In Re Electronic Arts Inc. Securities Litigation 05-CV-01219-Defendants
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1 KEKER & VAN NEST, LLP ROBERT A. VAN NEST - #84065 2 JAN NIELSON LITTLE - #100029 MICHAEL D. CELIO - #197998 3 710 Sansome Street San Francisco, CA 94111-1704 4 Telephone: (415) 391-5400 Facsimile: (415) 397-7188 5 Attorneys for Defendants 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8 Master File No. C 05-01219 MMC 9 In re ELECTRONIC ARTS INC. SECURITIES LITIGATION CLASS ACTION 10 DEFENDANTS’ MOTION FOR 11 ADMINISTRATIVE RELIEF TO CONSIDER WHETHER CASES SHOULD 12 BE RELATED 13 [Pursuant to Civil L.R. 3-12(b), a chambers copy of this motion is being lodged in the case 14 This document relates to: ALL ACTIONS listed below.] 15 Judge: Hon. Maxine M. Chesney 16 WALTER HAMMOCK, derivatively on Case No. C 05-02009 BZ 17 behalf of Nominal Defendant Electronic Arts Inc., 18 Plaintiff, 19 v. 20 M. RICHARD ASHER, BRUCE 21 McMILLAN, LEONARD S. COLEMAN, TIMOTHY MOTT, WILLIAM J, 22 BYRON, ROBERT W. PITTMAN, JOEL LINZNER, WARREN C. JENSON, 23 GERHARD FLORIN, LAWRENCE F. PROBST, III, DON A. MATTRICK, 24 NANCY L. SMITH, STEPHEN BENĖ and J. RUSSELL RUEFF, JR 25 Defendants, 26 and 27 ELECTRONIC ARTS INC. 28 Nominal Defendants. 353208.01 MOTION FOR ADMINISTRATIVE RELIEF TO CONSIDER WHETHER CASES SHOULD BE RELATED Case No. C 05-01219 MMC 1 Pursuant to Civil Local Rule 3-12, Defendants1 hereby ask this Court to relate the action 2 titled: Walter Hammock v. M. Richard Asher, et al. Case No. C 05-02009 BZ, currently pending 3 before the Hon. Bernard Zimmerman in this District, to the action pending before this Court, 4 entitled In re Electronic Arts Securities Litigation, Master File No. C 05-01219 MMC. A copy 5 of the Hammock complaint is attached hereto as Exhibit A. 6 The action pending before Magistrate Judge Zimmerman (the “Derivative Action”) 7 concerns “substantially the same parties, property, transaction or event” as the action pending 8 before this Court (the “Class Action”). See Civil L.R. 3-12(a). First, the two actions concern the 9 same event. The substantive allegations in the two actions – that guidance given by Electronic 10 Arts’ officers and directors regarding EA’s future financial performance was false and 11 misleading – are identical. Indeed, the complaint in the Derivative Action appears to have been 12 copied, often word-for-word, from one of the complaints on file in the Class Action. See Baker 13 v. Electronic Arts, et al, C-05-1219, MMC, attached hereto as Exhibit B. Although the two 14 actions rely on slightly different legal theories, they center on precisely the same facts. 15 Second, the two actions involve almost identical parties. The Derivative Action purports 16 to be brought on behalf of all persons who purchased EA stock between January 25, 2005, and 17 March 21, 2005 – the identical set of purchasers that the Class Action concerns. The Derivative 18 suit seeks relief from almost the same Defendants as well: the Derivative Action names as a 19 defendant every one of the Defendants in the Class Action – Electronic Arts Inc., Bruce 20 McMillan, Joel Linzner, Lawrence F. Probst, III, Gerhard Florin, Warren C. Jenson, Don A. 21 Mattrick, Nancy L. Smith and J. Russell Rueff, Jr. – and adds six additional officers and 22 directors. 23 Finally, it also appears that there is a substantial risk of “an unduly burdensome 24 duplication of labor and expense or conflicting results if the cases are conducted before different 25 judges.” See Civil L.R. 3-12(b). For example, in the Class Action, two different parties have 26 1 The defendants in the Class Action (Case No. 05-01219 MMC) are Electronic Arts Inc., Bruce 27 McMillan, Joel Linzner, Lawrence F. Probst, III, Gerhard Florin, Warren C. Jenson, Don A. Mattrick, Nancy L. Smith and J. Russell Rueff, Jr. The defendants in the Derivate Action (Case 28 No. C 05-02009 BZ) are those same parties, as well as M. Richard Asher, Leonard S. Coleman, 1 MOTION FOR ADMINISTRATIVE RELIEF TO CONSIDER WHETHER CASES SHOULD BE RELATED 353208.01 Case No. C 05-01219 MMC 1 filed papers seeking to be Lead Plaintiff. In the Derivative Action, Defendants have received 2 notice of a motion to “Appoint Lead Derivative Counsel.” Although Defendants express no 3 opinion on whether the Court should appoint a “lead derivative counsel,” Defendants believe that 4 it would be appropriate for the a single judge to consider all of these submissions together to 5 minimize confusion and duplication of effort. Because the two actions concern virtually 6 identical parties, identical facts and numerous overlapping legal issues, it would be a more 7 efficient use of judicial resources for the cases to be related. 8 9 Dated: June 7, 2005 KEKER & VAN NEST, LLP 10 11 By: /s/ Michael D. Celio 12 MICHAEL D. CELIO 13 Attorneys for Defendants ELECTRONIC ARTS INC., M. RICHARD ASHER, BRUCE 14 McMILLAN, LEONARD S. COLEMAN, TIMOTHY MOTT, WILLIAM J, BYRON, 15 ROBERT W. PITTMAN, JOEL LINZNER, WARREN C. JENSON, GERHARD FLORIN, 16 LAWRENCE F. PROBST, III, DON A. MATTRICK, NANCY L. SMITH, STEPHEN 17 BENĖ and J. RUSSELL RUEFF, JR. 18 19 20 21 22 23 24 25 26 27 28 Timothy Mott, William J, Byron, Robert W. Pittman and Stephen Benė. 2 MOTION FOR ADMINISTRATIVE RELIEF TO CONSIDER WHETHER CASES SHOULD BE RELATED 353208.01 Case No. C 05-01219 MMC EXHIBIT A ,.-..--- " ' .':::;:;;;:- - -,----- -- ..,--- , ~ ,- -- ,,' - ----,-------- i".;: I Mary E. Alexander (SBN: 104173) Gary W. Loftis (SBN: 235816) 2 Mary Alexander & Associates J 44 Montgomery Street, Suite 1303 San Francisco, CA 94104 Telephone: (415) 433-4440 Facsimile: ((415) 433-5440 William B. Federman FEDERMAN & SHERWOOD 120 N. Robinson, Suite 2720 Oklahoma City, OK 73102 Telephone: (405) 235- 1560 Facsimile: (405)239-2112 "C, , ' 10 Attorneys for Plaintiff UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA IJ WALTERHAMMOCK derivativelyonb~alf~ case Nominal Defendant, ELECTRONIC ARTS; \It Plaintiff ) VERIFIED SHAREHOLDER ) DERIVATIVE COMPLAINT 16 17 M. RICHARD ASHER, WILLIAM J. BYRON JURY TRIAL DEMANDED 18 LEONARD S. COLEMAN, , WARREN JENSON, TIMOTHY MOTT, ROBERT W. 19 PITTMAN, LAWRENCE F. PROBST, III, JOEL 20 SMITHL. LINZNER, BRUCE McMILLAN, NANCY L. ) , GERHARD FLORIN, DON A. 21 ATTRICK, STEPHEN BENE, and USSSELL J. RUEFF, JR. ~J Defendants c.~ c-::::. :...i Ud6 ~ u .&..:!: C,,') , Nominal Defendant. =:t" ~7 ' ~ 08 :.::J ;2 ~ COMPLAINT Page 1 ,-,-u --..uu...-u-- ----------"'.' Plaintiff, Walter Hammock (hereafter "Hammock" or "Plaintiff '), files this Verified Shareholder Derivative Complaint and alleges on information and belief , except as to those allegations that pertain to Plaintiff, which are alleged on personal knowledge , as follows: NATURE OF THE ACTION This is a federal class action on behalf of purchasers of the publicly traded securities of Electronic Arts , Inc. ("EA") between January 25, 2005, and March 21 , 2005 (the Relevant Period. " JURISDICTION AND VENUE This Court has jurisdiction over this action pursuant to 28 US. C. 9 133 1 (a)(2) as a Federal question exists. Venue is proper in this District pursuant to 28 U. C. 91391(a) in that many of the acts and the conduct constituting the violations of law complained of herein occurred in this District, and because Nominal Defendant EA maintains its principal executive offices in this District. In connection with the acts, conduct and other wrongs alleged in this complaint Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce including but not limited to, the United States mails, interstate telephone communications and the facilities ofthe national securities exchange. PARTIES Plaintiff is and was at all times relevant herein, an owner and holder of EA common stock. Hammock is domiciled in the State of Texas. Nominal Defendant EA is a Delaware corporation that maintains its principal place of business at 209 Redwood Shores Parkway, Redwood City, CA 94065. COMPLAINT Page 2 -.'--- -'" '---"--..-- ,.. Defendant M. Richard Asher ("Asher ) was a Director during the relevant time for Nominal Defendant EA. Defendant William 1. Byron ("Byron ) was a Director during the relevant time for Nominal Defendant EA. Defendant Leonard S. Coleman ("Coleman ) was a Director during the relevant time for Nominal Defendant EA. 10. Defendant Warren Jenson (trJenson ) was, at all relevant times, the Company Executive Vice President, Chief Financial and Administration Officer. 11. Defendant Timothy Mott ("Mottl!) was a Director during the relevant time for Nominal Defendant EA. 12. Defendant Robert W. Pittman ("Pittman ") was a Director during the relevant time for Nominal Defendant EA. 13. Defendant Lawrence F. Probst , III ("Probst") was, at all relevant times, the Company s Chairman ofthe Board and Chief Executive Officer. 14. Defendant Joel L. Linzner ("Linzner ) was a Senior Vice-President for the Company during the Relevant Period. 15. Defendant Bruce McMillan ("McMillan ) was an officer of the Company during the Relevant Period. 16. Defendant Nancy Smith ("Smith") was an officer of the Company during the Relevant Period. 17. Defendant Gerhard Florin ("Florin ) was an officer of the Company during the Relevant Period. COMPLAINT Page 3 .....------- ------'-'--"--'---_--.m_..._... 18. Defendant Don A. Mattrick ("Mattrick") was an officer of the Company during the Relevant Period. 19. Defendant Stephen Bene ("Bene ) was an officer of the Company during the Relevant Period. 20. Defendant Russell J. Rueff, Jr. ("Rueff' ) was an officer of the Company during the Relevant Period. 21. Defendants Asher , Linzner , Byron , Probst, Jenson, McMillan, Smith, Florin Mattrick, Bene and Russell are collectively referred to hereinafter as the " Individual Defendants. " The Individual Defendants, because of their positions with the Company, possessed the power and authority to control the contents of EA's quarterly reports , press releases and presentations to securities analysts, money and portfolio managers and institutional investors, i.