In re: NIMBLE STORAGE, INC. SECURITIES LITIGATION, ARKANSAS TEACHER RETIREMENT… v. Nimble Storage, Inc.; Suresh Vasudevan; Anup V. Singh; Daniel Leary; Varun Mehta

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: NIMBLE STORAGE, INC.
SECURITIES LITIGATION,
______________________________
ARKANSAS TEACHER RETIREMENT
SYSTEM, Lead Plaintiff; Individually and
On Behalf of a Class of Similarly Situated
Persons and Entities,
Plaintiff-Appellant,
v.
NIMBLE STORAGE, INC.; SURESH
VASUDEVAN; ANUP V. SINGH;
DANIEL LEARY; VARUN MEHTA,
Defendants-Appellees.
No. 17-17232
D.C. No. 4:15-cv-05803-YGR
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
Yvonne Gonzalez Rogers, District Judge, Presiding
Argued and Submitted February 13, 2019
San Francisco, California
Before: SCHROEDER, O’SCANNLAIN, and RAWLINSON, Circuit Judges.
FILED
MAR 14 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.

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Plaintiff Arkansas Teacher Retirement System brought this securities class
action against Nimble Storage, Inc. and four of its executives. Plaintiff alleges that
defendants violated § 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C.
§ 78j(b), when, between November 25, 2014, and November 19, 2015, they
(1) misleadingly touted Nimble’s enterprise-market success, and (2) released a
misleading earnings projection. Plaintiff appeals the district court’s order granting
defendants’ motion to dismiss. We affirm.
To state a claim under § 10(b), plaintiff must satisfy the “[e]xacting pleading
requirements” of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 313 (2007); see also
15 U.S.C. 78u-4(b)(1). The PSLRA, which “significantly altered pleading
requirements in private securities fraud litigation,” requires that “a complaint
‘plead with particularity both falsity and scienter.’” Gompper v. VISX, Inc., 298
F.3d 893, 895 (9th Cir. 2002) (quoting Ronconi v. Larkin, 253 F.3d 423, 429 (9th
Cir. 2001)).
This appeal turns on whether plaintiff adequately pled falsity. To plead
falsity under the PSLRA, plaintiff must “specify each statement alleged to have
been misleading” and the “reasons why the statement is misleading[.]” 15 U.S.C.
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§ 78u-4(b)(1); see also Zucco Partners, LLC v. Digimarc Corp., 552 F.3d 981,
990–91 (9th Cir. 2009).
Several of the allegedly false statements plaintiff identifies pertaining to
Nimble’s enterprise-market success are nonactionable, as they are “vague
statements of optimism” and opinion. In re Cutera Sec. Litig., 610 F.3d 1103,
1111 (9th Cir. 2010). Such statements include, for example: “we’ve successfully
broadened our base beyond mid-size enterprises to large enterprises”; and “I think
we are making really good progress [penetrating the large enterprise market].”
Plaintiff has not alleged that any of the facts contained within more specific
statements were inaccurate. Defendants stated, for example, that Nimble had
“added 41 new G5000 customers;” had obtained a “[r]ecord number of new G5000
(Global 5000) enterprises;” that “[b]ookings from Global 5000 Enterprises . . .
more than doubled from a year ago;” and that its “product enhancements and sales
investments are yielding strong bookings growth from Global 5000 enterprise . . .
customers.” Plaintiff contends that these statements were materially misleading
because Nimble was using a reclassification scheme to list smaller commercial
market customers as larger enterprise market customers. But, as the district court
observed, plaintiff never alleged that any disclosed numbers of customers in each
market were false. Nor did plaintiff allege that the bookings from Nimble’s
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reclassified customers were not in fact growing. Thus, absent specific allegations
that the statements were false, the complaint falls short of the PSLRA’s exacting
standard.
Plaintiff also claims that Nimble’s third-quarter earnings projection for fiscal
year 2016 was materially false and misleading. To support its position, plaintiff
alleges that because Nimble generally used a highly accurate predictive
technology, defendants must have known at the time they issued the third-quarter
projection that Nimble was in no position to achieve it. But plaintiff has not
alleged that Nimble’s software did in fact predict a third-quarter miss, or that
defendants received a report to that effect before issuing their prediction. That
Nimble generally used this predictive software, and that Nimble ultimately missed
its third-quarter projection, does not adequately plead that the projection was false
when made.
Because plaintiff has not adequately pled falsity, neither plaintiff’s § 10(b)
claim nor plaintiff’s derivative § 20(a) claim survives dismissal.
AFFIRMED.
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