Prairie Ventures, L.L.C. v. Liotta et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM with Brief In Support

N.D. Ga.November 9, 2016

28488886 v1 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION PRAIRIE VENTURES, L.L.C., Plaintiff, v. MATTHEW D. LIOTTA, VERN KENNEDY, and GERARD GUNTHERT, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) CIVIL ACTION FILE NO.: 1:16-CV-02966-MHC DEFENDANTS GERARD GUNTHERT'S AND VERN KENNEDY'S MOTION TO DISMISS John O'Shea Sullivan Georgia Bar No. 691305 ssullivan@burr.com Bret A. Beldt Georgia Bar No. 940327 bbeldt@burr.com Counsel for Defendants Gerard Gunthert and Vern Kennedy BURR & FORMAN LLP 171 Seventeenth Street, N.W. Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20 Filed 11/09/16 Page 1 of 5 1 28488886 v1 Defendants Gerard Gunthert ("Gunthert") and Vern Kennedy ("Kennedy" and together with Gunthert, the "Defendants"), pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure and the Private Securities Litigation Reform Act, hereby move this Court to dismiss Plaintiff Prairie Ventures, L.L.C.'s First Amended Complaint (Doc. 18) and all claims asserted therein, with prejudice, on the ground that it fails to state a claim upon which relief can be granted. In support of this Motion, Defendants rely on the pleadings of record in this action, their Memorandum in Support (filed herewith), and the Declaration of John O'Shea Sullivan (filed herewith). WHEREFORE, for the reasons stated in Defendants' Memorandum in Support, Defendants respectfully request that this Court dismiss the First Amended Complaint with prejudice. Respectfully submitted this 9th day of November, 2016. /s/ John O'Shea Sullivan John O'Shea Sullivan Georgia Bar No. 691305 ssullivan@burr.com Bret A. Beldt Georgia Bar No. 940327 bbeldt@burr.com Counsel for Defendants Gerard Gunthert and Vern Kennedy Case 1:16-cv-02966-MHC Document 20 Filed 11/09/16 Page 2 of 5 2 28488886 v1 BURR & FORMAN LLP 171 Seventeenth Street, N.W. Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20 Filed 11/09/16 Page 3 of 5 3 28488886 v1 CERTIFICATION OF COUNSEL I hereby certify that the foregoing DEFENDANTS GERARD GUNTHERT'S AND VERN KENNEDY'S MOTION TO DISMISS has been prepared with Times New Roman, 14 point font, one of the font and point selections approved by the Court in LR 5.1C. s/ John O'Shea Sullivan John O'Shea Sullivan Georgia Bar No. 691305 Counsel for Defendants Gerard Gunthert and Vern Kennedy BURR & FORMAN LLP 171 Seventeenth Street, N.W. Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20 Filed 11/09/16 Page 4 of 5 4 28488886 v1 CERTIFICATE OF SERVICE I hereby certify that on this 9 th day of November, 2016, I electronically filed the foregoing DEFENDANTS GERARD GUNTHERT'S AND VERN KENNEDY'S MOTION TO DISMISS with the Clerk of Court using the CM/ECF system which will automatically send an e-mail notification of such filing to the following: Alan E. Lubel, Esq. Benjamin I. Fink, Esq. Daniel H. Park, Esq. Berman Fink Van Horn P.C. 3475 Piedmont Road, NE Suite 1100 Atlanta, GA 30305 Email: alubel@lubellaw.com Email: bfink@bfvlaw.com Email: dpark@bfvlaw.com Counsel for Plaintiff Scott Lester Bonder Fried & Bonder LLC White Provision 1170 Howell Mill Road NW Suite 305 Atlanta, GA 30318 Email: sbonder@friedbonder.com Counsel for Defendant Matthew D. Liotta s/ John O'Shea Sullivan Counsel for Defendants Gerard Gunthert and Vern Kennedy BURR & FORMAN LLP 171 Seventeenth Street, Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20 Filed 11/09/16 Page 5 of 5 28369626 v1 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION PRAIRIE VENTURES, L.L.C., Plaintiff, v. MATTHEW D. LIOTTA, VERN KENNEDY, and GERARD GUNTHERT, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) CIVIL ACTION FILE NO.: 1:16-CV-02966-MHC DEFENDANTS GERARD GUNTHERT'S AND VERN KENNEDY'S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS John O'Shea Sullivan Georgia Bar No. 691305 ssullivan@burr.com Bret A. Beldt Georgia Bar No. 940327 bbeldt@burr.com Counsel for Defendants Gerard Gunthert and Vern Kennedy BURR & FORMAN LLP 171 Seventeenth Street, N.W. Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 1 of 29 1 28369626 v1 Defendants Gerard Gunthert ("Gunthert") and Vern Kennedy ("Kennedy" and together with Gunthert, the "Defendants") submit this Memorandum in Support of their Motion to Dismiss the First Amended Complaint filed by Plaintiff Prairie Ventures, L.L.C. (“Plaintiff”), respectfully showing the Court as follows: I. SUMMARY OF ALLEGATIONS IN THE COMPLAINT1 PodPonics, Inc. is a hydroponic produce farm that grew its produce indoors in water, not soil, using LED light. (Am. Complaint, ¶ 9). Gunthert and Kennedy were directors of PodPonics, although Plaintiff does not reveal when. (Am. Complaint, ¶¶ 4- 5). PodPonics filed a Chapter 7 bankruptcy on May 31, 2016 and ceased operations. (Am. Complaint, ¶ 26). Plaintiff bought 14,814,814 Series B shares of PodPonics on May 20, 2015 for $1 million. (Am. Complaint, ¶ 14). Plaintiff entered an Escrow Agreement in connection with its purchase of PodPonics stock whereby the $1 million was held in escrow until Plaintiff's principal, Rod Markin, was voted onto the PodPonics board of directors by the Series B shareholders. 2 (Am. Complaint, ¶ 15, and Escrow Agreement attached to the 1 Defendants recite and discuss the allegations in the pleadings because the Court is required to assume that all well-pleaded facts are true. Defendants do not admit that any of Plaintiff's allegations are true and specifically denies said allegations. 2 “[W]hen addressing a motion to dismiss, the Court ‘may also consider any attachments to the complaint, matters of public record, orders, and items appearing in the record.’” Andrade v. CitiMortgage, Inc., No. 4:11-CV-00210-HLM (N.D. Ga. Oct. 11, 2011); see also Thompson, 610 F.3d at 631 n. 5 ("Because [plaintiff] alleges violations of securities Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 2 of 29 2 28369626 v1 Declaration of John O'Shea Sullivan ("Sullivan Decl.") as Exhibit A. The Sullivan Decl. is attached hereto as Exhibit 1). Plaintiff authorized the escrow agent to release the $1 million investment on May 29, 2015 (Mr. Markin having been elected to the PodPonics board of directors). (Am. Complaint, ¶ 18; Sullivan Decl., Ex. B). On May 6, 2015, just two weeks before Plaintiff's stock purchase, PodPonics filed a Notice of Exempt Offering of Securities Form D with the SEC which disclosed that the offering was authorized up to $5 million, but had only sold $2,039,918 with $2,960,082 remaining unsold -- less than 50% had been sold three months into the offering. (See May 6, 2015 PodPonics Form D attached to the Sullivan Decl. as Exhibit C). Plaintiff alleges that "Defendants" made one misrepresentation and one omission of fact upon which Plaintiff "based" its investment. (Am. Complaint, ¶¶ 14, 18, 27). The alleged misrepresentation was that the Series B stock offering was "oversubscribed" and that Plaintiff should act quickly to invest. (Am. Complaint, ¶ 13). The alleged misrepresentation was made by two persons not parties to this litigation: (i) Stu Strumwasser of Green Circle Capital Partners, LLC retained by PodPonics to assist in raising the Series B round of capital, and (ii) Connor Seabrook, the PodPonics VP of laws, [the Court] may also take judicial notice of relevant SEC filings"). Also, on a 12(b)(6) motion, the Eleventh Circuit and this Court have held that extrinsic documents can be considered where those documents are referred to in the complaint and central to the plaintiff’s claim. Sturm v. Marriott Marquis Corp., 85 F. Supp. 2d 1356, 1366 (N.D. Ga. 2000) (citing Harris v. Ivax Corp., 182 F.3d 799, 802 n.2 (11th Cir. 1999)). Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 3 of 29 3 28369626 v1 Finance and Administration. (Am. Complaint, ¶ 13). The alleged omission was that "Defendants" failed to inform Plaintiff of a "fungal infection event in the crops that ultimately caused a catastrophic failure of all PodPonics crops." (Am. Complaint, ¶ 12). Plaintiff does not allege that Gunthert or Kennedy made any statement to Plaintiff or was otherwise involved with Plaintiff's PodPonics investment in any way. Plaintiff does not allege that Gunthert was involved with any statement or communication at any time, and the only statement allegedly made by Kennedy was allegedly at a board meeting the month after Plaintiff's investment. (Am. Complaint, ¶ 24). II. ARGUMENT AND CITATION OF AUTHORITY A. The Exchange Act Claims Fail to Meet the PSLRA's Heightened Pleading Requirements or Otherwise State a Claim. 1. Elements and Pleading Standard To state a claim for securities fraud under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, a plaintiff must adequately allege six elements: (1) a material misrepresentation or omission; (2) scienter; (3) a connection between the misrepresentation and the purchase or sale of a security; (4) reliance; (5) economic loss; and (6) loss causation. Meyer v. Greene, 710 F.3d 1189, 1194 (11th Cir. 2013) (citing Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 341-42 (2005)). To survive a motion to dismiss, a plaintiff must meet three standards: (1) Federal Rule of Civil Procedure 8(a)(2)’s notice pleading standard; (2) the special fraud pleading standard found in Fed. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 4 of 29 4 28369626 v1 R. Civ. P. 9(b); and (3) the heightened pleading standards imposed by the Private Securities Litigation Reform Act ("PSLRA"). FindWhat Investor Grp. v. FindWhat.com, 658 F.3d 1282, 1296 (11th Cir. 2011). See also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007). Under Rule 12(b)(6), a complaint must include "[f]actual allegations [adequate] to raise a right to relief above the speculative level, with enough heft to set forth a plausible entitlement to relief." In re HomeBanc Corp. Sec. Litig., 706 F. Supp. 2d 1336, 1350 (N.D. Ga. 2010) (quoting Fin. Sec. Assurance v. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir. 2007)). "[A] plaintiff’s obligation to provide the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rule 9(b) states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). Rule 9(b) requires a complaint to set forth "precisely what statements or omissions were made in what documents or oral representations, who made the statements, the time and place of the statements, the content of the statements and manner in which they misled the plaintiff, and what benefit the defendant gained as a consequence of the fraud." In re Theragenics Corp. Sec. Litig., 105 F. Supp. 2d 1342, 1347 (N.D. Ga. 2000); City of Pontiac Gen. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 5 of 29 5 28369626 v1 Emps. Ret. Sys. v. Schweitzer-Mauduit Int'l, Inc., 806 F. Supp. 2d 1267, 1291 (N.D. Ga. 2011) (internal quotation omitted). The PSLRA enhances Rule 9(b)'s requirements in two important ways. First, the plaintiff must plead with particularity "each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, . . . all facts on which the belief is formed." 15 U.S.C. § 78u-4(b)(1)(B). Second, for "each act or omission alleged" to be false or misleading, the PSLRA requires the plaintiff to "state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind." 15 U.S.C. § 78u-4(b)(2)(A). Thus, to survive a motion to dismiss, the complaint must allege facts supporting a strong inference of scienter "for each defendant with respect to each violation." Kadel v. Flood, 427 Fed. Appx. 778, 780 (11th Cir. 2011) (quoting Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1238 (11th Cir. 2008)); Phillips v. Scientific-Atlanta, Inc., 374 F.3d 1015, 1016 (11th Cir. 2004). 2. Plaintiff Fails to State a Claim Under the Exchange Act. Plaintiff's Exchange Act claim should be dismissed because it fails to plead an actionable misstatement or omission or a strong inference of scienter with respect to either Gunthert or Kennedy. Plaintiff's formulaic recitation of loss causation and its complete failure to plead justifiable reliance also falls short of the pleading standards. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 6 of 29 6 28369626 v1 Plaintiff fails to adequately plead a false or misleading a. statement or omission. An allegation of a misstatement or omission of material fact is the most basic requirement under Section 10(b). Thompson v. RelationServe Media, Inc., 610 F.3d 628, 633 (11th Cir. 2010). Plaintiff must, with particularity, explain why the statement or omission was false or misleading. See 15 U.S.C. § 78u-4(b)(1); Ziemba v. Cascade Int'l, Inc., 256 F.3d 1194, 1202 (11th Cir. 2001). Plaintiff fails this fundamental requirement for at least two reasons. First, Plaintiff does not allege that Gunthert or Kennedy was involved with the alleged misrepresentation or omission upon which Plaintiff's claims are based. Plaintiff does not allege that Gunthert or Kennedy had any communication with Plaintiff prior to (or in connection with) its investment. In fact, Plaintiff does not allege a single conversation or communication with Gunthert or Kennedy before Plaintiff's investment. Plaintiff cannot impose liability on Defendants for statements made by third parties over which Plaintiff fails to adequately allege that Defendants had any control. The United States Supreme Court's decision in Janus Capital Group, Inc. v. First Derivative Traders explained that only the "maker" of an allegedly false statement may be subject to liability under the securities laws. 564 U.S. 135, 141, 131 S. Ct. 2296, 2301-02 (2011). The test is simple: "One 'makes' a statement by stating it." Id. "[T]he maker of a statement is the Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 7 of 29 7 28369626 v1 person or entity with ultimate authority over the statement, including its content and whether and how to communicate it." Id. Plaintiff does not allege that Gunthert or Kennedy actually made a misrepresentation or omission that was allegedly made by Stu Strumwasser of Green Circle Capital Partners, LLC and/or Connor Seabrook. Plaintiff also alleges no facts that Gunthert or Kennedy were controlling persons of Strumwasser (or Seabrook). Accordingly, Defendants are not liable for these statements as a matter of law. Janus, 564 U.S. at 141-42, 131 S. Ct. at 2301-02 ("To be liable . . . [defendant] must have 'made' the material misstatements"). Plaintiff's conclusory allegations that the statements were made "by and through an authorized agent of PodPonics" are insufficient because there are no factual allegations to show that Gunthert or Kennedy had any authority or control over the statements. (Am. Complaint, ¶ 12). See Janus, 131 S. Ct. at 2302 (noting that even when a speechwriter drafts a speech, the content "is entirely within the control" of the speaker who delivers the speech). Second, Plaintiff fails to allege any actionable misstatement or omission by anyone. The Amended Complaint is premised on one alleged misrepresentation and one alleged omission. The alleged misrepresentation was that the PodPonics Series B offering was oversubscribed/oversold. The omission pertained to an alleged fungal infection that had occurred in the company's crops prior to Plaintiff's investment. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 8 of 29 8 28369626 v1 The alleged misrepresentation. Plaintiff alleges that it made its investment on May 20, 2015 after being told at some unknown time by Stu Strumwasser of Green Circle Capital Partners, LLC that "the Series B round had more investors than it could accommodate [and] . . . that the Series B round was oversubscribed and that if [Plaintiff] did not act quickly, it would not be able to invest." (Am. Complaint, ¶ 13). This allegation is simply not plausible because just days prior to the May 20 investment, PodPonics filed a Notice of Exempt Offering of Securities Form D with the SEC which disclosed that the Series B was less than half subscribed, not "oversubscribed." The PodPonics May 6, 2015 Form D disclosed that the offering was authorized up to $5 million, had 33 investors so far, but had sold only $2,039,918 with $2,960,082 unsold -- less than 50% sold in the three month old offering. The assertion that Plaintiff was misled about something that was squarely contradicted by this public disclosure renders this theory implausible. The "oversubscribed" allegation also fails because the alleged misrepresentation amounts to, at worst, puffery, which cannot serve as the basis for a claim under the securities laws. See IBEW Local 595 Pension & Money Purchase Pension Plans v. ADT Corp., Case No. 15-13595, 2016 U.S. App. LEXIS 16454 (11th Cir. 2016); Mogensen v. Body Cent. Corp., 15 F. Supp. 3d 1191, 1211 (M.D. Fla. 2014) ("[r]easonable investors do not base their investing decisions" on such vague and indefinite statements). Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 9 of 29 9 28369626 v1 Any purported reliance by Plaintiff on the puffery about being oversold and "to act fast" could not have been reasonable. It is far-fetched to think that Plaintiff would part with $1 million merely because PodPonics told it that the offering was popular. In fact, the entire misrepresentation is nonsensical because if the offering had been actually oversubscribed, then Plaintiff would have already been shut out. Plaintiff could not have taken the statement literally since it bought 20% of the offering. Something sold 80% or less could not, by definition, be considered "oversubscribed." Moreover, as an investor, Plaintiff had due diligence obligations and could not blindly invest just because the seller spoke optimistically about the popularity of the stock. Telling someone to act fast or they might miss out is common in automobile commercials and late night infomercials for gadgets. Such statements certainly could not form the basis of a fraud claim by someone who hurriedly purchased a Sham-Wow, Chia Pet or The Clapper only to find out later that there was no "limited supply" as advertised, nor can these statements form the basis of a securities fraud claim here. "A misstatement or omission will be considered material only if its disclosure would alter the total mix of information available to the reasonable investor and if there is a substantial likelihood that a reasonable investor would consider it important to an investment decision." HomeBanc, 706 F. Supp. 2d at 1352. "Statements classified as 'corporate optimism' or 'mere puffing' are typically forward-looking statements, or are Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 10 of 29 10 28369626 v1 generalized statements of optimism that are not capable of objective verification. Vague, optimistic statements are not actionable because reasonable investors do not rely on them in making investment decisions." Id. (quoting In re SI Corp. Sec. Litig., 173 F. Supp. 2d 1334, 1350 (N.D. Ga. 2001)). Moreover, Plaintiff essentially acknowledged that the offering being oversold was not material to Plaintiff because its Escrow Agreement did not condition the release of investment funds on the Series B being subscribed to any level -- instead, Plaintiff conditioned its investment on its principal, Rod Markin, being voted onto the board of directors. (See Sullivan Decl., Exhibits A and B). The alleged omission. Plaintiff alleges that "Defendants" failed to warn it that there had been "a fungal infection event in the crops that ultimately caused a catastrophic failure of all PodPonics crops and caused PodPonics to cease its operations." (Am. Complaint, ¶ 12). Plaintiff claims that it was not told about the alleged crop infection that allegedly existed prior to the May 20, 2015 investment, and that the infection led to PodPonics filing bankruptcy on May 31, 2016 -- more than one year after Plaintiff's investment. The omission claim fails based on the lack of a duty to disclose because Plaintiff fails to identify any statement that was rendered misleading by the alleged Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 11 of 29 11 28369626 v1 omission, or any other facts to suggest Defendants had a duty to disclose the alleged pre- May 20, 2015 fungal infection in crops. 3 Rule 10b-5 makes it unlawful "to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading." 17 C.F.R. § 240.10b- 5(b) (emphasis added). "Section 10(b) and Rule 10b-5 do not create an affirmative duty to disclose any and all material information. Disclosure is required . . . only when necessary to make statements made, in light of the circumstances under which they were made, not misleading." City of Edinburgh Council v. Pfizer, Inc., 754 F.3d 159, 174 (3d Cir. 2014) (quoting Matrixx Initiatives, Inc. v. Siracusano, 131 S. Ct. 1309, 1321, 179 L. Ed. 2d 398 (2011) and 17 C.F.R. § 240.10b-5(b)). Plaintiff fails to identify any statement made by anyone that was rendered misleading by the alleged omission about an alleged fungal crop infection. An omission, standing alone, is not actionable. Not only does Plaintiff fail to allege any statement rendered false by the purported omission, but the Amended Complaint also fails to allege any specific facts that plausibly explain the "reasons why" the statements or omissions were false or misleading at the 3 If the alleged crop disease was material to Plaintiff, one would assume that Plaintiff would have asked about the subject of disease before investing. Had Plaintiff asked, this claim would not be an omission, it would be a misrepresentation if PodPonics had told Plaintiff there had been no disease. The fact that this is an omission claim demonstrates that the issue was not even material to Plaintiff when making its investment. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 12 of 29 12 28369626 v1 time they were made as required by the PSLRA. The PSLRA requires that the reasons for a statement's falsity be alleged with particularity. 15 U.S.C. § 78u-4(b). Unsupported speculation is not sufficient to establish falsity under the PSLRA and Rule 9(b). See Garfield v. NDC Health Corp., 466 F.3d 1255, 1265 (11th Cir. 2006) ("It is well established that 'claims of securities fraud cannot rest on speculation and conclusory allegations'"); In re Spectrum Brands, Inc. Sec. Litig., 461 F. Supp. 2d 1297, 1308 (N.D. Ga. 2006) (complaint must allege "sufficiently the circumstances of the conduct to show why each statement or omission was misleading"); HomeBanc, 706 F. Supp. 2d at 1353 (finding that "throughout the complaint, Plaintiff makes conclusory allegations of falsity without establishing contrary true facts. To show falsity, one typically juxtaposes an alleged misrepresentation to a contrary true fact. Here, the complaint is replete with alleged statements and omissions that are not contradicted by what Plaintiff contends to be the 'true facts'"). Plaintiff does not allege any facts about the purported fungal infection, when it occurred, when or how it "ultimately" caused crop failure, or how it supposedly caused PodPonics to cease operations more than a year after Plaintiff's investment. A company that grows and sells crops is expected to experience crop disease -- it is part of every agricultural business. Merely alleging that there was unspecified crop disease at an unspecified time, and that Defendants did not disclose it, is woefully inadequate to state a Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 13 of 29 13 28369626 v1 claim for fraud. 4 Plaintiff's vague, conclusory allegations lack supporting facts sufficient to withstand dismissal under the PSLRA's heighted pleading standards requiring facts to explain the "reasons why" the statement/omission was false or misleading. See Garfield, 466 F.3d at 1263 (affirming dismissal of "vague and difficult to evaluate" claims where the complaint failed "to specify when the improper accounting occurred," and "how and what products were improperly capitalized or amortized"). Plaintiff fails to, and cannot, plead scienter. b. "[S]cienter must be found with respect to each defendant and with respect to each alleged violation of the statute." Thompson, 610 F.3d at 634 (finding insufficient allegations that persons in management positions were "involved in the drafting, producing, reviewing and/or dissemination of misleading statements," and had "control over or receipt of" the allegedly misleading statements). The requisite state of mind for a 10b-5 claim is an intent to deceive, manipulate, or defraud, or a showing of severe recklessness. A complaint must also allege scienter on behalf of the corporation to hold the individuals liable as control persons of the corporation. To plead corporate scienter, a complaint must allege facts showing that "'somebody responsible for the allegedly 4 In fact, Plaintiff alleges that Defendants omitted "readily obtainable information of the catastrophic failure of PodPonics' crops caused by a fungal infection," implying that the information was either not actually known by Defendants at the time of Plaintiff's investment, or that Plaintiff could have obtained the information through minimal diligence. (Am. Complaint, ¶ 38). Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 14 of 29 14 28369626 v1 misleading statements must have known about the fraud.'" Sheet Metal Workers Local 28 Pension Fund v. Office Depot, Inc., 405 F. App'x 384, 386 (11th Cir. 2010) (quoting Mizzaro, 544 F.3d at 1254). To satisfy the PSLRA's heightened standards for pleading scienter, a complaint must allege a theory of scienter that is "more than merely plausible or reasonable-it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent." Tellabs, 551 U.S. at 314 (2007) (emphasis added). The Supreme Court has instructed that "in determining whether the pleaded facts give rise to a 'strong' inference of scienter, the court must take into account plausible opposing inferences." Tellabs, 551 U.S. at 323; see also Edward J. Goodman Life Trust v. Jabil Circuit, Inc., 594 F.3d 783, 790-91 (11th Cir. 2010) (allegations failed to give rise to an inference of scienter "at least as probable as a non-fraudulent explanation"); HomeBanc, 706 F. Supp. 2d at 1358 ("The complaint . . . conspicuously omits any facts that would require one to rule out an innocent explanation for the alleged behavior"). See also Rosenberg v. Gould, 554 F.3d 962, 965 (11th Cir. 2009) (affirming dismissal where inference of scienter was not at least as compelling as inference of nonfraudulent intent). The law is clear that "allegations that a director or officer signed public disclosures and/or was involved in the company's daily operations, standing alone, will not satisfy the pleading requirements of the PSLRA or Rule 9(b)." In re Recoton Corp. Sec. Litig., 358 Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 15 of 29 15 28369626 v1 F. Supp. 2d 1130, 1148 (M.D. Fla. 2005) (quoting Cheney v. Cyberguard Corp, Case No. 98-6879, 2000 U.S. Dist. LEXIS 16351, at *32 (S.D. Fla. July 31, 2000)). Plaintiff's conclusory pleading is exactly what the PSLRA was enacted to eliminate, because such facts "can be ascribed to virtually all corporate officers and directors." See In re Sunbeam Securities Litigation, 89 F. Supp. 2d 1326, 1341 (S.D. Fla. 1999); In re Sunterra Corp. Securities Litigation, 199 F. Supp. 2d 1308, 1331 (M.D. Fla. 2002) (defendants' mere status as directors and their signatures on the Form 10-K do not raise a strong inference of scienter); Cheney, 2000 WL 1140306, at *9 ("plaintiffs have failed to adequately allege . . . scienter, because plaintiffs essentially rely solely on defendants'' roles"). Plaintiff makes no real attempt to state any particularized facts giving rise to a strong inference of scienter. Other than formulaically alleging that "Defendants" had knowledge of a crop failure and failed to tell Plaintiff about it for purposes of marketing the stock, Plaintiff omits any factual allegations that could create a strong inference that Gunthert and Kennedy (or anyone else at PodPonics) deceived, manipulated, defrauded, or were severely reckless in not telling Plaintiff about an unspecified crop disease that occurred at some unspecified time between 2010 and May 20, 2015. (Am. Complaint, ¶¶ 12, 16, 38). Plaintiff's formulaic allegations also improperly reference all "Defendants" collectively instead of clearly distinguishing how each defendant acted purposefully or Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 16 of 29 16 28369626 v1 with severe recklessness, which is insufficient under Rule 9(b) and the PSLRA. See, e.g., Thorpe v. Walter Inv. Mgmt., Corp., 111 F. Supp. 3d 1336, 1359-60 (S.D. Fla. 2015) ("to the extent allegations supporting scienter are not attributed to a specific Defendant, those allegations will be disregarded in the Court's analysis on scienter"). Plaintiff also ignores the rule from Tellabs and HomeBanc by completely failing to account for plausible opposing inferences which in this case are far stronger than any inference of fraudulent intent. For example, because Plaintiff alleges that Plaintiff was not told about an alleged crop disease -- an omission -- Plaintiff tacitly admits that it never bothered to ask anything about a history of crop disease because if it had, this would not be an omission. And, equally plausible is that Defendants omitted telling Plaintiff about a past crop disease because the disease had been cured and was not a concern at the time of Plaintiff's investment. Because the Amended Complaint conspicuously omits any facts that would require one to rule out these innocent explanations for failing to mention an alleged past incidence of disease, it provides no inference of deception, intentional misrepresentation, or other hallmark of scienter. Nor does the Amended Complaint allege any fraudulent motive, or any motive other than to market the stock. (Am. Complaint, ¶ 12). Statements made to market stock are wholly inadequate to satisfy the scienter requirement. A motive to market stock is far different than a motive to defraud to take money for personal gain which is not alleged. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 17 of 29 17 28369626 v1 See HomeBanc, 706 F. Supp. 2d at 1358-59 (finding that while there is no requirement that all of the facts typically found in securities fraud cases must be present to establish scienter, "the complete absence of any such facts compels the conclusion that scienter is lacking"); Sys. Inc. Sec. Litig, No.1:06-cv-1894, 2008 U.S. Dist. LEXIS 109174, at *28 (N.D. Ga. Mar. 31, 2008) ("general allegations of a motive to maintain stock price or enhance a Company's business prospects cannot support a strong inference of scienter"); see also PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 690 (4th Cir. 2004) ("In order to demonstrate motive, a plaintiff must show concrete benefits that could be realized by one or more of the false statements and wrongful nondisclosures alleged"); Garfield, 466 F.3d at 1264 (holding insufficient scienter allegations that defendants attended monthly meetings at which "the aggressive channel stuffing and mounting problems with accounts receivable[s]" were discussed because "[a]bsent from these allegations are any particularized averments of fraud or scienter"). Plaintiff fails to, and cannot, adequately plead justifiable c. reliance. Plaintiff fails to sufficiently plead justifiable reliance on the alleged misrepresentation and omission. See Meyer, 710 F.3d at 1194; see also Gochnauer v. A.G. Edwards & Sons, Inc., 810 F.2d 1042, 1047 (11th Cir. 1987). "Justifiable" reliance means that even "with the exercise of reasonable diligence one still could not have discovered the truth behind the fraudulent omission or misrepresentation." Id. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 18 of 29 18 28369626 v1 Plaintiff does not allege, and it is completely implausible, that Plaintiff could not have discovered with reasonable diligence that (i) the Series B was not oversold (the SEC Form D told it that), and (ii) that PodPonics had experienced a crop disease in its past. Instead, in purely conclusory fashion, Plaintiff alleges that it "relied on the false representations and material omissions made by PodPonics' officers and directors when they agreed to invest $1 million in PodPonics, and they would not have made that investment if Defendants had told the truth about the catastrophic failure of crops and the undersubscribed stock offering." (Am. Complaint, ¶¶ 14, 18, 21, 39). These formulaic allegations lack factual support and come nowhere close to raising "a right to relief above the speculative level, with enough heft to set forth a plausible entitlement to relief," HomeBanc, 706 F. Supp. 2d at 1350, especially considering that Plaintiff has not alleged any statement about PodPonics' crops that would make the omission misleading. If Plaintiff had requested crop production reports and documentation about the Series B subscriptions, or even basic financial statements which would show aberrations in production from crop disease and the investments by new Series B investors, Plaintiff would have discovered what it now claims were the basis of fraud. Under the allegations in the Amended Complaint, there is simply no plausible way for Plaintiff to have justifiably relied on the one alleged misrepresentation and one alleged omission. Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 19 of 29 19 28369626 v1 Plaintiff fails to adequately plead loss causation. d. Plaintiff fails to adequately plead loss causation as required under the PSLRA. See 15 U.S.C. § 78u-4(b)(4); In re Coca-Cola Enters. Inc. Sec. Litig., 510 F. Supp. 2d 1187, 1202 (N.D. Ga. 2007). It is appropriate to dismiss a 10b-5 claim where, as here, a complaint fails to plead loss causation. See Coca-Cola, 510 F. Supp. 2d at 1205. Loss causation requires a showing of both transaction causation and loss causation. Id. Transaction causation is "established when the misrepresentations or omissions cause the plaintiff to engage in the transaction in question." Id. (quoting Robbins v. Koger Properties, Inc., 116 F.3d 1441, 1447 (11th Cir. 1997)). To plead loss causation, a plaintiff must allege that "'the untruth was in some reasonably direct, or proximate, way responsible for [the plaintiff's] loss.'" HomeBanc, 706 F. Supp. 2d at 1361 (quoting Coca-Cola at 1203). In other words, the complaint must "allege facts sufficient to demonstrate that the defendant's actions were a 'significant contributing cause' to the plaintiff’s loss." Id. The Amended Complaint lacks any substantive loss causation allegations and instead relies on the same formulaic recitation of the elements with buzz words. Plaintiff does not allege how the alleged misrepresentations or omissions made the stock worthless or contributed to the company ceasing business and filing bankruptcy, or how the Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 20 of 29 20 28369626 v1 business continued for more than a year after the events that Plaintiff alleges rendered its stock "worthless" more than a year before the company ceased operations. 5 3. Plaintiff Cannot State a Claim for Violations of Section 20(a) of the Exchange Act. As demonstrated above, based on the one alleged misrepresentation and one alleged omission, Plaintiff cannot plead a valid 10b-5 claim. For this reason alone, there can be no claim for "controlling person" liability under Section 20(a). See, e.g., Mizzaro, 544 F.3d at 1254. Section 20(a) is not a freestanding claim but, rather, a means of imposing liability “not only on the person who actually commits a securities law violation, but also on an entity or individual that controls the violator.” Thompson, 610 F.3d at 635. “Because a primary violation of the securities law is an essential element of a § 20(a) derivative claim, a plaintiff who pleads a § 20(a) claim can withstand a motion to dismiss only if the primary violation is pleaded with legal sufficiency.” Thompson, 610 F.3d at 635; Ehlert v. Singer, 85 F. Supp. 2d 1269, 1274 (M.D. Fla. 1999); Malin v. Ivax, Corp., 17 F. Supp. 2d 1345, 1351 (S.D. Fla. 1998). Plaintiffs have failed to sue 5 Plaintiff vaguely, but repeatedly, alleges the "wrongful diversion of funds to one or more of the Defendants" after Plaintiff's investment. (Am. Complaint, ¶¶ 22, 26). Post- investment corporate mismanagement allegations cannot support an Exchange Act claim, and Plaintiff's allegation that this was a cause of PodPonics' demise tacitly admits that it cannot plead loss causation from a pre-investment misrepresentation. Sante Fe Industries, Inc. v. Green, 430 U.S. 462, 477 (1977) (Section 10(b) applies only to disclosure violations, not claims of corporate mismanagement). Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 21 of 29 21 28369626 v1 PodPonics, much less allege facts demonstrating that it is primarily liable under 10(b), so there can be no secondary liability under 20(a). Id. Even if Plaintiff had sufficiently alleged a primary violation, it has not sufficiently pled a violation under Section 20(a). Section 20(a) provides that "[e]very person who, directly or indirectly, controls any person liable under any provision of this chapter . . . shall . . . be liable jointly and severally liable with and to the same extent as such controlled person." 15 U.S.C. § 78t(a). "In order to state a claim under Section 20(a) based on a violation of Section 10(b), a plaintiff must allege that: (1) primary liability under Section 10(b) exists; (2) the defendants had the 'power to control the general business affairs of the corporation; and (3) the defendants had the requisite power to 'control or influence the specific corporate policy which resulted in primary liability.'" HomeBanc, 706 F. Supp. 2d at 1352 (quoting Theoharous v. Fong, 256 F.3d 1219, 1227 (11th Cir. 2001)). Plaintiff's only basis for attempting to hold Defendants liable as a control person is that they were directors of PodPonics. Plaintiff, again pleading mere buzz words, conclusorily alleges that "Defendants had the power to control the general affairs of PodPonics and had the specific power to control the specific corporate policy that resulted in the false representations and material omissions," but Plaintiff does not allege any facts to support this erroneous conclusion. (Am. Complaint, ¶ 36). Plaintiff fails to Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 22 of 29 22 28369626 v1 allege what "specific corporate policy" it is referring to, or the role of Gunthert or Kennedy with respect to such policies or Plaintiff's investment. "[A] complaint that merely restates the legal standard for control person liability, without providing facts in support of the allegation, does not adequately plead control person liability." Tippens v. Round Island Plantation, LLC, Case No. 09-CV-14036, 2009 U.S. Dist. LEXIS 66224, at *36-37 (S.D. Fla. 2009). As explained in Tippens: A defendant is not subject to control person liability simply because he is an officer or director of a corporation. Rather, the plaintiff must make a showing that the defendant “had power, directly or indirectly, to influence the policy and decision making process of the one who violated the act, such as through ownership of voting stock, by contract or through managerial power.” Plaintiffs’ factual allegations do not support such a showing. Plaintiffs make a few bare assertions, for example, that Heaton was “a top- level executive,” “had the power to control and influence the actions” of the Heaton Companies, and “caused [his] company to engage in the acts and omissions” constituting securities fraud….But Plaintiffs plead no facts in support of those conclusory assertions, and have not stated “who defendants allegedly controlled and what acts or status demonstrate their ability to control.” 2009 U.S. Dist. LEXIS 66224, at *37. In this case, Plaintiff alleges nothing against Gunthert and Kennedy other than the same conclusory allegations rejected in Tippens that "because you were a director, you are automatically liable." See Bruhl v. Price Waterhousecoopers Intern., 2007 WL 997362, at *4 (S.D. Fla. Mar. 27, 2007) (“Plaintiff’s claim for control person liability under 20(a) fails because there are no specific allegations of actual control”). Plaintiff Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 23 of 29 23 28369626 v1 makes no allegation of any facts to support a conclusion that Gunthert or Kennedy had any control over the process by which Plaintiff negotiated its investment, and there is no allegation that either Gunthert or Kennedy even interfaced with Plaintiff prior to the investment. The allegations in the Amended Complaint simply are inadequate to sue Gunthert and Kennedy for securities fraud. B. Plaintiff Utterly Fails to State a Claim for Fraud. Plaintiff must adequately allege that Gunthert and Kennedy each defrauded it, but there are no allegations that Gunthert or Kennedy even communicated with Plaintiff prior to its investment. Fed. R. Civ. P. 9(b) requires that "the circumstances constituting fraud . . . shall be stated with particularity." "The tort of fraud requires: (1) a false representation or omission of material fact; (2) scienter; (3) intention to induce the party claiming fraud to act or refrain from acting; (4) justifiable reliance; and (5) damages." Chesapeake Employers Ins. Co. v. Eades, 77 F. Supp. 3d 1241, 1259 (N.D. Ga. Jan. 5, 2015). To satisfy the heightened pleading standard under Rule 9(b), a plaintiff must set forth the precise statements made, who made the statements, when and where the statements were made, the content of the statements and how they misled the plaintiff, and how the defendant benefitted from the alleged fraud." Id. (emphasis added). Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 24 of 29 24 28369626 v1 Plaintiff has utterly failed to identify any false representations and/or affirmative misstatements that it contends were made at any time by Gunthert or Kennedy, the substance or contents of any alleged misrepresentations, when or on what occasion(s) the alleged misrepresentation(s) were made and by whom, and Plaintiff fails to explain with any specificity how it allegedly relied or acted upon any alleged misrepresentations by Gunthert or Kennedy to its detriment. Plaintiff also fails to allege how Gunthert or Kennedy benefitted from the alleged fraud. Nor has Plaintiff alleged anything to give rise to a duty to speak and a material omission by Defendants. See Badger v. S. Farm Bureau Life Ins. Co., 612 F.3d 1334, 1340-41 (11 th Cir. 2010) (duty to disclose arises in fiduciary or similar relation of trust and confidence). Further, Plaintiff's key allegations fail to distinguish among the "Defendants," and the very few instances where Plaintiff actually identifies someone being involved with an alleged misrepresentation do not identify or refer to Gunthert or Kennedy. "Rule 9(b) does not allow a complaint to merely 'lump' multiple defendants together but require[s] plaintiffs to differentiate their allegations when suing more than one defendant . . . and inform each defendant separately of the allegations surrounding his alleged participation in the fraud." McAdams v. Greenberg Traurig, LLP, No. 1:06-CV-1778-JTC, 2007 U.S. Dist. LEXIS 58126, at *15 (N.D. Ga. Aug. 9, 2007); see also Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010) ("The plaintiff must allege facts with respect Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 25 of 29 25 28369626 v1 to each defendant's participation in the fraud"). Plaintiff has failed to plead any facts in support of the essential elements of a fraud claim against Gunthert or Kennedy, requiring that the fraud claim be dismissed. C. Plaintiff Fails to State a Claim for Negligent Misrepresentation. Negligent misrepresentation requires "(1) the defendant's negligent supply of false information to foreseeable persons, known or unknown; (2) such persons' reasonable reliance upon that false information; and (3) economic injury proximately resulting from such reliance." Marquis Towers, Inc. v. Highland Grp., 265 Ga. App. 343, 346, 593 S.E.2d 903, 906 (2004). Plaintiff fails to allege that Gunthert or Kennedy supplied any false information to Plaintiff. 6 Without even an allegation of a false statement uttered by Gunthert or Kennedy, there can be no claim for negligent misrepresentation. There are also no facts that could establish the essential elements of reasonable reliance on a misstatement or "economic injury proximately resulting from such reliance." Instead, Plaintiff relies on its "formulaic recitation" of the tort's elements, not factual allegations about the who, what, where, why and how. See also Patel v. Patel, 761 F. Supp. 2d 1375, 1382 (N.D. Ga. 2011). Respectfully submitted this 9th day of November, 2016. 6 To the extent Delaware law applies, Delaware's economic loss rule bars recovery by Plaintiff. See Christiana Marine Serv. Corp. v. Texaco Fuel & Marine Mktg., 2002 WL 1335360, at *5 (Del. Super. 2002). Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 26 of 29 26 28369626 v1 /s/ John O'Shea Sullivan John O'Shea Sullivan Georgia Bar No. 691305 ssullivan@burr.com Bret A. Beldt Georgia Bar No. 940327 bbeldt@burr.com Counsel for Defendants Gerard Gunthert and Vern Kennedy BURR & FORMAN LLP 171 Seventeenth Street, N.W. Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 27 of 29 27 28369626 v1 CERTIFICATION OF COUNSEL I hereby certify that the foregoing DEFENDANTS GERARD GUNTHERT'S AND VERN KENNEDY'S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS has been prepared with Times New Roman, 14 point font, one of the font and point selections approved by the Court in LR 5.1C. s/ John O'Shea Sullivan John O'Shea Sullivan Georgia Bar No. 691305 Counsel for Defendants Gerard Gunthert and Vern Kennedy BURR & FORMAN LLP 171 Seventeenth Street, N.W. Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 28 of 29 28 28369626 v1 CERTIFICATE OF SERVICE I hereby certify that on this 9 th day of November, 2016, I electronically filed the foregoing DEFENDANTS GERARD GUNTHERT'S AND VERN KENNEDY'S MEMORANDUM IN SUPPORT OF MOTION TO DISMISS with the Clerk of Court using the CM/ECF system which will automatically send an e-mail notification of such filing to the following: Alan E. Lubel, Esq. Benjamin I. Fink, Esq. Daniel H. Park, Esq. Berman Fink Van Horn P.C. 3475 Piedmont Road, NE Suite 1100 Atlanta, GA 30305 Email: alubel@lubellaw.com Email: bfink@bfvlaw.com Email: dpark@bfvlaw.com Counsel for Plaintiff Scott Lester Bonder Fried & Bonder LLC White Provision 1170 Howell Mill Road NW Suite 305 Atlanta, GA 30318 Email: sbonder@friedbonder.com Counsel for Defendant Matthew D. Liotta s/ John O'Shea Sullivan Counsel for Defendants Gerard Gunthert and Vern Kennedy BURR & FORMAN LLP 171 Seventeenth Street, Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02966-MHC Document 20-1 Filed 11/09/16 Page 29 of 29 Case 1:16-cv-02966-MHC Document 20-2 Filed 11/09/16 Page 1 of 2 Case 1:16-cv-02966-MHC Document 20-2 Filed 11/09/16 Page 2 of 2 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 1 of 8 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 2 of 8 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 3 of 8 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 4 of 8 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 5 of 8 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 6 of 8 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 7 of 8 Case 1:16-cv-02966-MHC Document 20-3 Filed 11/09/16 Page 8 of 8 Case 1:16-cv-02966-MHC Document 20-4 Filed 11/09/16 Page 1 of 2 Case 1:16-cv-02966-MHC Document 20-4 Filed 11/09/16 Page 2 of 2 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 1 of 8 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 2 of 8 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 3 of 8 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 4 of 8 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 5 of 8 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 6 of 8 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 7 of 8 Case 1:16-cv-02966-MHC Document 20-5 Filed 11/09/16 Page 8 of 8