Saetes

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

PETER SAETES, et al., Case No. 19-cv-06235-VC

Plaintiffs,

ORDER DENYING MOTIONS FOR

v. SANCTIONS; GRANTING MOTION

TO STRIKE

EXPHAND, INC., et al., Re: Dkt. Nos. 123, 124, 125 Defendants.

Peter Saetes and other expHand shareholders sued expHand as well as thirteen people who were allegedly involved in running the company. The plaintiffs claimed that expHand made knowingly false statements to solicit investments. The defendants served the plaintiffs with a proposed Rule 11 motion for sanctions, and the plaintiffs voluntarily dismissed the case within Rule 11’s safe harbor period. Despite that voluntary dismissal, the defendants subsequently moved for sanctions under three authorities: (1) the Private Securities Litigation Reform Act (PSLRA) and Rule 11; (2) the Court’s inherent authority; and (3) 28 U.S.C. § 1927. The motions are denied. 1. Sanctions are impermissible under the PSLRA and Rule 11 because the plaintiffs voluntarily dismissed the case. In a private action arising under the PSLRA, district courts must enter findings on whether a party violated Rule 11(b) “upon final…