Chicago & Vicinity Laborers' District Council Pension Fund v. Amplitude, Inc.
3:24-cv-00898
| N.D. Cal. | Oct 2, 2024Background
- The Chicago & Vicinity Laborers’ District Council Pension Fund brought securities fraud claims against Amplitude, Inc. and two executives, alleging material omissions and misrepresentations related to the company's financial disclosures around its IPO.
- The plaintiffs claimed Amplitude failed to disclose the dissipation of COVID-19 growth tailwinds, the slow pace of its land-and-expand revenue strategy, and the true nature of its Q2 growth.
- The court reviewed whether Amplitude’s disclosures concerning these issues were adequate, and whether any alleged misrepresentations were made intentionally or with deliberate recklessness (scienter).
- Amplitude sought judicial notice of certain public documents, like SEC filings and conference call transcripts, for the purpose of showing what information was publicly available.
- The defendants moved to dismiss the complaint in its entirety.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial notice of public documents | Such documents can only be noticed for existence, not truth | Documents are proper for judicial notice to show public info | Granted, limited to showing info was available to market. |
| Omissions re: COVID-19 tailwinds | Amplitude failed to disclose tailwinds were dissipating | Amplitude clearly disclosed both benefit and possible reduction | Plaintiff fails to plead actionable omission. |
| Omissions re: land-and-expand strategy | Strategy was misrepresented as accelerating revenue sooner | Disclosed time for scaling accounts could take years | Plaintiff fails to show omission or misrepresentation. |
| Omissions re: Q2 growth & early renewals | Q2 growth attributed to "some early renewals" understated true impact | Disclosed that some growth was from early renewals | No actionable misstatement; no showing “some” was false. |
| Allegations of scienter | Executives knowingly or recklessly misrepresented facts | No particularized facts showing knowledge or recklessness | No strong inference of scienter alleged. |
| Claims under §§ 10(b), 20(a), Rule 10b-5 | Primary violations and control-person liability sufficiently alleged | No underlying primary violation stated | All claims dismissed. |
Key Cases Cited
- Oregon Public Employees Retirement Fund v. Apollo Group Inc., 774 F.3d 598 (9th Cir. 2014) (clarifies pleading standards for securities fraud based on omissions)
- In re Splunk Inc. Securities Litigation, 592 F. Supp. 3d 919 (N.D. Cal. 2022) (judicial notice of SEC filings and earnings call transcripts)
- Zucco Partners v. Digimarc Corp., 552 F.3d 981 (9th Cir. 2009) (scienter pleading standards in securities litigation)
- South Ferry LP, No. 2 v. Killinger, 542 F.3d 776 (9th Cir. 2008) (inference of scienter from confidential witness allegations)
- In re NVIDIA Corp. Securities Litigation, 768 F.3d 1046 (9th Cir. 2014) (requirements for control-person liability under § 20(a))