Case 5:18-cv-04844-BLF Document 1 Filed 08/10/18 Page 1 of 19

1 BERNSTEIN LITOWITZ BERGER

& GROSSMANN LLP
2 DAVID R. STICKNEY (Bar No. 188574)
(davids@blbglaw.com)
3 12481 High Bluff Drive, Suite 300
San Diego, CA 92130
4 Tel: (858) 793-0070
Fax: (858) 793-0323
5
-and-
6
MARK LEBOVITCH
7 (markl@blbglaw.com)
AVI JOSEFSON
8 (avi@blbglaw.com)
1251 Avenue of the Americas
9 New York, NY 10020
Tel: (212) 554-1400
10 Fax: (212) 554-1444

11 Attorneys for Plaintiff City of Sunrise

Firefighters’ Pension Fund
12
[Additional counsel appear on signature page]
13

14
UNITED STATES DISTRICT COURT
15 NORTHERN DISTRICT OF CALIFORNIA
16 Case No.
CITY OF SUNRISE FIREFIGHTERS’
17 PENSION FUND, on behalf of themselves
and all others similarly situated,
COMPLAINT FOR VIOLATIONS
18 OF THE FEDERAL SECURITIES
Plaintiff, LAWS
19
v. CLASS ACTION
20
ORACLE CORPORATION, SAFRA A. DEMAND FOR JURY TRIAL
21
CATZ, MARK HURD, LAWRENCE J.
22 ELLISON, THOMAS KURIAN, KEN
BOND, and STEVE MIRANDA,
23
Defendants.
24

25
26

27
28

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1 1. Plaintiff City of Sunrise Firefighters’ Pension Fund (“Plaintiff”), by and through its

2 counsel, alleges the following upon information and belief, except as to those allegations
3 concerning Plaintiff, which are alleged upon personal knowledge. Plaintiff’s information and
4 belief is based upon, inter alia, counsel’s investigation, which included review and analysis of: (a)

5 regulatory filings made by Oracle Corporation (“Oracle” or the “Company”) with the United States
6 Securities and Exchange Commission (“SEC”); (b) press releases, presentations, and media reports
7 issued by and disseminated by the Company; (c) analyst and media reports concerning Oracle; and

8 (d) other public information regarding the Company.

9 I. INTRODUCTION

10 2. This federal securities class action is brought on behalf of purchasers of Oracle

11 stock between May 10, 2017 and March 19, 2018, inclusive (the “Class Period”). The claims
12 asserted herein are alleged against Oracle and certain of the Company’s senior executives

13 (collectively, “Defendants”), and arise under Sections 10(b) and 20(a) of the Securities Exchange

14 Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.

15 3. Oracle is one of the world’s largest software companies. Among other things, the
16 Company offers both on-premises and cloud solutions to a variety of end users. Unlike on-

17 premises solutions, which are installed on a user’s computers, cloud solutions are accessed through

18 the internet, and are typically hosted by a third-party vendor like Oracle. Another significant

19 difference is the “pay as you go” or on-demand usage service model associated with cloud services,
20 as opposed to the traditional upfront capital expenditure for on-premises solutions.

21 4. Historically, Oracle’s revenues were driven by the sale of the Company’s on-
22 premises software services, but those revenues have stagnated in recent years as customers shifted
23 to cloud-based programs. Although Oracle initially hesitated when deciding whether to enter the
24 cloud storage business, as cloud storage became mainstream, Oracle began to rapidly expand its

25 cloud offerings.
26 5. This matter arises from Defendants’ misrepresentations regarding revenue growth

27 within Oracle’s cloud segment and the drivers of that growth. Throughout the Class Period,
28 Defendants falsely attributed the Company’s revenue growth in its cloud segment to a variety of

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1 factors and initiatives, including, among other things, Oracle’s “unprecedented level of automation

2 and cost savings,” as well as the Company being “customer-focused” and “intimate partners with
3 our customer.” In truth, Oracle drove sales of cloud products using threats and extortive tactics.
4 The use of such tactics concealed the lack of real demand for Oracle’s cloud services, making the

5 growth unsustainable (and ultimately driving away customers). Among other things, the Company
6 threatened current customers with “audits” of their use of the Company’s non-cloud software
7 licenses unless the customers agreed to shift their business to Oracle cloud programs.

8 6. The truth was revealed on March 19, 2018, when the Company disclosed that cloud

9 revenue growth had stagnated and forecasted significantly slower sales growth for its cloud

10 business than its competitors. Following these disclosures, analysts connected Oracle’s poor

11 financial performance to its improper sales tactics. Gartner, Inc.—a leading research and advisory
12 company—observed that Oracle had to rely on coercive practices because its cloud-based offering

13 is a “bare-bones minimum viable product.” These revelations caused Oracle shares to decline by

14 $4.90 per share, or nearly 9.5%—the Company’s largest single-day stock drop in over five years.

15 II. JURISDICTION AND VENUE

16 7. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange

17 Act, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R.

18 § 240.10b-5. This Court has jurisdiction over the subject matter of this action pursuant to 28

19 U.S.C. §§ 1331 and 1337, and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.
20 8. Venue is proper in this District pursuant to Section 27 of the Exchange Act and 28

21 U.S.C. § 1391(b). Oracle maintains its corporate headquarters in Redwood City, California, which
22 is situated in this District, conducts substantial business in this District, and many of the acts and
23 conduct that constitute the violations of law complained of herein, including the preparation and
24 dissemination to the public of materially false and misleading information, occurred in this

25 District. In connection with the acts alleged in this Complaint, Defendants, directly or indirectly,
26 used the means and instrumentalities of interstate commerce, including, but not limited to, the

27 mails, interstate telephone communications, and the facilities of the national securities markets.
28

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1 III. PARTIES

2 9. Plaintiff City of Sunrise Firefighters’ Pension Fund is a public pension fund that
3 provides retirement benefits to firefighters employed by the city of Sunrise, Florida. As of March
4 31, 2018, Plaintiff managed approximately $143 million in assets on behalf of approximately 235

5 participants. Plaintiff purchased shares of Oracle stock on the New York Stock Exchange
6 (“NYSE”) during the Class Period and suffered damages as a result of the violations of the federal
7 securities laws alleged herein.

8 10. Defendant Oracle is a multinational technology company. Incorporated in

9 Delaware, the Company maintains its corporate headquarters at 500 Oracle Parkway, Redwood

10 City, California. Oracle stock trades on NYSE, which is an efficient market, under ticker symbol

11 “ORCL.” As of November 30, 2017, Oracle had 5.16 billion shares of stock outstanding, owned
12 by at least hundreds or thousands of investors.

13 11. Defendant Safra A. Catz (“Catz”) is, and was at all relevant times, co-Chief

14 Executive Officer of Oracle, as well as a member of the Company’s Board of Directors.

15 12. Defendant Mark Hurd (“Hurd”) is, and was at all relevant times, co-Chief
16 Executive Officer of Oracle, as well as a member of the Company’s Board of Directors.

17 13. Defendant Lawrence J. Ellison (“Ellison”) is, and was at all relevant times, Oracle’s

18 Chief Technology Officer, as well as the Chairman of the Company’s Board of Directors.

19 14. Defendant Thomas Kurian (“Kurian”) is, and was at all relevant times, Oracle’s
20 President, Product Development.

21 15. Defendant Ken Bond (“Bond”) is, and was at all relevant times, Oracle’s Senior
22 Vice President of Investor Relations.
23 16. Defendant Steve Miranda (“Miranda”) is, and was at all relevant times, Oracle’s
24 Executive Vice President, Oracle Applications Product Development.

25 17. Defendants Catz, Hurd, Ellison, Kurian, Bond, and Miranda are collectively
26 referred to hereinafter as the “Individual Defendants.” The Individual Defendants, because of their

27 positions with Oracle, possessed the power and authority to control the contents of Oracle’s reports
28 to the SEC, press releases, and presentations to securities analysts, money and portfolio managers,

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1 and institutional investors. Each of the Individual Defendants was provided with copies of the

2 Company’s reports and press releases alleged herein to be misleading prior to, or shortly after,
3 their issuance and had the ability and opportunity to prevent their issuance or cause them to be
4 corrected. Because of their positions and access to material non-public information available to

5 them, each of the Individual Defendants knew that the adverse facts specified herein had not been
6 disclosed to, and were being concealed from, the public, and that the positive representations which
7 were being made were then materially false and/or misleading.

8 IV. BACKGROUND

9 18. Based in California, Oracle is one of the world’s largest software companies. The

10 Company develops database software and technology, cloud engineered systems, and enterprise

11 software products. Historically, Oracle’s revenues were driven by the sale of the Company’s on-
12 premises software services, but those revenues have stagnated in recent years as customers shifted

13 to cloud-based programs.

14 19. In 2008, when cloud-based software products began to gain popularity and

15 technology companies such as Google and Amazon were starting to expand into this new area of
16 data storage, Oracle stated its intention to stay out of the cloud business. At the time, Defendant

17 Ellison, called cloud storage “complete gibberish” and questioned when this “idiocy [was] going

18 to stop?” By 2015, however, as cloud storage entered the mainstream, Oracle publicly

19 acknowledged the importance of developing successful cloud services in order to compete with
20 platforms offered by Amazon and Microsoft and began to aggressively pursue several acquisitions

21 in an attempt to expand its cloud offerings.

22 20. As a late comer to the cloud space, Oracle had ceded significant market share to its
23 competitors. Instead of focusing on creating a better product, however, Oracle relied on improper
24 sales practices to railroad its customers into purchasing the Company’s cloud offerings. One such

25 practice was to “audit” customers’ use of the Company’s non-cloud software licenses and charge
26 those customers hefty penalties unless they agreed to shift their business to Oracle cloud

27 programs. Oracle’s use of audits was well known within the industry, but the extent to which the
28

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1 Company was using threats of audits to coerce customers to purchase cloud products was not

2 known to investors, and expressly denied by the Company.

3 21. In addition to threatening customers with audits, Oracle also decreased its customer
4 support for certain of its on-premises and hardware systems, in an effort to drive customers away

5 from such systems and into cloud-based systems. Oracle also strong-armed customers by
6 threatening to dramatically raise the cost of legacy database licenses if the customer chose another
7 cloud provider.

8 V. ORACLE DEFRAUDS INVESTORS

9 22. The Class Period starts on May 10, 2017, the first trading day after Oracle presented

10 at the Jefferies Technology Group Investor Conference. During the conference, which began after

11 the market closed on May 9, 2017, Defendant Bond touted that Oracle’s cloud business was
12 growing, stating that “[t]he good news . . . growth in cloud is actually getting bigger.” During the

13 conference, an unidentified analyst questioned how much of Oracle’s revenue growth was

14 attributable to the Company’s practice of auditing its customers. In response, Bond immediately

15 deflected the question, stating that “[i]t’s funny. This is one of those things where – gets talked
16 about a lot. And I think this is one of those things where the story is a lot bigger than the realities.”

17 Bond further assured investors that the Company’s auditing practices were not used to coerce

18 customers into purchasing products and that Oracle approaches its audits in “as gracious [a] way

19 as we can,” and stated that “as we go to cloud . . . this conversation is going to go away.”
20 23. The statements and omissions set forth in ¶22 were materially false and misleading.

21 In truth, the growth in Oracle’s cloud revenues were driven, at least in part, by improper, coercive
22 sales practices, which include: (1) threatening existing customers with “audits” of their use of
23 Oracle’s non-cloud software licenses and levying expensive penalties against those customers,
24 unless the customers agreed to shift their business to Oracle cloud programs; (2) decreasing

25 customer support for certain Oracle on-premises or hardware systems, in an effort to drive
26 customers away from such systems and into cloud-based systems; and (3) strong-arming customers

27 by threatening to dramatically raise the cost of legacy database licenses if the customers choose
28 another cloud provider. These tactics alienated and angered the Company’s customers, which in

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1 some cases have not only refused to purchase Oracle’s cloud offerings but have also looked to

2 terminate their existing business relationships.

3 24. On June 21, 2017, Oracle issued a press release announcing its financial results for
4 the fiscal fourth quarter and fiscal year ended May 31, 2017.1 In the press release, which was also

5 filed with the SEC on Form 8-K, the Company reported that quarterly “cloud revenues were up
6 58% to $1.4 billion.” The press release also quoted Defendant Catz stating that the Company was
7 “experience[ing] rapid adoption of the Oracle Cloud.” In the press release, Defendant Hurd is

8 quoted stating that Oracle “sold $855 million of new annually recurring cloud revenue (ARR) in

9 Q4” and touting that “[n]ext year is going to be even better. We expect to sell a lot more than $2

10 billion in new cloud ARR in fiscal year 2018.”

11 25. That same day, Oracle held a conference call with analysts and investors to discuss
12 the Company’s earnings and operations. During the conference call, Defendant Ellison told

13 investors that the Company’s cloud revenues would “accelerate into hyper-growth” as existing

14 customers “begin to migrate their millions of Oracle databases” to Oracle’s cloud-based offerings.

15 Also, during the call, Defendant Catz attributed Oracle’s cloud revenue growth to “the increasing
16 preference of customers for cloud.” During the call, an analyst questioned whether the Company’s

17 “phenomenal quarter around this aggressive cloud transition” was a “1-year phenom[enon].”

18 Defendant Catz responded that “this is absolutely not a 1-year phenomena. In fact, what you

19 should see, as this goes on, is we will have less drag from the [cloud] transition and the base will
20 continue to grow.”

21 26. The statements and omissions set forth in ¶¶24-25 were materially false and
22 misleading. In truth, the growth in Oracle’s cloud revenues were driven, at least in part, by
23 improper, coercive sales practices, which include: (1) threatening existing customers with “audits”
24 of their use of Oracle’s non-cloud software licenses and levying expensive penalties against those

25 customers, unless the customers agreed to shift their business to Oracle cloud programs; (2)
26 decreasing customer support for certain Oracle on-premises or hardware systems, in an effort to

27
28 1
Oracle’s fiscal year ends on May 31.

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1 drive customers away from such systems and into cloud-based systems; and (3) strong-arming

2 customers by threatening to dramatically raise the cost of legacy database licenses if the customers
3 choose another cloud provider. These tactics alienated and angered the Company’s customers,
4 which in some cases have not only refused to purchase Oracle’s cloud offerings but have also

5 looked to terminate their existing business relationships.

6 27. On September 14, 2017, Oracle issued a press release announcing its financial
7 results for the fiscal first quarter ended August 31, 2017. In the press release, which was also filed

8 with the SEC on Form 8-K, the Company reported that “Total Cloud Revenues were up 51% to

9 $1.5 billion.” The press release also quotes Defendant Catz stating that the “sustained hyper-

10 growth in our multi-billion dollar cloud business continues to drive Oracle’s overall revenue and

11 earnings higher and higher.”

12 28. That same day, Oracle held a conference call with analysts and investors to discuss

13 the Company’s earnings and operations. During the conference call, Defendant Catz touted that

14 “[c]ustomer adoption of our cloud products and services continue to be very, very strong.”

15 Similarly, Defendant Hurd stated that “cloud bookings were executing well on a very big and
16 growing pipeline” and that the Company expected that fiscal year 2018 full year “cloud booking

17 growth to be quite strong.” Hurd attributed Oracle’s cloud revenue growth to being better than the

18 competition, noting specifically that “our products are better. Our sales force is better. Our ability

19 to implement is better.” Hurd further stated that Oracle’s “ability to do all of these things has just
20 continued to improve quarter by quarter by quarter, and it manifests itself in the type of results

21 we’re talking about this afternoon.”

22 29. The statements and omissions set forth in ¶¶27-28 were materially false and
23 misleading. In truth, the growth in Oracle’s cloud revenues were driven, at least in part, by
24 improper, coercive sales practices, which include: (1) threatening existing customers with “audits”

25 of their use of Oracle’s non-cloud software licenses and levying expensive penalties against those
26 customers, unless the customers agreed to shift their business to Oracle cloud programs; (2)

27 decreasing customer support for certain Oracle on-premises or hardware systems, in an effort to
28 drive customers away from such systems and into cloud-based systems; and (3) strong-arming

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1 customers by threatening to dramatically raise the cost of legacy database licenses if the customers

2 choose another cloud provider. These tactics alienated and angered the Company’s customers,
3 which in some cases have not only refused to purchase Oracle’s cloud offerings but have also
4 looked to terminate their existing business relationships.

5 30. On September 18, 2017, Oracle filed with the SEC its Form 10-Q for the fiscal first
6 quarter ended August 31, 2017, reiterating the financial results announced by the Company in its
7 September 14 press release. The Form 10-Q was signed by Defendant Catz and contained

8 certifications by Defendants Catz and Hurd that attested to the purported accuracy and

9 completeness of the 10-Q. In the quarterly report, the Company touted “higher growth of our

10 cloud SaaS and cloud PaaS and IaaS revenues as customer preferences have pivoted to the Oracle

11 Cloud for new deployments and as customers migrate to and expand with the Oracle Cloud for
12 their existing on-premise workloads.” Oracle attributed its cloud revenue growth to “increased . .

13 . investments in and focus on the development, marketing and sale of our cloud-based applications,

14 platform and infrastructure technologies.” The Company also touted the superior quality of its

15 cloud products, stating that its products “provide a comprehensive and fully integrated stack of
16 applications, platform, compute, storage and networking services in all three primary layers of the

17 cloud.”

18 31. The statements and omissions set forth in ¶30 were materially false and misleading.

19 In truth, the growth in Oracle’s cloud revenues were driven, at least in part, by improper, coercive
20 sales practices, which include: (1) threatening existing customers with “audits” of their use of

21 Oracle’s non-cloud software licenses and levying expensive penalties against those customers,
22 unless the customers agreed to shift their business to Oracle cloud programs; (2) decreasing
23 customer support for certain Oracle on-premises or hardware systems, in an effort to drive
24 customers away from such systems and into cloud-based systems; and (3) strong-arming customers

25 by threatening to dramatically raise the cost of legacy database licenses if the customers choose
26 another cloud provider. These tactics alienated and angered the Company’s customers, which in

27 some cases have not only refused to purchase Oracle’s cloud offerings but have also looked to
28 terminate their existing business relationships. Oracle had to rely on these coercive practices given

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1 that its cloud-based offering is a “bare-bones minimum viable product,” not “a comprehensive and

2 fully integrated stack of applications” as the Company had represented.

3 32. On October 5, 2017, Oracle presented at the OpenWorld Financial Analyst
4 Meeting. During the meeting, Defendant Miranda touted that Oracle’s cloud business was

5 experiencing rapid growth and attributed that growth to being more “customer-focused” and
6 “much more intimate partners with our customer.”
7 33. The statements and omissions set forth in ¶32 were materially false and misleading.

8 In truth, the growth in Oracle’s cloud revenues were driven, at least in part, by improper, coercive

9 sales practices, which include: (1) threatening existing customers with “audits” of their use of

10 Oracle’s non-cloud software licenses and levying expensive penalties against those customers,

11 unless the customers agreed to shift their business to Oracle cloud programs; (2) decreasing
12 customer support for certain Oracle on-premises or hardware systems, in an effort to drive

13 customers away from such systems and into cloud-based systems; and (3) strong-arming customers

14 by threatening to dramatically raise the cost of legacy database licenses if the customers choose

15 another cloud provider. These tactics alienated and angered the Company’s customers, which in
16 some cases have not only refused to purchase Oracle’s cloud offerings but have also looked to

17 terminate their existing business relationships.

18 34. On December 14, 2017, Oracle issued a press release announcing its financial

19 results for the fiscal second quarter ended November 30, 2017. In the press release, which was
20 also filed with the SEC on Form 8-K, the Company reported that “Total Cloud Revenues were up

21 44% to $1.5 billion.” The press release attributes this revenue growth, at least in part, to “the
22 increasing scale and the gathering momentum in our cloud business.”
23 35. That same day, Oracle held a conference call with analysts and investors to discuss
24 the Company’s earnings and operations. During the conference call, Defendant Catz boasted that

25 “[c]ustomer adoption of our cloud products and services continues to be very strong. . . . Bottom
26 line, our transition to the cloud is going well.”

27 36. The statements and omissions set forth in ¶¶34-35 were materially false and
28 misleading. In truth, the growth in Oracle’s cloud revenues were driven, at least in part, by

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1 improper, coercive sales practices, which include: (1) threatening existing customers with “audits”

2 of their use of Oracle’s non-cloud software licenses and levying expensive penalties against those
3 customers, unless the customers agreed to shift their business to Oracle cloud programs; (2)
4 decreasing customer support for certain Oracle on-premises or hardware systems, in an effort to

5 drive customers away from such systems and into cloud-based systems; and (3) strong-arming
6 customers by threatening to dramatically raise the cost of legacy database licenses if the customers
7 choose another cloud provider. These tactics alienated and angered the Company’s customers,

8 which in some cases have not only refused to purchase Oracle’s cloud offerings but have also

9 looked to terminate their existing business relationships.

10 VI. DISCLOSURES OF COMPANY’S MISCONDUCT

CAUSE SIGNIFICANT INVESTOR LOSSES
11
12 37. The truth about the Company’s practices and their impact on Oracle’s business was

13 revealed on March 19, 2018, when the Company disclosed that cloud revenue growth had

14 stagnated and forecasted significantly slower sales growth for its cloud business than its

15 competitors. Specifically, the Company reported that quarterly cloud revenue rose only 32%, or

16 just half the average reported quarterly growth over the past two years, and Oracle projected that

17 cloud sales growth would decline even further to only 20% in the following quarter. As a result

18 of these disclosures, Oracle shares declined by $4.90 per share, or nearly 9.5%.

19 38. Following these disclosures, market researchers and the media connected Oracle’s

20 poor financial performance to its aggressive sales tactics. Indeed, these recent disclosures suggest

21 that the growth in Oracle’s cloud revenues were driven by improper, coercive sales practices. One

22 market commentator—Gartner, Inc.—also observed that Oracle’s cloud offering “remains a bare-

23 bones minimum viable product, and it is arguably too minimal to be viable for a broad range of

24 common cloud . . . use cases.”

25 VII. LOSS CAUSATION

26 39. During the Class Period, as detailed herein, Defendants made materially false and

27 misleading statements and omissions, and engaged in a scheme to deceive the market. This

28 artificially inflated the price of Oracle stock and operated as a fraud or deceit on the Class (as

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1 defined below). Later, when Defendants’ prior misrepresentations and fraudulent conduct were

2 disclosed to the market on March 19, 2018 the price of Oracle stock fell. As a result of their
3 purchases of Oracle stock during the Class Period, Plaintiff and other members of the Class
4 suffered harm.

5 VIII. CLASS ACTION ALLEGATIONS

6 40. Plaintiff brings this action as a class action pursuant to Rule 23 of the Federal Rules
7 of Civil Procedure on behalf of all persons who purchased Oracle stock during the Class Period

8 (the “Class”). Excluded from the Class are Defendants and their families, directors, and officers

9 of Oracle and their families and affiliates.

10 41. The members of the Class are so numerous that joinder of all members is

11 impracticable. The disposition of their claims in a class action will provide substantial benefits to
12 the parties and the Court. Oracle has approximately 5.16 billion shares of stock outstanding,

13 owned by at least hundreds or thousands of investors.

14 42. Questions of law and fact common to the members of the Class which predominate

15 over questions which may affect individual Class members include:

16 (a) Whether Defendants violated the Exchange Act;

17 (b) Whether Defendants omitted and/or misrepresented material facts;

18 (c) Whether Defendants’ statements omitted material facts necessary in order

19 to make the statements made, in light of the circumstances under which they were made, not
20 misleading;

21 (d) Whether Defendants knew or recklessly disregarded that their statements

22 and/or omissions were false and misleading;
23 (e) Whether Defendants’ misconduct impacted the price of Oracle stock;
24 (f) Whether Defendants’ conduct caused the members of the Class to sustain

25 harm; and
26 (g) The extent of harm sustained by Class members and the appropriate

27 measure of harm.
28

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1 43. Plaintiff’s claims are typical of those of the Class because Plaintiff and the Class

2 sustained harm from Defendants’ wrongful conduct.

3 44. Plaintiff will adequately protect the interests of the Class and has retained counsel
4 experienced in class action securities litigation. Plaintiff has no interests which conflict with those

5 of the Class.
6 45. A class action is superior to other available methods for the fair and efficient
7 adjudication of this controversy.

8 IX. INAPPLICABILITY OF STATUTORY SAFE HARBOR

9 46. Oracle’s “Safe Harbor” warnings accompanying its forward-looking statements

10 issued during the Class Period were ineffective to shield those statements from liability.

11 47. Defendants are also liable for any false or misleading forward-looking statements
12 pleaded herein because, at the time each such statement was made, the speaker knew the statement

13 was false or misleading and the statement was authorized and/or approved by an executive officer

14 of Oracle who knew that the statement was false. None of the historic or present tense statements

15 made by Defendants were assumptions underlying or relating to any plan, projection, or statement
16 of future economic performance, as they were not stated to be such assumptions underlying or

17 relating to any projection or statement of future economic performance when made, nor were any

18 of the projections or forecasts made by Defendants expressly related to, or stated to be dependent

19 on, those historic or present tense statements when made.

20 X. PRESUMPTION OF RELIANCE

21 48. At all relevant times, the market for Oracle stock was an efficient market for the
22 following reasons, among others:
23 (a) Oracle stock met the requirements for listing, and was listed and actively
24 traded on NYSE, a highly efficient and automated market;

25 (b) As a regulated issuer, Oracle filed periodic public reports with the SEC and
26 NYSE;

27 (c) Oracle regularly and publicly communicated with investors via established
28 market communication mechanisms, including through regular disseminations of press releases on

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1 the national circuits of major newswire services and through other wide-ranging public disclosures,

2 such as communications with the financial press and other similar reporting services; and
3 (d) Oracle was followed by several securities analysts employed by major
4 brokerage firm(s) who wrote reports which were distributed to the sales force and certain

5 customers of their respective brokerage firm(s). Each of these reports was publicly available and
6 entered the public marketplace.
7 49. As a result of the foregoing, the market for Oracle stock promptly digested current

8 information regarding Oracle from all publicly available sources and reflected such information in

9 the price of Oracle stock. Under these circumstances, all purchasers of Oracle stock during the

10 Class Period suffered similar injury through their purchase of Oracle stock at artificially inflated

11 prices and the presumption of reliance applies.

12 50. A Class-wide presumption of reliance is also appropriate in this action under the

13 Supreme Court’s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972),

14 because the Class’ claims are grounded on Defendants’ material omissions. Because this action

15 involves Defendants’ failure to disclose material adverse information regarding revenue growth in
16 Oracle’s cloud segment—information that Defendants were obligated to disclose—positive proof

17 of reliance is not a prerequisite to recovery. All that is necessary is that the facts withheld be

18 material in the sense that a reasonable investor might have considered them important in making

19 investment decisions. Given the importance of the Oracle’s cloud business, as set forth above, that
20 requirement is satisfied here.

21 COUNT I
22 For Violation of Section 10(b) of the Exchange Act and Rule 10b-5 Against All Defendants
23 51. Plaintiff repeats, incorporates, and realleges each and every allegation set forth
24 above as if fully set forth herein.

25 52. During the Class Period, Defendants carried out a plan, scheme, and course of
26 conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing

27 public, including Plaintiff and other Class members, as alleged herein; and (ii) cause economic
28 harm to Plaintiff and other members of the Class.

CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 13

Case No.
 Case 5:18-cv-04844-BLF Document 1 Filed 08/10/18 Page 15 of 19

1 53. Defendants: (i) employed devices, schemes, and artifices to defraud; (ii) made

2 untrue statements of material fact and/or omitted to state material facts necessary to make the
3 statements not misleading; and (iii) engaged in acts, practices, and a course of business which
4 operated as a fraud and deceit upon the purchasers of the Company’s stock in violation of Section

5 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder.

6 54. Defendants, individually and in concert, directly and indirectly, by the use, means
7 or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

8 continuous course of conduct to conceal adverse material information about the Company’s

9 financial well-being, operations, and prospects.

10 55. During the Class Period, Defendants made the false statements specified above,

11 which they knew or recklessly disregarded to be false or misleading in that they contained
12 misrepresentations and failed to disclose material facts necessary in order to make the statements

13 made, in light of the circumstances under which they were made, not misleading.

14 56. Defendants had actual knowledge of the misrepresentations and omissions of

15 material facts set forth herein, or recklessly disregarded the true facts that were available to them.
16 Defendants engaged in this misconduct to conceal Oracle’s true condition from the investing

17 public and to support the artificially inflated prices of the Company’s stock.

18 57. Plaintiff and the Class have suffered damages in that, in reliance on the integrity of

19 the market, they purchased Oracle stock and were harmed when the truth about Oracle negatively
20 impacted the price of those securities. Plaintiff and the Class would not have purchased Oracle

21 stock at the prices they paid, or at all, had they been aware of the truth about Oracle.
22 58. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and the
23 other members of the Class suffered harm in connection with their respective purchases of the
24 Company’s stock during the Class Period.

25 59. By virtue of the foregoing, Defendants violated Section 10(b) of the Exchange Act
26 and Rule 10b-5 promulgated thereunder.

27
28

CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 14

Case No.
 Case 5:18-cv-04844-BLF Document 1 Filed 08/10/18 Page 16 of 19

1 COUNT II

2 For Violation of Section 20(a) of the Exchange Act Against the Individual Defendants
3 60. Plaintiff repeats, incorporates, and realleges each and every allegation set forth
4 above as if fully set forth herein.

5 61. The Individual Defendants acted as controlling persons of Oracle within the
6 meaning of Section 20(a) of the Exchange Act. By virtue of their high-level positions,
7 participation in and/or awareness of the Company’s operations, direct involvement in the day-to-

8 day operations of the Company, and/or intimate knowledge of the Company’s actual performance,

9 and their power to control public statements about Oracle, the Individual Defendants had the power

10 and ability to control the actions of Oracle and its employees. By reason of such conduct, the

11 Individual Defendants are liable pursuant to Section 20(a) of the Exchange Act.
12 XI. PRAYER FOR RELIEF

13 WHEREFORE, Plaintiff prays for judgment as follows:

14 A. Determining that this action is a proper class action under Rule 23 of the Federal

15 Rules of Civil Procedure;

16 B. Awarding compensation to Plaintiff and other Class members against all

17 Defendants, jointly and severally, for all harm sustained as a result of Defendants’

18 wrongdoing, in an amount to be proven at trial, including interest thereon;

19 C. Awarding Plaintiff and the Class their reasonable costs and expenses incurred in
20 this action, including attorneys’ fees and expert fees; and

21 D. Awarding such equitable/injunctive or other further relief as the Court may deem
22 just and proper.
23 XII. JURY DEMAND
24 Plaintiff demands a trial by jury.

25
26

27
28

CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 15

Case No.
 Case 5:18-cv-04844-BLF Document 1 Filed 08/10/18 Page 17 of 19

1 Dated: August 10, 2018 Respectfully submitted,

2 BERNSTEIN LITOWITZ BERGER

& GROSSMANN LLP
3
4 /s/ David R. Stickney
DAVID R. STICKNEY
5
David R. Stickney (Bar No. 188574)
6 (davids@blbglaw.com)
12481 High Bluff Drive, Suite 300
7 San Diego, CA 92130
Tel: (858) 793-0070
8 Fax: (858) 793-0323
9 -and-
10 MARK LEBOVITCH
(markl@blbglaw.com)
11 AVI JOSEFSON
(avi@blbglaw.com)
12 1251 Avenue of the Americas
New York, NY 10020
13 Tel: (212) 554-1400
Fax: (212) 554-1444
14

15 KLAUSNER, KAUFMAN, JENSEN

& LEVINSON
16 Robert D. Klausner
(bob@robertdklausner.com)
17 7080 Northwest 4th Street
Plantation, Florida 33317
18 Tel: (954) 916-1202
Fax: (954) 916-1232
19
20 Attorneys for Plaintiff City of Sunrise Firefighters’
Pension Fund
21
22
23
24

25
26

27
28

CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 16

Case No.
 Case 5:18-cv-04844-BLF Document 1 Filed 08/10/18 Page 18 of 19

CaRan on Denali- or 1. iw ot Sunrise Firefighters' Pension Fund --Sunrise

etre-minters hereov certify, as to the minis asserted under the tederal securities laws.

i.
61 II C:2 it 22&‘2 ii2L 12
. Y ; ,66[21i.i.rii.;
IvIth rromv.P1 tr. 1-1:-PtIcshtfrg ,,,:;thrwl7p tIhno.

`, Piro-Jolters did not purchase the securities that are the subject of this
;41rIrlse
action at the direction ot counsel or in order to Participate in any action ansms
tinier the far tierce i,,v,

C.; Vie Iiii2116 :)0 ve. lieiiieseciive ,tet,,t11.1 th the

r.:;1,1 ^ cirr.r.qtfrion and Ihrtn!

-r + 2222111.2o1. &MALI I Wt. ‘,11.,21 h 1.. iliC

this action are 3Pt tr"1-1, in the chart attached h‘',"+"tr,

D. Sunrise i'iretiLtiners has not sought to serve as a lead Diaintitt or representative

21,l vciruii Ai i ti oULtIUra 22ilije2 tl tc acit r,sY c uY Ytica 1f.1141N aaYGU
the ttirpp-vf•--41' (.
1r'o'c' Inc,the date nt tins t ;ertiticatinn

6. Sunrise Firefighters will not accept any payment for serving as a representative
pia citt uel alii t,i the ‘...14SS, iieyt.411C1 uiia roc , a, ck,6•Ilic,,:s pit) iota SitaiC ts, wry
rprnvery pvrtent suer .nr! PyrIPticPc. IMr Inct Wf-ICTP=7• 1
directly relating to the representation or the Llass, as ordered or approved ov the

th1.3 X

friretio-ners' pension pnn4

 Case 5:18-cv-04844-BLF Document 1 Filed 08/10/18 Page 19 of 19

City of Sunrise Firefighters’ Pension Fund

Transactions in Oracle Corporation

Transaction Date Shares Price

Purchase 6/29/2017 17,660 50.2846

Purchase 9/26/2017 516 47.9591
Purchase 9/27/2017 1,293 48.2207
Purchase 9/28/2017 328 48.1636
Purchase 10/12/2017 3,527 48.3776

Sale 7/25/2017 (507) 51.0700

Sale 7/26/2017 (1,480) 51.0769
Sale 8/23/2017 (2,900) 49.1819
Sale 9/22/2017 (3,790) 48.2240
 Case 5:18-cv-04844-BLF Document 1-1 Filed 08/10/18 Page 1 of 2
CIVIL COVER SHEET
?H&75C8!--!#GSd'!)/(*0$!!
! !
IVS!?H&75C8!--!QWdWZ!Q]dS`!aVSSb!O\R!bVS!W\T]`[ObW]\!Q]\bOW\SR!VS`SW\!\SWbVS`!`S^ZOQS!\]`!ac^^ZS[S\b!bVS!TWZW\U!O\R!aS`dWQS!]T!^ZSORW\Ua!]`!]bVS`!^O^S`a!Oa!`S_cW`SR!Pg!ZOe%!!
SfQS^b!Oa!^`]dWRSR!Pg!Z]QOZ!`cZSa!]T!Q]c`b'!IVWa!T]`[%!O^^`]dSR!W\!Wba!]`WUW\OZ!T]`[!Pg!bVS!?cRWQWOZ!7]\TS`S\QS!]T!bVS!J\WbSR!HbObSa!W\!HS^bS[PS`!*20-%!Wa!`S_cW`SR!T]`!bVS!7ZS`Y!]T!
7]c`b!b]!W\WbWObS!bVS!QWdWZ!R]QYSb!aVSSb'!(SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)!
I. (a)!PLAINTIFFS! DEFENDANTS
Oracle Corporation, Safra A. Catz, Mark Hurd, Lawrence J. Ellison, Thomas Kurian, Ken
City of Sunrise Firefighters' Pension Fund Bond, and Steve Miranda
! (b)!7]c\bg!]T!GSaWRS\QS!]T!;W`ab!AWabSR!EZOW\bWTT! 7]c\bg!]T!GSaWRS\QS!]T!;W`ab!AWabSR!8STS\RO\b! San Mateo County
! ! (EXCEPT IN U.S. PLAINTIFF CASES)! (IN U.S. PLAINTIFF CASES ONLY)!
CDI93!!!!!!>C!A5C8!7DC89BC5I>DC!75H9H%!JH9!I=9!AD75I>DC!D;!
!! I=9!IG57I!D;!A5C8!>CKDAK98'!
! (c)!!!5bb]`\Sga!(Firm Name, Address, and Telephone Number)! 5bb]`\Sga!(If Known)!
!
David R. Stickney, Bernstein Litowitz Berger & Grossmann LLP,
12481 High Bluff Drive, Suite 300, San Diego, CA 92130, Tel: (858) 793-0070
II. BASIS OF JURISDICTION (Place an “X” in One Box Only)! III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff!
! (For Diversity Cases Only) ! ! ! ! and One Box for Defendant) !
PTF DEF PTF DEF
*!! J'H'!<]dS`\[S\b!EZOW\bWTT!! ,!! ;SRS`OZ!FcSabW]\! 7WbWhS\!]T!IVWa!HbObS!! *!! *! >\Q]`^]`ObSR!or!E`W\QW^OZ!EZOQS! -! -!
! ! (U.S. Government Not a Party)
! ! ! ]T!6caW\Saa!>\!IVWa!HbObS!
7WbWhS\!]T!5\]bVS`!HbObS!! +!! +!! >\Q]`^]`ObSR!and!E`W\QW^OZ!EZOQS!! .!! .!
+!! J'H'!<]dS`\[S\b!8STS\RO\b! -!! 8WdS`aWbg! ! ! ! ]T!6caW\Saa!>\!5\]bVS`!HbObS!
! ! (Indicate Citizenship of Parties in Item III)
7WbWhS\!]`!HcPXSQb!]T!O!! ,!! ,!! ;]`SWU\!CObW]\!! /!! /!
;]`SWU\!7]c\b`g!
!
IV. NATURE OF SUIT!!!(Place an “X” in One Box Only)!
CONTRACT! TORTS! FORFEITURE/PENALTY! BANKRUPTCY! OTHER STATUTES!
**)!>\ac`O\QS! PERSONAL INJURY PERSONAL INJURY /+.!8`cU!GSZObSR!HSWhc`S!]T! -++!5^^SOZ!+1!JH7!n!*.1! ,0.!;OZaS!7ZOW[a!5Qb!
*+)!BO`W\S! E`]^S`bg!+*!JH7!n!11*! -+,!LWbVR`OeOZ!+1!JH7! ,0/!FcW!IO[!#,*!JH7!
,*)!5W`^ZO\S! ,/.!ES`a]\OZ!>\Xc`g!l!E`]RcQb!
*,)!BWZZS`!5Qb! AWOPWZWbg! /2)!DbVS`! n!*.0! n!,0+2#O$$!
,*.!5W`^ZO\S!E`]RcQb!AWOPWZWbg!
*-)!CSU]bWOPZS!>\ab`c[S\b! ,/0!=SOZbV!7O`S(! LABOR PROPERTY RIGHTS -))!HbObS!GSO^^]`bW]\[S\b!
,+)!5aaOcZb%!AWPSZ!"!HZO\RS`!
*.)!GSQ]dS`g!]T! EVO`[OQScbWQOZ!ES`a]\OZ! -*)!5\bWb`cab!
,,)!;SRS`OZ!9[^Z]gS`ai! 0*)!;OW`!AOP]`!HbO\RO`Ra!5Qb! 1+)!7]^g`WUVba!
DdS`^Og[S\b!DT! >\Xc`g!E`]RcQb!AWOPWZWbg! -,)!6O\Ya!O\R!6O\YW\U!
AWOPWZWbg! 0+)!AOP]`(BO\OUS[S\b! 1,)!EObS\b!
KSbS`O\ia!6S\STWba! ,/1!5aPSab]a!ES`a]\OZ!>\Xc`g! -.)!7][[S`QS!
,-)!BO`W\S! GSZObW]\a! 1,.!EObS\b"5PP`SdWObSR!CSe!
*.*!BSRWQO`S!5Qb! E`]RcQb!AWOPWZWbg!
,-.!BO`W\S!E`]RcQb!AWOPWZWbg! 0-)!GOWZeOg!AOP]`!5Qb! 8`cU!5^^ZWQObW]\! -/)!8S^]`bObW]\!
*.+!GSQ]dS`g!]T!8STOcZbSR! PERSONAL PROPERTY -0)!GOQYSbSS`!>\TZcS\QSR!"!
,.)!B]b]`!KSVWQZS! 0.*!;O[WZg!O\R!BSRWQOZ! 1-)!I`ORS[O`Y!
HbcRS\b!A]O\a!#9fQZcRSa! ,0)!DbVS`!;`OcR! 7]``c^b!D`UO\WhObW]\a!
,..!B]b]`!KSVWQZS!E`]RcQb! ASOdS!5Qb!
KSbS`O\a$! ,0*!I`cbV!W\!AS\RW\U! SOCIAL SECURITY -1)!7]\ac[S`!7`SRWb!
AWOPWZWbg! 02)!DbVS`!AOP]`!AWbWUObW]\!
*.,!GSQ]dS`g!]T! ,1)!DbVS`!ES`a]\OZ!E`]^S`bg! 1/*!=>5!#*,2.TT$!
,/)!DbVS`!ES`a]\OZ!>\Xc`g! 02*!9[^Z]gSS!GSbW`S[S\b! -2)!7OPZS(HOb!IK!
DdS`^Og[S\b! 8O[OUS! >\Q][S!HSQc`Wbg!5Qb! 1/+!6ZOQY!Ac\U!#2+,$! 1.)!HSQc`WbWSa(7][[]RWbWSa(!
! !]T!KSbS`O\ia!6S\STWba! ,/+!ES`a]\OZ!>\Xc`g!&BSRWQOZ!
BOZ^`OQbWQS!! ,1.!E`]^S`bg!8O[OUS!E`]RcQb! 1/,!8>L7(8>LL!#-).#U$$! 9fQVO\US!
*/)!Hb]QYV]ZRS`ai!HcWba! AWOPWZWbg! IMMIGRATION
1/-!HH>8!IWbZS!MK>! 12)!DbVS`!HbObcb]`g!5QbW]\a!
*2)!DbVS`!7]\b`OQb! -/+!CObc`OZWhObW]\!
CIVIL RIGHTS PRISONER PETITIONS 1/.!GH>!#-).#U$$! 12*!5U`WQcZbc`OZ!5Qba!
*2.!7]\b`OQb!E`]RcQb!AWOPWZWbg! 5^^ZWQObW]\!
--)!DbVS`!7WdWZ!GWUVba! HABEAS CORPUS FEDERAL TAX SUITS 12,!9\dW`]\[S\bOZ!BObbS`a!
*2/!;`O\QVWaS! -/.!DbVS`!>[[WU`ObW]\!
--*!K]bW\U! -/,!5ZWS\!8SbOW\SS! 5QbW]\a! 12.!;`SSR][!]T!>\T]`[ObW]\!
10)!IOfSa!#J'H'!EZOW\bWTT!]`!
REAL PROPERTY --+!9[^Z]g[S\b! 5Qb!
.*)!B]bW]\a!b]!KOQObS! 8STS\RO\b$!
+*)!AO\R!7]\RS[\ObW]\! --,!=]caW\U(! HS\bS\QS! 12/!5`PWb`ObW]\!
10*!>GHlIVW`R!EO`bg!+/!JH7!
++)!;]`SQZ]ac`S! 5QQ][[]RObW]\a! .,)!<S\S`OZ! n!0/)2! 122!5R[W\Wab`ObWdS!E`]QSRc`S!
--.!5[S`'!e(8WaOPWZWbWSal 5Qb(GSdWSe!]`!5^^SOZ!]T!
+,)!GS\b!ASOaS!"!9XSQb[S\b! .,.!8SObV!ES\OZbg!
9[^Z]g[S\b! 5US\Qg!8SQWaW]\!
+-)!I]`ba!b]!AO\R! OTHER 2.)!7]\abWbcbW]\OZWbg!]T!HbObS!
+-.!I]`b!E`]RcQb!AWOPWZWbg! --/!5[S`'!e(8WaOPWZWbWSalDbVS`!
.-)!BO\RO[ca!"!DbVS`! HbObcbSa!
+2)!5ZZ!DbVS`!GSOZ!E`]^S`bg! --1!9RcQObW]\!
..)!7WdWZ!GWUVba!
...!E`Wa]\!7]\RWbW]\!
./)!7WdWZ!8SbOW\SSl!
7]\RWbW]\a!]T!
7]\TW\S[S\b!
!
V. ORIGIN (Place an “X” in One Box Only)!
* D`WUW\OZ! +! GS[]dSR!T`][! , GS[O\RSR!T`][! -! GSW\abObSR!]`! . I`O\aTS``SR!T`][!! / BcZbWRWab`WQb!!! 1 BcZbWRWab`WQb!
E`]QSSRW\U! HbObS!7]c`b! 5^^SZZObS!7]c`b! GS]^S\SR! 5\]bVS`!8Wab`WQb!(specify)! AWbWUObW]\lI`O\aTS`! AWbWUObW]\l8W`SQb!;WZS!
!
VI. CAUSE OF 7WbS!bVS!J'H'!7WdWZ!HbObcbS!c\RS`!eVWQV!g]c!O`S!TWZW\U!!(Do not cite jurisdictional statutes unless diversity)3!
!!Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5
ACTION!
6`WST!RSaQ`W^bW]\!]T!QOcaS3!
!!Violations of Federal Securities Laws as amended by the Private Securities Litigation Reform Act
!
VII. REQUESTED IN 7=97@!>;!I=>H!>H!5!CLASS ACTION! DEMAND $
!
7=97@!N9H!]\Zg!WT!RS[O\RSR!W\!Q][^ZOW\b3!
COMPLAINT:! JC89G!GJA9!+,%!;SR'!G'!7Wd'!E'! JURY DEMAND: NSa! C]!

VIII. RELATED CASE(S), ?J8<9! ! 8D7@9I!CJB69G!

IF ANY (See instructions): !
!
IX. DIVISIONAL ASSIGNMENT (Civil Local Rule 3-2)!
(Place an “X” in One Box Only) SAN FRANCISCO/OAKLAND SAN JOSE EUREKA-MCKINLEYVILLE !

DATE 08/10/2018 SIGNATURE OF ATTORNEY OF RECORD /s/ David R. Stickney

JS-CAND 44 (rev. 07/16) Case 5:18-cv-04844-BLF Document 1-1 Filed 08/10/18 Page 2 of 2

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS-CAND 44

Authority For Civil Cover Sheet. The JS-CAND 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and
service of pleading or other papers as required by law, except as provided by local rules of court. This form, approved in its original form by the Judicial
Conference of the United States in September 1974, is required for the Clerk of Court to initiate the civil docket sheet. Consequently, a civil cover sheet is
submitted to the Clerk of Court for each civil complaint filed. The attorney filing a case should complete the form as follows:
I. a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and
then the official, giving both name and title.
b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the “defendant” is the location of the tract of land involved.)
c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section “(see attachment).”

II. Jurisdiction. The basis of jurisdiction is set forth under Federal Rule of Civil Procedure 8(a), which requires that jurisdictions be shown in
pleadings. Place an “X” in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
(1) United States plaintiff. Jurisdiction based on 28 USC §§ 1345 and 1348. Suits by agencies and officers of the United States are included here.
(2) United States defendant. When the plaintiff is suing the United States, its officers or agencies, place an “X” in this box.
(3) Federal question. This refers to suits under 28 USC § 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code
takes precedence, and box 1 or 2 should be marked.
(4) Diversity of citizenship. This refers to suits under 28 USC § 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)
III. Residence (citizenship) of Principal Parties. This section of the JS-CAND 44 is to be completed if diversity of citizenship was indicated above.
Mark this section for each principal party.
IV. Nature of Suit. Place an “X” in the appropriate box. If the nature of suit cannot be determined, be sure the cause of action, in Section VI below, is
sufficient to enable the deputy clerk or the statistical clerk(s) in the Administrative Office to determine the nature of suit. If the cause fits more than
one nature of suit, select the most definitive.
V. Origin. Place an “X” in one of the six boxes.
(1) Original Proceedings. Cases originating in the United States district courts.
(2) Removed from State Court. Proceedings initiated in state courts may be removed to the district courts under Title 28 USC § 1441. When the
petition for removal is granted, check this box.
(3) Remanded from Appellate Court. Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
(4) Reinstated or Reopened. Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
(5) Transferred from Another District. For cases transferred under Title 28 USC § 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
(6) Multidistrict Litigation Transfer. Check this box when a multidistrict case is transferred into the district under authority of Title 28 USC
§ 1407. When this box is checked, do not check (5) above.
(8) Multidistrict Litigation Direct File. Check this box when a multidistrict litigation case is filed in the same district as the Master MDL docket.
Please note that there is no Origin Code 7. Origin Code 7 was used for historical records and is no longer relevant due to changes in statute.
VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC § 553. Brief Description: Unauthorized reception of cable service.
VII. Requested in Complaint. Class Action. Place an “X” in this box if you are filing a class action under Federal Rule of Civil Procedure 23.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.
VIII. Related Cases. This section of the JS-CAND 44 is used to identify related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.
IX. Divisional Assignment. If the Nature of Suit is under Property Rights or Prisoner Petitions or the matter is a Securities Class Action, leave this
section blank. For all other cases, identify the divisional venue according to Civil Local Rule 3-2: “the county in which a substantial part of the
events or omissions which give rise to the claim occurred or in which a substantial part of the property that is the subject of the action is situated.”
Date and Attorney Signature. Date and sign the civil cover sheet.