NOTICE TO DEFENDANT: ENDORSED FILED...

Case4:12-cv-Q3198-YGR Docunient1-1 File

Page1 of 55

SUMMONS (WA CION JUDICIAL)

NOTICE TO DEFENDANT: (AVISO AL DEMANDADO):

Fboi,k. tiii.., Muk Zuckcrbvrg. bawd A. IbCmnlUn. David M. SpiU.,ou. Marc L. Antfri:,,scn. F.rakinc 13, Buwica James W. Weyer. DumhJ E. (irairon. Rrcd Ihisthiga. Peter A. Thid, Morgan Sranky & CL l.LC. J.P. Morgan Si:ccuitics tIC. Goldman. Sash, & CO.. Merrill Lyfltth. Pierce, Fcouier & Sniih kucorporjccd. Barclays ('apical tnc.. Micn & Cilnipany I.I.C. Ciltgruip Global Mance Inc.. Credu Sinvic sncurnaca IUSA) LW. DcuLschc Bniik S w'iljrt inc.. RUC Capital Marious. I.E.C. and WOIb Fargo Stxuriucs. ILL YOU ARE BEING SUED BY PLAINTIFF: (LO ESTA DEMANDANDO EL DEMANDANTE):

Elbiia Alfonso, on behalf ofhcrselfand all others similarly situated

FON COLmT USE ONLY (SOLO PaM uao 00 LA Coam

ENDORSED FILED SAN MATEO COUNTY

MAY 2 5 2012

Cledc of the Suraijor Cnwt By- .G:MRpuE

DeRiTYCLM

NQTICt You have beer Sued. The court may decide against you without your being heard unless you respond Within 30 days. Read the information below.

You have 30 CALENDAR DAYS after mis summons and legal papers are served on you to ills a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal ton,i if you want the court to hear your

case. There may be a court Form that you can use for your response. You can find these court forms and more information at the California Courts online Self-Help Center (wiswcourtkm(o.ca.gov/soimelp) . your county Jaw library. or the courthouse nearest you. if you cannot pay the tiling rt fee, asaskthe cou dark for a tee waiver 'orm. If you do not file your response on time, you may lose the case by default, and your wages, money, and property may be 11*0a, will-out further warning from the court.

There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may want to call an attorney referral service. It you cannot afford an attorney, you may be aligitie for free legal services from a nonprofit legal Services program,. You can locate these nonprofit groups at the California Legal Services Web site (w.wirlawhelpcalifomia.org) the California Courts Onmirse Self-Help Center (mvw.cuJfo.ca.gov/seh,e). or by contacting your local coast or county bar association, NOTE: The Court has a statutory lien for waived fees and costs on any settlement or saturation award of $10,000 or note in a civil case. The courts Lien must be paid before the court Will dismiss the case. ;AWSOI Lo han demandado, Si no reapondo denh,o do 30 dlas. Is coile puede c/cc/dir an SO cant'e san esCuclrar CU version. Lea is infonn.cion a coiW,nuaclôn.

l7ene 300/AS DE CALENOARIO do$peès do qua 10 onhieguran asia ciiacidn y pepelca toga/es pore presenter one respue s/a par escnfo an sta cone y ha car qua se eniregue una copia at demandanle. (ma cOtta o one tamada te/e/O,.vca no Jo pthtege,n, Su respue s/a par escnio r/ene qua es/ar on (armato loge' 001700(0 Si doses qua pi'oCesen so case an la cone. Es pnSib'e qua hays on fotmutoifo qua uatealpueaa user pare su (OspUasla. Puede enconfrar 05105 /olmt,Ianos do la cone y ends infom,ac10n an at Centro c/a Ayuda do las Carlos do California 5ewwi.suncete.ca.gov), on to bibi/oloca do 'eyes do su condado 0 on ía colta cue to quads rises carca. Si no pueda pager Is cuota de presenfacidn. plc/a at socreianio c/fr to cotta Ia dé un fom,ulano do exencibn do pago c/c ouolas. Si no presents su 'aspasasla a Iiemoo puede pen/er at case par lflcurnplinsgenfo yia comp to podrb quar su sucido. dinero y blertoa sin rises edvettencie. Hay otros requisites legates. Es reconsenriabie qua llama a on abogado wsnsedsatamente. Sic conoco a un abogado. puede tamer a on seMcio do remis/dn a 000gasdoC. Si no puede pager a un abogado, as posible qua cuns/a con sos requistos para obtan.r sen,ecles iagai,s gratuifos do on programs c/a swrv,ctos legates sin fines do 1OCT01 Puede enconsrar eases grupos so, tines c/a micro an a! 5*0 web do California Legal Se,wcos. nmwi.lawi'topcalitomia.org). an el Conlre Ce Ayuda i/c tax Coites do Ca/Penile, (wwiw.suoorte.ca.goy) opons.rdoSe an conlac$o con Ic cotta eel notegirr c/a ,ffiogaiios loca/es. .4 VIS0: Por lay, to carts Iiene dorecho a reclamar/as cu/Pas yioscoslos CROnies par inponor un gravamen sobre cualquaer rracuperacion i/a $10,000 ô aids do valor recio,oa mac/lame on acuerdo 0 ursa conc.sion do erbitreje an on case c/a demche civil. Tie,,, quo Mar at gravamen c/a Is cone aisles Ce quo to cone puea'a d.sechar ci caso.

The name and address of the court is: (El nombre y diracciOn c/a is colic as): I LI! Superior Court of California, County of San Mateo (Southern Branch) 400 County Center, Redwood City, CA 94063 The name, address, and telephone number of plaintiffs attorney, or plaintiff without an attorney, is: (El nombre. (a direccicin y of flUmern de feiéfbno del abogado del darnandante, 0 del demaradante que no dane abogado, es): Patrick H. Moran, Wolf 1-laldenstein Adler Freeman & l -(erz LLP 750 8 Street, Suite 277 ',iego, CA 92101, Tel: 6191239-4599, Fax: 619/234-4599 DATE: MAY a LU1 4I7 fnm f7f by G.MARQUEZ (Fec/ia) (Secretanol (IOr proof Of SOrVICO Of this Summons, use Proof of Service of Summäns (form P08-010).) (Pare prueba do en/rage de os/a Cl/eric/n use at formula,lo Proof of Service of Summons. (P08.010)).

NOTICE TO THE PERSON SERVED: You are served IScALI 1. as an individual defendant. 2. as the person sued under the fictitious name of (specify):

Deputy

(Ac/fun/u)

3. W on behalf of (specify): /jcg'A' 7 Z,i.

under. CCP 418.10 (corporation)

CJ CCP 416.20 (defunct corporation) c: EJ CCP 416.40 (association or partnership)

other (specify):

4. c:j by personal delivery on (date):

CCP 416.60 (minor)

CCP 418.70 (conservatee)

CCP 41690 (authorized person)

P1ot1 fen,, AOGI1t.d tor Mafi/..y Liv. SUMMONS Cad. of Cisd cadrnv 5 4i2.5, 456 Ji,d coanol as Cldonda

SUM'Ist JRaa. Jos I. 2QO5 crsa'DiVcagov

Case4:12-cv-03198-YGR Document1-1 Filed06/20/12 Page2 of 55

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FRANCIS M. GREGOREK (144785) BETSY C. MANIF(IS) (182450) RACHELI R. RICKERT (190634) PATRICK H. MORAN (270881) WOLF HALDENSTEIN ADI.ER

FREEMAN & IIERZ L1.I' 750 B Strc.t, Suite 2770 San Diego. CA 92101 Telephone: 6191239-4599 Facsimile: 619/2344599

GREGORY M. NESPOLE R0I3ERT B. WEINFRAUB WOLF HAJ..DENS1EIN ADLER

FREEMAN & IIERZ LI.P 270 Madison Avenue New York. New York 10016 Telephone: 211/545-4600 Facsimile: 212/545-4653

I Attorneys for Plaintiff

[Additional Counsel Appear On Signature Page)

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO

ELHITA AI.FONSO. on behalf olherseliand all others similarly situated.

Plaintiff.

V.

FACEBOOK, INC., MARK ZUC KERBERG. DAVID A. EBFRSMAN, DAVID M. SPILLANE. MARC L. ANDREESSEN. ERSKJNE B. BOWLES, JAMES W. BREYER. DONALD F. GRAHAM, REED HASTINGS, PETER A. TI11EL. MORGAN STANLEY & CO. LI.C, J.P. MORGAN SECURITIES LLC. GOLDMAN, SACHS & CO.. MERRILL LYNCH, PIERCE, I:ENNER & SMEI11 1NCORPORAFED. BARCLAYS CAPITAL INC., ALLEN & COMPANY LLC, CFI1GROUP GLOBAL MARKETS INC.. CREDF1 SU1SSE SECURITIES (USA) LLC. DEUTSCHE HANK SECURITIES INC., RBC CA1I TAL MARKETS, LLC. and WELLS FAR(iO SLCURFI1ES. I.LC,

Defendants.

CLASS ACTION COMI'I.AINi

ENDORSED FILED SAN MATEO COUNTY

MAY 2 5 2012

Clerk of me By

OeFUTV CLERK

ADAM J. I.1-'VIT1• WOLF HAI.I)LNSTIjIN ADLER FREEMAN & HERZ LLC

55 West Monroe Street, Suite liii Chicago. Illinois 60603 Telephone: 3121984-0000 Facsimile: 312/984-0001

Case No. CIV 5 .:• •s /

CLASS ACTION

COMPLAINT

JURY TRIAL DEMANDED


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Plaintiff below, individually and on behalf of the class described below, alleges this class

action complaint based upon her own personal knowledge, as to her own acts and the acts and

statements of Defendants in which Plaintiff participated directly (the communications with,

representations made, and documentation and information provided to her by Defendants in the

ordinary course of business), and upon the investigation of her counsel (and counsel's information

and bclief only to the extent expressly stated herein). Counsel's investigation conducted on

Plaintiffs behalf, included, among other things: (i) an analysis of publicly-available news articles

and reports; (ii) a review and analysis of public filings, including but not limited to Securities and

Exchange Commission ("SEC") filings by Defendants; (iii) press releases issued by Defendants;

(iv) research of facts and the applicable law with respect to the claims asserted herein including

the use of sophisticated investigatory tools such as Bloomberg subscription services, Lexis Nexis

and other subscription services; and (v) other matters of public record.

SUMMARY OF THE ACTION

1. This is a securities class action brought by Plaintiff alleging claims under sections

11, 12, and 15 of the Securities Act of 1933, 15 U.S.C. § 77 et seq. ("Securities Act") against

Defendants, seeking to recover damages caused to the Class by Defendants' violations of the

Securities Act.

2. On May 18, 2012, Facebook, Inc. ("Faccbook" or the "Company") floated its initial

public offering ("IPO") of 421,233,615 shares of its common stock at a price to the public of $38

per share on the NASDAQ Global Select Market under the symbol "FB." Under the terms of the

offering, Facebook sold 180,000,000 shares of Class A common stock and selling stockholders

sold 241,233,615 shares of Class A common stock.

3. In addition, Facebook and the selling stockholders granted the underwriters a

30-day option to purchase up to 63,185,042 additional shares of Class A common stock to cover

over-allotments, if any. As discussed below, Morgan Stanley, J.P. Morgan, Goldman, Sachs,

BofA Merrill Lynch, Barclays, Allen & Co. LLC, Citigroup, Credit Suisse and Deutsche Bank (all

defined infra) served as book runners for the offering, and RBC Capital Markets and Wells Fargo

Securities (defined infra) are serving as active co-managers.

CLASS ACTION COMPLAINT

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4. The offering was slotted to raise over $16 billion and was predicted to be the most

2 important market event in recent history, generating tremendous enthusiasm. What transpired,

3 however, has proven to be an additional blemish on Wall Street's already damaged reputation and

4 provided more evidence that investment banks and their issuer clients are apt to favor hedge funds

5 and other large clients over retail customers. Indeed, it now appears that contrary to early reports,

6 Faccbook's poor debut was not the function of an efficient market settling on an appropriate

7 I valuation for the stock.

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5. Instead, Facebook's steady decline from its offering price was a function of large,

9 favored investors having been tipped off during the "road show" that analysts employcd by the

10 lead underwriters for the deal slashed internal revenue forecasts for the Company. This form of

II selective dissemination of material information that was in turn omitted from the effective and

12 operative Registration Statement and Prospectus that was delivered to investors is a violation of

13 the Sccuritics Act.

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6. This action arises from the issuance, underwriting and sale by Defendants of

15 F'acebook shares through a registration statement, various amendments thereto and prospectus

16 (collectively, the "Offering Documents") that contained material misstatements and matcrial

17 omissions concerning the investment risks of buying Facebook shares.

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7. Defendants, individually and collcctivcly, had a duty to Plaintiff and the Class

19 (defined infra) to provide information regarding Facebook that did not contain material

20 misstatcmcnts or omit to disclose all information about Facebook that would be material to

21 Plaintiff and the Class in their decisions to purchase shares of Facebook.

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JURISDICTION AND VENUE

8. This Court has jurisdiction over all causes of action asserted herein pursuant to the

24 California Constitution, Article VI, § 10, because this casc is a cause not given by statute to other

25 trial courts. § 4 10. 10 of the California Code of Civil Procedure and § 2116 of the California

26 Corporations Code. In addition, the amount in controversy exceeds $25,000, the jurisdictional

27 minimum of this Court. 28


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9. Moreover, subject matter jurisdiction is vested in this Court by Section 22(a) of the

Securities Act, 15 U.S.C. § 77v(a). As section 22(a) states:

The district courts of the United States and the United States courts of any Territory shall have jurisdiction of offenses and violations under this title and under the rules and regulations promulgated by the Commission in respect thereto, and, concurrent with State and Territorial courts, except as provided in section 16 with respect to covered class actions, of all suits in equity and actions at law brought to enforce any liability or duty created by this title. Any such suit or action may be brought in the district wherein the defendant is found or is an inhabitant or transacts business, or in the district where the offer or sale took place, if the defendant participated therein, and process in such cases may be served in any other district of which the defendant is an inhabitant or wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 1254, 1291, 1292, and 1294 of title 28, United States Code. Except as provided in section 16(c), no case arising under this title and brought in any State court of competent jurisdiction shall be removed to any court of the United States. No costs shall be assessed for or against the Commission in any proceeding under this title brought by or against it in the Supreme Court or such other courts.

15 U.S.C. § 77v(a) (emphasis added). Section 16 of the Securities Act, 15 U.S.C. § 77p(b),

provides that actions involving certain categories of claims shall not be brought in state court:

No covered class action based upon the statutory or common law of any State or subdivision thereof may be maintained in any State or Federal court by any private party alleging—

an untrue statement or omission of a material fact in connection with the purchase or sale of a covered security; or

(2) that the defendant used or employed any manipulative or deceptive device or contrivance in connection with the purchase or sale of a covered security.

15 U.S.C. § 77p(b). Because none of the claims herein are based on the "statutory or common law

of any state," this action is not removable pursuant to section 22(a) and is properly filed in this

Court.

10. This Court has personal jurisdiction over each defendant named herein because

each defendant is either a corpor.ation that does sufficient business in California, or an individual

who has sufficient minimum contacts with California to render the exercise of jurisdiction by the

California courts permissible under traditional notions of fair play and substantial justice. All of

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the defendants conduct business and/or maintain offices in California, and Facebook's

headquarters are located at 1601 Willow Road, Menlo Park, California 94025.

11. Venue is proper in this Court because a substantial portion of the wrongs

complained of herein, including the defendants' primary participation in the wrongful acts detailed

herein (violation of the Securities Act), occurred in this County, and the Defendants have received

substantial compensation in this County by doing business here and engaging in numerous

activities which had an effect in this County. Venue is also proper in this Court because many of

those affected by Defendants' conduct reside in this County, and many of the potential witnesses

reside or work in this County.

PARTIES

12. Plaintiff Elbita Alfonso purchased shares of Facebook pursuant to the Offering

Documents on the IPO and was damaged thereby.

13. Defendant Facebook, Inc. ("Facebook" or the "Company") is located in Menlo

Park, California, within this judicial district, and is incorporated under the laws of the State of

Delaware. Facebook operates a social networking website that allows people to communicate and

share information with friends and family. It also develops technologies that facilitate the sharing

of information.

Individual Defendants

14. Defendant Mark Zuckerberg ("Zuckerberg") is the Chairman and Chief Executive

Officer of the Company and signed the Final Registration Statement dated May 21, 2012.

Facebook, Inc., Registration Statement (Form S-8) (May 21, 2012) ("Final Registration

I Statement").

15. Defendant David A. Ebersman ("Ebersman") is the Chicf Financial Officer of the

Company and signed the Final Registration Statement dated May 21, 2012.

16. Defendant David M. Spillane ("Spillane") is the Chief Accounting Officer of the

Company and signed the Final Registration Statement dated May 21, 2012.

17. Defendant Marc L. Andreessen ("Andreessen") is a director of the Company and

signed the Final Registration Statement dated May 21, 2012.


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18. Dcfendant Erskine B. Bowles ("Bowles") is a director of the Company and signed

2 the Final Registration Statement dated May 21, 2012.

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19. Defendant James W. Breyer ("Breyer") is a director of the Company and signed

4 the Final Registration Statement dated May 21, 2012.

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20. Defendant Donald E. Graham ("Graham") is a director of the Company and

6 signed the Final Registration Statement datcd May 21, 2012.

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21. Defendant Reed Hastings ("Hastings") is a director of the Company and signed the

8 Final Registration Statcment dated May 21, 2012.

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22. Defendant Peter A. Thiel ("Thiel") is a director of the Company and signed the

10 Final Registration Statement dated May 21, 2012.

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23. These nine individual Defendants are collectively referred to as the "Individual

12 Defendants."

13 Underwriter Defendants

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24. The following underwriter Defendants were the underwriters "on the cover" of the

15 Facebook prospectus.

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25. Defendant Morgan Stanley & Co. LLC ("Morgan Stanley"), the lead underwriter,

17 is located at 1585 Broadway, New York, NY 10036.

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26. Defendant J.P. Morgan Securities LLC ("J.P. Morgan") is located at 270 Park

19 Ave., New York, NY 10017.

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27. Defendant Goldman, Sachs & Co. ("Goldman Sachs") is located at 200 West

21 Street, 29th Floor, New York, NY 10282.

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28. Defendant Merrill Lynch, Pierce, Fenner & Smith Incorporated ("BofA Merrill

23 Lynch") is located at Bank of America Corporate Center, 100 N. Tryon Street, Charlotte, North

24 Carolina 28255.

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29. Defendant Barclays Capital Inc. ("Barclays Capital") is located at 200 Park Ave.,

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30. Defendant Allen & Company LLC ("Allen & Co.") is located at 711 Fifth Ave.,

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31. Defendant Citigroup Global Markets Inc. ("Citigroup") is located at 388

Greenwich Street, New York, NY 10013.

32. Defendant Credit Suisse Securities (USA) LLC ("Credit Suisse") is located at 11

Madison Ave., New York, NY 10010.

33. Defendant Deutsche Bank Securities Inc. ("Deutsche Bank") is located at 31

West 52 St., New York, NY 10019.

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34. Defendant RBC Capital Markets, LLC ("RBC Capital Markets") is located at 3

8 World Financial Center, 200 Vesey St., New York, NY 10281.

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35. Defendant Wells Fargo Securities, LLC ("Wells Fargo") is locatcd at 420

10 Montgomery Street, San Francisco, CA 94104.

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36. These eleven Defendant underwriters arc collcctively referred to as the

12 "Underwriter Defendants."

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37. All Dcfcndants arc collectively referred to as "Defendants."

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CLASS ACTION ALLEGATIONS

15 38. Plaintiff brings this action as a class action pursuant to section 382 of the California

16 Code of Civil Procedure on behalf of all investors that purchased Facebook common stock on the

17 lPO pursuant or traceable to the Offering Documents (the "Class").

18 39. Members of the Class are so numerous that joinder of all members is impracticablc.

19 While the exact number of Class members is unknown to Plaintiff at this time and can only be

20 ascertained through appropriate discovery, Plaintiff believes that thcrc are thousands of members

21 of the Class located throughout the United States.

22 40. According to the Offering Documents, over 450 million shares of common stock

23 were sold to the public pursuant to the IPO.

24 41. Facebook shares were sold to Class members during the Class Period pursuant to

25 the Offering Documents.

26 42. All members of the Class may readily be identified from records maintained by

27 Facebook and/or its transfer agent and may be notified of the pendcncy of this action by mail,

28 using forms of notice similar to those customarily used in securities class actions.


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43. Plaintiff's claims are typical of the claims of the other members of the Class.

Plaintiff and the other members of the Class, by virtue of their purchases of shares of Facebook on

or pursuant to the IPO, have sustained damages as a result of Defendants' unlawful activities as

alleged herein. Plaintiff has retained counsel competent and cxperienccd in class and securities

litigation and intends to prosecute this action vigorously. The interests of the Class will be fairly

and adequately protected by Plaintiff. Plaintiff has no interests which are contrary to or in conflict

with those of the Class which Plaintiff seeks to represent.

44. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy. Plaintiff knows of no difficulty to be encountered in the

management of this action that would preclude its maintenance as a class action.

45. Common questions of law and fact exist as to all membcrs of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class arc:

a. Whether the Securities Act was violated by Defendants' acts;

b. Whether each Defendant participated in the course of conduct complained of

I herein; and

C. Whether members of the Class have sustained damages as a result of Defendants'

conduct, and the proper measure of such damages including but not limited to recessionary

I damages.

THE PROSPECTUS CONTAINED MATERIAL MISSTATEMENTS AND OMITTED MATERIAL INFORMATION

46. Facebook, through its underwriters, sold over 421 million shares of common stock

on May 18, 2012. The IPO was priced at $38 per share and rcsulted in the Company raising $16

billion for itself and the selling stockholders, including Defendant Zuckerberg.

47. The IPO was marketed through the issuance of the Offering Documents and the

presentation of numerous "road shows" to various investment banks and potential investors that

senior Facebook executives attended along with underwriters.

48. The Prospectus contained material misstatements and statements made materially

inaccurate through the omission of material facts. These include the following statements

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contained in the Prospectus:

We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered.

* * * As an example, we believe that the recent trend of our DAUs increasing more rapidly than the increase in the number of ads delivered has been due in part to certain pages having fewer ads per page as a result of these kinds of product decisions.

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Based upon our experience in the second quarter of 2012 to date, the trend we saw in the first quarter of DAUs increasing more rapidly than the increase in number of ads delivered has continued. We believe this trend is driven in part by increased usage of Facebook on mobile devices where we have only recently begun showing an immaterial number of sponsored stories in News Feed, and in part due to certain pages having fewer ads per page as a result of product decisions. For additional information on factors that may affect these matters, see "Risk Factors - Growth in use of Faccbook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results" and "Risk Factors - Our culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results."

Facebook, Inc., Prospectus (Form 424134), at 14, 17, 57 (May 18, 2012) ("Prospectus").

49. Each of these statements in the Prospectus contained material misstatements,

omitted to state a material fact required to be stated therein, or failed to disclose certain material

facts necessary to make the statements therein not misleading, because each failed to materially

disclose that Facebook' s revenue and revenue growth rate would be substantially lower than that

I originally disclosed and forecast.

50. It is absolutely clear that the statements in the Prospectus were materially

inaccurate and materially incomplete disclosures concerning the fact that Faccbook's revenue and

revenue growth rate would be lower, and that these facts were not being completely and accurately

disclosed in the Prospectus. This is so based upon the following facts.

51. The actionable statements from the Prospectus quoted above were originally added

by prospectus dated May 9, 2012. Facebook, Inc., Amendment No. 6 to Form S-I Registration

Statement (Form S-I/A), at 14, 17, 57 (May 9, 2012) ("Amendment No. 6").

52. Thereafter, during the time period between May 9, 2012 and May 17, 2012, which

included the Company's roadshow, the Underwriter Defendants materially lowered their estimates

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1 of Facebook's future revenue and revenue growth rate.

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53. Prior to the May 18, 2012 effective date of the Company's IPO, however, the

3 Underwriter Defendants only disclosed their materially lowered estimates of Facebook's revenue

4 and revenue growth rate privately to select major clients who werc potcntial investors in the IPO

5 and did not disclose their lowered estimates to the investing public at largc.

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54. The fact that the Underwriter Defendants lowered their revenue and revenue

7 growth rate estimates demonstrates that the statements added to the prospectus by prospectus

8 Amendment No. 6, which were subsequently contained in the effective Prospectus of May 18,

9 1 2012 , were material. The fact that the revised revenue and revenue growth rate estimates were

10 only privately disseminated by the Underwriter Defendants demonstrates that these additional

11 Amendment No. 6 disclosures were materially deficient - they contained material misstatements,

12 omitted to state material facts required to be stated therein, or failed to disclose certain material

13 facts necessary to make the statements therein not misleading. This is so because otherwise there

14 would have been no reason for the Underwriter Defendants to limit disclosure of their revised and

15 lowered estimates to private disclosure to select potential investors in the IPO, without full and

16 complete disclosure in the Prospectus.

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55. Defendant Morgan Stanley was the lead investment bank for the Facebook 1PO.

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56. Morgan Stanley's consumer Internet analyst, Scott Dcvitt, materially "cut his

19 revenue estimate for the current second quarter significantly, and also cut his full-year 2012

20 revenue forecast." But, prior to the Company's IPO, Morgan Stanley only disclosed its materially

21 lowered estimates privately to select major clients who were potential investors in the IPO and did

22 not disclose its lowered estimates to the general investing public, according to a May 22, 2012

23 Reuters article entitled, "Morgan Stanley Shocked investors By Cutting Facebook Estimates Just

24 Before IPO." Barr, Alistair, Morgan Stanley Shocked investors By Cutting Facebook Estimates

25 Just Before fF0, REUTERS, May 22, 2012 ("Reuters Article")

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57. Scott Sweet, senior managing partner at the research firm IPO Boutique, said he

27 was aware of the reduced estimates, according to the Reuters article. He went on to say, however,

28 that he learned of the lowered estimates from "[miy biggest hedge fund client [who] told me they

I CLASS ACTION COMPLAINT

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1 [Morgan Stanley] lowered their numbers right around mid-roadshow," according to the Reuters 2 Article.

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58. Upon information and belief, another of the three top-line investment banks on the

4 cover of the prospectus, J.P. Morgan, prior to the Company's IPO also materially lowered its

5 estimates of the Company's revenue and revenue growth rate. Similarly, prior to the IPO, J.P.

6 Morgan only disclosed its materially lowered estimates privately to select major clients who were

7 potential investors in the IPO and did not disclose its lowered estimates to the general public at

8 large. See Reuters Article.

9

59. Upon information and belief, another of the three top-linc investment banks on the

10 cover of the prospectus, Goldman Sachs, prior to the Company's IPO also materially lowered its

11 estimates of the Company's revenue and revenue growth rate. Similarly, prior to the IPO,

12 Goldman Sachs only disclosed its materially lowered estimates privately to select major clients

13 who were potential investors in the IPO and did not disclose its lowered estimates to the public at

14 large. See Reuters Article.

15

60. At the same time that the Underwriter Defendants were privately lowering their

16 estimates of the Company's revenues and revenue growth rate, the Company and the Underwriter

17 Defendants were publicly upwardly revising the projected IPO price to the effective price of $38

18 I per share.

19

61. This type of selective dissemination of material information has damaged the Class

20 by artificially inflating the initial price of Facebook stock.

21

62. First, in the days leading up to the IPO, Facebook and the Underwriter Defendants

22 elected to issue millions of additional shares in an exceeding 60 million shares. Many large hedge

23 funds were unwilling to accept additional allocations because they were aware that analysts at the

24 lead underwriters had privately lowered their revenue and revenue growth rate estimates. Those

25 additional shares, instead, found their way to the accounts of thousands of small, retail customers

26 who had requested small allocations but given prior experience in other "hot" IPOs like Google,

27 were surprised to receive their requested allocations or allocations larger than those requested.

28

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These investors did not know however that they were buying shares in an IPO that the lead

2 underwriters analysts thought was overvalued.

3

63. Second, many hedge funds which were told that analysts had slashed projections

4 were able to quickly sell their allocated position and short the stock, thereby causing downward

5 pressure on the IPO.

6

64. Third, the fact that the Underwriter Defendants' research analysts only privately

7 disclosed their lowered revenue and revenue growth rate estimates for Facebook demonstrates that

8 the separation of those investment banks' research and investment function did not exist and had

9 been breached for this IPO because the private only dissemination of the lowered estimates helped

10 the Underwriter Defendants' investment bankers sell the public offering.

11

65. The Facebook IPO went public on May 18, 2012 at a price of $38 per share. It

12 reached its high of $45 per share just a few minutes later.

13

66. On May 22, 2012, the price of Facebook shares further declined to close at $3 1.00.

14

67. Had Plaintiff and the members of the Class known of the facts not disclosed in the

15 Offering Documents, they would not have purchased their Facebook shares or would have

16 purchased them only at substantially reduced prices.

17

68. The Company raised billions of dollars which it would not have been able to raise

18 if the Offering Documents had not contained material misstatements and material omissions.

19

69. Similarly, the Underwriter Defendants made over $150 million in underwriting fees

20 from sales of Facebook shares in the IPO, fees that they would not have made if the Offering

21 Documents had not contained material misstatements and material omissions.

22

NO SAFE HARBOR

23 70. The statutory safe harbor provided for forward-looking statements under certain

24 circumstances does not apply to any of the allegedly false statements pled in this complaint.

25 Virtually all of the specific statements pled herein were not forward-looking or wcre not identified

26 as "forward-looking statements" when made. To the extent there were any forward-looking

27 statements upon which Plaintiff bases her claims, there were no meaningful cautionary statements

28 identifying important factors that could cause actual results to differ materially from those in the


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purportedly forward-looking statements. Alternatively, to the extent that the statutory safe harbor

does apply to any forward-looking statements pled herein, Defendants are liable for those false

3 forward-looking statements because at the time each of those forward-looking statements was

4 made, the particular speaker knew that the particular forward-looking statemcnt was false, and/or

5 the forward-looking statement was authorized and/or approved by an executive officer of

6 Defendants who knew that those statements were false when made.

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71. The safe harbor does not apply to statements made, as here, in connection with an

8 1 initial public offering.

9

FIRST CAUSE OF ACTION Class Claim For Violations Of Section 11 Of The Securities Act

10

(Against All Defendants)

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72. Plaintiff repeats and rcallcgcs each and every allegation above as if fully set forth

12 herein.

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73. Plaintiff does not allege that the material omissions and material misstatements set

14 forth herein were made intentionally, knowingly or recklessly by Defendants.

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74. Plaintiff brought this action within one year after the discovery of the materially

16 incorrect statements and omissions, and within three years after the shares were offered to the

17 public through the Offering Documents.

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75. This claim is brought by Plaintiff against all Defendants.

19

76. The Company was the issuer of the Offering Documents and sold the shares

20 pursuant to the Offering Documents.

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77. Each of the Individual Defendants signed the Prospectus.

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78. Each of the Underwriter Defendants served as a co-managing underwriter of the

23 Offering, and is identified as such by, among other things, their listing "on the cover" of the

24 Prospectus. Each of the Underwriter Defendants is also liable for the material misstatements and

25 material omissions in the Offering Documents and is therefore also liable to Plaintiff and the

26 members of the Class under section 11.

27

79. Each of the Individual Defendants participated in the preparation of, caused to be

28 issued and/or participated in the issuance of the Offering Documents, and signed the Registration


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1 Statement, each of which was inaccurate and contained material misstatements; omitted to state a

2 material fact required to be stated therein, or failed to disclose certain material facts necessary to

3 make the statements therein not misleading, as Set forth herein.

4

80. Each of the Underwriter Defendants participated in the preparation of, caused to be

5 issued and/or participated in the issuance of the Offering Documents, each of which was

6 inaccurate and contained material misstatements; omitted to state a material fact required to be

7 stated therein, or failed to disclose certain material facts necessary to make the statements therein

8 not misleading, as set forth herein.

9

81. The individual Defendants did not make a reasonable investigation, failed to

10 exercise reasonable due diligence, and/or had no reasonable grounds to believe, that the Offering

Ii Documents issued by the Company were free of material misstatements and material omissions at

12 the time those documents were filed, and they are therefore also liable to Plaintiff and the

13 members of the Class under section 11.

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82. Plaintiff alleges that all statutory affirmative defenses available to only Underwriter

15 Defendants under sections 11 and 12 are affirmative defenses which those Defendants must plead

16 and prove and which Plaintiff need not allege. Nevertheless, Plaintiff addresses the underwriter

17 affirmative defenses below.

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83. While the following concerns an affirmative defense which can be raised by the

19 Underwriter Defendants only, and concerning which each of them bears the burden of proof,

20 nevertheless, Plaintiff alleges that each Underwriter Defendant did not make a reasonable

21 investigation, did not possess reasonable grounds to believe, and did not believe, that the

22 statements contained in the Offering Documents were true, were without omissions of any

23 material facts and were not misleading. Each Underwriter Defendant participated in the

24 preparation of the Offering Documents, and was required to investigate with due diligence the

25 statements contained therein to confirm that they did not contain material misstatements or

26 omitted to state material facts, but each of the Underwriter Defendants did not perform this

27 investigation with due diligence. (Indeed, the underwriter Defendant had a substantial direct

28 interest in the success of the offering, as detailed above).


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84. Each Underwriter Defendant, as the result of engaging in the routine conduct of its

business or through common sense, was negligent (without limitation) as follows:

3

(a) in not knowing that its misstatements and omissions were material;

4

(b) in not knowing that the statements concerning the Company's future revenue

5 and revenue growth rates were materially inaccurate.

6

85. The Offering Documents, at the time they became effective, were inaccurate and

7 contained material misstatements of fact, omitted to state material facts required to be stated

8 therein, or failed to disclose certain material facts necessary to make the statements therein not

9 misleading, as set forth herein.

10

86. The facts misstated and omitted would have been material to a reasonable person

11 reviewing the Offering Documents.

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87. Plaintiff and the other Class members did not know and, in the exercise of

13 reasonable diligence, could not have known of the material misstatements and material omissions

14 contained in the Offering Documents at the time of their purchases during the Class Period.

15

88. During the Class Period, Plaintiff and the other members of the Class purchased in

16 the IPO over five hundred million shares of Facebook common stock.

17

89. Although not required to be alleged with respect to this claim because it is an

18 affirmative defense to be alleged and proven by Defendants, nevertheless, Plaintiff alleges that

19 Plaintiff and the other members of the Class purchased their Facebook shares as a direct and

20 proximate result of, and/or without knowledge of, the maicrial misstatements and omissions in the

21 Offering Documents. Plaintiff and/or other members of the class would not have purchased their

22 Facebook shares from Defendants if the material misstatements and material omissions in the

23 Offering Documents had not been made by Defendants.

24

90. By virtue of the foregoing, each of the Defendants on this section 11 claim violated

25 section 11 of the Securities Act, and is liable to Plaintiff and the other members of the Class.

26

91. As a direct and proximate result of Defendants' unlawful conduct as alleged herein,

27 Plaintiff and the other members of the Class sustained damages in connection with their purchase

28 of Facebook shares during the Class Period pursuant to or traceable to the Offering Documents in

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an amount in excess of $500 million and possibly in excess of $1 billion, the exact amount to be

proven at trial.

92. Plaintiff and the members of the Class acquired their shares pursuant or traceable to

the Company's Offering Documents which were rendered matcrially inaccurate as a result of

Defendants' misstatements and omissions.

SECOND CAUSE OF ACTION Class Claim For Control Person Liability Under Section 15 For Violation Of Section 11

(Against The Individual Defendants)

93. Plaintiff repeats and realleges each and every allegation above as if fully set forth

herein.


forth herein were made intcntionally, knowingly or recklessly by Defendants.

95. The Defendants in this claim for control person liability under section 15 of the

Securities Act, for violation of section 11 of the Securities Act, are all of the Individual

Defendants.

96. The Individual Defendants, individually and jointly, were control persons under

section 15 by virtue of their senior executive officer and/or directorial positions at the Company.

97. As senior officers and/or directors of the Company, the Individual Defendants had

a duty to havc the controllcd persons issue materially accurate information in the Offering

Documents.

98. The Individual Defendants at all relevant times were able to and did control the

Company's day-to-day operations, financial statements, and public filings.

99. The Individual Defendants at all relevant times were able to and did control the

contents of the Offering Documents, which contained material misstatcmcnts and material

omissions. The Individual Defendants had (and did exercise) the power and influence to cause the

Company to engage in the unlawful conduct complained of herein, and correspondingly were able

to cause some or all of the other Defendants to refrain from the conduct complained of herein.

100. The Individual Defendants were a control person of at least one primary violator of

section 11, the Company. By virtue of their positions as controlling persons of a primary violator,

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MASS ACTION ACTION COMPLAINT

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each of the Individual Defendants is also liable pursuant to section 15 of the Securities Act.

101. While the following concerns an affirmative defense that can be raised by only

these control person Defendants, and concerning which they bear the burden of proof,

nevertheless, Plaintiff alleges that each of these Defendants, as a controlling person, cannot prove

that he: (a) had no knowledge of the existence of the facts by reason of which the liability of the

controlled person is alleged to exist; or (b) had no reasonable grounds to believe in the existence

of the facts by reason of which the liability of the controlled person is alleged to exist.

102. As set forth above, each of the Defendants named in this Complaint violated

section 11 of the Securities Act.

103. The Individual Defendants, individually and jointly, are each liable under section

15 as a control person of the other Defendants who are primarily liable under section II, and each

Defendant on this claim is liable to Plaintiff and the other members of the Class, in an amount to

be proved at trial.

THIRD CAUSE OF ACTION Class Claim For Violations Of Section 12(a)(2) Of The Securities Act

(Against MI Defendants)


herein.


forth herein were made intentionally, knowingly or recklessly by Defendants.

106. Plaintiff brought this action within one year after the discovery of the materially

incorrect statements and omissions, and within three years after the shares were offered to the I

public through the Offering Documents.

107. This claim is brought by Plaintiff against all Defendants.

108. The Company, as the issuer of the shares, reaped over $6.8 billion from the IPO.

109. The Individual Defendants were sellers and offerors and/or solicitors of purchasers

of the Facebook shares offered pursuant to the Offering Documents.

110. Defendant Zuckerberg was not only Chairman and CEO of the Company, but was

the public face of the Company. Defendant Zuckerberg became a billionaire many times over as a

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LLASS ACTION COMPLAINT


LI liresult of the IPO.

2

111. The Underwriter Defendants made over $150 million in underwriting fccs from

3 sales of Facebook shares in the IPO, fees that they would not have made if the Offering

4 Documents had not contained material misstatements and material omissions.

5

112. Each of the Defendants was a seller, offerer and/or solicitor of purchases of the

6 Company's shares, pursuant to the Offcring Documents, for their own financial benefit.

7

113. Each of the Defendants' acts of selling, offering and/or soliciting included but were

8 not limited to the prcparation of the Offering Documents which contained the material

9 misstatements and material omissions, and their issuance and dissemination to public investors.

10

114. Each of the Defendants' acts of selling, offering and/or soliciting was a substantial

11 factor with respect to the purchase of the Company's shares by Plaintiff and the members of the

12 Class.

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115. But for the Defendants' selling and/or solicitation activities by means of the

14 materially incorrect Offering Documents, Plaintiff and the members of the Class would not have

15 purchascd thcir Faccbook shares or would have acquired their shares at a price less than they

16 actually paid.

17

116. While the following concerns an affirmative defense which can be raised by only

18 the section 12 Defendants, and concerning which they bear the burden of proof, nevertheless,

19 Plaintiff alleges that each of these Defendants cannot prove that it: (a) did not know of such

20 material misstatement or omission; and (b) in the cxcrcisc of reasonable care could not have

21 known of such material misstatement or omission.

22

117. Plaintiff and the other members of the Class purchased their shares in the IPO

23 which makes all shares purchased in and of themselves directly traceable to the offering.

24

118. Plaintiff and the other members of the Class purchased their Facebook shares

25 pursuant to the written Offering Documents herein, and without knowledge of the material

26 misstatements and omissions in those Offering Documents.

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119. The Facebook shares sold to Plaintiff and the other members of the Class during

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he Class Period lost at least hundreds of millions of dollars, and possible billions of dollars, in

LASS ACTION COMPLAINT

-17-


value.

120. As a direct and proximate result of Defendants' unlawful conduct as alleged herein,

Plaintiff and the other members of the Class suffered damages in connection with their purchases

of Facebook shares during the Class Period.

121. By virtue of the foregoing, each of the Defendants on this section 12 claim is

primarily liable under section 12(a)(2) of the Securities Act, and each is primarily liable to

Plaintiff and other members of the class.

122. Plaintiff, individually and representatively, hereby elects to rescind and tender

those securities that Plaintiff and the other members of the Class continue to own, in return for the

consideration paid for those securities together with interest thereon. Plaintiff and members of the

Class who have sold their Facebook shares are entitled to rescissory damages, in an amount to be

proved at trial.

FOURTH CAUSE OF ACTION Class Claim For Control Person Liability Under Section 15 For Violation Of Section 12

(Against The Individual Defendants)


I herein.


forth herein were made intentionally, knowingly or recklessly by Defendants.

125. The Defendants in this claim for control person liability under section 15 of the

Securities Act, for violation of section 12 of the Securities Act, are all of the Individual

Defendants.

126. For the reasons stated in the Second Claim above, each of the Individual

Defendants is a control person pursuant to Section 15 of the Securities Act.

127. While the following concerns an affirmative defense that can be raised by only

these control person Defendants, and concerning which they bear the burden of proof,

nevertheless, Plaintiff alleges that each of these Defendants, as a controlling person, cannot prove

that he: (a) had no knowledge of the existence of the facts by reason of which the liability of the

controlled person is alleged to exist; or (b) had no reasonable grounds to believe in the existence

- 18 -

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of the facts by reason of which the liability of the controlled person is alleged to exist.

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128. As set forth above, each of the Defendants on the section 12 claim violated section

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12 of the Securities Act.

4

129. The Individual Defendants, individually and jointly, arc cach liablc under section

5 15 as a control person of the other Defendants who are primarily liable under section 12, and each

6 Dcfcndant on this claim is liable to Plaintiff and the other members of the Class, in an amount to

7 be proved at trial.

8

REQUEST FOR RELIEF

9 130. WHEREFORE, Plaintiff demands judgment individually and on behalf of the

10 Class against Defendants, jointly and severally, as follows:

11 a. An order declaring this action to be a class action properly maintained pursuant to

12 section 382 of the California Code of Civil Procedure, certifying the Class, and certifying her

13 counsel as Class Counsel;

14

b. Against Defendants, jointly and severally, for damages suffered as a result of

15 Defendants' violations of the Securities Act, and/or awarding rescission under section 12 of the

16 Securities Act, in an amount to be proven at trial;

17 C. Awarding Plaintiff and the other members of the Class pre-judgment and post-

18 judgment interest, as well as her reasonable attorneys' fees, accountants' fees and experts' fees

19 and other costs and disbursements; and

20

d. Awarding Plaintiff and the Class such other and further relief as may bc just and

21 proper under the circumstances.

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-19-


JURY TRIAL DEMANDED

1'laintiff demands a trial by jury on all issues so triable.

DATED: May 25, 2012 WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP

FRANCIS M. GREGOREK BETSY C. MANIFOLD RACHELE R. RICKERT PATRICK H. MORAN

PA . CK ORAN

750 B Street, Suite 2770 San Diego, CA 92101 Telephone: 6191239-4599 Facsimile: 619/234-4599

WOLF HALDENSTEJN ADLER FREEMAN & HERZ LLP

GREGORY M. NESPOLE ROBERT B. WEINTRAUB 270 Madison Avenue New York, New York 10016 Telephone: 212/545-4600 Facsimile: 212/545-4653

WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLC

ADAM J. LEVITT 55 West Monroe Street, Suite 1111 Chicago, Illinois 60603 Telephone: 312/984-0000 Facsimile: 312/984-0001

GAINEY & McKENNA THOMAS J. McKENNA 440 Park Avenue South, 5th Floor New York,NY 10016 Telephone: 212-983-1300 Facsimile: 212-983-0380

Attorneys for Plaintiff

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FACEB00K:18910.CI'J

ACTION COMPLAINT

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Arrf)Nvr.ei PAHT WItHOUt At rORNtY INWI,*. SIseS ttme ....S.merJ: Patrnk H. Moran t270)*( I) Wolf HaJcJentcjn Adler Freeman & If crz LLP 750 R Street. Suite 277() San Diego. CA 921 ul

lfLHOWE (,I 9-239-4599 r*x an. 619-234-4599 STIORNEy con Plaintiff Elbita Alfonso

SUPERIOR COURT OF CALIFORNIA. COUNTY OF San Mateo rREETQRsn5: 40() County Center

uAILIRG ADQRES5: rir1ANozIp coos: Redwood City. CA 94063

SSANCWNf.ME Southern Branch (Hill of Justice) CASE NAME:

Alfonso v. Facebook. Inc.. et al. CIVIL CASE COVER SHEET Complex Case Designation

Unlimited (Amount (Amount

El Limited C] Counter El Joinder demanded demanded is Filed with first appearance by defendant exceeds $25.000) $25.000 or less) (Cs). Rules of Court. rule 3.4021

os COtr USE ONLY

RECEIVED

MAY 2 5 2012 CLEPX OF THE SUPERIOR COURT

SAN MATEOcOUNJY

EN IV .HJDO5:

u€p1 .

Items 1-6 below must be completed ($00 Instnjcfio Check one box below for the case type that best describes this case: Auto Tort Conbact

H Auto (22) C] 8rath of ccntractlwarranly (06) Uninsured mnlcritf (46) = Rule 3.740 c0lIecticn 409)

Other PIIPOmD (Personal tnjurylProperty El Other collections (09) DamagelWrongfui Death) Tort El Insurance coverage (18) El Asbestos(04) El Other contrac*(37)

Product liability 424) Real Property U Medical malpractice (45) C] Eminent domanhlnverse El Other 13 I11301W0 (23) CofIdWIlTtRtlofl (14)

Mon-PIIFDIWD (Other) Tort El WrengtJI eviction (33)

E] Business ton/unfair business practice (07) C] Other real properly (26)

CiQ rights (08)

C] Defamation (13)

CD Fraud ( IS)

El

Professional neglIgence (25)

El Other non-PIIPDtWD tort (35)

Wrongful termination (36)

Other employment ( IS)

Unlawful Defamer

El Commercial 131)

El

Residential (32)

C] Dnqs (38) Judicial Review

CJ Asset lOrfeirure (05)

Petition ra: artiration sward (II)

C]

Writ ot mandate (o

On

Provisionally Complas Civil Litigation (Cat. Rules of Cowt. rules 3.400-3.4031

El srintauustrrraee regulation (03)

R Construction defect (10) Mass tort (40)

[2] Sst.jrttisi litigation (28)

tat (30)

C] Insurance coveraqe claims analog from the above kted provisionally complex case types (41)

Enforcernem of Judgment

El Enforcement of judgment (20)

111118011011400040 Civil Complaint

El RICO (27)

El Other complain (nor epccrnodabove) (42) Miscellaneous CMI Petition El Partnership and corporate governance (21)

C) Other petition ('lot specified abovel 143)

2. This case LLJ is L.J is not complex under rule 3.400 of the California Rules of Court. If the ease is complex, mark the - factors requiring exceptional judicial management:

a. C] Large number of separatel y represented parties d. C] Large number of witnesses. b. Extensive motion practice raising difficult or novel e. El Coordination with related actions pending in one Or more courts

issues that will be time-consuming to resolve in other counties, States, or countries. or in a federal court c. Substantial amount of documentary evidence i. [J Substantial posl(udgment judicial supervision

3. Remedies sought (check all that apply) a.{23 monetary b. nonmonetary dedarotory or mjunotwo relief c. El punitive 4. Number of causes of action (specay): 1:4 II Viulutjons; It: CiIsItrol PoSer, I_i3bslityI II: 111:4 I2(aI21 violetiuni,: IV: Cuntrol Posun Liubllftyl( 12 5. This case [2J as C] is not a class action suit. 6. If there arc any known related cases, file ano serve a notice of related case. (You may use form C,4.O15) Date: May 25, 2012

1/1 Patrick H. Moran

• Plaintiff must file this cover sheet with the first paper tiled in the action or proceeding (except small claims cases or cases filed under the Probate Code. Family Code, or Welfare and Institutions Code). (Cal. Rules of Court, rule 3.220.) Failure to file may result in sanctions.

• File this cover sheet In addition to any cover sheet required by local court rule. • It this case is complex under rule 3.400 et seq. of the California Rules of Court. you must servo a copy of this cover sheet on all

other parties to the action or proceeding. • Unless this is a collections case under rule 3.740 or a complex case, (115 cover sheet will be used for statistical purposes only.

Alocel c ),erd;uary CIVIL CASE COVER SHEET Cit. RLISi ff Ca,,it 141Sf 2.30.3 220.1 100.4403.3.740. .kaIIraI Co,a,ci at

Oil. Slalceto o( Aar,lO Satlesuawn. $10. 3.11) C.441fl(R .hlp 1.2007)

Case4:12-cv-03198-YGR Document1-1 Fi

Page24 of 55

Attorney or Party without Attorney (Narn&Addrcss) FOR COURT USE ONLY

'4 r CY t4

Telephone: ENDORSED FILED State Bar No.: for Attorney SAN MATEO COUNTY

SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN MATEO MAY 25 2012 400 COUNTY CENTER REDWOOD CITY, CA 94063

Plaintiff _c (A— (t2)

Defendant

Certificate Re Complex Case Designation

This certificate must be completed and filed with your Civil Case Cover Sheet if you have checked a Complex Case designation or Counter-Designation

In the attached Civil Case Cover Sheet, this case is being designated or counter-designated as a complex case or as not a complex case] because at least one or more of the following boxes has been checked:

ci Box I Case type that is best described as being (or not being) provisionally complex civil litigation (i.e., antitrust or trade regulation claims, construction

defect claims involving many panics or structures, securities claims or investment losses involving many parties, environmental or toxic tort claims involving many parties, claims involving mass torts. or insurance coverage claims arising out of any of the foregoing claims).

ci Box 2 - Complex [or not complex] due to factors requiring exceptional judicial management

ci Box 5 - Is [or is not] a class action suit.

2. This case is being so designated based upon the following supporting infoñnation [including, without limitation, a brief description of the following factors as they pertain to this particular case (I) management of a large number of separately represented parties; (2) complexity of anticipated factual and/or legal issues; (3) numerous pretrial motions that will be time-consuming to resolve; (4) management of a large number of witnesses or a substantial amount of documentary evidcncc; (5) coordination with related actions

Lu -J

CV-59 tRcv. 11061 www.sanmaeocou,torg


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CERTIFICATE RE: COMPLEX CASE DESIGNATION

[This Certificate Must Be Completed And Filed With Your Civil Case Cover Sheet If You Have Checked A Complex Case Designation Or Counter-Designation ]

1. In the attached Civil Case Cover Sheet, this case is being designated or counter-

designated as a complex case [or as not a complex case] because at least one or more of the

following boxes has been checked:

0 Box 1 - case type that is best described as being (or not being] provisionally

complex civil litigation (i.e., antitrust or trade regulation claims, construction defect claims

involving many parties or structures, securities claims or investment losses involving many

parties, environmental or toxic tort claims involving many parties, claims involving mass torts, or

insurance coverage claims arising out of any of the foregoing claims).

Box 2— complex [or not complex] due to factors requiring exceptional judicial

management.

1S/ Box 5 - Is [or is not] a class action suit.

2. This case is being so designated based upon the following supporting information

[including, without limitation, a brief description of the following factors as they pertain to this

particular case: (1) management of a large number of separately represented parties; (2)

complexity of anticipated factual and/or legal issues; (3) numerous pretrial motions that will be

time-consuming to resolve; (4) management of a large number of witnesses or a substantial

amount of documentary evidence; (5) coordination with related actions pending in one or more

courts in other counties, states or countries or in a federal court; (6) whether or not certification

of a putative class action will in fact be pursued; and (7) substantial post-judgment judicial

supervision]:


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[Attach additional pages, if necessaty.]

3. Based on the above-stated supporting Information, there Is a reasonable basis for

the complex case designation or counter-designation [Or noncomplex case counter-designation]

being made in the attached Civil Case Cover Sheet.

I, the undersigned counsel or self-represented party, hereby certify that the above is true

and correct and that I make this certification subject to the applicable provisions of California

Code of Civil Procedure, Section 128.7 and/or California Rules of Professional Conduct, Rule 5-

200 (B) and San Mateo County Superior Court Local Rules, Local Rule 2.30.

Dated:

17 [Type or Print Name]

/1 t2i Arl'?1 /4u- /33- ,A4(O k1.. At , : i.... .

VIS c 'S

'i'jOf . .vvv

(t i'

M "Ilk

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SUPERIOR COURT OF

CALIFORNIA COUNTY OF SAN MATEO

LOCAL COURT RULES

As Amended Effective January 1, 2012

SUPERIOR COURT OF CALIFORNIA, COUNTY OF SAN MATEO Hall of justice and Records 400 County Center, 2od Floor

Redwood City, California 94063

Case4:12-cv-03198-YGR Document1-1 Filed06/20/12 Page2

Superior Court ofCalifomia. County of San Mateo

CHAPTER 2. CIVIL TRIAL COURT MANAGEMENT RULES PART 1. MANAGEMENT DUTIES

Rule 2.2 Trial Court Management

Reference CRC, rules 3.700, 3.710-3.713, 10.900, 10.901

(Adopted, effective January I, 2000) (Amended, effective January 1, 2007)

PART 2. CASEFLOW MANAGEMENT

Rule 2.3 New Case Management

This rule applies to all civil cases with the exception of the following: (I) juvenile court matters; (2) probate matters; (3) family law matters; and (4) civil cases which, based on subject matter, have been assigned to a judge, or to more than one judge, for all purposes. For rules applicable to these exceptions, see CRC 2.20, 2.30, 2.570-2.573, 2.585, 2.810-2.819, 2.830-2.834, 3.650, 3,700-3.735, 3.920-3.927, 3.1370, 3.1380-3.1385, 3.1590-3.1591,3.1806. 5.590, 10.900-10.901, 10.910, 10.950-10.953,.

(a) Purposes and Goals

The purposes and goals of the San Mateo Superior Court Civil Case Management System effective January 1, 1992 are:

(I) To manage fairly and efficiently, from commencement to disposition, the processing of civil litigation.

(2) To prepare the bench and bar for full implementation of the Trial Court Delay Reduction Act (A.B. 3 820) on July 1, 1992; and

(3) To encourage parties to agree to informal discovery early in the life of the case, to use standard form interrogatories and to promote alternative dispute resolution. Nothing in these rules is intended to prevent the parties from stipulating to an earlier intervention by the court by way of a case management conference, settlement conference or any other intervention that seems appropriate.

(4) In accordance with Sections 3.710-3.715, 10.900, 10.901 of the California Rules of Court, Local Rule 2.3 is adopted to advance the goals of Section 68603 of the Government Code and Section 2.1 of the Standards of Judicial Administration recommended by the Judicial Council.

(b) Team concept

Beginning January I, 1994 civil litigation will be managed primarily by a team of two program judges.

The clerk will assign the case to a program judge at the time the complaint is filed. The case shall be managed by the assigned program judge until disposition or until the case is assigned to a trial department.

Div II - Rules 201 Revised 111/2012


Superior Court of California, County of San Mateo

(c) Cases filed after July 1, 1992

Upon the filing of a complaint after July 1, 1992, the case shall be subject to all of the civil case management system rules set forth below. Cases filed before July 1, 1992 shall also be subject to these rules except for subsection (d) (Filing and service of pleadings; exceptions).

(d) Filing and service of pleadings; exceptions.

(I) Complaint: Except as provided in paragraph 5 below, plaintiff shall within 60 days after filing of the complaint serve the complaint on each defendant along with:

(A) A blank copy of the Judicial Council Case Management Statement;

(B) A copy of Local Rule 2.3;

(C) The Notice of Case Management Conference.

If a matter has been submitted to arbitration pursuant to uninsured motorist insurance, the plaintiff shall file a notice to that cffcct with the court at the time of filing the complaint, or at the time the matter is submitted. The notice shall include the name, address and telephone number of the insurance company, along with the claim number or other designation under which the matter is being processed.

(2) Cross-complaint: Except as provided in paragraph (5) below, each defendant shall within 30 days after answering the complaint file any cross-complaint (within 50 days if compliance with a governmental claims statute is a prerequisite to the cross-complaint) not already served with the answer under Code of Civil Procedure section 428.50 and serve with that cross-complaint:

(A) A blank copy of the Judicial Council Case Management Statement;

(B) A copy of Local Rule 2.3;

(C) The Notice of Case Management Conference.

(3) Responsive pleadings: Except as provided in paragraph S below, each party served with a complaint or cross-complaint shall file and serve a response within 30 days after service. The parties may by written agreement stipulate to one 15-day extension to respond to a complaint or cross-complaint.

If the responsive pleading is a demurrer, motion to strike, motion to quash service of process, motion for a change of venue or a motion to stay or dismiss the case on forum non conveniens grounds, and the demurrer is overruled or the motion denied, a further responsive pleading shall be tiled within 10 days following notice of the ruling unless otherwise ordered. If a demurrer is sustained or a motion to strike is granted with leave to amend, an amended complaint shall be filed within 10 days following notice of the ruling unless otherwise ordered. The court may fix a time for filing pleadings responsive to such amended complaint.

(4) Proofs of service: Proofs of service must be filed at least 10 calendar days before the case management conference.

(5) Exceptions for longer periods of time to serve or respond:

Div 11 - Rules 202 Revised 111/2012


Superior Court of California. County of San Mateo

(A) Time to serve may be extended for good cause: Upon ex parte application to the court, in compliance with California Rules of court 3.1200 —3.1206, within 60 days of the date the complaint was filed, plaintiff may obtain an extension of time to serve to a date on or before the case management conference, if good cause is shown by declaration of counsel (or plaintiff filing in propria persona). An additional extension of the time to serve (an initial extension if the application is by a cross-complainant) may be obtained upon written application to the court upon good cause shown before the prior extension has expired. The filing of a timely application for an extension will automatically extend the time to serve by five days, whether or not the application is granted.

Good cause will be found if the declaration shows that the action is filed against a defendant who is an uninsured motorist, and the plaintiffs claim is subject to an arbitration provision in plaintiff's contract of insurance. In determining good cause in other cases, the court will give due consideration to any standards, procedures and policies which have been developed in consultation with the bar of the county through the bench-bar trial court delay committee.

(B) Additional extension of time if uninsured motorist arbitration is pending. In addition to any extension of time obtained pursuant to subsection (5)(A) above, if an uninsured motorist arbitration is still pending between plaintiff and plaintiff's insurance carrier 30 days prior to the expiration of the extension, plaintiff may obtain an additional extension of time by an ex parte application supported by a declaration showing the scheduled or anticipated date of the arbitration hearing and the diligence of plaintiff in pursuing arbitration.

(C) Time to respond may be extended for good cause: Before the time to respond has expired, any party served with a complaint or cross-complaint may, with notice to all other parties in the action, make ex parte application to the court upon good cause shown for an extension of time to respond. The filing of a timely application for an extension will automatically extend the time to respond by five days, whether or not the application is granted.

(e) Case management conference

(1) Date of conference: Unless the parties stipulate in writing and the court orders that the case be earlier referred to arbitration, a case management conference will be set by the clerk at the time the complaint is filed. (Government Code 68616)

(2) Attendance at the case management conference is mandatory for all parties or their attorneys of record.

(3) Plaintiff must serve the Notice of Case Management on all parties no later than 30 calendar days before the conference, unless otherwise ordered by the Court.

(4) The Court will deem the case to be at-issue at the time of the conference (Reference: CRC 3.714(a)) absent a showing of extraordinary circumstances.

(5) The conference may be set at an earlier date by order of the Court or by written stipulation of the parties.

(6) Designation of trial counsel: Trial counsel and, except for gopd cause shown, back-up trial counsel, must be specified at the case management conference. if such counsel is not

Div 11 - Rules 203 Reviscd 1/1/2012


Superior Court of California, County of Son Mateo

specified, relief from the schcdulcd trial date may not be obtained based upon the ground that counsel is cngagcd clsewhcre.

(7) Canfercnce ordcrs: At the initial conference, the program judge will make appropriate pre-trial orders that may include the following:

(A) An order referring the case to arbitration, mediation or other dispute resolution process;

(B) An order transferring the casc to the limitcd jurisdiction of the superior court;

(C) An order assigning a trial date;

(D) An order identifying the case as one which may be protracted and determining what special administrative and judicial attention may be appropriate, including special assignmcnt;

(E) An order identifying the case as one which may be amenable to early setticmcnt or other alternative disposition technique;

(F) An order of discovery; including but not limited to establishing a discovcry schcdulc, assignment to a discovery referee, and/or establishing a discovery cut-off date;

(G) An order scheduling the exchange of expert witness information;

(H) An ordcr assigning a mandatory settlement conference date pursuant to Local Rule 2.3(k) and 2.4; and

(I) Other orders to achieve the interests of justice and the timcly disposition of the case.

(8) Cour*Call Telcphonic Appcarances

(A) Reference CRC, Rule 3.670

(B) Procedure. Telephonic appcaranccs through the use of CourtCall, an independent vendor, are permittcd at case management conference hearings. A party wishing to make a tcicphonc appearance must serve and file a Request for Telephone Appearance Form with CourtCall not less than five court days prior to the case management conference hearing. Copies of the Request for CourtCall Appearance form and accompanying information sheet are available in the Clerk's office. There is a fee to parties for each CourtCall appearance and fees are paid directly to CourtCall. CourtCall will fax confirmation of the request to parties.

(C) On the day of the case management conference hcaring, counsel and panics appcarina by CourtCall must check-in fivc minutes prior to the hearing. Check-in is accomplished by dialing the courtroom's dedicated toll-free teleconference number and access codc that will be provided by CounCall in the confirmation. Any attorney or party calling after the check-in period shall he considered late for the hearing and shall be treated in the same manner as if the person had personally appeared late for the hearing.

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Superior Court of California. County of San Mateo

(D) At a case management conference, parties may be referred to an appropriate dispute resolution ("ADR') process (e.g., mediation, binding arbitration or neutral evaluation). If parties are referred ADR, they must redial the dedicated toll-free teleconference number immediately following their case management conference appearance and use a second CourtCaIl access code to telephonically appear at the ADR referral meeting with ADR staff. If a case has been referred to ADR, a party's case management conference appearancc is not complete until they have also telcphonically appeared at the mandatory ADR referral. If parties arc rcfcrrcd to judicial arbitration, they do not have to appear at the ADR rcferr al.

(f) Casc Management Statement

At least 15 calendar days before the scheduled case management conference, each party shall file with the court and serve on all other parties a completed Judicial Council Case Management Statement. If the case is set for further case management conference hearing(s), all parties must file updated Case Management Statements 15 (fifteen) calendar days prior to the scheduled hearings(s).

(g) Appropriate Dispute Resolution, ADR, Policy Statement

The Court finds it is in the best interests of parties to litigation to participate in appropriate dispute resolution procedures, including but not limited to mediation, neutral evaluation, private or judicial arbitration, voluntary settlement conferences, and the use of special masters and referees. Therefore, all parties shall stipulate to, or be referred to, an appropriate form of dispute resolution before being set for trial, unless there is good cause to dispense with this requirement. Parties are encouraged to stipulate to judicial arbitration or ADR prior to the case management conference.

(h) Stipulations to Arbitration

(1) If the case is at issue, and all counsel and each party appearing in propia persona stipulate in writing to judicial arbitration prior to the case management conference, discovery will remain open following judicial arbitration. A written stipulation to judicial arbitration must be filed with the clerk and a copy immediately sent to the Master Calendar Coordinator at least 10 calendar days before the case management conference in order to avoid the need to appear at that conference. A written stipulation to arbitrate will be deemed to be without a limit as to the amount of the award unless it expressly states otherwise.

(2) It is the policy of this court to make every effort to process cases in a timely manner. Parties who elect or are ordered b the court to judicial arbitration must complete the arbitration hearing within the time frame specified by the court.

Parties who wish to continue the arbitration hearing after the jurisdictional time frame must submit a court provided form entitled "Ex Pane Motion and Stipulation for continuance of Judicial arbitration Ifearin,g." Parties can obtain a copy of the form by contacting the court's judicial arbitration administrator [See Local Rule 10.1(d)(1)]. Continuances without adequate grounds will not be considered. A case management judge will either grant or deny the request for continuance. If the request is denied, the case may be assigned a trial date. If the request is granted, the judge will impose anew deadline by which the arbitration must be completed.

(3) Parties who wish to change their election from judicial arbitration to another form of ADR must file a "Stipulation and [Proposed] Order to [Mediation, Neutral Evaluation, etc.] in Lieu of [Court-Ordercd] Judicial Arbitration" with the Clerk of the Court. The Stipulation must

Div 11 Rules 205 Revised 1/1/2012


Superior Court of California. County of Sun Mateo

state that parties have: (i) notified both the judicial arbitration and ADR coordinators; (ii) cancelled the judicial arbitration hearing: (iii) scheduled the ADR session within five months of the previously schedulcd judicial arbitration hearing; and (iv) stipulatcd to a trial date, which is not more than six months from the previously scheduled judicial arbitration hearing.

(i) Stipulations to Private ADR

(1) 11 a casc is at issue and all counsel and each party appearing in propria persona stipulate in writing to ADR and file a completed Stipulation and Order to ADR with the clerk of the court at ]cast ten (10) calendar days before the first scheduled case management conference, that conference shall be continued 90 days. The court shall notify all parties of the continued case management conference.

(2) If counsel and each party appearing in propria persona are unable to agree upon an appropriate ADR process, they shall appear at the case management confercnce.

(3) Following an appearancc at a casc managcmcnt conference hearing, parties shall, within 21 calcndar days, file a completed Stipulation to ADR and Proposed Order identifying the name of the ADR provider, date of ADR session and the names of those who will be in attendance at the ADR scssion, The completed Stipulation to ADR and Proposed Order shall be filed with the court by plaintiff's counsel. The parties, through counsel, if represented, shall confer with the court's Multi-Option ADR Project (M.A.P.) staff if they cannot agree on a provider. Plaintiff's counsel, shall additionally, send a copy of thc completed Stipulation to the court's M.A.P. offices within the same 21-day period.

(4) All partics and counsel shall participate in the ADR process in good faith.

(5) To maintain the quality of ADR services the court requires cooperation from all parties, counscl and ADR providers in completing ADR evaluation forms, and rcturning these forms to the M.A.P. offices within 10 calendar days of the completion ofthe ADR process.

(6) ADR Program Complaint Policy If mediation session participants have a concern about the mediation proccss or the conduct of a mediator affiliated with the court's program, the court encourages them to speak dircctly with the mediator first. In accordance with California Ruics of Court §3.865 et seq., parties may also address written complaints, rctrcncing the specific Rule of Court allegedly violated, to the Court's Civil ADR Program Coordinator. (For complete complaint proccdurc guidelines, scc court web site: www.sanmatcocourt.orgladrlcivj I

(7) In accordance with the Code of Civil Procedure, scction 10315(c)(4), the court, in its discrction, may allow the prcvailing party at trial the fecs and expenscs of the ADR provider, unlcss there is a contrary agreement by the parties.

(1) Setting Short Cause Matters

If the parties agree that the time estimated for trial is 5 hours or less prior to the conference, a written stipulation shall be filed at least 10 calendar days before the case management conference in order to avoid the need to appcar at that confcrcnce and a copy immediately sent to the Master Calendar Coordinator. In the absence of a stipulation, either party may file a motion to have the matter designated a "short cause" and set the ca.sc accordingly. All such matters shall be presumed short cause unless the contrary is established at the hearing on the motion.

(k) Law and Motion

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Superior Court of California. County of San Mateo,

All law and motion matters shall be heard by the regularly assigned Law and Motion judge.

(I) Settlement Conferences

All cases not assigned to arbitration or some other dispute resolution mechanism will be assigned two settlement conference dates, the first of which will be at the earliest practicable date under the circumstances presented by the case, and the second within approximately two weeks prior to the assigned trial date.

Cases assigned to arbitration or other form of ADR may be subjected to a settlement conference prior to the arbitration or ADR process, but will be assigned to a pre-trial settlement conference only if the arbitration/ADR procedure fails to resolve the case.

All cases which fail to resolve by the trial date will be subject to an additional settlement conference on the trial date.

.41/ settlement conferences shall be subject to the requirements specified in Local Rule 2.4.

(m) Sanctions

Sanctions pursuant to CRC 2.30 shall be imposed for any violation of the civil case management system rules. The minimum sanction imposed shall be $150.00 payable to the court; sanctions payable to the court may be larger where appropriate and will be in addition to appropriate attorney fees and calendar changes, including any appropriate change in calendar status of the action.

Sanctions mandated hereby may be waived by the judge conducting the conference only upon an application showing good cause why sanctions should not be imposed.

(Adopted. effective July 1, 1996)(Amended. effective January 1,2000) (Amended, effective January I, 2003) (Amended cffccrivc July I. 2003) (Amended, effective January I. 2005XAinended, effective January I, 2006) (Amended, effective January I, 2007) (Amended, effective January I, 2010)

Rule 2.3.1 Orders to Show Cause re: Dismissals

(a) A hearing on an order to show cause why the case should not be dismissed for failure to prosecute the matter shall be set at the two year anniversary of the filing of the complaint and/or cross-complaint.

(b) An order to show cause hearing shall be set 45 days after court's receipt of notice of settlement.

(c) An order to show cause hearing regarding dismissals may be set by the court to achieve the interests ofjustice and the timely disposition of the case.

(d) An order to show cause hearing re: failure to complete judicial arbitration within the court- ordered time frame may be heard during the case management calendar. Sanctions may be imposed and a trial date may be assigned.

(Adopted. effective January 1,2000) (Amended, effective January I, 2003)(Amended, effective January 1, 2006)

Rule 2.4 Settlement Conference

Reference: California Rule of Court, rule 3.138.

Div 11 - Rules 207 Revised 1112012

Case4:12-cv-03198-YGR

Document1-1 Filed06/20/12 Page35 of 55

NOTICE OF CASE MANACF:MF;N'I' CONF:RENCF;

FIL A ED Case No. cLij: • .1

MAY 2 5 2012 Date:

ClIft Time: 9:00 a.m.

Dept. n & 1 Wilt. f_on Vcilnesday :rl lay.

You are liciebv giveu notice olymir ti.se M:in:igcmrnt ( •oiifcivnec. The date. time mid (lcpir1ineiit h:ive been above.

In accordance with apphcable C:ibfnm:a itiilcs of Court and Local Rules 2.3(d)14 and 23(m), you aic hereby tijckrctj to:

a. Serve all named defendants and file proofs of service en those defendants ''tLh the court within 60 days of filing the complaint (CRC 201 7).

IS. Serve a copy of this notice, Case Management Statement and ADR Information Sheet (in all named parties in this aeflen.

c. File mid serve a completed Case Management Statement at least 15 days before the Case Manageineijt Conference [CRC 21 2(g1. Failure to do so may result in monetary sanctions.

d. Nlect and confer. in person or by telephone. to consider each of the issues identified in CRC 212(t) no later than 30 days before the date set for the Case Management Conference.

2. If you fail to follow the orders above, you are ordered to show cause why you should not be sanctioned. The Order To Show Cause hearing will be at the same time as the Case Management Conference hearing. Sanctions may include monetary, evidentiary or issue sanctions as well as striking pleadings and/or dismissal.

3. Continuances of case managcnierit conferences are highiy disfavoied unless good cause is shown. 4. Parties may proceed in an appiopriate dispute resolution process ("ADR") by filing a Stipulation To ADR

and Proposed Oider (see attached form.). If plaintiff files a Stipulation 1oADR and Proposed Order electing to procced to judicial arbitration. the Case Management Conference will be taken off the court calendar and the case will be referred to the Arbitration Administrator. If plamti Ifs and defendants file a completed stipulation to another ADR process (e.g., mediation) 10 days prior to the first scheduled case management conference, the case management conference will be continued for 90 days to allow parties time to complete their ADR session. The court will notify panics of their new case management conference date.

5. If you have filed a default or a judgment has been entered, your case is not automatically taken off the Case Mmiagenment Conference (.'alenttiu. IF" Does". "Roes", etc. are named in your complaint, they must be distiussed !n order to close the case. If any party is in bankruptcy. the case is stayed only :is to that named party.

. You are further ordered to appear in person' (or through yotr attorney ot'record) at the Case Management Conference noticed above. You must be thoroughly familiar with the case and fully authorized to proceed.

7 Ilic Ca::c Management judge will issue orders at the conclusion of the conference that may include: 1. Referring parties to voluntary ADR and setting an ADR completion date; b. Disnussing or scvcnui1 claitims or parties; e. Setting a trial date.

S. the Caie Manageniciii judge may be the trial judge in this case.

For itniher iiiforiiaation regaidiiig case ilianagcnieitt policies and procedures. see the court vcbiie at WWW .sanii Ia t eucouti. C ff0.

l'etephotiic appcarancs at c:isc lIi:iiiaiteiiicrii ccinfcrcnci:s are :iv:iilahle by contacting ut,iiru._':dl, (.LC. :icm indipendent vtalor, at least 5 business tl:iys p1 on to the schctlukd conference (see attached ( ourt('aIl inl'unnzition).


Civil Appropriate Dispute Resolution (ADR) Information Sheet Superior Court of California, San Mateo County

Appropriate Dispute Resolution (ADA) is a way of solving legal problems without going to trial. All types of disputes can be resolved through ADA. The Court encourages you to use some form of ADA before you proceed to triaL The most popular form of ADA is mediation. The Multi-Option ADA Project can help you choose the option that is best for your case and refer you to an experienced ADA provider.

What are the Advantages of Using ADR?

Faster - Traditional litigation can take years to complete but ADA usually takes weeks or months.

do Cheaper— Parties can save on attorneys' fees and litigation costs.

dD More control & flexibility - Parties choose the ADA process most appropriate for their case.

Cooperative & less stressful — In mediation, parties cooperate to find a mutually agreeable solution to their dispute.

What are the Dlsadvantaces of Usina ADR?

You may go to Court anyway— If you can't resolve your case using ADA, you may still have to spend time and money on your lawsuit.

Not free - The neutrals charge fees (except in judicial arbitration), but you may qualify for financial aid.

Ari There Different Kinds of ADR?

do Mediation - A neutral person (mediator) helps the parties communicate, clarify facts, identify legal issues, explore settlement options and agree on a solution that is acceptable to all sides.

to Judicial Arbitration - Is an informal hearing where a neutral person (arbitrator) reviews the evidence, hears arguments and makes a decision on your case. In non-binding judicial arbitration, parties have the right to reject the arbitrator's decision and proceed to trial. For more information regarding judicial arbitration, please see the attached sheet or call (650) 363-4896.

Binding Arbitration The parties agree ahead of time to accept the arbitrator's decision as final. Parties who choose binding arbitration give up their right to go to Court and their right to appeal the arbitrator's decision.

Neutral Evaluation - A neutral person (evaluator) listens to the parties, asks them questions about their case, reviews evidence and may hear witness testimony. The evaluator helps the parties identify the most important legal issues in their case and gives them an analysis of the strengths and weaknesses of each side's case. Special neutral evaluation guidelines are available on the Court's website at www.sanmateocourt.orciladr.

dn Settlement Conference - Although similar to mediation, the neutral (a judge) may take more control in encouraging parties to settle. Settlement conferences take place at the courthouse. All cases have a mandatory settlement conference approximately 2-3 weeks before the trial date.

Page 1 ol 3

Appropriate Dispute Resolution Information Sheet Form adoç*ed br Mandatory Use (CA Role 01 Court 3.221] Local Court Form ADR-CV.e [Now Saptan*er, 211101 www.sanmateoouirtorg


How Does Voluntary Mediation/Neutral Evaluation Work In San Mateo County?

The person who files the lawsuit (the plaintiff) must include this ADA Information Sheet with the complaint when serving the defendants in the case.

All the parties in your case will meet with a judge at your first Case Management Conference (CIVIC), which is scheduled within 120 days of the filing of the complaint. The judge will speak to you about your voluntary ADA options, encourage you to participate in ADA and ask you to meet with Court ADA staff.

If you and the parties decide to use ADA, Local Rule 2.3(i)(3) states that you must file a Stipulation and Order to ADR with the Court Clerk's Office. This form lets the Court know both whom you have selected as your ADR neutral and the date of the ADR session.

You and the other parties can find your own ADA neutral for the case or use a neutral who is on the Court's ADA Panel.

o For a list of Court ADA neutrals and their resumes, visit the Court's website at www.sanmateocourt.ordr. (Go to "Civil ADA Program,' "Civil ADA Program Panelist Ust" and click on any provider's name.)

Ro If you decide to do ADA and file a Stipulation and Order to ADRat least 10 days before your first CIVIC, the Court will postpone (continue) your first CIVIC for 90 days to allow the parties time to resolve the case using ADA. The Clerk's Office will send you a notice with your new CIVIC date.

Within 10 days of completing ADA, you and your lawyer (if you have one) must fill out either an Evaluation By Attorneys or Client Evaluation and mail or fax it to the ADA offices at: 400 County Center, Courtroom 2F, Redwood City, CA 94063; (650) 599-1754 (fax).

Do I Have to Pay to Use ADR?

Yes. You and the other parties will pay the ADA neutral directly. However, you do not have to pay the Court for either judicial arbitration or for the mandatory settlement conference that is scheduled before your trial.

do If you expect to have difficulty paying the ADR provider's fee, ask the ADA Coordinator for a financial aid application. You will need to fill out this application to determine whether or not you qualify for financial assistance.

In San Mateo County, parties also can take their case to the community mediation organization, the Peninsula Conflict Resolution Center ("PCRC"), and have their case mediated by PCAC's panel of trained and experienced volunteer mediators. To learn more about programs and fees, contact PCAC's Manager of Mediation Programs at (650) 513-0330.

For more information, visit the court website at www.sanmateocourt.oraladr or contact the Muhl-Option ADR Project: 400 County Center, Courtroom 2F, Redwood City, CA 94063.

(650) 599.1070, (650) 3634146 / tax: (650) 599-1754 Pee 2 of 3

Appropriate Dispute Resolution Information Sheet Form adopted for Mandatory Use (CA We of Cowl t3.2211 LaJ Octet Form ADR-CV4 (New September, 20101 aniw.sanmataccourtorg


Judicial Arbitration, one of the available Appropriate Dispute Resolution (ADR) options, differs from other Options in that it is usually court-ordered, unless the parties agree to it.

What are the Advantaaes at Usina Judicial Arbitratian?

do Free -Parties do not have to pay for the arbitrator's fee.

Fast -Parties are usually given 120 days from the date of the Case Management Conference (CIVIC) to have their case heard by the appointed arbitrator.

dn Informal -The hearing is conducted by an arbitrator who issues an award. (Arbitrators are usually attorneys who practice or have practiced in San Mateo County.)

What are the Disadvantages of Using Judicial Arbitration?

The award issued by the arbitrator is not always binding (unless the parties stipulated otherwise). If any party requests a trial within 30 days of the award, the award becomes void and the case continues on to trial.

How Does Judicial Arbitration Work in San Mateo County?

dD During your first CIVIC hearing, the judge may decide to order you to judicial arbitration. You will then receive instructions and a proposed list of arbitrators in the mail.

dn Parties also may agree to judicial arbitration by filing a Stipulation and Order to ADA form at least 10 days before the first CIVIC. The CIVIC clerk will then vacate your CIVIC hearing and send the case to arbitration. The parties will receive instructions and a proposed list of arbitrators in the mail.

do Parties can stipulate (agree) to an arbitrator on the Court's Judicial Arbitration Panel list. Otherwise, proposed names of arbitrators will be sent to the parties.

o For a list of arbitrators, their resumes, and other information, visit the Court's website at www.sanmateocourt.oraladr. (Go to 'Judicial Arbitration Program," 'Judicial Arbitration Panelist List' and click on the arbitrator's name. To view the arbitrators by subject matter, click on 'Judicial Arbitration Panelists by Subject Matter.")

do After the arbitration hearing is held and the arbitrator issues an award, the parties have 30 days to turn down/reject the award by filing a Trial de Novo (unless they have stipulated that the award would be binding).

dD If the parties reject the award and request a Trial de Novo, the Court will send out notices to the parties of the Mandatory Settlement Conference date and the trial date.

dn Following your arbitration hearing, you will also receive an evaluation form to be filled out and returned to the Arbitration Administrator.

For more information, visit the court website at www.sanmateocourtoraladr or contact Judicial Arbitration: 400 County Center, First Floor, Redwood City, CA 94063. Phone:

(650) 363-4896 and Fax: (650) 3654897

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Appropriate Dispute Resolution Information Sheet Fan,, adoptud for Mandatory uo. [CA Ruts of Court 63.2211 Lanai Court Form ADR.CV.$ [Now Slptswsr, 20101 wwor.sarmnamocounarg

Case4:12-cv-03198-YGR Elocument1-1 Filed06/20/12 Page39 of 55

CM-I 10 ATTORNEY OR PARTY %MTHOUT ATTORNEY (Name, Slam Bar numbm and oftessA FOR CO(ATUSE ONLY

TELEPHONE NO.: FAX NO. (OpLk,na

E-MAIL ADDRESS (Optkna(E

ATTORNEY FOR (Name):

SUPERIOR COURT OF CALIFORNIA, COUNTY OF

STREET ADDRESS:

MAILING ADDRESE

crrr AND ZIP CODE:

BRANCH NAME -

PLAINTIFF/PETITIONER:

DEFENDANT/RESPONDENT:

CASE MANAGEMENT STATEMENT CASE NUMBER

(Check one): M UNUMITED CASE LIMITED CASE (Amount demanded (Amount demanded is $25,000 exceeds $25,000) or less)

A CASE MANAGEMENT CONFERENCE is scheduled as follows:

Date: Time: Dept.: Div.: Room:

Address of court (if different from the address above):

Notice of Intent to Appear by Telephone, by (name):

INSTRUCTIONS: All applicable boxes must be checked, and the specified information must be provided.

Party or parties (answer one):

a. c::i This statement is submitted by party (name):

b. [J This statement is submitted Jointly by parties (names):

2. Complaint and cross-complaint (to be answered by plaintiffs and cross-complainants on,)

a. The complaint was filed on (date):

b. = The cross-complaint, if any, was filed on (date):

3. Service (to be answered by plaintiffs and cross-complainants only)

a. [J All parties named in the complaint and cross-complaint have been served, have appeared, or have been dismissed.

b. The following parties named in the complaint or cross-complaint

(1) I1 have not been served (specify names and explain why not):

(2) [] have been served but have not appeared and have not been dismissed (specify names):

(3) II have had a default entered against them (specify names):

c. EJ The following additional parties maybe added (specify names, nature of involvement in case, and date by which they may be served):

4. Description of case a. Type of case in =1 complaint I1 cross-complaint (Describe, including causes of action):

Pop 1cf5

FeimAdoplsdforMandatmy Use CASE MANAGEMENT STATEMENT cal Rulos of

Judmel counew 01 CaIimm fillS 3.720-3.730

cM-llOjRsv. July 1 20111 %sw.cowts.ca.gov


PLAINTIFF/PETITIONER: CASE NUMBER:


4. b. Provide a brief statement of the case, including any damages. (If personal injwy damages are sought, specify the injury and damages claimed, including medical expenses to date (indicate source and amount], estimated future medical expenses, lost earnings to date, and estimated future lost earnings, If equitable relief is sought, describe the nature of the relief.)

EJ (If more space is needed, check this box and attach a page designated as Attachment 4b.)

5. Jury or nonjury trial The party or parties request (] a jury trial c: a nonjury trial. (If more than one party, provide the name of each party requesting a jury trial):

6. Trial date a. The trial has been set for (date):

b. EJ No trial date has been set This case will be ready for trial within 12 months of the date of the fling of the complaint (if not, explain):

c. Dates on which parties or attorneys will not be available for trial (specify dates and explain reasons for unavailability):

7. Estimated length of trial The party or parties estimate that the trial will take (check one):

a. J days (specify number):

b. EJ hours (short causes) (specify):

B. Trial representation (to be answered for each party) The party or parties will be represented at trial [J by the attorney or party listed in the caption [J by the following: a. Attorney:

b. Firm: c. Address:

d. Telephone number

e. E-mail address:

EJ Additional representation is described in Attachment 8.

9. Preference This case is entitled to preference (specify code section):

10. Alternative dispute resolution (ADR)

f. Fax number

g. Party represented:

a. ADR information package. Please note that different ADR processes are available indifferent courts and communities; read the ADR information package provided by the court under rule 3.221 for information about the processes available through the court and community programs in this case.

(1) For parties represented by counsel: Counsel EJ has M has not provided the ADR information package identified in rule 3.221 to the client and reviewed ADR options with the client

(2) For self-represented parties: Party EJ has EJ has not reviewed the ADR information package identified in rule 3.221.

b. Referral to judicial arbitration or civil action mediation (if available).

(1) EJ This matter is subject to mandatory judicial arbitration under Code of Civil Procedure section 1141.11 or to civil action mediation under Code of Civil Procedure section 1775.3 because the amount in controversy does not exceed the statutory limit.

(2) I] Plaintiff elects to refer this case to judicial arbitration and agrees to limit recovery to the amount specified in Code of Civil Procedure section 1141.11.

(3) c:

This case is exempt from judicial arbitration under rule 3.811 of the California Rules of Courtor from civil action mediation under Code of Civil Procedure section 1775 at seq. (specify exemption):

cM.110 Rv. July 120111 CASE MANAGEMENT STATEMENT Page 2015

Case4:12-cv-03198-YGR

Document1-1 Filed06/20/12 Page41 of 55

CM-1 10 PLAINTIFFIPETITIONER:

ENDANTIRESPONDENT:

10. c. Indicate the ADR processor processes that the party or parties are willing to participate in, have agreed to participate in, or have already participated in (check all that apply and provide the specified information):

The party or parties completing If the party or parties completing this form in the case have agreed to this form are willing to participate in or have already completed an ADR process or processes, participate in the following ADR indicate the status of the processes (attach a copy of the paifies'ADR processes (check all that apply): stipulation):

Mediation session not yet scheduled

(1) Mediation Mediation session scheduled for (date):

Agreed to complete mediation by (date):

Mediation completed on (date):

Settlement conference not yet scheduled

(2) settlement M Settlement conference scheduled for (date): conference

Agreed to complete settlement conference by (date):

Settlement conference completed on (date):

Neutral evaluation not yet scheduled

(3) Neutral evaluation Neutral evaluation scheduled for (date):

Agreed to complete neutral evaluation by (date):

Neutral evaluation completed on (date):

Judicial arbitration not yet scheduled

(4) Nonbinding judicial C3 =1 Judicial arbitration scheduled for (date): arbitration

Agreed to complete judicial arbitration by (date):

1 Judicial arbitration completed on (date):

Private arbitration not yet scheduled

(5) Binding private Private arbitration scheduled for (date):

arbitration Agreed to complete private arbitration by (date):

Private arbitration completed on (date):

ADR session not yet scheduled

(6) Other (specify): ADR session scheduled for (date):

Agreed to complete ADR session by (date):

ADR completed on (date):

CM-ho (Rev. July 1, 20111 CASE MANAGEMENT STATEMENT

Page 3ot5


PLAINTIFFFPETITIONER;


11. Insurance

a. Insurance carrier, if any, for party filing this statement (name): b. Reservation of rights: EJ Yes No c. Coverage issues will significantly affect resolution of this case (explain):

CASE NUMBER:

12. Jurisdiction

Indicate any matters that may affect the courts jurisdiction or processing of this case and describe the status. Bankruptcy Other (specify):

Status: -

13. Related cases, consolidation, and coordination

a. There are companion, underlying, or related cases.

(1) Name of case: (2) Name of court: (3) Case number: (4) Status:

Additional cases are described in Attachment 13a.

A motion to consolidate c: coordinate will be filed by (name party):

14. Bifurcation

EJ The party or parties intend to file a motion for an order bifurcating, severing, or coordinating the following issues or causes of action (specify moving party, type of moUon, and masons):

15. Other motions

The party or parties expect to file the tellowing motions before trial (specify moving party, type of motion, and issues):

16. Discovery

a. i The party or parties have completed all discovery.

b. J The following discovery will be completed by the date specified (describe all an(lcipated discovery):

RKU Descriotion Data

c. C] The following discovery issues, including issues regarding the discovery of electronically stored information, are anticipated (specify):

CM,.110lRv. Julyl. Zill CASE MANAGEMENT STATEMENT


PLAINTIFF! PETITION ER

CASE NUMBER:


17. Economic litigation

a. EJ This is a limited civil case (i.e., the amount demanded is $25000 or less) and the economic litigation procedures in Code of Civil Procedure sections 90-98 will apply to this case.

b. This is limited civil case and a motion to withdraw the case from the economic litigation procedures or for additional discovery will be filed (if checked, explain specifically why economic litigation procedures relating to disco very or tilel should not apply to this case):

18. Other Issues

The party or parties request that the following additional matters be considered or determined at the case management conference (specify):

19. Meet and confer

a. LJ The party or parties have met and conferred with all parties on all subjects required by rule 3.724 of the California Rules of Court (if not, explain):

b. After meeting and conferring as required by rule 3.724 of the California Rules of Court, the parties agree on the following (specify):

20. Total number of pages attached (if any):

I am completely familiar with this case and will be fully prepared to discuss the status of discovery and alternative dispute resolution, as well as other issues raised by this statement, and will possess the authority to enter into stipulations on these issues at the time of the case management conference, including the written authority of the party where required.

Date:

(TYPE OR PRINT NAME)

(SIGNATURE OF PARTY OR ATTORNEY)

(TYPE OR PRINT NAME)

(SIGNATURE OF PARTY OR ATTORNEY)

Additional signatures are attached.

CM-llO(Rev. July 1. 20111 CASE MANAGEMENT STATEMENT page a of 6


TOREY OR PARTY WITHOUT ATTORNEY (Nm0. sIN PatnckH.Moran(270$gl) Wolf Haldensteut Adler Freeman & Herz LLP t*J W4' 1 1Db jtj 750 B Street. Suite 2770 San Diego, CA 92101

TELEPHCNEPIO.: 619-239-4599 FAX NO,: 619-234-4599

E1OR COURT 05 CALiFORNIA, COUNTY OF San STRUT ACORESS 400 County Center MAILiNG AOORE55:

ozpcooc Redwnd City CA 041

CASE NAME Alfonso v. Facebook, Inc., et al

CIVIL CASE COVER SHEET (2J Unlimited El Umft.d

(Amount (Amount demanded demanded Is exceeds $25,000) $25,000 or Is

Complex Case Designation

El Counter El Joinder

Filed with first appearance by defendant (Cal. Rules of Court, rule 3.402)

oust be completed (see instructions on • Check one box below for the case type that best describes this case:

Auto Tort Contract

RUninsured Auto (22) El Breath ol mntracttwarranty (06)

motorist (46) El Rule 3,740 collections (09) Other P1IPDIWD (Personal lnjurylProp,rty Other collections (09) Qam.gstWrongful Death) Tort Insurance coverage (18) El Asbestos (04) [J Other contract (37) El Product liability (24) Real Property

Medical malpractice (46) EJ Emirient domaintlnv.rae El Other PI/PDIWD (23) condemnation (14) Non'PUPOIWD (Other) Tort El WmnW eviction El Business tort/unfair business pra1ce (07) El Other real property (26) El CM rights (08)

R DstLmation (13) Fraud (16)

Intellectual property (19)

Li Professional negligence (25)

El Other non-P I1PDIWD tort (35)

Wrongful termInation (36) Oliuerernolovm.nt (151

Unlawful Dstalnsr El

Commercial (31) El

Residential (32)

El Drugs(38) Judicial Review El Asset bfefture (05) El Petition re: arbitration award (11)

El wrn at mandate (02)

FOR COURt use ONLY

RE CE! VIM MAY 2.5 2012

cn$ OP ThE SUPERIOR COURT N MAIEOCçXRiEY

Ulli JUDGE.

0EPT

Provisionally Complex Civil Ltd9atton (Cal. Rules at Court, rules 3.400-3.403)

tl AntltruWrrade regulation (03)

El Construction detect (10)

El Mass tort (40)

(21 Securities litigation (28) El En*onmen(aljToxjc toil (30) El insurance coverage claims arising from th e

above listed provisionally complex can types (41)

Enforcement of Judgment

El Enforcement of Judgment (20)

Miscellaneous Civil Complaint El RICO (27) El Other complaint (not spsc#?ed above) (42) MIscallaneous Civil Petition

Partnership and corporate governance (21) El Other petition (not specified above) (43)

2. This case LLJ is L.J Is not complex under rule 3.400 of the California Rules of Court. If the case is complex, mark the (actors requiring exceptional judicial management

a. El Large number of separately represented parties d. CJ Large number of witnesses b. [Z] Extensive motion practice raising difficult or novel e. El Coordination with related actions pending In one or more courts

Issues that will be time-consuming to resolve in other counties, states, or countries, or In a federal court C. Substantial amount of documentary evidence t El Substantial postudgment Judicial supervision

3. Remedies sought (check all that apply): a.fIJ monetary b.(Zl nonmonetary declaratory or Injunctive relief c. CJpunjtive 4. Number of causes of action (speafr) I: 111 Viclatloas; IL; Control PenoqLisbiIity/ II; Ill; § 12(a)(2) Violations: IV: Control Person Liability/ 12 5. This case (2] is El is not a class action suit.

6. It there are any known related cases, file and serve a notice of related case. (You may use form C44-015J Date: May 25, 2012

Patrick H. Moran

NOTICE • PlairtiJif must file this cover sheet with the first paper filed In the action or proceeding (except small claims cases or cases filed

under the Probate Code, Family Code, or Welfare and Institutions Code). (Cal. Rules of Court, rule 3.220.) Failure to file may result • In sanctions. • File this cover sheet In addition to any cover sheet required by local court rule. • If this case is complex under rule 3.400 at seq. of the California Rules of Court, you must serve a copy of this cover sheet on all • other parties to the action or proceeding.

• Unless this Is a collections case under rule 3.740 or a complex case, this cover sheet Will be used for statistical purposes only.

CIVIL CASE COVER SHEET ° cu.oio (Ray ,M 1. 20071


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IL 3

PILED SAN MATEO COUNTY

JUN1 8 2012 ccth,eØrccun 4

SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SAN MATEO

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DARRYL LAZAR, Individually and On Behalf of All Others Similarly Situated,

Plaintiff,

V.

FACEBOOK, INC., MARK ZUCKERBERO, DAVID A. EBERSMAN, DAVID M. SPILLANE, MARC L ANDREESSEN, ERSKINE B. BOWLES, JAMES W. BREYER, DONALD E. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC, J.P. MORGAN SECURITIES LLC, GOLDMAN, SACHS & CO., MERRILL LYNCH, PIERCE, PENNER & SMITH INCORPORATED, BARCLAYS CAPITAL INC., ALLEN & COMPANY LLC, CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., RBC CAPITAL MARKETS, LLC, BLAYLOCK ROBERT VAN LLC, BMO CAPITAL MARKETS CORP., C.L. KING & ASSOCIATES, INC., CABRERA CAPITAL MARKETS, LLC, CASTLEOAK SECURITIES, L.P., COWEN AND COMPANY, LLC., ETRADE SECURITIES LLC, ITAU BBA USA SECURITIES, INC., LAZARD CAPITAL MARKETS LLC, LEBENTHAL & CO., LLC, LOOP CAPITAL MARKETS LLC, M.R. REAL & COMPANY, MACQUARIE CAPITAL (USA) INC., MURIEL SIEBERT & CO., INC.,

Lead Case No. CW5 14065

CA

VUAN~21,1)1 ORDER GRANTING PLAINTIFPS' MOTION TO CONSOLIDATE ALL RELATED ACTIONS

[PROPOSED] ORDER GRANTING PLAINTIFFS' MOTION TO CONSOLIDATE ALL RELATED ACTIONS


OPPENHEIMER & CO. INC., PACIFIC CREST SECURITIES LLC, PIPER JAFFRAY & CO., RAYMOND JAMES & ASSOCIATES, INC., SAMUEL A. RAM1REZ & COMPANY, INC., STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE WILLIAMS CAPITAL GROUP, L.P., and WILLIAM BLAIR & COMPANY, LL.C.,

Defendants. JJNNWER STOKES Individually and On Behalf of All Others Similarly Situated,

Plaintiff

V.

FACEBOOK, INC., MARK ZUCKERBERG, DAVID A. EBERSMAN, DAVID M. SPILLANE, MARC L. ANDREESSEN, ERSKINE B. BOWLES, JAMES W. BREYER, DONALD E. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC, J.P. MORGAN SECURITIES LLC, GOLDMAN, SAC}IS & CO., MERRILL LYNCH, PIERCE, PENNER & SMITH INCORPORATED, BARCLAYS CAPITAL INC., ALLEN & COMPANY LLC, CITIOROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., RBC CAPITAL MARKETS, LLC, BLAYLOCK ROBERT VAN LW, BMO CAPITAL MARKETS CORP., CL KING & ASSOCIATES, INC., CABRERA CAPITAL MARKETS, LW, CASTLEOAK SECURITIES, L.P., COWEN AND COMPANY, LLC., ETRADE SECURITIES LLC, 1TAU BBA USA SECURITIES, INC., LAZARD CAPITAL MARKETS LW, LEBENTHAL & CO., LLC, LOOP CAPITAL MARKETS LLC, M.R. BEAL & COMPANY, MACQUARIE CAPITAL (USA) INC., MURIEL SIEBERT & CO., INC., OPPENHEIMER & CO. INC., PACIFIC CREST SECURITIES LLC, PIPER JAFFRAY & CO., RAYMOND JAMES & ASSOCIATES, INC., SAMUEL A. RAMIREZ & COMPANY, INC., STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE WILLIAMS CAPITAL GROUP, LP., and WILLIAM BLAIR &

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Can No. CN$14107 Date Flied: May 23,2012

(PROPOSED] ORDER GRANTING PLAINTIFFS' MOTION TO CONSOUDATE ALL RELATED ACTIONS


II

COMPANY, LL.C.,

2 Defendants.

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4 MATTHEW PILGRAM Individually and On Caw No. C1V514111 Behalf of All Others Similarly Situated, Date Filed: May 23, 2012

6 Plaintiff,

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FACEBOOK, INC., MARK ZUCKERBERO, DAVID A. EBBRSMAN, DAVID M. SPILLANE, MARC L. ANDREESSEN, ERSK1NE B. BOWLES, JAMES W. BREYER, DONALD E. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC,BARCLAyS CAPITAL INC., ALLEN & COMPANY LLC, CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., RBC CAPITAL MARKETS, LLC, BLAYLOCI( ROBERT VAN LLC, BMO CAPITAL MARKETS CORP., C.L. KING & ASSOCIATES, INC., CABRERA CAPITAL MARKETS, LLC, CASTLEOAK SECURITIES, LP., COWEN AND COMPANY, LLC., E*TRADE SECURITIES LLC, ITAU BBA USA SECURITIES, INC., LAZARD CAPITAL MARKETS LLC, LEBENTHAL & CO., LLC, LOOP CAPITAL MARKETS LLC, M.R. BEAL & COMPANY, MACQUARIE CAPITAL (USA) INC., MURIEL SIEBERT & CO., INC., OPPENHEIMER & CO. INC., PACIFIC CREST SECURITIES LLC, PIPER JAFFRAY & CO., RAYMOND JAMES & ASSOCIATES, INC., SAMUEL A. RAMIREZ & COMPANY, INC., STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE WILLIAMS CAPITAL GROUP, LP., and WILLIAM BLAIR & COMPANY, L.L.C.,

Defendants.

(PROPOSED) ORDER GRANTING PLAINTIPPS' MOTION TO CONSOLIDATE ALL RELATED ACIIONS

VERNON R. DeMOIS JR., Individually and on Behalf of All Others Similarly Situated,

Can No. CW514163 Date Filed: May 25, 2012

V.

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Case4:12-cv-03198-YGR Document1-1 Filed06/20/12 Page48 o

II

FACEBOOK, INC., MARK ZUCKERBERO, DAVID A. EBERSMAN, DAVID M. SPILLANE, MARC L ANDR.EBSSEN, ERSKJNE B. BOWLES, JAMES W. BREYBR., DONALD E. GRAHAM, REED HASTINGS, PETER A. THIEL, AND MORGAN STANLEY & CO. LLC.

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ELBITA ALFONSO, individually and on Behalf of All Others Similarly Situated,

Case No. CW514171 Date Filed: May25, 2012

FACEBOOK, INC., MARK ZUCKERBERG, DAVID A. EBERSMAN, DAVID M. SPILLANE, MARC L. ANDREESSEN, ERSKINE B. BOWLES, JAMES W. BREYER, DONALD B. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC, J.P. MORGAN SECURITIES LLC, GOLDMAN, SACHS & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS CAPITAL INC., ALLEN & COMPANY LLC, CITIGROUP GLOBAL MARKETS INC.C, REDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., RBC CAPITAL MARKETS, LLC, and WELLS FARGO SECURITIES, LLC,



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1 %66) ~w) -

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EDWARD J. S}HERRY, Individually and On Behalf of All Others Similarly Situated,

Plaintiff;

WA

Case No. CW514172 Date Filed: May 25,2012

FACEBOOK, INC., MARK ZUCKERBERG, DAVID E. EBERSMAN, DAVID M. SPILLANE, MARC L. ANDREESSEN, ERSIUNE B. BOWLES, JAMES W. BREYER, DONALD E. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC, GOLDMAN, SACHS & CO., BARCLAYS CAPITAL INC., ALLEN & COMPANY LLC, C1TIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., RBC CAPITAL MARKETS, LLC, BLAYLOCK ROBERT VAN LLC, BMO CAPITAL MARKETS CORP., C.L. KING & ASSOCIATES, INC., CABRERA CAPITAL MARKETS, LLC, CASTLEOAK SECURITIES, LP, COWEN AND COMPANY, LLC., ETRADE SECURITIES, LLC, 1TAU BBA USA SECURITIES, INC., LAZARD CAPITAL MARKETS LLC, LEBENTHAL & CO., LLC, LOOP CAPITAL MARKETS LLC, M.R. BEAL & COMPANY, MACQUARIE CAPITAL(USA) INC., MURIEL SIEBERT & CO., INC., OPPENHEIMER & CO. INC., PACIFIC CREST SECURITIES LLC, PIPER JAPPRA Y & CO., RAYMOND JAMES & ASSOCIATES, INC., SAMUEL A. RAMIREZ & COMPANY, INC., STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE WILLIAMS CAPITAL GROUP, L.P., and WILLIAM BLAIR & COMPANY, LLC.,

Defendants.

MICHAEL LIEBER, Individually and On Behalf Case No. CIV514193 Df All Others Similarly Situated, Date Filed; May 29, 2012

Plaintiff,

(PROPOSED] ORDER GRANTING PLAINTIFFS' MOTION TO CONSOLIDATE ALL RELATED ACTIONS

28


FACEBOOK INC.; MARK ZUCKERBURG; DONALD E. GRAHAM; DAVID A. EBERSMAN; JAMES W. BREYER; DAVID M. SPILLANE; PETER A. THIEL; MARC L. ANDREESSEN; REED HASTINGS, ERSKINE B. BOWLES, MORGAN STANLEY & Co. LLC; J.P. MORGAN SECURITIES LLC; GOLDMAN, SACHS & CO.; MERRILL LYNCH; E *TRADE SECURITIES LLC; OPPENHEIMER & CO., INC.; BARCLAYS CAPITAL INC.; CITIGROUP GLOBAL MARKETS INC.; CREDIT SUISSE SECURITIES (USA) LLC; PIERCE, FENNER & SMITH INCORPORATED; ALLEN & FACEBOOK LLC; DEUTSCHE BANK SECURITIES INC.; RBC CAPITAL MARKETS, LLC, MURIEL SIEBERT & Co, INC.; CABRERA CAPITAL MARKETS, LLC; DM0 CAPITAL MARKETS CORP.; CASTLEOAK SECURITIES, LP.; LAZARD CAPITAL MARKETS LLC; PACIFIC CREST SECURITIES LLC; LOOP CAPITAL MARKETS LLC; ITAU SEA USA SECURITIES, INC ,W ILLIAM BLAIR & FACEBOOK, L.L.C.; BLAYLOCK ROBERT VAN LLC, LEBENTHAL & CO LLC; M.R. BEAL & FACEBOOK; MACQUARIE CAPITAL (USA) INC.; PIPER JAFFRAY & CO.; COWEN AND FACEBOOK, LLC; RAYMOND JAMES ASSOCIATES, INC.; STIFEL, NICOLAUS & FACEBOOK, INCORPORATED; C.L. KING & ASSOCIATES, INC.; SAMUEL A. RAMIREZ & FACEBOOK, INC.; COWEN AND FACEBOOK, LLC; THE WILLIAMS CAPITAL GROUP, LP; and Does 1 through 100 inclusive,

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(PROPOSED] ORDER GRANTiNG PLAnuffs , MOTION TO CONSOliDATE ALL RELATED ACTIONS


Can No. CW5 14238 Date Filed: May 30, 2012

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KAREN CUKER and BRIAN GRALNICK, Individually and On Behalf of All Others Similarly

2 Situated,

3

Plaintiffs,

4 V.

FACEBOOK, INC., MARK ZUCKERBERG, DAVID A. EBERSMAN, DAVID M. SPILLANE, MARC L ANDREESSEN, ERSKINE B. BOWLES, JAMES W. BREYER, DONALD B. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC, J.P. MORGAN SECURITIES LLC, GOLDMAN, SACHS & CO., MERRILL LYNCH, PIERCE, PENNER & SMITH INCORPORATED, BARCLAYS CAPITAL INC., ALLEN & COMPANY LLC, CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., R.BC CAPITAL MARKETS, LLC, WELLS FARGO SECURITIES, LLC, BLAYLOCK ROBERT VAN LLC, BMO CAPITAL MARKETS CORP., C.L. KING & ASSOCIATES, INC., CABRERA CAPITAL MARKETS, LLC, CASTLEOAK SECURITIES, LP., COWEN AND COMPANY, LLC., ETRADE SECURITIES LLC, ITAU BBA USA SECURITIES, INC., LAZARD CAPITAL MARKETS LLC, LEBENTHAL & CO., LLC, LOOP CAPITAL MARKETS LLC, M.R. SEAL & COMPANY, MACQUARIE CAPITAL (USA) INC., MURIEL SIEBERT & CO., INC., OPPENHEIMER & CO. INC., PACIFIC CREST SECURITIES LLC, PIPER JAFFRAY & CO., RAYMOND JAMES & ASSOCIATES, INC., SAMUEL A. RAMIREZ & COMPANY, INC., STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE WILLIAMS CAPITAL GROUP, LP., and WILLIAM BLAIR & COMPANY, LLC.,

Defendants.


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Case No. C1V514240 Date Filed; May 30, 2012

HARVEY LAPIN, Individually and On Behalf of All Others Similarly Situated,

Plaintiff;

V.

FACEBOOK, INC., MARK ZUCKERBERG, DAVID A. EBERSMAN, DAV11) M. SPILLANE, MARC L. ANDREESSEN, ERSKINE B. BOWLES, JAMES W. BREYER, DONALD E. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC, J.P. MORGAN SECURITIES LLC, GOLDMAN, SACHS & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS CAPITAL INC., ALLEN.& COMPANY LLC, CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., RBC CAPITAL MARKETS, LLC, BLAYLOCK ROBERT VAN LLC, BMO CAPITAL MARKETS CORP., C.L. KING & ASSOCIATES, INC., CABRERA CAPITAL MARKETS, LLC, CASTLEOAK SECURITIES, L.P., COWEN AND COMPANY, LLC., E*TRADE SECURITIES LLC, ITAU BBA USA SECURITIES, INC., LAZARD CAPITAL MARKETS LLC, LEBENTHAL & CO., LLC, LOOP CAPITAL MARKETS LLC, M.R. BEAL & COMPANY, MACQUARIE CAPITAL (USA) INC., MURIEL SIEBERT & CO., INC., OPPENHEIMER & CO. INC., PACIFIC CREST SECURITIES LLC, PIPER JAFFRAY & CO., RAYMOND JAMES & ASSOCIATES, INC., SAMUEL A. RAMIREZ & COMPANY, INC., STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE WILLIAMS CAPITAL GROUP, L.P., and WILLIAM BLAIR & COMPANY, L.L.C.,

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Can Nwnber CW5 14065

C1V514107

C1V514111

C1V514163

C1V5 14171

CWS 14172

CW5 14193

C1V514238

Date Filed May 22,2012

May 23, 2012

May 23, 2012

May25, 2012

May 25, 2012

May 25, 2012

May 29, 2012

May 30, 2012

CW5 14240

May 30, 2012


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Upon Plaintiffs Darryl Lazar, Jennifer Stokes, Matthew Pilgrani, Vernon K. Demois Jr.,

Elbita Alfonso, Edward J. Shierry, Michael Lieber, Karen Cuker, Brian Gralnick and Harvey

Lapin (collectively "Movants") Ex Porte Application for Approval of Consolidation of Related

Cases and Appointment of Co-Lead Class Counsel, or Alternatively, for an Order Shortening

Time for Hearing Such Motion, and following consideration of the relevant papers and

arguments of counsel, and good cause appearing:

IT IS HEREBY ORDERED that

The following actions are hereby consolidated for all purposes, including pretrial

proceedings and trial, pursuant to Section 1048 of the California Code of Clvi! Procedure:

Abbreviated Case Name Darryl Lazar v. Faceboolç Inc. et at.,

Jennifer Stoke$ v. Facebook; Inc. eta!

Matthew Pilgram v. Faceboolç Inc. eta!

Vernon It DeMois, Jr., v. Facebook; Inc., et al.

Elbita Alfonso, v. Faceboolç Inc., et al.

Edward J. Shlery, v. Faceboolc, Inc., etal.

Michael Lieber v. Facebook; Inc., etal.

Karen Cuker and Brian Gralnick v. Faceboolç Inc.. et al.

Harvey Lapin v. Faceboolç Inc., etal.

Counsel shall promptly notify the Court of any new related cases filed before this Court

and if counsel wish to consolidate such cases, they shall file and serve an appropriate motion or

application.

Every pleading filed in these consolidated actions, or in any separate action included

herein shall bear the following caption:

(PROPOSED) ORDER GRANTING PLAINTIFFS' MOTION TO CONSOLIDATE ALL RELATED ACTIONS 1


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DARRYL LAZAR, Individually and On Behalf of All Others Similarly Situated,

Plaintift

V.

FACEBOOK, INC., MARK ZUCKERBERG, DAVID A. EBERSMAN, DAVID M. SPILLANE, MARC L. ANDREESSEN, ERSKINE B. BOWLES, JAMES W. BREYER, DONALD E. GRAHAM, REED HASTINGS, PETER A. THIEL, MORGAN STANLEY & CO. LLC, J.P. MORGAN SECURITIES LLC, GOLDMAN, SACHS & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS CAPITAL INC., ALLEN & COMPANY LLC, CITIGROUP GLOBAL MARKETS INC., CREDIT SUISSE SECURITIES (USA) LLC, DEUTSCHE BANK SECURITIES INC., RBC CAPITAL MARKETS, LLC, BLAYLOCK ROBERT VAN LLC, SMO CAPITAL MARKETS CORP., C.L KING & ASSOCIATES, INC., CABRERA CAPITAL MARKETS, LLC, CASTLEOAK SECURITIES, L.P., COWEN AND COMPANY, LLC., E*TRADE SECURITIES LLC, ITAU BBA USA SECURITIES, INC., LAZARD CAPITAL MARKETS LLC, LEBENTHAL & CO., LLC, LOOP CAPITAL MARKETS LLC, M.R. BEAL & COMPANY, MACQUARIE CAPITAL (USA) INC., MURIEL SIEBERT & CO., INC., OPPENHEIMER & CO. INC., PACIFIC CREST SECURITIES LLC, PIPER JAFFRAY & CO., RAYMOND JAMES & ASSOCIATES, INC., SAMUEL A. RAMIREZ & COMPANY, INC., STIFEL, NICOLAUS & COMPANY, INCORPORATED, THE WILLIAMS CAPITAL GROUP, L.P., and WILLIAM BLAIR & COMPANY, L.L.C.,

Defendants.

Lead Case No. CWS 14065

(Consolidated with Case Nos: CN$14107, CIV5141 11, CN$14163, CIV514171, CIV514172, C1V514193, CN$14238, CN$14240)

CLASS ACTION

[PROPOSED] ORDER GRANTING PLAINTIFFS' MOTION TO CONSOLIDATE ALL RELATED ACTIONS 2


The files of these consolidated actions shall be maintained in one file under Lead Case

No. CW5 14065.

-Ordsr 1i11 pply ineash ease, arising Out of the ni nr iubsthrH 1ly the same

to

When a can which properly belongs as part of Darryl Lazar v. Faceboo* inc. et al,,

Lead Case No. CW5 14065, is hereafter filed in the Court or transferred here from another court,

this Court requests the assistance of counsel in calling to the attention of the Clerk of the Court

the filing or transfer of any can which might properly be consolidated as part of the lead case,

and counsel are to assist in assuring that counsel in subsequent actions receive notice of this

Order.

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NOTICE TO DEFENDANT: ENDORSED FILED...

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