On December 18, 2019, the U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a securities class action filed against Mentor Graphics, a company that develops, manufactures, and distributes electronic design automation computer software and emulation hardware systems.  The complaint alleged that the defendants made false or misleading statements concerning the company's financial projections and the impact of competition and semiconductor industry consolidation on the company's business.  The Ninth Circuit held that the plaintiff had failed to plead sufficient allegations giving rise to a strong inference of scienter, as required by the Private Securities Litigation Reform Act (PSLRA).  In particular, the Court of Appeals found that the inference of scienter was not as compelling as the plausible inference of defendants’ confidence in the company’s financial projections despite these challenges.

Wilson Sonsini Goodrich & Rosati represented Mentor Graphics, along with its former CEO, CFO, and VP of Corporate Development and Investor Relations, in the matter.

On August 23, 2017, Judge Anna J. Brown of the District of Oregon granted defendants’ motion to dismiss with leave to amend, adopting the detailed findings and recommendations of Magistrate Judge Paul Papak.  After plaintiff filed an amended complaint, on July 27, 2018, Judge Brown granted defendants’ second motion to dismiss with prejudice, adopting the detailed findings and recommendations of Judge Papak, and entered judgment.  The plaintiff appealed, and the Ninth Circuit affirmed.

The Wilson Sonsini team that represented Mentor Graphics in the matter was led by partners Barry Kaplan and Greg Watts and included associates John Roberts and Stephanie Jensen.

For more information, please refer to the Ninth Circuit's opinion.