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1 An IPO is a financing tool companies use to raise capital through equity rather than
debt. An issuing company, also referred to as “the issuer,” can earn equity capital by selling its
shares to a large number of public investors. This process of raising capital is commonly
referred to “going public” or an “initial public offering.”
ORDER 1
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
IN RE: SECTION 16(B) LITIGATION MASTER CASE NO. C07-
1549JLR
ORDER DISMISSING CASES
I. INTRODUCTION
Before the court are 54 derivative shareholder actions brought by one shareholder,
Plaintiff Vanessa Simmonds. The cases are based on the theory that Defendants engaged
in insider trading during the late-1990s and early 2000 during which there was an increase
in private companies going public. Ms. Simmonds sued the underwriters that were
responsible for underwriting the Initial Public Offerings (“IPOs”) for many of these
companies (hereinafter the “Underwriter Defendants”), whose duties included setting an
IPO price for the shares.1 Ms. Simmonds also names, as nominal defendants, the
Case 2:07-cv-01549-JLR Document 78 Filed 03/12/2009 Page 1 of 27
Case 2:07-cv-01549-JLR Document 78 Filed 03/12/2009 Page 1 of 27
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6UNITED STATES DISTRICT COURT
7WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
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IN RE: SECTION 16(B) LITIGATION MASTER CASE NO. C07-
11 1549JLR
12 ORDER DISMISSING CASES
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16 I. INTRODUCTION
17 Before the court are 54 derivative shareholder actions brought by one shareholder,
18 Plaintiff Vanessa Simmonds. The cases are based on the theory that Defendants engaged
19 in insider trading during the late-1990s and early 2000 during which there was an increase
20 in private companies going public. Ms. Simmonds sued the underwriters that were
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responsible for underwriting the Initial Public Offerings (“IPOs”) for many of these
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companies (hereinafter the “Underwriter Defendants”), whose duties included setting an
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24 IPO price for the shares.1 Ms. Simmonds also names, as nominal defendants, the
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1 An IPO is a financing tool companies use to raise capital through equity rather than
27 debt. An issuing company, also referred to as “the issuer,” can earn equity capital by selling its
28 shares to a large number of public investors. This process of raising capital is commonly
referred to “going public” or an “initial public offering.”
ORDER 1
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2 Unless noted otherwise, all docket references are to the master docket found at
Simmonds v. Credit Suisse Sec., et al., C07-1549.
3 It is unclear why only 30 of the 54 Issuer Defendants joined in the motion to dismiss.
This may be the result of the remaining 24 Issuer Defendants believing that Ms. Simmonds has
standing based on the information she provided to those Issuer Defendants. The court
questioned Issuer Defendants’ liaison counsel at oral argument on this issue but liaison counsel
did not know why only 30 of the Issuer Defendants joined in the motion.
ORDER 2
companies themselves (hereinafter the “Issuer Defendants”). She asserts a claim for
violation of Section 16(b) of the Securities and Exchange Act of 1934 (the “Act”) against
each of the Underwriter Defendants. She contends that during the underwriting process
the Underwriter Defendants made agreements with other insiders and certain investors in
order to profit from under priced IPOs.
Before the court is a motion to dismiss pursuant to Rule 12(b)(1) filed by 30 of the
54 Issuer Defendants in C07-1549 (Dkt. # 56); an omnibus motion to dismiss filed by all
of the Underwriter Defendants in C07-1549 (Dkt. # 57); and supplemental individual
motions to dismiss filed by Issuer Defendant Intersil Corporation in C07-1572 (Dkt. #
47), Issuer Defendant Audible Inc. in C07-1623 (Dkt. # 33), and Issuer Defendant
Packeteer Inc. in C07-1654 (Dkt. # 39).2 The Issuer Defendants’ motion to dismiss (Dkt.
# 56) presents the threshold question whether Plaintiff Vanessa Simmonds has standing to
bring these derivative claims because she failed to make an adequate demand on the
Issuer Defendants before instituting these actions.3 In the Underwriter Defendants’
omnibus motion, as well as part of the Issuer Defendants’ motion, the Defendants ask the
court to determine whether the statute of limitations for bringing these Section 16(b)
claims has expired. The remaining supplemental motions seek dismissal of Ms.
Simmonds’ complaints against certain Issuer Defendants bringing motions for lack of
standing based on separate sets of facts. For the reasons stated below, the court GRANTS
in part and DENIES in part the motions as follows:
Case 2:07-cv-01549-JLR Document 78 Filed 03/12/2009 Page 2 of 27
Case 2:07-cv-01549-JLR Document 78 Filed 03/12/2009 Page 2 of 27
1companies themselves (hereinafter the “Issuer Defendants”). She asserts a claim for
2violation of Section 16(b) of the Securities and Exchange Act of 1934 (the “Act”) against
3each of the Underwriter Defendants. She contends that during the underwriting process
4the Underwriter Defendants made agreements with other insiders and certain investors in
5order to profit from under priced IPOs.
6Before the court is a motion to dismiss pursuant to Rule 12(b)(1) filed by 30 of the
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54 Issuer Defendants in C07-1549 (Dkt. # 56); an omnibus motion to dismiss filed by all
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9of the Underwriter Defendants in C07-1549 (Dkt. # 57); and supplemental individual
10 motions to dismiss filed by Issuer Defendant Intersil Corporation in C07-1572 (Dkt. #
11 47), Issuer Defendant Audible Inc. in C07-1623 (Dkt. # 33), and Issuer Defendant
12 Packeteer Inc. in C07-1654 (Dkt. # 39).2 The Issuer Defendants’ motion to dismiss (Dkt.
13 # 56) presents the threshold question whether Plaintiff Vanessa Simmonds has standing to
14 bring these derivative claims because she failed to make an adequate demand on the
15 Issuer Defendants before instituting these actions.3 In the Underwriter Defendants’
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omnibus motion, as well as part of the Issuer Defendants’ motion, the Defendants ask the
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18 court to determine whether the statute of limitations for bringing these Section 16(b)
19 claims has expired. The remaining supplemental motions seek dismissal of Ms.
20 Simmonds’ complaints against certain Issuer Defendants bringing motions for lack of
21 standing based on separate sets of facts. For the reasons stated below, the court GRANTS
22 in part and DENIES in part the motions as follows:
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24 2 Unless noted otherwise, all docket references are to the master docket found at
25 Simmonds v. Credit Suisse Sec., et al., C07-1549.
26 3 It is unclear why only 30 of the 54 Issuer Defendants joined in the motion to dismiss.
This may be the result of the remaining 24 Issuer Defendants believing that Ms. Simmonds has
27 standing based on the information she provided to those Issuer Defendants. The court
28 questioned Issuer Defendants’ liaison counsel at oral argument on this issue but liaison counsel
did not know why only 30 of the Issuer Defendants joined in the motion.
ORDER 2
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