Chicago & Vicinity Laborers' District Council Pension Fund v. Amplitude, Inc.

Background

Chicago & Vicinity Laborers’ District Council Pension Fund brought federal securities claims concerning statements by Amplitude, Inc., Vuong, and Skates. The complaint alleged that the defendants failed to disclose or misrepresented information about COVID-19-related business benefits, Amplitude’s “land and expand” sales strategy, early customer renewals, slowing growth, and customer cancellations or reductions in contractual commitments.

Court’s Analysis

The court held that the complaint did not sufficiently plead a material misrepresentation or omission. Amplitude had disclosed that it benefited from post-COVID conditions and that those benefits could diminish. It had also told investors that expanding individual customer accounts could take years. The court further found that statements about Q2 growth being driven by “some early customer renewals” were not shown to be false, and that the complaint did not adequately connect particular growth statements to facts showing why they were misleading.

The court also held that the complaint did not allege facts creating a strong inference of scienter, meaning that Vuong or Skates acted intentionally or with deliberate recklessness. The allegations about stock sales, the timing of later disclosures, and confidential witnesses did not establish that either defendant knew the statements were misleading or deliberately disregarded that risk.

Because the claim under Section 10(b) of the Securities Exchange Act and Rule 10b-5(b) was dismissed, the court also dismissed the related Section 20(a) claim and the claims under Rule 10b-5(a) and (c). The opinion does not state a separate merits ruling on those claims beyond their dependence on the dismissed primary securities claim.

Other Rulings and Disposition

The court granted Amplitude’s request for judicial notice. It explained that the referenced Securities and Exchange Commission filings, press releases, conference-call transcripts, and analyst reports could be considered to determine what information was available to the market, but not for the truth of the statements contained in those materials.

The court granted the motion to dismiss with leave to amend. It denied the motion to strike because the challenged chart contained no new argument that was not already presented in the motion to dismiss. Any amended complaint had to be filed within 21 days of the order, and a response was due 21 days after the amended complaint was filed.