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Bros, Inc.","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/12401956/","id":12401956,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/8288371/","attorney_id":8288371,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","docket_id":66921700,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","docket_id":66921700,"name":"Plaintiff","date_terminated":null,"extra_info":"Individually and on Behalf of All Others Similarly Situated,","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2023-03-05T18:38:37.347332-08:00","date_modified":"2023-03-05T18:38:37.347346-08:00","name":"Jerry Peacock","extra_info":""}],"entries":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/394534257/","id":394534257,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/403629832/","id":403629832,"tags":[],"absolute_url":"/docket/66921700/38/douglas-rein-v-dutch-bros-inc/","date_created":"2024-06-24T12:10:20.848786-07:00","date_modified":"2025-01-11T03:04:14.658014-08:00","sha1":"9c8486894f47ccedcd1e842f82040f83e5e44f5a","page_count":1,"file_size":111812,"filepath_local":"recap/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.38.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.38.0.pdf","ia_upload_failure_count":null,"thumbnail":"recap-thumbnails/gov.uscourts.nysd.594862/403629832.thumb.1068.png","thumbnail_status":1,"plain_text":" Case 1:23-cv-01794-PAE Document 38 Filed 06/24/24 Page 1 of 1\n\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n----------------------------------------------------------------------X\nDOUGLAS REIN, individually and on behalf of all\nothers similarly situated,\n\n\n Plaintiff,\n -against- 23 CIVIL 01794 (PAE)\n\n JUDGMENT\nDUTCH BROS, INC. et al.,\n\n Defendants.\n----------------------------------------------------------------------X\n\n\n\n It is hereby ORDERED, ADJUDGED AND DECREED: That for the reasons\n\nstated in the Court's Opinion and Order dated June 24, 2024, the Court grants defendants' motion\n\nto DISMISS in its entirety and DISMISSES this case with prejudice; accordingly, the case is\n\nclosed.\n\nDated: New York, New York\n\n June 24, 2024\n DANIEL ORTIZ\n _________________________\n Acting Clerk of Court\n\n BY:\n _________________________\n _____\n ____________\n __________\n _____\n Deputy\n Deputy Clerk\n\f","ocr_status":2,"date_upload":"2024-07-10T21:46:17.657953-07:00","document_number":"38","attachment_number":null,"pacer_doc_id":"127035697294","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Judgment - Clerk","acms_document_guid":""}],"date_created":"2024-06-24T12:10:20.838637-07:00","date_modified":"2025-01-11T03:04:14.591312-08:00","date_filed":"2024-06-24","time_filed":"14:23:32","entry_number":38,"recap_sequence_number":"2024-06-24.002","pacer_sequence_number":145,"description":"CLERK'S JUDGMENT re: 37 Opinion & Order. in favor of Dutch Bros, Inc., Charles L. Jemley, Jonathan Ricci against Douglas Rein, Jerry Peacock. It is hereby ORDERED, ADJUDGED AND DECREED: That for the reasons stated in the Court's Opinion and Order dated June 24, 2024, the Court grants defendants' motion to DISMISS in its entirety and DISMISSES this case with prejudice; accordingly, the case is closed. (Signed by Acting Clerk of Court - Daniel Ortiz on 6/24/2024) (Attachments: # 1 Notice of right to appeal) (nd) (Entered: 06/24/2024)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/394512948/","id":394512948,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/403607615/","id":403607615,"tags":[],"absolute_url":"/docket/66921700/37/douglas-rein-v-dutch-bros-inc/","date_created":"2024-06-24T10:09:37.230074-07:00","date_modified":"2025-01-11T03:04:14.563431-08:00","sha1":"94cb8724a820306cd00e6bb01eae9145a99503c3","page_count":46,"file_size":1644987,"filepath_local":"recap/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.37.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.37.0.pdf","ia_upload_failure_count":null,"thumbnail":"recap-thumbnails/gov.uscourts.nysd.594862/403607615.thumb.1068.png","thumbnail_status":1,"plain_text":" Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 1 of 46\n\n\n\n\nUNITED STATES DISTRJCT COURT\nSOUTHERN DISTRJCT OF NEW YORK\n\n\n DOUGLAS REIN, individually and on behalf of all\n others similarly situated,\n 23 Civ. 1794 (PAE)\n Plaintiff,\n -v- OPINION & ORDER\n\n DUTCH BROS, INC. et al.,\n\n Defendants.\n\n\nPAUL A. ENGELMAYER, District Judge:\n\n Lead plaintiff Douglas Rein brings this putative federal securities class action against\n\nDutch Bros, Inc. (\"Dutch Bros\") and its chief executive officer Jonathan Ricci and chief financial\n\nofficer Charles L. Jemley (collectively, \"Defendants\") alleging violations of Sections l0(b) and\n\n20(a) of the Securities Exchange Act of 1934, 15 U.S.C. \u00a7\u00a7 78j(b) and 78t(a), and the\n\nimplementing rule of the Securities and Exchange Commission, 17 C.F.R. \u00a7 240b-5 (\"Rule 10b-\n\n5\"). On behalf of himself and others who purchased Dutch Bros securities between November\n\n10, 2021, and May 11, 2022 (the \"class period\"), Rein claims that Defendants made a series of\n\nfalse and misleading statements during the class period touting Dutch Bros' performance and\n\nprospects, which allegedly understated the threat to the company's sales and profitability\n\npresented by rising inflation affecting the cost of commodities key to its success.\n\n Pending now is Defendants' motion to dismiss the Amended Complaint (\"AC\") for\n\nfailure to state a claim under Federal Rules of Civil Procedure 12(b)(6) and 9(b). For the\n\nfollowing reasons, the Court grants the motion and dismisses the AC in its entirety.\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 2 of 46\n\n\n\n\nI. Background\n\n A. Factual Background 1\n\n 1. The Parties\n\n Dutch Bros is a publicly traded company incorporated under Delaware law that operates\n\nand franchises drive-through coffee shops, which sell coffee and related products. AC 14, 22.\n\nOn September 17, 2021, Dutch Bros went public, with an initial public offering (\"IPO\") in which\n\nit issued approximately 24.2 million shares of Class A common stock at a public offering price\n\nof$23 per share. Id.~~ 28, 3. As of its IPO, Dutch Bros had 471 shops in 11 states. Its IPO was\n\nintended to facilitate the company's \"expansion to at least 4,000 Dutch Bros locations in the\n\nUnited States.\" Id. 23.\n\n At all relevant times, Ricci was Dutch Bros' president and chief executive officer, and\n\nJemley was its chief financial officer. Id.~~ 15-16.\n\n Lead plaintiff Rein is an investor who, during the class period, purchased Dutch Bros\n\nsecurities at what he alleges were \"artificially inflated prices,\" which declined after Dutch Bros,\n\non the last day of the class period, announced a decline in profitability. Id.~ 13.\n\n\n\n1 These facts are drawn primarily from the AC. For the purpose of resolving the motion to\ndismiss, the Court assumes all well-pied facts to be true and draws all reasonable inferences in\nfavor of plaintiffs. See Koch v. Christie's Int'! PLC, 699 F.3d 141, 145 (2d Cir. 2012). The\nCourt also considers documents incorporated into the AC by reference, documents publicly filed\nwith the Securities Exchange Commission (\"SEC\"), see ATS] Commc 'ns, Inc. v. Shaar Fund.\nLtd., 493 F.3d 87, 98 (2d Cir. 2007), transcripts of relevant earnings calls, Franlifurt-Tr. Inv.\nLuxemburg AG v. United Techs. Corp., 336 F. Supp. 3d 196,205 (S.D.N.Y. 2018), and other\n\"matters of which a Court may take judicial notice,\" In re Pfizer, Inc. Sec. Litig., 538 F. Supp. 2d\n621,627 (S.D.N.Y. 2008). As all documents attached to Defendants' declaration in support of\ndismissal fall into one or more of these categories, the Court considers them in resolving this\nmotion. See Dlct. 34 (\"Wu Deel.\"), Exs. 1, 2 (\"3/11/22 Form 10-K\"), 3 (\"9/16/21 Prospectus\"), 4\n(\"5/12/22 Form 10-Q\"), 5 (\"11/12/21 Form 10-Q\"), 6 (\"11/10/21 Form 8-K\"), 7 (\"11/10/21\nEarnings Call Tr.\"), 8 (\"3/1/22 Earnings Call Tr.\"), 9 (\"3/1/22 Form 8-K\"), 10 (\"5/11/22 Form 8-\nK\"), 11 (\"5/11/22 Earnings Call Tr.\"), 12-16, 17 (\"8/10/22 Earnings Call Tr.\"), 18 (\"1/11/22\nICR Interview Tr.\"), 19.\n 2\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 3 of 46\n\n\n\n\n 2. Rising Commodities Prices Before and During the Class Period\n\n In the months leading up to, and during, the class period, inflation and commodities\n\nprices were rising in the United States. See id. ,r 3. The Bureau of Labor Statistics' Consumer\n\nPrice Index for All Urban Consumers rose to 5.4% in September 2021, 7.5% in January 2022,\n\nand reached 8.3% by April 2022. Id. Daity and petroleum, the commodities most central to\n\nDutch Bros' business, were subject to these trends. Id. The Department of Agriculture\n\ncalculated the National All-Milk Price Received at $18.30 in September 2021, $23.90 in January\n\n2022, and $27 in April 2022. The Department of Energy reported the Gasoline Average Retail\n\nPrice in September 2021 as $3.272, as $3.413 in January 2022, $3.611 in February 2022, $4.322\n\nin March 2022, and $4.213 in April 2022. Id. A September 2021 Wall Street Journal article\n\nnoted that\"[e]conomists anticipate that broader, longer-lasting inflationary pressures will emerge\n\nin coming quarters\"; another, published November 2021, opined that \"[t]hings are going to get\n\nworse before they get better.\" Id. ,r 26.\n\n During the class period, Defendants made statements that were generally positive about\n\nDutch Bros' past and forthcoming financial performance, notwithstanding that inflation in\n\ngeneral and commodities costs in patiicular were rising. These statements were made in, inter\n\nalia, SEC filings, conference calls, and interviews. See id. ,r,r 55-101.\n\n In particular, Defendants stated that they believed that (I) given the particular ingredients\n\nthat Dutch Bros required, Dutch Bros was not as susceptible to rising inflation rates and supply\n\nchain issues as other companies, (2) a price increase implemented just before the class period,\n\nand the option of future price increases, would help Dutch Bros weather the inflation it would\n\nface, and (3) inflation in gas, more than dairy, prices, was the company's biggest concern, but\n\nconsumers would not necessarily cease drive-through coffee purchases as a result ofrising gas\n\nprices. See id. The Court below reviews the specific challenged statements to these effects.\n\n 3\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 4 of 46\n\n\n\n\n A confidential witness (\"CWl \")-who worked for Dutch Bros as a retail optimization\n\nmanager-is cited in the AC as stating that, as of December 2021, Dutch Bros was aware of its\n\npotential need to combat rising dairy prices. Id ,i,i 18-21. CWl and his team \"worked on\n\noperational changes that would be effective in the field\" and \"created processes for field\n\ntraining,\" and designed \"processes that would create efficiencies at the retail store-level.\" Id ,i\n\n19. CWl stated that, in or around December 2021, his team was tasked with \"troubleshooting\n\nthe issue of rising dairy costs[.]\" Id ,i 21. This entailed steps such as \"switch[ing] from\n\npurchasing dairy by the gallon to purchasing it by the half gallon.\" Id CW! stated that \"finding\n\nadditional sources of dairy, especially 2%, was important because the supply was also an issue\n\naround this time, not just the cost.\" Id The AC does not address whether Dutch Bros adopted\n\nthese or other suggestions.\n\n 3. Dutch Bros' Ql 2022 Earnings Drop, Reported May 11, 2022\n\n Through at least the end of 2021, Dutch Bros' performance remained stable. In the first\n\nquarter of 2022, ending March 31, 2022, however, Dutch Bros experienced \"margin pressure\"-\n\nthat is, a decrease in its profit margins. Cf, e.g., id ,i,i 102-111 (identifying Q 1 losses in 2022 as\n\nturning point).\n\n On May 11, 2022, the last day of the class period, after the markets closed, Dutch Bros\n\nissued its earnings release for the first quarter of 2022. It revealed a big drop in performance.\n\nSee id It reported a net loss that quarter of $16.3 million, compared to $4.8 million in the first\n\nquarter of 2021, and an adjusted net loss of$0.02 per share, \"below the market's estimated\n\nearnings of$0.01 per share.\" Id ,i 102\n\n In public statements that day, Defendants attributed these losses to three factors:\n\n \"[Dutch Bros'] decision to be disciplined on the price [they] took, which [they]\n believe[d] [wa]s less than half as much as many of [their] peers; faster inflation and\n cost of goods, especially in dairy; the pull forward of defe1Ted expenses related to\n\n 4\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 5 of 46\n\n\n\n\n the maintenance of shops; and normal new store inefficiency amplified by the\n volume of new and ramping units in quarter l.\"\n\nId. ,i 103. As to rising costs, Ricci stated on an earnings call that day:\n\n Unfortunately, in this past quarter, a confluence of cost pressures overwhelmed our\n decisions around price and resulted in near-term margin compression. We\n anticipated higher expenditures. However, we did not perceive the speed and\n magnitude of cost escalation within the quarter. Dairy, for example, which makes\n up 28% of our commodity based, rose almost 25% in QI. While costs rose\n throughout the quarter, we experienced a change in sales trajectory from mid-\n March onward as macroeconomic headwinds accelerated and comps turned\n negative. We are monitoring these factors and have chosen to take a more\n conservative stance on our 2022 outlook given macroeconomic uncertainty.\n\nId. ,i 104. During the May 11, 2022 earnings call, Jemley attributed the drop in sales to rising\n\ngasoline prices:\n\n [W]ithout claiming to be a macroeconomist, I will tell you that in mid-March when\n gas prices jumped the way they did, we saw an immediate flip on our daily sales.\n It was almost to the day of the way that, that works. So I think you could infer-\n and we believe that we've done some analysis on the gas prices and influence\n related to our daily sales, and we believe it has influenced it. And we believe that\n if gas prices stay inflated, it will continue to influence it.\n\nId. ,i 110. Based on these metrics and what it termed \"unanticipated\" cost increases, Dutch Bros\n\nthat day put forward a \"more conservative\" forecast of its earnings and \"same shop sales\" in\n\n2022. Id. ,i 105.\n\n The next day, May 12, 2022, Dutch Bros' share price fell by $9.26 or 26.9%. Id. ,i 111.\n\nThat share price was 59.7% below what it had been at the start of the class period on November\n\n10,2021. Id.\n\n Throughout the second quarter of 2022, margin pressure continued. In its Q2 earnings\n\ncall on August I 0, 2022, Dutch Bros stated that, \"[l]ike many of our peers, the macro-economic\n\nenvironment is impacting various aspects of our business, and our company-operated shop\n\nmargins continue to be pressured by record inflation in the second quarter.\" Id. ,i 115. It\n\n\n\n 5\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 6 of 46\n\n\n\n\nreported a 3% price increase in the second quarter and stated that it was continuing to evaluate\n\n\"further menu pricing action as needed in the back half of the year. Id. On that earnings call,\n\nhowever, Jemley stated that Dutch Bros was \"starting to [overcome] the inflation that began to\n\nshow in Q2 of2021.\" Id. ,i 116.\n\n 4. The Individual Defendants' Stock Sales\n\n On approximately March 4, 2022-in the middle of the class period-Ricci and Jemley's\n\n\"Lock-Up Agreements\" with Dutch Bros' underwriters expired, freeing them to sell Dutch Bros'\n\nshares they owned. See id. ,i 6. Each executive had entered into a Rule 10b5-l trading plan three\n\nmonths earlier: Ricci on December 7, 2021, and Jemley on December 9, 2021. After the\n\nexpiration of the lock-up periods, both defendants made sales pursuant to these plans. Ricci sold\n\na total of71,125 shares of Dutch Bros common stock, with some sales on March 7, 2022, and the\n\nrest on May 9, 2022. Id. ,i 128. 2 Those sales represented about 3.3% of the 2,133,794 fully\n\nvested shares of Dutch Bros common stock that Ricci had owned as of the expiration of the lock-\n\nup periods. Id. ,i 129. Jemley sold 15,000 shares on March 4, 2022, and an additional 5,000\n\nshares on April 5, 2022. Id. ,i 132. Those sales represented about 2.1 % of the 932,828 fully\n\nvested shares of Dutch Bros common stock that Jemley had owned. Id. ,i 133.\n\n 5. The Appointment of a New President and CEO\n\n In November 2022, Dutch Bros announced the appointment of a new president, Christine\n\nBarone; Ricci remained CEO. Id. ,i 149. On August 8, 2023, Dutch Bros announced that Barone\n\nwould replace Ricci as CEO in January 2024. Id. ,i 150.\n\n\n\n\n2 The AC overstates, by a factor of two, Ricci's stock sales. See AC ,i 128. Rein's brief corrects\nthis error. See Dkt. 3 5 at 20 n.13.\n 6\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 7 of 46\n\n\n\n\n B. Procedural History\n\n On March 1, 2023, plaintiff Jerry Peacock filed this action on behalf of purchasers of\n\nDutch Bros securities between March 1 and May 11, 2022. Dkt. 1. On May 1, 2023, Rein and\n\ntwo others filed motions to serve as lead plaintiff and for their respective attorneys to serve as\n\nlead counsel. See Dkts. 12-21. On August 3, 2023, the Court appointed Rein lead plaintiff and\n\nhis attorneys lead counsel. Dkt. 29. Thereafter, Rein filed the now-operative AC, which moved\n\nthe start of the class period earlier, to November 10, 2021. AC ,r 2.\n\n On September 28, 2023, Defendants filed their motion to dismiss the AC, Dkt. 32, a\n\nmemorandum oflaw in support thereof, Dkt. 33 (\"Def. Br.\"), and a declaration and attached\n\nexhibits, Dkt. 34 & Exs. 1-19. On October 26, 2023, Rein filed a brief in opposition. Dkt. 35\n\n(\"Pl. Br.\"). On November 9, 2023, Defendants filed a reply. Dkt. 36 (\"Def. Reply Br.\").\n\nII. Applicable Legal Standards\n\n A. Standards for Resolving a Motion to Dismiss\n\n To survive a motion to dismiss under Rule 12(b)(6), a complaint must plead \"enough\n\nfacts to state a claim to relief that is plausible on its face.\" Bell At/. Corp. v. Twombly, 550 U.S.\n\n544, 570 (2007). A claim will only have \"facial plausibility when the plaintiff pleads factual\n\ncontent that allows the court to draw the reasonable inference that the defendant is liable for the\n\nmisconduct alleged.\" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A complaint is properly\n\ndismissed where, as a matter of law, \"the allegations in a complaint, however ttue, could not\n\nraise a claim of entitlement to relief.\" Twombly, 550 U.S. at 558. Although the court must\n\naccept as ttue all well-pied factual allegations in the complaint and draw all reasonable\n\ninferences in the plaintiff's favor, Steginsky v. Xcelera Inc., 741 F.3d 365,368 (2d Cir. 2014),\n\nthat tenet \"is inapplicable to legal conclusions,\" Iqbal, 556 U.S. at 678.\n\n\n\n 7\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 8 of 46\n\n\n\n\n \"Securities fraud claims are subject to heightened pleading requirements that the plaintiff\n\nmust meet to survive a motion to dismiss.\" ATS! Commc 'ns, Inc. v. Shaar Fund, Ltd, 493 F.3d\n\n87, 99 (2d Cir. 2007); see also Tellabs, Inc. v. Makar Issues & Rights, Ltd, 551 U.S. 308, 321-\n\n23 (2007).\n\n First, a complaint alleging securities fraud must meet the requirements of Federal Rule of\n\nCivil Procedure 9(b). See ECA & Local 134 !BEW Joint Pension Tr. of Chi. v. JP Morgan\n\nChase Co., 553 F.3d 187, 196 (2d Cir. 2009) (\"ECA\"). Rule 9(b) states that \"[i]n alleging fraud\n\nor mistake, a party must state with particularity the circumstances constituting fraud or mistake.\"\n\nFed. R. Civ. P. 9(b). \"Allegations that are conclusory or unsupported by factual assertions are\n\ninsufficient.\" ATS! Commc 'ns, 493 F.3d at 99.\n\n Second, such a complaint must comply with the pleading requirements of the Private\n\nSecurities Litigation Reform Act (\"PSLRA\"), 15 U.S.C. \u00a7 78u-4(b). See ECA, 553 F.3d at 196.\n\nIn particular, where a plaintiffs claims depend upon allegations that the defendant has made an\n\nuntrue statement of material fact or that the defendant omitted a material fact necessary to make\n\na statement not misleading, the plaintiff \"shall specify each statement alleged to have been\n\nmisleading [and] the reason or reasons why the statement is misleading.\" 15 U.S.C. \u00a7 78u-\n\n4(b)(I). Thus, to plead a claim of securities fraud, plaintiffs \"must do more than say that the\n\nstatements ... were false and misleading; they must demonstrate with specificity why and how\n\nthat is so.\" Rombach v. Chang, 355 F.3d 164, 174 (2d Cir. 2004). In addition, the plaintiff\n\n\"shall, with respect to each act or omission ... state with particularity facts giving rise to a\n\nstrong inference that the defendant acted with the required state of mind.\" 15 U.S.C. \u00a7 78u-\n\n4(b)(2).\n\n\n\n\n 8\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 9 of 46\n\n\n\n\n B. Elements of Rein's Claims\n\n Rein brings claims under\u00a7\u00a7 l0(b) and 20(a) of the Exchange Act, and its implementing\n\nrule, Rule l0b-5. FAC 11168-80.\n\n Section l0(b) makes it unlawful to \"use or employ, in connection with the purchase or\n\nsale of any security ... any manipulative or deceptive device or contrivance in contravention of\n\nsuch rules and regulations as the Commission may prescribe.\" 15 U.S.C. \u00a7 78j(b). Rule l0b-5\n\nprovides that it is unlawful \"[t]o make any untrue statement of a material fact or to omit to state a\n\nmaterial fact necessary in order to make the statements made, in light of the circumstances under\n\nwhich they were made, not misleading.\" 17 C.F.R. \u00a7 240.l0b-5.\n\n To state a claim under \u00a7 10(b ), a plaintiff must adequately plead \"(1) a material\n\nmisrepresentation or omission by the defendant; (2) scienter; (3) a connection between the\n\nmisrepresentation or omission and the purchase or sale of a security; (4) reliance upon the\n\nmisrepresentation or omission; ( 5) economic loss; and (6) loss causation.\" Matrixx Initiatives,\n\nInc. v. Siracusano, 563 U.S. 27, 37-38 (2011) (internal quotation marks and citation omitted).\n\n To state a claim under\u00a7 20(a), \"a plaintiff must show (1) a primary violation by the\n\ncontrolled person, (2) control of the primary violator by the defendant, and (3) that the defendant\n\nwas, in some meaningful sense, a culpable participant in the controlled person's fraud.\"\n\nCarpenters Pension Tr. Fund of St. Louis v. Barclays PLC, 750 F.3d 227,236 (2d Cir. 2014)\n\n(quoting ATS! Commc 'ns, 493 F.3d at 108) (quotation marks omitted). If a plaintiff has not\n\nadequately alleged a primary violation, i.e., a viable claim under a provision of the Exchange\n\nAct, then the\u00a7 20(a) claims must be dismissed. See id.\n\n 1. False or Misleading Statements or Omissions\n\n To survive a motion to dismiss, the complaint must adequately plead \"that the defendant\n\nmade a statement that was 'misleading as to a material fact.\"' Matrixx Initiatives, 563 U.S. at 38\n\n 9\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 10 of 46\n\n\n\n\n(emphasis omitted) (quoting Basic Inc. v. Levinson, 485 U.S. 224,238 (1988)). Section l0(b)\n\nand Rule 10b-5 \"do not create an affirmative duty to disclose any and all material information.\"\n\nId. at 44; see also Basic, 485 U.S. at 239 n.17. \"Disclosure of ... information is not\n\nrequired ... simply because it may be relevant or of interest to a reasonable investor.\" Resnik v.\n\nSwartz, 303 F.3d 147, 154 (2d Cir. 2002). An omission of information not affirmatively required\n\nto be disclosed is, instead, actionable only when disclosure of such information is \"necessary 'to\n\nmake ... statements made, in light of the circumstances under which they were made, not\n\nmisleading.'\" Matrixx Initiatives, 563 U.S. at 44 (quoting 17 C.F.R. \u00a7 240.10b-5(b)); see also In\n\nre Vivendi, SA. Sec. Litig., 838 F.3d 223, 239-40 (2d Cir. 2016) (\"pure omissions\" of\n\ninformation, absent a duty to disclose, are not actionable; however, \"half-truths\"-\"statements\n\nthat are misleading ... by virtue of what they omit to disclose\"-are ).\n\n The materiality requirement, meanwhile, \"is satisfied when there is 'a substantial\n\nlikelihood that the disclosure of the omitted fact would have been viewed by the reasonable\n\ninvestor as having significantly altered the total mix of information made available.'\" Matrixx\n\nInitiatives, 563 U.S. at 38 (quoting Basic, 485 U.S. at 231-32). As the Supreme Court has\n\nexplained, a lower standard-such as defining a \"material fact\" as any \"fact which a reasonable\n\nshareholder might consider important\"-would lead corporations to \"bury the shareholders in an\n\navalanche of trivial information[,] a result that is hardly conducive to informed decisionmaking.\"\n\nTSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 448-49 (1976). The \"materiality hurdle\" is,\n\ntherefore, \"a meaningful pleading obstacle.\" In re ProShares Tr. Sec. Litig., 728 F.3d 96, 102\n\n(2d Cir. 2013). However, because of the fact-intensive nature of the materiality inquiry, the\n\nComt may not dismiss a complaint \"on the ground that the alleged misstatements or omissions\n\nare not material unless they are so obviously unimportant to a reasonable investor that reasonable\n\n\n\n 10\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 11 of 46\n\n\n\n\nminds could not differ on the question of their importance.\" ECA, 553 F.3d at 197 (quotation\n\nmarks omitted).\n\n Still, some statements are \"too general to cause a reasonable investor to rely upon them\"\n\nand thus inactionable under the securities laws as \"puffery.\" Id. at 206. For example. \"[g]eneral\n\nexpressions of corporate optimism are 'too indefinite to be actionable under the securities laws.\"'\n\nBoca Raton Firefighters and Police Pension Fund v. Bahas, 506 F. App'x 32, 38 (2d Cir. 2012)\n\n(quoting In re Int'/ Bus. Machs. Corp. Sec. Litig., 163 F.3d 102, 108 (2d Cir. 1998)).\n\n 2. Item 303\n\n Also relevant here, Item 303 of SEC Regulation S-K (\"Item 303\"), 17 C.F.R. \u00a7 299.303,\n\ncompels disclosure of \"any known trends or uncertainties that have had or that the registrant\n\nreasonably expects will have a material favorable or unfavorable impact on net sales or revenues\n\nor income from continuing operations ... [as well as] events that are reasonably likely to cause a\n\nmaterial change in the relationship between costs and revenues (such as known or reasonably\n\nlikely future increases in costs of labor or materials or price increases or inventory\n\nadjustments)[,]\" id. \u00a7 299.303(b)(2)(ii), as well as \"any unusual or infrequent events or\n\ntransactions or any significant economic changes that materially affected the amount of reported\n\nincome from continuing operations[,]\" id. \u00a7 299.303(b)(2)(i).\n\n Although Item 303 itself does not support an independent cause of action, until recently,\n\nthe law in this Circuit was such that \"Item 3 03 's affirmative duty to disclose in Form 10-Qs\n\n[could] serve as the basis for a securities fraud claim under Section lO(b).\" Stratte-McClure v.\n\nMorgan Stanley, 776 F.3d 94, 101-02 (2d Cir. 2015). The Circuit had held that failure to\n\ncomply with an affirmative disclosure obligation, like Item 303, would cause a reasonable\n\ninvestor to assume the nonexistence of \"known trends or uncertainties\" of the type Item 303\n\ncovers, rendering omissions along these lines misleading. Id. However, on April 12, 2024,\n\n 11\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 12 of 46\n\n\n\n\nwhile this motion was pending, the Supreme Court held that \"the failure to disclose information\n\nrequired by Item 303 can support a[\u00a7 l0(b) or] Rule 10b-5(b) claim only if the omission renders\n\naffirmative statements made misleading.\" Macquarie Infrastructure Corp. v. Moab Partners, L.\n\nP., 144 S. Ct. 885,892 (2024). It rejected the Circuit's prior reasoning as wrongly shifting the\n\nfocus of\u00a7 l0(b) and Rule 10b-5(b) \"from fraud to disclosure.\" Id. Thus, Item 303 can support a\n\nclaim under these provisions only where there has been an otherwise-misleading statement. See\n\nid. at 892 n.2.\n\n 3. Application to Statements of Opinion\n\n Like objective statements of material fact, subjective statements of opinion can be\n\nactionable as fraud. As the Supreme Court has clarified, and the Second Circuit has recognized,\n\nsuch statements of opinion can give rise to liability in two distinct ways.\n\n First, \"liability for making a false statement of opinion may lie if either 'the speaker did\n\nnot hold the belief she professed' or 'the supporting fact she supplied were untrue.\"' See Tongue\n\nv. Sanofi, 816 F.3d 199, 209-10 (2d Cir. 2016) (quoting Omnicare, Inc. v. Labs. Dist. Council\n\nConst. Indus. Pension Fund, 575 U.S. 175, 186 (2015)). \"It is not sufficient for these purposes to\n\nallege that an opinion was unreasonable, irrational, excessively optimistic, [or] not borne out by\n\nsubsequent events.\" In re Salomon Analyst Level 3 Litig., 350 F. Supp. 2d 477,489 (S.D.N.Y.\n\n2004). \"The Second Circuit has firmly rejected this 'fraud by hindsight' approach.\" Podany v.\n\nRobertson Stephens, Inc., 318 F. Supp. 2d 146, 156 (S.D.N.Y. 2004) (citing Steve/man v. Alias\n\nResearch, Inc., 174 F.3d 79, 85 (2d Cir. 1999)).\n\n Second, \"opinions, though sincerely held and otherwise true as a matter of fact, may\n\nnonetheless be actionable if the speaker omits information whose omission makes the statement\n\nmisleading to a reasonable investor.\" Sanofi, 816 F.3d at 210 (citing Omnicare, 575 U.S. at 194-\n\n95). To adequately allege that a statement of opinion was misleading through the omission of\n\n 12\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 13 of 46\n\n\n\n\nmaterial information, \"[t]he investor must identify particular (and material) facts going to the\n\nbasis for the issuer's opinion-facts about the inquiry the issuer did or did not conduct or the\n\nknowledge it did or did not have-whose omission makes the opinion statement at issue\n\nmisleading to a reasonable person reading the statement fairly and in context.\" Id. (quoting\n\nOmnicare, 575 U.S. at 194). As the Supreme Court has explained, \"a reasonable investor, upon\n\nhearing a statement of opinion from an issuer, 'expects not just that the issuer believes the\n\nopinion (however irrationally), but that it fairly aligns with the information in the issuers\n\npossession at a time.\"' Id. (quoting Omicare, 575 U.S. at 188-89). \"The core inquiry,\" then, \"is\n\nwhether the omitted facts would 'conflict with what a reasonable investor would take from the\n\nstatement itself.\"' Id. (quoting Omnicare, 575 U.S. at 189).\n\n The Supreme Court has instructed that its ruling that material omissions of facts may\n\nrender a statement of opinion actionable should not be given \"an overly expansive reading,\" and\n\nthat establishing liability on such a theory \"is no small task for an investor\" to meet. Id. at 210\n\n(quoting Omnicare, 575 U.S. at 194). \"Reasonable investors understand that opinions sometimes\n\nrest on a weighing of competing facts, and ... [do] not expect that every fact known to an issuer\n\nsupports its opinion statement.\" Id. (quoting Omnicare, 575 U.S. at 189-90) (internal quotation\n\nmarks omitted) (alterations and internal quotation marks omitted). \"[A] statement of opinion 'is\n\nnot necessarily misleading when an issuer knows, but fails to disclose, some fact cutting the\n\nother way.\"' Id. (quoting Omnicare, 575 U.S. at 189).\n\n Further, statements of opinion must be considered in the context in which they arise.\n\nParticularly in the context of formal documents filed with the SEC, '\" investors do not, and are\n\nright not to, expect opinions contained in those statements to reflect baseless, off-the-cuff\n\njudgments'; '[a]t the same time, an investor reads each statement within such a document ... in\n\n\n\n 13\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 14 of 46\n\n\n\n\nlight of all its surrounding text, including hedges, disclaimers, and apparently conflicting\n\ninformation.\"' Id (quoting Omnicare, 575 U.S. at 190). Moreover \"'the investor takes into\n\naccount the customs and practices of the relevant industry' and ... 'an omission that renders\n\nmisleading a statement of opinion when viewed in a vacuum may not do so once that statement\n\nis considered, as is appropriate, in a broader frame.\"' Id. (quoting Omnicare, 575 U.S. at 190).\n\n 4. Scienter\n\n As noted, Rule 9(b) and the PSLRA require plaintiffs to \"state with particularity facts\n\ngiving rise to a strong inference that the defendant acted with the required state of mind.\" 15\n\nU.S.C. \u00a7 78u-4(b)(2). \"For an inference of scienter to be strong, 'a reasonable person [must]\n\ndeem [it] cogent and at least as compelling as any opposing inference one could draw from the\n\nfacts alleged,\"' and \"the court must take into account plausible opposing inferences.\" ATS!\n\nCommc'ns, 493 F.3d at 99 (quoting Tellabs, 551 U.S. at 324). The requisite mental state is one\n\n\"embracing intent to deceive, manipulate, or defraud.\" Tellabs, 551 U.S. at 319 (quotation\n\nmarks and citation omitted).\n\n Plaintiffs \"may satisfy this requirement by alleging facts (1) showing that the defendants\n\nhad both motive and opportunity to commit the fraud or (2) constituting strong circumstantial\n\nevidence of conscious misbehavior or recklessness.\" ATS! Commc 'ns, 493 F.3d at 99. Where\n\nplaintiffs do not sufficiently allege that defendants had a motive to defraud the public, they \"must\n\nproduce a strongerinference ofrecklessness.\" Kalnit v. Eichler, 264 F.3d 131, 143 (2d Cir.\n\n2001).\n\n Recklessness is \"a state of mind approximating actual intent, and not merely a heightened\n\nform of negligence.\" S. Cherry St., LLC v. Hennessee Grp. LLC, 573 F.3d 98, 109 (2d Cir.\n\n2009) (citation and emphasis omitted). To qualify as reckless, defendants' conduct must have\n\nbeen \"highly unreasonable\" and \"an extreme departure from the standards of ordinary care.\"\n\n 14\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 15 of 46\n\n\n\n\nNovak v. Kasaks, 216 F .3d 300, 308 (2d Cir. 2000) (quoting Rolf v. Blyth, Eastman Dillon & Co.,\n\n570 F.2d 38, 47 (2d Cir. 1978)) (quotation marks omitted).\n\n A plaintiff can establish recklessness by adequately alleging that \"defendants knew facts\n\nor had access to non-public information contradicting their public statements\" and therefore\n\n\"knew or should have known they were misrepresenting material facts.\" In re Scholastic Corp.\n\nSec. Litig., 252 F.3d 63, 76 (2d Cir. 2001) (citing Novak, 216 F.3d at 308). In other words,\n\ndefendants have acted recklessly if they \"understood that their public statements were inaccurate,\n\nor were 'highly unreasonable' in failing to appreciate that possibility.\" In re Sanofi Sec. Litig.,\n\n87 F. Supp. 3d 510, 534 (S.D.N.Y. 2015) (quoting Novak, 216 F.3d at 308), qff'd sub nom,\n\nSanofi, 816 F.3d 199. \"The key, of course, is the honest belief of the management in the truth of\n\ninformation issued to the public.\" In re AstraZeneca Sec. Litig., 559 F. Supp. 3d 453,470\n\n(S.D.N.Y. 2008), aff'd sub nom., State Univ. Ref. Sys. oflll. V. Astrazeneca PLC, 334 F. App'x\n\n404 (2d Cir. 2009).\n\n 5. The PSLRA Safe Harbor for Forward-Looking Statements\n\n The PSLRA amended the Exchange Act to provide a safe harbor for forward-looking\n\nstatements. See 15 U.S.C. \u00a7 78u-5(c). Forward-looking statements are defined as those that\n\ncontain, among other things, \"a projection of revenues, income, [or] earnings,\" \"plans and\n\nobjectives of management for future operations,\" or \"a statement of future economic\n\nperformance.\" Id.\u00a7 78u-5(i)(l). A forward-looking statement is not actionable ifit \"is\n\nidentified and accompanied by meaningful cautionary language or is immaterial or the plaintiff\n\nfails to prove that it was made with actual knowledge that it was false or misleading.\" Slayton v.\n\nAm. Exp. Co., 604 F.3d 758, 766 (2d Cir. 2010). Because the statute is written in the disjunctive,\n\nstatements are protected by the safe harbor if they satisfy any one of these three categories. Id.\n\nMateriality is defined above; the other two categories are defined as follows:\n\n 15\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 16 of 46\n\n\n\n\n Meaningful cautionary language: To qualify as \"meaningful,\" cautionary language\n\n\"must convey substantive information about factors that realistically could cause results to differ\n\nmaterially from those projected in the forward-looking statements.\" Id. at 771 (quoting H.R.\n\nConf. Rep. 104-369, at 43 (1995)). Language that is \"vague\" or \"boilerplate\" does not suffice.\n\nId. at 772. \"To determine whether cautionary language is meaningful, courts must first 'identify\n\nthe allegedly undisclosed risk' and then 'read the allegedly fraudulent materials-including the\n\ncautionary language-to determine if a reasonable investor could have been misled into thinking\n\nthat the risk that materialized and resulted in his loss did not actually exist.\"' In re Delcath Sys.,\n\nInc. Sec. Litig., 36 F. Supp. 3d 320,333 (S.D.N.Y. 2014) (quoting Halperin v. eBanker\n\nUSA.com, Inc., 295 F.3d 352,359 (2d Cir. 2002)). A plaintiff may establish that cautionary\n\nlanguage is not meaningful \"by showing, for example, that the cautionary language did not\n\nexpressly warn of or did not directly relate to the risk that brought about plaintiffs' loss.\"\n\nHalperin, 295 F.3d at 359.\n\n Actual knowledge: The scienter requirement for forward-looking statements-actual\n\nknowledge-is \"stricter than for statements of current fact. Whereas liability for the latter\n\nrequires a showing of either knowing falsity or recklessness, liability for the former attaches only\n\nupon proof of knowing falsity.\" Slayton, 604 F.2d at 773 (quoting Inst. Invs. Grp. v. Avaya, Inc.,\n\n564 F.3d 242, 274 (3d Cir. 2009)) (internal quotation marks omitted). And under the heightened\n\npleading standards, which apply to both scienter requirements, plaintiffs must \"state with\n\nparticularity facts giving rise to a strong inference that the defendant acted with the required state\n\nof mind.\" 15 U.S.C. \u00a7 78u-4(b)(2). \"For an inference of scienter to be strong, 'a reasonable\n\nperson [must] deem [it] cogent and at least as compelling as any opposing inference one could\n\ndraw from the facts alleged.\"' ATS!, 493 F.3d at 99 (quoting Tellabs, 551 U.S. at 324).\n\n\n\n 16\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 17 of 46\n\n\n\n\nIII. Discussion\n\n Defendants move to dismiss all claims on two broad grounds: that (1) the challenged\n\nstatements are not actionable, as each is either protected by the PSLRA safe harbor, a non-\n\nactionable statement of opinion, puffery, or an accurate statement of fact, Def. Br. at 19-22; and\n\n(2) in any event, in the AC does not adequately plead scienter, Def. Br. at 22-25. 3\n\n For the reasons that follow, defendants are correct on both points. The Court thus grants\n\nthe motion to dismiss in its entirety.\n\n A. Allegedly Actionable Statements\n\n The Amended Complaint identifies 26 distinct statements-made in a range of fora-as\n\nallegedly materially false or misleading. The Court addresses these chronologically, sorting the\n\ncommunications at issue into eight groups.\n\n 1. Statements Made During November 1, 2021 Earnings Call\n\n On November 10, 2021, Dutch Bros issued a press release detailing its performance in\n\nthe third quarter of 2021, ending on September 30, 2021. That day, Dutch Bros held a\n\nconference call with analysts and investors to discuss those results. The AC challenges the\n\nfollowing four statements made on that earnings call:\n\n \u2022 Ricci said, addressing the number of shops Dutch Bros opened in the third quarter\n of 2021: \"A record 33 shops opened in this quarter, of which 30 were company-\n operated shops. The prior opening record was 26 shops in the fourth quarter of\n 2020. We achieved this record despite the well documented industry supply chain\n challenges. The supply chain issues impacted everything from building materials\n to equipment to product.\" 11/10/21 Earnings Call Tr. 8; see also AC ,r 56.\n\n3 Defendants also argue that the AC fails to plead fraud with the particularity Rule 9(b) requires.\n\nSee Def. Br. at 10-11; Born v. Quad/Graphics, Inc., 521 F. Supp. 3d 469, 477-79 (S.D.N.Y.\n2021) (complaint, which \"rel[ied] primarily on bolded text in half-page block quotations to\nidentify the allegedly misleading statements . . . [and] ... include[ d] a substantially similar\nparagraph containing some variation of the same five or so generalized, conclusory statements,\"\nfailed Rule 9(b )). Finding the AC deficient on other grounds, the Court does not reach this issue.\nDefendants also challenge the AC's Section 20(a) claim as dependent on ill-pled primary\nviolations of Section l0(b). Def. Br. at 25. That argument, as explained below, has merit.\n 17\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 18 of 46\n\n\n\n\n \u2022 Jemley said, in response to a question about why shop margins had been lower in\n third quarter 2021 versus the prior 12 months: \"And you may have noted that we\n did pulse prices in early November. We have not taken any prices in our system\n of any significance since pre COVID. And so we've absorbed a little bit of\n general inflation, normal inflation, whether it's wage changes in markets that had\n legislated minimum wage, and they're getting to their last tiers or other general\n wage inflation, and we've been very thoughtful and careful about price escalation.\n And again, we've instituted a price increase to defend our margins going forward.\n So you've got both a seasonality aspect and then the lag of the current price\n increase versus what's happened inflationally over the last few quarters.\"\n 11/10/21 Earnings Call Tr. 13; see also AC 157.\n\n \u2022 Jemley said, in response to a question about how to \"think about the right\n [pricing] level in periods of outsized inflation\"-whether to keep pricing higher to\n hold margins or price more modestly to protect traffic: \"Okay. So historically,\n over the years, 1% to 2% pricing. And as I mentioned, very low pricing since pre\n COVID. The great thing, and Joth mentioned it in his script, that we have 12\n ingredients. We have a-I don't want to simplify the supply chain and dismiss the\n great effort our teams make to get things to stores. But we don't have a\n complexity that others do, and therefore, we're not nearly as subject, at least to\n date, to the types of inflationary pressures that others are having. We believe that\n that price increase we just took will defend our margins again going into next\n year. And we want to just stay really focused on genuinely giving value to our\n customers, and we'll just monitor it, right? We don't have any hard and fast\n philosophy. It's an environment today where you've got to be able to pivot\n quickly, and that's the approach we'd like to take. I think we expect our margins\n to generally hold up. They are industry-leading, and we're very grateful to have\n that, and we'll watch this over time.\" 11/10/21 Earnings Call Tr. 14; see also AC\n 157.\n\n \u2022 Jemley said, in response to a follow-up question on the previous answer asking\n what Dutch Bros' \"basket of inflation was for commodity and labor in the third\n quarter\": \"The basket is low single digits. And inflation, overall, it's very mild\n and tempered. And we don't say that thinking we're immune to the struggles that\n could happen going forward. But we've been very fortunate. Dairy is not really\n up, that's a big component of our cost structure. We're forward out on coffee,\n very long. And we have about a 3-bean blend that we can pivot around and\n manage our costs. And so we feel-we don't see the kind of pressure others are\n seeing.\" 11/10/21 Earnings Call Tr. 14; see also AC 158.\n\n The AC pleads that the reason each statement is false or misleading is that Defendants\n\nfailed to disclose, alongside it, that ( 1) they were \"experiencing increased costs relating to\n\ncommodities, including on dairy and petroleum,\" (2) as a result, Dutch Bros was experiencing\n\n 18\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 19 of 46\n\n\n\n\n\"increased margin pressure and decreased earning and profitability,\" and (3) thus, \"positive\n\nstatements about [Dutch Bros'] business, operations, and prospects were materially misleading\n\nand/or lacked a reasonable basis.\" AC ,r 60. The AC notes that in November 2021, at the time\n\nthese statements were made, \"inflation was skyrocketing,\" and \"dairy prices were already rapidly\n\nrising (as opposed to being 'not really up'), with tbe USDA's 2021 all-milk price[] forecasted at\n\n$18.45 per cwt [hundredweight] in October (up from $18.15 per cwt in September) and 2022 all-\n\nmilk price[] forecasted at $19.20 per cwt (up from $18.40 per cwt in September).\" Id It adds\n\nthat, after the class period, Jemley \"conceded that inflation actually 'began to show in Q2 of\n\n2021. \"' Id.\n\n These allegations, however, do not plead anything actionable under the PSLRA. As to\n\nthe first two statements, the AC does not explain, let alone with particularity, how Ricci and\n\nJemley's apparently accurate reports about Dutch Bros' shop openings and its price increase in\n\nQ3 2021 were made misleading by the absence of a reference to inflation. Even if \"inflation was\n\nskyrocketing,\" AC ,r 60, it would not make inaccurate tbe company's report as to the number of\n\nshops it had opened in that quarter. Nor can Dutch Bros' acknowledgment that its lower shop\n\nmargins in 3Q 2021 were partially attributable to \"what's happened inflationally\" be fairly cast\n\nas misleadingly positive for failing to identify the actual inflation rates. Cf 11/10/21 Tr. 13. At\n\nbottom, both statements recite apparently truthful statements about past events. And \"a violation\n\nof federal securities law cannot be premised upon a company's disclosure of accurate historical\n\ndata.\" Boca Raton Firefighters, 506 F. App'x at 38-39 (quoting In re Sofamor Danek Group,\n\nInc., 123 F.3d 394,401 n.3 (6th Cir. 1997)); see also Nadojfv. Duana Reader, Inc., 107 F.\n\nApp'x 250, 252 (2d Cir. Aug. 17, 2004) (\"Accurate statements about past performance are self\n\nevidently not actionable under the securities laws[.]\").\n\n\n\n 19\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 20 of 46\n\n\n\n\n As to the third statement, by Jemley, it is one of opinion: Jemley's comment captures his\n\nexpressed \"belie[f] that that price increase [Dutch Bros had] just t[ aken] [would] defend [their]\n\nmargins again going into next year.\" 11/10/21 Tr. 14. For this statement to be actionably false\n\nor misleading, the AC would need to plead either that Jemley did not actually hold this opinion\n\nor that the facts in support he referenced were untrue. See Sanoji, 816 F.3d at 199. The AC\n\nrelies on its contention that inflation and increased commodity costs were already evident in\n\nNovember 2021. See AC, 60. But this argument does not say anything about whether Jemley\n\nthen genuinely believed that price increases could enable Dutch Bros to preserve its margins\n\n\"going into [the] next year.\" 11/10/21 Tr. 14. And Jemley's post-class period statement that\n\ninflation \"began to show in Q2 of 2021\" does not connote a disingenuous belief that Dutch Bros\n\ncould effectively preserve its margins through price increases. See Sanoji, 816 F.3d at 211 (no\n\nliability where opinion statements did not conflict with information in possession at time\n\nstatements were made). Further, the AC does not impugn as false or misleading the facts Jemley\n\ncited in support of his opinion: that Dutch Bros had relatively fewer inputs subject to inflationary\n\npressure or supply chain issues than others in the market, and that, \"to date\" in November 2021,\n\nthese inputs had not faced intense inflationary pressures. Id; see also AC , 60. That dairy and\n\npetroleum costs were rising is consistent with-if not the impetus for-Jemley's statement. See\n\nGillis v. QRX Pharma Ltd, 197 F. Supp. 3d 557, 589-90 (S.D.N.Y. 2016) (opinion statement not\n\nactionable under PSLRA where operative complaint did not allege any facts cited in stating\n\nopinions were themselves false).\n\n Finally, as to the fourth statement, the AC does not adequately plead that Jemley's\n\nstatement about Dutch Bros' \"basket of inflation\" was false or misleading. In selectively quoting\n\nthe statement, the AC tellingly omits its factual crux: that Dutch Bros' \"basket of inflation\" was\n\n\n\n 20\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 21 of 46\n\n\n\n\nin the low single digits. Compare AC ,r 58, with 11/10/21 Earnings Call Tr. 14. The general,\n\nqualitative statements that followed-that inflation \"overall\" was \"very mild and tempered,\" and\n\nthat dairy prices specifically were \"not really up\"-must be read in conjunction with that\n\nquantitative disclosure. See 17 C.F .R. \u00a7 240.1 0b-5 (unlawful to \"omit to state a material fact\n\nnecessary in order to make the statements made, in light of the circumstances under which they\n\nwere made, not misleading\" (emphasis added)). No facts pled in the AC contradict that factual\n\nstatement. See generally AC ,r 60. And the AC does not plead that other species of data bearing\n\non inflation-regarding the Consumer Price Index (\"CPI\"), or dairy products, or some other\n\n\"basket\" of goods-were necessary to make Jemley's statement non-misleading. See Matrixx\n\nInitiatives, Inc., 563 U.S. at 44--45. On the facts pled, that statement, made in response to an\n\ninvestor's question of \"can you share maybe what your basket of inflation was for commodity\n\nand labor in the third quarter?\" 11/10/21 Tr. 13, was not misleading. On the contrary, Jemley's\n\nanswer gave reasonable investors additional context for his more subjective statements that\n\ninflation was \"mild\" and dairy prices were \"not really up.\" See, e.g., In re Sanofi-Aventis Sec.\n\nLitig., No. 07 Civ. 10279 (GBD), 2009 WL 3094957, at *5 (S.D.N.Y. Sept. 25, 2009), on\n\nreconsideration, 2010 WL 2985912 (S.D.N.Y. July 27, 2010) (\"[T]aken in context with the\n\npublicly available data, defendants' conclusions that the negative side effects were 'relatively\n\nmild and self-limiting' and their other characterizations, amount to little more than expressions\n\nof opinion which are not actionable misstatements under Rule !0b-5.\"); In re Xerox Corp. Sec.\n\nLitig., 935 F. Supp. 2d 448,488 n.8 (D. Conn. 2013) (\"[A] company has no duty to disparage its\n\nown competitive position in the market where it has provided accurate hard data from which\n\nanalysis! and investors can draw their own conclusions about the company's condition[.]\").\n\nAccordingly, the AC does not adequately plead that this statement was false or misleading.\n\n\n\n 21\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 22 of 46\n\n\n\n\n 2. Statements Made in November 12, 2021 Quarterly Report\n\n Rein next challenges three statements from Dutch Bros' third-quarter 2021 Form 10-Q,\n\nfiled with the SEC on November 12, 2021. AC ,r,r 61-64. These are:\n\n \u2022 Under the \"Commodity Risks\" subsection of the broader \"Quantitative and\n Qualitative Disclosures about Market Risk\" section, the form states: \"Our\n profitability is dependent on, among other things, our ability to anticipate and\n react to changes in the costs of key operating resources, including beverage,\n energy and other commodities. We have been able to partially offset cost\n increases resulting from several factors, including market conditions, shortages or\n interruptions in supply due to weather or other conditions beyond our control,\n governmental regulations and inflation, by increasing our menu prices, as well as\n making other operational adjustments that increase productivity. However,\n substantial increases in costs and expenses could impact our operating results to\n the extent that such increases cannot be offset by menu price increases.\" 11/12/21\n Form 10-Q at 46; see also AC 'if 61.\n\n \u2022 Under the \"Impact oflnflation\" subsection of the same section, the form states:\n \"The primary inflation factions affecting our operations are commodity and\n supplies, energy costs, and materials used in the construction of company-\n operated shops. Our leases require us to pay taxes, maintenance, repairs,\n insurance, and utilities, all of which are generally subject to inflationary increases.\n Finally, the cost of constructing our restaurants is subject to inflation, increasing\n the costs of labor and materials, and resulting in higher rent expense on new\n shops.\n\n While we have been able to partially offset inflation and other changes in the\n costs of core operating resources by gradually increasing menu prices, coupled\n with more efficient purchasing practices, productivity improvements and greater\n economies of scale, there can be no assurance that we will be able to continue to\n do so in the future. From time to time, competitive conditions could limit our\n menu pricing flexibility. In addition, macroeconomic conditions could make\n additional menu price increases imprudent. There can be no assurance that future\n cost increases can be offset by increased menu prices or that increased menu\n prices will be fully absorbed by our guests without any resulting change to their\n visit frequencies or purchasing patterns. In addition, there can be no assurance\n that we will generate same shop sales growth in an amount sufficient to offset\n inflationary or other cost pressures.\" 11/12/21 Form 10-Q at 46-47; see also AC\n 'if 62.\n\n \u2022 Under the \"Risk Factors\" section, the form states: \"We also purchase significant\n amounts of dairy products, particularly milk, to support the needs of our shops.\n Additionally, and although less significant to our operations than coffee or dairy,\n other commodities, including but not limited to plant-based 'milks,' tea, sugar,\n\n\n 22\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 23 of 46\n\n\n\n\n syrups, energy and packaging material, such as plastics, corrugate, and carming\n materials, are important to our operations. Increases in the cost of dairy products\n and other commodities, such as petroleum which in turn may increase the cost of\n our packing materials, or lack of availability, whether due to supply shortages,\n delays or interruptions in processing, or otherwise, especially in international\n markets, could harm our business.\" 11/12/21 Form 10-Q at 58; see also AC ,r 63.\n\nThe AC alleges that these statements were false or misleading essentially for the same reasons as\n\nthe statements challenged in the November 10, 2021 Earnings Call. See AC if 64.\n\n For substantially the same reasons as above, the AC falls far short of pleading with the\n\nrequired particularity that these statements were false or misleading. On the contrary, based on\n\nthe pleadings, each presented a measured assessment of the state of play as of the end of the third\n\nquarter of 2021: Dutch Bros had thus far coped with increased costs by increasing prices, but this\n\nstrategy was not assured of success going forward, with rising dairy, coffee, and petroleum\n\nprices presenting a particular risk to \"harm [Dutch Bros'] business.\" 11/12/21 Form 10-Q at 58.\n\nThe AC characterizes these excerpts as misleadingly \"positive statements about the Company's\n\nbusiness, operations, and prospects,\" AC if 64, but the qualified and caveated quality of nearly\n\nevery full sentence in the Form 10-Q belies that characterization. 4\n\n Moreover, these challenged statements fall comfortably within the PSLRA safe-harbor,\n\nas they are both forward-looking and replete with meaningful cautionary language. \"To\n\ndetermine whether cautionary language is meaningful, courts must first 'identify the allegedly\n\nundisclosed risk' and then 'read the allegedly fraudulent materials-including the cautionaty\n\nlanguage-to determine if a reasonable investor could have been misled into thinking that the\n\nrisk that materialized and resulted in his loss did not actually exist.'\" In re Delcath Sys., Inc.\n\nSec. Litig., 36 F. Supp. 3d 320,333 (S.D.N.Y. 2014) (quoting Halperin v. eBanker USA.com,\n\n\n\n4 Tellingly in this respect, the AC omits to quote the bulk of Dutch Bros' disclosures in its\n\n\"Impact ofinflation\" subsection. See AC if 62.\n 23\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 24 of 46\n\n\n\n\nInc., 295 F.3d 352, 359 (2d Cir. 2002)). Here, the allegedly undisclosed risk is addressed\n\nsquarely by the cautionary language, as both address the potential impact on Dutch Bros' future\n\nmargins should petroleum and dairy costs continue to rise. In its Form 10-Q, Dutch Bros\n\nelaborated on its then-strategy for handling inflation, but it repeatedly qualified that discussion\n\nwith the caveat that increased petroleum, dairy, and other costs could defeat that strategy. Those\n\ncandid assessments are not actionable under the PSLRA. See, e.g., In re NovaGold Res. Inc. Sec.\n\nLitig., 629 F. Supp. 2d 272, 294 (S.D.N.Y. 2009) (meaningful cautionary language satisfied\n\nPSLRA safe-harbor requirement where it warned that \"[p]roject's economic viability [was]\n\nsubject to risks regarding capital costs, the very risks which ultimately materialized.\"); In re\n\nTurquoise Hill Res. Ltd. Sec. Litig., 625 F. Supp. 3d 164, 216-217 (S.D.N.Y. 2022) (company-\n\nspecific warnings concerning significant uncertainty of \"the timing and cost of the construction\"\n\nof certain project sufficient to invoke safe harbor in case alleging fraud based on the same);\n\nOlkey v. Hyperion 1999 Term Tr., 98 F .3d 2, 5 (2d Cir.1996) (defendant not liable where it gave\n\n\"prominent and specific\" cautions regarding \"exactly the risk the plaintiffs claim was not\n\ndisclosed\"). To the extent Reins claim is that Dutch Bros' failure to refer to specific inflationary\n\nrates precludes the PSLRA safe-harbor defense, that is wrong. The absence of that level of\n\nprecision could not have misled a reasonable investor to think that the risk presented by\n\nincreased commodity costs did not exist. See In re Delcath Sys., 36 F. Supp. 3d at 333.\n\n Rein's attempt to salvage these claims by alleging Item 303 violations is unavailing, for\n\nmultiple reasons. At the threshold, because the above statements are not false or misleading, the\n\nSupreme Court's recent decision in Macquarie Infrastructure Corporation v. Moab Partners,\n\nL.P., 144 S. Ct. 885 (2024), appears to bar such a claim, insofar as it precludes claims based\n\nsolely on an alleged Item 303 violation. Id. at 889 (Item 303 cannot support a private action\n\n\n\n 24\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 25 of 46\n\n\n\n\nunder Rule 10b-5(b) \"even if the failure does not render any 'statements made' misleading).\n\nMoreover, the AC's Item 303 arguments fail on their own terms. It alleges that Dutch Bros'\n\ninclusion of more specific disclosures in SEC filings after its financial troubles in the first quarter\n\nof 2022 shows that the above earlier disclosures did not \"sufficiently convey the then-present\n\nrisk that rising dairy and commodities prices were significantly outstripping Dutch Bros' pricing\n\nand/or margins\" during 2021. AC~~ 99, 101. But that argument rests on a logical fallacy.\n\nDutch Bros' first quarter 2022 SEC filings report a \"jump\" in dairy and gas prices in 2022 that\n\noutpaced the company's pricing model, with adverse consequences including margin pressure.\n\nId. 98, 100. These filings thus revealed that the very risk that the company had identified in\n\nits third quarter 2021 report had transpired: that \"substantial increases in costs and expenses\n\ncould impact our operating results to the extent that such increases carmot be offset by menu\n\nprice increases.\" Id 61. If anything, Dutch Bros' 2022 filings reflect the foresightedness of its\n\n2021 filings.\n\n The AC thus does not adequately plead that any statement in the November 12, 2021\n\nQuarterly Report are actionable.\n\n 3. January 10, 2022 Form 8-K & January 11, 2022 Conference Interview\n\n The AC alleges that the following statements in Dutch Bros' Form 8-K, filed with the\n\nSEC on January 11, 2022, and in an interview of Ricci the same day at an industry conference\n\ncommenting on the material in the Form 8-K, were materially false or misleading: 5\n\n \u2022 A press release submitted with the Form 8-K quoting Ricci as \"stating that Dutch\n Bros' '2020 and 2021 shop classes are performing at or above our volume\n\n5 The AC, in~ 66, mistakenly refers to a statement which the parties now agree was made a year\n\nlater, in January 2023, outside the class period. See Def. Br. at 17 n.8; PL Reply at 7 n.3\n(\"Plaintiff incorrectly attributed the language in~ 66 to the 2021 ICR Conference when it was, in\nfact, from a 2023 Conference. Plaintiff retracts that statement.\"). The Court disregards this\nallegation.\n\n\n 25\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 26 of 46\n\n\n\n\n expectations and within our margin expectations,' and that the Company expected\n 'fourth quarter revenue to exceed the upper end of the previously provided\n guidance, with mature shop level margins in line with expectations.\"' AC ,r 65. 6\n\n \u2022 Ricci, when asked by an interviewer at the conference to talk about \"any supply\n chain challenges that you're facing\" said: \"You know we've certainly see things\n get a little bit better as the po1is have freed up on the west coast and [] You know\n doesn't mean we are having challenges, but we know nothing that's gotten in the\n way of our ability to serve the customer, you may get a cup that doesn't have any\n printing on it, because the ink isn't available or the lid on our cups used to be blue\n now they're white because you can't get them[.] You know color differently, but\n you know, fortunately, our team's done a great job of managing some of the\n challenges that they've had they've gotten creative[.] And we haven't had the\n issues I you !mow we look at supply chain and inflation, I think tile one area we're\n probably most concerned about is freight[.] And we seem to be doing pretty well\n on the cost of goods side and working with our suppliers on that end but afraid, as\n we grow across the country I think we're realizing[.] You know how much that\n impact is going to have you know, on us and learning about what the long term\n might look like.\" 1/11/2022 ICR Conference Tr. 7; see also AC ,r 67.\n\nThe AC asserts that these statements were materially false or misleading on essentially the same\n\ngrounds as it challenges the November 2021 statements. The AC adds that:\n\n [A]t the time each statement was made, the macroeconomic conditions plaguing\n the U.S. economy and, in tum, Dutch Bros' business, were (as opposed to \"get[ting]\n a little bit better\") getting far worse, as the FOMC and Federal Reserve Chair\n Powell had now explicitly recognized inflation was not \"transitory,\" Powell stated\n his expectation that elevated inflation would persist through \"the middle of' 2022,\n and the CPI was up 6.8% year-over-year in November. At the time each statement\n was made, dairy prices were also rapidly rising, with the USDA's 2021 all-milk\n price was forecasted at $18.60 per cwt in December (up from $18.50 per cwt in\n November) and 2022 all-milk price was forecasted at $20.75 per cwt (up from\n $20.25 per cwt in November). Indeed, CW! recalled that in or around\n December/late 2021, CW! 'steam was tasked with finding solutions to the issues\n ofrising dairy costs and tighter dairy supply.\n\nId ,r 68.\n\n\n\n\n6 The Court is unable to find the above-quoted language in the Form 8-K in the form produced\n\nby counsel on this motion. Regardless, because the AC alleges and defendants do not dispute\nthat the statement was included in this filing, the Court considers it.\n 26\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 27 of 46\n\n\n\n\n There is, however, a mismatch between the fact that the AC faults Dutch Bros for\n\nomitting (national inflationary trends) and the statements it challenges (the press release and\n\nRicci' s comments on Dutch Bros' metrics and performance during a discrete timeframe ).\n\n\"[R]evealing one fact about a subject does not trigger a duty to reveal all facts on the subject, so\n\nlong as 'what was revealed would not be so incomplete as to mislead.'\" Richman v. Goldman\n\nSachs Group, Inc., 868 F. Supp. 2d 261,274 (S.D.N.Y. 2012) (quoting In re Bristol Myers, 586\n\nF. Supp. 2d 148, 160 (S.D.N.Y. 2008)). Here, the company discussed shop margins for the\n\nfourth quarter of2021 in a press release (margins which the AC does not contend were errantly\n\nreported or below the company's targets, cf AC ,r,r 102-09) and referenced inflation in passing\n\nduring an interview response with respect to how supply chain issues had affected the company.\n\nAddressing those distinct points did not oblige Dutch Bros to comment on \"macroeconomic\n\nconditions plaguing the U.S. economy.\" AC ,r 68; see also Jiajia Luo v. Sogou, Inc., 465 F.\n\nSupp. 3d 393,409 (S.D.N.Y. 2020) (where statement did not touch on certain compliance\n\nmeasures, not misleading to omit facts regarding those measures); In re Ferroglobe PLC Secs.\n\nLitig., 19 Civ. 629 (RA), 2020 WL 6585715, at *7 (S.D.N.Y. Nov. 10, 2020) (\"Ferroglobe's\n\nstatements about macro-trends within its industry did not require an accompanying disclosure\n\nabout the ancillary issues of pricing issues from that quarter. Nor did the mere mention of the\n\nconcept of demand trigger a duty to disclose the Company's current financial health.\").\n\n The AC's references to statements by a confidential witness (CW!) do not alter this\n\nanalysis. See AC ,r 68. CW! 's allegations-that the CW! 'steam was tasked with finding\n\nsolutions to rising dairy costs and tighter dairy supply-are not in tension with the challenged\n\nstatements. See id. Nowhere in the challenged comments from early 2022 did Dutch Bros\n\nsuggest that dairy was not a concern on which it was deploying resources. On the contrary, in\n\n\n\n 27\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 28 of 46\n\n\n\n\nthe interview, Ricci stated that \"our team's done a great job of managing some of the challenges\n\nthat they've had they've gotten creative\" and that \"we seem to be doing pretty well on the cost of\n\ngoods side and working with our suppliers on that end.\" Id. ,r 67. These comments fairly\n\nconveyed that the company was addressing the cost of goods and that he believed the team\n\nworking on finding solutions to rising dairy costs had thus far done a good job.\n\n The AC thus fails to adequately plead that these comments were false or misleading.\n\n 4. March 1, 2022 Earnings Call\n\n The AC next challenges two sets of statements made during a March 1, 2022 conference\n\ncall with analysts and investors to discuss the content of the Form 8-K that Dutch Bros filed with\n\nthe SEC that same day, which reported the company's performance during the fourth quarter\n\n(and thus the entirety) of 2021. AC if 69. The first set consists of these:\n\n \u2022 During the call, Ricci said: \"While we are not immune to margin pressures but are\n managing it appropriately, we continue to look for operational improvements and\n further opportunities in our market-based pricing model. In addition, we will use\n segmentation, personalization and innovation to excite our customers about our\n unique premium and, at times, higher-margin beverage offerings. In November, we\n successfully took a modest price increase of2.9%. It was our first since prior to the\n pandemic and was well received by our customers, operators and franchisees.\"\n 3/1/2022 Earnings Call at 6; see also AC ,i 70.\n\n \u2022 Jemley stated: \"[A]s we moved through the pandemic, we were very careful not to\n escalate our menu prices. In November, we took a modest price increase, which was\n our first measurable price increase in over a year for our company shops. That price\n advance landed well for us. It was appropriate relative to our desired positioning in\n the market. ... Let's quickly look at the movement in beverage, food and packaging\n costs and labor costs, given those are the 2 most significant costs, and the industry in\n general has been challenged by these 2 areas over much of 2021. Beverage, food and\n packaging costs increased from 22.4% to 25.3% or 290 basis points. 120 basis points\n of that increase is related to the change in discounts. That leaves 170 basis points of\n real changes.\" 3/1/2022 Earnings Call at 8-9; see also AC ,i 71.\n\n \u2022 Jemley stated with respect to the fourth quarter of2021: \"Beverage, food and\n packaging costs increased from 22.9% to 26.8% or 390 basis points. 190 basis points\n of this increase is related to the change in discounts. That leaves 200 basis points of\n real change or 30 basis points more than the full year trends noted above. Two things\n\n\n 28\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 29 of 46\n\n\n\n\n to point out: first, we incurred a bit more ingredient costs, driven by inflation; and\n second, accelerating new shop development means we will have some cost\n efficiencies as we open up new shops and establish logistics in new markets . . . . We\n made the conscious decision to accelerate growth in the fourth quarter and into 2022.\n And while we always try to balance the profit growth equation in the near term, we\n are also keen to focus on long-term high-quality revenue that will yield lasting profit\n and growth.\" 3/1/2022 Earnings Call at 9-10; see also AC, 71.\n\nThe AC claims that these statements gave a falsely positive impression of the company's\n\nfinancial situation without taking into inflationary pressure that it alleges was, by March 1, 2022,\n\n\"decimat[ing] the Company's projected earnings and margins.\" AC, 76.\n\n These statements, each made during introductory remarks to a call summarizing fourth\n\nquarter and full-year performance, are not actionable. Each reported recent performance and\n\nassociated data. The AC does not allege that any of the data cited by Ricci and Jemley, or their\n\nlimited commentary on it, was inaccurate. The AC instead emphasizes that later statements by\n\nDutch Bros situated its troubles combatting inflation as starting during the first quarter of 2022.\n\nSee id. But that does not put in question the accuracy of the historical data set out by J emley or\n\nRicci with respect to Q4 or year-end 2021 performance. Accurate statements of historical data\n\nare not a basis for Rule !0b-5 liability. See Boca Raton Firefighters, 506 Fed. App'x at 38-39.\n\n The AC also challenges these statements from the March 1, 2022 Earnings Call:\n\n \u2022 Jemley, when asked by a researcher ifhe anticipated additional price increases\n beyond the relatively modest one Dutch Bros had already implemented, stated: \"So\n we look typically in a normal time frame. We're going to look at our pricing\n windows every 6 months, right, in the fall before holiday, in the spring before\n summer. And so we're very mindful of that. I think we've been fortunate to not have\n a lot of inflation drag, both in '21 and frankly, moving into early '22. And so we\n haven't felt compelled. We don't price to a margin. First of all, we want to price to\n what consumers are willing to pay. And so we're just-honestly, we're flexible and\n we're watching that closely, but we do, with the mindset of our relative position in\n the market and the customer, not to seek to a margin level. But we are feeling good\n as we enter '22 with the trajectory of our margins, given everything going on.\"\n 3/1/2022 Earnings Call at 15; see also AC, 73.\n\n\n\n\n 29\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 30 of 46\n\n\n\n\n \u2022 Jemley said, when asked \"what guidance might be for the first quarter or the full year\n '22 on that restaurant operating margin line\" given inflationary pressures: \"Yes. So\n we're fortunate that the 2 big costs, cost of goods and labor, we don't have any real\n significant upward momentum in the labor line. So we're starting halfway better than\n everybody else, to begin with. And then secondly, we have a pretty simple pantry of\n goods. What we're really dealing with right now is freight and logistics costs going\n up. But we're able to do, as we've shown in Q4 and the walk I gave you in COGS,\n we're really able to handle that pretty effectively, and we'll get a full quarter of the\n price impact from November in our Ql. In terms of guiding a specific margin for QI,\n I'd prefer not to do that. It is a-Q4 is the lowest seasonality, Q 1 is the next lowest\n seasonality. And then we kind of get into Q2. But I just think from a----other than the\n discount rollover from a year-over-year perspective, we're just not feeling\n compression in margins. And the biggest thing for us is our labor costs are stable.\"\n 3/1/2022 Earnings Call at 16; see also AC 174.\n\n \u2022 Jemley said, in response to a questioner \"looking to better contextualize the guidance\n [Dutch Bros had provided] for lQ [2022]\": \"Yes. It was softer in January. It was\n better in February, less outages. We're sitting ahead of the mid-singles right now.\n We're-like everybody, don't know where the world is going to go over the next 30\n days with all that's going on. And so we're just being a little tepid about how we\n look at things. It doesn't really move the needle much. The biggest revenue driver is\n annualization of new stores and new stores getting added. So it gets a lot of talk track\n and it is important to the underlying health of the business, but it's really not that\n financially meaningful right now as fast as we're growing the top line. That's why we\n don't -- we try not to overthink it.\" 3/1/2022 Earnings Call at 17; see also AC 175.\n\nThe AC alleges that these statements were materially false or misleading because Dutch Bros did\n\nnot disclose the effect of increased dairy and petroleum costs: \"[D]espite reassuring the market\n\ntwo-thirds of the way through 1Q22 that the 1Q22 results would be positive, and, in particular,\n\nthat the Company's margins were healthy and not being compressed,\" the company later\n\n\"reveal[ ed], on May 11, 2022, that rising inflation and commodities prices had, in truth,\n\ndecimated the Company's projected earnings and margins in 1Q22.\" AC 176.\n\n This claim fails for multiple reasons. First, the AC simplistically describes the above\n\nlanguage as \"reassuring the market two-thirds of the way through 1Q22 that the 1Q22 results\n\nwould be positive.\" Id. Reading the statements on the call in full and in context, they were more\n\nnuanced and qualified. Jemley noted that Dutch Bros had \"been fortunate to not have a lot of\n\n\n\n 30\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 31 of 46\n\n\n\n\ninflation drag, both in '21 and frankly, moving into early '22,\" but that positive assessment was\n\nsupported by the company's performance data and not contradicted by any data cited in the AC.\n\nAnd the speakers' guardedly optimistic statements about the company's anticipated performance\n\nand margins were by and large conditional. 3/1/2022 Earnings Call at 15-17. Jemley stated that\n\nDutch Bros was \"feeling good as we enter '22 with the trajectory of our margins, given\n\neverything going on[,]\" id. at 15 (emphasis added), adding that ''.from a year-over-year\n\nperspective, we're just not feeling compression in margins,\" id. at 16 (emphasis added). But, he\n\nadded that Dutch Bros was remaining \"flexible\" as the company could not \"know where the\n\nworld is going to go over the next 30 days with all that's going on,\" id. at 16-17, and that the\n\nexecutives could evaluate the impact and efficacy of the company's pricing strategy to deal with\n\ncost of goods increases only after they received \"a full quarter\" of data \"regarding the price\n\nimpact from November [2021] in our Ql[,]\" id. at 16. Contrary to the AC's characterization,\n\nthese statements were not blanket assurances of a positive future.\n\n Second, the AC is wrong to treat negative developments in 1Q22-in which Dutch Bros\n\nexperienced accelerating \"macroeconomic headwinds\" that overtook its new-shop and price-\n\noriented strategy for combatting inflation-as undermining what was said on the March 1\n\nearnings call. The AC does not clearly situate these developments (and Dutch Bros' recognition\n\nof them) as having occurred as of March 1. Rather, it appears to situate this development in mid-\n\nMarch. See, e.g., AC ,i,i 91 (mid-March 2022), 104 (quoting Ricci as referencing mid-March as\n\npoint when sales took a turn), 110 (same). The opinion statements of guarded optimism on the\n\nMarch 1 call carmot be impeached as false or misleading based on events that had not yet\n\noccurred or information that was not yet known to the speaker. See Vivendi, SA., 838 F.3d at\n\n\n\n\n 31\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 32 of 46\n\n\n\n\n262 (\"Fraud depends on the state of events when a statement is made, not on what happens\n\nlater.\" (quoting Schleicher v. Wendt, 618 F.3d 679,684 (7th Cir. 2010)).\n\n The AC thus fails to plead actionable statements during this earnings call.\n\n 5. March 9, 2022 Conference Interview\n\n The AC next contends that the following statements made at a March 9, 2022, Bank of\n\nAmerica-sponsored conference were materially false or misleading:\n\n \u2022 Asked whether he was worried about higher gas prices, among other things,\n Jemley responded: \"I think we are concerned about the environment around us as\n citizens. But for Dutch Bros, we're not greatly concerned about elevated energy\n prices and people's ability to still come and enjoy Dutch. We feel like that would\n be one of the latter places that people would decide not to spend money on.\n Elevated energy affects our freight cost, but its-but we don't see it affecting our\n sales demand in the near term.\" AC ,i 77.\n\n \u2022 Asked about Dutch Bros' \"moderate\" pricing relative to peer companies given\n rising costs, Jemley responded: \"[B]ecause we have a beverage-only menu, we\n have the power of good margins going in. We are not using margin on food, for\n example. So that set some context to why we sort of feel like we can give people\n a great value at a reasonable price . . . . Secondly, from a margin shape\n perspective, and Joth will talk about our cadence of how we actually think about\n price increases, but everybody's mind is around 2 things moving: one is\n commodity costs, and in our business that's cost of goods and labor. And really\n because we began this journey in a really good place with our culture and the take\n home pay that our people have and everything we do for our people and about our\n people, we have not had wage escalation pressure . . . . So you take that-half of\n that pressure off the table from a margin perspective. And you really just dial the\n margin pressure into freight and logistics costs, in the cost of goods, which\n allowed us, we don't price to margin, we price to consumers' willingness to pay,\n but those things work together to really be able to take a moderate reasonable\n price increase back in November to kind of put us in a good spot going into this\n year.\" Id. ,i 78.\n\n \u2022 Responding to the same question, Ricci stated: \"[W]e're going to evaluate it every\n 6 months. We'll look at it in the spring as we head into the late spring and\n summertime, and then we'll look at it again in the fall as we head into the holiday\n season and really into winter. And we'll evaluate our costs, we'll evaluate our\n dynamic pricing differences between our sizes. We'll look at what we think our\n promotional menu will drive for us. And we'll kind of look at it holistically\n versus just looking at it as menu items that and a price increases. So we're going\n to take a lot of factors into consideration as we think about price. And yes, we're\n\n\n 32\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 33 of 46\n\n\n\n\n watching it every day. We're talking about it a lot, but we're also going to be\n considerate to the consumer.\" Id. 1 79.\n\n These statements are akin to those highlighted from the March I Earnings Call, as is the\n\nAC's theory as to why they were materially false or misleading. In essence, Jemley and Ricci\n\nagain stated, as they had eight days earlier, that (I) Dutch Bros was not immune to rising costs;\n\n(2) various factors, with those cited here including a lack of wage pressure, fewer ingredient\n\ninputs, and a general optimism surrounding consumer behavior, made them guardedly optimistic\n\nthat the company could weather rising costs without substantial price increases; and (3) Dutch\n\nBros was monitoring the situation. These statements are not actionable for the reasons given\n\nabove. The one statement in this instance that is arguably new is Jemley's that the company\n\n\"felt\" consumers would still want to \"enjoy Dutch,\" and be loath to cut out drive-through coffee,\n\nnotwithstanding rising gas prices. That opinion statement is not actionable; the AC does not\n\nimpeach it as contrary to the speaker's actual views or contrary to undisclosed known facts. It is\n\nalso inactionable puffery. See, e.g., Robeco Capital Growth Funds SICAV-Robeco Glob.\n\nConsumer Trends v. Peloton Interactive, Inc., 665 F. Supp. 3d 522, 540 (S.D.N.Y. 2023)\n\n(general, optimistic statements from defendant such as \"[we] feel like [at home fitness] is a trend\n\nthat's here to stay\" were \"textbook\" cases of corporate puffery); Schaffer v. Horizon Pharma\n\nPLC, No. 16 Civ. 1763 (JMF), 2018 WL 481883 (S.D.N.Y. Jan. 18, 2018) (statements that a\n\ndefendant-company was \"on track\" and had a \"unique commercial business model\" were\n\ninactionable puffery); San Leandro Emergency Med. Grp. Profit Sharing Plan v. Philip Morris\n\nCos., Inc., 75 F.3d 801,811 (2d Cir. 1996) (statements of\"optimism\" about margins and\n\nexpectations of good performance were puffery).\n\n In challenging the March 9 statements, the AC notes a later statement by Ricci, on May\n\n11, 2022, that:\n\n\n 33\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 34 of 46\n\n\n\n\n [I]n mid-March when gas prices jumped the way they did, we saw an immediate\n flip on our daily sales. It was almost to the day of the way that, that works. So I\n think you could infer-and we believe that we've done some analysis on the gas\n prices and influence related to our daily sales, and we believe it has influenced it.\n And we believe that if gas prices stay inflated, it will continue to influence it.\n\nAC~ 80. The AC implies that this statement reveals that, as of March 9, 2022, gas prices had\n\nalready jumped, and Dutch Bros' sales \"flip\" had already occurred, such that Ricci and Jemley's\n\nstatements at the Bank of America Conference were false or misleading. See id. But the AC\n\ndoes not adequately plead facts supporting that thesis. Although March 9 surely approaches\n\n\"mid-March,\" the AC does not anywhere allege that by March 9, the company had experienced\n\nthe \"jump\" in gas prices or the downward \"flip\" in its daily sales. See id. Nor does it plead that\n\nby March 9 Jemley or Ricci had access to, or that Dutch Bros had generated, data akin to that on\n\nwhich Ricci relied two months later in May 2022. Absent concrete allegations that facts then\n\n!mown contradicted the statements defendants made on March 9, the AC fails to plead that these\n\nstatements were actionable. See, e.g., Rombach, 355 F.3d at 174-75 (upholding dismissal under\n\nRule 9(b) and PSLRA based on failure to plead specific evidence contradicting challenged\n\nstatements concerning company's financial health); ATS/ Comm 'ens, Inc., 493 FJd at 106\n\n(dismissing for failure to plead falsity element where complaint did not plead temporal facts\n\nsufficient to support this claim).\n\n 6. 2021 Form 10-K\n\n On March 11, 2022, defendants filed Dutch Bros' 2021 Form 10-K with the SEC. The\n\nAC challenges the following statements in that filing.\n\n \u2022 Under the \"Commodity Risks\" subsection of the \"Quantitative and Qualitative\n Disclosures about Market Risk\", the form stated: \"Our profitability is dependent on,\n among other things, our ability to anticipate and react to changes in the costs of key\n operating resources, including beverage, energy, and other commodities. We have\n been able to partially offset cost increases resulting from several factors, including\n market conditions, shortages or interruptions in supply due to weather or other\n conditions beyond our control, governmental regulations and inflation by increasing\n 34\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 35 of 46\n\n\n\n\n our menu prices as well as making other operational adjustments that increase\n productivity. However, substantial increases in costs and expenses could impact our\n operating results to the extent that such increases cannot be offset by menu price\n increases.\" 3/11/2022 Form 10-K at 75; see also AC ,i 82.\n\n \u2022 Under the \"Impact oflnflation\" subsection of the \"Quantitative and Qualitative\n Disclosures about Market Risk\" section, the form stated: \"The primary inflation\n factors affecting our operations are commodity and supplies, energy costs, and\n materials used in the construction of company-operated shops .... While we have\n been able to partially offset inflation and other changes in the costs of core operating\n resources by gradually increasing menu prices, coupled with more efficient\n purchasing practices, productivity improvements and greater economies of scale ...\n .\" 3/11/2022 Fmm 10-K at 76; see also AC ,i 83.\n\n The AC does not plead facts plausibly suggesting that these qualified statements were\n\nfalse or misleading, let alone materially so. The AC attempts this showing by seizing on\n\nexcerpts of the Form I 0-K. It notes, for example, the start of a sentence that begins, \"[w]hile\n\n[Dutch Bros] ha[d] been able to partially offset inflation and other changes in the costs of core\n\noperating resources\" by increasing prices in addition to other tweaks around the edges. AC ,i 83\n\n(quoting 3/11/2022 Form 10-K at 76) (emphasis added). But it omits the critical qualifiers that\n\nfollow, such that the passage reads in full:\n\n While we have been able to partially offset inflation and other changes in the costs\n of core operating resources by gradually increasing menu prices, coupled with more\n efficient purchasing practices, productivity improvements and greater economies\n of scale, there can be no assurance that we will be able to continue to do so in the\n future. From time to time, competitive conditions could limit our menu pricing\n flexibility. In addition, macroeconomic conditions could make additional menu\n price increases imprudent. There can be no assurance that future cost increases can\n be offset by increased menu prices or that increased menu prices will be fully\n absorbed by our guests without any resulting change to their visit frequencies or\n purchasing patterns. In addition, there can be no assurance that we will generate\n same shop sales growth in an amount sufficient to offset inflationary or other cost\n pressures.\n\n3/11/2022 Form 10-K at 76 (emphasis added). The portions that the AC cuts out overtly caution\n\nthat the strategies Dutch Bros had thus far deployed to \"partially offset inflation and other\n\nchanges in the costs of core operating resources\" might fail in the future. Id. The AC does not\n\n\n 35\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 36 of 46\n\n\n\n\naddress, let alone explain, why these blunt risk disclosures, addressed at the very risk that it\n\ncontends was concealed, are compatible with its claim of fraud. See, e.g., In re AppHarvest Sec.\n\nLitigation, 2023 WL 4866233, at *41 (statements functioning as risk disclosures not false or\n\nmisleading where they \"warned investors of the types of risks inherent to businesses similar to\n\n[the defendant's]\").\n\n The 2021 Form I 0-K thus is not fairly pled as actionable.\n\n 7. April 6, 2022 Podcast Interview\n\n The AC next challenges statements made by Ricci during a podcast interview published\n\non April 6, 2022:\n\n \u2022 Ricci stated, when asked about Dutch Bros' competitive advantage over peer\n companies: \"Our business is pretty simple, right? I mean, we keep a very simple\n ingredient base. We don't have ovens and kitchens and we're a drive-thru\n business. We have very few walk-in locations of the 575 locations we have\n today. We're really focused on doing what we do and doing it very, very well.\n We don't complicate it. A lot of people have talked about supply chain problems.\n In those issues that you're serving food and you have all of these 150 ingredients\n that maybe a classic QSR chain would have, we have basically 12 and then some\n extensions of that. So we're a simple model, we have a very simple menu. We\n have a core base of espresso and energy drinks and things like that.\" AC ,r 85.\n\n \u2022 Ricci stated, when asked about how the IPO affected Dutch Bros: \"Having done a\n few other public companies, I think that the structure and the discipline that being\n a public company creates, I think that makes you a better company. The\n infrastructure that you're, you know, really required to hire, the reporting that\n you're required to do, I think makes you better in everything else that you do. It\n forces you to look further out, it forces you to plan ahead, it forces you to be\n committed to a gameplan and be able to resource that. We're growing into that.\n We've put a lot of good people in place and we've added some great resources to\n the company over the last couple of years to prepare for this, but I think we're still\n growing into that. I think our G&A still has some work to do.\" Id. ,r 86.\n\n \u2022 Ricci stated, when asked to discuss how \"supply chain stuff, labor cost,\n commodity costs\" \"affects you, or maybe not as much as your peers or in others\n in the industry\": \"On the supply chain. You know, like I said earlier, we work\n with a pretty small ingredient base and so we're working very closely with a very\n small amount of suppliers that are doing that. Now, we've had the occasional trip\n up on a part for an ice machine or something that we could get and we've had to\n\n\n 36\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 37 of 46\n\n\n\n\n respond accordingly and be able to pivot, which our team again has done a great\n job of doing. We just certainly haven't seen the inflation or supply chain\n challenges that we've heard about with other companies, and it goes back to\n simple, right? I mean, the more simple the business, the more effective, and\n fortunately we have the numbers to back it up, and we sit in a pretty good spot.\"\n Id ,i 87.\n\n \u2022 Ricci stated, when asked about Dutch Bros' financial situation: \"Margin-wise,\n we've been told that our margin numbers and our EBITDA numbers are industry-\n leading, and maybe we'll let other people fill in the blanks related to that. But I\n think because our supply chain and our logistics and everything is so simple, you\n know we run a pretty efficient business with a lot of throughput.\" Id ,i 88.\n\nThe AC alleges that these statements were materially false or misleading because they did not\n\ndivulge relevant negative macroeconomic trends, and because by the time this interview was\n\npublished, Q 1 2022 had concluded-a quarter in which Dutch Bros later reported feeling the\n\nadverse effects of inflation on its profit margins. See id ,i 89.\n\n Ricci' s first two statements are plainly not actionable. In the first, he broadly described\n\nthe company's business model. The AC does not dispute any fact referenced therein, nor explain\n\nwhy any was made misleading for failure to also address the subject of inflation. In the second,\n\nRicco addressed how the IPO affected Dutch Bros, a subject even further afield from the impact\n\nof present-day inflation. Cf Richman, 868 F. Supp. 2d at 274.\n\n The third and fourth statements do comment on conditions later in time, with the third\n\nstating that the company hadn't \"seen the inflation or supply chain challenges that we've heard\n\nabout with other companies\" and that relatively speaking, \"we sit in a pretty good spot.\" The AC\n\nclaims that these statements were misleading because, at some point towards the end of Q 1 2022,\n\nDutch Bros experienced a sharp increase in input costs as well as a drop in sales, putting pressure\n\non its profit margins. See AC ,i,i 102-111.\n\n The passing reference to inflation in the third statement, however, is eclipsed by the more\n\ninvolved discussion elsewhere in the podcast interview of Dutch Bros' experience (or lack\n\n\n 37\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 38 of 46\n\n\n\n\nthereof) with supply-chain issues. And the AC does not allege that that discussion was\n\nmisleading. See Sanofi, 816 F.3d at 210 (statement or omission must be \"misleading to a\n\nreasonable person reading the statement fairly and in context\"). Read in context, that the\n\ndiscussion of supply chain issues contained a brief reference to inflation does not make the\n\nstatement misleading for not having taken on the subject of commodities costs.\n\n Further, to the extent the AC means to allege that these statements were misleading based\n\non what was known to the company as of the moment in time the podcast aired, the AC lacks the\n\nspecific time references necessary to support this claim. It does not allege when Ricci made the\n\nstatements in the recorded podcast, as opposed to its air date of April 6, see AC 1 85. It does not\n\nallege that the podcast, the statements in which were largely big picture and historical, was made\n\nclose in time to the air date. Nor does it that, whatever the date ofRicci's statements, Dutch\n\nBros by then had experienced the adverse consequences that emerged late in Q 1 (or tabulated its\n\nQl results). See Lopez v. Ctpartners Exec. Search Inc., 173 F. Supp. 3d 12, 40 (S.D.N.Y. 2016)\n\n(statements materially false and misleading only where alleged contradiction was apparent at\n\ntime of statement). To the extent that Ricci's statements addressed the state of play before the\n\n\"flip\" in margins, these statements are compatible with the company's results. See Boca Raton\n\nFirefighters, 506 F. App'x at 38-39. And to the extent that the AC faults Ricci's statements as\n\nfalsely positive about future performance, they are forward looking, and not contradicted by well\n\npied facts as to the speaker's knowledge at the time. See, e.g., Lopez, 173 F. Supp. 3d at 39-41\n\n(projections as to corporate earnings were forward-looking and preliminary even though made\n\nafter the relevant quarter had closed); In re Lottery.com, Inc. Sec. Litig., No. 22 Civ. 07111\n\n(JLR), 2024 WL 454298, at *19 (S.D.N.Y. Feb. 6, 2024) (same).\n\n\n\n\n 38\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 39 of 46\n\n\n\n\n 8. April 7, 2022 Interview\n\n Finally, the AC challenges a statement made by Ricci contained in a podcast interview\n\naired on the \"Inside the Ice House\" podcast feed on April 7, 2022. In response to a question as to\n\nwhether Ricci saw \"headwinds for your drive through [] from the recent rise in both coffee bean\n\nand gas prices,\" Ricci replied:\n\n A third of our business is done in espresso-based drinks. Coffee, technically, makes\n up a pretty small percentage of our overall cost of goods. We're not concerned\n about it. I think when you live in the coffee world, you're used to the C price going\n way up and way down and you just kind have to live in that commodity space. I\n think, related to fuel prices, most of our stands are, they are within a kind of a\n person's daily life, right? It's on the way to school or on the way to work or\n something that you're not going to stop doing anyway. I think that from the kind\n of the bubble that people live in, most of our stands to kind of work within that\n bubble. We'll see a little bit of hit related to kind ofroad trips. On the west coast,\n we have a stand that I hear about all the time in Davis, California. That's, if you're\n driving from the Bay Area to Tahoe, everyone says, \"Well, I stop at that Dutch on\n my way to Tahoe.\" Well, the road trip may go down a little bit here as gas prices\n are high but I think for daily living, I wouldn't expect us to see much of a change.\n\nAC 190. The AC contends that this statement was materially false or misleading because it\n\nprojected a positive picture of Dutch Bros' business model without disclosing the difficulties\n\npresented by inflation and other macroeconomic trends, as surfaced late in Q 1 2022. Id 1 91.\n\n For much the same reasons as above, the AC does not plead facts making this statement\n\nactionable. The AC does not plead when Ricci made the statements at issue, as opposed to the\n\ndate the podcast became available, nor how that date compared to the date when Ricci became\n\naware of the extent to which inflation had cut into QI profit margins. More important, the\n\nstatement the AC challenges is forward-looking. Ricci projects how a \"recent rise in coffee bean\n\nand gas prices\" would affect Dutch Bros' business in the future. See id 1 90. The AC does not\n\nplead that Ricci's generally put projection-that the company's future business would take \"a bit\n\nof a hit\" because \"gas prices are high\" causing \"road trip[]\" to \"go down a little bit,\" but would\n\nnot experience \"much of a change\"-was disbelieved by Ricci at the time it was made. See id\n\n 39\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 40 of 46\n\n\n\n\n,r,r 90-91. This forward-looking statement is thus a non-actionable of opinion and a statement\nprotected under the PSLRA safe-harbor. See Slayton, 604 F.3d at 777 (forward-looking\n\nstatements protected by PSLRA safe-harbor where facts pied made it at least equally likely\n\ndefendants did not know statements false at time made).\n\n ***\n\n For the above reasons, the AC does not adequately plead that any statement it challenges\n\nwas materially false or misleading. That defeats all claims, both as to primary liability under\n\nSection l0(b) and Rule !0b-5, and secondary liability under Section 20(a). Bristol-Myers, 2023\n\nWL 2308151, at *9. For completeness, however, the Court assesses defendants' challenge to the\n\nAC's scienter allegations.\n\n B. Scienter\n\n To adequately plead scienter, the AC must include sufficient allegation to raise a \"strong\n\ninference that the defendant acted with the required state of mind.\" 15 U.S.C. \u00a7 78u-4(b)(2).\n\nThe A C's relevant allegations are as follows. It alleges that Ricci and Jemley had a monetary\n\nmotive to artificially inflate Dutch Bros' share price, based on the quantity and timing of their\n\nsales of stocks during the class period. See AC ,r,r 136-139. It further alleges that a strong\n\ninference of scienter is shown by the individual defendants' high-level positions within Dutch\n\nBros, by statements they made during and after the class period, by allegations from CWl, and\n\nby Ricci's January 2024 departure. Id. ,r,r 140-50. As to Dutch Bros, the AC pursues a theory of\n\nrespondeat superior, based on the scienter of the individual defendants. Id. ,r,r 151-52. These\n\nallegations, however, do not support-more than the opposite inference-that the defendants\n\nacted intentionally or recklessly. See ATS! Commc 'ns, 493 F.3d at 99.\n\n\n\n\n 40\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 41 of 46\n\n\n\n\n The Court's analysis begins with the stock sales, which the AC terms unusual. It alleges\n\nthat Jemley and Ricci, capitalizing on Dutch Bros' artificially high share price, each sold shares\n\non two days between the end of their lock-up agreements on March 4, 2022 and Dutch Bros'\n\n\"cotTective disclosures\" on May 11, 2022, as follows.\n\n\n Charles L. Jemley Stock Sales'\n\n 'frnnsadioJr Date Sltru\u2022es Sohl Priee. Rei\u2022 Sha:1-c\n\n CLASS PERIOD SALES\n\n 03/15/2022 1,600 $47.89\n\n 03/15/2022 8,274 $48.58\n\n 03/15/2022 5,126 $49.35\n\n 04/05/2022 Z,790 $53.46\n\n 04/05/2022 1,400 $54.04\n\n 04/05/2022 310 $55.39\n\n 04/05/2022 400 $56.61\n\n 04/05/2022 100 $57.74\n\n Total:\n\n POST-CLASi3PERIOD SALie$\n\n 08/15/2022 35,305 $45.79\n\n 08/15/2022 47,995 $46.61\n\n 08/15/2022 1,700 $47.25\n\n Total:\n\n\n\n\n 41\n\f Case 1:23-cv-01794-PAE Document 37 Filed 06/24/24 Page 42 of 46\n\n\n\n\n Jonathan Ricci Stock Sales'\n\n Transaction Dnfr Shar>>NOTICE REGARDING PRO HAC VICE MOTION. Regarding Document No. 10 MOTION for Patrick E. Gibbs to Appear Pro Hac Vice . Filing fee $ 200.00, receipt number ANYSDC-27658648. Motion and supporting papers to be reviewed by Clerk's Office staff.. The document has been reviewed and there are no deficiencies. (sgz)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/331768634/","id":331768634,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/338057438/","id":338057438,"tags":[],"absolute_url":"/docket/66921700/26/douglas-rein-v-dutch-bros-inc/","date_created":"2023-05-22T21:06:29.185293-07:00","date_modified":"2026-06-23T04:27:58.080414-07:00","sha1":"5950c0c464622774414d07820b751e26e1dbe74f","page_count":2,"file_size":193371,"filepath_local":"recap/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.26.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.26.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-01794-PAE Document 26 Filed 05/22/23 Page 1 of 2\n\n\n\n\nKAHN SWICK & FOTI, LLC\nKim E. Miller (NY-6996)\n250 Park Avenue, 7th Floor\nNew York, NY 10177\nTelephone: (212) 696-3730\nFacsimile: (504) 455-1498\nE-Mail: kim.miller@ksfcounsel.com\n\n-and-\n\nLewis S. Kahn\n1100 Poydras Street, Suite 960\nNew Orleans, LA 70163\nTelephone: (504) 455-1400\nFacsimile: (504) 455-1498\nE-Mail: lewis.kahn@ksfcounsel.com\n\nCounsel for Lead Plaintiff Movant Douglas Rein\nand Proposed Lead Counsel for the Class\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n )\n JERRY PEACOCK, Individually And On Behalf )\n of All Others Similarly Situated, ) Case No. 1:23-cv-01794-JLC-PAE\n )\n Plaintiff, )\n v. )\n )\n DUTCH BROS INC., JONATHAN RICCI, and )\n CHARLES L. JEMLEY, )\n )\n Defendants. )\n )\n\n SUPPLEMENTAL DECLARATION OF KIM E. MILLER IN OPPOSITION TO\n COMPETING MOTION FOR APPOINTMENT AND IN FURTHER SUPPORT OF\n MOTION OF DOUGLAS REIN FOR APPOINTMENT AS LEAD PLAINTIFF AND\n APPROVAL OF LEAD PLAINTIFF\u2019S SELECTION OF LEAD COUNSEL\n\f Case 1:23-cv-01794-PAE Document 26 Filed 05/22/23 Page 2 of 2\n\n\n\n\nI, Kim E. Miller, hereby declare as follows:\n\n 1. I am a partner of the law firm of Kahn Swick & Foti, LLC (\u201cKSF\u201d), Counsel for\n\nLead Plaintiff Movant Douglas Rein (\u201cMr. Rein\u201d or \u201cMovant\u201d). I have personal knowledge of the\n\nfacts set forth herein.\n\n 2. Movant seeks appointment as Lead Plaintiff pursuant to Section 21(D) of the\n\nSecurities Exchange Act of 1934 in the above-captioned action.\n\n 3. I submit this Supplemental Declaration, together with the attached exhibit, in\n\nopposition to the motion of Tyler Scheinost (\u201cMr. Scheinost\u201d) (ECF No.16) and in further\n\nsupport of Mr. Rein\u2019s motion for appointment as Lead Plaintiff and approval of his selection of\n\nKSF as Lead Counsel for the Class. ECF No. 12.\n\n 4. Attached hereto as Exhibit A is the Conformed Loss Chart of Tyler Scheinost in\n\nSecurities of Dutch Bros Inc. (NYSE: \u201cBROS\u201d).\n\n I declare under penalty of perjury under the laws of the United States of America that the\n\nforegoing facts are true and correct.\n\n Executed this 22nd day of May, 2023 at Greenwich, Connecticut.\n\n /s/ Kim E. Miller\n Kim E. Miller\n\f","ocr_status":2,"date_upload":"2026-06-22T09:51:25.059474-07:00","document_number":"26","attachment_number":null,"pacer_doc_id":"127033398621","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Declaration in Opposition to Motion","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/483558203/","id":483558203,"tags":[],"absolute_url":"/docket/66921700/26/1/douglas-rein-v-dutch-bros-inc/","date_created":"2026-06-22T09:51:16.478080-07:00","date_modified":"2026-06-25T07:29:33.633442-07:00","sha1":"07847c66bc40926f11cfbdfba3a69175483dcfd3","page_count":2,"file_size":160178,"filepath_local":"recap/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.26.1.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.26.1.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:23-cv-01794-PAE Document 26-1 Filed 05/22/23 Page 1 of 2\n\n\n\n\n EXHIBIT A\n\f Case 1:23-cv-01794-PAE Document 26-1 Filed 05/22/23 Page 2 of 2\n\n\nDutch Bros Securities Litigation\nConformed Loss Chart of Tyler Scheinost in Securities of Dutch Bros Inc. (NYSE: \"BROS\")\nClass Period Begins: 3/1/2022\nClass Period Ends: 5/11/2022\n90-Day Lookback Period Ends: 8/9/2022\n90-Day Lookback Price: $ 35.5248\n\nCommon Stock\n Purchases Sales\n Date Quantity Price (Cost) Date Quantity Price* Proceeds (Loss)/Gain\n 5/5/2022 5400 $ 46.63 $(251,802.00) HELD 5400 $35.5248 $191,833.92 $ (59,968.08)\n 5/5/2022 4600 $ 46.63 $(214,498.00)\n 5/11/2022 2500 $ 34.71 $ 86,775.00\n 5/11/2022 2100 $ 34.63 $ 72,723.00 $ (55,000.00) **Non-Dura Loss\n\n Nominal Total Losses: $ (114,968.08)\n Total LIFO/Dura Losses: $ (59,968.08)\n\n\n * For those shares purchased during the Class Period and \"HELD\" through the 90-day period immediately thereafter,\n losses have been determined using the mean trading price of that security during the 90-day period beginning on the\n date on which the information correcting the misstatement or omission that forms the basis for the action is\n disseminated to the market. See 15 U.S.C. \u00a7 78u\u20134(e)(1). Because the final corrective disclosure was disseminated to\n the market on 5/12/2022, the final day of the 90-day lookback period is 8/9/2022. The mean trading price of Dutch\n Bros' common stock for that 90-Day period is $35.5248.\n\n ** Mr. Scheinost's Class Period sales on 5/11/2022 totalling 4,600 shares match on a 'Last-In, First-Out' (\"LIFO\") basis\n with Class Period purchases on 5/5/2022. Because Mr. Scheinost sold shares purchased in the Class Period before the\n end of the Class Period (and the information correcting Defendants' alleged misstatements and/or omissions that form\n the basis of the Action was disseminated to the market), these sales are unrecoverable 'in-and-out' transactions under\n Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 125 S. Ct. 1627 (2005).\n\n\n\n\n Page 1 of 1\n\f","ocr_status":1,"date_upload":"2026-06-23T04:30:46.606129-07:00","document_number":"26","attachment_number":1,"pacer_doc_id":"127033398622","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit A - Conformed Scheinost Loss Chart","acms_document_guid":""}],"date_created":"2023-05-22T21:06:29.177584-07:00","date_modified":"2025-01-11T03:04:13.602939-08:00","date_filed":"2023-05-22","time_filed":"22:05:23","entry_number":26,"recap_sequence_number":"2023-05-22.004","pacer_sequence_number":107,"description":"DECLARATION of Kim E. Miller in Opposition re: 16 MOTION to Appoint Counsel . MOTION to Appoint Tyler Scheinost to serve as lead plaintiff(s) .. Document filed by Douglas Rein. (Attachments: # 1 Exhibit A - Conformed Scheinost Loss Chart).(Miller, Kim) (Entered: 05/22/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/331764583/","id":331764583,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/338052432/","id":338052432,"tags":[],"absolute_url":"/docket/66921700/24/douglas-rein-v-dutch-bros-inc/","date_created":"2023-05-22T19:06:19.539642-07:00","date_modified":"2026-06-23T02:38:55.955576-07:00","sha1":"261963a62dab62cfc8f41e51abef3bbaf9187fbd","page_count":10,"file_size":210398,"filepath_local":"recap/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.24.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.24.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 1 of 10\n\n\n\n\n UNITED STATES DISTRICT COURT\n SOUTHERN DISTRICT OF NEW YORK\n\nJERRY PEACOCK, Individually and on Case No. 1:23-cv-01794-PAE\nBehalf of All Others Similarly Situated,\n\n Plaintiff,\n\n v.\n\nDUTCH BROS INC., JONATHAN RICCI,\nand CHARLES L. JEMLEY,\n\n Defendants.\n\n\nLEAD PLAINTIFF MOVANT TYLER SCHEINOST\u2019S MEMORANDUM OF LAW IN\n OPPOSITION TO THE COMPETING MOTIONS FOR APPOINTMENT AS LEAD\n PLAINTIFF AND APPROVAL OF COUNSEL\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 2 of 10\n\n\n\n\n Lead Plaintiff Movant Tyler Scheinost (\u201cScheinost\u201d) submits this memorandum of law in\n\nsupport of his motion for appointment as lead plaintiff and approval of lead counsel (Dkt. No. 16),\n\nand in opposition to the competing motion for appointment as lead plaintiff and approval of lead\n\ncounsel filed by Douglas Rein (\u201cRein\u201d) (Dkt. No. 12).\n\nI. INTRODUCTION\n\n Only Scheinost and Rein are still seeking appointment as lead plaintiff. While Michael\n\nRice (\u201cRice\u201d) initially filed a motion (Dkt. No. 19), he effectively abandoned his motion by filing\n\na notice on May 22, 2023, informing the Court that he does not oppose the competing motions\n\nbecause he \u201chas not asserted the \u2018largest financial interest.\u2019\u201d See Dkt. No. 23; In re KIT Digital,\n\nInc. Sec. Litig., 293 F.R.D. 441, 443 (S.D.N.Y. 2013) (movants \u201cdid not file opposition briefs, and\n\nthus the Court deems their applications abandoned\u201d).\n\n With respect to the lead plaintiff determination, the question presently before the Court is\n\nwhich of these two movants is the \u201cmost adequate plaintiff\u201d\u2014i.e., the plaintiff \u201cmost capable of\n\nadequately representing the interests of class members.\u201d 15 U.S.C. \u00a7 78u-4(a)(3)(B)(i). The Private\n\nSecurities Litigation Reform Act of 1995 (\u201cPSLRA\u201d) directs courts to appoint the \u201cmost adequate\n\nplaintiff\u201d as lead plaintiff and provides a rebuttable presumption that the most adequate plaintiff\n\nis the movant that, inter alia, has the \u201clargest financial interest in the relief sought by the class.\u201d\n\n15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(I). The presumption may be rebutted, however, by a showing that\n\nthe presumptively most adequate plaintiff \u201cwill not fairly and adequately protect the interests of\n\nthe class\u201d or \u201cis subject to unique defenses.\u201d 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(II).\n\n Here, of the remaining movants, Scheinost has the largest financial interest in the relief\n\nsought by the class and satisfies the requirements of Rule 23. As such, Scheinost is the\n\npresumptively \u201cmost adequate plaintiff.\u201d 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii).\n\n Since Scheinost is the presumptively most adequate plaintiff, and the presumption cannot\n\n\n 1\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 3 of 10\n\n\n\n\nbe rebutted, Scheinost should be appointed as lead plaintiff, and his selection of counsel should be\n\napproved.1\n\nII. SCHEINOST IS THE PRESUMPTIVELY MOST ADEQUATE PLAINTIFF\n BECAUSE HE HAS THE LARGEST FINANCIAL INTEREST\n\n Scheinost satisfies all three requirements to be the presumptively most adequate plaintiff.\n\nSee 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(I). First, Scheinost filed a timely motion for appointment as\n\nlead plaintiff. See Dkt. No. 16; 15 U.S.C. \u00a7 78u\u20134(a)(3)(B)(iii)(I)(aa). Second, Scheinost satisfies\n\nthe requirements of Rule 23, as demonstrated in his memorandum of law in support of his lead\n\nplaintiff motion. See Dkt. No. 17 at 6-8; 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(I)(cc). Finally, as\n\nexplained infra, Scheinost has the largest financial interest in the relief sought by the class. See 15\n\nU.S.C. \u00a7 78u-4(a)(3)(B)(iii)(I)(bb).\n\n A. Courts Use the Four Lax Factors to Compare Movants\u2019 Financial Interests\n\n \u201cThe PSLRA does not specify a method for calculating which plaintiff has the \u2018largest\n\nfinancial interest,\u2019 and neither the Supreme Court nor the Second Circuit has articulated such a\n\nmethod.\u201d See In re Fuwei Films Sec. Litig., 247 F.R.D. 432, 436 (S.D.N.Y. 2008). However,\n\n\u201cmany courts, including courts in this District . . . have adopted a four-factor [Lax] test\u201d which\n\nconsiders: \u201c(1) the number of shares purchased during the class period; (2) the number of net shares\n\npurchased during the class period; (3) the total net funds expended during the class period; and (4)\n\nthe approximate losses suffered.\u201d Id. at 437. Courts place the most emphasis on the last factor. Id.\n\n Most courts agree that the preferred method to calculate financial losses requires Class\n\nPeriod sales to be matched to purchases on a last-in-first-out (\u201cLIFO\u201d) basis. See In re eSpeed, Inc.\n\n\n\n\n1\n \u201cThe most adequate plaintiff shall, subject to the approval of the court, select and retain counsel\nto represent the class.\u201d 15 U.S.C. \u00a7 78u-4(a)(3)(B)(v).\n\n\n 2\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 4 of 10\n\n\n\n\nSec. Litig., 232 F.R.D. 95, 100-102 (S.D.N.Y. 2005). eSpeed describes the LIFO loss calculation\n\nmethod:\n\n [The LIFO] method matches the last purchases made during the class period with\n the first sales made during the class period. Subtracting the sales from the\n purchases, the Adib Group arrives at its base class period losses. Then, shares that\n were bought during the class period but were not sold during the class period are\n accounted for as if they had been sold at the average price of the shares in the 90\n calendar days following the class period. Adding the losses incurred during the\n class period to the unrealized losses that would have been incurred had the Adib\n Group sold their remaining stock at the average price immediately following the\n class period, the Adib Group arrives at its final calculation.\n\nId. at 102 (footnotes omitted). LIFO is the preferred accounting method because it \u201chas been used\n\nnot only for lead plaintiff calculations, but also to determine compensation amounts for\n\nstockholders suffering losses due to securities fraud.\u201d Id. at 101.\n\n B. Scheinost Has the Largest Financial Interest\n\n Here, Scheinost has a larger financial interest than Rein, the only other remaining movant,\n\nas measured by every Lax factor:2\n\n Gross Shares Net Shares Net\n Movant LIFO Loss\n Purchased Purchased Expenditure\n Tyler Scheinost 10,000 5,400 $306,802.00 $114,968.33\n Douglas Rein 9,000 2,000 $64,685.00 $102,011.20\n\n Notably, Rein has much smaller net shares purchased and net expenditure figures compared\n\nto Scheinost because Rein sold 7,000 shares during the Class Period on March 29, 2022, for a large\n\ngain. See Dkt. No. 14-2. Prior to this sale Rein had only purchased 2,000 shares during the Class\n\nPeriod. As such, his sale caused his Class Period share count to go negative by 5,000 shares. Rein\n\nsubsequently purchased more shares during the Class Period. However, his massive Class Period\n\n\n\n\n2\n The data in the chart is taken from the movants\u2019 respective loss charts. See Dkt. Nos. 14-2, 18-\n3).\n\n\n 3\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 5 of 10\n\n\n\n\ngain on his sale of 7,000 shares caused his net shares purchased and net expenditure figures to be\n\nmuch smaller than Scheinost\u2019s.\n\n C. The Court Should Reject Any Belated Attempts by Rein to Alter the Loss\n Calculation to Game the Financial Interest Analysis\n\n Any attempt by Rein to alter the loss calculation method in his opposition to gain an\n\nadvantage should be rejected. See Cook v. Allergn PLC, No. 18-cv-12089, 2019 WL 1510894, at\n\n*3 (S.D.N.Y. Mar. 21, 2019) (denying the motion of movant who \u201cused the same methodology as\n\n[a competing movant] in its original moving papers - only to alter its calculation when it learned\n\nthat someone else had a larger loss\u201d); Chandler v. Ulta Beauty, Inc., No. 18-cv-1577, 2018 WL\n\n3141763, at *3 (N.D. Ill. June 26, 2018) (\u201c[C]ourts have rejected proposals to alter a proposed loss\n\ncalculation method made after it was apparent that the proponent of the change would not have the\n\nlargest financial interest under the initially proposed method.\u201d) (collecting cases).\n\n For instance, it is possible that Rein will argue that some courts have endorsed a\n\nmodification to the LIFO loss calculation that excludes movants\u2019 losses (or gains) on shares that\n\nwere purchased and then sold during the class period before a corrective disclosure. On this basis\n\nRein might argue that Scheinost\u2019s sale of 4,600 shares (of his 10,000 shares) on the last day of the\n\nClass Period, shortly before the market closed, should be excluded from Scheinost\u2019s loss\n\ncalculation. This argument should be rejected for a few reasons.\n\n First, Rein endorsed the traditional LIFO calculation in his initial motion papers, matching\n\nhis Class Period sales to his Class Period purchases. See Dkt. No. 14-2 n. ** (\u201cMr. Rein\u2019s\n\n3/29/2022 sale of 7,000 shares for $63.88/share matches on a \u2018Last-In, First-Out\u2019 (\u2018LIFO\u2019) basis\n\nwith Class Period purchases totalling [sic] 2,000 shares on 3/25/2022 . . . .\u201d); see also eSpeed, 232\n\nF.R.D. 95, 102 (the LIFO method \u201cmatches the last purchases made during the class period with\n\nthe first sales made during the class period\u201d and [s]ubtract[s] the sales from the purchases\u201d to\n\n\n\n 4\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 6 of 10\n\n\n\n\n\u201carrive[] at [the] base class period losses\u201d). As such, Rein should not be permitted to change\n\nmethods in his opposition brief.\n\n Second, Dutch Bros\u2019 stock price fell substantially on high volume on May 11, 2022, which\n\ncaused Scheinost\u2019s loss on shares he sold that day and indicates that the corrective disclosure\n\nreleased after market hours on May 11, 2022 may have leaked prior to market close. Dutch Bros\u2019\n\nstock price opened at $40.00 per share on May 11, 2022, but closed at just $34.37 per share, a\n\ndecline of $5.63 per share, or 14%.3 The trading volume on May 11, 2022 was 7,713,100 shares,\n\ncompared to the Class Period daily average of just 1,980,647 shares. Id. Scheinost sold some of\n\nhis shares near the market close for $34.63 and some for $34.71, causing a substantial loss. See\n\nDkt. No. 18-3.\n\n Given the price movement and volume, it is possible that further fact investigation,\n\nincluding discovery, will yield evidence that the information Dutch Bros disclosed after market\n\nclose on May 11, 2022 leaked into the market prior to Scheinost\u2019s sale near market close, which\n\nwould eliminate any argument that the corrective information did not cause Scheinost\u2019s loss. While\n\nsome courts have taken clear cut loss causation issues into account when calculating movants\u2019\n\nlosses, disputed loss causation issues like the one present here should not be adjudicated at the lead\n\nplaintiff appointment stage. See Cook, 2019 WL 1510894, at *2-*3 (rejecting movant\u2019s proposal\n\nto exclude all \u201cin and out transactions\u201d from the loss calculation in part because \u201c[g]iven . . . the\n\ndocumented decline in Allergan\u2019s share price during [the class period] (at points dramatically), it\n\nwould be unwise to embrace\u201d such a method); Di Scala v. ProShares Ultra Bloomberg Crude Oil,\n\nNo. 20-cv-5865, 2020 WL 7698321, at *3 (S.D.N.Y. Dec. 28, 2020) (declining to \u201cexclude . . . in-\n\n\n\n\n3\n Historical volume and pricing data available at: https://finance.yahoo.com/quote/BROS/history\n(last visited May 22, 2023).\n\n\n 5\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 7 of 10\n\n\n\n\nand-out trades prior to April 3, 2020\u201d even though \u201cthe complaint alleges multiple partial\n\ndisclosures, beginning on April 3, 2020\u201d because the allegations were \u201cinsufficient to establish the\n\ndate of UCO\u2019s first corrective disclosure\u201d).\n\n Finally, as illustrated above, Scheinost has a much larger financial interest than Rein under\n\nthe first three Lax factors: gross shares purchased, net shares purchased, and net expenditure. As\n\nsuch, even if Rein had a larger loss than Scheinost, the balance of the factors weighs in favor of a\n\nfinding that Scheinost has the largest financial interest. See Police & Fire Ret. Sys. of Detroit v.\n\nSafeNet, Inc., No. 06-cv-5797, 2007 WL 7952453, at *2 (S.D.N.Y. Feb. 21, 2007) (appointing the\n\nmovant that prevailed on the first three factors, but not loss); City of Hollywood Firefighters\u2019\n\nPension Fund v. TransDigm Grp., Inc., No. 17-cv-1958, 2017 WL 6028213, at *3 (N.D. Ohio Dec.\n\n5, 2017) (same).\n\n As such, the Court should reject any request by Rein in his opposition to alter the loss\n\ncalculation. Moreover, regardless of the loss calculation method used, Scheinost has the largest\n\nfinancial interest when considering all the Lax factors.\n\n * * *\n\n Since Scheinost has the largest financial interest in the relief sought by the class, filed a\n\ntimely motion, and satisfies the requirements of Rule 23, he is the presumptively most adequate\n\nplaintiff. See 15 U.S.C. \u00a7 78u\u20134(a)(3)(B)(iii)(I).\n\nIII. THE PRESUMPTION THAT SCHEINOST IS THE MOST ADEQUATE\n PLAINTIFF HAS NOT BEEN AND CANNOT BE REBUTTED\n\n The lead plaintiff presumption may be rebutted only upon \u201cproof\u201d that the presumptively\n\nmost adequate plaintiff \u201cwill not fairly and adequately protect the interests of the class,\u201d or \u201cis\n\nsubject to unique defenses that render such plaintiff incapable of adequately representing the\n\nclass.\u201d 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(II). Such proof requires more than mere \u201cspeculation.\u201d\n\n\n\n 6\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 8 of 10\n\n\n\n\nFoley v. Transocean Ltd., 272 F.R.D. 126, 133 (S.D.N.Y. 2011). \u201c[C]onclusory assertions of\n\ninadequacy are . . . insufficient to rebut the statutory presumption under the PSLRA without\n\nspecific support in evidence of the existence of an actual or potential conflict of interest or a\n\ndefense to which [the movant] would be uniquely subject.\u201d Constance Sczesny Tr. v. KPMG LLP,\n\n223 F.R.D. 319, 324\u201325 (S.D.N.Y. 2004); see also Murphy v. JBS S.A., No. 17-cv-3084, 2017 WL\n\n4480751, at *5 (E.D.N.Y. Oct. 6, 2017) (\u201cConclusory assertions and mere speculation will not\n\nsuffice.\u201d).\n\n No such proof has been\u2014or can be\u2014presented that Scheinost would be inadequate or\n\nsubject to unique defenses. In fact, Scheinost has been a practicing medical professional since\n\nAugust of 2000, and is well-equipped to represent the class.\n\n As such, Scheinost should be appointed as lead plaintiff, and no other movant is entitled to\n\nconsideration. See Tronox, Inc. Sec. Litig., 262 F.R.D. 338, 344 (S.D.N.Y. 2009) (the lead plaintiff\n\nprocess ends when \u201ca candidate succeeds in both the first and second phases of inquiry\u201d).\n\nIV. LEAD PLAINTIFF\u2019S SELECTION OF COUNSEL SHOULD BE APPROVED\n\n The PSLRA vests authority in the lead plaintiff to select and retain counsel, subject to the\n\nCourt\u2019s approval. See 15 U.S.C. \u00a7 78u-4(a)(3)(B)(v). Here, Scheinost selected Glancy Prongay &\n\nMurray LLP and Holzer & Holzer, LLC as co-lead counsel for the class. The firms filed the initial\n\ncomplaint in this action on behalf of Plaintiff Jerry Peacock and the class following an extensive\n\ninvestigation into the claims. The firms also have decades of experience litigating securities fraud\n\nclass actions. See Dkt. Nos. 18-4, 18-5. As such, the firms are more than adequate to represent the\n\nclass, and Scheinost\u2019s selection of counsel should be approved. See Topping v. Deloitte Touche\n\nTohmatsu CPA, 95 F. Supp. 3d 607, 623 (S.D.N.Y. 2015) (\u201cThere is a strong presumption in favor\n\n\n\n\n 7\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 9 of 10\n\n\n\n\nof approving a properly-selected lead plaintiff\u2019s decision as to counsel.\u201d).\n\nV. CONCLUSION\n\n For the foregoing reasons, Scheinost respectfully requests that the Court grant his motion\n\nand enter an Order: (1) appointing Scheinost as lead plaintiff; (2) approving Scheinost\u2019s selection\n\nof counsel; and (3) denying the competing motions.\n\n\n Respectfully submitted,\n\nDATED: May 22, 2023 GLANCY PRONGAY & MURRAY LLP\n\n By: /s/ Gregory B. Linkh\n Gregory B. Linkh (GL-0477)\n 230 Park Ave., Suite 358\n New York, NY 10169\n Telephone: (212) 682-5340\n Facsimile: (212) 884-0988\n Email: glinkh@glancylaw.com\n\n Robert V. Prongay\n Charles H. Linehan\n Pavithra Rajesh\n 1925 Century Park East, Suite 2100\n Los Angeles, CA 90067\n Telephone: (310) 201-9150\n Facsimile: (310) 201-9160\n\n HOLZER & HOLZER, LLC\n Corey D. Holzer\n 211 Perimeter Center Parkway, Suite 1010\n Atlanta, Georgia 30346\n Telephone: (770) 392-0090\n Facsimile: (770) 392-0029\n\n Counsel for Tyler Scheinost and Proposed Co-\n Lead Counsel for the Class\n\n\n\n\n 8\n\f Case 1:23-cv-01794-PAE Document 24 Filed 05/22/23 Page 10 of 10\n\n\n\n\n PROOF OF SERVICE\n\n I, the undersigned say:\n\n I am not a party to the above case and am over eighteen years old.\n\n On May 22, 2023, I served true and correct copies of the foregoing document, by posting\n\nthe document electronically to the ECF website of the United States District Court for the Southern\n\nDistrict of New York, for receipt electronically by the parties listed on the Court\u2019s Service List.\n\n I affirm under penalty of perjury under the laws of the United States of America that the\n\nforegoing is true and correct. Executed on May 22, 2023, at New York, New York.\n\n /s/ Gregory B. Linkh\n Gregory B. Linkh\n\f","ocr_status":2,"date_upload":"2026-06-22T09:51:55.409528-07:00","document_number":"24","attachment_number":null,"pacer_doc_id":"127033398600","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Memorandum of Law in Opposition to Motion","acms_document_guid":""}],"date_created":"2023-05-22T19:06:19.534364-07:00","date_modified":"2025-01-11T03:04:13.467686-08:00","date_filed":"2023-05-22","time_filed":"21:58:38","entry_number":24,"recap_sequence_number":"2023-05-22.002","pacer_sequence_number":99,"description":"MEMORANDUM OF LAW in Opposition re: 12 MOTION to Appoint Douglas Rein to serve as lead plaintiff(s) . MOTION to Appoint Counsel . . Document filed by Tyler Scheinost..(Linkh, Gregory) (Entered: 05/22/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/331764578/","id":331764578,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/338052427/","id":338052427,"tags":[],"absolute_url":"/docket/66921700/25/douglas-rein-v-dutch-bros-inc/","date_created":"2023-05-22T19:06:19.317765-07:00","date_modified":"2026-06-23T04:28:00.519425-07:00","sha1":"d72ac4225585a5b0d91fa534586ffb088175a42e","page_count":15,"file_size":216325,"filepath_local":"recap/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.25.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.25.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 1 of 15\n\n\n\n\nKAHN SWICK & FOTI, LLC\nKim E. Miller (NY-6996)\n250 Park Avenue, 7th Floor\nNew York, NY 10177\nTelephone: (212) 696-3732\nFacsimile: (504) 455-1498\nE-Mail: kim.miller@ksfcounsel.com\n-and-\nLewis S. Kahn\n1100 Poydras Street, Suite 960\nNew Orleans, LA 70163\nTelephone: (504) 455-1400\nFacsimile: (504) 455-1498\nE-Mail: lewis.kahn@ksfcounsel.com\nCounsel for Lead Plaintiff Movant Douglas Rein\nand Proposed Lead Counsel for the Class\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n\n )\n JERRY PEACOCK, Individually And On Behalf )\n of All Others Similarly Situated, ) Case No. 1:23-cv-01794-JLC-PAE\n )\n Plaintiff, )\n v. )\n )\n DUTCH BROS INC., JONATHAN RICCI, and )\n CHARLES L. JEMLEY, )\n )\n Defendants. )\n )\n\n MEMORANDUM OF LAW IN OPPOSITION TO COMPETING MOTION FOR\n APPOINTMENT AND IN FURTHER SUPPORT OF MOTION OF\n DOUGLAS REIN FOR APPOINTMENT AS LEAD PLAINTIFF AND\n APPROVAL OF LEAD PLAINTIFF\u2019S SELECTION OF LEAD COUNSEL\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 2 of 15\n\n\n\n\n TABLE OF CONTENTS\n Page:\n\nI. INTRODUCTION .................................................................................................................... 1\n\nII. ARGUMENT ............................................................................................................................ 2\n\n A. Mr. Rein is the Presumptive \u201cMost Adequate Plaintiff\u201d and the\n Court Should Appoint Him as Lead Plaintiff ..................................................................... 2\n\n 1. Mr. Rein Possesses the \u201cLargest Financial Interest\u201d in the\n Relief Sought By the Class ........................................................................................... 3\n\n 2. Mr. Rein \u201cOtherwise Satisfies\u201d the Requirements of Rule 23...................................... 6\n\n a) Mr. Rein is Typical ................................................................................................. 6\n\n b) Mr. Rein is Adequate .............................................................................................. 7\n\n 3. The Competing Movants Cannot Rebut the Presumption that\n Mr. Rein is the \u201cMost Adequate Plaintiff\u201d ................................................................... 8\n\n B. The Court Should Approve Mr. Rein\u2019s Choice of Counsel .............................................. 10\n\nIII. CONCLUSION ....................................................................................................................... 10\n\n\n\n\n i\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 3 of 15\n\n\n\n\n TABLE OF AUTHORITIES\n Page(s):\nCases\nBo Young Cha v. Kinross Gold Corp.,\n No. 12-cv-1203, 2012 U.S. Dist. LEXIS 79288 (S.D.N.Y. May 31, 2012)................................ 5\nCity of Riviera Beach Gen. Emps. Ret. Sys. v. Macquarie Infrastructure Corp.,\n No. 18-cv-3608, 2019 U.S. Dist. LEXIS 14860 (S.D.N.Y. Jan. 30, 2019)................................. 8\nClynes v. Hebron Tech. Co. (In re Hebron Tech. Co. Sec. Litig.),\n No. 20-cv-4420, 2020 U.S. Dist. LEXIS 169480 (S.D.N.Y. Sep. 16, 2020) .......................... 3, 6\nDura Pharm., Inc. v. Broudo,\n 544 U.S. 336, 125 S. Ct. 1627 (2005) ................................................................................. 2, 4, 5\nEllenburg v. JA Solar Holdings Co.,\n 262 F.R.D. 262 (S.D.N.Y. 2009)................................................................................................. 9\nFaig v. Bioscrip, Inc.,\n No. 13-cv-06922, 2013 U.S. Dist. 178854 (S.D.N.Y. Dec. 19, 2013) ........................................ 7\nGutman v. Sillerman,\n No. 15-cv-7192, 2015 U.S. Dist. LEXIS 179553 (S.D.N.Y. Dec. 8, 2015) ............................... 5\nIn re Cavanaugh,\n 306 F.3d 726 (9th Cir. 2002) ..................................................................................................... 10\nIn re Comverse Tech., Inc. Sec. Litig.,\n No. 06-cv-1825, 2007 U.S. Dist. LEXIS 14878 (E.D.N.Y. Mar. 2, 2007) ......................... 4, 5, 9\nIn re Drexel Burnham Lambert Grp., Inc.,\n 960 F.2d 285 (2d Cir. 1992) ........................................................................................................ 7\nIn re Facebook, Inc., IPO Sec. & Derivative Litig.,\n 288 F.R.D. 26 (S.D.N.Y. 2012)................................................................................................... 8\nIn re Olsten Corp. Sec. Litig.,\n 3 F. Supp. 2d 286 (E.D.N.Y. 1998) ............................................................................................. 3\nKaplan v. Gelfond,\n 240 F.R.D. 88 (S.D.N.Y. 2007)................................................................................................... 4\nKhunt v. Alibaba Grp. Holding Ltd.,\n 102 F. Supp. 3d 523 (S.D.N.Y. 2015) ..................................................................................... 5, 9\nKniffin v. Micron Tech., Inc.,\n 379 F. Supp. 3d 259 (S.D.N.Y. 2019) ......................................................................................... 6\nLax v. First Merchants Acceptance Corp.,\n No. 97-cv-2715, 1997 U.S. Dist. LEXIS 11866 (N.D. Ill. Aug. 11, 1997)................................. 3\nMicholle v. Ophthotech Corp.,\n No. 17-cv-0210, 2018 U.S. Dist. LEXIS 41120 (S.D.N.Y. Mar. 13, 2018) ............................... 6\n\n\n\n\n ii\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 4 of 15\n\n\n\n\nMoshell v. Sasol Limited,\n No. 20-cv-1008, 2020 U.S. Dist. LEXIS 78106 (S.D.N.Y. May 4, 2020).................................. 8\nPlaut v. The Goldman Sachs Grp., Inc.,\n No. 18-cv-12084, 2019 U.S. Dist. LEXIS 160255 (S.D.N.Y. Sep. 19, 2019) ........................ 5, 7\nRodriguez v. Draftkings Inc.,\n No. 21-cv-5739, 2021 U.S. Dist. LEXIS 219489 (S.D.N.Y. Nov. 12, 2021) ................. 2, 4, 5, 7\nSalinger v. Sarepta Therapeutics, Inc.,\n No. 19-cv-8122, 2019 U.S. Dist. LEXIS (S.D.N.Y. Dec. 17, 2019) .......................................... 7\nSallustro v. Cannavest Corp.,\n 93 F. Supp. 3d 265 (S.D.N.Y. 2015) ........................................................................................... 5\nSgalambo v. McKenzie,\n 268 F.R.D. 170 (S.D.N.Y. 2010)................................................................................................. 7\nSimco v. Aegean Marine Petroleum Network Inc.,\n No. 18-cv-4993, 2018 U.S. Dist. LEXIS 241261 (S.D.N.Y. Oct. 30, 2018) .............................. 5\nTan v. NIO Inc.,\n No. 19-cv-1424, 2020 U.S. Dist. LEXIS 36623 (E.D.N.Y. Mar. 3, 2020) ............................. 7, 8\nWeinberg v. Atlas Air Worldwide Holdings, Inc.,\n 216 F.R.D. 248 (S.D.N.Y. 2003)................................................................................................. 6\nStatutes\n15 U.S.C. \u00a778u-4(a)(3) .......................................................................................................... passim\n\n\n\n\n iii\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 5 of 15\n\n\n\n\n Presumptive Lead Plaintiff Douglas Rein (\u201cMr. Rein\u201d or \u201cMovant\u201d) respectfully submits\n\nthis Memorandum of Law in opposition to the motion of Tyler Scheinost (\u201cMr. Scheinost\u201d) for\n\nappointment as lead plaintiff and approval of lead counsel (ECF No.16) and in further support of\n\nMr. Rein\u2019s motion for appointment as Lead Plaintiff and approval of his selection of Kahn Swick\n\n& Foti, LLC (\u201cKSF\u201d) as Lead Counsel for the Class. ECF No. 12.\n\nI. INTRODUCTION\n On May 1, 2023, pursuant to 15 U.S.C. \u00a778u-4(a)(3), as amended by the Private Securities\n\nLitigation Reform Act of 1995 (\u201cPSLRA\u201d), three parties filed competing motions for appointment\n\nas lead plaintiff and approval of their respective choices of lead counsel in the above captioned\n\nmatter: (1) Mr. Rein (ECF No. 12); Mr. Scheinost (ECF No. 16); and Michael Rice (\u201cMr. Rice\u201d)\n\n(ECF No. 19). On May 22, 2023, Mr. Rice filed a notice on non-opposition to competing motions\n\nfor appointment of lead plaintiff (ECF No. 23); thus, only the motions of Mr. Rein and Mr.\n\nScheinost remain.\n\n The PSLRA clearly states that the Court shall appoint as lead plaintiff the movant who: (1)\n\nfiles the complaint or a timely motion for appointment as lead plaintiff; (2) has the largest financial\n\ninterest in the relief sought by the class; and (3) otherwise satisfies the requirements of Fed. R.\n\nCiv. P. 23 (\u201cRule 23\u201d). 15 U.S.C. \u00a778u-4(a)(3)(B)(i), (iii).\n\n As demonstrated by the chart below, Mr. Rein possesses the largest financial interest in the\n\nrelief sought of the remaining movants:\n\n Actual\n Asserted Total Shares Net Shares Net Funds\n LIFO/Dura\n Loss: Purchased: Purchased: Expended:\n Loss:\nMr. Rein: $(102,011.20) $(102,011.20) 9,000 7,000 $(384,084.80)\nMr. Scheinost: $(114,968.33) $(59,968.08) 10,000 5,400 $(306,802.00)\n\n While Mr. Scheinost asserts a loss of $(114,968.33), that figure erroneously includes\n\n$(55,000.00) in losses attributable to \u2018in-and-out\u2019 transactions which are not recoverable under the\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 6 of 15\n\n\n\n\nSupreme Court\u2019s holding in Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 125 S. Ct. 1627 (2005).\n\nSee infra at \u00a7 II; Supplemental Declaration of Kim E. Miller (\u201cSuppl. Miller Decl.\u201d), submitted\n\ncontemporaneously herewith, at Exhibit A (Conformed Scheinost Loss Chart); Rodriguez v.\n\nDraftkings Inc., No. 21-cv-5739, 2021 U.S. Dist. LEXIS 219489, at *13 (S.D.N.Y. Nov. 12, 2021)\n\n(Engelmayer, J.). Thus, when Mr. Scheinost\u2019s non-Dura \u2018in-and-out\u2019 transactions are properly\n\nexcluded, his loss on 5,400 retained shares totals just $(59,968.08), some $42,043.12 less than Mr.\n\nRein\u2019s loss of $(102,011.20). Further, Mr. Rein purchased more shares on a net basis and expended\n\ngreater net funds than Mr. Scheinost. Thus, Mr. Rein possesses the largest financial interest in the\n\nlitigation.\n\n Mr. Rein also filed a timely motion for appointment as lead plaintiff with supporting\n\ndocumentation and otherwise satisfies the adequacy and typicality requirements of Rule 23.\n\nMr. Rein went above and beyond the minimal requirements of the PSLRA by providing a\n\ndeclaration in addition to his certification with further information about his qualifications to serve\n\nas Lead Plaintiff. Mr. Rein is a business executive with over 25 years of investing experience and\n\nis therefore well-suited to supervise Lead Counsel in this matter. See ECF No. 14-4 at \u00b6\u00b6 2-3.\n\nMr. Rein is willing to serve as Lead Plaintiff, has selected competent counsel to represent himself\n\nand the Class, and no other movant can rebut the presumption that he is the most adequate plaintiff.\n\nAs such, Mr. Rein\u2019s motion for appointment as Lead Plaintiff should be granted, his selection of\n\nKSF as Lead Counsel should be approved, and the competing motions should be denied.\n\nII. ARGUMENT\n A. Mr. Rein is the Presumptive \u201cMost Adequate Plaintiff\u201d and the Court\n Should Appoint Him as Lead Plaintiff\n The PSLRA creates a strong presumption that the lead plaintiff is the \u201cperson or group of\n\npersons\u201d that \u201chas the largest financial interest in the relief sought by the class\u201d and \u201cotherwise\n\nsatisfies the requirements of Rule 23.\u201d 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(I). The movant that has the\n\n\n 2\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 7 of 15\n\n\n\n\nlargest financial interest need only make a prima facie showing at this stage that it satisfies the\n\nadequacy and typicality requirements of Rule 23. See, e.g., Clynes v. Hebron Tech. Co. (In re\n\nHebron Tech. Co. Sec. Litig.), No. 20-cv-4420, 2020 U.S. Dist. LEXIS 169480, at *12 (S.D.N.Y.\n\nSep. 16, 2020) (Engelmayer, J.) (\u201cWhen moving for appointment as lead plaintiff, the moving\n\nplaintiff must only make a preliminary showing that the adequacy and typicality requirements have\n\nbeen met.\u201d) (internal quotations omitted). Once this presumption is triggered, it may be rebutted\n\nonly upon proof that the presumptive lead plaintiff will not fairly represent the interests of the\n\nClass. 15 U.S.C. \u00a7 78u\u20134(a)(3)(B)(iii)(II). As set forth below: (1) Mr. Rein has the largest financial\n\ninterest in the Action; (2) Mr. Rein has made a prima facie showing of adequacy and typicality\n\nunder Rule 23; and (3) no competing movant can rebut the presumption that Mr. Rein will fairly\n\nrepresent the interests of the Class. Accordingly, Mr. Rein is the most adequate plaintiff and the\n\nCourt should appoint him to represent the Class.\n\n 1. Mr. Rein Possesses the \u201cLargest Financial Interest\u201d in the\n Relief Sought By the Class\n While the PSLRA does not provide any guidance regarding the appropriate methodology\n\nfor determining a plaintiff\u2019s \u201cfinancial interest,\u201d courts within the Second Circuit and this District\n\nhave typically considered the \u201cLax-Olsten\u201d factors to determine which movant possesses the\n\ngreatest financial interest: (1) the number of shares purchased during the class period; (2) the net\n\nnumber of shares purchased during the class period; (3) the total net funds expended during the\n\nclass period; and (4) the approximate loss suffered during the class period. See In re Olsten Corp.\n\nSec. Litig., 3 F. Supp. 2d 286, 296 (E.D.N.Y. 1998) (citing Lax v. First Merchants Acceptance\n\nCorp., No. 97-cv-2715, 1997 U.S. Dist. LEXIS 11866, at *18 (N.D. Ill. Aug. 11, 1997)).\n\nNevertheless, most courts within this Circuit also recognize that fourth factor\u2014the approximate\n\nfinancial loss\u2014is the most significant factor to be considered. See, e.g., Kaplan v. Gelfond, 240\n\n\n\n 3\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 8 of 15\n\n\n\n\nF.R.D. 88, 93 (S.D.N.Y. 2007) (\u201cAlthough courts have differed on how much weight to assign to\n\neach of the Lax factors, we, as have other courts, shall place the most emphasis on the last of the\n\nfour factors: the approximate loss suffered by the movant.\u201d); In re Comverse Tech., Inc. Sec. Litig.,\n\nNo. 06-cv-1825, 2007 U.S. Dist. LEXIS 14878, at *13 (E.D.N.Y. Mar. 2, 2007) (recognizing that\n\nmost courts consider \u201cthe approximate loss a plaintiff suffered during the class period to be most\n\ninfluential in identifying the plaintiff with the largest financial interest\u201d); Draftkings Inc., 2021\n\nU.S. Dist. LEXIS 219489, at *11 (collecting cases).\n\n The loss chart submitted with Mr. Scheinost\u2019s motion obfuscates his recoverable loss,\n\nerroneously claiming a loss of $(114,968.33). See ECF No. 18-3. But that figure includes\n\n$(55,000.00) in losses attributable to \u2018in-and-out\u2019 sales of 4,600 shares which are not recoverable\n\nunder Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 125 S. Ct. 1627 (2005). See Suppl. Miller Decl.\n\nat Ex. A. While Mr. Scheinost purchased 10,000 shares of Dutch Bros common stock during the\n\nClass Period on May 4, 2022, he then sold 4,600 of those shares during the Class Period on May\n\n11, 2022. The Peacock Complaint (which was filed on behalf of Plaintiff Jerry Peacock by\n\nMr. Scheinost\u2019s counsel, Glancy Prongay & Murray LLP (\u201cGlancy\u201d)), alleges Defendants\u2019 fraud\n\nwas first revealed to the market upon the issuance of Dutch Bros\u2019 1Q22 Earnings Release \u201con May\n\n11, 2022, after the market closed\u2026.\u201d \u00b6\u00b6 4, 22 (emphasis added). The Class Period is therefore\n\ndefined to include all \u201cpersons and entities that purchased or otherwise acquired Dutch Bros\n\nsecurities between March 1, 2022, and May 11, 2022, inclusive\u2026.\u201d \u00b6 1 (emphasis added).\n\nMr. Scheinost\u2019s erroneous loss chart implicitly recognizes that the corrective disclosure was not\n\nrevealed to the market until May 12, 2022: \u201cThe 90-Day Average Price used in this loss chart is\n\nthe average closing price between May 12, 2022 and August 9, 2022.\u201d ECF No. 18-3.\n\n\n\n\n 4\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 9 of 15\n\n\n\n\n As courts within this Circuit have routinely held, losses on securities that were not held at\n\nthe time of a corrective disclosure are excluded under the Supreme Court\u2019s holding in Dura,\n\nbecause \u201cif\u2026the purchaser sells the shares quickly before the relevant truth begins to leak out, the\n\nmisrepresentation will not have led to any loss.\u201d 544 U.S. at 342; see, e.g., Draftkings, 2021 U.S.\n\nDist. LEXIS 219489, at *13-14 (\u201cThe problem with \u201cin and out\u201d transactions is that \u201c[a]ny gain\n\nor loss due to [them] is reasonably read to reflect price fluctuations attributable to factors other\n\nthan the fraud.\u201d) (quoting Bo Young Cha v. Kinross Gold Corp., No. 12-cv-1203, 2012 U.S. Dist.\n\nLEXIS 79288, at *13 (S.D.N.Y. May 31, 2012) (Engelmayer, J.)); Plaut v. The Goldman Sachs\n\nGrp., Inc., No. 18-cv-12084, 2019 U.S. Dist. LEXIS 160255, at *13 (S.D.N.Y. Sep. 19, 2019)\n\n(\u201c[U]nder Dura, I am inclined to exclude in-and-out transactions prior to the first alleged corrective\n\ndisclosure, i.e., those \u201closses that [each movant] may have incurred before [Defendants\u2019]\n\nmisconduct was ever disclosed to the public.\u201d) (quoting In re Comverse, 2007 U.S. Dist. LEXIS\n\n14878, at *13); In re Comverse, 2007 U.S. Dist. LEXIS 14878, at *18 (holding that Dura and its\n\nprogeny \u201crequire a court to make pre-discovery loss causation determinations regarding asserted\n\nclaims (or parts of asserted claims) that are based on the facts alleged in the complaint\u201d); Sallustro\n\nv. Cannavest Corp., 93 F. Supp. 3d 265, 275 (S.D.N.Y. 2015) (holding that \u201ctransactions that took\n\nplace prior to [the first corrective disclosure], will not be considered in calculating recoverable loss\n\nor in determining lead plaintiff status\u201d).1\n\n\n\n1\n See also Simco v. Aegean Marine Petroleum Network Inc., No. 18-cv-4993, 2018 U.S. Dist.\nLEXIS 241261, at *9 (S.D.N.Y. Oct. 30, 2018) (citing CannaVest and confirming that \u201c[l]osses\nresulting from shares sold prior to corrective disclosures are not considered in evaluating a\nmovant\u2019s financial interests\u201d); Khunt v. Alibaba Grp. Holding Ltd., 102 F. Supp. 3d 523, 531\n(S.D.N.Y. 2015) (\u201c[A]ny losses that [a plaintiff] may have incurred before [a defendant\u2019s]\nmisconduct was ever disclosed to the public are not recoverable, because those losses cannot be\nproximately linked to the misconduct at issue in th[e] litigation.\u201d); Gutman v. Sillerman, No. 15-\ncv-7192, 2015 U.S. Dist. LEXIS 179553, at *13 (S.D.N.Y. Dec. 8, 2015) (\u201c[W]hen evaluating a\nplaintiff's financial interest for purposes of selecting a lead plaintiff, courts in this Circuit consider\n\n\n 5\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 10 of 15\n\n\n\n\n Thus, when the losses attributable to Mr. Scheinost\u2019s \u2018in-and-out\u2019 transactions are properly\n\nexcluded, Mr. Rein\u2019s loss of $(102,011.20) exceeds Mr. Scheinost\u2019s recoverable loss of\n\n$(59,968.08) by $42,043.12, or more than 70%. See infra at \u00a7 I. In fact, Mr. Rein\u2019s loss even\n\nexceeds the losses of Mr. Scheinost and the only other movant, Mr. Ross, combined. Finally, in\n\naddition to suffering the largest loss, Mr. Rein carries two of the remaining three Lax-Olsten\n\nfactors: net shares purchased and net funds expended. See infra at \u00a7 I. Accordingly, Mr. Rein\n\npossesses the largest financial interest in the relief sought by the Class.\n\n 2. Mr. Rein \u201cOtherwise Satisfies\u201d the Requirements of Rule 23\n In addition to suffering the largest loss, Mr. Rein also satisfies the PSLRA\u2019s preliminary\n\nshowing of typicality and adequacy. See 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(I)(cc); Hebron Tech.,\n\n2020 U.S. Dist. LEXIS 169480, at *12 (\u201cWhen moving for appointment as lead plaintiff, the\n\nmoving plaintiff must only make a preliminary showing that the adequacy and typicality\n\nrequirements have been met.\u201d). Indeed, \u201ca wide ranging analysis under Rule 23 is not appropriate\n\n[at this initial stage of litigation] and should be left for consideration of a motion for class\n\ncertification.\u201d Weinberg v. Atlas Air Worldwide Holdings, Inc., 216 F.R.D. 248, 252 (S.D.N.Y.\n\n2003) (alteration in original). Here, Mr. Rein unquestionably satisfies both requirements.\n\n a) Mr. Rein is Typical\n Mr. Rein is typical to the Class as a whole and not subject to any potentially disqualifying\n\nunique defenses. With respect to typicality, courts consider whether \u201c\u2018each class member\u2019s claim\n\narises from the same course of events, and [whether] each class member makes similar legal\n\n\nthat plaintiff\u2019s recoverable loss, and do not take into account losses from shares sold prior to\ncorrective disclosures.\u201d); Micholle v. Ophthotech Corp., No. 17-cv-0210, 2018 U.S. Dist. LEXIS\n41120, at *14 (S.D.N.Y. Mar. 13, 2018) (\u201cCourts consider only recoverable losses when\ncalculating financial loss for the purpose of selecting lead plaintiff.\u201d); Kniffin v. Micron Tech.,\nInc., 379 F. Supp. 3d 259, 264 (S.D.N.Y. 2019) (\u201c[T]he recent trend in this district is for movants\nto adjust their LIFO calculations to remove any losses arising from securities that were bought and\nsold before a defendant's corrective disclosure.\u201d).\n\n\n 6\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 11 of 15\n\n\n\n\narguments to prove the defendant\u2019s liability.\u2019\u201d Draftkings, 2021 U.S. Dist. LEXIS 219489, at *18\n\n(quoting Sgalambo v. McKenzie, 268 F.R.D. 170, 173-74 (S.D.N.Y. 2010)); see also In re Drexel\n\nBurnham Lambert Grp., Inc., 960 F.2d 285, 291 (2d Cir. 1992)). Additionally, Rule 23 does not\n\nrequire the lead plaintiff to be identically situated with all class members to satisfy the typicality\n\nrequirement. See Goldman Sachs, 2019 U.S. Dist. LEXIS 160255, at *7 (noting that \u201cclaims need\n\nnot be identical\u201d); see also Faig v. Bioscrip, Inc., No. 13-cv-06922, 2013 U.S. Dist. 178854, at *9\n\n(S.D.N.Y. Dec. 19, 2013) (same).\n\n As applied, Mr. Rein\u2019s claims are typical to the Class as a whole. Mr. Rein: (i) suffered\n\nlosses on its investments in Dutch Bros securities; (ii) as a result of his reliance on Defendants\u2019\n\nalleged misstatements and/or omissions; (iii) therefore, the claims of Mr. Rein are based on the\n\nsame course of events as the claims of the Class; and (iv) as a result thereof, Mr. Rein\u2019s claims\n\nwill rely upon the same legal theories as the Class as a whole. Therefore, Mr. Rein satisfies the\n\ntypicality requirement. See Tan v. NIO Inc., No. 19-cv-1424, 2020 U.S. Dist. LEXIS 36623, at *16\n\n(E.D.N.Y. Mar. 3, 2020) (noting that movant\u2019s \u201cclaims appear to be typical because, like all\n\nmembers of the class, he alleges that he purchased [company] stock during the class period and\n\nsuffered losses after it was discovered that [company\u2019s] misleading statements artificially inflated\n\nthe stock price during that period.\u201d) (quotation omitted).\n\n b) Mr. Rein is Adequate\n Mr. Rein also satisfies the adequacy requirement of Rule 23. In analyzing a movant\u2019s\n\nadequacy, \u201ca court must consider whether the proposed lead plaintiff: (1) maintains claims that\n\nconflict with those of the class; (2) has sufficient interest in the outcome of the case; and (3) has\n\nselected counsel that is qualified, experienced, and generally able to conduct the litigation in\n\nquestion.\u201d Salinger v. Sarepta Therapeutics, Inc., No. 19-cv-8122, 2019 U.S. Dist. LEXIS, at *8\n\n(S.D.N.Y. Dec. 17, 2019).\n\n\n 7\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 12 of 15\n\n\n\n\n Here, Mr. Rein has no interests that are antagonistic to the class. Moreover, \u201cgiven [his]\n\nsignificant losses,\u201d Mr. Rein is strongly motivated to vigorously act as an advocate and fiduciary\n\non behalf of the Class and is well equipped to oversee counsel in this regard. NIO, 2020 U.S. Dist.\n\nLEXIS 36623, at *16. Finally, Mr. Rein has further demonstrated his adequacy through the\n\nselection of KSF, a firm with decades of experience successfully litigating securities class actions,\n\nas proposed Lead Counsel for the Class. See Moshell v. Sasol Limited, No. 20-cv-1008, 2020 U.S.\n\nDist. LEXIS 78106, at *5 (S.D.N.Y. May 4, 2020) (finding adequacy requirement satisfied where\n\nmovant selected \u201cfirm experienced in securities class action litigation\u201d).\n\n Based on the foregoing, Mr. Rein, as the movant with the largest financial interest who\n\nalso satisfies the typicality and adequacy requirements of Rule 23, is entitled to appointment as\n\nLead Plaintiff.\n\n 3. The Competing Movants Cannot Rebut the Presumption that\n Mr. Rein is the \u201cMost Adequate Plaintiff\u201d\n To overcome the presumption entitling Mr. Rein to appointment as Lead Plaintiff, the\n\nPSLRA requires the remaining Lead Plaintiff movants to present \u201cproof\u201d that he is inadequate to\n\nserve as Lead Plaintiff. 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(II); see also In re Facebook, Inc., IPO Sec.\n\n& Derivative Litig., 288 F.R.D. 26, 40 (S.D.N.Y. 2012) (requiring \u201cexacting proof\u2026to rebut the\n\nPSLRA\u2019s presumption\u201d). As no other movant has, or will be able to, submit the required \u201cproof\u201d\n\nthat Mr. Rein fails on typicality or adequacy grounds, Mr. Rein is entitled to appointment as Lead\n\nPlaintiff. 15 U.S.C. \u00a7 78u-4(a)(3)(B)(iii)(II) (evidentiary burden required to rebut presumption of\n\nmost adequate plaintiff is \u201cproof\u201d); see also City of Riviera Beach Gen. Emps. Ret. Sys. v.\n\nMacquarie Infrastructure Corp., No. 18-cv-3608, 2019 U.S. Dist. LEXIS 14860, at *18 (S.D.N.Y.\n\nJan. 30, 2019) (rejecting speculative arguments against presumptive lead plaintiff).\n\n\n\n\n 8\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 13 of 15\n\n\n\n\n Nevertheless, Mr. Rein anticipates Mr. Scheinost may argue his Class Period sales\n\nsomehow render him inadequate and/or atypical under Rule 23, despite the fact that Mr. Rein is\n\nneither a \u2018net seller\u2019 nor \u2018net gainer\u2019 and properly netted his gains on Class Period sales (which\n\nLIFO-match to both Class Period and pre-Class Period purchases) from his losses on retained Class\n\nPeriod purchases. Such an argument would constitute mere subterfuge. See ECF No. 14-2 (Rein\n\nLoss Chart); Ellenburg v. JA Solar Holdings Co., 262 F.R.D. 262, 266 (S.D.N.Y. 2009) (\u201cThe\n\nmost accurate and realistic way to account for the gain realized from the [class period sale of pre-\n\nclass period purchases] is to subtract the purchase price of the shares sold from the proceeds of\n\ntheir sale, and to offset the resulting gain against [the movant]\u2019s class period losses.\u201d). Similarly,\n\nMr. Rein anticipates Mr. Scheinost may argue his \u201cnet shares\u201d are not 7,000, but rather 2,000, in\n\nconsideration of Mr. Rein\u2019s March 29, 2022 sale of 7,000 shares. But the court in Comverse\n\nclarified that net shares is defined as \u201cshares purchased during and retained at the end of the class\n\nperiod\u2026.\u201d In re Comverse, 2007 U.S. Dist. LEXIS 14878, at *8 (emphasis added). Thus, because\n\n5,000 of the 7,000-share sale LIFO-match with his pre-Class Period purchases, Mr. Rein purchased\n\n9,000 shares during the Class Period and retained 7,000 of those same shares at the end of the\n\nClass Period.2 These arguments notwithstanding, it is incontrovertible that Mr. Rein\u2019s approximate\n\nloss of $(102,011.20)\u2014being the most significant of the Lax-Olsten factors\u2014exceeds\n\nMr. Scheinost\u2019s recoverable loss of $(59,968.08) by $42,043.12, or more than 70%.\n\n As the unrebutted presumptive PSLRA Lead Plaintiff in this case, the plain language of\n\nthe statute supports Mr. Rein\u2019s appointment and the denial of all competing motions. See 15 U.S.C.\n\n\u00a7 78u-4(a)(3)(B); see also Alibaba, 102 F. Supp. 3d at 536 (\u201cSo long as the plaintiff with the largest\n\n\n\n2\n It is for this same reason that Mr. Rein\u2019s \u201cnet funds expended\u201d is $(384,084.80) and not\n$(64,684.80)\u2014$319,400.00 of the proceeds from his March 29, 2022 sale match to pre-Class\nPeriod purchases of 5,000 shares.\n\n\n 9\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 14 of 15\n\n\n\n\nlosses satisfies the typicality and adequacy requirements, he is entitled to lead plaintiff status\u2026.\u201d)\n\n(quoting In re Cavanaugh, 306 F.3d 726, 732 (9th Cir. 2002)). For this reason alone, all competing\n\nmotions should be denied.\n\n B. The Court Should Approve Mr. Rein\u2019s Choice of Counsel\n The PSLRA vests authority in the lead plaintiff to select and retain lead counsel, subject to\n\nthe approval of the court. See 15 U.S.C. \u00a7 78u-4(a)(3)(B)(v). The court should interfere with the\n\nlead plaintiff\u2019s selection only when necessary \u201cto protect the interests of the class.\u201d 15 U.S.C. \u00a7\n\n78u-4(a)(3)(B)(iii)(II)(aa).\n\n Here, Mr. Rein has selected KSF as Lead Counsel for the Class. As its resume reflects,\n\nKSF is highly experienced in the areas of securities litigation and class actions and has successfully\n\nprosecuted numerous securities litigations and securities fraud class actions on behalf of investors.\n\nSee ECF No. 14-5. Thus, the Court may be assured that by approving Mr. Rein\u2019s selection of\n\ncounsel, the members of the Class will receive the best legal representation available.\n\nIII. CONCLUSION\n For all of the foregoing reasons, Mr. Rein respectfully requests that this Court: (1) deny\n\nMr. Scheinost\u2019s motion; (2) appoint Mr. Rein to serve as Lead Plaintiff; (3) approve his selection\n\nof KSF as Lead Counsel for the Class; and (4) grant such other and further relief as the Court may\n\ndeem just and proper.\n\nDATED: May 22, 2023 Respectfully submitted,\n\n KAHN SWICK & FOTI, LLC\n\n\n /s/ Kim E. Miller\n Kim E. Miller (NY-6996)\n 250 Park Avenue, 7th Floor\n New York, NY 10177\n Telephone: (212) 696-3732\n Facsimile: (504) 455-1498\n E-Mail: kim.miller@ksfcounsel.com\n\n\n 10\n\f Case 1:23-cv-01794-PAE Document 25 Filed 05/22/23 Page 15 of 15\n\n\n\n\n -and-\n Lewis S. Kahn\n 1100 Poydras Street, Suite 960\n New Orleans, LA 70163\n Telephone: (504) 455-1400\n Facsimile: (504) 455-1498\n E-Mail: lewis.kahn@ksfcounsel.com\n\n Counsel for Lead Plaintiff Movant Douglas Rein\n and Proposed Lead Counsel for the Class\n\n\n\n CERTIFICATE OF SERVICE\n I hereby certify under penalty of perjury that on May 22, 2023, I authorized the electronic\n\nfiling of the foregoing with the Clerk of the Court using the CM/ECF system which will send a\n\nNotice of Electronic Filing to the e-mail addresses on the Electronic Mail Notice List, and I hereby\n\ncertify that I caused the mailing of the foregoing via the United States Postal Service to non-\n\nCM/ECF participants.\n\n /s/ Kim E. Miller\n Kim E. Miller\n\n\n\n\n 11\n\f","ocr_status":2,"date_upload":"2026-06-22T09:51:43.602418-07:00","document_number":"25","attachment_number":null,"pacer_doc_id":"127033398618","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Memorandum of Law in Opposition to Motion","acms_document_guid":""}],"date_created":"2023-05-22T19:06:19.309554-07:00","date_modified":"2025-01-11T03:04:13.565082-08:00","date_filed":"2023-05-22","time_filed":"22:04:05","entry_number":25,"recap_sequence_number":"2023-05-22.003","pacer_sequence_number":103,"description":"MEMORANDUM OF LAW in Opposition re: 16 MOTION to Appoint Counsel . MOTION to Appoint Tyler Scheinost to serve as lead plaintiff(s) . . Document filed by Douglas Rein..(Miller, Kim) (Entered: 05/22/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/331726249/","id":331726249,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/338013169/","id":338013169,"tags":[],"absolute_url":"/docket/66921700/23/douglas-rein-v-dutch-bros-inc/","date_created":"2023-05-22T13:11:22.471886-07:00","date_modified":"2025-01-11T03:04:13.401266-08:00","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":"23","attachment_number":null,"pacer_doc_id":"127033394934","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Notice (Other)","acms_document_guid":""}],"date_created":"2023-05-22T13:11:22.463917-07:00","date_modified":"2025-01-11T03:04:13.382556-08:00","date_filed":"2023-05-22","time_filed":"14:51:34","entry_number":23,"recap_sequence_number":"2023-05-22.001","pacer_sequence_number":97,"description":"NOTICE of Non-Opposition to Competing Motions for Appointment of Lead Plaintiff and Approval of Selection of Lead Counsel. Document filed by Michael Rice..(Laughlin, Thomas) (Entered: 05/22/2023)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/305249414/","id":305249414,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/66921700/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/311487135/","id":311487135,"tags":[],"absolute_url":"/docket/66921700/22/douglas-rein-v-dutch-bros-inc/","date_created":"2023-05-02T13:10:44.115733-07:00","date_modified":"2025-01-11T03:04:13.362349-08:00","sha1":"c2008e6698f440981c91fbe9376cfffebee43005","page_count":1,"file_size":113376,"filepath_local":"recap/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.22.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nysd.594862/gov.uscourts.nysd.594862.22.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":" Case 1:23-cv-01794-PAE Document 22 Filed 05/02/23 Page 1 of 1\n\n\n\nUNITED STATES DISTRICT COURT\nSOUTHERN DISTRICT OF NEW YORK\n----------------------------------------------------------------- X\n\nJERRY PEACOCK,\n\n Plaintiff,\n 23 Civ.1794(PAE)\n -v-\n ORDER\nDUTCH BROS., INC. ET AL.,\n\n Defendants.\n\n----------------------------------------------------------------- X\n\nPAUL A. ENGELMAYER, District Judge:\n\n The Court has received motions for appointment oflead plaintiff(s) and counsel in this\n\ncase. See Dkts. 12, 16, 19. Responses to these motions are due on May 22, 2023. The Court\n\ndoes not invite replies.\n\n\n\n SO ORDERED.\n\n\n PuWJ A \u00b7[Y\\f!ry\n Paul A. Engelmayer\n United States District Judge\n\n\nDated: May 2, 2023\n New York, New York\n\f","ocr_status":2,"date_upload":"2023-05-03T01:49:32.515515-07:00","document_number":"22","attachment_number":null,"pacer_doc_id":"127033287587","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Order AND ~Util - Set Deadlines","acms_document_guid":""}],"date_created":"2023-05-02T13:10:44.110426-07:00","date_modified":"2025-01-11T03:04:13.295031-08:00","date_filed":"2023-05-02","time_filed":"15:14:02","entry_number":22,"recap_sequence_number":"2023-05-02.002","pacer_sequence_number":94,"description":"ORDER: The Court has received motions for appointment of lead plaintiff(s) and counsel in this case. See Dkts. 12, 16, 19. Responses to these motions are due on May 22, 2023. The Court does not invite replies. (Responses due by 5/22/2023) (Signed by Judge Paul A. 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