BARRACK, RODOS & BACINE
EDWARD M. GERGOSIAN (105679)
600 West Broadway, Suite 1700
San Diego, CA 92101
Telephone: 619/230-0800

BERGER & MONTAGUE, P.C.
SHERRIE R. SAVETT
GARY E. CANTOR
1622 Locust Street
Philadelphia, PA 19103

Telephone: 215/875-3000

Co-Lead Counsel for Plaintiffs

The court in Itron recognized that under the Private Securities Litigation Reform Act of 1995, plaintiff's allegations must still be taken as true, and the standards under Rule 12(b)(6) remain unchanged. Ex. A at 1.

Moreover, regarding the standard for pleading scienter, the Itron decision supports plaintiff's position, as in that case the court found that plaintiff's complaint adequately alleged a "strong inference" of defendants' knowing or reckless conduct:

[F]acts critical to a business's core operations or an important transaction generally are so apparent that their knowledge may be attributed to the company and its key officers. In this case, Plaintiff's allegations regarding the incompatibility of Itron's ERTs and its Fixed Network AMR are these types of facts. If it is true, as Plaintiff alleges, that Itron's core product is technologically incapable of meeting requirements that are central to Itron's continued survival as a business entity, it can be strongly inferred that key officers like Humphreys had knowledge of this fact.

This basis alone -- knowledge of technological incompatibility -- is sufficient to support a strong inference that Defendants knew or recklessly disregarded the false or misleading nature of their statements regarding Itron's Fixed Network AMR.

The Itron court found that this inference was strengthened by certain statements that such a product would not work in a marketing brochure dated two years before Itron's efforts to develop the product, and in Itron's 1997 Form 10-K.
 

DATED: January 30, 1998

Respectfully submitted, MILBERG WEISS BERSHAD HYNES & LERACH LLP WILLIAM S. LERACH HELEN J. HODGES ARTHUR C. LEAHY ______________________________      HELEN J. HODGES  600 West Broadway, Suite 1800 San Diego, CA 92101 Telephone: 619/231-1058 MILBERG WEISS BERSHAD HYNES & LERACH LLP ALISON M. TATTERSALL 222 Kearny Street, 10th Floor San Francisco, CA 94108 Telephone: 415/288-4545 BARRACK, RODOS & BACINE EDWARD M. GERGOSIAN 600 West Broadway, Suite 1700 San Diego, CA 92101 Telephone: 619/230-0800 BERGER & MONTAGUE, P.C. SHERRIE R. SAVETT GARY E. CANTOR 1622 Locust Street Philadelphia, PA 19103 Telephone: 215/875-3000 Co-Lead Counsel for Plaintiffs

FRITZ\JMI03842.MIS

I, the undersigned, declare:

1. That declarant is and was, at all times herein mentioned, a citizen of the United States and a resident of the County of San Francisco, over the age of 18 years, and not a party to or interested in the within action; that declarant's business address is 222 Kearny Street, 10th Floor, San Francisco, California 94108.

2. That on January 30, 1998, declarant served the PLAINTIFFS' SUPPLEMENTAL SUBMISSION OF AUTHORITY PURSUANT TO LOCAL RULE 7-3(e) By depositing a true copy thereof in a United States mailbox at San Francisco, California in a sealed envelope with postage thereon fully prepaid and addressed to the parties listed on the attached Service List and that this document was forwarded to the following designated Internet site at:

3. Declarant also caused to be personally served a true copy of the above on the parties denoted on the attached Service List.

4. That there is a regular communication by mail between the place of mailing and the places so addressed.

I declare under penalty of perjury that the foregoing is true and correct. Executed this 30th day of January, 1998, at San Francisco, California.
 

______________________________ JANETTE M. INGRAM

 

6 Feb 1998
Source: Milberg Weiss website