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In re Facebook, Inc. IPO Securities & Derivative Litigation

United States District Court, S.D. New York

December 11, 2013

IN RE FACEBOOK, INC., IPO SECURITIES AND DERIVATIVE LITIGATION

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[Copyrighted Material Omitted]

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[Copyrighted Material Omitted]

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For Co-Lead Plaintiffs and the Class: Max W. Berger, Esq., Steven B. Singer, Esq., John J. Rizio-Hamilton, Esq., Catherine E. McCaw, Esq., BERNSTEIN LITOWITZ BERGER & GROSSMAN LLP, New York, NY; Thomas A. Dubbs, Esq., James W. Johnson, Esq., Louis Gottlieb, Esq., Thomas G. Hoffman, Jr., Esq., LABATON SUCHAROW LLP, New York, NY.

For Co-Lead Plaintiff Banyan Capital Master Fund: David Kessler, Esq., Darren J. Check, Esq., Radnor, Pennsylvania.

For Named Plaintiffs Jose G. Galvan and Mary Jane Lule Galvan: Steven E. Fineman, Esq., Daniel P. Chiplock, Esq., LIEFF CABRASER HEIMANN & BERNSTEIN, New York, NY.

For Facebook, Inc. and Individual Facebook Defendants: Andrew B. Clubok, Esq., Brant W. Bishop, Esq., KIRLAND & ELLIS LLP, New York, NY; Susan E. Engel, Esq., Kellen S. Dwyer, Esq., Bob Allen, Esq., KIRLAND & ELLIS LLP, Washington, DC; Tariq Mundiya, Esq., Todd G. Cosenza, Esq., Sameer Advani, Esq., WILLKIE FARR & GALLAGHER LLP, New York, NY; Richard D. Bernstein, Esq., Elizabeth J. Bower, Esq., WILLKIE FARR & GALLAGHER LLP, Washington, DC.

For Underwriter Defendants: James P. Rouhandeh, Esq., Charles S. Duggan, Esq., Andrew Ditchfield, Esq., DAVIS POLK & WARDWELL LLP, New York, NY.

OPINION

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OPINION & ORDER

ROBERT W. SWEET, D.J.

Pursuant to the transfer order from the United States Judicial Panel on Multidistrict Litigation (the " MDL Panel" ), entered on October 4, 2012, 41 actions stemming from the May 18, 2012 initial public offering (" IPO" ) of Facebook, Inc. (" Facebook" or the " Company" ) are presently before this Court.

The instant motion relates to Plaintiffs North Carolina Department of State Treasurer on behalf of the North Carolina Retirement Systems; Banyan Capital Master Fund Ltd.; Arkansas Teacher Retirement System; and the Fresno County Employees' Retirement Association; and the Named Plaintiffs' Jose G. Galvan and Mary Jane Lule Galvan (collectively, " Lead Plaintiffs" or " Plaintiffs" ) consolidated class action complaint (the " Consolidated Class Action Complaint" or " CAC" ) alleging federal securities claims (the " Securities Actions" ) against the Defendants Facebook, certain Facebook directors and officers (the " Individual Defendants" ),[1] and

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underwriters of the initial public offering (" IPO" ) of Facebook (the " Underwriter Defendants" )[2] (collectively, " Defendants" or " Facebook Defendants" ). The Defendants have moved to dismiss the Class Action Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) for failure to state a claim. Based on the conclusions set forth below, Defendants' motion to dismiss is denied.

I. Prior Proceedings

On September 20, 2012, the MDL Panel held a hearing to determine whether the pending 41 filed actions should be transferred to the Southern District of New York. On October 4, 2012, the MDL Panel issued a transfer order, finding that the " Southern District of New York is an appropriate transferee district for pretrial proceedings in this litigation," reasoning that " [m]uch of the relevant discovery will be located in New York . . . ." In re Facebook. IPO Secs. & Derivative Litig., 899 F.Supp.2d 1374, 2012 WL 4748325, at *3 (2012). The cases were assigned to this Court for coordination or consolidation of the pretrial proceedings. Id.

Of the 41 actions presently before the Court due to the MDL Panel's transfer order, 30 of these actions allege violations of the Securities Act of 1933 (the " Securities Act" ) and the Securities Exchange Act of 1934 (the " Exchange Act" ) against movants and various underwriter defendants. On December 6, 2012, this Court issued an opinion, In re Facebook. IPO Sec. & Derivative Litig., 288 F.R.D. 26 (S.D.N.Y. 2012) (the " December 6, 2012 Opinion" ), which consolidated the actions alleging violations of the Securities ...


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