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In re Fisker Automotive Holdings, Inc. Shareholder Litigation

United States District Court, D. Delaware

October 12, 2018

IN RE FISKER AUTOMOTIVE HOLDINGS, INC. SHAREHOLDER LITIGATION

          Norman M. Monhait, P. Bradford deLeeuw, ROSENTHAL, MONHAIT & GODDESS, P.A., Wilmington, Delaware; Kurt B. Olsen, KLAFTER OLSEN & LESSER LLP, Washington, District of Columbia; Jeffrey A. Klafter, Fran L. Rudich, KLAFTER OLSEN & LESSER LLP, Rye Brook, New York; Todd S. Collins, Barbara A. Podell, BERGER & MONTAGUE, P.C., Philadelphia, Pennsylvania Counsel for Plaintiffs

          A. Thompson Bayliss, Daniel J. McBride, ABRAMS & BAYLISS LLP, Wilmington, Delaware; James N. Kramer, Lacey Bangle, ORRICK, HERRINGTON & SUTCLIFFE LLP, San Francisco, California; Kevin M. Askew, ORRICK, HERRINGTON, & SUTCLIFFE LLP, Los Angles, California; William J. Foley, ORRICK, HERRINGTON, & SUTCLIFFE LLP, New York, New York Counsel for Defendant Henrik Fisher

          William B. Chandler III, Ian R. Liston, WILSON SONSINI GOODRICH & ROSATI, PC, Georgetown, Delaware; Steven Guggenheim, WILSON SONSINI GOODRICH & ROSATI, PC, Palo Alto, California Counsel for Defendant Bernhard Koehler

          Samuel A. Nolen, Katharine Lester Mowery, Renee M. Mosley, RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; Glenn M. Kurtz, Douglas P. Baumstein, Kimberly A. Haviv, WHITE & CASE LLP, New York, New York Counsel for Defendants Richard Li Tzar Kai and Ace Strength Ltd.

          M. Duncan Grant, Christopher B. Chuff, PEPPER HAMILTON LLP, Wilmington, Delaware Counsel for Defendant Keith Daubenspeck

          J. Clayton Athey, PRICKETT, JONES & ELLIOTT, P.A., Wilmington, Delaware; Peter M. Stone, Edward Han, PAUL HASTINGS LLP, Palo Alto, California Counsel for Defendant Joe DaMour

          Brian C. Ralston, Bindu A. Palapura, POTTER ANDERSON & CORROON, LLP, Wilmington, Delaware; Michael D. Celio, GIBSON, DUNN & CRUTCHER LLP, Palo Alto, California Counsel for Defendants Kleiner Perkins Caufield & Byers, LLC & Ray Lane

          MEMORANDUM OPINION

          CONNOLLY, UNITED STATES DISTRICT JUDGE.

         On May 12, 2017, Plaintiffs filed a motion for leave to file a third amended complaint in this consolidated securities and common-law fraud case. For the reasons discussed below, I will grant in part and deny in part the motion.

         Background

         Plaintiffs are shareholders of Fisker Automotive Holdings, Inc., a start-up launched in 2003 with the stated intent of manufacturing novel, hybrid-electric luxury cars. There are currently seven Defendants in the case: Kleiner Perkins Caufieled & Byers ("Kleiner Perkins"), a venture capital firm and controlling shareholder of Fisker; Ray Lane, the former Chairman of Fisker's board of directors and the managing partner of Kleiner Perkins; Henrik Fisker, the co-founder and former CEO and director of Fisker; and four other former executives and/or directors of Fisker (Bernhard Koehler, Richard Li Tzar Kai, Keith Daubenspeck, and Joe DaMour). Consistent with the parties' practice to date, I will refer to Lane and Kleiner Perkins collectively as "the Kleiner Perkins Defendants" and I will refer to the remaining five Defendants collectively as the "Non-Kleiner Perkins Defendants."

         In November 2013, after raising more than $650 million in capital and securing a loan commitment of $529 million from the U.S. Department of Energy, Fisker filed for bankruptcy. One month later, the first of three Fisker shareholder actions was filed in this Court. (D.I. 1.) This consolidated action joined the three lawsuits in July 2014. In their Consolidated Amended Complaint, Plaintiffs alleged that Defendants violated provisions of the 1933 Securities Act and the 1934 Securities Exchange Act in connection with the sale of Fisker stock. (D.I. 24.)

         Defendants moved to dismiss the Consolidated Amended Complaint, and the Court granted in part and denied in part Defendants' motion on October 15, 2015. (D.I. 81.) Five days later, the Court issued a Scheduling Order, directing the parties to complete fact discovery by November 9, 2016 and to file all motions for amendments of pleadings, including the joinder of parties, before November 23, 2016. (D.I. 84.)

         The parties then began to engage in discovery. (See, e.g., D.I. 117 at 2.) In April 2016, Plaintiffs filed, with the Court's leave, an unopposed Second Amended Complaint, adding a common-law fraud claim and amending the original Exchange Act claims. (D.I. 145.) In June and September 2016 and again in January 2017, at the parties' request, the Court extended the deadlines for the completion of fact discovery and the filing of motions to amend the pleadings. (D.I. 152, 212, 256.)

         Because of scheduling issues for depositions of witnesses from Kleiner Perkins, the parties agreed in March 2017 to seek jointly the Court's permission to extend once again the deadline to file pleading amendments. To that end, the parties filed with the Court a stipulation and proposed order (the "Stipulated Order") that read in relevant part:

WHEREAS, Plaintiffs and counsel for Kleiner Perkins and Ray Lane (the "Kleiner Perkins Defendants") have agreed, subject to Court approval, that the Scheduling Order should be amended to extend the deadline for motions to join other parties and amend the pleadings until May 12, 2017;
WHEREAS, Defendants Henrik Fisker, Richard Li Tzar Kai, Ace Strength Ltd., [1] Bernard Koehler, Joe DaMour and Keith Daubenspeck (the "Non-Kleiner Perkins Defendants") do not believe that there is good cause to amend the Scheduling Order as to the Non-Kleiner Perkins Defendants, but in the interests of efficiency and judicial economy they do not object to the proposed amendment of the Scheduling Order subject to the terms set forth below;
IT IS HEREBY STIPULATED AND AGREED, by and between the parties, through their respective counsel and subject to approval of the Court, as follows:
1. Section 3 of the Scheduling Order is amended to provide that all motions to join other parties and amend the pleadings shall be filed on or before May 12, 2017 (currently March 23, 2017).
2. On or before April 7, 2017, Plaintiffs shall provide to Defendants (but need not file with the Court) a draft amended complaint (the "April 7 Draft") containing any proposed amendments which bear on Plaintiffs' claims ...

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