Douglas Bray v. Rocket Lab USA, Inc. — Entry #96: MINUTES IN CHAMBERS - TENTATIVE RULING ON DEFENDANTS' MOTION TO DISMISS SECOND AMENDED CLASS ACTION COMPLAINT 82 by Judge George H Wu

Case 2:25-cv-01733-GW-KES                  Document 96 Filed 04/14/26              Page 1 of 13 Page ID
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                                   UNITED STATES DISTRICT COURT
                                  CENTRAL DISTRICT OF CALIFORNIA

                                          CIVIL MINUTES - GENERAL
 Case No.          CV 25-1733-GW-KESx                                            Date       April 14, 2026
 Title             Douglas Bray v. Rocket Lab USA, Inc., et al.


 Present: The Honorable           GEORGE H. WU, UNITED STATES DISTRICT JUDGE
                Javier Gonzalez                            None Present
                 Deputy Clerk                        Court Reporter / Recorder                    Tape No.
                Attorneys Present for Plaintiffs:                   Attorneys Present for Defendants:
                         None Present                                          None Present
 PROCEEDINGS:                IN CHAMBERS - TENTATIVE RULING ON DEFENDANTS' MOTION
                             TO DISMISS SECOND AMENDED CLASS ACTION COMPLAINT [82]


Attached hereto is the Court’s Tentative Ruling on Defendants’ Motion [82] set for hearing on April 16,
2026 at 8:30 a.m.


                                                                                                    :
                                                               Initials of Preparer    JG
CV-90 (06/04)                                  CIVIL MINUTES - GENERAL                                   Page 1 of 1


Case 2:25-cv-01733-GW-KES                  Document 96 Filed 04/14/26                     Page 2 of 13 Page ID
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   Bray v. Rocket Lab USA, Inc., et al., Case No. 2:25-cv-1733-GW-(KESx)
   Tentative Ruling on Motion to Dismiss Second Amended Class Action Complaint


            On November 10, 2025, the Court granted an earlier motion to dismiss in this
   securities fraud action (with leave to amend) based on deficiencies in the scienter
   allegations (without ruling out that there were additional deficiencies in other required
   elements). See Docket Nos. 79-80. Subsequently, on December 19, 2025, plaintiff
   Douglas Bray (“Plaintiff”)1 filed his Second Amended Class Action Complaint for
   Violations of the Federal Securities Laws (“SAC”). See Docket No. 81. Defendants
   Rocket Lab USA, Inc. (“Rocket Lab”), Peter Beck (“Beck”) and Adam Spice (“Spice,”
   together with Beck, “the Individual Defendants,” and the Individual Defendants together
   with Rocket Lab, “Defendants”) have again filed a Rule 12(b)(6)-based motion to
   dismiss. Defendants’ motion again challenges Plaintiff’s ability to successfully plead the
   required elements of falsity, scienter and loss causation. See In re Genius Brands Int’l,
   Inc. Sec. Litig., 97 F.4th 1171, 1180 (9th Cir. 2024) (setting forth the elements for Section
   10(b) and Rule 10b-5(b) claims).
            Scienter2
            Noting that the SAC continues to lack any motive or “unique benefit” to the
   Individual Defendants from the scheme Plaintiff believes he has identified, in their
   opening brief Defendants summarize Plaintiff’s scienter allegations as being reliant upon
   the theory that:
            (i) “paid” commercial launches of Neutron “will create a big inflection
            point” for Rocket Lab’s profitability; and (ii) an inflated stock price would
            purportedly help support an at-the-market (“ATM”) offering and corporate
            acquisition that Rocket Lab announced two months later in mid-March
            (two weeks after the end of the class period), and a separate acquisition
            announced four months later in late May (a full three months after the
            class period ended).
   Docket No. 82, at 13:17-22 (emphasis in original) (citing/quoting SAC ¶¶ 88-91). After

   1
    The operative pleading refers to Willie Croskrey as the “Lead Plaintiff” and to Douglas Bray as simply a
   “plaintiff.” See SAC ¶ 21-22. However, to accord with the caption of the action, the Court refers to Bray
   as “Plaintiff” herein.
   2
    The Court set forth the principles underlying the scienter requirements subsequent to enactment of the
   Private Securities Litigation Reform Act in its prior order, and the parties’ familiarity with that discussion,
   and those principles, is presumed such that it will not be repeated herein.


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   again noting that a lack of motive is not fatal to a sufficient scienter allegation, Plaintiff
   acknowledges that these allegations are his “short-term [profit] motive” allegations.
   Docket No. 87, at 17:21-26; see also SAC ¶ 13.            He cites evidence – or at least
   allegations – that Neutron’s launch timeline “was a huge driver of Rocket Lab’s stock
   price.” Docket No. 87, at 18:1-6. He also believes that, although the ATM offering and
   acquisition were announced two weeks after the class period ended on February 25, 2025,
   see SAC ¶¶ 1, 89-91, “[t]he far more plausible inference is that Defendants had been
   working to finalize both throughout the Class Period.” Docket No. 87, at 18:10-11. But
   he identifies no factual allegations in that regard, let alone any that suggest there was a
   connection between statements made about Neutron’s timeline and those future corporate
   transactions.
          The scienter requirement obligates securities fraud plaintiffs to “state with
   particularity facts giving rise to a strong inference that the defendant acted with the
   required state of mind.” 15 U.S.C. § 78u-4(b)(2). There is no “strong inference” based
   on facts connecting the ATM and acquisition to the allegedly actionable statements in
   this case. Instead, Plaintiff wants the Court to take a leap across a chasm, not what the
   Private Securities Litigation Reform Act (“PSLRA”) has in mind.               As the Court
   explained in its prior dismissal order, under the PSLRA it is simply not the case that all
   scienter inferences are necessarily drawn in favor of the plaintiff.
          The Court reaches the same conclusion as Defendants: even ignoring Plaintiff’s
   failure to connect the future, post-class period, ATM offering and acquisition with the
   statements made leading up to and during the class period, these – and the basic interest
   in “driv[ing]” one’s stock price – are “routine corporate objectives.” As the Court has
   previously explained in this case, “allegations of routine corporate objectives . . . are not,
   without more, sufficient to allege scienter,” because otherwise a finding of scienter would
   exist “for any company that seeks to enhance its business prospects.”            In re Rigel
   Pharms., Inc. Sec. Litig., 697 F.3d 869, 884 (9th Cir. 2012); see also Espy v. J2 Global,
   Inc., 99 F.4th 527, 536 (9th Cir. 2024) (“‘Deliberate recklessness is a higher standard
   than mere recklessness and requires more than a motive to commit fraud.’”) (quoting
   Glazer Cap. Mgmt., L.P. v. Forescout Techs. Inc., 63 F.4th 747, 764 (9th Cir. 2023));
   Lipton v. Pathogenesis Corp., 284 F.3d 1027, 1038 (9th Cir. 2002) (“If scienter could be


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   pleaded merely by alleging that officers and directors possess motive and opportunity to
   enhance a company’s business prospects, ‘virtually every company in the United States
   that experiences a downturn in stock price could be forced to defend securities fraud
   actions.’”) (quoting Acito v. IMCERA Grp., Inc., 47 F.3d 47, 54 (2d Cir. 1995)). As
   Defendants note in their motion, see Docket No. 82, at 14:26-15:21, this would not be the
   only court to reject reliance on an upcoming ATM offering (or similar upcoming
   corporate transactions) as a basis to surpass the PSLRA’s scienter hurdle.
          Again, where a plausible motive allegation is missing a complaint must
   “otherwise assert[] compelling and particularized facts showing fraudulent intent or
   deliberate recklessness.” Prodanova v. H.C. Wainwright & Co., LLC, 993 F.3d 1097,
   1108 (9th Cir. 2021). Are there compelling and particularized facts alleged that amount
   to that state-of-mind here? In the Court’s view, the answer is “no,” leading the Court
   once again to the conclusion that Plaintiff is left with a theory of fraud that simply does
   not make much sense. See Docket No. 79, at pg. 6 of 11; see also Nguyen v. Endologix,
   Inc., 962 F.3d 405, 415 (9th Cir. 2020).
          Beyond his motive-deficient allegations – in addition to repeating in the SAC
   information that the Court already addressed and found deficient in its earlier dismissal
   order, see, e.g., SAC ¶¶ 8, 13, 51, 84, 88 – Defendants identify Plaintiff’s reliance on a
   meeting during the week of Thanksgiving 2024 and what he says “was admitted” during
   that meeting about Rocket Lab’s inability to test a “beach landing” until September 2025
   and its inability to timely obtain dredging permits to use dredging to meet a mid-2025
   test-launch date for Neutron. See id. ¶¶ 65-68. As Defendants observe, there is no
   indication in the SAC that either of the Individual Defendants attended that meeting, and
   Plaintiff himself has acknowledged that there were numerous ways, other than a beach
   landing and dredging, of delivering Neutron parts to Wallops Island. See id. ¶¶ 9, 11, 44,
   74-75, 84.
          Relying on In re ChinaCast Education Corp. Securities Litigation, 809 F.3d 471
   (9th Cir. 2015), where the Ninth Circuit allowed imputation of the scienter of a
   company’s founder/CEO and CFO to the company itself, Plaintiff’s response is that
   information known to agents is deemed known by principals, without specifying who the
   agent was at the Thanksgiving 2024 meeting.           As to the Individual Defendants


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   themselves, despite their non-attendance at that meeting, Plaintiff believes that all he has
   to allege is that the Individual Defendants had access to information that contradicted
   their public statements.         In demonstrating such access, he argues that a Court can
   consider the Individual Defendants’ positions and “detail-oriented nature.”3                         In that
   regard, Plaintiff points to paragraphs 86 and 87 with respect to Beck, and paragraphs 79,
   80, and 88 for Spice. See also SAC ¶¶ 28, 83. He argues that “[t]he more plausible
   inference” is that “they were informed by their senior executive in attendance at the
   Thanksgiving-week meeting” – not identifying who that “senior executive in attendance”
   was – “that receiving a permit in time for the mid-2025 launch ‘was not remotely
   feasible.’” Docket No. 87, at 14:7-10.
            With respect to confidential-witness (“CW”) allegations, Defendants point out
   that Plaintiff removed from the SAC allegations about three CWs that had been present in
   the prior version of the complaint, and added allegations about one CW who did not work
   at Rocket Lab and who – at least as the SAC reveals – had no interactions with the
   Individual Defendants at all. See Sneed v. Talphera, Inc., 147 F.4th 1123, 1134 (9th Cir.
   2025) (concluding that confidential witness statements did not show scienter because
   “few witnesses had the required personal knowledge of [company’s Chief Executive and
   Chief Medical Officers’] decision-making . . . , as most witnesses never interacted with
   either executive”); Police Ret. Sys. Of St. Louis v. Intuitive Surgical, Inc., 759 F.3d 1051,
   1063 (9th Cir. 2014) (“Missing are allegations linking specific reports and their contents
   to the executives, not to mention the link between the witnesses and the executives.”).
   Plaintiff’s only response on this point is that he has described the CW sufficiently and
   that the CW can attest to what occurred at the Thanksgiving 2024 meeting. That the CW
   had no interaction with either of the Individual Defendants is unimportant, in Plaintiff’s
   telling, so long as there is still a strong inference of scienter based upon “a holistic
   evaluation of the allegations.” Docket No. 87, at 15:25-16:7. And, according to Plaintiff,
   the CW’s account “establishes that [the six alternatives to a beach landing and dredging]

   3
    Defendants note that the actual words spoken by Beck in podcast interviews (as to which Plaintiff does
   not contest the Court’s ability to take judicial notice) do not support the allegation, in paragraph 86 of the
   SA, that Beck was “hands-on” or “intimately involved . . . in Neutron’s development.” See Docket No. 82,
   at 17:20-26. Plaintiff does not respond to this point in his Opposition, in effect conceding that Defendants
   are correct.


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   were not in consideration at the time,” citing paragraph 69 of the SAC. Id. at 16:13-15.
            However, paragraph 69 does not say that. Instead, it says that an unidentified
   “general” indicated that a permit for dredging “needed to be issued by year-end, in order
   for the parts to arrive in time for [a July 2025] launch” and that the general also stated
   that “they believed they would miss the seasonal beach-landing window and did not
   know how else to get the components to the island, without dredging.” SAC ¶ 69. There
   is no explanation of the connection between the “general” and Rocket Lab. Nor is there
   any indication that anyone from Rocket Lab indicated, or agreed, that alternatives to a
   beach landing/dredging operation were “not in consideration at the time” or that Rocket
   Lab “did not know how else to get the components to the island, without dredging.”
            Even assuming that the Court were to ignore the Individual Defendants’ non-
   attendance at the Thanksgiving 2024 meeting, and were to fully credit either or both of
   Plaintiff’s “agent” and/or “access” theories4 for attributing knowledge about that meeting
   to the Individual Defendants, how is the Court to ignore the existence of alternatives to a
   beach landing and dredging that Plaintiff concedes existed? See id. ¶¶ 9, 11, 44, 74-75,
   84. Indeed, the SAC cites a March 11, 2025 dredging permit application that “detailed
   Rocket Lab’s and the Virginia Port Authority’s previous evaluation of alternative
   delivery methods,” explaining that barge transportation was simply “the preferred
   alternative.” Id. ¶¶ 72, 74 (emphases added). The Court has to be able to conclude that
   the Defendants had a fraudulent intent or were deliberately reckless. See SEC v. Rubera,
   350 F.3d 1084, 1094 (9th Cir. 2003); In re Silicon Graphics Sec. Litig., 183 F.3d 970,
   974, 979 (9th Cir.), reh’g & reh’g en banc denied, 195 F.3d 521 (1999). When there
   were other possible solutions to the problems posed for readiness for a mid-2025 launch,
   how do we get there just because the Defendants were – under Plaintiff’s theory/theories
   – aware that two possible solutions clearly were not going to work with their timeline?
            Plaintiff believes that an inference about the possibilities posed by the alternatives
   to a beach landing or dredging is “not logical, let alone compelling,” because “it was
   admitted” during the Thanksgiving 2024 meeting that Rocket Lab “did not know how


   4
     With respect to the “access” theory, the Court sees little reason to disagree with Defendants’ statement in
   their Reply that “[i]f mere ability to access allegedly contradictory information was sufficient, scienter
   would be established in every case for high-ranking executives because they always have the ability to
   access company data.” Docket No. 93, at 15:12-14.


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   else” to transport Neutron components without dredging, see SAC ¶¶ 10, 85, and because
   the March 2025 permit application – an application that was submitted after the close of
   the class period, see id. ¶ 11 – identified drawbacks of the five alternatives identified
   therein. Plaintiff’s use of the passive voice in the phrase “it was admitted” does not
   reflect whom, if anyone, actually “admitted” these points. As Defendants point out in
   their Reply, it appears that no one associated with Rocket Lab “admitted” that the
   company did not know how else to transport components without dredging. Again,
   paragraph 69 of the SAC, which Plaintiff relies upon in his Opposition, refers to a
   “general,” but Plaintiff admits that he does not know the “general’s” name “or whether he
   worked for, or represented, Rocket Lab.” Id. ¶¶ 67, 69. Moreover, an admission of
   complicating considerations after the close of the class period, even ignoring that timing
   issue, does not mean that alternative options were impossible or so implausible that one
   would have to be “deliberately reckless” to conclude that they might work (which, again,
   is all for the goal of meeting a general launch-timeline instead of suffering a few-month
   delay5).
            Beyond these points, Plaintiff again attempts to rely on the “core operations”
   inference with respect to Neutron, citing to cases that he says support a conclusion that
   allegations relating to a company’s projects or products like Neutron were sufficient to
   call into play that inference. Defendants assert in their Reply that the Court can ignore
   any attempt by Plaintiff, in his Opposition, to discuss a “core operations” theory, because,
   they assert, it was not pled in Plaintiff’s SAC. It is true that the phrase “core operations”
   does not appear in the SAC, but the Court does not necessarily agree that there is not at
   least a hint that Plaintiff intended to make use of that theory. In any event, for the
   reasons the Court explained in its prior dismissal order, “it would seem to be a stretch to
   call Rocket Lab’s plans for launching Neutron the company’s ‘core operations,’ unless
   one were to consider everything that Rocket Lab does its core operations.” Docket No.
   79, at pgs. 8-9 of 11. The Court would take the same view again here given the length
   and success of Rocket Lab’s operation and its only-recent emphasis on Neutron. See


   5
     The Court does not see any indication in the SAC that a few-month delay in launch of the Neutron
   threatened the ability to achieve any of the goals or potential contracts that were reliant on a successful
   Neutron product. See SAC ¶¶ 38-39.


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   SAC ¶¶ 29-38, 88.           Moreover, in any event, under the core operations doctrine,
   “‘reporting false information will only be indicative of scienter where the falsity is
   patently obvious.’” Sneed, 147 F.4th at 1134 (quoting Zucco Partners, LLC v. Digimarc
   Corp., 552 F.3d 981, 1001 (9th Cir. 2009)). When dealing with a prediction of a launch
   schedule for a ground-breaking rocket, it would be difficult to imagine a “patently
   obvious falsity.” The Court easily concludes that no such falsity is present here.
           Finally, as to Plaintiff’s attempt to rely on “corporate scienter” (where scienter is
   imputed to a company based on the knowledge of any employee), Defendants note that
   the Ninth Circuit has not (yet, at least) adopted that doctrine because of its inconsistency
   with the PSLRA’s pleading requirements. See Glazer Capital Mgmt., LP v. Magistri, 549
   F.3d 736, 743-45 (9th Cir. 2008); see also In re NVIDIA Corp. Sec. Litig., 768 F.3d 1046,
   1063 (9th Cir. 2014). Despite raising the theory in the SAC, see SAC ¶¶ 93-95, Plaintiff
   does not appear to attempt to address this issue in his Opposition,6 so the Court considers
   it no further here.
           It is true that the question “is whether all of the facts alleged, taken collectively,
   give rise to a strong inference of scienter, not whether any individual allegation,
   scrutinized in isolation, meets that standard.” 551 U.S. at 322-23 (emphasis in original);
   see also In re VeriFone Holdings, Inc. Sec. Litig., 704 F.3d 694, 702 (9th Cir. 2012);
   Zucco Partners, 552 F.3d at 992.                Whether viewed individually or holistically,
   Defendants argue the scienter allegations come up short. Once again, the Court agrees.
           In determining whether a “strong” inference of scienter exists, “the court must
   take into account plausible opposing inferences.” Tellabs, Inc. v. Makor Issues & Rights,
   Ltd., 551 U.S. 308, 323 (2007). The inference of scienter must be more than merely
   “reasonable” or “permissible” – “it must be cogent and compelling,” and “at least as
   compelling as any opposing inference one could draw from the facts alleged.” Id. at 324;
   see also id. at 314, 328. It is at least an equally-compelling inference that, at the time the
   statements in question were made between January 9 and January 21, 2025, see SAC ¶¶
   78-81, Defendants had sincere hopes that their expressed timeline would be achievable,
   while also knowing that meeting that timeline would not be without challenges related to


   6
    Defendants make the same point about a “collective scienter” theory in their Reply. See Docket No. 93, at
   16 n.10.


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   the ability to transport parts to Wallops Island in a timely manner. See also Docket No.
   79, at pgs. 10-11 of 11 (“Without a short-term profit motive, the Court agrees with
   Defendants that a fraud theory that is reliant on tricking the public into thinking that an
   event will occur a few months earlier than it apparently will does not make a lot of sense,
   i.e. is at best questionably ‘cogent,’ and nowhere near as ‘compelling’ as Defendants’
   alternative explanation.”).7 The Court believes that this is even more an appropriate
   conclusion here because “[s]howing scienter necessarily becomes harder when the
   allegedly misleading statements are not flagrantly false because in those cases an
   innocent alternative explanation becomes more likely.”                   Sneed, 147 F.4th at 1134.
   Plaintiff has not come close to demonstrating statements about the launch schedule for
   the Neutron were “flagrantly false.”
           Plaintiff has already amended his allegations twice (though only once in response
   to a successful dismissal motion), and the Court has already specifically provided
   Plaintiff an amendment opportunity to get his scienter allegations across the line set by
   the PSLRA. As explained, he has not done so successfully. Under that setting, another
   opportunity for amendment is not mandated (and Plaintiff has not given any indication in
   his papers about anything that he now knows he could add, let alone in a way that might
   conceivably make a difference to the Court’s analysis). See Zucco Partners, 552 F.3d at
   1007 (“[W]here the plaintiff has previously been granted leave to amend and has
   subsequently failed to add the requisite particularity to its claims, ‘[t]he district court’s
   discretion to deny leave to amend is particularly broad.’”); see also Espy, 99 F.4th at 542
   (“[V]ague promise[s] of ‘additional information’ cannot cure the deficiencies in the
   complaint.”). As such, Plaintiff’s failure on this element is enough, by itself, to warrant
   dismissal without leave to amend. However, the Court will also briefly discuss the issue
   of loss causation, another element that Plaintiff falls short on here.
           Loss Causation
           “A private plaintiff who claims securities fraud must prove that the defendant’s

   7
     Defendants state the premise perhaps better than the Court has here: “Given the obvious complexity in
   creating a reusable rocket, everyone understands that predicting an exact launch date is impossible. It
   simply ‘does not make a lot of sense’ to ‘trick[] the public into thinking . . . an event will occur a few
   months earlier than it apparently will when Defendants obtain no benefit and the entire world will see when
   a huge rocket ultimately test-launches from Wallops Island.” Docket No. 82, at 19:2-6 (omitting internal
   citation to Docket No. 79, at pgs. 10-11 of 11).


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    fraud caused an economic loss.” Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 338 (2005);
    see also Or. Pub. Emps. Ret. Fund v. Apollo Grp. Inc., 774 F.3d 598, 608 (9th Cir. 2014).
    Part of this involves alleging “that ‘the truth became known.’” Genius Brands, 97 F.4th
    at 1184 (quoting Dura Pharm., 544 U.S. at 347). “The most common way for plaintiffs
    to prove that ‘the truth became known’ is to identify one or more corrective disclosures.”
    Id. (omitting internal quotation marks). “A plaintiff does not, of course, need to prove
    loss causation in order to avoid dismissal; but the plaintiff must properly allege it.”
    Metzler Inv. GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1062 (9th Cir. 2008). Rule
    9(b)’s heightened pleading standards apply to allegations of loss causation, as with all
    elements of a securities fraud claim. See Or. Pub. Emps., 774 F.3d at 605.
            We are presented here with a situation involving a loss causation theory that is
    tied to a report written by an acknowledged short-seller, Bleecker Street Research
    (“Bleecker”). See SAC ¶¶ 4-6, 40-47, 98-100 & nn.4-5. In that setting, Defendants argue
    that Plaintiff cannot establish loss causation under the Ninth Circuit’s approach to such
    reports, reflected in Houston Municipal Employees Pension System v. Bofl Holding, Inc.
    (In re Bofl Holding, Inc. Securities Litigation), 977 F.3d 781, 790, 795 (9th Cir. 2020), In
    re Nektar Therapeutics Securities Litigation, 34 F.4th 828, 840 (9th Cir. 2022) and Espy,
    with Defendants particularly focusing on the second of those three cases.
            Nektar repeated the reasoning Bofl Holding when that earlier decision assessed
    anonymous short-seller blog posts:
            The posts were authored by anonymous short-sellers who had a financial
            incentive to convince others to sell, and the posts included disclaimers
            from the authors stating that they made “no representation as to the
            accuracy or completeness of the information set forth in this article.” A
            reasonable investor reading these posts would likely have taken their
            contents with a healthy grain of salt.
    Nektar, 34 F.4th at 840. It then applied that reasoning to a published “report” that
    likewise was “authored by anonymous short-sellers who had a financial incentive to
    convince others to sell, and the [report] included disclaimers from the authors stating that
    they made ‘no representation as to the accuracy or completeness of the information set
    forth in this article.’” Id.; see also id. at 833-34.
            Plaintiff’s response on this point is to first assert that the Ninth Circuit has
    endorsed a “flexible approach to evaluating corrective disclosures,” which can “come


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    from any source,” quoting In re Bofl Holding, 977 F.3d at 790, 795. See also Genius
    Brands, 97 F.4th at 1184 (“In the end, a corrective disclosure can . . . come from any
    source, including knowledgeable third parties such as whistleblowers, analysts, or
    investigative reporters.”) (omitting internal quotation marks).               Then, addressing
    Defendants’ reliance on Nektar, Plaintiff takes the position that the corrective report in
    question in this case was, unlike Nektar, “authored by a well-known, short-seller firm,
    not anonymous authors . . . with no apparent history in publicizing short ideas.” Docket
    No. 87, at 19:28-20:2. He argues that, in Espy, the Ninth Circuit allowed for reports like
    Bleecker’s here to serve as a plausible loss causation allegation because, in part, the
    reports “had associated contact information that would allow investors to verify
    reliability.” See Espy, 99 F.4th at 541 (“The Citron and Hindenburg reports differ from
    the blog posts and reports held to be insufficient in Bofl, Grigsby [v. Bofl Holding, Inc.,
    979 F.3d 1198 (9th Cir. 2020)], and Nektar. Most notably, Citron and Hindenburg are
    well-known short-seller firms whose reports are not ‘anonymous,’ unlike the blog posts
    in Bofl and Grigsby or the Plainview report in Nektar, which had no associated contact
    information that would allow investors to verify the report’s reliability.”).
            In addition, Plaintiff asserts that Bleecker “did not disavow the accuracy of its
    findings” because its report “clearly expressed Bleecker’s belief that the information
    provided is accurate and reliable.” Docket No. 87, at 20:12-13. In so doing, however,
    Plaintiff ignores that the very language he quotes from the report also states that the
    information in the report is “presented ‘as is,’ without warranty of any kind,” and that
    Bleecker “makes no representation, express or implied, as to the accuracy . . . or
    completeness of any such information.” Id. at 20:18-21. He nevertheless feels that this
    language can be disregarded here because, unlike in Nektar, Bleecker also said that “[t]o
    the best of [its] ability and belief, all information contained [in the report] is accurate and
    reliable.” Id. at 20:15-16, 20:22-24. But, as Defendants point out in their Reply (relying
    on material that is permissible to consider by way of judicial notice), the report involved
    in Nektar included that exact same language (even if the language did not make it into the
    Ninth         Circuit’s        opinion         in        the         case).                 See
    https://s3.amazonaws.com/plainviewllc/Nektar+Therapeutics+Report.pdf             (last   viewed
    April 9, 2026).


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              Even ignoring this lack of any distinction from the facts before the courts in
    Nektar, Bleecker was clearly attempting to speak out of both sides of its “mouth” here.
    The language Plaintiff relies on is effectively meaningless given the disclaimer that
    follows it. Bleecker unquestionably “disavowed any accuracy” in its report, even though
    it stated that it “belie[ved]” the information it provided was accurate and reliable.
              Returning to the question of anonymity, is the fact that Bleecker itself was
    identified with the report enough to avoid that problem, or was the identity of the actual
    individual who wrote it the important consideration? Defendants have identified a (pre-
    Espy) case that has concluded it is the latter. See Ng v. Berkeley Lights, Inc., No. 21-cv-
    09497-HSG, 2024 WL 695699, at *16 n.7 (N.D. Cal. Feb. 20, 2024) (rejecting argument
    that report of “well-known ‘activist’ short-seller entity” distinguishes case from approach
    in Nektar and other short-seller cases because “the identity of the entity that sponsored
    the report (as opposed to the identity of any actual person who wrote the representations
    in it) does not change the ‘character’ of the report itself – namely, that it was based on
    secondhand information gathered by a self-interested short-seller”); see also In re
    LexinFintech Holdings Ltd. Sec. Litig., No. 3:20-cv-1562-SI, 2021 WL 5530949, at *15-
    16 & n.12 (D. Or. Nov. 24, 2021) (“Plaintiffs asserted at oral argument that Grizzly is not
    ‘anonymous’ because the Grizzly website identifies its owner and operator, Siegfried G.
    Eggert.     The site also, however, states that the ‘analyst team consists of trained
    account[ant]s, economists, and engineers,’ and thus it does not appear that Mr. Eggert is
    necessarily the author of the Grizzly report.”). Indeed, Espy itself described Nektar as
    dealing with “a report from an anonymous author at Plainview LLC.” Espy, 99 F.4th at
    541 (emphasis added).
              With respect to Plaintiff’s reliance on Espy in association with this issue,
    Defendants characterize that decision as providing dicta on the topic. The Court agrees.
    In that case, the Ninth Circuit concluded that, even accepting that the reports in question
    could be considered for purposes of loss causation, they did “not qualify as corrective
    disclosures” because they did not “relate back” to the alleged misrepresentations in the
    case or because they were “based entirely on public information” not requiring “expertise
    or specialized skills beyond what a typical market participant would possess” that would
    have already been reflected in the company’s stock price. Espy, 99 F.4th at 541; see also


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Case 2:25-cv-01733-GW-KES           Document 96 Filed 04/14/26           Page 13 of 13 Page ID
                                          #:2094


    Pujo v. EHang Holdings Ltd., No. 2:23-cv-10165 MWC (DFMx), 2025 WL 1242324, at
    *11 (C.D. Cal. Mar. 26, 2025) (noting what the Ninth Circuit ultimately “found” in
    Espy). As such, given the approaches to the issue taken in Ng and In re LexinFintech,
    and the conclusion that the language in Espy (which itself appeared to focus on the author
    source, not just the publication source) supporting a different conclusion was dicta, the
    Court disagrees with Plaintiff that the holding in Espy allows the Bleecker Report to
    serve as a loss causation-qualifying corrective disclosure here.
           Like scienter, then, Plaintiff’s loss causation allegations come up short, with no
    suggestion for how they can be corrected to be viable. Due to deficiencies in both of
    these elements, Plaintiff’s Rule 10b-5 claim will again be dismissed. The Court does not
    see a need to address the parties’ arguments concerning falsity and/or application of the
    statutory safe harbor for forward-looking statements.
           Section 20(a)
           Having failed to sufficiently state a Rule 10b-5 claim, Plaintiff’s derivative
    Section 20(a) claim necessarily fails as well. See Zucco Partners, 552 F.3d at 990
    (“Section 20(a) claims may be dismissed summarily . . . if a plaintiff fails to adequately
    plead a primary violation of section 10(b).”).
           Amendment
           As the Court has already explained, it has already given Plaintiff one opportunity
    to amend (though specifically with respect to scienter). Plaintiff has not solved the
    problems with those allegations, and offers no reason to hope that anything would change
    given another opportunity. Plaintiff also comes up short with respect to loss causation,
    and he has not suggested that he has some entirely different “corrective disclosure”
    separate from Bleecker’s report that is waiting in the wings. Given the opportunity for
    amendment already-extended and the lack of any indication that anything meaningful
    could be added or changed, the Court concludes that a further opportunity to amend is not
    warranted. Plaintiff’s case is therefore dismissed with prejudice.


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