The original complaint charges Micron and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Micron manufactures and markets semiconductor devices worldwide.
Specifically, the complaint alleges that at the start of the Class Period, Micron and its employees (along with others in its industry) were engaged in a scheme to manipulate the price of dynamic random access memory, a type of computer memory semiconductor chip, commonly known as DRAM. Specifically, the complaint alleges that during the Class Period, defendants falsified the Company's public statements and financial reporting by concealing the following material adverse facts from the investing public: (a) that Micron and its co-conspirators had entered into and engaged in a combination and conspiracy in the United States and elsewhere to suppress and eliminate competition by fixing the prices of DRAM to be sold to certain original equipment manufacturers of personal computers and servers; (b) that Micron's publicly reported sales and earnings had been improperly inflated due to illegal price-fixing activities during the Class Period; and (c) that as a result of defendants' participation in the illegal price-fixing activities, Micron's sales and earnings reports and forward-looking price forecasts issued during the Class Period were false and misleading.
The complaint further alleges that as a result of defendants' false and misleading Class Period statements, the Company's shares traded at inflated prices enabling the Company to issue more than $632 million worth of debt during 2003, sell over $480 million worth of warrants and complete numerous stock-for-stock acquisitions using the Company's inflated shares as acquisition currency. Insiders also sold approximately $4.5 million worth of their own personally held Micron stock at inflated prices during the Class Period.
As summarized by the Company’s FORM 10-K for the fiscal year ended August 31, 2006, the five similar lawsuits have been consolidated and a consolidated amended class action complaint was filed on July 24, 2006. The complaint generally alleges violations of federal securities laws based on, among other things, claimed misstatements or omissions regarding alleged illegal price-fixing conduct. The complaint seeks unspecified damages, interest, attorneys’ fees, costs, and expenses
According to a press release dated May 31, 2007, the U.S. District Court for the District of Idaho denied Micron Technologies Ins.'s motion for reconsideration of its decision to deny Micron's motion to dismiss a securities fraud class action against it, finding that the plaintiffs adequately pleaded causation as required by Dura. Shareholders sued Micron alleging the company made material misrepresentations that caused its stock purchase price to be artificially inflated and lose value in light of the truth. Micron moved to dismiss, and the district court denied the motion. Micron moved for reconsideration, contending that the shareholders failed to allege loss causation.
On December 19, 2007 the judge entered an order certifying the class and appointing class representatives. After discovery, defendants filed a motion for summary judgment on April 14, 2008. On July 18, 2008 parties were ordered to participate in mediation to resolve their dispute.
On February 23, 2009 the judge denied the defendants' motion for summary judgment, which was filed 10 months prior. Settlement mediation soon proceeded, and on October 4, 2010, a Stipulation of Settlement was filed. The proposed settlement amount is in the amount of $42 million. The settlement was preliminarily approved on November 18, 2010. The final settlement hearing was set for February 17, 2011.
On April 28, 2011, Judge William F. Downes granted the Plaintiffs' motion for final approval of the class action settlement and motion for attorney fees. The Orloff Trust's request for attorney fees from the common fund is denied.
On May 25, 2011, objector Orloff Family Trust UAD filed a Notice of Appeal to the United States Court of Appeals for the Ninth Circuit from the Memorandum Order Approving Class Action Settlement and Granting Motion for Attorney Fees entered in this action on April 28, 2011 (Doc 188).