Cody Dixon v. The Honest Company, Inc. et al
Case Summary
On September 15, 2021, Cody Dixon (“Plaintiff”), individually and on behalf of all others similarly situated, represented by Charles Henry Linehan of Glancy Prongay and Murray LLP, filed a civil action against The Honest Company, Inc. (“Honest” or the “Company”), Nikolaos Vlahos (“Vlahos”), Kelly Kennedy (“Kennedy”), Jessica Warren (“Warren”), Katie Bayne (“Bayne”), and others, (collectively, the “Defendants”), seeking declaratory and compensatory relief, including interest thereon, as well as reasonable costs and expenses, for allegedly issuing materially false and misleading registration statements, in connection with the Company’s May 2021 initial public offering (“IPO” or the “Offering”). This case was filed in the U.S. District Court in the Central District of California.
In the complaint, the Plaintiff alleged that, “On May 6, 2021, the Company filed its prospectus on Form 424B4 with the SEC, which forms part of the Registration Statement. In the IPO, the Company sold 6,451,613 shares of common stock, plus an additional 3,871,050 shares of common stock pursuant to the underwriter’s option to purchase additional shares at a price of $16.00 per share. Certain existing stockholders also sold an aggregate of 19,355,387 shares of common stock in the IPO for $16.00 per share, including 15,229,543 by the executive officers and directors of Honest as a group (excluding the underwriters’ over-allotment option). The Company received proceeds of approximately $91.1 million from the Offering, net of underwriting discounts and commissions. The proceeds from the IPO were purportedly to be used for “general corporate purposes” including “operating expenses, working capital and capital expenditures for future growth, including marketing and direct-to-consumer advertising investments, innovation and adjacent product category expansion, international growth investment and organizational capabilities investments.” Honest further claimed that it “may also use a portion of the net proceeds . . . to acquire complementary businesses, products, services or technologies.”
The Plaintiff further alleged that, “The Registration Statement was materially false and misleading and omitted: (1) that, prior to the IPO, the Company’s results had been significantly impacted by a multimillion-dollar COVID-19 stock-up for products in the Diapers and Wipes category and Household and Wellness category; (2) that, at the time of the IPO, the Company was experiencing decelerating demand for such products; (3) that, as a result, the Company’s financial results would likely be adversely impacted; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.”
The Plaintiff lists out two claims for relief. The first claim is against all Defendants for alleged violation of Section 11 of the Securities Act. The second claim is against the individual Defendants for alleged violation of Section 15 of the Securities Act.
In his prayer for relief, the Plaintiff requested the Court to determine that this action is a proper class action and award compensatory damages in favor of Plaintiff and the other Class members against all Defendants, jointly and severally, for all damages sustained as a result of Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon, and reasonable costs and expenses incurred in this action, including counsel fees and expert fees and such other and further relief as the Court may deem just and proper.
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Case Details
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Case Number:
2:21-CV-07405
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Filing Date:
09/15/2021
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Case Status:
Pending - Other Pending
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Case Type:
Finance - Security/Commodity/Exchange
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Court:
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Courthouse:
Judge Details
Presiding Judge
Mark C. Scarsi
Referral Judge
Paul L. Abrams
Party Details
Plaintiff
Cody Dixon
Defendants
The Honest Company, Inc.
Nikolaos Vlahos
Kelly Kennedy
Jessica Warren
Katie Bayne
Scott Dahnke
Eric Liaw
Jeremy Liew
Avik Pramanik
Morgan Stanley & Co. LLC
J.P. Morgan Securities LLC
Jefferies LLC
BofA Securities, Inc.
Citigroup Global Markets, Inc.
William Blair & Company, L.L.C.
Guggenheim Securities, LLC
Telsey Advisory Group LLC
C.L. King & Associates, Inc.
Loop Capital Markets LLC
Attorney/Law Firm Details
Plaintiff Attorneys
Charles Henry Linehan
Attorney at Glancy Prongay and Murray LLP
1925 Century Park East Suite 2100
Los Angeles, CA 90067
Pavithra Rajesh
Attorney at Glancy Prongay and Murray LLP
1925 Century Park East Suite 2100
Los Angeles, CA 90067
Robert Vincent Prongay
Attorney at Glancy Prongay and Murray LLP
1925 Century Park East Suite 2100
Los Angeles, CA 90067
Defendant Attorneys
Koji F Fukumura
Attorney at Cooley LLP
4401 Eastgate Mall
San Diego, CA 92121-1909
Michael C Tu
Attorney at Cooley LLP
1333 2Nd Street Suite 400
Santa Monica, CA 90401-4100
Daniel H R Laguardia
Attorney at Shearman and Sterling LLP
535 Mission Street 25Th Floor
San Francisco, CA 94105
Court Documents
(#17) ORDER GRANTING JOINT STIPULATION REGARDING RESPONSES TO PLAINTIFF'S INITIAL COMPLAINT #12 by Judge Mark C. Scarsi 1. No defendants shall be required to move, answer or otherwise respond to the Initial Complaint filed in this action, or any other similar complaints that may be filed by other plaintiffs that are related to or consolidated with this case, prior to the Court's appointment of the Lead Plaintiff.2. Once the Court has appointed a Lead Plaintiff pursuant to the PSLRA, counsel for the Lead Plaintiff and all defendants that have appeared in the case shall confer and jointly propose to the Court within fourteen (14) days a briefing schedule for the filing of (i) an amended complaint (or the election to proceed on an existing operative complaint), and (ii) defendants' motions, answers or other responses to the amended or operative complaint. (lc) (Entered: 10/13/2021)
(#16) Certification and NOTICE of Interested Parties filed by Defendants BofA Securities, Inc., C.L. King and Associates, Inc., Citigroup Global Markets, Inc., Guggenheim Securities, LLC, J.P. Morgan Securities LLC, Jefferies LLC, Loop Capital Markets LLC, Morgan Stanley and Co. LLC, Penserra Securities LLC, Samuel A. Ramirez and Company, Inc., Telsey Advisory Group LLC, William Blair and Company, L.L.C., (Laguardia, Daniel) (Entered: 10/12/2021)
(#15) Notice of Appearance or Withdrawal of Counsel: for attorney Daniel H.R. Laguardia counsel for Defendants BofA Securities, Inc., C.L. King and Associates, Inc., Citigroup Global Markets, Inc., Guggenheim Securities, LLC, J.P. Morgan Securities LLC, Jefferies LLC, Loop Capital Markets LLC, Morgan Stanley and Co. LLC, Penserra Securities LLC, Samuel A. Ramirez and Company, Inc., Telsey Advisory Group LLC, William Blair and Company, L.L.C.. Adding Daniel H.R. Laguardia as counsel of record for Morgan Stanley & Co LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, Jeffries LLC, Citigroup Global Markets Inc., William Blair & Company, L.L.C., Guggenheim Securities, LLC, Telsey Advisory Group LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, Penserra Securities LLC, Samuel A. Ramirez & Company, Inc. for the reason indicated in the G-123 Notice. Filed by Defendants Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Jefferies LLC, BofA Securities, Inc., Citigroup Global Markets Inc., William Blair & Company, L.L.C., Guggenheim Securities, LLC, Telsey Advisory Group LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, Penserra Securities LLC, Samuel A. Ramirez & Company, Inc.. (Attorney Daniel H.R. Laguardia added to party BofA Securities, Inc.(pty:dft), Attorney Daniel H.R. Laguardia added to party C.L. King and Associates, Inc. (pty:dft), Attorney Daniel H.R. Laguardia added to party Citigroup Global Markets, Inc.(pty:dft), Attorney Daniel H.R. Laguardia added to party Guggenheim Securities, LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party J.P. Morgan Securities LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Jefferies LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Loop Capital Markets LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Morgan Stanley and Co. LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Penserra Securities LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Samuel A. Ramirez and Company, Inc. (pty:dft), Attorney Daniel H.R. Laguardia added to party Telsey Advisory Group LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party William Blair and Company, L.L.C.(pty:dft))(Laguardia, Daniel) (Entered: 10/12/2021)
(#14) NOTICE of Interested Parties filed by Defendants Katie Bayne, Scott Dahnke, Kelly Kennedy, Eric Liaw, Jeremy Liew, Avik Pramanik, The Honest Company, Inc., Nikolaos Vlahos, Jessica Warren, (Tu, Michael) (Entered: 10/08/2021)
(#13) CORPORATE DISCLOSURE STATEMENT filed by Defendant The Honest Company, Inc. (Tu, Michael) (Entered: 10/08/2021)
Proposed Order
Main Document
(#11) NOTICE of Appearance filed by attorney Koji F Fukumura on behalf of Defendants Katie Bayne, Scott Dahnke, Kelly Kennedy, Eric Liaw, Jeremy Liew, Avik Pramanik, The Honest Company, Inc., Nikolaos Vlahos, Jessica Warren (Attorney Koji F Fukumura added to party Katie Bayne (pty:dft), Attorney Koji F Fukumura added to party Scott Dahnke (pty:dft), Attorney Koji F Fukumura added to party Kelly Kennedy(pty:dft), Attorney Koji F Fukumura added to party Eric Liaw(pty:dft), Attorney Koji F Fukumura added to party Jeremy Liew(pty:dft), Attorney Koji F Fukumura added to party Avik Pramanik(pty:dft), Attorney Koji F Fukumura added to party The Honest Company, Inc. (pty:dft), Attorney Koji F Fukumura added to party Nikolaos Vlahos(pty:dft), Attorney Koji F Fukumura added to party Jessica Warren(pty:dft))(Fukumura, Koji) (Entered: 10/08/2021)
(#10) NOTICE of Appearance filed by attorney Michael C Tu on behalf of Defendants Katie Bayne, Scott Dahnke, Kelly Kennedy, Eric Liaw, Jeremy Liew, Avik Pramanik, The Honest Company, Inc., Nikolaos Vlahos, Jessica Warren (Attorney Michael C Tu added to party Katie Bayne (pty:dft), Attorney Michael C Tu added to party Scott Dahnke (pty:dft), Attorney Michael C Tu added to party Kelly Kennedy(pty:dft), Attorney Michael C Tu added to party Eric Liaw(pty:dft), Attorney Michael C Tu added to party Jeremy Liew(pty:dft), Attorney Michael C Tu added to party Avik Pramanik(pty:dft), Attorney Michael C Tu added to party The Honest Company, Inc. (pty:dft), Attorney Michael C Tu added to party Nikolaos Vlahos(pty:dft), Attorney Michael C Tu added to party Jessica Warren(pty:dft))(Tu, Michael) (Entered: 10/08/2021)
(#9) INITIAL STANDING ORDER FOR CIVIL CASES ASSIGNED TO JUDGE MARK C. SCARSI upon filing of the complaint by Judge Mark C. Scarsi. (smo) (Entered: 09/16/2021)
(#8) NOTICE OF DEFICIENCIES in Request to Issue Summons RE: Summons Request #3 . The following error(s) was found: The caption of the summons must match the caption of the complaint verbatim. If the caption is too large to fit in the space provided, enter the name of the first party and then write see attached.Next, attach a face page of the complaint or a second page addendum to the Summons. Summons is not directed to the defendant(s). The defendants name must appear in the To:section of the summons. The summons cannot be issued until this defect has been corrected. Please correct the defect and re-file your request. (et) (Entered: 09/16/2021)
(#7) Notice to Counsel Re Consent to Proceed Before a United States Magistrate Judge. (et) (Entered: 09/16/2021)
(#6) NOTICE TO PARTIES OF COURT-DIRECTED ADR PROGRAM filed. (et) (Entered: 09/16/2021)
(#5) NOTICE OF ASSIGNMENT to District Judge Mark C. Scarsi and Magistrate Judge Paul L. Abrams. (et) (Entered: 09/16/2021)
Docket Entries
- 10/13/2021
- View Court Documents
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Docket(#17) ORDER GRANTING JOINT STIPULATION REGARDING RESPONSES TO PLAINTIFF'S INITIAL COMPLAINT #12 by Judge Mark C. Scarsi 1. No defendants shall be required to move, answer or otherwise respond to the Initial Complaint filed in this action, or any other similar complaints that may be filed by other plaintiffs that are related to or consolidated with this case, prior to the Court's appointment of the Lead Plaintiff.2. Once the Court has appointed a Lead Plaintiff pursuant to the PSLRA, counsel for the Lead Plaintiff and all defendants that have appeared in the case shall confer and jointly propose to the Court within fourteen (14) days a briefing schedule for the filing of (i) an amended complaint (or the election to proceed on an existing operative complaint), and (ii) defendants' motions, answers or other responses to the amended or operative complaint. (lc) (Entered: 10/13/2021)
- 10/12/2021
- View Court Documents
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Docket(#16) Certification and NOTICE of Interested Parties filed by Defendants BofA Securities, Inc., C.L. King and Associates, Inc., Citigroup Global Markets, Inc., Guggenheim Securities, LLC, J.P. Morgan Securities LLC, Jefferies LLC, Loop Capital Markets LLC, Morgan Stanley and Co. LLC, Penserra Securities LLC, Samuel A. Ramirez and Company, Inc., Telsey Advisory Group LLC, William Blair and Company, L.L.C., (Laguardia, Daniel) (Entered: 10/12/2021)
- 10/12/2021
- View Court Documents
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Docket(#15) Notice of Appearance or Withdrawal of Counsel: for attorney Daniel H.R. Laguardia counsel for Defendants BofA Securities, Inc., C.L. King and Associates, Inc., Citigroup Global Markets, Inc., Guggenheim Securities, LLC, J.P. Morgan Securities LLC, Jefferies LLC, Loop Capital Markets LLC, Morgan Stanley and Co. LLC, Penserra Securities LLC, Samuel A. Ramirez and Company, Inc., Telsey Advisory Group LLC, William Blair and Company, L.L.C.. Adding Daniel H.R. Laguardia as counsel of record for Morgan Stanley & Co LLC, BofA Securities, Inc., J.P. Morgan Securities LLC, Jeffries LLC, Citigroup Global Markets Inc., William Blair & Company, L.L.C., Guggenheim Securities, LLC, Telsey Advisory Group LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, Penserra Securities LLC, Samuel A. Ramirez & Company, Inc. for the reason indicated in the G-123 Notice. Filed by Defendants Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Jefferies LLC, BofA Securities, Inc., Citigroup Global Markets Inc., William Blair & Company, L.L.C., Guggenheim Securities, LLC, Telsey Advisory Group LLC, C.L. King & Associates, Inc., Loop Capital Markets LLC, Penserra Securities LLC, Samuel A. Ramirez & Company, Inc.. (Attorney Daniel H.R. Laguardia added to party BofA Securities, Inc.(pty:dft), Attorney Daniel H.R. Laguardia added to party C.L. King and Associates, Inc. (pty:dft), Attorney Daniel H.R. Laguardia added to party Citigroup Global Markets, Inc.(pty:dft), Attorney Daniel H.R. Laguardia added to party Guggenheim Securities, LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party J.P. Morgan Securities LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Jefferies LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Loop Capital Markets LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Morgan Stanley and Co. LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Penserra Securities LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party Samuel A. Ramirez and Company, Inc. (pty:dft), Attorney Daniel H.R. Laguardia added to party Telsey Advisory Group LLC(pty:dft), Attorney Daniel H.R. Laguardia added to party William Blair and Company, L.L.C.(pty:dft))(Laguardia, Daniel) (Entered: 10/12/2021)
- 10/08/2021
- View Court Documents
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Docket(#14) NOTICE of Interested Parties filed by Defendants Katie Bayne, Scott Dahnke, Kelly Kennedy, Eric Liaw, Jeremy Liew, Avik Pramanik, The Honest Company, Inc., Nikolaos Vlahos, Jessica Warren, (Tu, Michael) (Entered: 10/08/2021)
- 10/08/2021
- View Court Documents
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Docket(#13) CORPORATE DISCLOSURE STATEMENT filed by Defendant The Honest Company, Inc. (Tu, Michael) (Entered: 10/08/2021)
- 10/08/2021
- View Court Documents
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Docket(#12) Joint STIPULATION for Extension of Time to File Regarding Responses to Plaintiff's Initial Complaint as to Complaint (Attorney Civil Case Opening) #1 filed by Defendants Katie Bayne, Scott Dahnke, Kelly Kennedy, Eric Liaw, Jeremy Liew, Avik Pramanik, The Honest Company, Inc., Nikolaos Vlahos, Jessica Warren. (Attachments: #1 Proposed Order)(Tu, Michael) (Entered: 10/08/2021)
- 10/08/2021
- View Court Documents
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Docket(#11) NOTICE of Appearance filed by attorney Koji F Fukumura on behalf of Defendants Katie Bayne, Scott Dahnke, Kelly Kennedy, Eric Liaw, Jeremy Liew, Avik Pramanik, The Honest Company, Inc., Nikolaos Vlahos, Jessica Warren (Attorney Koji F Fukumura added to party Katie Bayne (pty:dft), Attorney Koji F Fukumura added to party Scott Dahnke (pty:dft), Attorney Koji F Fukumura added to party Kelly Kennedy(pty:dft), Attorney Koji F Fukumura added to party Eric Liaw(pty:dft), Attorney Koji F Fukumura added to party Jeremy Liew(pty:dft), Attorney Koji F Fukumura added to party Avik Pramanik(pty:dft), Attorney Koji F Fukumura added to party The Honest Company, Inc. (pty:dft), Attorney Koji F Fukumura added to party Nikolaos Vlahos(pty:dft), Attorney Koji F Fukumura added to party Jessica Warren(pty:dft))(Fukumura, Koji) (Entered: 10/08/2021)
- 10/08/2021
- View Court Documents
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Docket(#10) NOTICE of Appearance filed by attorney Michael C Tu on behalf of Defendants Katie Bayne, Scott Dahnke, Kelly Kennedy, Eric Liaw, Jeremy Liew, Avik Pramanik, The Honest Company, Inc., Nikolaos Vlahos, Jessica Warren (Attorney Michael C Tu added to party Katie Bayne (pty:dft), Attorney Michael C Tu added to party Scott Dahnke (pty:dft), Attorney Michael C Tu added to party Kelly Kennedy(pty:dft), Attorney Michael C Tu added to party Eric Liaw(pty:dft), Attorney Michael C Tu added to party Jeremy Liew(pty:dft), Attorney Michael C Tu added to party Avik Pramanik(pty:dft), Attorney Michael C Tu added to party The Honest Company, Inc. (pty:dft), Attorney Michael C Tu added to party Nikolaos Vlahos(pty:dft), Attorney Michael C Tu added to party Jessica Warren(pty:dft))(Tu, Michael) (Entered: 10/08/2021)
- 09/16/2021
- View Court Documents
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Docket(#9) INITIAL STANDING ORDER FOR CIVIL CASES ASSIGNED TO JUDGE MARK C. SCARSI upon filing of the complaint by Judge Mark C. Scarsi. (smo) (Entered: 09/16/2021)
- 09/16/2021
- View Court Documents
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Docket(#8) NOTICE OF DEFICIENCIES in Request to Issue Summons RE: Summons Request #3 . The following error(s) was found: The caption of the summons must match the caption of the complaint verbatim. If the caption is too large to fit in the space provided, enter the name of the first party and then write see attached.Next, attach a face page of the complaint or a second page addendum to the Summons. Summons is not directed to the defendant(s). The defendants name must appear in the To:section of the summons. The summons cannot be issued until this defect has been corrected. Please correct the defect and re-file your request. (et) (Entered: 09/16/2021)
- 09/16/2021
- View Court Documents
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Docket(#7) Notice to Counsel Re Consent to Proceed Before a United States Magistrate Judge. (et) (Entered: 09/16/2021)
- 09/16/2021
- View Court Documents
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Docket(#6) NOTICE TO PARTIES OF COURT-DIRECTED ADR PROGRAM filed. (et) (Entered: 09/16/2021)
- 09/16/2021
- View Court Documents
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Docket(#5) NOTICE OF ASSIGNMENT to District Judge Mark C. Scarsi and Magistrate Judge Paul L. Abrams. (et) (Entered: 09/16/2021)
- 09/15/2021
- View Court Documents
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Docket(#4) NOTICE of Interested Parties filed by Plaintiff Cody Dixon, (Linehan, Charles) (Entered: 09/15/2021)
- 09/15/2021
- View Court Documents
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Docket(#3) Request for Clerk to Issue Summons on Complaint (Attorney Civil Case Opening) #1 filed by Plaintiff Cody Dixon. (Linehan, Charles) (Entered: 09/15/2021)
- 09/15/2021
- View Court Documents
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Docket(#2) CIVIL COVER SHEET filed by Plaintiff Cody Dixon. (Linehan, Charles) (Entered: 09/15/2021)
- 09/15/2021
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Docket(#1) COMPLAINT Receipt No: ACACDC-31990991 - Fee: $402, filed by Plaintiff Cody Dixon. (Attorney Charles Henry Linehan added to party Cody Dixon(pty:pla))(Linehan, Charles) (Entered: 09/15/2021)
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