Colaprico

ORDER DENYING DEFENDANTS’ MOTION TO DISMISS PLAINTIFFS’ STATE LAW CLAIM FOR NEGLIGENT MISREPRESENTATION AND DENYING DEFENDANTS’ MOTION TO STRIKE PARAGRAPHS 29 AND 38 OF PLAINTIFFS’ FIRST AMENDED COMPLAINT

Defendants move to dismiss count III and to strike paragraphs 29 and 38 of the first amended complaint. Because count III of the complaint states a valid claim for negligent misrepresentation under California law, defendants’ motion to dismiss this claim is DENIED. Because paragraphs 29 and 38 of the complaint are not clearly irrelevant to a determination of plaintiffs’ claims, defendants’ motion to strike those paragraphs is DENIED.

BACKGROUND

Although this class action has not yet been certified, plaintiffs’ proposed class consists of those investors who purchased Sun Microsystems Inc. stock between August 9, 1990 and October 23, 1990. The complaint states that defendants issued, or caused to be issued, several misleading positive statements and forecasts, upon which plaintiffs relied in making their investments. Plaintiffs further allege that they suffered losses when the company’s actual earnings fell short of the projected earnings, and the value of the stock…