17 at 3, 5, 9. 17 Copper Mountain, 311 F. Supp. 2d at 864, 876; see 15 U.S.C. § 78u-5(e). Case 3:09-cv-00419-ECR-RAM Document 50 Filed 06/17/10 Page 25 of 39 MOTION TO DISMISS, MEMO OF PS&AS CASE NO. 3:09-cv-00419-ECR-RAM -19- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 in the next few years as server-based technology is rolled out.

Sec. Litig., 2004 WL 3030058, at *9 (N.D. Cal. Dec. 1, 2004) (applying safe harbor where press releases directed readers to SEC filings containing cautionary language); Clorox, 353 F.3d at 1133 (oral forward-looking statements do “not require that the cautions physically accompany oral statements”) (citing 15 U.S.C. § 78u-5(c)(2)(B)(i)). Case4:09-cv-03362-CW Document72 Filed02/08/10 Page22 of 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 DEFENDANTS’ MOTION TO DISMISS Master File No. 09-cv-03362-CW Safe Harbor to apply, they did so here.

¶¶ 93-103), they are insufficient to demonstrate liability for the forward-looking statement regarding Ambac’s plans to meet collateral requirements. See 15 U.S.C. § 78u-5(c)(1)(B); Aegon, 2004 WL 1415973, at *12. In any case, plaintiff fails even to demonstrate recklessness by simply alleging that defendants were aware of the collateral requirements issue and that Leonard signed the 2007 10-K (Compl.

(c) Plaintiff Has Failed To Plead A Strong Inference That Defendants Acted With Actual Knowledge Even in the absence of meaningful cautionary language, a forward-looking statement is not actionable under Rule 10b-5 where, as here, the plaintiff’s allegations fail to show that the defendant had “actual knowledge” that the statement, when made, was false or misleading. 15 U.S.C. § 78u-5(i)(1)(A); see Avaya, 564 F.3d at 274 (recognizing that liability for forward-looking statements “attaches only upon proof of knowing falsity”). As explained in Section III.C.1, infra, Plaintiff’s conclusory assertions that defendants “knew” the alleged falsity of Freshpet’s forecasts for the full year of 2015 (see, e.g., AC ¶¶ 81-83; 97) fail to meet this actual knowledge standard, which is even stricter than the “recklessness” scienter pleading requirement for statements of current fact.

The portions of these statements explaining the reasons for the Board’s belief—that experience indicated it was unlikely for all business units to meet their individual projections— also fall within the statutory definition of forward-looking because they are “statement[s] of the assumptions underlying or relating to” the prediction that Case One was the more likely scenario for FEI’s future economic performance. 15 U.S.C. § 78u-5(i)(1)(D); Intuitive Surgical, 759 F.3d at 1059. As the Ninth Circuit has made clear, such statements of assumptions underlying financial projections fall within the definition of forward-looking.

Case 1:09-cv-11267-GAO Document 63 Filed 06/02/10 Page 52 of 60 45 expenditures, dividends, capital structure, or other financial items.” 15 U.S.C. § 78u-5(i)(1)(A) (2010). The revenue and earnings guidance statements alleged in the Complaint fall squarely into this category — Genzyme offered forecasts of future performance that were consistently couched in terms of what Genzyme “expected” or “anticipated.”

The Reform Act provides that a person “shall not be liable with respect to any forward-looking statement” if either (a) it was accompanied by “meaningful cautionary statements,” “or” (b) “plaintiff fails to prove” actual knowledge of falsity. 15 U.S.C. § 78u-5(c)(1) (emphasis added). Thus, if (as here), the safe harbor applies, then the Court’s inquiry is complete, regardless of any claims about defendants’ alleged state of mind.4 4 Plaintiff’s interpretation ignores the statute’s use of the disjunctive and would make the requirement for “meaningful cautionary language” superfluous.

Sec. Litig., 554 F. Supp. 2d 1083, 1098 (C.D. Cal. 2008); see also 15 U.S.C. § 78u-5(c)(1)(A). “Because the two prongs of the Safe Harbor are ‘alternative means by which forward-looking statements may qualify for the safe harbor,’ a defendant need only Case 2:17-cv-02649-SJO-AS Document 31 Filed 07/12/17 Page 17 of 29 Page ID #:287 .

In re Splash Tech. Holdings, Inc. Sec. Litig., 160 F. Supp. 2d 1059, 1069 n.4 (N.D. Cal. 2001) (“‘subsections (A) and (B) of 15 U.S.C. §78u-5(c)(1) provide alternative means by which forward-looking statements may qualify for the safe harbor. . . .’”).

But even if there were no cautionary language, the second prong of the PSLRA’s safe harbor provision provides protection if plaintiffs fail to prove that defendants’ forward- looking statements were made with actual knowledge that each such statement was false or misleading. 15 U.S.C. § 78u-5(c)(1)(B) (emphasis added). Significantly, “[a]n even more stringent scienter requirement applies to forward-looking statements . . . where plaintiffs must plead facts to support the strong inference that the speaker had actual knowledge that the Case 1:07-cv-05574-LLS Document 51 Filed 12/13/2007 Page 66 of 69 -59- statement was false or misleading when made.”