Nancy Davis, et al. v. Hot Topic Inc, et al. 13-CV-00787...

• •. Case 8:13-cv-00787-JST-AN Document 1 Filed 05/17/13 of 32 Page ID #:3

:'..:•i ....

1 ROBSINS GELLER RUDMAN &DOWDLLP

2 RANDALL J. BARON (15 0796) 3 A'.RICK ATWOOD,JR (156529)

DAVID T. WISSEROECKER (243867) EDWARD -M. GERGOSIAN (105679)

5 655 West Broadway, Suite 1900 6 San Diego, CA 92101-8498

Telephone: 619/231-1058 7 619/231-7423 (fax)

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Attorneys for Plaintiff

[Additional counsel appear on signature page.]

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

NANCY DAVIS, Individually and on ) VIA FAX

) Behalf of All Others Similarly SituateA Ci1 3 U Z;IV Plaintiff,

) CLASS ACTION )

VS. ) COMPLAINT FOR VIOLATION OF

HOT TOPIC, INC., 212F HOLDINGS ) FEDERAL SECURITIES LAWS AND LLC, HT MERGER SUB INC.,

) BREACH OF FIDUCIARY DUTIES

SYCAMORE PARTNERS ) MANAGEMENT; L.L.C.,. LISA M. ) HARPER, STEVE BECKER, MATT ) DRAPKIN, EVELYN D'AN, TERRI ) FUNK GRAHAM, SCOTT HEDRICK,) JOHN KYEES, ANDY SCHIJON and ) TOM VELLIOS,

)

Defendants. ) ) DEMAND FOR JURY TRIAL

8:13-cv-00787-JST-AN Document 1 Filed 05/17/13 of 32 Page ID #:4

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Plaintiff, by counsel, alleges as follows:

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JURISDICTION AND VENUE

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1. This Court has jurisdiction over all claims asserted herein pursuant to §27

4 I of the Securities Exchange Act of 1934 (the "1934 Act") for violations of §§ 14(a) and

5 120(a) of the 1934 Act and U.S. Securities and Exchange Commission ("SEC") Rule

6 11 4-a-9 promulgated thereunder. This Court has supplemental jurisdiction under 28

7 1 U.S.C. §1367.

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2. This Court has jurisdiction over each defendant because each defendant

9 I is either a corporation that conducts business in and maintains operations in this

10 District, or is an individual who has sufficient minimum contacts with this District so

11 as to render the exercise of jurisdiction by this Court permissible under traditional

12 notions of fair play and substantial justice.

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3. Venue is proper in this District pursuant to 28 U.S.C. § 1391 because

14 I defendant Hot Topic, Inc.'s headquarters are located at 18305 East San Jose Avenue,

15 City of Industry, California 91748, and defendants include officers and/or directors

16 who reside in California.

17

NATURE OF THE ACTION

18

4. This is a stockholder class action brought on behalf of the holders of Hot

19 I Topic, Inc. ("Hot Topic" or the "Company") common stock against Hot Topic, its

20 Board of Directors (the "Board"), 212F Holdings LLC, a Delaware limited liability

21 company ("2121"'), HT Merger Sub Inc., a California corporation and a wholly owned

22 subsidiary of 212F ("Merger Sub"), and Sycamore Partners Management, L.L.C.,

23 which, through affiliates, beneficially owns 212F and Merger Sub ("Sycamore" and

24 with 212F and Merger Sub, "Sycamore Partners") for breaches of fiduciary duty and

25 aiding and abetting breaches of fiduciary duty under state law in connection with the

26 proposed sale of the Company to Sycamore Partners, pursuant to an unfair process and

27 for an unfair price (the "Proposed Acquisition"), and for violations of the federal

28 securities laws arising out of defendants' dissemination of a false and misleading

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1 I proxy statement in violation of § § 14(a) and 20(a) of the 1934 Act and SEC Rule 14a-9

2 I promulgated thereunder.

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5. As detailed herein, defendants breached their fiduciary duties under state

4 law, and aided and abetted such breaches, by conducting a flawed sales process

5 designed to deliver the Company to Sycamore Partners and provide material benefits

6 to Company insiders. As a result, the Board failed in its duty to secure the best price

7 possible for the Company's shares, and exacerbated their breaches of fiduciary duty in

8 the sales process by agreeing to lock up the Proposed Acquisition with preclusive deal

9 protection devices and failing to disclose all material information to shareholders.

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6. In an attempt to secure shareholder support for the unfair Proposed

11 Acquisition, on April 24, 2013, Hot Topic issued a materially false and misleading

12 Preliminary Proxy Statement Pursuant to § 14(a) of the Securities Exchange Act of

13 1934 (the "Proxy"). The Proxy, which recommends that Hot Topic's shareholders

14 vote in favor of the Proposed Acquisition, omits and/or misrepresents material

15 information in contravention of § § 14(a) and 20(a) of the 1934 Act regarding the unfair

16 consideration offered in the Proposed Acquisition, and the actual intrinsic value of the

17 Company.

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7. As explained herein, the foregoing information is material to the

19 impending decision of Hot Topic's shareholders whether or not to vote in favor of the

20 Proposed Acquisition and/or whether to seek appraisal for their shares. As such,

21 defendants' violations of §14(a) and 20(a) of the 1934 Act and their breaches of

22 fiduciary duty under state law to maximize shareholder value and disclose all material

23 information in connection with a merger transaction threaten shareholders with

24 irreparable harm for which money damages are not an adequate alternate remedy.

25 Thus, plaintiff seeks injunctive relief to ensure that defendants cure their breaches of

26 fiduciary duty and violations of § § 14(a) and 20(a) before Hot Topic shareholders are

27 asked to vote on the Proposed Acquisition and/or seek appraisal, and that defendants

28 are not permitted to seek shareholder support of the Proposed Acquisition without

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1 complying with their duty under state law to maximize shareholder value and the

2 federal securities laws and state law to provide shareholders with all material

3 1 information.

4

PARTIES

5

S. Plaintiff Nancy Davis is and was at all times relevant hereto a

6 shareholder of Hot Topic.

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9. Defendant Hot Topic is a California corporation headquartered in City of

8 Industry, California. Hot Topic is sued herein as an aider and abettor.

9

10. Defendant Sycamore is a Delaware limited liability company

10 headquartered New York New York. Sycamore is sued herein as an aider and abettor.

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11. Defendant 212F is a Delaware limited liability company. 212F is

12 beneficially owned by affiliates of Sycamore. 212F is sued herein as an aider and

13 abettor.

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12. Defendant Merger Sub is a California corporation and a wholly owned

15 subsidiary of 212F. Merger Sub is beneficially owned by affiliates of Sycamore.

16 Merger Sub is sued herein as an aider and abettor.

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13. Defendant Harper is and was at all relevant times the Company's CEO

18 and a director of Hot Topic.

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14. Defendant Becker is and was at all relevant times a director of Hot Topic.

20 Becker is a founder of Becker Drapkin Management LP ("Becker Drapkin").

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15. Defendant Drapkin is and was at all relevant times a director of Hot

22 Topic. Drapkin is a founder of Becker Drapkin.

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16. Defendant Evelyn D'An is and was at all relevant times a director of Hot

24 Topic.

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17. Defendant Terri Funk Graham is and was at all relevant times a director

26 of Hot Topic.

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18. Defendant Scott Hedrick is and was at all relevant times a director of Hot

28 Topic.

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19. Defendant John Kyees is and was at all relevant times a director of Hot

2 Topic.

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20. Defendant Andy Schuon is and was at all relevant times a director of Hot

4 Topic.

5 21. Defendant Tom Vellios is and was at all relevant times a director of Hot

S Topic.

22. The defendants named above in ¶J13-21 are sometimes collectively

I referred to herein as the "Individual Defendants."

9

CLASS ACTION ALLEGATIONS

10 23. Plaintiff's claims are brought on her own behalf and as a class action

11 pursuant to Federal Rule of Civil Procedure 23 on behalf of all public holders of Hot

12 Topic stock who are being and will be harmed by defendants' actions described below

13 (the "Class"). Excluded from the Class are defendants herein and any person, firm,

14 trust, corporation, or other entity related to or affiliated with any defendants.

15 24. Plaintiff's claims are properly maintainable as a class action under

16 I Federal Rule of Civil Procedure 23.

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25. The Class is so numerous that joinder of all members is impracticable.

18 According to the Company's SEC filings, as of November 15, 2012, there were more

19 than 42 million shares of Hot Topic common stock outstanding.

20 26. There are questions of law and fact which are common to the Class and

21 which predominate over questions affecting any individual Class member. The

22 common questions include, inter alia, the following:

23 (a) whether defendants are breaching their fiduciary duties of

24 undivided loyalty, independence, or due care with respect to plaintiff and the other

25 members of the Class in connection with the Proposed Acquisition, and/or are aiding

26 I and abetting therein;

27 (b) whether defendants are engaging in self-dealing in connection with

28 the Proposed Acquisition, and/or aiding and abetting therein;

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(c) whether defendants are breaching their fiduciary duty to secure and

2 I obtain the best value reasonable under the circumstances for the benefit of plaintiff

3 I and the other members of the Class in connection with the Proposed Acquisition,

4 I and/or aiding and abetting therein;

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(d) whether defendants are unjustly enriching themselves and other

6 I insiders or affiliates of Sycamore Partners and Hot Topic, and/or aiding and abetting

7 I therein;

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(e) whether defendants are breaching any of their other fiduciary

9 duties to plaintiff and the other members of the Class in connection with the Proposed

10 Acquisition, including the duties of good faith, diligence, candor and fair dealing,

11 I and/or aiding and abetting therein;

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(f) whether defendants, in bad faith and for improper motives, have

13 impeded or erected barriers to discourage other offers for the Company or its assets,

14 I and/or aided and abetted therein;

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(g) whether the Proposed Acquisition compensation payable to

16 plaintiff and the Class for their holdings in the Company is unfair and inadequate;

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(h) whether defendants have disseminated a false and misleading

proxy statement in violation of14(a) and 20(a) of the 1934 Act and SEC Rule 14a-9

vJ I promulgated thereunder; and

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(i) whether plaintiff and the other members of the Class would suffer

21 irreparable injury were the transaction complained of herein consummated.

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27. Plaintiffs claims are typical of the claims of the other members of the

23 I Class and plaintiff does not have any interests adverse to the Class.

24 28. Plaintiff is an adequate representative of the Class, has retained

25 competent counsel experienced in litigation of this nature, and will fairly and

26 adequately protect the interests of the Class.

MA 29. The prosecution of separate actions by individual members of the Class

would create a risk of inconsistent or varying adjudications with respect to individual

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1 I members of the Class which would establish incompatible standards of conduct for the

2 I party opposing the Class.

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30. Plaintiff anticipates that there will be no difficulty in the management of

4 I this litigation. A class action is superior to other available methods for the fair and

5 I efficient adjudication of this controversy.

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31. Defendants have acted on grounds generally applicable to the Class with

7 respect to the matters complained of herein, thereby making appropriate the relief

8 sought herein with respect to the Class as a whole.

9

THE PROPOSED ACQUISITION

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32. Hot Topic is a mall and web based specialty retailer operating the Hot

11 Topic and Torrid concepts, as well as a new test retail concept, Blackheart. Hot Topic

12 I offers music/pop culture-licensed and music/pop culture-influenced apparel,

13 accessories, music and gift items for young men and women. Torrid retails on-trend

14 fashion apparel, lingerie and accessories inspired by and designed to fit the young,

15 voluptuous woman who wears size 12 and up. Blackheart offers an expanded

16 collection of dark, edgy, sexy lingerie, accessories and beauty products. As of

17 February 2, 2013, the Company operated 618 Hot Topic stores in all 50 states, Puerto

18 Rico and Canada, 190 Torrid stores, five Blackheart stores, and Internet stores

19 hottopic .com, torrid.com and blackheartlingerie .com.

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33. Sycamore is a private equity firm based in New York specializing in

21 consumer and retail investments. The firm has more than $1 billion in capital under

22 management. The founders of Sycamore have a long history of partnering with

23 management teams to takeover undervalued businesses. They work with companies

24 they believe have significant growth potential, particularly when given the capital and

25 outside expertise they need to succeed.

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34. Despite the Company's bright future, on March 7, 2013, Hot Topic and

27 I Sycamore Partners announced that they had entered into the Merger Agreement

28 whereby Sycamore Partners would acquire all of Hot Topic's outstanding stock for

Case 11 :13-cv-00787-JST-AN Document 1 Filed 05/17/13 of 32 Page ID #:10

$14.00 per share in cash. Pursuant to the Merger Agreement, when the merger is

complete, Hot Topic will survive as a wholly owned subsidiary of affiliates owned by

Sycamore, and Sycamore Partners will own and control the Company.

35. The press release announcing the Proposed Acquisition states in pertinent

part:

Sycamore Partners to Acquire Hot Topic, Inc.for $14.00 Per Share in Cash Transaction Valued at $600 Million

Hot Topic, Inc. ("Hot Topic" or the "Company") and

Sycamore Partners today announced that they have entered into a

definitive agreement pursuant to which Sycamore Partners will acquire

Hot Topic for $14.00 per share in cash, or a total of approximately $600

million. The agreement, which has been unanimously approved by Hot

Topic's Board of Directors, represents a premium of approximately 30%

over Hot Topic's closing stock price on March 6, 2013.

Lisa Harper, Chief Executive Officer and Chairman of the Board

of Hot Topic, said, "We are pleased that this transaction will allow us to

deliver positive results for our shareholders. In addition, we are very

excited about the future growth for the company and know that

Sycamore Partners will provide great resources and expertise to us as we

operate as a private company."

"We are excited to partner with the Hot Topic management team

and all of its talented and passionate employees," said Stefan Kaluzny,

Managing Director of Sycamore Partners. "We look forward to

supporting the Company's continued growth."

The transaction, which is structured as a one-step merger with Hot

Topic as the surviving corporation, is subject to customary closing

conditions, including receipt of shareholder and regulatory approvals.

The transaction requires the affirmative vote of holders of a majority of

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13-cv-00787-JST-AN Document 1 Filed 05/17/13 of 32 Page ID #:11

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the Company's outstanding shares, which will be sought at a special

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meeting of shareholders.

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In connection with the merger agreement, Lisa Harper and Becker

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Drapkin Management LP, holders of 8.9% of the Company's stock, each

5 signed customary support agreements indicating they would support the

6 proposed transaction.

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Guggenheim Securities is acting as financial advisor to Hot Topic

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in connection with the transaction. Cooley LLP is acting as Hot Topic's

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legal advisor. BofA Merrill Lynch is acting as financial advisor to

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Sycamore Partners and Winston & Strawn LLP and the Law Offices of

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Gary M. Holihan, P.C. are acting as its legal counsel.

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36. The Proposed Acquisition is the result of an unfair sales process designed

13 Ito ensure that only Sycamore Partners has the opportunity to acquire Hot Topic. The

14 Proposed Acquisition is being driven by Hot Topic's largest stockholder, hedge fund

15 I Becker Drapkin. The firm first revealed it had taken a 5% stake in Hot Topic in

16 September 2010 for between $5 and $6 a share. Becker Drapkin sought out the

17 Proposed Acquisition in order to secure liquidity for its illiquid holdings in the

18 Company. As of December 31, 2012, Becker Drapkin's illiquid Hot Topic holdings

19 represented 25% of the hedge fund's portfolio, limiting its ability to diversify or

20 otherwise make new investments. Becker Drapkin will more than double its initial

21 investment, and stands to receive over $50 million if the Proposed Acquisition closes.

22 Becker Drapkin control two of the Company's Board members, defendants Becker

23 and Drapkin.

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37. At the time of its investment, Becker Drapkin said that Hot Topic's

25 shares were undervalued and that they were considering nominating board members.

26 Less than three weeks later the fund reached a settlement with Hot Topic. Becker

27 Drapkin's co-founders Becker and Drapkin were added to Hot Topic's Board and

28 within six months the CEO and other top executives had been changed. After

Case :13-cv-00787-JST-AN Document 1 Filed 05/17/13 of 32 Page ID #:12

1 Sycamore Partners acquired its interest in Hot Topic, it appointed defendant and

2 Board member Harper as Hot Topic's CEO.

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38. The Proposed Acquisition, pursuant to an equity commitment agreement

4 entered into with Sycamore Partners, provides defendant Harper, Chairman and CEO

5 of the Company, Don Hendricks, COO of the Company, Mark Mizicko, Chief

6 Planning Officer of the Company, and certain other employees of the Company with a

7 special benefit not being made available to any of Hot Topic's other shareholders.

8 Defendant Harper will rollover over 30,000 shares, and other members of

9 management will rollover thousands more shares, of Hot Topic common stock into the

10 newly created private company. Thus, defendant Harper is strongly motivated to

11 facilitate the merger - not because it is the best price for shareholders - but because

12 she will personally profit more than any other shareholder if the merger closes.

13 Defendant Harper has therefore chosen to participate in Hot Topic's future upside as a

14 Company rather than take the $14.00 in cash, indicating that she thinks the cash is not

15 the best deal. In contrast, public shareholders have no such option. Of course

16 defendant Harper has agreed to vote all her Hot Topic shares in favor of the

17 transaction, as she will now be given the "private equity" bonus, rolling over her Hot

18 Topic shares into Sycamore Partners.

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39. Hot Topic's other officers and directors are similarly conflicted because

20 they will receive millions of dollars in special payments - not being made to ordinary

21 shareholders - for currently unvested stock options, performance units, and restricted

22 shares, all of which shall, upon completion of the transaction, become fully vested

23 and exercisable. Under the terms of the Merger Agreement, the unvested stock

24 options and restricted stock units ("RSUs") held by each of the directors will

25 immediately vest and become exercisable, providing windfall benefits to these

26 insiders. For example, defendant Becker holds 42,437 unvested stock options. Upon

27 the closing of the Proposed Acquisition, defendant Becker alone will receive $594,118

28 for these currently unvested options. The Company's senior management is also

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1 entitled to receive from the Proposed Acquisition millions more in change-of-control

2 payments.

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40. Moreover, the Company's management appears to be staying on board

4 for the long term after the Proposed Acquisition closes. In fact, as noted above, upon

5 closing of the proposed deal, certain of Hot Topic's executive team will be retained by

6 Sycamore Partners, including defendant Harper, and Hot Topic's COO, Don

7 Hendricks. In essence, the Proposed Acquisition is a management buyout, backed by

8 Sycamore Partners.

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41. In addition, the Board selected a conflicted financial advisor in the

10 process that led to the Proposed Acquisition. Guggenheim Securities ("Guggenheim")

11 will receive a multi-million dollar fee as Hot Topic's financial advisor that is

12 contingent on the closing of the Proposed Acquisition. Moreover, Guggenheim has

13 provided services for GoldenGate Capital, the former firm of the Principal of

14 Sycamore Partners, Mr. Kaluzny, while he was the Principal and Managing Director

15 there.

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42. These conflicts tainted the process leading to the Proposed Acquisition.

17 While the Board created a transaction committee "to more efficiently manage" the

18 process, the formation of the committee did nothing to address the conflicts, and in

19 fact furthered those conflicts. The Board appointed to the committee conflicted

20 defendants Drapkin and Harper, who were both strongly motivated to facilitate the

21 Proposed Acquisition and who dominated the transaction committee.

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43. The Board and its transaction committee catered the sales process

23 exclusively towards Sycamore Partners in order to ensure that Company management

24 secured continuing employment and the opportunity for equity rollover. The

25 transaction committee granted Sycamore Partners defacto exclusivity and refused to

26 give Company A, whose bid matched Sycamore Partners' bid of$ 14.00 per share, the

27 opportunity to continue to participate in the process. The result was a lack of any

28 competitive process, and a failure to maximize shareholder value when, with the

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Case 8

:13-cv-00787-JST-AN Document 1 Filed 05/17/13 of 32 Page ID #:14

1 knowledge that it was the only bidder the Board was dealing with, Sycamore Partners

2 did not raise their bid over $14.00 per share.

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44. In order to justify the inadequate consideration, the Board directed that

4 downward-revised financial projections (the "Revised Projections") be prepared just

5 prior to the consummation of the Merger Agreement to be used by Guggenheim in its

6 fairness opinion in place of the long-range projections that were prepared by

7 management in late 2012 (the "LRP Projections"). The Revised Projections, that do

8 not incorporate any growth from the Company's Torrid and Blackheart franchises,

9 were used to justify Guggenheim's opinion that $14.00 per share was "fair" to Hot

10 Topic's shareholders. The Revised Projections will also make it easier for

11 management to meet targets for increased equity compensation in the Company post-

12 close.

13

45. The consideration secured fails to adequately value the Company on an

14 intrinsic value basis. While the Company's shareholders will receive just $14.00 per

15 Hot Topic share, analysts have projected the Company's value is at least $16.40 per

16 share. Moreover, the Company has no debt and has at least $1.40 per share of cash on

17 its books, meaning the purchase price is closer to $12.60 per share. Furthermore, the

18 Company has seen substantial recent growth. Its share price has risen from $5.11 on

19 March 18, 2011 to $11.35 on February 20, 2013. The clothing and apparel chain,

20 found in malls across the U.S. and popular among teens, has performed well over the

21 last year, as same-store sales at locations open more than a year rose 2%. Hot Topic

22 has 618 locations and also runs a plus-size brand, Torrid, with 190 locations, and a

23 lingerie brand, Blackheart, with five locations. Torrid saw a 5.4% increase in same-

24 store sales for locations open more than a year. For Hot Topic, revenue reached $233

25 million in the fourth quarter that ended February 2, an 11% increase in revenue from

26 the same period a year earlier. Hot Topic shares rose 46% last year as quarterly

27 results beat analysts' estimates for four straight quarters, according to data compiled

28 by Bloomberg.

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46. Becker Drapkin, which owns about 8.5% of the Company, has, pursuant

2

to a Support Agreement, agreed to support Sycamore Partners' buyout offer. So has

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defendant Harper, whose exact ownership stake is undisclosed. The Merger

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Agreement states the Support Agreements cover 10.36% of the Company's shares,

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including options. The agreements require Becker Drapkin and Harper to vote for the

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deal, against any competing bid, and against any other transaction that would impede

7 the merger, like a reorganization, recapitalization, asset sale or anything that

8 endangers its performance under debt documents. The Support Agreements

9 essentially put a competing bidder in a 10% hole.

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47. The unfair sales process was further designed to ensure that only

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Sycamore Partners had an opportunity to acquire the Company. To achieve this,

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defendants agreed to preclusive deal protection devices in the Merger Agreement with

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Sycamore Partners that effectively chills the auction process for the Company,

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including:

15 a "No Shop" provision that precludes the Board from engaging in

16 a fair process to sell the Company by seeking out the best possible

17 price for Hot Topic's shareholders, as their fiduciary duties

18 require;

19 a "Matching Rights" provision that requires Hot Topic to give full

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Information about competing acquisition proposals to Sycamore

21 Partners and then allows Sycamore Partners to match any

22 competing proposal, thus discouraging competing proposals; and

23 • a "Termination Fee" provision whereby defendants agreed to pay

24 Sycamore Partners $21 million in the event the Board receives a

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higher offer for the Company and its shareholders, despite the no-

26 shop provision.

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II

THE MATERIALLY MISLEADING PROXY

2

48. In connection with the Proposed Acquisition, defendants filed the

3 materially misleading Proxy. The Proxy, which recommends that Hot Topic's

4 shareholders vote in favor of the Proposed Acquisition, omits and/or misrepresents

5 material information about the intrinsic value of the Company, that makes it more

6 likely that Hot Topic's public shareholders will be coerced and misled into voting in

7 favor of the Proposed Acquisition without that material information regarding the

8 critical decision they face. Specifically the Proxy omits/or misrepresents the material

9 information set forth below in contravention of §14(a) and 20(a) of the 1934 Act

10 and/or defendants' duty of candor and full disclosure under state law:

11

(a) The bases for utlizing the Revised Projections in analyzing the

12 intrisic value of the Company. The Proxy contains two sets of projections, the LRP

13 Projections and the Revised Projections that were put together by Company

14 management towards the end of the process, and were used by Guggenheim when

15 conducting its financial analyses, portions of which are disclosed in the Proxy. The

16 Proxy does not disclose, however, the methodology and rationale employed for

17 making the downward revisions to the LRP Projections. Specifically, the Proxy

18 omits, among other things: (i) the basis for the decrease in Capital Expenditures

19 revised projections which is not commensurate with the decrease in Total Stores

20 and/or Total Revenue from the LRP Projections; and (ii) a description of how the new

21 and very successful Torrid and Blackheart businesses were treated in the preparation

22 of the LRP Projections. This omission renders the portion of the Proxy that sets for

23 the LRP Projections materially misleading, as well as the description in the

24 Background of the Merger section, at page 28, which vaguely describes the revisions

25 as reflective of "a more moderate growth trajectory and achievement of operating

26 margin improvement over a longer period than the LRP Projections." Without

27 disclosure of this material information, shareholders have no abiltity to assess whether

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Guggenheim's analyses, which is based on the Revised Projections, sufficiently values

the Company's intrinsic value.

(b) Material line items in the LRP projections. The Proxy sets forth

certain line items for the LRP Projections, but omits critical items for 2013-2018,

including: (i) stock based compensation expense; (ii) working capital; (iii) taxes or

marginal tax rate; (iv) net income; and (v) unlevered free cash flows for years 2013

thru 2018. Without this material information, shareholders cannot conduct their own

assessment of the Company's value based on the LRP Projections, which is critical

under the circumstances because the Proxy does not disclose the basis for the

10 downward revisions made to the LRP Projections, and Guggenheim conducted its

11 analyses on the Revised Projections and not the LRP Projections. This omission

12 renders the information concerning the LRP Projections set forth on pages 34-3 5 of

13 the Proxy materially misleading.

14

(c) The basisfor Guggenheim's selection of an unlevered beta range

15I in the DCF. The Proxy sets forth that Guggenheim selected an unlevered beta range

16 of .950-1.250 for use in its DCF analysis, but does not provide the basis for this

17 selected range. This omission is material because Hot Topic's beta is generally

18 believed to be in the range of 0.9. This omission renders the Proxy's discussion of

19 Guggenheim's DCF analysis materially misleading.

20

(d) Guggenheim's treatment of stock-based compensation in its

21 DCF. The Proxy does not disclose how stock-based compensation was treated in

22 Guggenheim's DCF. This omission renders the Proxy materially misleading because

23 the manner is which stock-based compensation is treated in a DCF analysis, either as a

24 cash or non-cash expense, can have a significant impact on the outcome of this

25 analysis. Without this information, shareholders cannot assess the actual intrinsic

26 value of their shares in the Company, and thus cannot make a fully informed decision

27 whether to vote in favor of the Proposed Acquisition.

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(e) The methodology used by Guggenheim to arrive at the "illustrative

2 reference range" of "$9.00415.00" utilized in the "Precedent Merger and

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Acquisitions Transaction Analysis." The Proxy discloses the range utilized, but does

4 not disclose how that range was derived and what inputs and/or factors were

5 considered in generating that range, nor does the Proxy disclose why Guggenheim

6 utilized a "illustrative reference range" in the Precedent Transaction Analysis, rather

7 than deriving a reference range from the EV/EBITDA and EV/EBIT multiple ranges

8 calculated as part of the analysis. This omission is material because the purpose of a

9 comparative transactions analysis is to provide shareholders with a sense of how the

10 consideration offered in the Proposed Acquisition compares to similar transactions,

11 and without this information shareholders have no ability to assess whether the range

12 selected by Guggenheim bears any relation to the actual outputs generated by the

13 selected transactions, or why an illustrative range was used rather than a range based

14 on the observed multiples.

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(f) The benchmarking and comparative metrics used by Guggenheim

16 to compare Hot Topic to its peers in the "Peer Group Financial Benchmarking and

17 Trading Valuation Analysis." The Proxy discloses certain multiples observed in

18 comparing Hot Topic to its selected peers, but it does not disclose which

19

benchmarking metrics Guggenheim used in conducting the analysis. This material

20 omission renders the Proxy's discussion of the analysis materially misleading,

21 particularly with respect to the statement "[a]fter reviewing all of the peer group

22 trading multiples and benchmarking analysis, Guggenheim Securities' analysis of the

23 selected peer group companies resulted in an overall reference range of$7.50-$ 12.50

24 per share for purposes of valuing Hot Topic's common stock on a stand-alone public-

25 market trading basis. This reference range implied EV/20 13 EBITDA multiples of

26 3.3x-6.2x and EV/2013 EBIT multiples of 6. lx- 11.4x." This omission is material

27

because without the information, shareholders do not have the ability to understand

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1 how Guggenheim arrived at the reference ranges implied by the analysis, and thus

2 how Hot Topic compares to similar companies in its space based on the analysis.

3

49. There is no more material information to shareholders in a merger than

4 the information underlying or supporting the purported "fair value" of their shares.

5 Shareholders are entitled to the information necessary to inform a decision as to the

6 adequacy of the merger consideration, which includes the underlying data (including

7 management's projections) the investment bankers relied upon, the key assumptions

8 that the financial advisors used in performing valuation analyses, and the range of

9 values that resulted from those analyses. Here the analyses of the three financial

10 advisors incorporated certain critical assumptions that significantly affect the output

11 (valuation) of the analyses. Without this material information, shareholders have no

12 basis on which to judge the adequacy of Sycamore Partners' offer.

13

50. Without full and fair disclosure of the material information set forth

14 above, shareholders should not be asked to vote to approve the Proposed Acquisition.

15

51. In sum, and as described in further detail herein, by agreeing to the

16 Proposed Acquisition, each of the defendants breached their fiduciary duties of

17 loyalty, due care, independence, candor, good faith and fair dealing, and/or has aided

18 and abetted such breaches. Rather than acting in the best interests of the Company's

19 shareholders, defendants spent substantial effort tailoring the structural terms of the

20 Proposed Acquisition to aggrandize their own personal interests and to meet the

21 specific needs of Sycamore Partners, which efforts will eliminate the equity interest of

22 Hot Topic's public shareholders.

23

52. In essence, the Proposed Acquisition is the product of a flawed process

24 that is designed to ensure the merger of Hot Topic with Sycamore Partners, on terms

25 preferential to Sycamore Partners and defendants, and detrimental to plaintiff and Hot

26 Topic's shareholders. Plaintiff seeks to enjoin the Proposed Acquisition.

27

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- 16-

Case 8


1

DEFENDANTS' FIDUCIARY DUTIES

2

53. In any situation where the directors of a publicly traded corporation

3 undertake a transaction that will result in either (i) a change in corporate control or (ii)

4 a break-up of the corporation's assets, the directors have an affirmative fiduciary

5 obligation to obtain the highest value reasonably available for the corporation's

6 shareholders, and if such transaction will result in a change of corporate control, the

7 shareholders are entitled to receive a significant premium. To diligently comply with

8 these duties, the directors may not take any action that:

9

(a) adversely affects the value provided to the corporation's

10 shareholders;

11

(b) discourages or inhibits alternative offers to purchase control of the

12 corporation or its assets;

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(c) contractually prohibits them from complying with their fiduciary

14 duties;

15 (d) otherwise adversely affects their duty to search and secure the best

16 value reasonably available under the circumstances for the corporation's shareholders;

17 and/or

18

(e) provides the directors with preferential treatment at the expense of,

19 or separate from, the public shareholders.

20

54. In accordance with their duties of loyalty and good faith, the Individual

21 Defendants, as directors and/or officers of Hot Topic, are obligated to refrain from:

22

(a) participating in any transaction where the directors' or officers'

23 loyalties were divided;

24

(b) participating in any transaction where the directors or officers

25 received a personal financial benefit not equally shared by the public shareholders of

26 the corporation; and/or

27

(c) unjustly enriching themselves at the expense or to the detriment of

28 the public shareholders.

- 17-


55. Plaintiff alleges herein that defendants, separately and together, in

connection with the Proposed Acquisition, are breaching and/or aiding and abetting in

the breaches of fiduciary duties owed to plaintiff and the other public shareholders of

Hot Topic, including the duties of loyalty, good faith, candor, due care and

independence. As a result of these breaches of fiduciary duties and the aiding and

abetting therein, neither plaintiff nor the Class will receive adequate or fair value for

their Hot Topic common stock in the Proposed Acquisition.

56. Because defendants are breaching their duties of due care, loyalty and

good faith in connection with the Proposed Acquisition, and/or are aiding and abetting

therein, the burden of proving the inherent or entire fairness of the Proposed

Acquisition, including all aspects of its negotiation, structure, price and terms, is

placed upon defendants as a matter of law.

COUNT I

Against Defendants for Violations of §14(a) of the 1934 Act and SEC Rule 14a-9 Promulgated Thereunder

57. Plaintiff repeats and realleges each and every allegation contained above

as if fully set forth herein.

58. During the relevant period, defendants disseminated the false and

misleading Proxy specified above, which failed to disclose material facts necessary in

order to make the statements made, in light of the circumstances under which they

were made, not misleading.

59. The Proxy was prepared, reviewed and/or disseminated by defendants. It

misrepresented and/or omitted material facts, including material information about the

unfair consideration offered in the Proposed Acquisition, and the actual intrinsic value

of the Company.

60. In so doing, defendants made untrue statements of material facts and

omitted to state material facts necessary to make the statements that were made not

misleading in violation of14(a) of the 1934 Act and SEC Rule 14a-9 promulgated

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Case 8


1 thereunder. By virtue of their positions within the Company and/or roles in the

2 process and in the preparation of the Proxy, defendants were aware of this information

3 and of their duty to disclose this information in the Proxy.

4

61. Defendants were at least negligent in filing the Proxy with these

5 materially false and misleading statements.

6

62. The omissions and false and misleading statements in the Proxy are

7 material in that a reasonable shareholder would consider them important in deciding

8 how to vote on the Proposed Acquisition. In addition, a reasonable investor would

9 view a full and accurate disclosure as significantly altering the "total mix" of

10 information made available in the Proxy and in other information reasonably available

11 to shareholders.

12

63. By reason of the foregoing, defendants have violated § 14(a) of the 1934

13 Act and SEC Rule 14a-9(a) promulgated thereunder.

14

64. Because of the false and misleading statements in the Proxy, plaintiff and

15 the Class are threatened with irreparable harm, rendering money damages inadequate.

16 Therefore, injunctive relief is appropriate to ensure defendants' misconduct is

17 corrected.

18

COUNT II

19

Against Defendants for Violation of §20(a) of the 1934 Act

20

65. Plaintiff repeats and realleges each and every allegation contained above

21 as if fully set forth herein.

22

66. Defendants acted as controlling persons of Hot Topic within the meaning

23 of §20(a) of the 1934 Act as alleged herein. By virtue of their positions as officers

24 and/or directors and/or controlling shareholders and/or advisors of Hot Topic, and/or

25 their participation in and/or awareness of the Company's operations and/or intimate

26 knowledge of the false statements contained in the Proxy filed with the SEC, they had

27 the power to influence and control and did influence and control, directly or indirectly,

28

-19-

Case 8


1 the decision-making of the Company, including the content and dissemination of the

2 various statements which plaintiff contends are false and misleading.

3

67. Each of the defendants was provided with or had unlimited access to

4 copies of the Proxy and other statements alleged by plaintiff to be misleading prior to

5 and/or shortly after these statements were issued and had the ability to prevent the

6 issuance of the statements or cause the statements to be corrected.

7

68. In particular, each of the Individual Defendants had direct and

8 supervisory involvement in the day-to-day operations of the Company, and, therefore,

9 is presumed to have had the power to control or influence the particular transactions

10 giving rise to the securities violations as alleged herein, and exercised the same. The

11 Proxy at issue contains the unanimous recommendation of each of the Individual

12 Defendants to approve the Proposed Acquisition. They were thus directly involved in

13 the making of this document.

14

69. Hot Topic and Sycamore Partners also had direct supervisory control

15 over composition of the Proxy and the information disclosed therein, as well as the

16 information that was omitted and/or misrepresented in the Proxy.

17

70. In addition, as the Proxy sets forth at length, and as described herein,

18 defendants were each involved in negotiating, reviewing and approving the Proposed

19 Acquisition. The Proxy purports to describe the various issues and information that

20 they reviewed and considered, descriptions which had input from all defendants.

21

71. By virtue of the foregoing, defendants have violated §20(a) of the 1934

22 Act.

23

72

As set forth above, defendants had the ability to exercise control over and

24 did control a person or persons who have each violated § 14(a) of the 1934 Act and

25 SEC Rule 14a-9, by their acts and omissions as alleged herein. By virtue of their

26 positions as controlling persons, these defendants are liable pursuant to §20(a) of the

27 1934 Act. As a direct and proximate result of defendants' conduct, plaintiff and the

28 Class will be irreparably harmed.

-20-

Case 8


1

COUNT III

2

Breach of Fiduciary Duties Against the Individual Defendants

3

73. Plaintiff incorporates by reference and realleges each and every

4 allegation contained above as though fully set forth herein.

5

74. The Individual Defendants have violated the fiduciary duties of care,

6 loyalty, good faith and independence owed to the public shareholders of Hot Topic

7 and have acted to put their personal interests ahead of the interests of Hot Topic's

8 shareholders.

9

75. By the acts, transactions, and courses of conduct alleged herein,

10 defendants, individually and acting as a part of a common plan, are attempting to

11 unfairly deprive plaintiff and other members of the Class of the true value inherent in

12 and arising from Hot Topic.

13

76. The Individual Defendants have violated their fiduciary duties by

14 entering Hot Topic into the Proposed Acquisition without regard to the effect of the

15 Proposed Acquisition on Hot Topic's shareholders.

16

77. As demonstrated by the allegations above, the Individual Defendants

17 failed to exercise the care required, and breached their duties of loyalty, good faith,

18 and independence owed to the shareholders of Hot Topic because, among other

19 reasons:

20

(a) they failed to take steps to maximize the value of Hot Topic to its

21 minority shareholders;

22

(b) they failed to properly value Hot Topic and its various assets and

23 operations; and

24

(c) they ignored or did not protect against the numerous conflicts of

25 interest resulting from defendants' own interrelationships or connection with the

26 Proposed Acquisition.

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78. Because the Individual Defendants and dominate and control the business

28 and corporate affairs of Hot Topic, have access to private corporate information

- 21 -

Case 8


1 concerning Hot Topic's assets, business and future prospects, there exists an

2 imbalance and disparity of knowledge and economic power between them and the

3 minority shareholders of Hot Topic which makes it inherently unfair for them to

4 pursue and recommend any proposed transaction wherein they will reap

5 disproportionate benefits to the exclusion of maximizing minority shareholder value.

6

79. By reason of the foregoing acts, practices, and course of conduct, the

7 Individual Defendants have failed to exercise ordinary care and diligence in the

8 exercise of their fiduciary obligations toward plaintiff and the other members of the

9 Class.

10

80. The Individual Defendants are engaging in self-dealing, are not acting in

11 good faith toward plaintiff and the other members of the Class, and have breached and

12 are breaching their fiduciary duties to the members of the Class.

13

81. As a result of the Individual Defendants' unlawful actions, plaintiff and

14 the other members of the Class will be irreparably harmed in that they will not receive

15 their fair portion of the value of Hot Topic's assets and operations. Unless the

16 Proposed Acquisition is enjoined by the Court, the Individual Defendants will

17 continue to breach their fiduciary duties owed to plaintiff and the members of the

18 Class, will not engage in arm's-length negotiations on the Merger Agreement's terms,

19 and may consummate the Proposed Acquisition, all to the irreparable harm of the

20 members of the Class.

21

82. Plaintiff and the members of the Class have no adequate remedy at law.

22 Only through the exercise of this Court's equitable powers can plaintiff and the Class

23 be fully protected from the immediate and irreparable injury which defendants'

24 actions threaten to inflict.

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Case 8


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COUNT IV

For Aiding and Abetting Breach of Fiduciary Duty Against Hot Topic, Sycamore, 212F and Merger Sub

83. Plaintiff incorporates by reference and realleges each and every

allegation contained above as though fully set forth herein.

84. The Individual Defendants owed to plaintiff and the members of the

Class certain fiduciary duties as fully set out herein.

85. By committing the acts alleged herein, the Individual Defendants

breached their fiduciary duties owed to plaintiff and the members of the Class.

86. Hot Topic, Sycamore, 212F and Merger Sub colluded in or aided and

abetted the Individual Defendants' breaches of fiduciary duties, and each was an

active and knowing participant in the Individual Defendants' breaches of fiduciary

duties owed to plaintiff and the members of the Class.

87. Plaintiff and the members of the Class shall be irreparably injured as a

direct and proximate result of the aforementioned acts.

PRAYER FOR RELIEF

WHEREFORE, plaintiff demands relief, in plaintiff's favor against defendants,

as follows:

A. Declaring that plaintiff's fiduciary duty claims are properly maintainable

as a class action;

B. Enjoining defendants, their agents, counsel, employees and all persons

acting in concert with them from consummating the Proposed Acquisition, unless and

until they comply with their fiduciary duties under state law of loyalty, good faith,

care and candor to maximize shareholder value and fully and disclose all material

information in their possession, and their duties under §§ 14(a) and 20(a) of the 1934

Act to provide shareholders with all material information about the unfair sales

process for the Company, the conflicts of interest suffered by defendants in

Case 8


connection with the Proposed Acquisition, the unfair consideration offered in the

Proposed Acquisition, and the actual intrinsic value of the Company;

C. Rescinding, to the extent already implemented, the Proposed Acquisition

or any of the terms thereof;

D. Awarding plaintiff the costs and disbursements of this action, including

reasonable attorneys' and experts' fees; and

B. Granting such other and further equitable relief as this Court may deem

just and proper.

JURY DEMAND

Plaintiff hereby demands a trial by jury on all issues so triable.

DATED: May 17, 2013 ROBB1NS GELLER RUDMAN & DOWD LLP

RANDALL J. BARON A. RICK ATWOOD, JR. DAVID T. WISSBROECKER ED WARDI Mi GERGO SIAN

DAVID T. WISSBROECKER

655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax)

DEANS & LYONS LLP HAMILTON P. LINDLEY 325 N. Saint Paul Street, Suite 1500 Dallas, TX 75201 Telephone: 214/736-7861 214/965-8505 (fax)

Attorneys for Plaintiff

S:\CptDraft\Deal\CPT Hot Topic_fed.docx

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Case 8:13-cv-00787-JST-AN Document 1 Filed 05/17/13 of 32 Page ID #:28

CERTIFICATION OF NAMED PLAINTIFF PURSUANT TO FEDERAL SECURITIES LAWS

Nancy .1 Davis ("Plaintiff') declares

I Plaintiff has reviewed a complaint and authorized its filing

2 Plaintiff did not acquire the security that is the subject of this action at

the direction of plaintiff's counsel or in order to participate in this private action or

any other litigation under the federal securities laws

3.. Plaintiff is willing to serve as a representative party on behalf of the

class, including providing testimony at deposition and trial, if necessary.

4 Plaintiff has made the following transaction(s) during the Class Period

in the securities that are the subject of this action:

Acquisitions, Number of Shares Acquisition Puce Per Date Acquired Acquired Share

12/12/2003 50 $28.53

3/08/2004 4 $28.64

12/03/2004 300 $1605

06/30/2005 60 $14.61

7/01/2005 89 $12.11

06/30/2006 103 $9.78

12/31/2006 104 $9.78

Sales

Number of Shares Selling Price Per Date Sold Sold Share

None Sold

5 Plaintiff has not sought to serve or served as a representative party in

a class action that was filed under the federal securities laws within the three-year

period prior to the date of this Certification except as detailed below

HOT TOPIC


6 The Plaintiff will not accept any payment for serving as a

representative party on behalf of the class beyond the Plaintiffs pro rata share of

any recovery, except such reasonable costs and expenses (including lost wages)

directly relating to the representation of the class as ordered or approved by the

court

I declare under penalty of perjury that the foregoing is true and correct

Executed this 6th day of May , 2013

-2- HOT TOPIC

Case 8:13-cv-00787-JST-AN Document 1Filed 05/17/13 of 32 Page ID #:30

Ono Address

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

on Others Similarly Situated,

PLAMMS

HOT TOPIC, INC., 212F HOLDINGS LLC, NT tERGER SUB INC.,

(See ATTACHMENT A) DEFENDANT(S).

CASE NUMB 1?R

CVI3.•QygZ

SUMMONS

TO: DEFENDANT(S):

A lawsuit has been filed against you.

Within 21 days after service of this summons on you (not counting the day you received it), you must serve on the plaintiff an answer to the attached Cdcomplaint. C] -amended complaint

O counterclaim 0 cross-claim or a motion under Rule 12 of the Federal Rules of Civil Procedure, The answer or thotkthMugtbe served on the plaintiff's attorney, David T; Wlssbrecice? , whose address is Robbins .GelIer,.et al, 655 W. Broadway, #1900, an Diego, EA-1-2101 619/231-1058 . If you fail to do so, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or, motion with the court

Clerk US. District Court

Dated: MAY 1 72013

By: iULIEPRftOO Deputy Clerk

(Seal of the Court)

(Use 60 days if the defendant is the United States or a United Slates agency, or is an officer or employee of the United Stales. Alftwed 60 days by Rule 12(a)(3)J.

(10111 SUMMONS


ATTACHMENT A

Defendants (cont.):

SYCAMORE PARTNERS MANAGEMENT, L.L.C., LISA M. HARPER, STEVE BECKER, MATT DRAPK[N, EVELYN D'AN, TERRI FUNK GRAHAM, SCOTT HEDRICK, JOHN KYEES, ANDY SCHUON and TOM VELLIOS,


UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

NOTICE OF ASSIGNMENT TO UNITED STATES MAGISTRATE JUDGE FOR DISCOVERY

This case has been assigned to District Judge Josephine Tucker and the assigned discovery Magistrate Judge is Arthur Nakazato.

The case number on all documents filed with the Court should read as follows:

SACV13- 787 t7ST (ANx)

Pursuant to General Order 05-07 of the United States District Court for the Central District of California, the Magistrate Judge has been designated to hear discovery related motions.

All discovery related motions should be noticed on the calendar of the Magistrate Judge

NOTICE TO COUNSEL

A copy of this notice must be served with The summons and complaint on all defendants (If a removal action is Ned, a copy of this notice must be served on all plaintiffs).

Subsequent documents must be flied at the following location:

U Western Division 4outhern Division Eastern Division 312 N. Spring St., Rm. G-8 411 West Fourth St., Rm. 1-053 3470 Twelfth St, Rm. 134 Los Angeles, CA 90012 Santa Ana, CA 927014516 Riverside, CA 92501

Failure to file at the proper location will reault In your documents being returned to you.

CV-1 8(03/06) NOTICE OF ASSIGNMENT TO UNITED STATES MAGISTRATE JUDGE FOR DISCOVERY

II. BASIS OF PW DEF 0404

(Place an X In one box fo PTF

n of This State 0 1

in of Another State 0 2

in or Subject of a gnCountry 0

00

0606

PP.). PARTIES-For Diversity cases c )lalntlff and one for defendant)

DEF Incorporated or Principal Place otBusiness In this State

02 Incorporated and Principal Place of Business In Another Stile

03 foreign Nation

an X in one

o I. U.S. Government . 3. Federal Question (U.S.

Plaintiff' .....Government Not a Party)

2. U.S. Government. ri 4. DiversIty (Indicate Citizenship Defendant ..

' of Parties In Item Ill)


UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA f .. . . . . .. CIVIL COVER SHEET

.l. (a) PLAINTIFFS (Check box Wyou are representing yourself 0) DEFENDANTS (Check box If you are representing yourself 0) NANCY DAVIS, Individually and ofl .BbhelFof Mi Otior Simiarly Situated HOT TOPIC, INC.. 212F HOLDINGS LLC,, HI MERGER SUB INC SYCAMORE PARTNERS

MANAGEMENT, L,LC...LISA M. HARPER, STEVE BECICER, MATT DRAPKIN, EVELYN &AN,TERRI FUNK GRAHAM, SCOTT HEDRICK, JOHN KYPES, ANDY SCHUON and TOM

are David T.Wisabroecker(2438671. Robbln5GellerRudman & DbWd L1P.. . 655 West Broadway, Suite 1900: San DIèYO,CA9.2101.......•• .•.

Attorneys (Firm Name, representing yourself,

Number. If you

IV. ORIGIN (Place an X In one box only.) D 5,Trl iAnothe 6.MuItr

DIstrIct District (S)• £ Removed from 3. Remanded from 4. Reinstated or

' ' 0 Litigation

LSi Proceeding State Court Appellate Court Reopened

V REQUESTED IN COMPLAINT:.JURY DEMAND Yes 0 No (Check Yes only If demanded In complaint)

CLASS ACTION under F R.Cv P 23., [RYes No ]

MONEY DEMANDED IN COMPLAINT $

Vi; CAUSE OF ACTION (CIte the US. CMI Statute under which you are fIling and write a brief statement of cause. Do not citeJurlsdlctlon&.statutes unless diversity,) • COMPLAINT FOR VIOLATION OF FEDERAL SECURITIES LAWS AND BREACH OF FIDUCIARY DU11RS 115 U.S.0 §78n and 78t1

VII. NATURE OF SUIT (Place an K In one box only).

0110 Insurance [J 240 TortS to LSfld o 462 NaturalIzatIon . rsuoeaaorpue:

0 245 Tort Product Application 9 463 Allen Detainee

0 12DManIfle Liability 465 other Slo Motions toVacate

O 130 Miller Act 290 All Other Real immigration Actions Sentence

14ONe9ottabie 0 Property TORTS D 530Gerrerai

Instrument TOUTS I PERSONAL PROPERTY 0 535 Death Penalty

150 Recovery of PER QNAL1P&J(1II1_ 13 370 Other Fraud Othei'l 540 Mandamus/Other

o Enloscmnen 0 3iOAlrpIane

tof 315 Airplane. 9 371 Truth in Lending 13 550 CMI.Rlghu • Judgment Product Liability 380 Other Personal

O 151 MedicareAct 320AssauLlbei& 0 Property Damage ri 0 PilsonConditlon

Slander 560C1I1 Detainee 152 Recovery of 330 Fed. Employers'

385 Property Damagi 9 cnuo of Product LiabIlity 13 Defaulted Student 0 LIabilIty

Loan (Ead. Vet) UP _____________ BANKRTCY O 340Merine

Recovery of O overpayment or

.345 Marine Product 492 Appeal 28 153

Vet8ene8ts 0 Liability 423 thdrawal 28

151 o 'l6oStockholders' 0 35oMotorVehlcte

USC

Sultt 355 Motor. Vehicle . CM4 I1IGHTS o Product Liability 13 440 Other Civil Rlgl

l900ther 3680therPersonal 13 441 Voting Contract 0 InJury. 195 Contract 362 Personal Injury- 0 442 Employment

L.1 Product Liability Mod Maipratice o 365 Personal Injury, Lj 443 Houskn/

0 196 Franchise Product Liability Accomodations

899 Admin. Procedures _I1EAL PROPERTY 367 Health Caret 44 American with

13 Act/RevIeW of Appeal ofIt-i 210 Land Pharmaceutical 9 DISCbIIltleS

AgencyDetislofl I_2 Condemnation 0 Personal Injury Employment

. . 220 Foreclosure Product Uablitty o 446Amedcan with

Costft 230 Rent Lease& 368 Asbestos Djsabllldec-Qther

0 stateStatUtes ID EIp.theant 13 PersonallnJtiiy 0 446Educatlon O..,.1. .-.-1 1,.kIII..,

O 820 Copyrights

o 830 Patent

o

o 861 HIA (239511)

o 862 Black Lung (923)

13 863 DIWC/DIWW (405(g))

o 364 SSIDTkia

o 86SRSI(405(g))

O 375 FalseClaims Act

D 400 State Reapportionment

13 410 Antitrust

O 430 Banks and Banldng

450 Commerce/iCC Rates/Etc.

o 460 Deportation

D 470 Racketeer Influ-enced &Corrupt Org.

O 480 consumer Credit

o 0 Cable/Sat TV

850 SecuritIes/Coin-'' maditles/Eachange

fl 690 Other Statutory Actions

13 891 Agricultural Acts

E 893'E nvironrrrenUl Matters

D 895 Freedom of Info. Act

o 896 Arbitration

625 Drug Related U Seizure of Property 21

USC 881

690 Other

O 710 Fair Labor Standard Act

o 720 Labor/Mgmt. Relations

o l4G Hallway i.abne Act

O 751 Family and Medical Leave Act

1379* Other Labor Litigation

,-i 791 Employee Ret. Inc.

870 Taxes (U.S. Plaintiff or 0 Defendant)

O871 IRS-ThIrdParty 26 USC

S A CV 13 -0 7 8.

• .......... AFTER COMPLETING PAGE 'I OF FORM 01-71, COMPLETE THE INFORMATION REQUESTED ON PAGE 2.

CMV 71 (027111) , CMLCOVER SHEET Page 1 of 7


UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA CIVIL COVER SHEET

VIII(a). IDENTICAL CASES: Has this action been previously filed in this court and dismissed, remanded or closed?j NO J YES

If yes, list case number(s):

VIII(b). RELATED CASES: Have any cases been previously filed in this court that are related to the present case?

If yes, list case number(s): 1 3-cv-02939-SJO-JC; 1 3-cv-02941 -PSG-AGR

Civil cases are deemed related if a previously filed case and the present case:

(Check all boxes that apply) A. Arise from the same or closely related transactions, happenings, or events; or

fl NO YES

B. Call for determination of the same or substantially related or similar questions of law and fact; or

C. For other reasons would entail substantial duplication of labor if heard by different judges; or

D. Involve the same patent, trademark or copyright,antone of the factors identified above in a, b or c also is present.

IX. VENUE: (When completing the following information, use an additional sheet if necessary.)

(a) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH named

plaintiff resides.

fl Check here if the government, its agencies or employees is a named plaintiff. If this box is checked, go to item (b).

County in this District:* California County outside of this District; State, if other than California; or Foreign Country

Orange

(b) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH named

defendant resides.

Check here if the government, its agencies or employees is a named defendant. If this box is checked, go to item (C).

County in this District:* California County outside of this District; State, if other than California; or Foreign Country

Los Angeles

(C) List the County in this District; California County outside of this District; State if other than California; or Foreign Country, in which EACH claim arose. NOTE: In land condemnation cases, use the location of the tract of land involved.

County in this District:* County outside of this District; State, if other than California; or Foreign

Los Angeles

Los Angeles, Orange, San ntura, banta varoara, or

Obispo Counties

Note: Inland condemnatioi

the tract of land involved

X. SIGNATURE OF ATTORNEY (OR SELF-REPRESENTED LITIGANT): /DATE: May 17,2013

Notice to Counsel/Parties: The 01-71 (JS-44) Civil Cover Sheet and the informatrbn contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law. This form, approved by the Judicial Conference of the United States in September 1974, is required pursuant to Local Rule 3-1 is not filed but is used by the Clerk of the Court for the purpose of statistics, venue and initiating the civil docket sheet. (For more detailed instructions, see separate instructions sheet).

Key to Statistical codes relating to Social Security Cases: Nature of Suit Code Abbreviation Substantive Statement of Cause of Action

All claims for health insurance benefits (Medicare) under Title 18, Part A, of the Social Security Act, as amended. Also, 861 HIA include claims by hospitals, skilled nursing facilities, etc., for certification as providers of services under the program.

(42 U.S.C. 1 93SFF(b))

862 BL

863

DIWC

863

DRAW

864

SSID

865

RSI

CV-71 (02/13)

All claims for "Black Lung" benefits under Title 4, Part B, of the Federal Coal Mine Health and Safety Act of 1969. (30 U.S.C. 923)

All claims filed by insured workers for disability insurance benefits under Title 2 of the Social Security Act, as amended; plus all claims filed for child's insurance benefits based on disability. (42 U.S.C. 405 (g))

All claims filed for widows or widowers insurance benefits based on disability underTitle 2 of the Social Security Act, as amended. (42 U.S.C. 405 (g))

All claims for supplemental security income payments based upon disability filed under Title 16 of the Social Security Act, as amended.

All claims for retirement (old age) and survivors benefits under Title 2 of the Social Security Act, as amended. (42 U.S.C. 405 (g)

CIVIL COVER SHEET

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Nancy Davis, et al. v. Hot Topic Inc, et al. 13-CV-00787...

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