Shnayder v. Allbirds, Inc.

Background

The defendants moved to dismiss the amended complaint in this proposed securities-fraud class action. They also asked the court to take judicial notice, meaning to formally recognize, 22 documents.

Reasoning

The court observed that the parties’ filings did not clearly identify which statements, or portions of statements, the plaintiffs alleged were false or misleading. As an example, the court discussed allegations concerning statements in Allbirds’ registration statement about the company’s connection with its customers and the percentage of sales from repeat customers. The defendants challenged those statements as not actionable, while the plaintiffs said the statements were included only as context and to show that the defendants recognized the importance of core customers.

The court found that it could not reconcile those positions with the complaint’s use of bold and italicized text to indicate allegedly misleading portions. Rather than guess which parts of each statement the plaintiffs intended to challenge, the court required the plaintiffs to identify that information clearly for every statement serving as a basis for their claims.

Ruling

The court granted the defendants’ motion to dismiss with leave to amend. The court denied as moot the request for judicial notice. The plaintiffs may file a second amended complaint within 30 days of the order. A required chart is due 14 days after that filing, and courtesy copies of each document must be delivered to chambers within three days of filing.