Class action complaint — Tran v. Beyond Meat, Inc. (C.D. Cal.)

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U.S. District Court for the Central District of California · No. 2:20-cv-00963-MWF-AFM · Doc. 1 · 2020-01-30 · Docket on CourtListener

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CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE FEDERAL SECURITIES LAWS 
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POMERANTZ LLP 
Jennifer Pafiti (SBN 282790) 
1100 Glendon Avenue, 15th Floor 
Los Angeles, California 90024 
Telephone: (310) 405-7190  
Email: jpafiti@pomlaw.com 
 
Attorney for Plaintiff 
 
[Additional Counsel on Signature Page] 
 
 
UNITED STATES DISTRICT COURT 
CENTRAL DISTRICT OF CALIFORNIA 
 
LARRY TRAN, Individually and 
On Behalf of All Others Similarly 
Situated, 
 
Plaintiff, 
 
v. 
 
BEYOND MEAT, INC., ETHAN 
BROWN, and MARK J. NELSON, 
 
Defendants. 
 
Case No. 
 
CLASS ACTION 
 
COMPLAINT FOR VIOLATIONS OF 
THE FEDERAL SECURITIES LAWS 
 
DEMAND FOR JURY TRIAL 
 
 
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Plaintiff Larry Tran (“Plaintiff”), individually and on behalf of all other 
persons similarly situated, by Plaintiff’s undersigned attorneys, for Plaintiff’s 
complaint against Defendants, alleges the following based upon personal knowledge 
as to Plaintiff and Plaintiff’s own acts, and information and belief as to all other 
matters, based upon, inter alia, the investigation conducted by and through 
Plaintiff’s attorneys, which included, among other things, a review of the 
Defendants’ public documents, conference calls and announcements made by 
Defendants, United States Securities and Exchange Commission (“SEC”) filings, 
wire and press releases published by and regarding Beyond Meat, Inc. (“Beyond 
Meat” or the “Company”), analysts’ reports and advisories about the Company, and 
information readily obtainable on the Internet.  Plaintiff believes that substantial 
evidentiary support will exist for the allegations set forth herein after a reasonable 
opportunity for discovery. 
NATURE OF THE ACTION 
1. 
This is a federal securities class action on behalf of a class consisting 
of all persons other than Defendants who purchased or otherwise acquired Beyond 
Meat securities between May 2, 2019 and January 27, 2020, both dates inclusive (the 
“Class Period”), seeking to recover damages caused by Defendants’ violations of the 
federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the 
Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated 
thereunder, against the Company and certain of its top officials. 
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2. 
Beyond Meat is a food company that provides plant-based meats.  It 
offers its products in the meat platforms of beef, pork, and poultry.  The Company 
sells its products to various customers in the retail and foodservice channels through 
brokers and distributors in the U.S. and internationally. 
3. 
Don Lee Farms (“Don Lee”) is a maker of plant-based and meat 
proteins.  In 2014, Beyond Meat entered into an exclusive supply agreement with 
Don Lee to produce all of Beyond Meat’s products, including the development and 
launch of the Company’s popular Beyond Burger.   
4. 
In early 2017, following the launch of the Beyond Burger, Beyond Meat 
terminated the Supply Agreement and transferred its production from Don Lee to 
other food manufacturers.   
5. 
On May 25, 2017, Don Lee filed a complaint against Beyond Meat in 
the Superior Court of the State of California for the County of Los Angeles asserting 
claims for, inter alia, breach of contract, misappropriation of trade secrets, and unfair 
competition, seeking monetary damages and declaratory and injunctive relief. 
6. 
Don Lee’s initial lawsuit spawned other related legal proceedings, 
including related claims by Don Lee against one of Beyond Meat’s new 
manufacturing partners, ProPortion Foods, LLC (“Proportion”), and cross-
complaints by both Beyond Meat and ProPortion against Don Lee (collectively with 
Don Lee’s initial lawsuit, the “Don Lee Litigation”). 
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7. 
As the litigation progressed, Don Lee further alleged that Beyond Meat 
had employed lax food safety practices during the two companies’ partnership, 
specifically alleging, inter alia, that Don Lee found plastics, cardboard and a metal 
nozzle in ingredients that Beyond Meat supplied and that a Beyond Meat truck had 
arrived at a Don Lee processing facility with a load contaminated with an 
unidentified white powder.  Don Lee alleged that Beyond Meat had provided an 
altered copy of a food-safety audit of its manufacturing facilities, and on that basis 
added fraud claims to its suit against Beyond Meat in March 2019.   
8. 
Beyond Meat has consistently denied the merits of Don Lee’s claims. 
9. 
Throughout the Class Period, Defendants made materially false and 
misleading statements regarding the Company’s business, operational and 
compliance policies.  Specifically, Defendants made false and/or misleading 
statements and/or failed to disclose that: (i) Beyond Meat’s termination of its supply 
agreement with Don Lee constituted a breach of that agreement, thus exposing the 
Company to foreseeable legal liability and reputational harm; (ii) Beyond Meat and 
certain of its employees had doctored and omitted material information from a food 
safety consultant’s report, which the Company represented as accurate to Don Lee; 
and (iii) as a result, the Company’s public statements were materially false and 
misleading at all relevant times. 
10. 
On January 27, 2020, post-market, Don Lee issued a press release 
entitled “Judge Rules Don Lee Farms Likely to Obtain a Judgment.  Beyond Meat’s 
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CFO and Others Named Individually for Fraud.”  The press release stated, in part, 
that “[a] judge has ruled Don Lee Farms proved the probable validity of its claim 
that Beyond Meat breached its manufacturing agreement with Don Lee Farms” and 
that “[i]n a separate motion before a different Judge, the Court granted Don Lee 
Farms’ request to name Beyond Meat Chief Financial Officer Mark Nelson, Senior 
Quality Assurance Manager Jessica Quetsch and Director of Operations Anthony 
Miller in its fraud claims which allege they intentionally doctored and omitted 
material information from a food safety consultant’s report, and then delivered that 
doctored report to Don Lee Farms and affirmatively represented that it was the 
complete opinion of the consultant.” 
11. 
On this news, Beyond Meat’s stock price fell $4.63 per share, or 3.71%, 
to close at $120.12 per share on January 28, 2020. 
12. 
As a result of Defendants’ wrongful acts and omissions, and the 
precipitous decline in the market value of the Company’s securities, Plaintiff and 
other Class members have suffered significant losses and damages. 
JURISDICTION AND VENUE 
13. 
The claims asserted herein arise under and pursuant to Sections 10(b) 
and 20(a) of the Exchange Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 
promulgated thereunder by the SEC (17 C.F.R. § 240.10b-5).  
14. 
This Court has jurisdiction over the subject matter of this action 
pursuant to 28 U.S.C. § 1331 and Section 27 of the Exchange Act.  
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15. 
Venue is proper in this Judicial District pursuant to Section 27 of the 
Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1391(b).  Beyond Meat is 
headquartered in this Judicial District, Defendants conduct business in this Judicial 
District, and a significant portion of Defendants’ activities took place within this 
Judicial District. 
16. 
In connection with the acts alleged in this complaint, Defendants, 
directly or indirectly, used the means and instrumentalities of interstate commerce, 
including, but not limited to, the mails, interstate telephone communications, and the 
facilities of the national securities markets.  
PARTIES 
17. 
Plaintiff, as set forth in the attached Certification, acquired Beyond 
Meat securities at artificially inflated prices during the Class Period and was 
damaged upon the revelation of the alleged corrective disclosures.  
18. 
Defendant Beyond Meat is a Delaware corporation, with principal 
executive offices located at 119 Standard Street, El Segundo, CA 90245.  Beyond 
Meat’s common stock trades in an efficient market on the Nasdaq Stock Market 
(“NASDAQ”) under the ticker symbol “BYND.” 
19. 
Defendant Ethan Brown (“Brown”) has served as Beyond Meat’s 
President, Chief Executive Officer, and a Director at all relevant times. 
20. 
Defendant Mark J. Nelson (“Nelson”) has served as Beyond Meat’s 
Chief Financial Officer, Treasurer, and Secretary at all relevant times. 
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21. 
Defendants Brown and Nelson are sometimes referred to herein as the 
“Individual Defendants.” 
22. 
The Individual Defendants possessed the power and authority to control 
the contents of Beyond Meat’s SEC filings, press releases, and other market 
communications.  The Individual Defendants were provided with copies of Beyond 
Meat’s SEC filings and press releases alleged herein to be misleading prior to or 
shortly after their issuance and had the ability and opportunity to prevent their 
issuance or to cause them to be corrected.  Because of their positions with Beyond 
Meat, and their access to material information available to them but not to the public, 
the Individual Defendants knew that the adverse facts specified herein had not been 
disclosed to and were being concealed from the public, and that the positive 
representations being made were then materially false and misleading.  The 
Individual Defendants are liable for the false statements and omissions pleaded 
herein. 
SUBSTANTIVE ALLEGATIONS 
Background 
23. 
Beyond Meat is a food company that provides plant-based meats.  It 
offers its products in the meat platforms of beef, pork, and poultry.  The Company 
sells its products to various customers in the retail and foodservice channels through 
brokers and distributors in the U.S. and internationally.  Formerly known as Savage 
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River Inc., the Company was founded in 2009 and changed its name to Beyond Meat, 
Inc. in September 2018.  
24. 
Don Lee is a maker of plant-based and meat proteins.  In 2014, Beyond 
Meat entered into an exclusive supply agreement with Don Lee to produce all of 
Beyond Meat’s products, including the development and launch of the Company’s 
popular Beyond Burger. 
25. 
In early 2017, following the launch of the Beyond Burger, Beyond Meat 
terminated its exclusive supply agreement with Don Lee and moved its production 
to other companies, including ProPortion.  
26. 
In May 2017, Don Lee filed a complaint against the Company in the 
Superior Court of the State of California for the County of Los Angeles asserting 
claims for, inter alia, breach of contract, misappropriation of trade secrets, and unfair 
competition, seeking monetary damages and declaratory and injunctive relief. 
27. 
Don Lee’s initial lawsuit spawned other related legal proceedings.  In 
July 2017, Beyond Meat filed a cross-complaint against Don Lee, alleging that Don 
Lee had breached the Supply Agreement by failing to provide saleable product, 
engaged in unfair competition, and unlawfully converted Beyond Meat property. 
28. 
In October 2018, Don Lee filed an amended complaint adding 
ProPortion, one of Beyond Meat’s new contract manufacturers, as a defendant, 
asserting, inter alia, claims arising from ProPortion’s alleged use of Don Lee’s trade 
secrets and for replacing Don Lee as Beyond Meat’s co-manufacturer.  ProPortion 
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then filed a cross-complaint against Beyond Meat, asserting claims of total and 
partial equitable indemnity, contribution and repayment. 
29. 
On March 2019, Don Lee filed a second amended complaint, adding 
claims of fraud and negligent misrepresentation against Beyond Meat.  Don Lee 
specifically alleged, inter alia, that Don Lee found plastics, cardboard and a metal 
nozzle in ingredients that Beyond Meat supplied and that a Beyond Meat truck had 
arrived at a Don Lee processing facility with a load contaminated with an 
unidentified white powder.  Don Lee further alleged that Beyond Meat had provided 
an altered copy of a food-safety audit of its manufacturing facilities. 
30. 
In May 2019, with the Don Lee Litigation still ongoing, Beyond Meat 
conducted its initial public offering (“IPO”), issuing 11,068,750 shares of common 
stock priced at $25.00 per share. 
Materially False and Misleading Statements Issued During the Class Period 
31. 
The Class Period begins on May 2, 2019, when Beyond Meat’s 
securities began trading on the NASDAQ following the Company’s IPO.  In the 
registration statement and prospectus issued in connection with the IPO (the 
“Offering Documents”), with respect to the Don Lee Litigation, Beyond Meat stated, 
in relevant part: 
[O]n May 25, 2017, following our termination of our supply agreement 
with Don Lee Farms, a co-manufacturer, Don Lee Farms filed a lawsuit 
against us in California state court claiming that we wrongfully 
terminated the parties’ contract and that we misappropriated their trade 
secrets principally by sharing with subsequent co-manufacturers the 
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processes for manufacturing our products—processes which they claim 
to have developed. On July 27, 2017 we filed a cross-complaint, 
alleging that Don Lee Farms (1) breached the supply agreement, 
including by failing to provide saleable product, as certain of our 
products manufactured by Don Lee Farms were contaminated with 
salmonella and other foreign objects, and that Don Lee Farms did not 
take appropriate actions to address these issues; (2) engaged in unfair 
competition in violation of California’s Unfair Competition Law; and 
(3) unlawfully converted certain Beyond Meat property, including 
certain pieces of equipment. In October 2018, Don Lee Farms filed an 
amended complaint that added ProPortion Foods, LLC (one of Beyond 
Meat’s current contract manufacturers) as a defendant, principally for 
claims arising from ProPortion’s alleged use of Don Lee Farms’ alleged 
trade secrets, and for replacing Don Lee Farms as Beyond Meat’s co-
manufacturer. ProPortion filed an answer denying all of Don Lee 
Farms’ claims and a cross-complaint against Beyond Meat asserting 
claims of total and partial equitable indemnity, contribution, and 
repayment. On March 11, 2019, Don Lee Farms filed a second 
amended complaint to add claims of fraud and negligent 
misrepresentation against us. Trial is currently set for May 18, 2020. 
 
Don Lee Farms is seeking from us and ProPortion unspecified 
compensatory and punitive damages, declaratory and injunctive relief, 
including the prohibition of our use or disclosure of the alleged trade 
secrets, and attorneys’ fees and costs. We are seeking from Don Lee 
Farms monetary damages, restitution of monies paid to Don Lee Farms, 
and attorneys’ fees and costs. ProPortion is seeking indemnity, 
contribution, or repayment from us of any or all damages that 
ProPortion may be found liable to Don Lee Farms, and attorney’s fees 
and costs. We believe we were justified in terminating the supply 
agreement with Don Lee Farms, that we did not misappropriate their 
alleged trade secrets, that we are not liable for the fraud or negligent 
misrepresentation alleged in the proposed second amended 
complaint, that Don Lee Farms is liable for the conduct alleged in 
our cross-complaint, and that we are not liable to ProPortion for any 
indemnity, contribution, or repayment, including for any damages or 
attorney’s fees and costs. 
 
We intend to vigorously defend ourselves against the claims and 
prosecute our own. However, we cannot assure you that Don Lee 
Farms or ProPortion will not prevail in all or some of their claims 
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against us, or that we will prevail in some or all of our claims against 
Don Lee Farms. For example, if Don Lee Farms succeeds in the lawsuit, 
we could be required to pay damages, including but not limited to 
contract damages reasonably calculated at what we would have paid 
Don Lee Farms to produce our products through 2019, the end of the 
contract term, and Don Lee Farms could also claim some ownership in 
the intellectual property associated with the production of certain of our 
products or in the products themselves, and thus claim a stake in the 
value we have derived and will derive from the use of that intellectual 
property after we terminated our supply agreement with Don Lee 
Farms. As another example, we also could be required to pay attorney’s 
fees and costs incurred by Don Lee Farms or ProPortion. 
 
(Emphases added.)  The statements in the Offering Documents cautioning investors 
that the Company “cannot assure” its investors as to the outcome of the Don Lee 
Litigation, that the Company “could be required to pay damages,” and that Don Lee 
“could also claim some ownership in the intellectual property associated with the 
production of certain of our products or in the products themselves” (emphases 
added) were clearly generic disclaimers that were not tailored to Beyond Meat’s 
actual known risks with respect to the Don Lee Litigation, given the Company’s 
knowledge of its own conduct with respect to the Supply Agreement and its 
collaboration with Don Lee. 
32. 
On June 12, 2019, Beyond Meats filed its quarterly report on Form 
10-Q with the SEC for the quarter ended March 30, 2019 (the “Q1 2019 10-Q”).  
With respect to the Don Lee Litigation, the Q1 2019 10-Q echoed the statements in 
the Company’s Offering Documents (see ¶ 31): 
On May 25, 2017, Don Lee Farms, a division of Goodman Food 
Products, Inc., filed a complaint against us in the Superior Court of the 
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State of California for the County of Los Angeles asserting claims for 
breach of contract, misappropriation of trade secrets, unfair competition 
under the California Business and Professions Code, money owed and 
due, declaratory relief and injunctive relief, each arising out of our 
decision to terminate an exclusive supply agreement between us and 
Don Lee Farms. We deny all of these claims and filed counterclaims 
on July 27, 2017, alleging breach of contract, unfair competition under 
the California Business and Professions Code and conversion. In 
October 2018, Don Lee Farms filed an amended complaint that added 
ProPortion Foods, LLC (one of Beyond Meat’s current contract 
manufacturers) as a defendant, principally for claims arising from 
ProPortion’s alleged use of Don Lee Farms’ alleged trade secrets, and 
for replacing Don Lee Farms as Beyond Meat’s co-manufacturer. 
ProPortion filed an answer denying all of Don Lee Farms’ claims and 
a cross-complaint against Beyond Meat asserting claims of total and 
partial equitable indemnity, contribution, and repayment. On March 11, 
2019, Don Lee Farms filed a second amended complaint to add claims 
of fraud and negligent misrepresentation against us. On May 30, 2019, 
the judge denied our motion to dismiss the fraud and negligent 
misrepresentation claims, allowing the claims to proceed. Trial is 
currently set for May 18, 2020. 
 
Don Lee Farms is seeking from Beyond Meat and ProPortion 
unspecified compensatory and punitive damages, declaratory and 
injunctive relief, including the prohibition of Beyond Meat’s use or 
disclosure of the alleged trade secrets, and attorneys’ fees and costs. We 
are seeking from Don Lee Farms monetary damages, restitution of 
monies paid to Don Lee Farms, and attorney’s fees and costs. 
ProPortion is seeking indemnity, contribution, or repayment from us of 
any or all damages that ProPortion may be found liable to Don Lee 
Farms, and attorney’s fees and costs. 
 
We believe we were justified in terminating the supply agreement with 
Don Lee Farms, that we did not misappropriate their alleged trade 
secrets, that we are not liable for the fraud or negligent 
misrepresentation alleged in the proposed second amended 
complaint, that Don Lee Farms is liable for the conduct alleged in 
our cross-complaint, and that we are not liable to ProPortion for any 
indemnity, contribution, or repayment, including for any damages or 
attorney’s fees and costs. We are currently in the process of litigating 
this matter and intend to vigorously defend ourselves against the 
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claims. We cannot assure you that Don Lee Farms or ProPortion will 
not prevail in all or some of their claims against us, or that we will 
prevail in some or all of our claims against Don Lee Farms. For 
example, if Don Lee Farms succeeds in the lawsuit, we could be 
required to pay damages, including but not limited to contract damages 
reasonably calculated at what we would have paid Don Lee Farms to 
produce our products through 2019, the end of the contract term, and 
Don Lee Farms could also claim some ownership in the intellectual 
property associated with the production of certain of our products or in 
the products themselves, and thus claim a stake in the value we have 
derived and will derive from the use of that intellectual property after 
we terminated our supply agreement with Don Lee Farms. Based on 
our current knowledge, we have determined that the amount of any 
material loss or range of any losses that is reasonably possible to result 
from this lawsuit is not estimable. 
 
(Emphases added.)  The Q1 2019 10-Q likewise reiterated the generic disclaimers 
that were not tailored to Beyond Meat’s actual known risks with respect to the Don 
Lee Litigation, given the Company’s knowledge of its own conduct with respect to 
the Supply Agreement and its collaboration with Don Lee. 
33. 
Appended as exhibits to the Q1 2019 10-Q were certifications pursuant 
to the Sarbanes-Oxley Act of 2002 (“SOX”) by the Individual Defendants, attesting 
that the Q1 2019 10-Q “fully complies with the requirements of Section 13(a) or 
Section 15(d), as applicable, of the Securities Exchange Act of 1934” and that “the 
information contained in the [Q1 2019 10-Q] fairly presents, in all material respects, 
the financial condition and results of operations of the Company for the periods 
presented therein.” 
34. 
On July 29, 2019, Beyond Meats filed its quarterly report on Form 10-Q 
with the SEC for the quarter ended June 29, 2019 (the “Q2 2019 10-Q”).  With 
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respect to the Don Lee Litigation, the Q2 2019 10-Q echoed the statements in the 
Company’s Offering Documents and in the Q1 2019 10-Q (see ¶¶ 31-32): 
On May 25, 2017, Don Lee Farms, a division of Goodman Food 
Products, Inc., filed a complaint against us in the Superior Court of the 
State of California for the County of Los Angeles asserting claims for 
breach of contract, misappropriation of trade secrets, unfair competition 
under the California Business and Professions Code, money owed and 
due, declaratory relief and injunctive relief, each arising out of our 
decision to terminate an exclusive supply agreement between us and 
Don Lee Farms. We deny all of these claims and filed counterclaims 
on July 27, 2017, alleging breach of contract, unfair competition under 
the California Business and Professions Code and conversion. In 
October 2018, Don Lee Farms filed an amended complaint that added 
ProPortion Foods, LLC (one of Beyond Meat’s current contract 
manufacturers) as a defendant, principally for claims arising from 
ProPortion’s alleged use of Don Lee Farms’ alleged trade secrets, and 
for replacing Don Lee Farms as Beyond Meat’s co-manufacturer. 
ProPortion filed an answer denying all of Don Lee Farms’ claims and 
a cross-complaint against Beyond Meat asserting claims of total and 
partial equitable indemnity, contribution, and repayment. On March 11, 
2019, Don Lee Farms filed a second amended complaint to add claims 
of fraud and negligent misrepresentation against us. On May 30, 2019, 
the judge denied our motion to dismiss the fraud and negligent 
misrepresentation claims, allowing the claims to proceed. On June 19, 
2019, we filed an answer denying Don Lee Farms' claims. Trial is 
currently set for May 18, 2020. 
 
Don Lee Farms is seeking from Beyond Meat and ProPortion 
unspecified compensatory and punitive damages, declaratory and 
injunctive relief, including the prohibition of Beyond Meat’s use or 
disclosure of the alleged trade secrets, and attorneys’ fees and costs. We 
are seeking from Don Lee Farms monetary damages, restitution of 
monies paid to Don Lee Farms, and attorney’s fees and costs. 
ProPortion is seeking indemnity, contribution, or repayment from us of 
any or all damages that ProPortion may be found liable to Don Lee 
Farms, and attorney’s fees and costs. 
 
We believe we were justified in terminating the supply agreement with 
Don Lee Farms, that we did not misappropriate their alleged trade 
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secrets, that we are not liable for the fraud or negligent 
misrepresentation alleged in the proposed second amended 
complaint, that Don Lee Farms is liable for the conduct alleged in 
our cross-complaint, and that we are not liable to ProPortion for any 
indemnity, contribution, or repayment, including for any damages or 
attorney’s fees and costs. We are currently in the process of litigating 
this matter and intend to vigorously defend ourselves against the 
claims. We cannot assure you that Don Lee Farms or ProPortion will 
not prevail in all or some of their claims against us, or that we will 
prevail in some or all of our claims against Don Lee Farms. For 
example, if Don Lee Farms succeeds in the lawsuit, we could be 
required to pay damages, including but not limited to contract damages 
reasonably calculated at what we would have paid Don Lee Farms to 
produce our products through 2019, the end of the contract term, and 
Don Lee Farms could also claim some ownership in the intellectual 
property associated with the production of certain of our products or in 
the products themselves, and thus claim a stake in the value we have 
derived and will derive from the use of that intellectual property after 
we terminated our supply agreement with Don Lee Farms. Based on 
our current knowledge, we have determined that the amount of any 
material loss or range of any losses that is reasonably possible to result 
from this lawsuit is not estimable. 
 
(Emphases added.)  Like the Q1 2019 10-Q, the Q2 2019 10-Q likewise reiterated 
the generic disclaimers that were not tailored to Beyond Meat’s actual known risks 
with respect to the Don Lee Litigation, given the Company’s knowledge of its own 
conduct with respect to the Supply Agreement and its collaboration with Don Lee. 
35. 
Appended as exhibits to the Q2 2019 10-Q were SOX certifications by 
the Individual Defendants, attesting that the Q2 2019 10-Q “fully complies with the 
requirements of Section 13(a) or Section 15(d), as applicable, of the Securities 
Exchange Act of 1934” and that “the information contained in the [Q2 2019 10-Q] 
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fairly presents, in all material respects, the financial condition and results of 
operations of the Company for the periods presented therein.” 
36. 
On November 12, 2019, Beyond Meats filed its quarterly report on 
Form 10-Q with the SEC for the quarter ended September 28, 2019 (the “Q3 2019 
10-Q”).  With respect to the Don Lee Litigation, the Q3 2019 10-Q echoed the 
statements in the Company’s Offering Documents and prior quarterly filings (see ¶¶ 
31-32, 34): 
On May 25, 2017, Don Lee Farms, a division of Goodman Food 
Products, Inc., filed a complaint against us in the Superior Court of the 
State of California for the County of Los Angeles asserting claims for 
breach of contract, misappropriation of trade secrets, unfair competition 
under the California Business and Professions Code, money owed and 
due, declaratory relief and injunctive relief, each arising out of our 
decision to terminate an exclusive supply agreement between us and 
Don Lee Farms. We deny all of these claims and filed counterclaims 
on July 27, 2017, alleging breach of contract, unfair competition under 
the California Business and Professions Code and conversion. In 
October 2018, Don Lee Farms filed an amended complaint that added 
ProPortion Foods, LLC (one of Beyond Meat’s current contract 
manufacturers) as a defendant, principally for claims arising from 
ProPortion’s alleged use of Don Lee Farms’ alleged trade secrets, and 
for replacing Don Lee Farms as Beyond Meat’s co-manufacturer. 
ProPortion filed an answer denying all of Don Lee Farms’ claims and 
a cross-complaint against Beyond Meat asserting claims of total and 
partial equitable indemnity, contribution, and repayment. On March 11, 
2019, Don Lee Farms filed a second amended complaint to add claims 
of fraud and negligent misrepresentation against us. On May 30, 2019, 
the judge denied our motion to dismiss the fraud and negligent 
misrepresentation claims, allowing the claims to proceed. On June 19, 
2019, we filed an answer denying Don Lee Farms' claims. Trial is 
currently set for May 18, 2020. 
 
Don Lee Farms is seeking from Beyond Meat and ProPortion 
unspecified compensatory and punitive damages, declaratory and 
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injunctive relief, including the prohibition of Beyond Meat’s use or 
disclosure of the alleged trade secrets, and attorneys’ fees and costs. We 
are seeking from Don Lee Farms monetary damages, restitution of 
monies paid to Don Lee Farms, and attorney’s fees and costs. 
ProPortion is seeking indemnity, contribution, or repayment from us of 
any or all damages that ProPortion may be found liable to Don Lee 
Farms, and attorney’s fees and costs. 
 
We believe we were justified in terminating the supply agreement with 
Don Lee Farms, that we did not misappropriate their alleged trade 
secrets, that we are not liable for the fraud or negligent 
misrepresentation alleged in the proposed second amended 
complaint, that Don Lee Farms is liable for the conduct alleged in 
our cross-complaint, and that we are not liable to ProPortion for any 
indemnity, contribution, or repayment, including for any damages or 
attorney’s fees and costs. We are currently in the process of litigating 
this matter and intend to vigorously defend ourselves against the 
claims. We cannot assure you that Don Lee Farms or ProPortion will 
not prevail in all or some of their claims against us, or that we will 
prevail in some or all of our claims against Don Lee Farms. For 
example, if Don Lee Farms succeeds in the lawsuit, we could be 
required to pay damages, including but not limited to contract damages 
reasonably calculated at what we would have paid Don Lee Farms to 
produce our products through 2019, the end of the contract term, and 
Don Lee Farms could also claim some ownership in the intellectual 
property associated with the production of certain of our products or in 
the products themselves, and thus claim a stake in the value we have 
derived and will derive from the use of that intellectual property after 
we terminated our supply agreement with Don Lee Farms. Based on 
our current knowledge, we have determined that the amount of any 
material loss or range of any losses that is reasonably possible to result 
from this lawsuit is not estimable. 
 
(Emphases added.)  Like the Company’s previous two quarterly filings, the Q3 2019 
10-Q likewise reiterated merely generic disclaimers that were not tailored to Beyond 
Meat’s actual known risks with respect to the Don Lee Litigation, given the 
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Company’s knowledge of its own conduct with respect to the Supply Agreement and 
its collaboration with Don Lee. 
37. 
Appended as exhibits to the Q3 2019 10-Q were SOX certifications by 
the Individual Defendants, attesting that the Q3 2019 10-Q “fully complies with the 
requirements of Section 13(a) or Section 15(d), as applicable, of the Securities 
Exchange Act of 1934” and that “the information contained in the [Q3 2019 10-Q] 
fairly presents, in all material respects, the financial condition and results of 
operations of the Company for the periods presented therein.” 
38. 
The statements referenced in ¶ 31-37 were materially false and 
misleading because Defendants made false and/or misleading statements, as well as 
failed to disclose material adverse facts about the Company’s business, operational 
and compliance policies.  Specifically, Defendants made false and/or misleading 
statements and/or failed to disclose that: (i) Beyond Meat’s termination of its supply 
agreement with Don Lee constituted a breach of that agreement, thus exposing the 
Company to foreseeable legal liability and reputational harm; (ii) Beyond Meat and 
certain of its employees had doctored and omitted material information from a food 
safety consultant’s report, which the Company represented as accurate to Don Lee; 
and (iii) as a result, the Company’s public statements were materially false and 
misleading at all relevant times. 
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The Truth Begins to Emerge 
39. 
On January 27, 2020, post-market, Don Lee issued a press release 
entitled “Judge Rules Don Lee Farms Likely to Obtain a Judgment.  Beyond Meat’s 
CFO and Others Named Individually for Fraud.”  The press release stated, in part, 
that “[a] judge has ruled Don Lee Farms proved the probable validity of its claim 
that Beyond Meat breached its manufacturing agreement with Don Lee Farms” and 
that “[i]n a separate motion before a different Judge, the Court granted Don Lee 
Farms’ request to name Beyond Meat Chief Financial Officer Mark Nelson, Senior 
Quality Assurance Manager Jessica Quetsch and Director of Operations Anthony 
Miller in its fraud claims which allege they intentionally doctored and omitted 
material information from a food safety consultant’s report, and then delivered that 
doctored report to Don Lee Farms and affirmatively represented that it was the 
complete opinion of the consultant.” 
40. 
On this news, Beyond Meat’s stock price fell $4.63 per share, or 3.71%, 
to close at $120.12 per share on January 28, 2020. 
41. 
As a result of Defendants’ wrongful acts and omissions, and the 
precipitous decline in the market value of the Company’s securities, Plaintiff and 
other Class members have suffered significant losses and damages. 
PLAINTIFF’S CLASS ACTION ALLEGATIONS 
42. 
Plaintiff brings this action as a class action pursuant to Federal Rule of 
Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who 
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purchased or otherwise acquired Beyond Meat securities during the Class Period 
(the “Class”); and were damaged upon the revelation of the alleged corrective 
disclosures.  Excluded from the Class are Defendants herein, the officers and 
directors of the Company, at all relevant times, members of their immediate families 
and their legal representatives, heirs, successors or assigns and any entity in which 
Defendants have or had a controlling interest. 
43. 
The members of the Class are so numerous that joinder of all members 
is impracticable.  Throughout the Class Period, Beyond Meat securities were 
actively traded on the NASDAQ.  While the exact number of Class members is 
unknown to Plaintiff at this time and can be ascertained only through appropriate 
discovery, Plaintiff believes that there are hundreds or thousands of members in the 
proposed Class.  Record owners and other members of the Class may be identified 
from records maintained by Beyond Meat or its transfer agent and may be notified 
of the pendency of this action by mail, using the form of notice similar to that 
customarily used in securities class actions. 
44. 
Plaintiff’s claims are typical of the claims of the members of the Class 
as all members of the Class are similarly affected by Defendants’ wrongful conduct 
in violation of federal law that is complained of herein. 
45. 
Plaintiff will fairly and adequately protect the interests of the members 
of the Class and has retained counsel competent and experienced in class and 
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securities litigation.  Plaintiff has no interests antagonistic to or in conflict with those 
of the Class. 
46. 
Common questions of law and fact exist as to all members of the Class 
and predominate over any questions solely affecting individual members of the 
Class.  Among the questions of law and fact common to the Class are:   
• 
whether the federal securities laws were violated by Defendants’ acts 
as alleged herein; 
 
• 
whether statements made by Defendants to the investing public 
during the Class Period misrepresented material facts about the 
business, operations and management of Beyond Meat; 
 
• 
whether the Individual Defendants caused Beyond Meat to issue false 
and misleading financial statements during the Class Period; 
 
• 
whether Defendants acted knowingly or recklessly in issuing false 
and misleading financial statements; 
 
• 
whether the prices of Beyond Meat securities during the Class Period 
were artificially inflated because of the Defendants’ conduct 
complained of herein; and 
 
• 
whether the members of the Class have sustained damages and, if so, 
what is the proper measure of damages. 
 
47. 
A class action is superior to all other available methods for the fair and 
efficient adjudication of this controversy since joinder of all members is 
impracticable.  Furthermore, as the damages suffered by individual Class members 
may be relatively small, the expense and burden of individual litigation make it 
impossible for members of the Class to individually redress the wrongs done to them.  
There will be no difficulty in the management of this action as a class action. 
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48. 
Plaintiff will rely, in part, upon the presumption of reliance established 
by the fraud-on-the-market doctrine in that: 
• 
Defendants made public misrepresentations or failed to disclose 
material facts during the Class Period; 
 
• 
the omissions and misrepresentations were material; 
 
• 
Beyond Meat securities are traded in an efficient market; 
 
• 
the Company’s shares were liquid and traded with moderate to heavy 
volume during the Class Period; 
 
• 
the Company traded on the NASDAQ and was covered by multiple 
analysts; 
 
• 
the misrepresentations and omissions alleged would tend to induce a 
reasonable investor to misjudge the value of the Company’s 
securities; and 
 
• 
Plaintiff and members of the Class purchased, acquired and/or sold 
Beyond Meat securities between the time the Defendants failed to 
disclose or misrepresented material facts and the time the true facts 
were disclosed, without knowledge of the omitted or misrepresented 
facts. 
 
49. 
Based upon the foregoing, Plaintiff and the members of the Class are 
entitled to a presumption of reliance upon the integrity of the market.  
50. 
Alternatively, Plaintiff and the members of the Class are entitled to the 
presumption of reliance established by the Supreme Court in Affiliated Ute Citizens 
of the State of Utah v. United States, 406 U.S. 128, 92 S. Ct. 2430 (1972), as 
Defendants omitted material information in their Class Period statements in violation 
of a duty to disclose such information, as detailed above. 
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COUNT I 
(Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Promulgated 
Thereunder Against All Defendants) 
 
51. 
Plaintiff repeats and re-alleges each and every allegation contained 
above as if fully set forth herein. 
52. 
This Count is asserted against Defendants and is based upon Section 
10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated 
thereunder by the SEC. 
53. 
During the Class Period, Defendants engaged in a plan, scheme, 
conspiracy and course of conduct, pursuant to which they knowingly or recklessly 
engaged in acts, transactions, practices and courses of business which operated as a 
fraud and deceit upon Plaintiff and the other members of the Class; made various 
untrue statements of material facts and omitted to state material facts necessary in 
order to make the statements made, in light of the circumstances under which they 
were made, not misleading; and employed devices, schemes and artifices to defraud 
in connection with the purchase and sale of securities.  Such scheme was intended 
to, and, throughout the Class Period, did:  (i) deceive the investing public, including 
Plaintiff and other Class members, as alleged herein; (ii) artificially inflate and 
maintain the market price of Beyond Meat securities; and (iii) cause Plaintiff and 
other members of the Class to purchase or otherwise acquire Beyond Meat securities 
and options at artificially inflated prices.  In furtherance of this unlawful scheme, 
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plan and course of conduct, Defendants, and each of them, took the actions set forth 
herein. 
54. 
Pursuant to the above plan, scheme, conspiracy and course of conduct, 
each of the Defendants participated directly or indirectly in the preparation and/or 
issuance of the quarterly and annual reports, SEC filings, press releases and other 
statements and documents described above, including statements made to securities 
analysts and the media that were designed to influence the market for Beyond Meat 
securities.  Such reports, filings, releases and statements were materially false and 
misleading in that they failed to disclose material adverse information and 
misrepresented the truth about Beyond Meat’s finances and business prospects. 
55. 
  By virtue of their positions at Beyond Meat, Defendants had actual 
knowledge of the materially false and misleading statements and material omissions 
alleged herein and intended thereby to deceive Plaintiff and the other members of 
the Class, or, in the alternative, Defendants acted with reckless disregard for the truth 
in that they failed or refused to ascertain and disclose such facts as would reveal the 
materially false and misleading nature of the statements made, although such facts 
were readily available to Defendants.  Said acts and omissions of Defendants were 
committed willfully or with reckless disregard for the truth.  In addition, each 
Defendant knew or recklessly disregarded that material facts were being 
misrepresented or omitted as described above. 
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56. 
Information showing that Defendants acted knowingly or with reckless 
disregard for the truth is peculiarly within Defendants’ knowledge and control.  As 
the senior managers and/or directors of Beyond Meat, the Individual Defendants had 
knowledge of the details of Beyond Meat’s internal affairs. 
57. 
The Individual Defendants are liable both directly and indirectly for the 
wrongs complained of herein.  Because of their positions of control and authority, 
the Individual Defendants were able to and did, directly or indirectly, control the 
content of the statements of Beyond Meat.  As officers and/or directors of a publicly-
held company, the Individual Defendants had a duty to disseminate timely, accurate, 
and truthful information with respect to Beyond Meat’s businesses, operations, 
future financial condition and future prospects.  As a result of the dissemination of 
the aforementioned false and misleading reports, releases and public statements, the 
market price of Beyond Meat securities was artificially inflated throughout the Class 
Period.  In ignorance of the adverse facts concerning Beyond Meat’s business and 
financial condition which were concealed by Defendants, Plaintiff and the other 
members of the Class purchased or otherwise acquired Beyond Meat securities at 
artificially inflated prices and relied upon the price of the securities, the integrity of 
the market for the securities and/or upon statements disseminated by Defendants, 
and were damaged thereby. 
58. 
During the Class Period, Beyond Meat securities were traded on an 
active and efficient market.  Plaintiff and the other members of the Class, relying on 
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the materially false and misleading statements described herein, which the 
Defendants made, issued or caused to be disseminated, or relying upon the integrity 
of the market, purchased or otherwise acquired shares of Beyond Meat securities at 
prices artificially inflated by Defendants’ wrongful conduct.  Had Plaintiff and the 
other members of the Class known the truth, they would not have purchased or 
otherwise acquired said securities, or would not have purchased or otherwise 
acquired them at the inflated prices that were paid.  At the time of the purchases 
and/or acquisitions by Plaintiff and the Class, the true value of Beyond Meat 
securities was substantially lower than the prices paid by Plaintiff and the other 
members of the Class.  The market price of Beyond Meat securities declined sharply 
upon public disclosure of the facts alleged herein to the injury of Plaintiff and Class 
members. 
59. 
By reason of the conduct alleged herein, Defendants knowingly or 
recklessly, directly or indirectly, have violated Section 10(b) of the Exchange Act 
and Rule 10b-5 promulgated thereunder. 
60. 
As a direct and proximate result of Defendants’ wrongful conduct, 
Plaintiff and the other members of the Class suffered damages in connection with 
their respective purchases, acquisitions and sales of the Company’s securities during 
the Class Period, upon the disclosure that the Company had been disseminating 
misrepresented financial statements to the investing public. 
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COUNT II 
(Violations of Section 20(a) of the Exchange Act Against The Individual 
Defendants) 
 
61. 
Plaintiff repeats and re-alleges each and every allegation contained in 
the foregoing paragraphs as if fully set forth herein. 
62. 
During the Class Period, the Individual Defendants participated in the 
operation and management of Beyond Meat, and conducted and participated, 
directly and indirectly, in the conduct of Beyond Meat’s business affairs.  Because 
of their senior positions, they knew the adverse non-public information about 
Beyond Meat’s misstatement of income and expenses and false financial statements. 
63. 
As officers and/or directors of a publicly owned company, the 
Individual Defendants had a duty to disseminate accurate and truthful information 
with respect to Beyond Meat’s financial condition and results of operations, and to 
correct promptly any public statements issued by Beyond Meat which had become 
materially false or misleading. 
64. 
Because of their positions of control and authority as senior officers, 
the Individual Defendants were able to, and did, control the contents of the various 
reports, press releases and public filings which Beyond Meat disseminated in the 
marketplace during the Class Period concerning Beyond Meat’s results of 
operations.  Throughout the Class Period, the Individual Defendants exercised their 
power and authority to cause Beyond Meat to engage in the wrongful acts 
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complained of herein. The Individual Defendants therefore, were “controlling 
persons” of Beyond Meat within the meaning of Section 20(a) of the Exchange Act.  
In this capacity, they participated in the unlawful conduct alleged which artificially 
inflated the market price of Beyond Meat securities. 
65. 
Each of the Individual Defendants, therefore, acted as a controlling 
person of Beyond Meat.  By reason of their senior management positions and/or 
being directors of Beyond Meat, each of the Individual Defendants had the power to 
direct the actions of, and exercised the same to cause, Beyond Meat to engage in the 
unlawful acts and conduct complained of herein.  Each of the Individual Defendants 
exercised control over the general operations of Beyond Meat and possessed the 
power to control the specific activities which comprise the primary violations about 
which Plaintiff and the other members of the Class complain. 
66. 
By reason of the above conduct, the Individual Defendants are liable 
pursuant to Section 20(a) of the Exchange Act for the violations committed by 
Beyond Meat. 
PRAYER FOR RELIEF 
WHEREFORE, Plaintiff demands judgment against Defendants as follows: 
A. 
Determining that the instant action may be maintained as a class action 
under Rule 23 of the Federal Rules of Civil Procedure, and certifying Plaintiff as the 
Class representative;  
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B. 
Requiring Defendants to pay damages sustained by Plaintiff and the 
Class by reason of the acts and transactions alleged herein; 
C. 
Awarding Plaintiff and the other members of the Class prejudgment and 
post-judgment interest, as well as their reasonable attorneys’ fees, expert fees and 
other costs; and 
D. 
Awarding such other and further relief as this Court may deem just and 
proper. 
DEMAND FOR TRIAL BY JURY 
Plaintiff hereby demands a trial by jury. 
Dated:  January 30, 2020 
Respectfully submitted, 
 
POMERANTZ LLP 
 
Jennifer Pafiti 
Jennifer Pafiti (SBN 282790) 
1100 Glendon Avenue, 15th Floor 
Los Angeles, California 90024 
Telephone: (310) 405-7190  
E-mail: jpafiti@pomlaw.com 
 
POMERANTZ LLP 
Jeremy A. Lieberman 
(pro hac vice application forthcoming) 
J. Alexander Hood II 
(pro hac vice application forthcoming) 
600 Third Avenue, 20th Floor 
New York, New York 10016 
Telephone:  (212) 661-1100 
Facsimile:  (212) 661-8665 
Email: jalieberman@pomlaw.com 
Email: ahood@pomlaw.com 
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 POMERANTZ LLP 
Patrick V. Dahlstrom 
(pro hac vice application forthcoming) 
10 South La Salle Street, Suite 3505 
Chicago, Illinois 60603 
Telephone: (312) 377-1181 
Facsimile: (312) 377-1184 
Email: pdahlstrom@pomlaw.com 
 
Attorneys for Plaintiff 
 
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Beyond, Meat, Inc. (BYND)
Tran, Larry
Purchase
Number of
Price Per
Date
or Sale
Shares/Unit
Share/Unit
1/22/2020
Purchase
1,300
$133.2181
List of Purchases and Sales
Case 2:20-cv-00963-MWF-AFM     Document 1     Filed 01/30/20     Page 33 of 33   Page ID
#:33

File and source

File

gov.uscourts.cacd.771552.1.0.pdf

Size

2,211,656 bytes

SHA-256

2ef4f7a7a7f0a47f12a0a9db0d36691bdc415ecb7a14fa41f8f80ed4886ea0a1

Our copy

gov.uscourts.cacd.771552.1.0.pdf

Original

archive.org