent annual interest on January 1 of\n 15\n each year, but allowed Sable to elect to add any unpaid interest to the outstanding\n 16\n principal of the loan. Crucially, if Sable failed to restart oil production by January\n 17\n 1, 2026, ExxonMobil could retake ownership of the SYU Assets without any\n 18\n compensation to Sable.\n 19\n 26. In December 2024, Sable entered into an amended loan agreement\n 20\n whereby it must restart production by March 1, 2026 and refinance the loan within\n 21\n 22 240 days of first production.\n\n 23 27. Sable faced significant operational and federal, state, and local\n\n 24 regulatory hurdles before it could restart oil production. Sable onshore pipelines,\n 25 alone, are regulated by California Coastal Commission; the California Department\n 26 of Conservation; the California Geologic Energy Management Division, the\n 27 California Department of Fish and Wildlife, including the Office of Oil Spill\n 28\n 29 5\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 7 of 36 Page ID\n #:1376\n\n\n\n 1 Prevention and Response; the California Department of Forestry and Fire\n 2 Protection, Office of the State Fire Marshal; the California Department of Parks\n 3 and Recreation (State Parks); the Central Coast Regional Water Quality Control\n 4 Board; the Central Valley Regional Water Quality Control Board; and the State\n 5 Lands Commission.\n 6 Final Development Permits\n 7 28. In March 2024, Sable filed applications to the Santa Barbara County\n 8 Planning Commission seeking the transfer of Final Development Permits (\u201cFDPs\u201d)\n 9 from Exxon to Sable. The FDPs, initially issued by the County between 1987 and\n 10\n 1993, authorized the operation and maintenance of the SYU Assets.\n 11\n 29. The Planning Commission approved the transfer of the FDPs to Sable\n 12\n in October 2024. However, environmental groups appealed that decision to the\n 13\n County\u2019s Board of Supervisors (the \u201cBoard\u201d). In a February 2025 hearing, the\n 14\n Board vote on the transfer was a 2-2 tie. The Board required majority support to\n 15\n take any action, which meant the transfer was not approved.\n 16\n 30. On May 8, 2025, Sable filed a federal lawsuit in the Central District\n 17\n of California against the County and the Board seeking to force the County to\n 18\n transfer the FDPs to Sable.\n 19\n 31. On September 12, 2025, Judge Dolly M. Gee denied in part Sable\u2019s\n 20\n motion for summary judgment, holding that a majority of the Board was required\n 21\n 22 to approve the transfer to of FDPs to Sable. See Sable Offshore Corp. v. Cnty. of\n\n 23 Santa Barbara, No. CV 25-4165-DMG (AGRx), 2025 WL 2674260, at *1 (C.D.\n\n 24 Cal. Sept. 12, 2025). Judge Gee also ordered the Board to hold another vote within\n 25 60 days.\n 26 32. On November 3, 2025, the Board voted 4-to-1 to deny the transfer of\n 27 the FDPs to Sable.\n 28\n 29 6\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 8 of 36 Page ID\n #:1377\n\n\n\n 1 California Coastal Commission\n 2 33. In September 2024, the California Coastal Commission (the \u201cCCC\u201d)\n 3 issued a Notice of Violation, finding that Sable was engaging in construction\n 4 activities without a permit in violation of the California Coastal Act and Santa\n 5 Barbara County\u2019s Local Coastal Program.\n 6 34. On February 11, 2025, the CCC issued another Notice of Violation\n 7 concerning Sable\u2019s unpermitted offshore development activity. After Santa\n 8 Barbara County declined to act on the CCC\u2019s notices, Sable told the CCC that its\n 9 work on the pipeline does not require any further authorization from the CCC. In\n 10\n response, on February 16, 2025, the CCC sent a letter to Sable warning them to\n 11\n \u201cimmediately cease all unpermitted development activities.\u201d\n 12\n 35. On February 18, 2025, after Sable failed to respond, the CCC issued\n 13\n an Executive Director Cease and Desist Order and a notice of intent to commence\n 14\n cease and desist order, restoration order, and administrative order proceedings.\n 15\n Sable ignored the order and continued its unpermitted activities.\n 16\n 36. On February 18, 2025, Sable filed a petition against the CCC in Santa\n 17\n Barbara County Superior Court for declaratory relief and damages (Case No.\n 18\n 25CV00974) (the \u201cCCC Action\u201d).\n 19\n 37. On April 10, 2025, the CCC issued a cease and desist order requiring\n 20\n Sable to halt all repair and maintenance work that requires coastal development\n 21\n 22 permits, a restoration order, and an $18 million administrative penalty against\n\n 23 Sable (the \u201cApril 10 Orders\u201d). The April 10 Orders required Sable to submit\n\n 24 complete coastal development permit applications within 30 days for (i) all\n 25 unpermitted development conducted onshore and offshore, and (ii) prospective\n 26 authorization for any proposed development activities that have not yet been\n 27 completed but that are contemplated in Sable\u2019s current plans.\n 28\n 29 7\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 9 of 36 Page ID\n #:1378\n\n\n\n 1 38. On April 16, the CCC filed a cross-complaint against Sable requesting\n 2 a temporary restraining order to restrain further violation of the April 10 Orders\n 3 and for issuance of an order to show cause why a preliminary injunction should not\n 4 issue.\n 5 39. On May 28, 2025, Judge Thomas P. Anderle granted the CCC\u2019s\n 6 application for a preliminary injunction, which enforces the April 10 cease and\n 7 desist order and enjoins Sable\u2019s violations of the Coastal Act. Judge Anderle found\n 8 that the CCC made a prima facie showing of violation of the Coastal Act and of\n 9 the cease and desist order. Specifically, the CCC presented evidence (i) \u201cof grading\n 10\n and removal of materials, reconstruction of a \u2018structure,\u2019 and change in the\n 11\n intensity of the use of land with respect to Sable\u2019s repair and maintenance\n 12\n activities; (ii) \u201cthat Sable has not obtained a CDP for Sable\u2019s repair and\n 13\n maintenance activities\u201d; (iii) \u201cit issued a [cease and desist order] prohibiting further\n 14\n work with respect to Sable\u2019s repair and maintenance activities\u201d; and (iv) \u201cthat\n 15\n Sable has continued its repair and maintenance activities notwithstanding the\n 16\n CDO.\u201d Judge Anderle also found that the balance of harms weighed in favor of an\n 17\n injunction despite Sable\u2019s argument that granting a temporary restraining order\n 18\n \u201cwould cause substantial economic loss to Sable.\u201d\n 19\n 40. On October 15, 2025, Judge Thomas Anderle ruled in favor of the\n 20\n CCC, finding that the CCC had not abused its discretion in issuing the April 10\n 21\n 22 Orders. Judge Anderle found that, contrary to Sable\u2019s assertions, Sable\u2019s\n\n 23 development work was not authorized by a 1986 permit from the County and that\n\n 24 the CCC had the authority to issue a cease and desist order given the County\u2019s\n 25 failure to act on Sable\u2019s violations.\n 26\n 27\n 28\n 29 8\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 10 of 36 Page ID\n #:1379\n\n\n\n 1 Office of State Fire Marshal\n 2 41. Pursuant to the Consent Decree, Sable also required approval from\n 3 the California Office of State Fire Marshal (\u201cOSFM\u201d) before restarting use of the\n 4 onshore pipelines.\n 5 42. The Consent Decree requires OSFM approval of restart plans for each\n 6 of the Pipelines (the \u201cRestart Plans\u201d) prior to returning the onshore pipelines to\n 7 service. Prior to the potential restart of operations, OSFM will review the startup\n 8 plan and perform on-site inspections of the pipelines to verify compliance to the\n 9 plan. After the pipeline operator fulfills all other necessary requirements, OSFM\n 10\n finalizes the specific requirements of the restart plan, ensuring they meet or exceed\n 11\n those mandated by the Consent Decree.\n 12\n 43. On August 1, 2024, OSFM granted Sable\u2019s request to extend the\n 13\n deadline to complete its implementation of the Restart Plans to July 1, 2025. In\n 14\n granting the extension, OSFM stated that \u201c[i]t is imperative that [Sable]\n 15\n successfully completes the proposed retrofit construction by this new deadline.\u201d\n 16\n 44. On December 17, 2024, issued certain state waivers for the onshore\n 17\n pipelines.\n 18\n 45. On March 13, 2025, California State Fire Marshal Daniel Berlant\n 19\n stated at a town hall that permitting and violation issues with all other state agencies\n 20\n must be resolved before his office will sign off on a restart. \u201cThey need to agree\n 21\n 22 that all rules have been followed,\u201d he said, according to the Santa Barbara\n\n 23 Independent. OSFM\u2019s website also states that \u201cSable must also secure all necessary\n\n 24 approvals from all other state and federal agencies before putting the pipeline into\n 25 operation.\u201d\n 26 46. In April 2025, the Center for Biological Diversity brought an action\n 27 against the California Department of Forestry and Fire Protection in Santa Barbara\n 28\n 29 9\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 11 of 36 Page ID\n #:1380\n\n\n\n 1 County Superior Court (Case Nos. 25CV02244 and 25CV02247), alleging that\n 2 OSFM failed to conduct an adequate environmental review of Sable\u2019s pipeline\n 3 work. On June 3, 2025, Judge Donna Geck issued a temporary restraining order\n 4 preventing OSFM from granting further authorizations and prohibiting Sable from\n 5 restarting use of the pipelines.\n 6 47. On July 18, 2025, Judge Geck issued a preliminary injunction\n 7 \u201cenjoin[ing] the restart of the Las Flores Pipelines . . . until 10 court days following\n 8 Sable\u2019s filing and service of notice that Sable has received all necessary approvals\n 9 and permits for restarting the Las Flores Pipelines and that Sable intends to\n 10\n commence such restart.\u201d Environmental groups can then file another challenge\n 11\n within that 10-day period.\n 12\n 48. On September 11, 2025, Sable submitted a Restart Plan to OSFM.\n 13\n 49. On October 22, 2025, OSFM sent a letter to Sable stating that Sable\n 14\n had still not completed the required repairs to the damaged pipeline. The letter\n 15\n stated that \u201cOSFM identified a requirement of the State Waivers that has not yet\n 16\n been met and that Sable must complete prior to any potential restart. . . . The above\n 17\n findings alone and the inconsistencies with the State Waiver requirements prevent\n 18\n restart under the law.\u201d\n 19\n Santa Barbara County Criminal Charges\n 20\n 50. On September 16, 2025, the Santa Barbara County\u2019s District Attorney\n 21\n 22 charged Sable with five felony violations of the California Water Code (the\n\n 23 \u201cCriminal Complaint\u201d) for allegedly discharging dredged or fill material into\n\n 24 creeks and wetlands that are considered \u201cwaters of the United States.\u201d The\n 25 Criminal Complaint also charged Sable with 16 misdemeanor violations of the\n 26 California Fish and Game Code. The alleged criminal activity occurred between\n 27 October 2024 and April 2025.\n 28\n 29 10\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 12 of 36 Page ID\n #:1381\n\n\n\n 1 Water Quality Control Board Complaint\n 2 51. On October 3, 2025, the California Regional Water Quality Control\n 3 Board filed a civil complaint (the \u201cWater Board Complaint\u201d) against Sable alleging\n 4 \u201cnumerous violations of its obligation to notify the Regional Water Board of\n 5 proposed waste discharges and obtain the appropriate regulatory requirements,\n 6 thereby preventing the Regional Water Board from assuring best management\n 7 practices are employed to avoid, minimize and mitigate impacts to water quality.\u201d\n 8 52. The Water Board Complaint details Sable\u2019s repeated refusal to\n 9 cooperate with the regulator or comply with applicable regulations. In August\n 10 2024, Sable assured the Water Board that it \u201cconducts environmental surveys for\n 11 all work locations as part of its site evaluation and understands the regulatory\n 12 requirements and processes for water qualification certificates involving both U.S.\n 13 and state waters.\u201d\n 14 53. The Water Board informed Sable in November 2024 that it was\n 15 conducting pipeline maintenance without the required permit. In December 2024,\n 16 after Sable failed to respond, the Water Board issued directive identifying the\n 17 specific site where Sable was engaged in unpermitted pipeline repairs. That same\n 18 day, the Water Board issued a Notice of Violation for Unauthorize Discharge of\n 19 Waste to Sable. In January 2025, after Sable still failed to respond, the Water Board\n 20 issued an order requiring Sable to submit \u201ca detailed assessment\u201d of Sable\u2019s\n 21 excavation work and how it could affect the quality of state and federal waters.\n 22 Sable eventually sent \u201cpiecemeal and belated responses\u201d to the notices in March\n 23 and April 2025, providing \u201cincomplete information with little meaningful detail\n 24 regarding the extensive excavation, repair and backfilling conducted as part of the\n 25 Repair Plan.\u201d The Water Board determined that Sable\u2019s response \u201cmade clear it\n 26 did not perform meaningful assessment of the environmental impact of its\n 27 excavation campaign.\u201d\n 28\n 29 11\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 13 of 36 Page ID\n #:1382\n\n\n\n 1 54. The Water Board Complaint states that Sable management\n 2 intentionally misled the Water Board in order to impede the permitting process:\n 3 \u201cAt the time of its inadequate submissions in March and April of 2025, Sable\n 4 management knew full well additional excavation and repair work would be\n 5 ongoing. However, instead of identifying sites where Sable was planning to carry\n 6 out activities resulting in earthen waste discharges that could affect water quality\n 7 as required by the Section 13267 Order, Sable chose to limit its response to work\n 8 done as of the March 10, 2025 due date of the Technical Report (which ironically\n 9 was not met). This cynical approach to the Regional Water Board\u2019s regulatory\n 10\n permitting requirements was obviously taken to avoid any potential delay in getting\n 11\n the sites permitted and any associated Regional Water Board review that might\n 12\n impact the July 1, 2025 deadline for Sable\u2019s completion of repairs imposed by the\n 13\n Fire Marshal.\u201d\n 14\n 55. On July 24, 2025, the Water Board issued a Notice of Violation for\n 15\n Failure to Report that \u201cidentified twenty-seven sites where Sable\u2019s excavation and\n 16\n repair activities could affect water quality not previously addressed.\u201d The Water\n 17\n Board determined that \u201cthere is no excuse for Sable\u2019s failure to timely provide a\n 18\n Technical Report with this information in response to the Section 13267 Order.\u201d\n 19\n 56. Sable responded to the July notice on August 13, 2025, admitting\n 20\n there were \u201cnine sites requiring waste discharge requirements that it had previously\n 21\n 22 either overlooked or made incorrect determinations regarding the impact of the\n\n 23 excavations on water quality.\u201d\n\n 24 57. As described below, Sable repeatedly misled investors about the\n 25 regulatory hurdles the company faced, the status of its repairs, and its timeline for\n 26 restarting oil production and recommencing commercial sales.\n 27\n 28\n 29 12\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 14 of 36 Page ID\n #:1383\n\n\n\n 1 B. Materially False and Misleading Statements\n Issued During the Class Period\n 2\n 58. On May 19, 2025, before the market opened, the Company issued a\n 3\n press release entitled \u201cSable Offshore Corp. Reports Restart of Oil Production at\n 4\n the Santa Ynez Unit and Anticipated Oil Sales from the Las Flores Pipeline System\n 5\n in June 2025.\u201d (the \u201cMay 19 Press Release\u201d).\n 6\n 59. The May 19 Press Release stated that, \u201cas of May 15, 2025, [Sable]\n 7\n has restarted production at the Santa Ynez Unit (\u201cSYU\u201d) and has begun flowing\n 8\n oil production to Las Flores Canyon (\u201cLFC\u201d) and that \u201cSable has now completed\n 9\n its anomaly repair program on the Onshore Pipeline as specified by the Consent\n 10\n Decree.\u201d\n 11\n 12 60. The May 19 Press Release further stated that \u201cSable expects to fill the\n\n 13 ~540,000 barrels of crude oil storage capacity at LFC by the middle of June 2025\n\n 14 and subsequently recommence oil sales in July 2025.\u201d\n\n 15 61. The May 19 Press Release also quoted Defendant Flores as stating\n 16 that \u201c[Sable Offshore] is proud to have safely and responsibly achieved first\n 17 production at the Santa Ynez Unit\u201d and is \u201cvery grateful for the cooperation and\n 18 partnership from our local community and regulatory bodies as we seek to provide\n 19 energy security to the State of California.\u201d\n 20 62. In a statement to the Los Angeles Times, published on May 20, 2025,\n 21 a spokesperson for Sable, stated \u201cIt\u2019s our position the lawsuits are without merit\n 22 and will not impact the project.\u201d2 In a statement to Courthouse News, published on\n 23\n 24\n 25\n 26\n 27 2\n https://www.latimes.com/california/story/2025-05-20/offshore-oil-production-\n 28 resumes-santa-barbara\n 29 13\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 15 of 36 Page ID\n #:1384\n\n\n\n 1 May 23, 2025, the same spokesperson asserted that \u201cAll the work Sable has\n 2 performed is fully permitted and approved.\u201d3\n 3 63. The statements in \u00b6\u00b6 58-62 were materially false and misleading at\n 4 the time they were made because, contrary to Defendants\u2019 representations, Sable\n 5 had not restarted oil production. Further, Sable\u2019s completed and ongoing work was\n 6 neither fully permitted nor fully approved. Regulators had repeatedly informed\n 7 Sable that it lacked the necessary permits to complete its repairs or restart\n 8 production and that the pending lawsuits concerning Sable\u2019s unpermitted work\n 9 were both meritorious and consequential to Sable\u2019s ability to restart production.\n 10\n Similarly, Defendant Flores\u2019s statement thanking \u201cregulatory bodies\u201d for their\n 11\n \u201ccooperation and partnership\u201d created the false impression that Sable had been\n 12\n cooperating with regulators. Finally, Defendants\u2019 statement that Sable expects to\n 13\n fill the ~540,000 barrels of crude oil storage capacity at LFC by the middle of June\n 14\n 2025 and subsequently recommence oil sales in July 2025 created the false\n 15\n impression that such completion dates were plausible. Those dates were\n 16\n implausible because Sable had not finished its repairs, obtained the necessary\n 17\n permits, or resolved outstanding litigation \u2013 all of which were necessary steps to\n 18\n restarting production and recommencing sales\n 19\n 64. After the release of the May 19 Press Release, Sable stock climbed\n 20\n from a closing price of $28.86 per share on May 16, 2025 to $33.02 per share on\n 21\n 22 May 19, 2025, a 14.4% climb in share price.\n\n 23 65. Defendants then used the share price appreciation following the May\n\n 24 19 Press Release to conduct a secondary public offering at a higher offering price\n 25 per share than would have otherwise been possible.\n 26\n 27 3\n https://courthousenews.com/one-decade-after-disaster-drilling-returns-to-santa-\n 28 barbara/\n 29 14\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 16 of 36 Page ID\n #:1385\n\n\n\n 1 66. On May 22, 2025, Sable filed with the SEC a prospectus on Form\n 2 424B5 (the \u201cProspectus\u201d), specifying that the Company was offering 8,695,654\n 3 shares of common stock at $29.50 per share, higher than the last closing price\n 4 before the May 19 press release.\n 5 67. The Prospectus stated, in relevant part, that \u201c[o]n May 15, 2025, Sable\n 6 initiated oil production from six wells on Platform Harmony at SYU and began\n 7 flowing oil production to Las Flores Canyon (\u201cLFC\u201d) at an initial rate of\n 8 approximately 6,000 barrels of oil per day.\u201d The Prospectus further stated that\n 9 \u201cSable expects to initiate production from the additional 44 wells on Platform\n 10\n Heritage and the additional 26 wells on Platform Hondo in July 2025 and August\n 11\n 2025, respectively.\u201d\n 12\n 68. The Prospectus also stated that Sable had completed its repairs to the\n 13\n damaged onshore pipelines: \u201cOn May 18, 2025, Sable completed anomaly repairs\n 14\n on Line 324 (formerly known as Line 901), which extends from the Las Flores\n 15\n Station on the California coast to the Gaviota Pump Station in Santa Barbara\n 16\n County, California, and Line 325 (formerly known as Line 903), which extends\n 17\n from the Gaviota Pump Station to Pentland Station in Kern County, California, the\n 18\n point of sale. With the completion of such repairs, Sable has now completed its\n 19\n anomaly repair program on the Onshore Pipeline as specified by a Consent\n 20\n Decree . . . .\u201d The Prospectus further stated that \u201c[u]nder the terms of the Senior\n 21\n 22 Secured Term Loan, the restart of production on May 15, 2025 is expected to\n\n 23 trigger the springing maturity date resulting in the loans thereunder maturing on\n\n 24 January 9, 2026.\u201d\n 25 69. The statements in \u00b6\u00b6 67-68 were materially false and misleading at\n 26 the time they were made because, contrary to Defendants\u2019 representations, Sable\n 27 had not restarted oil production. Further, Sable\u2019s completed and ongoing work was\n 28\n 29 15\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 17 of 36 Page ID\n #:1386\n\n\n\n 1 neither fully permitted nor fully approved. Regulators had repeatedly informed\n 2 Sable that it lacked the necessary permits to complete its repairs or restart\n 3 production and that the pending lawsuits concerning Sable\u2019s unpermitted work\n 4 were both meritorious and consequential to Sable\u2019s ability to restart production.\n 5 C. THE TRUTH BEGINS TO EMERGE\n 6 70. On May 23, 2025, Eleni Kounalakis, the Lieutenant Governor of\n 7 California and chair of the California State Lands Commission wrote a letter (the\n 8 \u201cMay 23 Letter\u201d) to Sable\u2019s Vice President of Environmental & Government\n 9 Affairs, Steve Rusch.\n 10\n 71. Upon information and belief, the May 23 Letter was not published on\n 11\n the internet for the general public to view until May 28, 2025.\n 12\n 72. The May 23 Letter stated the following, in part:\n 13\n I am writing to express my serious concerns regarding Sable Offshore\n 14\n Corp.\u2019s [May 19 Press Release, as discussed above], which you sent to\n 15 Commission staff on the same day. The press release appears to\n 16 mischaracterize the nature of recent activities, causing significant\n public confusion and raising questions regarding Sable\u2019s intentions.\n 17 Your press release also implies that Sable has restarted operations at\n 18 the Santa Ynez Unit (SYU). However, Commission staff has\n informed me that the limited volume oil flows are the result of well-\n 19 testing procedures required by the Bureau of Safety and\n 20 Environmental Enforcement prior to restart. These activities do not\n constitute a resumption of commercial production or a full restart of\n 21\n the SYU. Characterizing testing activities as a restart of operations is\n 22 not only misleading but also highly inappropriate \u2013 particularly\n 23 given that Sable has not obtained the necessary regulatory approvals\n to fully resume operations at SYU.\n 24\n I am also concerned that as Exxon\u2019s designated operator, Sable was\n 25 required to communicate with Commission staff before initiating any\n 26 oil flow through the offshore pipeline, even in this limited capacity.\n Sable\u2019s failure to clearly and timely communicate these activities to\n 27\n the Commission undermines trust of Sable\u2019s motives, demonstrates\n 28\n 29 16\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 18 of 36 Page ID\n #:1387\n\n\n\n 1 a lack of understanding of the significant concerns held by many\n regarding the resumption of activities, and raises serious questions\n 2 about Sable\u2019s willingness to be a transparent operator.\n 3 Commission staff\u2019s letter dated May 9, 2025, made clear that failure\n 4 to comply with applicable regulatory requirements or to resolve any\n outstanding regulatory issues could constitute a breach of the\n 5\n Commission\u2019s leases. Any attempt to restart commercial operations at\n 6 the SYU without final regulatory approvals may place the company in\n 7 violation of its lease terms and jeopardize the status of Sable\u2019s\n holdover lease.\n 8\n As Chair of the State Lands Commission, it is my expectation that\n 9 Sable will resolve all pending legal challenges and litigation with other\n 10 state agencies prior to the full restart of operations. The willful\n disregard for the directives of regulatory agencies does not engender\n 11\n trust or confidence in Sable\u2019s willingness to serve as a responsible\n 12 partner, and could weigh significantly into considerations on the\n 13 future assignment of the SYU leases from Exxon to Sable.\n\n 14 73. The May 23 Letter also warned that \"Sable was required to\n\n 15 communicate with Commission staff before initiating any oil flow through the\n\n 16 offshore pipeline, even in this limited capacity\u201d and that \"[a]ny attempt to restart\n\n 17 commercial operations at the SYU without final regulatory approvals may place\n 18 the company in violation of its lease terms and jeopardize the status of Sable\u2019s\n 19 holdover lease.\" Lt. Governor Kounalakis added that \u201cit is my expectation that\n 20 Sable will resolve all pending legal challenges and litigation with other state\n 21 agencies prior to the full restart of operations. The willful disregard for the\n 22 directives of regulatory agencies does not engender trust or confidence in Sable\u2019s\n 23 willingness to serve as a responsible partner, and could weigh significantly into\n 24 considerations on the future assignment of the SYU leases from Exxon to Sable.\u201d\n 25 74. On May 28, 2025, Judge Anderle issued a preliminary injunction in\n 26 the CCC Action enjoining Sable from continuing its unpermitted maintenance and\n 27 repair activities on the onshore pipelines. Judge Anderle held that the CCC made\n 28\n 29 17\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 19 of 36 Page ID\n #:1388\n\n\n\n 1 a prima facie showing that Sable had violated the Coastal Act and the CCC\u2019s April\n 2 10 cease and desist order.\n 3 75. On May 28, 2025, during market hours, KEYT, a local news\n 4 organization in Santa Barbara, California (a subsidiary of News-Press & Gazette\n 5 Company), published an article entitled \u201cSanta Barbara County Judge issues\n 6 preliminary injunction against Sable Offshore as the company announces\n 7 completion of pipeline tests.\u201d The article stated the following, demonstrating that\n 8 Sable Offshore\u2019s claim to have restarted production in California was false:\n 9\n Sable Offshore announced that it has completed all required\n 10 hydrotesting of onshore pipelines necessary to transport oil across\n 11 Santa Barbara County, but the Houston-based company suffered a\n setback regarding repair work on along the coast in court\n 12\n Wednesday.\n 13\n The announcement of pipeline work comes as representatives of Sable\n 14 Offshore and the California Coastal Commission met Wednesday\n 15 about the pending litigation between the two entities.\n * * *\n 16 Wednesday morning, Santa Barbara County Judge Thomas Anderle\n 17 granted a preliminary injunction requested by the California Coastal\n Commission against Sable Offshore for alleged violations of The\n 18\n California Coastal Act.\n 19\n The injunction could impact Sable's ability to do future repairs or\n 20 maintenance until its legal battle with the state regulator is settled.\n 21 Linda Krop with the Environmental Defense Center questioned\n Sable's assertions that it has completed all necessary repairs in an\n 22 interview Wednesday with Your News Channel.\n 23\n She shared that this is the first time a judge has ruled that Sable\n 24 Offshore is violating the law instead of state regulators and\n 25 environmental groups.\n\n 26 Krop, whose organization opposes restarting oil production and has\n been involved in multiple lawsuits related to the project, says Sable's\n 27\n 28\n 29 18\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 20 of 36 Page ID\n #:1389\n\n\n\n 1 attorney told the judge that granting the injunction would harm the\n company.\n 2\n \u201cIf Sable really has completed all the repairs, they would be fine with\n 3 this injunction,\" argued Krop. \"The injunction only applies to repairs\n 4 on the pipeline. So why does Sable care about this injunction if it's\n really completed the repairs?\"\n 5\n * * *\n 6 A California Coastal Commission spokesperson sent a statement in\n 7 response to Your News Channel's inquiries stating, \"Sable has\n consistently ignored California law, as confirmed by the court\u2019s\n 8 decision today [Wednesday] to halt work on this aging oil pipeline in\n 9 Santa Barbara. This fly-by-night oil company has repeatedly abused\n the public\u2019s trust, racking up millions of dollars in fines and causing\n 10 environmental damage along the treasured Gaviota Coast.\"\n 11 76. On May 28, 2025, during market hours, Investing.com published an\n 12 article entitled \u201cSable Offshore Corp stock sinks following court injunction.\u201d It\n 13 stated the following:\n 14\n Shares of Sable Offshore Corp (NYSE:SOC) tumbled 14% after the\n 15 California Coastal Commission was granted a preliminary\n 16 injunction against the company\u2019s pipeline repair and maintenance\n activities within the coastal zone in unincorporated Santa Barbara\n 17\n County. The court\u2019s decision, which aligns with the Coastal Act\u2019s\n 18 strict regulations on coastal development, has raised concerns about\n 19 potential project delays and additional costs for Sable Offshore.\n\n 20 The legal proceedings stem from allegations that Sable Offshore\n Corp did not obtain the necessary coastal development permits\n 21 (CDPs) for their ongoing repair and maintenance work on the Las\n 22 Flores Pipelines. Despite Sable\u2019s claims that the work was authorized\n under existing permits from the County of Santa Barbara, the court\n 23\n found a prima facie case for the Coastal Commission, indicating that\n 24 the activities constituted a violation of the Coastal Act.\n 25 The injunction stops Sable from continuing any development\n 26 associated with the return to service of the Las Flores Pipelines CA-\n 324 and CA-325 unless they secure a new, operative CDP or other\n 27 form of Coastal Act authorization. The company had resumed repair\n 28\n 29 19\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 21 of 36 Page ID\n #:1390\n\n\n\n 1 and maintenance activities earlier in February 2025, following\n confirmation from the County that the activities were authorized under\n 2 existing permits.\n 3 The court\u2019s ruling highlights the ongoing tension between regulatory\n 4 compliance and operational progress within the energy sector. Sable\n Offshore Corp\u2019s stock movement reflects investor concerns over the\n 5\n potential impact of regulatory hurdles on the company\u2019s ability to\n 6 complete essential maintenance work and resume operations.\n 7 77. On this news, the price of Sable stock fell by $5.04 per share, or\n 8 15.3%, on heavy trading volume to close at $27.89 per share on May 28, 2025.\n 9 78. On June 3, 2025, Santa Barbara County Superior Court Judge Donna\n 10 Geck issued a temporary restraining order preventing OSFM from granting further\n 11 authorizations and preventing Sable from restarting use of the pipelines. Sable had\n 12 opposed the temporary restraining order. Steve Rusch, Sable\u2019s Vice President,\n 13 Regulatory & Environmental Affairs, stated in a sworn declaration to the court that\n 14 Sable is \u201crequired to meet specific deadlines in order to thereafter conduct\n 15 operations at the Pipelines, which is critical to the livelihood of [Sable\u2019s] business,\u201d\n 16\n and that \u201c[i]f a TRO is issued, Plaintiffs will be forced to shut down repair and\n 17\n maintenance activities, which will require Plaintiffs to incur significant\n 18\n economic damages.\u201d Rusch further swore that issuing the TRO would force Sable\n 19\n \u201cto absorb costs amounting to approximately $423,100 per day, or approximately\n 20\n $2,500,000 per week\u201d and \u201clay off approximately 75 workers.\u201d\n 21\n 79. On this news, the price of Sable stock fell by $5.14 per share, or\n 22\n 17.6%, on heavy trading volume to close at $24.04 on June 3, 2025.\n 23\n 80. On May 27, 2025, Sable filed a Form 8-K with the SEC. The 8-K,\n 24\n signed by Defendant Patrinely, stated that Sable \u201csuccessfully hydrotested all\n 25\n segments of Line 324 and Line 325 (collectively, the \u2018Onshore Pipeline\u2019),\n 26\n 27 satisfying the final operational condition to restart of the Onshore Pipeline as\n\n 28\n 29 20\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 22 of 36 Page ID\n #:1391\n\n\n\n 1 outlined in the Consent Decree\u201d and that \u201cno more repairs are required to the\n 2 Onshore Pipelines prior to restart.\u201d\n 3 81. On May 28, 2025, the Santa Barbara Independent quoted Steve Rusch\n 4 as stating \u201cToday\u2019s court ruling was about the maintenance and repair of the Las\n 5 Flores Pipeline System. As of this morning, that work, including all hydrotesting\n 6 of the lines, has been successfully completed.\u201d Rusch \u2014 who previously worked\n 7 for ExxonMobil, the prior owner of the plant \u2014 added, \u201cWe look forward to\n 8 overturning today\u2019s decision, though it has no bearing on Sable\u2019s plans to\n 9 recommence oil sales by July.\u201d On June 3, 2025, Rusch stated to news outlet\n 10\n Noozhawk that \u201c[t]he court decision does not impede Sable\u2019s preparations for\n 11\n restarting the flow of oil. Restart of the Las Flores Pipeline System is governed by\n 12\n a federal consent decree.\u201d\n 13\n 82. The statements in \u00b6\u00b6 80-81 were materially false and misleading at\n 14\n the time they were made because, contrary to Defendants\u2019 representations, the\n 15\n preliminary injunction prevented Sable from restarting the pipelines, and the\n 16\n statement is directly contradicted by Sable\u2019s representations to the Superior Court\n 17\n that the preliminary injunction would cause significant economic damage to Sable\n 18\n by delaying the restart of the pipelines. Additionally, Sable had not (and still has\n 19\n not) completed its required repairs to the onshore pipelines as required by the\n 20\n Consent Decree.\n 21\n 22 83. On October 15, 2025, Judge Thomas Anderle ruled in favor of the\n\n 23 CCC in the CCC Action, finding that the CCC had not abused its discretion in\n\n 24 issuing the April 10 Orders. Judge Anderle found that, contrary to Sable\u2019s\n 25 assertions, Sable\u2019s development work was not authorized by a 1986 permit from\n 26 the County and that the CCC had the authority to find that Sable was in violation\n 27\n 28\n 29 21\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 23 of 36 Page ID\n #:1392\n\n\n\n 1 of the Coastal Act and to issue a cease and desist order given the County\u2019s failure\n 2 to act on Sable\u2019s violations.\n 3 84. On this news, the price of Sable stock fell by $3.56 per share, or\n 4 20.1%, to close at $14.13 on heavy trading volume on October 15, 2025.\n 5 85. On October 15, 2025, Sable issued a press release on its website\n 6 entitled \u201cSable Offshore Corp. Statement on California Coastal Commission\n 7 Litigation.\u201d The press release stated, in relevant part, that \u201cthe ruling would have\n 8 no impact on the resumption of petroleum transportation through the Las\n 9 Flores Pipeline System. Additionally, oil and gas production from the federal\n 10\n Santa Ynez Unit and the flow of petroleum from the Santa Ynez Unit to the Las\n 11\n Flores Canyon processing facilities or to a potential Offshore Storage & Treating\n 12\n Vessel (\u201cOS&T\u201d) would be unaffected by rulings in the Coastal Commission\n 13\n litigation.\u201d (emphasis in original).\n 14\n 86. The October 15, 2025 press release also quoted Defendant Flores\n 15\n stating, in relevant part: \u201cAlthough the tentative ruling is disappointing, it has no\n 16\n impact on Sable\u2019s business strategy of either resuming petroleum transportation\n 17\n through the Las Flores Pipeline System or selling its Santa Ynez Unit production\n 18\n through an OS&T.\u201d (emphasis in original)\n 19\n 87. The statements in \u00b6\u00b6 85-86 were materially false and misleading at\n 20\n the time they were made because, contrary to Defendants\u2019 representations, the\n 21\n 22 October 15 ruling prevented Sable from performing the necessary repairs and\n\n 23 maintenance work required to restart oil production and resume commercial sales.\n\n 24 88. On October 31, 2025, Hunterbrook Media (\u201cHunterbrook\u201d) reported\n 25 that Defendant Flores \u201ctold a select group of investors in October that the company\n 26 would likely have to raise up to $200 million in equity by the end of 2025.\u201d The\n 27 company had not publicly disclosed that Sable required an imminent equity raise,\n 28\n 29 22\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 24 of 36 Page ID\n #:1393\n\n\n\n 1 which would dilute the value of existing shares. Sable\u2019s need to raise additional\n 2 equity contradicted Defendants\u2019 repeated claims that regulatory and judicial orders\n 3 concerning the Company\u2019s ability to make repairs and restart production would\n 4 have an effect on the Company\u2019s ability to timely resume commercial sales.\n 5 Hunterbrook published a 38-minute recording of the conversation between\n 6 Defendant Flores and investors. On the recording, Flores stated \u201cWe\u2019re supposed\n 7 to be on production in September, right? We\u2019re not gonna be on production in\n 8 September, so we\u2019re gonna have to bridge a little to the financing. We\u2019ll need some\n 9 type of injection somewhere in the $100 to $150 to $200 million dollar range.\u201d\n 10\n 89. On this news, the price of Sable Offshore stock fell by $2.37 per share,\n 11\n or 18.5%, on heavy trading volume to close at $10.46 on October 31, 2025.\n 12\n 90. On October 31, 2025, the Company falsely denied the Hunterbrook\n 13\n report. Sable stated to Hunterbrook that \u201cbased upon information provided to us\n 14\n we believe that the alleged recording was either AI generated or otherwise altered.\u201d\n 15\n 91. The statement in \u00b6 90 was materially false and misleading at the time\n 16\n it was made because, contrary to Defendants\u2019 representations, the Hunterbrook\n 17\n report accurately reported that Defendant Flores was selectively providing material\n 18\n non-public information to investors and that Sable imminently needed to raise to\n 19\n hundreds of millions of dollars to continue operations.\n 20\n 92. On November 3, 2025, the Company issued a press release effectively\n 21\n 22 confirming the Hunterbrook report. The press release disclosed that Sable had\n\n 23 entered into an amended loan agreement with ExxonMobil that would become\n\n 24 effective once the company raises at least $225 million in equity contributions. The\n 25 press release further stated that the amendment extends the maturity date of the\n 26 loan by one year, to March 31, 2027, and increases the annual interest rate for the\n 27 loan from ten percent to fifteen percent. Further, the Company announced that \u201cthe\n 28\n 29 23\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 25 of 36 Page ID\n #:1394\n\n\n\n 1 Company\u2019s Board of Directors formed a Special Committee of independent\n 2 directors to undertake an independent investigation of the allegations contained in\n 3 an October 31, 2025 report published by Hunterbrook, which contains audio\n 4 recording of a call that took place in October 2025.\u201d Finally, the press release stated\n 5 that Sable was no longer pursuing use of the pipelines as its primary course for\n 6 delivering oil, and that it would instead pursue an \u201cOffshore Storage and Treating\n 7 Vessel\u201d strategy.\n 8 93. On November 4, 2025, the Santa Barbara County Supervisors voted\n 9 4-1 to deny the transfer of permits from ExxonMobil to Sable. Supervisor\n 10\n Steve Lavagnino, who previously voted in favor of transferring the permits to\n 11\n Sable in February 2025, voted against the transfer. Lavagnino explained that he\n 12\n changed his mind because of Sable\u2019s repeated refusal to cooperate with regulators\n 13\n and follow the law \u2013 which Sable had repeatedly, and falsely, denied. As the Santa\n 14\n Maria Sun reported:\n 15\n 16 \u201c[T]he landscape has changed dramatically since February,\u201d he said\n during the hearing. \u201cTo me, the following are facts, not emotions:\n 17\n Since February, Sable has been charged criminally 21 times, with five\n 18 of those charges being felonies.\u201d\n 19\n He clarified that although September\u2019s charges from the Santa Barbara\n 20 County District Attorney\u2019s Office have not been adjudicated, \u201cthey are\n 21 still part of the evidence\u201d that puts Sable\u2019s ability to comply with\n county standards while operating the Santa Ynez Unit into question.\n 22\n 23 Among the 21 criminal counts, the five felony violations are centered\n on three waterways\u2014Asphaltum Creek, Nojoqui Creek, and Arroyo\n 24 Quemado\u2014which the county District Attorney accused Sable of\n 25 knowingly polluting during excavation and repair work tied to its\n Santa Ynez Unit efforts.\n 26\n 27 \u201cI have many friends in the oil industry, and I will continue to support\n 28 efforts to access our natural resources, but it has to be done responsibly\n\n 29 24\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 26 of 36 Page ID\n #:1395\n\n\n\n 1 by operators who put safety above profits,\u201d Lavagnino said. \u201cThe\n evidence in this case is overwhelming. There is something wrong\n 2 with the strategy of Sable\u2019s leadership. Trying to simply bulldoze\n 3 through the permitting process has not been helpful and is not the\n way we expect businesses in Santa Barbara County to conduct\n 4 themselves.\u201d\n 5 94. On this news, the price of Sable stock fell by $3.19 per share, or\n 6 30.5%, on heavy trading volume to close at $7.27 on November 3, 2025. The price\n 7 of Sable stock continued to fall on November 4, 2025, as the market digested the\n 8 news, falling an additional $1.37 per share, or 18.8%, on heavy trading volume to\n 9\n close at $5.90 on November 4, 2025.\n 10\n 95. During the Class Period, as detailed herein, Defendants\u2019 false\n 11\n representations and omissions of material facts about Sable\u2019s business caused\n 12\n Sable stock to trade at artificially inflated prices and deceived purchasers of the\n 13\n securities. As Defendants\u2019 fraud and the previously-concealed, material, adverse\n 14\n information was revealed to the market, the price of Sable stock fell precipitously.\n 15\n 96. Defendants\u2019 false and misleading statements concealed material risks\n 16\n from the public, including the truth concerning Sable\u2019s compliance with applicable\n 17\n laws and regulations, Sable\u2019s progress towards restarting oil production and\n 18\n commercial sales, Sable\u2019s cooperation with regulators, and Sable\u2019s financial\n 19\n position. Through Defendants\u2019 and other public disclosures, the market became\n 20\n 21 aware of these previously undisclosed risks and/or these risks materialized. As a\n\n 22 result, the price of Sable stock fell precipitously.\n\n 23 D. Additional Facts Supportive of Scienter\n\n 24 97. The Company\u2019s sole asset is the SYU Assets. The Company has no\n 25 revenue or cash flows from its operations, nor will it generate any revenue or cash\n 26 flows from its operations until it restarts production of the SYU Assets. The\n 27 Company has experienced losses from operations and has had negative cash flows\n 28\n 29 25\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 27 of 36 Page ID\n #:1396\n\n\n\n 1 from operations since its inception and will continue to incur losses until it can\n 2 restart production of the SYU Assets. Accordingly, the Company is entirely reliant\n 3 on its cash on hand and capital raises to continue its operations. The Company\n 4 reported in its 2024 Form 10-K that it had approximately 161 employees.\n 5 98. Defendants were under existential pressure to rush Sable\u2019s repair and\n 6 maintenance work to meet its July 1, 2025 deadline to complete its implementation\n 7 of the Restart Plans with OSFM. Sable ignored its legal obligations under state\n 8 laws and the notices from regulators of Sable\u2019s violations.\n 9 99. Defendants were also pressured by Sable\u2019s cash crunch. Without\n 10\n revenue, Sable was forced to repeatedly raise funds from investors in order to\n 11\n continue its operations. Defendants misled investors about the true state of Sable\u2019s\n 12\n operations and regulatory compliance to artificially inflate its stock price at the\n 13\n time of its equity raises.\n 14\n 100. Defendants faced further existential pressure from the term loan with\n 15\n ExxonMobil. If Sable failed to restart production and repay the loan by the term\n 16\n loan deadlines, ExxonMobil could foreclose on substantially all of Sable\u2019s assets\n 17\n and the assets of its subsidiaries. Once Sable declared that it had restarted oil\n 18\n production on May 15, 2025, Sable reported that the loan would mature on January\n 19\n 9, 2026.\n 20\n 101. Defendant Flores has decades of experience in the oil production\n 21\n 22 business and has a comprehensive understanding of Sable\u2019s regulatory hurdles and\n\n 23 operations. Indeed, Sable\u2019s term loan agreement from ExxonMobil requires that\n\n 24 Defendant Flores remain \u201cdirectly and actively involved in the day-to-day\n 25 management\u201d of Sable. The Company\u2019s 2025 Proxy Statement stated: \u201cThe board\n 26 of directors believes that Mr. Flores\u2019 knowledge of the daily operations of and\n 27 familiarity with the Company and industry put him in the best position to provide\n 28\n 29 26\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 28 of 36 Page ID\n #:1397\n\n\n\n 1 leadership to the board of directors on setting the agenda, emerging issues facing\n 2 the Company and the upstream oil and gas industry, and strategic opportunities.\u201d\n 3 102. The Wall Street Journal reported that Flores\u2019s venture paid $204\n 4 million in cash out of the total $1.1 billion Sable was expected to pay to\n 5 ExxonMobil for the SYU Assets. The Wall Street Journal reported that Flores\n 6 would \u201cmake tens of millions of dollars if he can\u201d restart the commercial oil sales.\n 7 103. Prior to forming Sable, Flores served as CEO and President of Sable\n 8 Permian Resources, LLC (\u201cSable Permian\u201d), where Patrinely served as CFO. Sable\n 9 Permian filed for voluntary bankruptcy in June 2020.\n 10\n 104. The October 31 Hunterbrook report disclosed that Defendant Flores\n 11\n regularly shared material non-public information with selective investors. Such\n 12\n selective disclosures potentially violate Regulation FD, which is designed to ensure\n 13\n fair disclosure. Hunterbrook reported leaked group chats among Sable investors:\n 14\n 15 \u201cI spoke to Jim this morning. An announcement is coming today after\n market closes. It could be an 8K or press release,\u201d Mickelson wrote to\n 16 a group of Sable investors, in one example, on September 29. Later\n 17 that afternoon, just after 5pm, Sable filed the 8-K \u2014 a form companies\n use to disclose material events to the public \u2014 disclosing its new\n 18 strategy to circumvent California regulators.\n 19\n The stock initially shot up 8% in after-hours trading after the news,\n 20 before closing down the following day.\n 21 ...\n This incident wasn\u2019t necessarily an aberration.\n 22\n 23 \u201cI believe this beyond any doubt: These guys definitely have first hand\n 24 communication from Jim and they are being fed information from Jim\n and giving it to other group members. There is a hierarchy to the\n 25 insiders,\u201d a member of the chat opined to Hunterbrook, referring to\n 26 certain other members of the group whom he did not name. \u201cThere are\n people that are very close to Jim and Jim is giving real information to.\n 27 Then there\u2019s people that think they\u2019re close to Jim who he is giving\n 28 fraudulent information to.\u201d\n 29 27\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 29 of 36 Page ID\n #:1398\n\n\n\n 1 ...\n Numerous messages from recent months reviewed by Hunterbrook\n 2 show Mickelson claiming to have frequently communicated with\n 3 Flores, receiving details about company developments from the CEO\n \u2014 whom he sometimes called \u201cBJF\u201d for \u201cBig Jim Flores.\u201d\n 4\n V. PLAINTIFFS\u2019 CLASS ACTION ALLEGATIONS\n 5\n 105. Plaintiffs bring this action as a class action pursuant to Federal Rule\n 6\n of Civil Procedure 23(a) and (b)(3) on behalf of a class consisting of all persons\n 7\n other than defendants who acquired the Company\u2019s securities publicly traded on\n 8\n NYSE during the Class Period, and who were damaged thereby (the \u201cClass\u201d).\n 9\n Excluded from the Class are Defendants, the officers and directors of the Company,\n 10\n members of the Individual Defendants\u2019 immediate families and their legal\n 11\n 12 representatives, heirs, successors or assigns and any entity in which Defendants\n\n 13 have or had a controlling interest.\n\n 14 106. The members of the Class are so numerous that joinder of all members\n 15 is impracticable. Throughout the Class Period, the Company\u2019s securities were\n 16 actively traded on NYSE. While the exact number of Class members is unknown\n 17 to Plaintiffs at this time and can be ascertained only through appropriate discovery,\n 18 Plaintiffs believe that there are hundreds, if not thousands of members in the\n 19 proposed Class.\n 20 107. Plaintiffs\u2019 claims are typical of the claims of the members of the Class\n 21 as all members of the Class are similarly affected by Defendants\u2019 wrongful conduct\n 22 in violation of federal law that is complained of herein.\n 23 108. Plaintiffs will fairly and adequately protect the interests of the\n 24 members of the Class and have retained counsel competent and experienced in\n 25 class and securities litigation. Plaintiffs have no interests antagonistic to or in\n 26 conflict with those of the Class.\n 27\n 28\n 29 28\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 30 of 36 Page ID\n #:1399\n\n\n\n 1 109. Common questions of law and fact exist as to all members of the Class\n 2 and predominate over any questions solely affecting individual members of the\n 3 Class. Among the questions of law and fact common to the Class are:\n 4 \u2022 whether the Exchange Act was violated by Defendants\u2019 acts as alleged\n 5 herein;\n 6 \u2022 whether statements made by Defendants to the investing public during\n 7 the Class Period misrepresented material facts about the business and\n 8 financial condition of the Company;\n 9 \u2022 whether Defendants\u2019 public statements to the investing public during\n 10\n the Class Period omitted material facts necessary to make the statements\n 11\n made, in light of the circumstances under which they were made, not\n 12\n misleading;\n 13\n \u2022 whether the Defendants caused the Company to issue false and\n 14\n misleading filings during the Class Period;\n 15\n \u2022 whether Defendants acted knowingly or recklessly in issuing false\n 16\n filings;\n 17\n \u2022 whether the prices of the Company securities during the Class Period\n 18\n were artificially inflated because of the Defendants\u2019 conduct complained of\n 19\n herein; and\n 20\n \u2022 whether the members of the Class have sustained damages and, if so,\n 21\n 22 what is the proper measure of damages.\n\n 23 110. A class action is superior to all other available methods for the fair\n\n 24 and efficient adjudication of this controversy since joinder of all members is\n 25 impracticable. Furthermore, as the damages suffered by individual Class members\n 26 may be relatively small, the expense and burden of individual litigation make it\n 27\n 28\n 29 29\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 31 of 36 Page ID\n #:1400\n\n\n\n 1 impossible for members of the Class to individually redress the wrongs done to\n 2 them. There will be no difficulty in the management of this action as a class action.\n 3 111. Plaintiffs will rely, in part, upon the presumption of reliance\n 4 established by the fraud-on-the-market doctrine in that:\n 5 \u2022 the Company\u2019s shares met the requirements for listing, and were listed\n 6 and actively traded on NYSE, an efficient market;\n 7 \u2022 as a public issuer, the Company filed periodic public reports;\n 8 \u2022 the Company regularly communicated with public investors via\n 9 established market communication mechanisms, including through the\n 10\n regular dissemination of press releases via major newswire services and\n 11\n through other wide-ranging public disclosures, such as communications with\n 12\n the financial press and other similar reporting services;\n 13\n \u2022 the Company\u2019s securities were liquid and traded with moderate to\n 14\n heavy volume during the Class Period; and\n 15\n \u2022 the Company was followed by a number of securities analysts\n 16\n employed by major brokerage firms who wrote reports that were widely\n 17\n distributed and publicly available.\n 18\n 112. Based on the foregoing, the market for the Company\u2019s securities\n 19\n promptly digested current information regarding the Company from all publicly\n 20\n available sources and reflected such information in the prices of the shares, and\n 21\n 22 Plaintiffs and the members of the Class are entitled to a presumption of reliance\n\n 23 upon the integrity of the market.\n\n 24 113. Alternatively, Plaintiffs and the members of the Class are entitled to\n 25 the presumption of reliance established by the Supreme Court in Affiliated Ute\n 26 Citizens of the State of Utah v. United States, 406 U.S. 128 (1972), as Defendants\n 27\n 28\n 29 30\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 32 of 36 Page ID\n #:1401\n\n\n\n 1 omitted material information in their Class Period statements in violation of a duty\n 2 to disclose such information as detailed above.\n 3 COUNT I\n 4 For Violations of Section 10(b) And Rule 10b-5 Promulgated Thereunder\n 5 Against All Defendants\n 6 114. Plaintiffs repeat and realleges each and every allegation contained\n 7 above as if fully set forth herein.\n 8 115. This Count is asserted against Defendants is based upon Section 10(b)\n 9 of the Exchange Act, 15 U.S.C. \u00a7 78j(b), and Rule 10b-5 promulgated thereunder\n 10\n by the SEC.\n 11\n 116. During the Class Period, Defendants, individually and in concert,\n 12\n directly or indirectly, disseminated or approved the false statements specified\n 13\n above, which they knew or deliberately disregarded were misleading in that they\n 14\n contained misrepresentations and failed to disclose material facts necessary in\n 15\n order to make the statements made, in light of the circumstances under which they\n 16\n were made, not misleading.\n 17\n 117. Defendants violated \u00a710(b) of the 1934 Act and Rule 10b-5 in that\n 18\n they:\n 19\n \u2022 employed devices, schemes and artifices to defraud;\n 20\n \u2022 made untrue statements of material facts or omitted to state material\n 21\n 22 facts necessary in order to make the statements made, in light of the\n\n 23 circumstances under which they were made, not misleading; or\n\n 24 \u2022 engaged in acts, practices and a course of business that operated as a\n 25 fraud or deceit upon plaintiffs and others similarly situated in connection with\n 26 their purchases of the Company\u2019s securities during the Class Period.\n 27\n 28\n 29 31\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 33 of 36 Page ID\n #:1402\n\n\n\n 1 118. Defendants acted with scienter in that they knew that the public\n 2 documents and statements issued or disseminated in the name of the Company\n 3 were materially false and misleading; knew that such statements or documents\n 4 would be issued or disseminated to the investing public; and knowingly and\n 5 substantially participated, or acquiesced in the issuance or dissemination of such\n 6 statements or documents as primary violations of the securities laws. These\n 7 defendants by virtue of their receipt of information reflecting the true facts of the\n 8 Company, their control over, and/or receipt and/or modification of the Company\u2019s\n 9 allegedly materially misleading statements, and/or their associations with the\n 10\n Company which made them privy to confidential proprietary information\n 11\n concerning the Company, participated in the fraudulent scheme alleged herein.\n 12\n 119. The Individual Defendants, who are the senior officers of the\n 13\n Company, had actual knowledge of the material omissions and/or the falsity of the\n 14\n material statements set forth above, and intended to deceive Plaintiffs and the other\n 15\n members of the Class, or, in the alternative, acted with reckless disregard for the\n 16\n truth when they failed to ascertain and disclose the true facts in the statements made\n 17\n by them or any other of the Company\u2019s personnel to members of the investing\n 18\n public, including Plaintiffs and the Class.\n 19\n 120. As a result of the foregoing, the market price of the Company\u2019s\n 20\n securities was artificially inflated during the Class Period. In ignorance of the\n 21\n 22 falsity of Defendants\u2019 statements, Plaintiffs and the other members of the Class\n\n 23 relied on the statements described above and/or the integrity of the market price of\n\n 24 the Company\u2019s securities during the Class Period in purchasing the Company\u2019s\n 25 securities at prices that were artificially inflated as a result of Defendants\u2019 false and\n 26 misleading statements.\n 27\n 28\n 29 32\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 34 of 36 Page ID\n #:1403\n\n\n\n 1 121. Had Plaintiffs and the other members of the Class been aware that the\n 2 market price of the Company\u2019s securities had been artificially and falsely inflated\n 3 by Defendants\u2019 misleading statements and by the material adverse information\n 4 which Defendants did not disclose, they would not have purchased the Company\u2019s\n 5 securities at the artificially inflated prices that they did, or at all.\n 6 122. As a result of the wrongful conduct alleged herein, Plaintiffs and other\n 7 members of the Class have suffered damages in an amount to be established at trial.\n 8 123. By reason of the foregoing, Defendants have violated Section 10(b)\n 9 of the 1934 Act and Rule 10b-5 promulgated thereunder and are liable to the\n 10\n plaintiffs and the other members of the Class for substantial damages which they\n 11\n suffered in connection with their purchase of the Company\u2019s securities during the\n 12\n Class Period.\n 13\n COUNT II\n 14\n Violations of Section 20(a) of the Exchange Act\n 15\n Against the Individual Defendants\n 16\n 124. Plaintiffs repeat and reallege each and every allegation contained in\n 17\n the foregoing paragraphs as if fully set forth herein.\n 18\n 125. During the Class Period, the Individual Defendants participated in the\n 19\n operation and management of the Company, and conducted and participated,\n 20\n directly and indirectly, in the conduct of the Company\u2019s business affairs. Because\n 21\n 22 of their senior positions, they knew the adverse non-public information about the\n\n 23 Company\u2019s business practices.\n\n 24 126. As officers of a publicly owned company, the Individual Defendants\n 25 had a duty to disseminate accurate and truthful information with respect to the\n 26 Company\u2019s\u2019 financial condition and results of operations, and to correct promptly\n 27\n 28\n 29 33\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 35 of 36 Page ID\n #:1404\n\n\n\n 1 any public statements issued by the Company which had become materially false\n 2 or misleading.\n 3 127. Because of their positions of control and authority as senior officers,\n 4 the Individual Defendants were able to, and did, control the contents of the various\n 5 reports, press releases and public filings which the Company disseminated in the\n 6 marketplace during the Class Period concerning the Company\u2019s results of\n 7 operations. Throughout the Class Period, the Individual Defendants exercised their\n 8 power and authority to cause the Company to engage in the wrongful acts\n 9 complained of herein. The Individual Defendants therefore, were \u201ccontrolling\n 10\n persons\u201d of the Company within the meaning of Section 20(a) of the Exchange\n 11\n Act. In this capacity, they participated in the unlawful conduct alleged which\n 12\n artificially inflated the market price of the Company\u2019s securities.\n 13\n 128. By reason of the above conduct, the Individual Defendants are liable\n 14\n pursuant to Section 20(a) of the Exchange Act for the violations committed by the\n 15\n Company.\n 16\n PRAYER FOR RELIEF\n 17\n WHEREFORE, Plaintiffs, on behalf of themselves and the Class, pray for\n 18\n judgment and relief as follows:\n 19\n (a) declaring this action to be a proper class action, certifying Plaintiffs as\n 20\n class representatives under Rule 23 of the Federal Rules of Civil Procedure;\n 21\n 22 (b) awarding damages in favor of Plaintiffs and the other Class members\n\n 23 against all Defendants, jointly and severally, together with interest thereon;\n\n 24 (c) awarding Plaintiffs and the Class reasonable costs and expenses\n 25 incurred in this action, including counsel fees and expert fees; and\n 26 (d) awarding Plaintiffs and other members of the Class such other and\n 27 further relief as the Court may deem just and proper.\n 28\n 29 34\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\fCase 2:25-cv-06869-SVW-PVC Document 77 Filed 12/08/25 Page 36 of 36 Page ID\n #:1405\n\n\n\n 1 JURY TRIAL DEMANDED\n 2 Plaintiffs hereby demand a trial by jury.\n 3\n 4 Dated: December 8, 2025 THE ROSEN LAW FIRM, P.A.\n 5 /s/ Daniel Tyre-Karp\n Daniel Tyre-Karp (pro hac vice)\n 6 275 Madison Ave., 40th Floor\n 7 New York, NY 10016\n Telephone: (212) 686-1060\n 8\n Facsimile: (212) 202-3827\n 9 Email: dtyrekarp@rosenlegal.com\n 10\n 11 Laurence M. Rosen (SBN 219683)\n 12 355 South Grand Avenue, Suite 2450\n Los Angeles, CA 90071\n 13 Telephone: (213) 785-2610\n 14 Facsimile: (213) 226-4684\n Email: lrosen@rosenlegal.com\n 15\n 16 Lead Counsel for Plaintiffs\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n 29 35\n SECOND AMENDED CLASS ACTION COMPLAINT FOR\n 30 VIOLATIONS OF THE FEDERAL SECURITIES LAWS\n 31\n\f","ocr_status":2,"date_upload":"2026-01-03T14:05:20.222366-08:00","document_number":"77","attachment_number":null,"pacer_doc_id":"031046491093","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Amended Complaint/Petition","acms_document_guid":""}],"date_created":"2025-12-08T02:34:04.620271-08:00","date_modified":"2026-02-10T08:16:36.755066-08:00","date_filed":"2025-12-08","time_filed":"02:23:31","entry_number":77,"recap_sequence_number":"2025-12-08.001","pacer_sequence_number":281,"description":"Second AMENDED COMPLAINT against Defendants James C. Flores, Gregory D. Patrinely, Sable Offshore Corp. amending Amended Complaint/Petition, 71, filed by plaintiff Jimmy Cleveland White, Jake Stewart, Tracy Johnson(Attorney Daniel I. Tyre-Karp added to party Jake Stewart(pty:pla))(Tyre-Karp, Daniel) (Entered: 12/08/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/446233761/","id":446233761,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/460951436/","id":460951436,"tags":[],"absolute_url":"/docket/70941407/76/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-12-04T21:04:17.369766-08:00","date_modified":"2026-05-18T07:00:24.403796-07:00","sha1":"428b736982c29686cdb3c178b8eb5d9c6abb1b72","page_count":5,"file_size":200082,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.76.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.76.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 2:25-cv-06869-SVW-PVC Document 76 Filed 12/04/25 Page 1 of 5 Page ID\n #:1365\n\n\n\n\n 1 Laurence M. Rosen (SBN 219683)\n THE ROSEN LAW FIRM, P.A.\n 2\n 355 South Grand Avenue, Suite 2450\n 3 Los Angeles, CA 90071\n 4 Telephone: (213) 785-2610\n Facsimile: (213) 226-4684\n 5 Email: lrosen@rosenlegal.com\n 6\n Counsel for Plaintiffs\n 7\n 8 UNITED STATES DISTRICT COURT\n CENTRAL DISTRICT OF CALIFORNIA\n 9\n 10\n 11 TRACY JOHNSON, Individually and No. 2:25-CV-06869-SVW\n on behalf of all others similarly situated,\n 12 PLAINTIFFS\u2019 NOTICE OF\n 13 Plaintiff, INTENT TO FILE SECOND\n AMENDED COMPLAINT\n 14 v.\n 15 CLASS ACTION\n SABLE OFFSHORE CORP., JAMES C.\n 16\n FLORES, GREGORY D. PATRINELY, JURY TRIAL DEMANDED\n 17 J.P. MORGAN SECURITIES LLC,\n JEFFERIES LLC, TD SECURITIES\n 18\n (USA) LLC, THE BENCHMARK\n 19 COMPANY, LLC, JOHNSON RICE &\n 20 COMPANY, L.L.C., PEP ADVISORY\n LLC, ROTH CAPITAL PARTNERS,\n 21 LLC, and TUOHY BROTHERS\n 22 INVESTMENT RESEARCH, INC.,\n 23 Defendants.\n 24\n 25\n 26\n 27\n 28\n\n\n NOTICE OF INTENT TO FILE SECOND AMENDED COMPLAINT\n\fCase 2:25-cv-06869-SVW-PVC Document 76 Filed 12/04/25 Page 2 of 5 Page ID\n #:1366\n\n\n\n 1 TO ALL PARTIES AND THEIR COUNSEL OF RECORD:\n 2 PLEASE TAKE NOTICE THAT Lead Plaintiff Jimmy Cleveland White\n 3 and named plaintiffs Tracy Johnson and Jake Stewart (\u201cPlaintiffs\u201d) will serve and\n 4 file a second amended complaint by December 15, 2025 as a matter of course as\n 5 permitted by Federal Rule of Civil Procedure 15(a)(1).\n 6 Rule 15(a) provides:\n 7\n (1) Amending as a Matter of Course. A party may amend its\n 8 pleading once as a matter of course within:\n 9 (A) 21 days after serving it, or\n 10\n (B) if the pleading is one to which a responsive pleading is\n 11 required, 21 days after service of a responsive pleading or 21\n 12 days after service of a motion under Rule 12(b), (e), or (f),\n whichever is earlier.\n 13\n (2) Other Amendments. In all other cases, a party may amend its\n 14\n pleading only with the opposing party's written consent or the court's\n 15 leave. The court should freely give leave when justice so requires.\n 16 Fed. R. Civ. P. 15(a).\n 17 Defendants served their motion to dismiss pursuant to Rule 12(b) on\n 18 November 24, 2025. ECF 73. Plaintiffs have not previously served an amended\n 19 pleading as of right in this action. Accordingly, Plaintiffs may serve an amended\n 20 complaint as of right by December 15, 2025 \u2013 which is 21 days after service of the\n 21 motion to dismiss. Fed. R. Civ. P. 15(a)(1).\n 22 The fact that Plaintiffs previously served an amended complaint (ECF 71)\n 23 pursuant to Rule 15(a)(2) does not exhaust Plaintiffs\u2019 right to serve an amended\n 24\n complaint pursuant to Rule 15(a)(1). The Ninth Circuit\u2019s decision in Ramirez v.\n 25\n Cnty. of San Bernardino, 806 F.3d 1002, 1007 (9th Cir. 2015) under identical\n 26\n circumstances is particularly instructive. In Ramirez, the Ninth Circuit held that a\n 27\n plaintiff who served an amended complaint pursuant to Rule 15(a)(2) did not\n 28\n\n 1\n NOTICE OF INTENT TO FILE SECOND AMENDED COMPLAINT\n\fCase 2:25-cv-06869-SVW-PVC Document 76 Filed 12/04/25 Page 3 of 5 Page ID\n #:1367\n\n\n\n 1 exhaust his right to serve a second amended complaint as of right under Rule\n 2 15(a)(1). Id., at 1006. As the Ninth Circuit explained, \u201cRule 15 is organized\n 3 substantively, not chronologically. It does not prescribe any particular sequence\n 4 for the exercise of its provisions. That is, it does not mandate that the matter of\n 5 course amendment under 15(a)(1) be exhausted before an amendment may be\n 6 made under 15(a)(2), nor does it state that the ability to amend under 15(a)(1) is\n 7 exhausted or waived once a 15(a)(2) amendment is made.\u201d Id., at 1007 (emphasis\n 8 added). Reversing the district court\u2019s order striking the second amended complaint,\n 9 the Ninth Circuit held that the second amended complaint \u2013 filed 21 days after the\n 10\n defendants served their motion to dismiss \u2013 was timely filed. Id., at 1008; see also\n 11\n Martinez v. Robinhood Crypto LLC, 2022 WL 18932814, at *1 (C.D. Cal. Nov.\n 12\n 16, 2022) (holding the plaintiff could file third amended complaint as of right after\n 13\n filing a first amended complaint pursuant to stipulation with the defendants and a\n 14\n second amended complaint with leave of the court).\n 15\n Nor does Plaintiffs\u2019 failure to file an opposition to Defendants\u2019 motion to\n 16\n dismiss exhaust their right to amend under Rule 15(a)(1). Again, the Ninth\n 17\n Circuit\u2019s decision in Ramirez under identical circumstances is instructive. Ramirez,\n 18\n 806 F.3d, at 1008. In Ramirez, Central District of California Local Rule 7\u20139,\n 19\n required the plaintiff to file an opposition to the defendants\u2019 motion to dismiss or\n 20\n file a written statement confirming he would not oppose the motion by June 3,\n 21\n 22 2013. Id., at 1004. Plaintiff failed to file any response to the motion to dismiss. Id.\n\n 23 Instead, the plaintiff filed a second amended complaint on June 12 \u2013 which was 21\n\n 24 days after the defendants served their motion to dismiss. Id. The district court\n 25 granted the motion to dismiss, relying upon Local Rule 7\u201312, which provides that\n 26 \u201c[t]he failure to file any required document, or the failure to file it within the\n 27 deadline, may be deemed consent to the granting or denial of the motion....\u201d Id.\n 28 (\u201cwithout considering the merits of the Plaintiff's First Amended Complaint, the\n\n 2\n NOTICE OF INTENT TO FILE SECOND AMENDED COMPLAINT\n\fCase 2:25-cv-06869-SVW-PVC Document 76 Filed 12/04/25 Page 4 of 5 Page ID\n #:1368\n\n\n\n 1 district court deemed the Plaintiff's silence as his consent to the granting of the\n 2 Defendants\u2019 motion to dismiss.\u201d).\n 3 The Ninth Circuit reversed the district court\u2019s grant of the motion to dismiss,\n 4 holding that granting the motion to dismiss under Local Rule 7-12 \u201cdeprived the\n 5 Plaintiff of his right to file an amended complaint under Rule 15.\u201d Ramirez, 806\n 6 F.3d, at 1008. Further, the Ninth Circuit held that the \u201cdistrict court erred in\n 7 permitting a local rule to trump the governing federal rule\u201d because \u201c[i]f in conflict,\n 8 the Local Rule must yield to the federal rule.\u201d Id. (citing Colgrove v. Battin, 413\n 9 U.S. 149, 161 n. 18, 93 S.Ct. 2448, 37 L.Ed.2d 522 (1973). \u201c[T]he Court cannot\n 10\n dismiss an action under a Local Rule where Plaintiff may still timely act under the\n 11\n Federal Rules of Civil Procedure.\u201d Holguin v. Residential Credit Servs., Inc., 2016\n 12\n WL 7486280, at *2 (C.D. Cal. May 24, 2016) (\u201cwhile the Local Rules require\n 13\n Plaintiff to file his opposition twenty-one days prior to the hearing date, the Federal\n 14\n Rules allow Plaintiff, in the alternative, to amend his complaint and thereby render\n 15\n RCS's motion moot\u201d).\n 16\n Plaintiffs will timely file their second amended complaint as of right, which\n 17\n will supersede the first amended complaint and moot Defendants\u2019 motion to\n 18\n dismiss. See Ramirez, 806 F.3d, at 1008 (\u201cthe Plaintiff's Second Amended\n 19\n Complaint superseded the First Amended Complaint, and the First Amended\n 20\n Complaint ceased to exist. Because the Defendants' motion to dismiss targeted the\n 21\n 22 Plaintiff's First Amended Complaint, which was no longer in effect, we conclude\n\n 23 that the motion to dismiss should have been deemed moot before the district court\n\n 24 granted it.\u201d).\n 25\n 26\n 27\n 28\n\n 3\n NOTICE OF INTENT TO FILE SECOND AMENDED COMPLAINT\n\fCase 2:25-cv-06869-SVW-PVC Document 76 Filed 12/04/25 Page 5 of 5 Page ID\n #:1369\n\n\n\n 1 Dated: December 4, 2025 THE ROSEN LAW FIRM, P.A.\n 2 /s/ Daniel Tyre-Karp\n Daniel Tyre-Karp (pro hac vice)\n 3 275 Madison Ave., 40th Floor\n 4 New York, NY 10016\n Telephone: (212) 686-1060\n 5 Facsimile: (212) 202-3827\n 6 Email: dtyrekarp@rosenlegal.com\n 7\n 8 Laurence M. Rosen (SBN 219683)\n 355 South Grand Avenue, Suite 2450\n 9\n Los Angeles, CA 90071\n 10 Telephone: (213) 785-2610\n 11 Facsimile: (213) 226-4684\n Email: lrosen@rosenlegal.com\n 12\n 13 Lead Counsel for Plaintiffs\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n\n 4\n NOTICE OF INTENT TO FILE SECOND AMENDED COMPLAINT\n\f","ocr_status":2,"date_upload":"2026-05-15T02:39:10.115895-07:00","document_number":"76","attachment_number":null,"pacer_doc_id":"031046478195","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Notice (Other)","acms_document_guid":""}],"date_created":"2025-12-04T21:04:17.341469-08:00","date_modified":"2026-02-10T08:16:36.709558-08:00","date_filed":"2025-12-04","time_filed":"20:48:17","entry_number":76,"recap_sequence_number":"2025-12-04.002","pacer_sequence_number":279,"description":"Notice of Intent to File Second Amended Complaint filed by plaintiff Tracy Johnson, Jake Stewart, Jimmy Cleveland White. (Tyre-Karp, Daniel) (Entered: 12/04/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/446229514/","id":446229514,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/460947039/","id":460947039,"tags":[],"absolute_url":"/docket/70941407/75/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-12-04T18:07:35.448743-08:00","date_modified":"2026-02-10T08:16:36.682950-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"75","attachment_number":null,"pacer_doc_id":"031046477491","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Motion Related Document","acms_document_guid":""}],"date_created":"2025-12-04T18:07:35.308753-08:00","date_modified":"2026-02-10T08:16:36.663619-08:00","date_filed":"2025-12-04","time_filed":"17:33:53","entry_number":75,"recap_sequence_number":"2025-12-04.001","pacer_sequence_number":276,"description":"NOTICE OF PLAINTIFF'S FAILURE TO FILE OPPOSITION re NOTICE OF MOTION AND MOTION to Dismiss Amended Class Action Complaint 73 filed by Defendants James C. Flores, Gregory D. Patrinely, Sable Offshore Corp.. (Murphy, Kristin) (Entered: 12/04/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/445298336/","id":445298336,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/70941407/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/459989952/","id":459989952,"tags":[],"absolute_url":"/docket/70941407/73/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-11-25T00:04:42.849423-08:00","date_modified":"2026-02-10T08:16:36.592722-08:00","sha1":"d520782260184904c995107267761869f0088ed2","page_count":36,"file_size":351426,"filepath_local":"recap/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.73.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.cacd.980751/gov.uscourts.cacd.980751.73.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 1 of 36 Page ID\n #:736\n\n 1 LATHAM & WATKINS LLP\n Colleen C. Smith (SBN 231216)\n 2 colleen.smith@lw.com\n 3 12670 High Bluff Drive\n San Diego, CA 92130\n 4 Telephone: (858) 523-5400\n 5 Kristin N. Murphy (SBN 268285)\n 6 kristin.murphy@lw.com\n 650 Town Center Drive, 20th Floor\n 7 Costa Mesa, CA 92626\n Telephone: (714) 540-1235\n 8\n Counsel for Defendants Sable Offshore Corp.,\n 9 James C. Flores, and Gregory D. Patrinely\n 10\n UNITED STATES DISTRICT COURT\n 11 CENTRAL DISTRICT OF CALIFORNIA\n 12\n TRACY JOHNSON, Individually and on\n 13 behalf of all others similarly situated, Case No. 2:25-cv-06869-SVW-PVC\n 14 DEFENDANTS SABLE OFFSHORE\n Plaintiff, CORP., JAMES C. FLORES, AND\n 15 GREGORY D. PATRINELY\u2019S\n v. NOTICE OF MOTION AND\n 16 MOTION TO DISMISS AMENDED\n SABLE OFFSHORE CORP., JAMES C. CLASS ACTION COMPLAINT;\n 17 MEMORANDUM OF POINTS AND\n FLORES, GREGORY D. PATRINELY, AUTHORITIES\n 18 J.P. MORGAN SECURITIES LLC,\n JEFFERIES LLC, TD SECURITIES CLASS ACTION\n 19 (USA) LLC, THE BENCHMARK\n COMPANY, L.L.C., JOHNSON RICE &\n 20 COMPANY, L.L.C., PEP ADVISORY Judge: Hon. Stephen V. Wilson\n 21 LLC, ROTH CAPITAL PARTNERS, Hearing Date: January 5, 2026\n LLC, and TUOHY BROTHERS Time: 1:30 p.m.\n 22 INVESTMENT RESEARCH, INC.,\n 23 Defendants,\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 2 of 36 Page ID\n #:737\n\n 1 TO ALL PARTIES AND THEIR COUNSEL OF RECORD:\n 2 PLEASE TAKE NOTICE THAT on January 5, 2026, at 1:30 p.m., or at such\n 3 later date and time as the Court may order, in the Courtroom of the Honorable\n 4 Stephen V. Wilson, Courtroom 10A, United States District Court, Central District\n 5 of California, located at the First Street Courthouse, 350 W. 1st Street, 10th Floor,\n 6 Los Angeles, California 90012, Defendants Sable Offshore Corp., James C. Flores,\n 7 and Gregory D. Patrinely will, and hereby do, move for an Order dismissing the\n 8 Amended Class Action Complaint (the \u201cComplaint,\u201d Dkt. No. 71). This Motion is\n 9 made pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6) and the Private\n 10 Securities Litigation Reform Act, on the grounds that the Complaint fails to state a\n 11 claim upon which relief can be granted.\n 12 This Motion is made following the conference of counsel pursuant to Local\n 13 Rule 7-3, which took place on November 17, 2025, and is based on this Notice of\n 14 Motion and Motion, the accompanying Memorandum of Points and Authorities,\n 15 Request for Judicial Notice, Declaration of Kristin N. Murphy, and exhibits thereto,\n 16 the Court\u2019s record on this matter, the arguments of counsel, and other evidence and\n 17 argument that may be presented prior to the Court\u2019s decision.\n 18\n 19 Dated: November 24, 2025\n 20 LATHAM & WATKINS LLP\n 21 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 22 650 Town Center Drive, 20th Floor\n Costa Mesa, CA 92626\n 23 Telephone: (714) 540-1235\n 24 Email: kristin.murphy@lw.com\n\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 1 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 3 of 36 Page ID\n #:738\n\n 1 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 2 San Diego, CA 92130\n Telephone: (858) 523-5400\n 3 Email: colleen.smith@lw.com\n 4 Counsel for Defendants\n 5 Sable Offshore Corp., James C.\n Flores, and Gregory D. Patrinely\n 6\n 7\n 8\n 9\n 10\n 11\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 2 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 4 of 36 Page ID\n #:739\n\n 1 TABLE OF CONTENTS\n 2 Page\n\n 3 I. INTRODUCTION ............................................................................... 1\n 4 II. BACKGROUND ................................................................................. 3\n 5 A. Sable Purchases and Repairs Oil-Related Assets in Santa\n 6 Barbara ................................................................................................. 3\n 7 B. Legal Battles Emerge About Restarting the Onshore\n 8 Pipelines ............................................................................................... 4\n\n 9 C. Sable Begins Flowing Oil and Updates Its Investors .......................... 5\n 10 D. Sable Suffers Unexpected Setbacks in Its Operational\n 11 Progress ................................................................................................ 7\n\n 12 E. A Short Seller-Affiliated Organization Publishes a\n Report and Sable Issues a Press Release ............................................. 8\n 13\n 14 III. LEGAL STANDARD .......................................................................... 9\n\n 15 IV. ARGUMENT ....................................................................................... 9\n 16 A. Plaintiffs Fail to Plead Falsity ............................................................ 10\n 17\n 1. Statements About the Resumption of Oil Flow Are\n 18 Not Pleaded as False (Statements 1, 2, 5, 6, and 8)................. 10\n 19 2. Statements About the Repair Status Are Not\n 20 Pleaded as False (Statements 3 and 10) ................................... 12\n\n 21 3. Projections About Future Production Are Protected\n by the Statutory Safe Harbor and Are Not Pleaded\n 22\n as False (Statements 4 and 9) .................................................. 13\n 23\n 4. Sable\u2019s Opinions Are Not Actionable (Statements\n 24 7, 11, 12, 13) ............................................................................ 14\n 25\n B. Plaintiffs Fail to Plead Scienter.......................................................... 15\n 26\n 1. Plaintiffs Fail to Plead a Plausible Motive .............................. 16\n 27\n 2. Plaintiffs Fail Plead Specific Facts Showing Intent\n 28\n to Defraud or Deliberate Recklessness .................................... 16\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n i MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 5 of 36 Page ID\n #:740\n\n 1 3. The Non-Culpable Inference Is More Compelling.................. 18\n 2\n C. Plaintiffs Fail to Plead Loss Causation .............................................. 19\n 3\n 1. No Loss Causation from the Letter on May 28,\n 4 2025 ......................................................................................... 20\n 5\n 2. No Loss Causation from Court and Local\n 6 Government Developments on May 28, June 3,\n and November 4, 2025............................................................. 22\n 7\n 8 3. No Loss Causation on October 31 and November\n 3, 2025 ..................................................................................... 23\n 9\n V. CONCLUSION .................................................................................. 25\n 10\n 11\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n ii MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 6 of 36 Page ID\n #:741\n\n 1 TABLE OF AUTHORITIES\n 2\n Page(s)\n 3\n CASES\n 4\n Anshen v. Facebook,\n 5\n 2017 WL 5635021 (C.D. Cal. Oct. 4, 2017) ...................................................... 19\n 6\n Blehm v. DC Shoes, Inc.,\n 7 2006 WL 8455574 (S.D. Cal. Feb. 24, 2006) .................................................... 17\n 8\n City of Dearborn Heights Act 345 Police & Fire Ret. Sys. v. Align\n 9 Tech., Inc.,\n 856 F.3d 605 (9th Cir. 2017) .............................................................................. 15\n 10\n 11 Dura Pharms., Inc. v. Broudo,\n 544 U.S. 336 (2005) ............................................................................................. 1\n 12\n Espy v. J2 Glob.,\n 13\n 99 F.4th 527 (9th Cir. 2024) ............................................................................... 21\n 14\n Hamano v. Activision Blizzard, Inc.,\n 15 2019 WL 7882076 (C.D. Cal. Oct. 17, 2019) .............................................. 17, 18\n 16\n Hershewe v. JOYY Inc.,\n 17 2021 WL 6536670 (C.D. Cal. Nov. 5, 2021) ..................................................... 25\n 18 Hoang v. ContextLogic, Inc.,\n 19 2023 WL 6536162 (N.D. Cal. Mar. 10, 2023) ................................................... 23\n 20 In re BofI Holding, Inc. Sec. Litig.,\n 21 977 F.3d 781 (9th Cir. 2020) ........................................................................ 21, 24\n\n 22 In re Cisco Sys. Inc. Sec. Litig.,\n 2013 WL 1402788 (N.D. Cal. Mar. 29, 2013) ................................................... 14\n 23\n 24 In re Cloudera, Inc. Sec. Litig.,\n 121 F.4th 1180 (9th Cir. 2024) ..................................................................... 10, 25\n 25\n In re Cutera Sec. Litig.,\n 26 610 F.3d 1103 (9th Cir. 2010) ............................................................................ 13\n 27\n In re Hansen Nat. Corp. Sec. Litig.,\n 28 527 F. Supp. 2d 1142 (C.D. Cal. 2007) .............................................................. 17\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n iii MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 7 of 36 Page ID\n #:742\n\n 1 In re Herbalife, Ltd. Sec. Litig.,\n 2 2015 WL 12732428 (C.D. Cal. Mar. 27, 2015) ................................................. 21\n\n 3 In re Illumina, Inc. Sec. Litig.,\n 2025 WL 2739655 (S.D. Cal. Sept. 26, 2025) ............................................. 19, 23\n 4\n 5 In re Nektar Therapeutics Sec. Litig.,\n 34 F.4th 828 (9th Cir. 2022) ........................................................................... 9, 24\n 6\n In re NVIDIA Corp. Sec. Litig.,\n 7\n 768 F.3d 1046 (9th Cir. 2014) ............................................................................ 15\n 8\n In re Rigel Pharms., Inc. Sec. Litig.,\n 9 697 F.3d 869 (9th Cir. 2012) ........................................................................ 12, 18\n 10\n In re Sorrento Therapeutics, Inc. Sec. Litig.,\n 11 97 F.4th 634 (9th Cir. 2024) ............................................................................... 11\n 12 In re Splash Tech. Holdings, Inc. Sec. Litig.,\n 13 160 F. Supp. 2d 1059 (N.D. Cal. 2001) ............................................................. 14\n 14 In re Wet Seal, Inc. Sec. Litig.,\n 518 F. Supp. 2d 1148 (C.D. Cal. 2007) .............................................................. 17\n 15\n 16 In re Worlds of Wonder Sec. Litig.,\n 35 F.3d 1407 (9th Cir. 1994) .............................................................................. 19\n 17\n 18 Loos v. Immersion Corp.,\n 762 F.3d 880 (9th Cir. 2014) ........................................................................ 19, 24\n 19\n Markette v. XOMA Corp.,\n 20 2017 WL 4310759 (N.D. Cal. Sept. 28, 2017)................................................... 15\n 21\n Metzler Inv. GMBH v. Corinthian Colls., Inc.,\n 22 540 F.3d 1049 (9th Cir. 2008) .............................................................................. 9\n 23 Mineworkers\u2019 Pension Scheme v. First Solar Inc.,\n 24 881 F.3d 750 (9th Cir. 2018) ........................................................................ 19, 22\n 25 Nguyen v. Endologix, Inc.,\n 26 962 F.3d 405 (9th Cir. 2020) .................................................................. 16, 18, 19\n\n 27 Omnicare, Inc. v. Laborers Dist. Council Constr. Indus. Pension\n Fund,\n 28 575 U.S. 175 (2015) ........................................................................................... 15\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n iv MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 8 of 36 Page ID\n #:743\n\n 1 Or. Pub. Emps. Ret. Fund v. Apollo Grp. Inc.,\n 2 774 F.3d 598 (9th Cir. 2014) .......................................................................... 9, 19\n\n 3 Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc.,\n 759 F.3d 1051 (9th Cir. 2014) ................................................................ 10, 12, 13\n 4\n 5 Prodanova v. H.C. Wainwright & Co., LLC,\n 993 F.3d 1097 (9th Cir. 2021) ...................................................................... 16, 19\n 6\n Rok v. Identiv, Inc.\n 7\n 2017 WL 35496 (N.D. Cal. Jan. 4, 2017) .......................................................... 24\n 8\n Rubke v. Capitol Bancorp Ltd.,\n 9 551 F.3d 1156 (9th Cir. 2009) ............................................................................ 14\n 10\n Sneed v. Talphera, Inc.,\n 11 147 F.4th 1123 (9th Cir. 2025) ..................................................................... 10, 11\n 12 Teamsters Loc. 617 Pension & Welfare Funds v. Apollo Grp., Inc.,\n 13 2011 WL 1253250 (D. Ariz. Mar. 31, 2011) ..................................................... 12\n 14 Tellabs, Inc. v. Makor Issues & Rts., Ltd.,\n 551 U.S. 308 (2007) ..................................................................................... 16, 18\n 15\n 16 Wallack v. Idexx Laboratories, Inc.,\n 2013 WL 1562523 (S.D. Cal. Apr. 11, 2013) .................................................... 20\n 17\n 18 Waterford Twp. Police & Fire Ret. Sys. v. Mattel, Inc.,\n 321 F. Supp. 3d 1133 (C.D. Cal. 2018), aff\u2019d sub nom. Castro v.\n 19 Mattel, Inc., 794 F. App\u2019x 669 (9th Cir. 2020) .................................................. 12\n 20 Webb v. SolarCity Corp.,\n 21 884 F.3d 844 (9th Cir. 2018) .................................................................. 15, 16, 18\n 22 Wenzel v. Semiconductor Mfg. Int\u2019l Corp.,\n 23 2021 WL 12312024 (C.D. Cal. Nov. 18, 2021) ................................................. 22\n\n 24 Weston Fam. P\u2019ship LLLP v. Twitter, Inc.,\n 29 F.4th 611 (9th Cir. 2022) ......................................................................... 10, 13\n 25\n 26 Zamir v. Bridgepoint Educ., Inc.,\n 2018 WL 1258108 (S.D. Cal. Mar. 12, 2018) .................................................... 17\n 27\n Zucco Partners, LLC v. Digimarc Corp.,\n 28 552 F.3d 981 (9th Cir. 2009) .............................................................................. 25\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n v MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 9 of 36 Page ID\n #:744\n\n 1 STATUTES\n 2\n 15 U.S.C.\n 3 \u00a7 78j(b) ........................................................................................................... 9, 25\n \u00a7 78t .................................................................................................................... 25\n 4\n \u00a7 78u-4(b)(1)....................................................................................................... 12\n 5 \u00a7 78u-4(b)(1)(B) ................................................................................................... 9\n \u00a7 78u-4(b)(2)(A) ................................................................................................... 9\n 6\n \u00a7 78u-5(c)(1) ....................................................................................................... 13\n 7\n 49 U.S.C.\n 8 \u00a7 60118, subd. (c)(1)(a) ........................................................................................ 5\n 9 \u00a7 60118, subd. (d) ................................................................................................. 5\n 10 RULES\n 11 Fed. R. Civ. P.\n 12 9(b).................................................................................................... 12, 17, 19, 20\n 12(b)(6) ................................................................................................................. 9\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n vi MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 10 of 36 Page ID\n #:745\n\n 1 I. INTRODUCTION\n 2 On May 19, 2025, Sable Offshore announced that it had begun flowing oil\n 3 from its offshore platform near Santa Barbara, California to its onshore storage and\n 4 processing facility. This was an important step in Sable\u2019s ongoing effort to re-\n 5 commercialize an oil field unit that had not transported petroleum for ten years.\n 6 While Sable celebrated its achievement in a press release, it also warned investors\n 7 that it had not yet completed required testing for its onshore pipelines and had not\n 8 yet sold commercial quantities of oil from the unit. This press release included\n 9 \u201cDisclaimers\u201d that there could be \u201cno assurance\u201d that Sable would achieve necessary\n 10 approvals to allow the unit \u201cto recommence sales.\u201d\n 11 Unfortunately, within weeks of issuing the press release, Sable encountered a\n 12 series of unexpected \u201csignificant operational and federal, state, and local regulatory\n 13 hurdles.\u201d \u00b6 25. In a case involving the California Coastal Commission, a judge\n 14 issued a preliminary injunction barring future development work (including repairs)\n 15 on the onshore pipelines; in another case, a judge temporarily restrained the state fire\n 16 marshal from issuing further authorizations for the onshore pipelines. Then, in\n 17 November, the Santa Barbara County Board of Supervisors voted against\n 18 transferring permits from the unit\u2019s prior owner to Sable. Sable advocated for its\n 19 property rights in each of these cases and timely updated its investors about the\n 20 results. Unsurprisingly, the market reacted negatively to the potential for additional\n 21 delays, costs, and litigation.\n 22 All these developments were bad news for Sable. But the stock drops they\n 23 precipitated were not securities fraud. Securities laws do not \u201cprovide investors with\n 24 broad insurance against market losses.\u201d Dura Pharms., Inc. v. Broudo, 544 U.S.\n 25 336, 345 (2005). Congress enacted the Private Securities Litigation Reform Act\n 26 (\u201cPSLRA\u201d) to bar cases like this one, where investors plead nothing more than fraud-\n 27 by-hindsight in an effort to recover for the downside risk of their investments. Here,\n 28 Plaintiffs fail to meet the required elements of falsity, scienter, and loss causation.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 1 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 11 of 36 Page ID\n #:746\n\n 1 Falsity. Plaintiffs\u2019 theory is that Defendants \u201cmisled investors about the\n 2 regulatory hurdles the company faced, the status of its repairs, and its timeline for\n 3 restarting oil production and recommencing commercial sales.\u201d \u00b6 37. But the\n 4 Complaint fails to plead particularized facts establishing that any statement was false\n 5 or misleading. The Complaint lists statements Defendants made throughout 2025\n 6 about developments in Sable\u2019s operations and ongoing legal proceedings, but the\n 7 Complaint does not allege any facts that contradict these statements. Instead,\n 8 Plaintiffs improperly strip statements from their context, ignore Sable\u2019s robust risk\n 9 disclosures, and read words into the challenged statements to contort their meaning.\n 10 Other statements can be dismissed for the additional (independent) reasons that they\n 11 are forward-looking, puffery, or opinions that are not actionable.\n 12 Scienter. Plaintiffs\u2019 allegations of scienter\u2014that Defendants intended to\n 13 deceive investors or acted deliberately recklessly\u2014are thinner still. The\n 14 Complaint\u2019s attempt to plead scienter is based on speculation in a dubious third-\n 15 party media expos\u00e9 alleging potential violations of SEC selective disclosure rules at\n 16 the end of the Class Period, after which Sable\u2019s Board of Directors immediately\n 17 appointed a Special Committee to investigate. This third-party accusation is\n 18 insufficient as a matter of law to plead scienter, much less a \u201cstrong inference\u201d of\n 19 scienter, for unrelated statements made months earlier. The Complaint pleads no\n 20 contemporaneous facts suggesting that any Defendant knew that a statement made\n 21 was false or misleading, nor does it allege any motive to mislead the market. To the\n 22 contrary, the pleaded facts show that Sable was engaging with regulators, litigating\n 23 novel administrative issues, and adjusting its business strategy as circumstances\n 24 evolved. Viewed holistically, the more cogent inference is non\u2011culpable:\n 25 Defendants believed in their plans, communicated risks to the market, and reported\n 26 developments to investors as they occurred.\n 27 Loss Causation. Plaintiffs also fail to plead loss causation with the necessary\n 28 specificity. The Complaint pleads that Sable\u2019s stock price dropped after a variety of\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 2 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 12 of 36 Page ID\n #:747\n\n 1 regulatory, litigation, and political setbacks, not after any revelation of fraud.\n 2 Each of these pleading defects requires dismissal of the Complaint.\n 3 II. BACKGROUND\n 4 A. Sable Purchases and Repairs Oil-Related Assets in Santa Barbara\n 5 In February 2024, Sable bought three types of oil-related assets from Exxon\n 6 Mobil located in or near Santa Barbara, California. \u00b6 22; Ex. 1 at 9.1\n 7 1. Offshore Leases and Other Assets (the Santa Ynez Unit): The Santa Ynez\n 8 Unit consists of federal oil and gas leases, and includes three offshore\n drilling platforms in federal waters and related wells, pipelines, and\n 9\n facilities. \u00b6\u00b6 9, 19; see Ex. 1 at 10. These platforms extract oil from\n 10 beneath the ocean floor. \u00b6 9; Ex. 1 at 10.\n 11 2. Onshore Storage & Processing (Las Flores Canyon): Oil produced from\n 12 the Santa Ynez Unit offshore platforms can then flow via pipeline to the\n Las Flores Canyon onshore storage and processing facility. \u00b6 39; Ex. 1\n 13\n at 10.\n 14\n 3. Onshore Pipelines (The Las Flores Pipelines): After processing at Las\n 15 Flores Canyon, the onshore Las Flores Pipelines are intended to transport\n 16 oil to inland pipeline infrastructure that further transports the oil to\n 17 refineries. \u00b6\u00b6 19, 47; Ex. 1 at 10-12.\n\n 18 These three assets are meant to work in concert with each other, as Sable repeatedly\n 19 disclosed. See \u00b6\u00b6 19, 21-22, 47; Ex. 1 at 9-15.\n 20 Exxon Mobil loaned Sable $623 million to fund this deal. \u00b6 23. If Sable did\n 21 not \u201cRestart Production\u201d by March 1, 2026, Exxon Mobil could retake ownership of\n 22 the assets. \u00b6\u00b6 22-24; see also Ex. 2 at 175 (defining \u201cRestart Production\u201d as \u201cninety\n 23 (90) days after. . . production from [the Santa Ynez Unit] Wells\u201d).\n 24 After the deal closed, Sable undertook repair and maintenance work as needed\n 25 on the assets. \u00b6\u00b6 26, 34. Most of Sable\u2019s work\u2014and most of Plaintiffs\u2019 allegations\n 26 about that repair work\u2014focused on repairing the onshore pipelines. See \u00b6\u00b6 30-34,\n 27\n 1\n 28 Cites to \u201c\u00b6\u201d refer to the Complaint, Dkt. 71, unless otherwise stated. Cites to \u201cEx.\u201d\n refer to exhibits attached to the Declaration of Kristin N. Murphy.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 3 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 13 of 36 Page ID\n #:748\n\n 1 52-55. In 2015, one location along the onshore Las Flores Pipelines had ruptured\n 2 resulting in an oil spill. See \u00b6 18. After that event, the onshore pipelines\u2019 prior\n 3 owner entered into a consent decree with the United States and the State of California\n 4 (\u201cConsent Decree\u201d). See id. \u00b6\u00b6 39, 57; Ex. 3. The Consent Decree provided a path\n 5 for resuming petroleum transportation through the onshore pipelines. Ex. 3\n 6 at 260-61, 275-282. As part of Sable\u2019s effort to resume petroleum transportation\n 7 consistent with the Consent Decree\u2019s requirements, Sable began repairing certain\n 8 \u201canomalies\u201d2 along the pipelines. See Exs. 3, 4. Sable subsequently requested (and\n 9 received) confirmation from Santa Barbara County that its anomaly repair work was\n 10 covered by existing County permits and that Sable\u2019s work did \u201cnot . . . require\n 11 Zoning Clearances.\u201d Ex. 4 at 326-27; see \u00b6\u00b6 38, 53.\n 12 B. Legal Battles Emerge About Restarting the Onshore Pipelines\n 13 As Sable drew closer to resuming oil production at the Santa Ynez Unit,\n 14 multiple organizations sued to try to prevent (or postpone) Sable\u2019s efforts. \u00b6\u00b6 32-34.\n 15 Two cases are alleged in detail in the Complaint:\n 16 The California Coastal Commission Litigation3: The California Coastal\n 17 Commission issued notices starting in September 2024 claiming that Sable\u2019s repair\n 18 and maintenance work violated the California Coastal Act. \u00b6\u00b6 26-27. On February\n 19 18, 2025, Sable sought declaratory relief that the Commission lacked authority to\n 20 issue the notices because, in part, the Commission had previously delegated its\n 21 authority to regulate these activities along the Las Flores Pipelines to Santa Barbara\n 22 County, and the County had informed Sable that its \u201c\u2018anomaly repair work\u2019 . . . is\n 23 authorized by [Sable\u2019s] existing permits.\u201d \u00b6 29; see also Ex. 4 at 286-87, 326-327.\n 24\n 25 2\n A pipeline anomaly \u201crefers to a pipeline segment with some deviation from its\n 26 original configuration.\u201d Ex. 4 at 285. The Consent Decree required (among other\n things) that the Las Flores Pipelines\u2019 owner \u201cremediate . . . [certain] metal loss\n 27 anomalies . . . within one year of discovery.\u201d Ex. 3 at 262-63.\n 3\n 28 Sable Offshore Corp. v. California Coastal Comm\u2019n, No. 25CV00974 (Santa\n Barbara Cnty. Sup. Ct.) (\u201cCoastal Commission Litigation\u201d).\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 4 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 14 of 36 Page ID\n #:749\n\n 1 The State Waivers Litigation4: On April 15, 2025, environmental groups filed\n 2 two lawsuits against the Office of the State Fire Marshal and others, naming Sable\n 3 as the real party in interest. See \u00b6 32; Exs. 5-6. These plaintiffs alleged that the Fire\n 4 Marshal improperly approved certain \u201cState Waivers\u201d5 without allowing for\n 5 sufficient public notice and without conducting an adequate environmental review\n 6 under the California Environmental Quality Act (\u201cCEQA\u201d). \u00b6 32; Exs. 5-6. The\n 7 plaintiffs asked the court to enjoin the restart of the onshore pipelines and require\n 8 more public hearings and CEQA review. Exs. 5-6.\n 9 When the Los Angeles Times asked Sable for comment, a spokesperson stated\n 10 Sable\u2019s \u201cposition [that] the lawsuits are without merit and will not impact the\n 11 project.\u201d \u00b6 42.6\n 12 C. Sable Begins Flowing Oil and Updates Its Investors\n 13 On May 15, 2025, while the Coastal Commission Litigation and the State\n 14 Waivers Litigation were in their early stages, Sable began flowing oil production\n 15 from one of its offshore platforms to its onshore storage at Las Flores Canyon. See\n 16 \u00b6\u00b6 38-39. On May 19, 2025, Sable reported this in a press release with a headline\n 17 starting: \u201cSable Offshore Corp. Reports Restart of Oil Production at the Santa Ynez\n 18 Unit.\u201d \u00b6 38; see Ex. 7 at 428. Sable reported the flow rate of oil and disclosed\n 19 projections about the future of its wells. Ex. 7 at 428. When Sable resumed\n 20 production, oil was flowing from the Santa Ynez Unit to Las Flores Canyon \u201cat a\n 21 rate of ~6,000 barrels of oil per day.\u201d Id. Based on Sable\u2019s projections, Sable\n 22\n 4\n Env\u2019t Def. Ctr v. Cal. Dep\u2019t of Forestry & Fire Prot., No. 25CV02247 (Santa\n 23 Barbara Cnty. Sup. Ct.); Ctr. for Biological Diversity v. Cal. Dep\u2019t of Forestry &\n Fire Prot., No. 25CV02244 (Santa Barbara Cnty. Sup. Ct.) (\u201cState Waivers\n 24 Litigation\u201d).\n 25 5 The Consent Decree required the onshore pipelines\u2019 owner to apply for certain\n State Waivers, which modify generally applicable regulatory standards for\n 26 hazardous materials pipelines, from the Fire Marshal before resuming petroleum\n transportation. Ex. 3 at 260; 49 U.S.C. \u00a7 60118, subd. (c)(1)(a), (d).\n 27 6\n Plaintiffs also describe later-filed criminal and civil cases about alleged violations\n 28 of the California Water Code. \u00b6\u00b6 35-36. Plaintiffs do not explain how these cases\n are relevant to their allegations.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 5 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 15 of 36 Page ID\n #:750\n\n 1 \u201cexpect[ed] to fill the ~540,000 barrels of crude oil storage capacity at [Las Flores\n 2 Canyon] by the middle of June 2025.\u201d Id.; \u00b6 40. Sable also projected that its second\n 3 and third offshore platforms would begin production in July and August 2025. Ex. 7\n 4 at 428.\n 5 In this May 19 press release, Sable also cautioned investors that the onshore\n 6 Las Flores Pipelines were not yet commercially operable. See id. Sable reported\n 7 that, while it had \u201ccompleted its anomaly repair program on the Onshore Pipeline[s]\n 8 as specified by the Consent Decree,\u201d \u00b6 39, the onshore Las Flores Pipelines had not\n 9 yet been fully tested, Ex. 7 at 428 (noting only \u201c[s]even of the eight sections of the\n 10 Onshore Pipeline[s] have been successfully hydrotested\u201d). Sable also told investors\n 11 that it expected to \u201ccomplete the final hydrotest\u201d at a future date, and expected to\n 12 \u201crecommence oil sales in July 2025.\u201d \u00b6 40; Ex. 7 at 428.\n 13 Along with the updates, Sable\u2019s May 19 press release contained \u201cDisclaimers\u201d\n 14 and explanations about how its forward-looking projections could turn out to be\n 15 incorrect. Ex. 7 at 429-430. Among other risk factors, Sable noted that its results\n 16 could differ from expectations based on \u201clitigation,\u201d \u201cregulatory changes and\n 17 uncertainties,\u201d and its \u201cability to comply with laws and regulations applicable to [its]\n 18 business.\u201d Id. at 429. The press release was clear that Sable had not begun selling\n 19 oil produced by the Santa Ynez Unit, noting in the first \u201cDisclaimer\u201d titled \u201cRestart\n 20 Production\u201d that \u201c[t]he [Santa Ynez Unit] assets discussed in this press release\n 21 have not sold commercial quantities of [oil] since . . . June of 2015 . . .\u201d Id.7 The\n 22 Disclaimers also made clear to investors that Sable might never be able to re-open\n 23 the onshore pipelines and transport oil to the point of sale: \u201cThere can be no\n 24 assurance that the necessary permits will be obtained that would allow the\n 25 Onshore Pipeline[s] to recommence transportation and allow the [Santa Ynez\n 26 Unit] assets to recommence sales.\u201d Id.\n 27 On May 22, 2025, Sable issued a prospectus for a secondary public offering,\n 28 7\n Emphasis added. All emphasis in quotations of the Complaint has been omitted.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 6 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 16 of 36 Page ID\n #:751\n\n 1 which reiterated statements in the May 19 press release that Sable \u201cinitiated oil\n 2 production from six wells. . . at [the Santa Ynez Unit]\u201d and \u201cbegan flowing oil\n 3 production\u201d to Las Flores Canyon. \u00b6\u00b6 44-46; see Ex. 8 at 443. The prospectus had\n 4 additional warnings and cautionary statements about risks in Sable\u2019s forward-\n 5 looking projections, and stated that Sable was not yet selling or transporting oil\n 6 through its onshore pipelines. See, e.g., Ex. 8 at 455 (\u201c[T]here is no assurance that\n 7 we will be successful in satisfying the remainder of the requirements to restart [the\n 8 onshore pipelines] and recommence oil sales in a timely manner.\u201d), 456 (\u201cWe are\n 9 subject to complex federal, state, local and other laws, regulations and permits that\n 10 could adversely affect . . . our operations.\u201d), 458 (\u201cEnvironmental groups may . . .\n 11 prevent us from obtaining required approvals to recommence oil sales.\u201d).\n 12 D. Sable Suffers Unexpected Setbacks in Its Operational Progress\n 13 On May 23, 2025, Eleni Kounalakis, California Lieutenant Governor and\n 14 chair of the California State Lands Commission, wrote a letter criticizing Sable. See\n 15 \u00b6 49. The letter expressed \u201cserious concerns\u201d that Sable\u2019s recent \u201cactivities do not\n 16 constitute a resumption of commercial production\u201d and that Sable had not completed\n 17 \u201ca full restart\u201d of the Santa Ynez Unit. \u00b6 51. It acknowledged that there was a\n 18 \u201climited volume [of] oil flows\u201d from wells and reported Kounalakis\u2019 understanding\n 19 that these resulted from \u201cwell-testing procedures.\u201d Id. Nonetheless, she asserted\n 20 that the May 19 press release was \u201cmisleading\u201d and \u201cinappropriate\u201d because Sable\n 21 had \u201cnot obtained the necessary regulatory approvals to fully resume operations.\u201d\n 22 Id. The letter cautioned that failing to comply with regulations could \u201cjeopardize\n 23 the status of Sable\u2019s holdover lease\u201d for the offshore Santa Ynez Unit facilities. Id.\n 24 In the ensuing days, Sable confronted setbacks in its ongoing litigation. On\n 25 May 28, 2025, the court in the Coastal Commission Litigation issued a preliminary\n 26 injunction that \u201cstop[ped] Sable from continuing any development associated with\n 27 the return to service of the Las Flores Pipelines.\u201d \u00b6 53. On June 3, 2025, the court\n 28 in the State Waivers Litigation issued a temporary restraining order that \u201cprevent[ed]\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 7 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 17 of 36 Page ID\n #:752\n\n 1 [the Fire Marshal] from granting further authorizations and preventing Sable from\n 2 restarting use of the [Las Flores] [P]ipelines.\u201d \u00b6 55.\n 3 E. A Short Seller-Affiliated Organization Publishes a Report and\n 4 Sable Issues a Press Release\n\n 5 Five months later, on October 31, 2025, Hunterbrook Media8\u2014an\n 6 organization that self-identifies as an affiliate of short sellers who seek to profit from\n 7 corporate misfortunes\u2014published an article about Sable (\u201cHunterbrook Article\u201d).\n 8 \u00b6 59; Ex. 9. The Hunterbrook Article published an allegedly leaked audio recording\n 9 involving Sable CEO James Flores and a \u201cselect group of investors\u201d from October,\n 10 allegedly concerning Sable\u2019s need for an equity infusion, and argued that such\n 11 \u201cselective disclosures potentially violate\u201d SEC rules. \u00b6 67. The Hunterbrook Article\n 12 disclaimed any \u201crepresentation regarding the completeness or timeliness\u201d of the\n 13 information it reported, and it noted that the information it sourced from third parties\n 14 \u201chas not been independently verified, and its accuracy or completeness is not\n 15 guaranteed.\u201d Ex. 9 at 558.\n 16 On November 3, 2025, Sable issued a press release with three updates. See\n 17 \u00b6 63; see also Ex. 10. First, Sable announced that its Board of Directors (\u201cBoard\u201d)\n 18 formed a Special Committee to \u201cundertake an independent investigation of the\n 19 allegations contained in\u201d the Hunterbrook Article. \u00b6 63; Ex. 10 at 564. Second,\n 20 Sable announced that it amended the loan agreement with Exxon Mobil, and that the\n 21 amendment would be effective after Sable raised additional capital. Id. Third,\n 22 Plaintiffs allege Sable announced that it was \u201cno longer pursuing use of the [onshore]\n 23 pipelines as its primary course for delivering oil,\u201d and would instead pursue an\n 24 \u201c\u2018Offshore Storage and Treating Vessel\u2019 strategy.\u201d \u00b6 63. Plaintiffs allege that the\n 25\n 26\n 8\n 27 Hunterbrook Media \u201cgenerate[s] revenue\u201d by sharing information with its affiliated\n fund. See About Us, HUNTERBROOK MEDIA, https://hntrbrk.com/about-us/ (last\n 28 visited Nov. 27, 2025). Its affiliated fund can short sell based on that information,\n \u201cyielding significant gains from stock price fluctuations post-publication.\u201d Id.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 8 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 18 of 36 Page ID\n #:753\n\n 1 next day, on November 4, 2025, the Santa Barbara County Supervisors voted to\n 2 \u201cdeny the transfer of permits from ExxonMobil to Sable.\u201d \u00b6 64.\n 3 III. LEGAL STANDARD\n 4 \u201cTo plead a claim under \u00a7 10(b) and rule 10b-5, a plaintiff must allege: \u2018(1) a\n 5 material misrepresentation or omission [falsity]; (2) scienter; (3) a connection\n 6 between the misrepresentation or omission and the purchase or sale of a security;\n 7 (4) reliance; (5) economic loss; and (6) loss causation.\u2019\u201d In re Nektar Therapeutics\n 8 Sec. Litig., 34 F.4th 828, 835 (9th Cir. 2022). Under the PSLRA, \u201cplaintiffs in\n 9 private securities fraud class actions face formidable pleading requirements to\n 10 properly state a claim and avoid dismissal under Fed. R. Civ. P. 12(b)(6).\u201d Metzler\n 11 Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1054-55 (9th Cir. 2008).\n 12 Plaintiffs must \u201cspecify each statement alleged to have been misleading [and] the\n 13 reason or reasons why the statement is misleading\u201d and \u201cstate with particularity facts\n 14 giving rise to a strong inference that the defendant acted with the required state of\n 15 mind.\u201d 15 U.S.C. \u00a7\u00a7 78u-4(b)(1)(B), (2)(A). Similarly, Rule 9(b)\u2019s \u201cheightened\n 16 pleading requirements\u201d mean that Plaintiffs must allege each element of falsity,\n 17 scienter, and loss causation with particularity. See Or. Pub. Emps. Ret. Fund v.\n 18 Apollo Grp. Inc., 774 F.3d 598, 604-05 (9th Cir. 2014).\n 19 IV. ARGUMENT\n 20 The Complaint should be dismissed. Plaintiffs abandoned the central theory\n 21 from the original complaint, that \u201cDefendants represented that Sable Offshore Corp.\n 22 had restarted oil production off the coast of California when it had not.\u201d Dkt. 1 \u00b6 44.9\n 23 Instead, the Complaint now chronicles a set of regulatory and litigation \u201churdles\u201d\n 24 and \u201csetback[s]\u201d Sable encountered after it began flowing oil from the Santa Ynez\n 25 Unit to storage tanks in May 2025. \u00b6\u00b6 25, 37, 52-53. But facing and promptly\n 26 reporting unexpected challenges and developments is not securities fraud.\n 27 9\n The Complaint also drops all claims under the Securities Act of 1933, and abandons\n 28 all claims against the underwriter banks from Sable\u2019s secondary public offering.\n Although the banks are listed in the case caption, no allegations against them remain.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 9 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 19 of 36 Page ID\n #:754\n\n 1 A. Plaintiffs Fail to Plead Falsity\n 2 The PSLRA \u201cprescribes an \u2018exacting\u2019 standard, under which a \u2018litany of\n 3 alleged false statements, unaccompanied by the pleading of specific facts indicating\n 4 why those statements were false,\u2019 is insufficient.\u201d In re Cloudera, Inc. Sec. Litig.,\n 5 121 F.4th 1180, 1187 (9th Cir. 2024). \u201cFor a statement to be false or misleading, it\n 6 must \u2018directly contradict what the defendant knew at that time\u2019 or \u2018omit[] material\n 7 information.\u2019\u201d Weston Fam. P\u2019ship LLLP v. Twitter, Inc., 29 F.4th 611, 619 (9th\n 8 Cir. 2022). The Court must also \u201clook at \u2018the context surrounding the statement,\u2019\u201d\n 9 because \u201c[a] reasonable investor cares about a statement\u2019s \u2018surrounding text,\n 10 including hedges, disclaimers, and apparently conflicting information.\u2019\u201d Sneed v.\n 11 Talphera, Inc., 147 F.4th 1123, 1131 (9th Cir. 2025); see also Police Ret. Sys. of St.\n 12 Louis v. Intuitive Surgical, Inc., 759 F.3d 1051, 1060 (9th Cir. 2014) (\u201c[T]he context\n 13 in which the statements were made is key.\u201d).\n 14 Plaintiffs challenge thirteen statements made between May 19 and October\n 15 31, 2025. None is actionable because Plaintiffs fail to plead particularized facts that\n 16 any of the thirteen statements was false or misleading. Two additional statements\n 17 (Stmts. 4 and 9) fail to state a claim because they fall within the PSLRA\u2019s safe harbor\n 18 for forward-looking statements. And five statements (Stmts. 6, 7, 11, 12, 13) are\n 19 statements of opinion or puffery that are not adequately pleaded as false.\n 20 1. Statements About the Resumption of Oil Flow Are Not Pleaded\n as False (Statements 1, 2, 5, 6, and 8)\n 21\n 22 The core of the Complaint relates to Sable\u2019s reporting on May 19, 2025 that\n 23 it had \u201crestarted production at the Santa Ynez Unit\u201d and had \u201cbegun flow[ing] oil\n 24 production to Las Flores Canyon,\u201d the onshore storage facility. See \u00b6\u00b6 38, 39\n 25 (Stmts. 1, 2); see also \u00b6 41 (Stmt. 5) (Sable \u201cis proud to have safely and responsibly\n 26 achieved first production\u201d). Three days later, on May 22, Sable reiterated in its\n 27 prospectus that it had \u201cinitiated oil production\u201d from the Santa Ynez Unit and \u201cbegan\n 28 flowing oil production to Las Flores Canyon\u201d at a rate of about \u201c6,000 barrels of oil\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 10 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 20 of 36 Page ID\n #:755\n\n 1 per day.\u201d Id. \u00b6 46 (Stmt. 8).\n 2 Plaintiffs do not allege that any of these statements were inaccurate. There\n 3 are no allegations that oil was not flowing from Sable\u2019s offshore platform to onshore\n 4 storage, nor allegations that Sable\u2019s wells were turned off when Sable said they were\n 5 on. Instead, Plaintiffs contend that these statements were misleading because\n 6 \u201ccontrary to Defendants\u2019 representations, Sable had not resumed commercial\n 7 production.\u201d \u00b6 48 (emphasis added). But the May 19 press release and May 22\n 8 prospectus never said that Sable had resumed \u201ccommercial production.\u201d See\n 9 Exs. 7-8. In fact, Sable said the opposite: \u201cThere can be no assurance that . . . the\n 10 [Santa Ynez Unit] assets\u201d would \u201crecommence sales.\u201d Ex. 7 at 429; see Ex. 8 at 455\n 11 (\u201c[T]here is no assurance that we will . . . restart [the onshore pipelines] and\n 12 recommence oil sales in a timely manner.\u201d).\n 13 Even the title of Sable\u2019s press release made this clear by discussing\n 14 \u201cAnticipated Oil Sales,\u201d not current sales. \u00b6 38 (Stmt. 1) (emphasis added).\n 15 Plaintiffs cannot credibly contend that investors were tricked into thinking that Sable\n 16 had \u201cresumed commercial production,\u201d \u00b6 48, when Sable said clearly that the Santa\n 17 Ynez Unit had \u201cnot sold commercial quantities\u201d of oil for ten years, Ex. 7 at 429.\n 18 Its May 22 prospectus repeated this message through robust risk factors identifying\n 19 events that might delay the start of commercial production. Ex. 8 at 455 (\u201cThe\n 20 timing of returning wells to production is subject to risks that may cause delays . . .\u201d),\n 21 458 (\u201cEnvironmental groups may initiate litigation and . . . delay or prevent us from\n 22 obtaining required approvals to recommence oil sales.\u201d).\n 23 The Ninth Circuit\u2019s recent reminder that a court must examine \u201cthe context\n 24 surrounding the statement\u201d to \u201cdecide whether a misstatement or omission can\n 25 mislead\u201d is especially apt here. Sneed, 147 F.4th at 1131. Examining the \u201chedges\u201d\n 26 and \u201cdisclaimers,\u201d as the Court must do, reveals that the Complaint fails to plead\n 27 that any statements in the May 19 press release and May 22 prospectus about oil\n 28 flow were false or misleading. Id.; see also In re Sorrento Therapeutics, Inc. Sec.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 11 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 21 of 36 Page ID\n #:756\n\n 1 Litig., 97 F.4th 634, 641-42 (9th Cir. 2024) (affirming dismissal when \u201c[a] fair\n 2 reading of the press release and the articles\u201d showed only promising experimental\n 3 results).\n 4 Finally, the portion of the May 19 press release where CEO Flores said that\n 5 Sable was \u201cvery grateful for the cooperation and partnership\u201d of unspecified\n 6 community members and regulators is not adequately pleaded as false. See \u00b6 41\n 7 (Stmt. 6), \u00b6 48. It is also inactionable corporate puffery. Courts regularly dismiss\n 8 securities fraud claims premised on optimistic statements that cannot be objectively\n 9 verified\u2014just like Flores\u2019s gratitude. See Intuitive Surgical, 759 F.3d at 1060 (\u201c\u2018feel\n 10 good\u2019 speak\u201d is \u201cnon-actionable puffing\u201d).\n 11 2. Statements About the Repair Status Are Not Pleaded as False\n (Statements 3 and 10)\n 12\n 13 Similarly, Plaintiffs fail to plead any particularized facts contradicting\n 14 statements in the May 19 press release and May 22 prospectus that Sable had\n 15 \u201ccompleted its anomaly repair program on the Onshore Pipeline[s] as specified by\n 16 the Consent Decree.\u201d \u00b6 39 (Stmt. 3); \u00b6 47 (Stmt. 11). Plaintiffs plead the bare\n 17 conclusion that \u201cSable had not finished its repairs.\u201d \u00b6 48. That cannot satisfy the\n 18 PSLRA\u2019s requirement that plaintiffs \u201cspecify . . . the reason or reasons why the\n 19 statement is misleading,\u201d 15 U.S.C. \u00a7 78u-4(b)(1), by pleading specific facts to the\n 20 contrary in compliance with Rule 9(b). See In re Rigel Pharms., Inc. Sec. Litig., 697\n 21 F.3d 869, 876-78 (9th Cir. 2012) (affirming dismissal for failure to plead falsity);\n 22 Teamsters Loc. 617 Pension & Welfare Funds v. Apollo Grp., Inc., 2011 WL\n 23 1253250, at *24 (D. Ariz. Mar. 31, 2011) (dismissing claims for failure to plead\n 24 falsity because a \u201c[r]ote repetition of [a] conclusory allegation\u201d that statements were\n 25 false \u201cdoes not satisfy the PSLRA\u2019s particularity requirement\u201d); see also Waterford\n 26 Twp. Police & Fire Ret. Sys. v. Mattel, Inc., 321 F. Supp. 3d 1133, 1146 (C.D. Cal.\n 27 2018) (dismissing \u201cblanket, conclusory\u201d allegations of falsity), aff\u2019d sub nom.\n 28 Castro v. Mattel, Inc., 794 F. App\u2019x 669 (9th Cir. 2020).\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 12 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 22 of 36 Page ID\n #:757\n\n 1 3. Projections About Future Production Are Protected by the\n 2 Statutory Safe Harbor and Are Not Pleaded as False\n (Statements 4 and 9)\n 3\n 4 Plaintiffs next challenge three of Sable\u2019s projections in the May 19 press\n 5 release and May 22 prospectus: (i) Sable\u2019s projection that it \u201cexpect[ed] to fill the\n 6 ~540,000 barrels of crude oil storage capacity at [Las Flores Canyon] by the middle\n 7 of June 2025\u201d; (ii) that Sable expected to \u201crecommence oil sales in July 2025\u201d; and\n 8 (iii) that Sable \u201cexpect[ed] to initiate production from the [two] additional [offshore\n 9 platforms] . . . in July 2025 and August 2025.\u201d \u00b6 40 (Stmt. 4), \u00b6 46 (Stmt. 9).\n 10 Plaintiffs contend that these projections \u201ccreated the false impression that such\n 11 completion dates were plausible,\u201d but were actually \u201cimplausible.\u201d \u00b6 48.\n 12 Sable\u2019s projections are forward-looking statements that are not actionable\n 13 under the PSLRA\u2019s statutory safe harbor. 15 U.S.C. \u00a7 78u-5(c)(1). The PSLRA\n 14 provides that forward-looking statements cannot form the basis of a claim if either\n 15 (A) the statements are identified as forward-looking and accompanied by meaningful\n 16 cautionary language, or (B) \u201cthe plaintiff fails to show that the statement was made\n 17 with actual knowledge that it was false or misleading.\u201d Weston Fam. P\u2019ship, 29\n 18 F.4th at 620. Sable\u2019s projections fall within both provisions of the safe harbor.\n 19 A \u201cprojection is by definition a forward-looking statement.\u201d In re Cutera Sec.\n 20 Litig., 610 F.3d 1103, 1111 (9th Cir. 2010). And Sable told investors that its\n 21 \u201cexpect[ations]\u201d are \u201c\u2018forward-looking statements\u2019 within the meaning of the\n 22 [PSLRA]\u201d in both its May 2025 press release and prospectus. Exs. 7-8. Sable\u2019s\n 23 projections also included meaningful cautionary statements. Exs. 7-8. Sable stated\n 24 that \u201cregulatory changes,\u201d \u201clitigation,\u201d \u201cadverse publicity,\u201d and its \u201cability to\n 25 comply with laws and regulations\u201d could cause its \u201c[a]ctual results [to] differ\n 26 materially from those described in the forward-looking statements.\u201d Ex. 7 at 429;\n 27 see Ex. 8 at 455. These cautionary statements foreclose liability under Ninth Circuit\n 28 law. See, e.g., Intuitive Surgical, 759 F.3d at 1059 (affirming dismissal of forward-\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 13 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 23 of 36 Page ID\n #:758\n\n 1 looking statements accompanied by less specific warnings than Sable\u2019s). Even\n 2 absent this language, the safe harbor would still apply because Plaintiffs fail to plead\n 3 \u201cin \u2018great detail\u2019 specific facts sufficient to demonstrate a strong inference that\n 4 defendants made the forward-looking statements . . . with actual knowledge that they\n 5 were false.\u201d In re Splash Tech. Holdings, Inc. Sec. Litig., 160 F. Supp. 2d 1059,\n 6 1071 (N.D. Cal. 2001); see infra \u00a7 IV.B (failure to plead scienter).\n 7 Even without the safe harbor, claims based on Statements 4 and 9 would fail\n 8 because Plaintiffs have not pleaded any contradictory facts. Plaintiffs contend that\n 9 Sable\u2019s projections were \u201cimplausible because Sable had not finished its repairs,\n 10 obtained the necessary permits, or resolved outstanding litigation.\u201d \u00b6 48. Plaintiffs\n 11 fail to specify what repairs were unfinished, what permits were missing, or how these\n 12 related to the challenged projections. Nor do Plaintiffs explain how \u201coutstanding\n 13 litigation\u201d undermined Sable\u2019s projections. \u00b6 48. When Sable made its projections,\n 14 no courts had issued rulings on the preliminary injunction or temporary restraining\n 15 order that could interfere with Sable\u2019s future operations. See In re Cisco Sys. Inc.\n 16 Sec. Litig., 2013 WL 1402788, at *6 (N.D. Cal. Mar. 29, 2013) (requiring challenged\n 17 statements to be \u201cfalse or misleading when made\u201d); see also \u00b6\u00b6 52, 53, 55 (PI and\n 18 TRO issued on May 28 and June 3). Even if there were some aspect of the litigation\n 19 or yet-to-be obtained permits or that might affect Sable\u2019s projections, the status of\n 20 those events was public. Ex. 8 at 445-448 (May 22, 2025 Prospectus discussing\n 21 Coastal Commission and State Waivers Litigation); id.at 456 (disclosing that\n 22 \u201c[Sable] may . . . be unable to obtain required permits\u201d). The Complaint cannot\n 23 plead falsity based on information that the market already knew. See Rubke v.\n 24 Capitol Bancorp Ltd., 551 F.3d 1156, 1162-63 (9th Cir. 2009) (\u201cIt is pointless and\n 25 costly to compel firms to reprint information already in the public domain.\u201d (citation\n 26 omitted)).\n 27 4. Sable\u2019s Opinions Are Not Actionable (Statements 7, 11, 12, 13)\n 28 The remaining statements\u2014various Sable opinion statements\u2014fare no better.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 14 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 24 of 36 Page ID\n #:759\n\n 1 The Supreme Court set forth stringent pleading requirements when a plaintiff alleges\n 2 that an opinion statement is false or misleading. See Omnicare, Inc. v. Laborers\n 3 Dist. Council Constr. Indus. Pension Fund, 575 U.S. 175 (2015). To challenge an\n 4 opinion statement, a plaintiff must allege: (1) that the speaker subjectively did not\n 5 hold the stated opinion at the time the statement was made; (2) that the statement\n 6 contained an embedded statement of fact that was false; or (3) the statement omitted\n 7 a material fact necessary not to make the opinion statement misleading. Id.\n 8 at 186-91. This is \u201cno small task for an investor.\u201d Id. at 194.\n 9 Statements 7 and 11-13 represent Sable\u2019s opinions. They discuss Sable\u2019s\n 10 assessment of pending litigation (Stmts. 7, 12), its belief that the repair work was\n 11 authorized by the County\u2019s permits (Stmt. 11), and a \u201cbelie[f] that the alleged\n 12 recording\u201d published by Hunterbrook \u201cwas . . . altered\u201d (Stmt. 13). See Markette v.\n 13 XOMA Corp., 2017 WL 4310759, at *4 (N.D. Cal. Sept. 28, 2017) (dismissing\n 14 opinion statements because they \u201creflect[d] the speaker\u2019s assessment of and\n 15 judgment about underlying circumstances\u201d). Plaintiffs allege no facts about any\n 16 speaker\u2019s subjective knowledge, identified no false embedded facts within the\n 17 opinions, and have identified no omitted facts at all. See \u00b6\u00b6 42, 48, 57-58, 61-62.\n 18 Because Plaintiffs fail to meet the pleading standard for opinions under Omnicare,\n 19 these statements should be dismissed. See City of Dearborn Heights Act 345 Police\n 20 & Fire Ret. Sys. v. Align Tech., Inc., 856 F.3d 605, 615-16 (9th Cir. 2017). And\n 21 even if the Court analyzes these statements under the PSLRA\u2019s standard for non-\n 22 opinion statements, Plaintiffs fail to plead facts that Statements 7 and 11-13 were\n 23 false or misleading. See \u00b6\u00b6 42, 48, 57-58, 61-62. Claims based on these statements\n 24 should be dismissed.\n 25 B. Plaintiffs Fail to Plead Scienter\n 26 The Complaint should also be dismissed because it fails to plead scienter\u2014\n 27 that is, \u201cintent to deceive, manipulate, or defraud\u201d or \u201cdeliberate recklessness.\u201d\n 28 Webb v. SolarCity Corp., 884 F.3d 844, 851 (9th Cir. 2018); see In re NVIDIA Corp.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 15 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 25 of 36 Page ID\n #:760\n\n 1 Sec. Litig., 768 F.3d 1046, 1053 (9th Cir. 2014) (\u201c[T]he standard for recklessness is\n 2 actually much closer to one of intent.\u201d). Plaintiffs must plead a \u201cstrong inference\u201d\n 3 of scienter that is \u201ccogent and at least as compelling as any opposing inference of\n 4 nonfraudulent intent.\u201d Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 314\n 5 (2007). As the Ninth Circuit repeatedly confirms, \u201c[t]he bar set by Tellabs is not\n 6 easy to satisfy.\u201d Webb, 884 F.3d at 855-56; see Nguyen v. Endologix, Inc., 962 F.3d\n 7 405, 414 (9th Cir. 2020) (\u201cThe PSLRA\u2019s \u2018strong inference\u2019 requirement has teeth.\u201d).\n 8 1. Plaintiffs Fail to Plead a Plausible Motive\n 9 Far from pleading a \u201cstrong inference\u201d of scienter, the Complaint lacks any\n 10 cognizable scienter allegations. As an initial matter, the Complaint does not even\n 11 attempt to theorize why any Individual Defendant would be inclined to commit, or\n 12 benefit from, any fraud. \u201c[T]he lack of a plausible motive certainly makes it much\n 13 less likely that a plaintiff can show a strong inference of scienter.\u201d Prodanova v.\n 14 H.C. Wainwright & Co., LLC, 993 F.3d 1097, 1108 (9th Cir. 2021). The Complaint\n 15 does not allege that any corporate insider stood \u201cto gain a substantial profit by\n 16 engaging in deceptive behavior, such as selling shares before the company discloses\n 17 negative information.\u201d Id. at 1107. It alleges no stock sales whatsoever,\n 18 performance-based compensation, or other benefit tied to any Individual Defendant.\n 19 Because the Complaint fails to allege a plausible motive, it must be dismissed unless\n 20 it \u201cotherwise asserts compelling and particularized facts showing fraudulent intent\n 21 or deliberate recklessness.\u201d Id. at 1108. But the Complaint fails to do that, either.\n 22 2. Plaintiffs Fail Plead Specific Facts Showing Intent to Defraud\n or Deliberate Recklessness\n 23\n 24 Instead of pleading particularized allegations supported by confidential\n 25 employee witness statements, internal reports, or other contemporaneous facts, the\n 26 Complaint provides boilerplate, generic allegations that could be copied from any\n 27 complaint. Specifically, Plaintiff claims that the Individual Defendants were\n 28 \u201cinvolved in . . . disseminating the false and misleading statements\u201d and \u201cintended\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 16 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 26 of 36 Page ID\n #:761\n\n 1 to deceive Plaintiffs.\u201d \u00b6\u00b6 13, 81. That falls below the pleading standard even if\n 2 Plaintiffs were not required to comply with Rule 9(b). Without a cogent theory tying\n 3 these generalized allegations to intent to mislead or deliberate recklessness for\n 4 specific statements, \u201c[i]nferring scienter from these sparse allegations would require\n 5 impermissible speculation.\u201d Hamano v. Activision Blizzard, Inc., 2019 WL\n 6 7882076, at *3 (C.D. Cal. Oct. 17, 2019) (Wilson, J.).\n 7 Fairly read, the face of the Complaint asserts just one theory of scienter: that\n 8 Hunterbrook\u2019s allegation that Flores \u201cpotentially violate[d] Regulation FD\u201d by\n 9 \u201cregularly shar[ing] material non-public information with selective investors\u201d is\n 10 \u201csupportive of scienter.\u201d \u00b6 67 (emphasis added). A full-page block quote from the\n 11 Hunterbrook Article does not come close setting forth \u201cparticular facts giving rise to\n 12 a strong inference of scienter\u201d for \u201ceach statement\u201d and \u201ceach defendant.\u201d Blehm v.\n 13 DC Shoes, Inc., 2006 WL 8455574, at *7 (S.D. Cal. Feb. 24, 2006). Plaintiffs do\n 14 not allege that the Hunterbrook Article matched up in any way to the alleged\n 15 misstatements earlier in the class period. \u00b6 67. Plaintiffs also make no attempt to\n 16 articulate how Flores, or any Defendant, might benefit from an alleged sharing of\n 17 non-public information. In re Wet Seal, Inc. Sec. Litig., 518 F. Supp. 2d 1148, 1169\n 18 (C.D. Cal. 2007) (\u201c[S]trongly weighing against scienter is Plaintiffs\u2019 failure to\n 19 indicate how [individual officer defendants] would benefit personally from the\n 20 alleged scheme.\u201d (emphasis in original)).\n 21 Moreover, no case law supports that an amorphous third-party accusation of\n 22 \u201cpotential\u201d violations of SEC rules\u2014from an author who made \u201c[n]o representation\n 23 regarding the completeness or timeliness of this information,\u201d Ex. 9\u2014is sufficient\n 24 to plead scienter with particularity. Even if the allegations of SEC rule violations\n 25 came from the SEC itself, that would not be enough. See Zamir v. Bridgepoint\n 26 Educ., Inc., 2018 WL 1258108, at *17 (S.D. Cal. Mar. 12, 2018) (\u201c[S]everal district\n 27 courts have found the existence of an investigation, standing alone, insufficient to\n 28 support scienter.\u201d); In re Hansen Nat. Corp. Sec. Litig., 527 F. Supp. 2d 1142, 1162\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 17 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 27 of 36 Page ID\n #:762\n\n 1 (C.D. Cal. 2007) (\u201c[T]he mere existence of [an] investigation cannot support any\n 2 inferences of wrongdoing or fraudulent scienter on the part of [a] company or its\n 3 senior management.\u201d). And even if the law were otherwise, the earliest \u201cpotential\u201d\n 4 rule violation alleged in the Hunterbrook Article is September 29, 2025\u2014nearly four\n 5 months after all of the challenged statements (save for Sable\u2019s statement about the\n 6 Hunterbrook Article itself). See \u00b6 67. That Sable\u2019s Board immediately formed a\n 7 Special Committee to investigate the allegations in the Hunterbrook Article further\n 8 cuts against scienter.\n 9 Even \u201cspeculation\u201d about unpleaded scienter theories cannot save Plaintiffs\u2019\n 10 Complaint. See Hamano, 2019 WL 7882076, at *3. Plaintiffs may argue that one\n 11 can infer that Statements 1-6 (announcing the flow of oil and projections) were made\n 12 with scienter because Defendants wanted to raise Sable\u2019s stock price before a public\n 13 offering. See \u00b6 44. Even if Plaintiffs had pleaded this theory of scienter, it would\n 14 be foreclosed by Ninth Circuit law. Allegations of \u201c[r]outine corporate objectives\n 15 such as the desire to obtain good financing\u201d are \u201cnot \u2018specific\u2019 or \u2018particularized\u2019\u201d\n 16 enough to establish a strong inference of scienter. Webb, 884 F.3d at 856. \u201c[T]o\n 17 hold otherwise would support a finding of scienter for any company that seeks to\n 18 enhance its business prospects.\u201d Rigel, 697 F.3d at 884; Webb, 884 F.3d at 856\n 19 (\u201cSurely every company that goes public wants to . . . maintain a high share price\n 20 afterward in order to finance acquisitions and expand.\u201d).\n 21 3. The Non-Culpable Inference Is More Compelling\n 22 When viewed as a whole, the \u201cplausible, nonculpable explanations\u201d far\n 23 outweigh any possible inference of fraud. Tellabs, 551 U.S. at 324. Plaintiffs ask\n 24 this Court to accept that Sable intentionally misled investors about its progress,\n 25 timeline, and hurdles it was facing. \u00b6 37. But the Ninth Circuit has rejected a theory\n 26 of scienter based on allegations that defendants knew a milestone was unachievable,\n 27 or at least unachievable \u201con the timeline defendants were telling the market,\u201d in\n 28 order to \u201ckeep the stock price high for a time and then face the inevitable fallout.\u201d\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 18 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 28 of 36 Page ID\n #:763\n\n 1 Nguyen, 962 F.3d at 415. That theory \u201cdoes not make a whole lot of sense.\u201d Id.\n 2 Even when viewed in the most favorable light, Plaintiffs\u2019 pleaded facts show\n 3 that Sable believed in its plans but faced disappointing, unexpected third-party\n 4 developments while working in a highly regulated, politically polarizing industry.\n 5 Sable adjusted its strategy in response to evolving circumstances, as it openly\n 6 engaged with multiple regulators and litigated novel administrative issues. At each\n 7 step, Sable kept investors informed, including advising potential investors of the\n 8 risks inherent to its business. See In re Worlds of Wonder Sec. Litig., 35 F.3d 1407,\n 9 1425 (9th Cir. 1994) (\u201c[D]etailed risk disclosure[s] . . . negate[] an inference of\n 10 scienter.\u201d)). Plaintiffs\u2019 theory that these facts show an intent to mislead the market\n 11 is \u201cdivorced from common experience.\u201d Prodanova, 993 F.3d at 1107.\n 12 C. Plaintiffs Fail to Plead Loss Causation\n 13 Plaintiffs also fail to plead specific facts showing loss causation. \u201cRule 9(b)\n 14 applies to all elements of a securities fraud action, including loss causation.\u201d Anshen\n 15 v. Facebook, 2017 WL 5635021, at *4 (C.D. Cal. Oct. 4, 2017) (Wilson, J.) (quoting\n 16 Apollo, 774 F.3d at 605)). Where, as here, Plaintiffs try to show loss causation\n 17 through a series of purported corrective disclosures, Plaintiffs must plead with\n 18 particularity that \u201cthe defendant\u2019s fraud was \u2018revealed to the market and caused the\n 19 resulting losses.\u2019\u201d Loos v. Immersion Corp., 762 F.3d 880, 887 (9th Cir. 2014)\n 20 (emphases in original); see also Mineworkers\u2019 Pension Scheme v. First Solar Inc.,\n 21 881 F.3d 750, 753 (9th Cir. 2018) (plaintiffs must \u201ctrac[e] the loss back to the very\n 22 facts about which the defendant lied\u201d).\n 23 The Complaint fails under these standards. As a threshold matter, the\n 24 Complaint does not \u201cspecify which misrepresentations the [] disclosures supposedly\n 25 correct, leaving it to Defendants and this Court to guestimate the connection,\u201d which\n 26 on its own is \u201cgrounds for dismissal.\u201d In re Illumina, Inc. Sec. Litig., 2025 WL\n 27 2739655, at *3 (S.D. Cal. Sept. 26, 2025); see \u00b6\u00b6 49-65.\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 19 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 29 of 36 Page ID\n #:764\n\n 1 There are also fundamental flaws with Plaintiffs\u2019 five alleged corrective\n 2 disclosure dates, which are May 28, June 3, October 31, November 3, and November\n 3 4, 2025. Except for November 3, the Complaint does not allege that Sable issued\n 4 corrective statements on any of these dates. It alleges instead that third parties made\n 5 unproven accusations directed at Sable or the public learned of litigation and local\n 6 government developments about Sable, and Sable\u2019s stock price dropped \u201con this\n 7 news.\u201d \u00b6\u00b6 54, 56, 60, 65. None of these dates qualifies as a loss-causing event that\n 8 could support allegations of securities fraud.\n 9 1. No Loss Causation from the Letter on May 28, 2025\n 10 Plaintiffs allege that the \u201ctruth [began] to emerge\u201d on May 28, 2025, when the\n 11 public allegedly learned the contents of the May 23 letter from Lieutenant Governor\n 12 Kounalakis to Sable expressing \u201cserious concerns\u201d about Sable\u2019s May 19 press\n 13 release. \u00b6\u00b6 50-51.10 This was not a corrective disclosure.\n 14 While critical in tone, this letter did not correct any of Sable\u2019s prior statements\n 15 in the May 19 press release or May 22 prospectus about developments at the Santa\n 16 Ynez Unit (see Stmts. 1-3, 5, 8), Sable\u2019s expectations for the future (see Stmts. 4, 9),\n 17 or the fact that Sable had completed anomaly repairs on the onshore pipelines (Stmts.\n 18 5, 10). The letter expressed displeasure with Sable\u2019s level of communication with\n 19 the State Lands Commission, questioned \u201cSable\u2019s intentions\u201d and \u201clack of\n 20 understanding,\u201d and urged that failure to comply with regulatory requirements could\n 21 \u201cweigh significantly into considerations on the future assignment of the [Santa Ynez\n 22 Unit] leases.\u201d \u00b6 51. But the Complaint does not explain as a matter of logic how\n 23 such criticisms or warnings corrected any prior statements in the May 19 press\n 24\n 25 10\n Plaintiffs have not adequately pleaded when the letter became public, such that it\n could have affected the stock price on May 28. The Complaint alleges that \u201con\n 26 information and belief\u201d the letter was published on May 28, citing no source. \u00b6 50.\n 27 \u201cAllegations based on information and belief usually do not satisfy the degree of\n particularity required under Rule 9(b).\u201d Wallack v. Idexx Laboratories, Inc., 2013\n 28 WL 1562523, at *6 (S.D. Cal. Apr. 11, 2013) (internal quotation and citation\n omitted).\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 20 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 30 of 36 Page ID\n #:765\n\n 1 release or May 22 prospectus, as opposed to raising concerns about the reported\n 2 development that Sable had resumed production at the Santa Ynez Unit. See Espy\n 3 v. J2 Glob., 99 F.4th 527, 541 (9th Cir. 2024) (third party report\u2019s \u201cgeneralized\n 4 criticism\u201d of defendants\u2019 accounting could not be a corrective disclosure when\n 5 \u201cuntethered from [plaintiff\u2019s] allegations in the second amended complaint\u201d); In re\n 6 Herbalife, Ltd. Sec. Litig., 2015 WL 12732428, at *7 (C.D. Cal. Mar. 27, 2015)\n 7 (letters from senator to government \u201ccommunicating concerns about Herbalife\u2019s\n 8 practices\u201d did not \u201cconstitute a corrective disclosure\u201d).\n 9 Kounalakis claimed that Sable\u2019s May 19 press release was \u201cmisleading\u201d in\n 10 \u201cimpl[ying] that Sable has restarted operations at the Santa Ynez Unit,\u201d because she\n 11 was informed that Sable\u2019s activities were \u201cthe result of well-testing procedures\u201d and\n 12 \u201cnot . . . a resumption of commercial production or a full restart of the [Santa Ynez\n 13 Unit].\u201d \u00b6 51. But the press release never stated that there was a \u201cfull\u201d restart or\n 14 resumption of commercial production at the Santa Ynez Unit. See supra at II.C,\n 15 IV.A. Among other things, it disclosed that only one of the Santa Ynez Unit\u2019s three\n 16 offshore platforms (Platform Harmony) was producing oil, and that it was producing\n 17 oil \u201cfrom six wells\u201d of the \u201c32 producing wells at Platform Harmony.\u201d Ex. 7 at 428.\n 18 The press release further disclosed (in sections that the Complaint omits) that Sable\n 19 \u201chad been testing wells on Platform Harmony throughout May 2025\u201d with\n 20 \u201cremaining Platform Harmony wells projected to be tested.\u201d Id. (emphasis added).\n 21 In other words, the May 19 press release itself made clear that there had not been a\n 22 full commercial resumption of production at the Santa Ynez Unit. That the\n 23 Kounalakis letter reiterated steps required \u201cprior to\u201d full \u201crestart of operations,\u201d \u00b6 51,\n 24 provided no new information to the market, cf. In re BofI Holding, Inc. Sec. Litig.,\n 25 977 F.3d 781, 794 (9th Cir. 2020) (\u201cA corrective disclosure, though, must by\n 26 definition reveal new information to the market that has not yet been incorporated\n 27 into the price.\u201d).\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 21 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 31 of 36 Page ID\n #:766\n\n 1 2. No Loss Causation from Court and Local Government\n 2 Developments on May 28, June 3, and November 4, 2025\n\n 3 The Complaint fares no better in trying to turn negative developments on May\n 4 28, June 3, and November 4 into corrective disclosures. The Complaint pleads that\n 5 on these dates, the public learned of court rulings and a county supervisor vote\n 6 affecting Sable. But a \u201csimple revelation of \u2018bad news\u2019 does not establish loss\n 7 causation.\u201d Wenzel v. Semiconductor Mfg. Int\u2019l Corp., 2021 WL 12312024, at *10\n 8 (C.D. Cal. Nov. 18, 2021). Court rulings and a vote by a county board are the\n 9 ultimate examples of unpredictable events. Plaintiffs cannot rely on these\n 10 developments to meet their burden to prove that the \u201cdefendant\u2019s misstatement, as\n 11 opposed to some other fact, foreseeably caused the plaintiff\u2019s loss.\u201d First Solar, 881\n 12 F.3d at 753 (emphasis added and internal citation omitted). It was not foreseeable\n 13 that courts would rule or supervisors would vote as they did, nor do Plaintiffs plead\n 14 any facts that these events corrected prior Sable statements.\n 15 May 28, 2025: The Complaint alleges that, on the same day the Kounalakis\n 16 letter allegedly became public, two articles publicized the court\u2019s decision to issue a\n 17 preliminary injunction in the Coastal Commission Litigation. \u00b6\u00b6 52-54. The\n 18 Complaint itself confirms that neither the preliminary injunction nor the articles\n 19 discussing it are corrective disclosures. As the Complaint pleads, the injunction was\n 20 a \u201csetback\u201d in Sable\u2019s ongoing \u201clegal battle with the state regulator.\u201d \u00b6 52; see\n 21 \u00b6\u00b6 26-31. It \u201cstop[ped] Sable from continuing any development.\u201d \u00b6\u00b6 53 (emphases\n 22 altered). But it by no means revealed that \u201cSable Offshore\u2019s claim to have restarted\n 23 production in California was false.\u201d \u00b6 52. Nor did the issuance of the preliminary\n 24 injunction reveal as false Sable\u2019s statement that it \u201ccompleted its anomaly repair\n 25 program on the Onshore Pipeline[s].\u201d See Statements 3, 10. As the Complaint\n 26 pleads, the preliminary injunction \u201ccould impact Sable\u2019s ability to do future\n 27 repairs.\u201d \u00b6 52 (emphasis added).\n 28 June 3, 2025: For similar reasons, a court\u2019s issuance on June 3 of a temporary\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 22 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 32 of 36 Page ID\n #:767\n\n 1 restraining order in the State Waivers Litigation was not a corrective disclosure.\n 2 \u00b6 55. As the Complaint alleges, the temporary restraining order was merely another\n 3 adverse development in ongoing litigation between Sable and environmental groups\n 4 that could lead to lost profits and delays. \u00b6\u00b6 32-34. But \u201c[t]o be corrective, the\n 5 disclosure must \u2018relate back to the misrepresentation and not to some other negative\n 6 information about the company.\u2019\u201d Hoang v. ContextLogic, Inc., 2023 WL 6536162,\n 7 at *27 (N.D. Cal. Mar. 10, 2023).\n 8 The Complaint does not plead what alleged misstatements the temporary\n 9 restraining order corrects. \u00b6\u00b6 55-56. But it is apparent that the court ruling against\n 10 Sable\u2019s \u201cclaims that the [repair and maintenance] work was authorized under\n 11 existing permits\u201d\u2014a position that the Complaint admits had \u201cfollowed confirmation\n 12 from the County,\u201d \u00b6 53\u2014did not render false any of Sable\u2019s prior statements that it\n 13 believed the State Waivers lawsuits were \u201cwithout merit\u201d and that all work had been\n 14 permitted. See Statements 7, 8.\n 15 November 4, 2025: Finally, the Santa Barbara County Supervisors\u2019 vote on\n 16 November 4, 2025 \u201cto deny the transfer of permits from ExxonMobil to Sable\u201d was\n 17 not a corrective disclosure. \u00b6 64.11 Plaintiffs in no way allege what earlier\n 18 misstatements this event supposedly corrected, nor how a vote by government actors\n 19 could correct a company\u2019s statements.\n 20 3. No Loss Causation on October 31 and November 3, 2025\n 21 The news events on October 31 and November 3 were also not corrective\n 22 disclosures. These came in the last week of the alleged class period, but Plaintiffs\n 23 fail to specify which challenged statements in the prior six months were corrected.\n 24 See Illumina, 2025 WL 2739655, at *3 (Plaintiffs must make \u201csome attempt to\n 25 actually link each of the [] corrective disclosures to each Defendant\u2019s prior\n 26\n 27 11\n The Complaint fails to plead the timing of the County Supervisors\u2019 vote on\n 28 November 4. \u00b6 64. The Complaint also fails to plead that the temporary restraining\n order was publicized before market close on June 3.\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 23 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 33 of 36 Page ID\n #:768\n\n 1 misstatement on that topic instead of forcing the Court . . . to speculate how the\n 2 jigsaw puzzle connects in Plaintiffs\u2019 mind.\u201d).\n 3 On October 31, Hunterbrook purported to publish a leaked recording of a call\n 4 involving CEO Flores and certain investors, in which Flores allegedly discussed\n 5 Sable\u2019s need to raise up to $200 million in additional equity by 2025. \u00b6 59; Ex. 9\n 6 at 540-542, 552. The thrust of the Hunterbrook Article was allegations of \u201cselective\n 7 disclosure from Sable\u201d to certain investors in \u201cpotential\u201d violation of SEC rules.\n 8 Id. at 540, 544-545.\n 9 The Hunterbrook Article is not alleged to have \u201ccorrected\u201d any prior\n 10 misstatements, and it cannot support a theory of loss causation. The Ninth Circuit\n 11 has repeatedly rejected corrective disclosures based on third-party articles, like this\n 12 one, that \u201cincluded disclaimers from the authors stating that they made \u2018no\n 13 representation as to the accuracy or completeness of the information set forth in this\n 14 article.\u2019\u201d BofI, 977 F.3d at 797; see Ex. 9 (same language by Hunterbrook). It is\n 15 \u201cnot plausible that the market would perceive\u201d the Hunterbrook Article as \u201crevealing\n 16 false statements,\u201d because the nature of the piece \u201cmeans that investors would have\n 17 taken its \u2018contents with a healthy grain of salt.\u2019\u201d Nektar, 34 F.4th at 840 (citing BofI,\n 18 977 F.3d at 797).\n 19 As the Complaint pleads, the Company\u2019s Board promptly formed a Special\n 20 Committee to investigate the allegations in the Hunterbrook Article on November 3.\n 21 The act of doing so did not \u201ceffectively confirm[]\u201d the Hunterbrook allegations, \u00b6 63,\n 22 nor does it qualify as a disclosure corrective of anything. It is well-established in\n 23 the Ninth Circuit that the \u201cannouncement of an investigation, without more, is\n 24 insufficient to establish loss causation,\u201d because \u201cit simply puts investors on notice\n 25 of a potential future disclosure of fraudulent conduct.\u201d Loos, 762 F.3d at 890; see\n 26 Rok v. Identiv, Inc. 2017 WL 35496, at *17-18 (N.D. Cal. Jan. 4, 2017) (disclosure\n 27 that company had \u201cformed a Special Committee to investigate\u201d a former employee\u2019s\n 28 complaint \u201cdoes not support loss causation because it merely announced an internal\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 24 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 34 of 36 Page ID\n #:769\n\n 1 investigation\u201d). In any event, the Complaint pleads no facts tying an investigation\n 2 into Hunterbrook\u2019s allegations to any prior statements about operational activity at\n 3 the Santa Ynez Unit or any of the other challenged statements.\n 4 Nor did the purported disclosure of Sable\u2019s alleged financing needs in the\n 5 Hunterbrook Article on October 31, or Sable November 3 press release about\n 6 amending the Exxon Mobil loan once additional financing was raised, reveal any\n 7 fraudulent activity to the market. As the Complaint pleads, the reason for additional\n 8 equity needs was delays to the project. See \u00b6 59. The Complaint fails to plead how\n 9 these changing circumstances corrected any prior alleged misstatements. Similarly,\n 10 Sable\u2019s statement in the November 3 Press Release that it was \u201cactively evaluating\n 11 and pursuing\u201d an offshore storage and treating strategy for the Santa Ynez Unit,\n 12 Ex. 10 at 564, did not correct any prior statements. Sable had previously told\n 13 investors that offshore storage and treating was one of two options it was\n 14 considering, the other being transport via onshore pipelines. Ex. 11 at 570. The\n 15 announcement that Sable now viewed offshore storage and treating as its \u201cmain\n 16 path\u201d was a change in business strategy, not a revelation of fraud. See Cloudera,\n 17 121 F.4th at 1189 (\u201cStatements made at the end of the class period about the\n 18 challenges [the company] had faced\u201d \u201cdo not by themselves \u2018make the earlier,\n 19 cheerier statement a falsehood.\u2019\u201d).\n 20 V. CONCLUSION\n 21 Despite being \u201clong on sound, fury, and speculation,\u201d the Complaint is \u201cshort\n 22 on specifics.\u201d Hershewe v. JOYY Inc., 2021 WL 6536670, at *8 (C.D. Cal. Nov. 5,\n 23 2021). Quoting Sable\u2019s litigation adversaries, political critics, and short-seller\n 24 skeptics cannot make up for a failure to plead particularized facts showing that any\n 25 statement was intentionally false or misleading.12 The Complaint should be\n 26 dismissed.\n 27 12\n Because Plaintiffs fail to plead a primary violation of section 10(b), the section\n 28 20(a) claims also fail. See 15 U.S.C. \u00a7 78t; Zucco Partners, LLC v. Digimarc Corp.,\n 552 F.3d 981, 990 (9th Cir. 2009).\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 25 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 35 of 36 Page ID\n #:770\n\n 1 Dated: November 24, 2025 Respectfully submitted,\n 2 LATHAM & WATKINS LLP\n 3 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 4 650 Town Center Drive, 20th Floor\n Costa Mesa, CA 92626\n 5 Telephone: +1.714.540.1235\n 6 Email: kristin.murphy@lw.com\n\n 7 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 8 San Diego, CA 92130\n Telephone: (858) 523-5400\n 9 Email: colleen.smith@lw.com\n 10 Counsel for Defendants\n Sable Offshore Corp., James C.\n 11 Flores, and Gregory D. Patrinely\n 12\n 13\n 14\n 15\n 16\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n CASE NO. 2:25-cv-06869\nATTORNEYS AT LAW\n 26 MOTION TO DISMISS AMENDED\n CLASS ACTION COMPLAINT\n\f Case 2:25-cv-06869-SVW-PVC Document 73 Filed 11/24/25 Page 36 of 36 Page ID\n #:771\n\n 1 CERTIFICATE OF COMPLIANCE\n 2 The undersigned counsel of record for Defendants Sable Offshore Corp.,\n 3 James C. Flores, and Gregory D. Patrinely certifies that this brief contains 25 pages,\n 4 which:\n 5 __ complies with the word limit of L.R. 11-6.1.\n 6 X complies with the page limit set by court order dated August 4, 2025 (Dkt. 10).\n 7\n 8 Dated: November 24, 2025 By: /s/ Kristin N. Murphy\n Kristin N. Murphy (SBN 268285)\n 9 650 Town Center Drive, 20th Floor\n 10 Costa Mesa, CA 92626\n Telephone: +1.714.540.1235\n 11 Email: kristin.murphy@lw.com\n 12 Colleen C. Smith (SBN 231216)\n 12670 High Bluff Drive\n 13 San Diego, CA 92130\n Telephone: (858) 523-5400\n 14 Email: colleen.smith@lw.com\n 15 Counsel for Defendants\n 16 Sable Offshore Corp., James C.\n Flores, and Gregory D. Patrinely\n 17\n 18\n 19\n 20\n 21\n 22\n 23\n 24\n 25\n 26\n 27\n 28\n\nATTORNEYS AT LAW\n 27\n\f","ocr_status":2,"date_upload":"2025-12-01T11:56:36.272923-08:00","document_number":"73","attachment_number":null,"pacer_doc_id":"031046409303","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Dismiss (cause or other)","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/460455040/","id":460455040,"tags":[],"absolute_url":"/docket/70941407/73/1/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-12-01T11:56:23.367842-08:00","date_modified":"2025-12-01T11:56:23.367855-08:00","sha1":"","page_count":4,"file_size":736358,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"73","attachment_number":1,"pacer_doc_id":"031046409304","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Appendix A","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/460455041/","id":460455041,"tags":[],"absolute_url":"/docket/70941407/73/2/tracy-johnson-v-sable-offshore-corp/","date_created":"2025-12-01T11:56:23.469941-08:00","date_modified":"2025-12-01T11:56:23.469955-08:00","sha1":"","page_count":4,"file_size":143257,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"73","attachment_number":2,"pacer_doc_id":"031046409305","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Declaration of Kristin N. 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