I. BACKGROUND

21 The parties are familiar with the facts alleged in this securities class action, which the 22 Court recited in its order on the first set of motions to dismiss. See Dkt. No. 154. As relevant 23 here, Plaintiffs filed an Amended Class Action Complaint against numerous defendants in 24 February 2023, alleging that Defendant C3.ai, Inc. (“C3”) and several of its individual officers 25 26 1 Defendant Lorenzo Simonelli and Defendant Baker Hughes filed motions to join Defendant 27 C3.ai, Inc.’s opposition to Plaintiffs’ motion for leave to amend. See Dkt. Nos. 187, 188. Because 1 made false or misleading statements concerning the nature of C3’s joint venture with Defendant 2 Baker Hughes. Dkt. No. 71. Defendants moved to dismiss, Dkt. Nos. 105, 109, and the Court 3 granted in part and denied in part the C3 Defendants’ motion to dismiss and granted Baker 4 Hughes’ motion to dismiss. See Dkt. No. 154. Plaintiffs then filed their Second Amended Class 5 Action Complaint, Dkt. No. 167, and Defendants again moved to dismiss, Dkt. Nos. 167, 170, 6 171. Before the Court resolved the pending motions to dismiss, Plaintiffs sought leave to file a 7 Third Amended Class Action Complaint, Dkt. No. 181. 8 II. LEGAL STANDARD 9 Rule 15(a) of the Federal Rules of Civil Procedure allows a plaintiff to amend the 10 complaint once, as a matter of right, prior to the filing of a responsive pleading. See Fed. R. Civ. 11 P. 15(a). Once the complaint has been amended, a plaintiff must then seek leave of court or 12 written consent of the adverse party before further amendment may be made. See id. The Court 13 shall grant leave to amend “when justice so requires.” Id. The Court must be guided by Rule 15’s 14 underlying purpose: to facilitate decision on the merits, rather than on the pleadings or 15 technicalities. See Roth v. Garcia Marquez, 942 F.2d 617, 628 (9th Cir. 1991). Thus, requests for 16 leave to amend should be granted with “extreme liberality.” Brown v. Stored Value Cards, Inc., 17 953 F.3d 567, 574 (9th Cir. 2020). When considering whether to grant leave to amend, district 18 courts consider several factors including undue delay, the movant’s bad faith or dilatory motive, 19 repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the 20 opposing party, and futility. Foman v. Davis, 371 U.S. 178, 182 (1962). “[P]rejudice to the 21 opposing party carries the most weight” in the Court’s analysis. Eminence Capital, LLC v. 22 Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003). 23 III. DISCUSSION 24 Plaintiffs state that they seek leave to amend based on information contained in a recently 25 unsealed C3 derivative case from the Delaware Chancery Court, Pankow v. Siebel et al., C.A. No. 26 2024-0520-NAC (Del. Ch.). These proposed amendments include factual allegations regarding 27 Defendant Siebel’s knowledge of C3’s access to Baker Hughes’ full 12,000-person salesforce, 1 chart containing information required under 15 U.S.C. § 78u-4(b)(1). Mot. at 6. Defendants argue 2 that Plaintiffs should not be given leave to amend because the proposed amendments are (1) futile 3 and (2) unduly delayed and thus prejudicial. Opp at 10–18. 4 The Court finds that the most important factor weighs in favor of granting leave to amend: 5 there is no evidence that amendment would substantially prejudice Defendants.2 Defendants cite 6 “delay and inefficiency” stemming from the need to “start over with new motions to dismiss” as 7 the primary basis for prejudice, but Plaintiffs’ proposed amendments are narrow.3 Plaintiffs seek 8 to materially modify two paragraphs and add one chart to a 60-page complaint. Defendants’ 9 assertions that they will need to “start over” are simply unpersuasive. The proposed amendments 10 would not “greatly alter[] the nature of the litigation,” nor would they “requir[e] defendants to . . . 11 undertake[], at a late hour, an entirely new course of defense.” Morongo Band of Mission Indians 12 v. Rose, 893 F.2d 1074, 1079 (9th Cir. 1990). Although Defendants may need to modify their 13 motions to dismiss, Plaintiffs’ amendments will not substantially reshape the parameters of the 14 defense. See Carranza v. City of San Pablo, No. 4:20-CV-08443-SBA, 2022 WL 110647, at *6 15 (N.D. Cal. Jan. 12, 2022) (finding that no undue prejudice existed where the proposed complaint 16 was “based largely on the same underlying facts as the prior pleadings”). Moreover, the parties 17 have not begun discovery, which weighs against a finding of prejudice. See Lockheed Martin 18 Corp. v. Network Sols., Inc., 194 F.3d 980, 986 (9th Cir. 1999) (“A need to reopen discovery and 19 therefore delay the proceedings supports a district court’s finding of prejudice from a delayed 20 motion to amend the complaint.”). “Prejudice is the touchstone of the inquiry under rule 15(a),” 21 and in this case Defendants have not demonstrated substantial prejudice. Eminence, 316 F.3d at 22 2 Defendants’ arguments regarding undue delay and prejudice bleed together. Undue delay may 23 occur when a party attempts to add a claim known to the party before it initiated an action or when a party unjustifiably waits to seek leave to amend after learning new information. See Jackson v. 24 Bank of Haw., 902 F.2d 1385, 1388 (9th Cir. 1990); AmerisourceBergen Corp. v. Dialysist W., Inc., 465 F.3d 946, 953 (9th Cir. 2006). Neither circumstance is present here. Plaintiffs informed 25 the Court that they would seek to amend their complaint less than one month after the Pankow complaint was unsealed. See Dkt. No. 178. This gap does not establish undue delay. Defendants 26 also appear to argue that Plaintiffs should have included allegations regarding Baker Hughes’ alleged control of C3 in an earlier complaint. Opp. at 6–7. Adding less than a paragraph of 27 additional factual material to a complaint is not equivalent to adding an entire claim, nor does it 1 1052; see DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987) (“The party 2 opposing amendment bears the burden of showing prejudice.”). 3 Defendants also argue that Plaintiffs’ proposed amendments are futile because they “lack 4 necessary foundation,” are “speculative” and do not remedy the Second Amended Class Action 5 Complaint’s defects. Leave to amend should be denied as futile when “no set of facts can be 6 proved under the amendment to the pleadings that would constitute a valid and sufficient claim or 7 defense.” Missouri ex rel. Koster v. Harris, 847 F.3d 646, 656 (9th Cir. 2017). Denial of leave to 8 amend based on futility is rare. See Netbula, LLC v. Distinct Corp., 212 F.R.D. 534, 539 (N.D. 9 Cal. 2003). In general, “courts will defer consideration of challenges to the merits of a proposed 10 amended pleading until after leave to amend is granted and the amended pleading is filed.” Id. 11 The parties dispute whether Plaintiffs’ proposed amendments remedy the pleading deficiencies 12 that the Court previously identified. See Dkt. No. 154. For example, the parties disagree as to 13 whether allegations that Defendant Siebel participated in a Board of Directors meeting and viewed 14 a particular PowerPoint presentation would remedy Plaintiffs’ scienter pleading deficiencies. Mot. 15 at 13; Opp. at 12. Defendants argue, in part, that Plaintiffs’ proposed amendment would be futile 16 because Plaintiffs “plead no supporting facts that the slide, or even the PowerPoint containing it, 17 were actually presented, much less that the board discussed the fragment they highlight.” Opp. at 18 12. This argument goes to the strength of the parties’ eventual evidence, not the futility of 19 amendment. See Allen v. Bayshore Mall, No. 12CV02368JSTJST, 2013 WL 6441504, at *5 (N.D. 20 Cal. Dec. 9, 2013) (holding that “[w]hether Defendants had knowledge of the letters or had a 21 reasonable belief that the Mall’s ceiling did not present a falling hazard” were “issues for the trier 22 of fact.”). Since “[t]he merits or facts of a controversy are not properly decided in a motion for 23 leave to amend and should instead be attacked by a motion to dismiss for failure to state a claim or 24 for summary judgment,” the Court will not deny leave to amend here on futility grounds. 25 LiveCareer Ltd. v. Su Jia Techs. Ltd., No. 14-CV-03336-JST, 2015 WL 4089800, at *3 (N.D. Cal. 26 July 2, 2015). 27 “[T]here exists a presumption under Rule 15(a) in favor of granting leave to amend,” 1 liberality,” Brown, 953 F.3d at 574. Defendants will have the opportunity to challenge the 2 || veracity and strength of the amended allegations, but the Court finds that Rule 15’s liberal 3 standard and the Rule 15 factors counsel in favor of allowing amendment under these 4 || circumstances. 5 || IV. CONCLUSION 6 The Court GRANTS Plaintiffs’ motion for leave to file a Third Amended Class Action 7 || Complaint, Dkt. No. 181. Defendants’ motions to dismiss Plaintiffs’ Second Amended Class 8 Action Complaint, Dkt. Nos. 167, 170, 171, are TERMINATED as MOOT in light of Plaintiffs’ 9 Third Amended Class Action Complaint. Defendants’ motions for joinder, Dkt. Nos. 187, 188, 10 are also TERMINATED AS MOOT. Plaintiffs are DIRECTED to file their Third Amended 11 Class Action Complaint as a separate docket entry by February 14, 2025. The parties are directed 12 || to meet and confer regarding a briefing schedule for any renewed motion to dismiss, and to file a 13 stipulation and proposed order setting out the agreed-upon briefing schedule and proposed hearing 14 || date by February 20, 2025.

a 16 IT IS SO ORDERED. 2 17 |) Dated: — 2/13/2025

HAYWOOD S. GILLIAM, JR.

19 United States District Judge 20 21 22 23 24 25 26 27 28