# Porter v. GrafTech International Ltd.

> District Court, N.D. Ohio · August 18, 2025

URL: https://www.frixlaw.com/law-library/cases/11122758

## Case

- **Court:** District Court, N.D. Ohio
- **Decided:** August 18, 2025
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

JOHN C. PORTER, ) CASE 1:24 CV 00154
Individually and on Behalf of All )
Others Similarly Situated, )
) JUDGE DONALD C. NUGENT
Plaintiff, )
Vv. )
)
GRAFTECH ) MEMORANDUM OF OPINION
INTERNATIONAL LTD., et al., ) AND ORDER
)
Defendants. ) (This Memorandum and Order Applies
) to Documents ECF #64, #65, #66 & #67)

This matter is before the Court on various Motions to Dismiss, filed by Defendants, each
on December 6, 2024, in this Private Securities Litigation Reform Act of 1995 (“PSLRA”)
proposed class action complaint, (see ECF #56, First Amended Complaint for Violations of the
Federal Securities Laws, hereinafter “First Amended Complaint’), asserting alleged violation of
Section 10(b) of the Securities Exchange Act of 1934 and Securities Exchange Commission Rule
10b-5,' pled against Defendant GrafTech International Ltd. (“GrafTech”) and individual-person
Defendants David Rintoul, Quinn Coburn, Marcel Kessler, Timothy Flanagan, and Jeremy
Halford (collectively referred to as the “Individual Defendants”), each of whom is or was a
Throughout this Memorandum of Opinion, the Securities Exchange Act of 1934 (which
primarily regulates the transaction of securities in the secondary market) is often referred to as
the “Exchange Act” to contrast it with the Securities Act of 1933 (which primarily regulates the
initial issuance of securities in the primary market). Securities Exchange Commission Rule
10b-5 will often be referred to as simply “Rule 10b-5.”

Senior-level Officer of GrafTech (Count I), and a claim alleging “control person” Liability in
violation of Section 20(a) of the Exchange Act against each of these Individual Defendants as
well as Defendants BCP IV GrafTech Holdings LP, Brookfield Capital Partners Ltd., and
Brookfield Asset Management Ltd. (collectively referred to as “the Brookfield Defendants”)
(Count II), specifically:
(1) Motion of Defendants GrafTech, Kessler, Coburn, Flanagan, and Halford to
Dismiss the First Amended Complaint for Violations of the Federal
Securities Laws (ECF #64);
(2) Defendant David Rintoul’s Motion to Dismiss the First Amended Complaint
(ECF #65); and
(3) Motion of Defendants BCP IV GrafTech Holdings LP, Brookfield Capital
Partners Ltd., and Brookfield Asset Management Ltd., to Dismiss the First
Amended Complaint for Violations of the Federal Securities Laws (ECF
#66).
In response to these Motions to Dismiss, Lead Plaintiff University of Puerto Rico
Retirement System (“Plaintiff”) filed an Omnibus Memorandum in Opposition to the Motions to
Dismiss (ECF #69) on February 3, 2025. On March 17, 2025, each of the Defendants filed their
respective Replies in support of their Motions to Dismiss. (ECF #72 [Brookfield], ECF #73
[Rintoul] & ECF #74 [Graftech & Individual Officers]). These motions are now ready for
decision.
On May 7, 2024, the Court held a hearing on two competing motions to be named as
Lead Plaintiff, those of Shekhar Agrawal and University of Puerto Rico Retirement System.
(ECF #23 & Un-numbered Docket Entry following ECF #38). There were initially five
competing motions, but three of the movants withdrew their motions prior to the hearing, either
through Notice of Withdrawal or Notice of Non-Opposition. (See ECF #41, n.1). By
Memorandum of Opinion and Order dated May 15, 2024, (ECF #41 & ECF #42), University of
Puerto Rico Retirement System was named as Lead Plaintiff to represent the interests of the
proposed class plaintiffs.
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This matter is also before the Court on Motion of Defendants GrafTech, Kessler, Coburn,
Flanagan, and Halford to Strike Allegations Regarding “Former Engineering Lead” (ECF
#67), which is now also fully briefed, (see ECF #70 & ECF #71), and ready for decision.
Because the Motion to Strike addresses an issue predicate to determination of the Motions to
Dismiss, the Motion to Strike will be addressed first.
For each of the reasons stated below:
(1) Motion of Defendants GrafTech, Kessler, Coburn, Flanagan, and Halford to
Strike Allegations Regarding “Former Engineering Lead” (ECF #67), is
GRANTED;.
(2) Motion of Defendants GrafTech, Kessler, Coburn, Flanagan, and Halford to
Dismiss the First Amended Complaint for Violations of the Federal
Securities Laws (ECF #64), is GRANTED;
(3) Defendant David Rintoul’s Motion to Dismiss the First Amended Complaint
(ECF #65), is GRANTED; and
(4) Motion of Defendants BCP IV GrafTech Holdings LP, Brookfield Capital
Partners Ltd., and Brookfield Asset Management Ltd., to Dismiss the First
Amended Complaint for Violations of the Federal Securities Laws (ECF
#66), is GRANTED.

I. FACTUAL BACKGROUND
A. The Parties
Lead Plaintiff University of Puerto Rico Retirement System manages the pension
benefits for employees of the University of Puerto Rico. (ECF #56, First Amended Complaint,
20). It is an investor which, during the proposed Class Period, purchased 226,300 shares of
GrafTech securities, expended $1,690,398.78, had net purchases of 102,900 shares of GrafTech
common stock, and incurred net losses of $623,340.38. (ECF #20-1, Briefin Support of Motion
for Appointment as Lead Plaintiff; PageID #412-#413; ECF #20-4, Certification of Plaintiff,
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PageID #428-429 & ECF #20-5, Gain (Loss) Chart, PageID #431-#433). On May 15, 2024, the
Court appointed University of Puerto Rico Retirement System as Lead Plaintiff. (ECF #41,
Memorandum of Opinion, dated May 15, 2024 & ECF #42, Order; see also ECF #56, □ 20).
Defendant Graffech is a global manufacturer of graphite electrode products and is
headquartered in Brooklyn Heights, Ohio. Graftech common stock is listed on the New York
Stock Exchange as “EAF.” (ECF #56, § 21).
Defendant David Rintoul served as GrafTech’s President and Chief Executive Officer,
and as a member of GrafTech’s Board of Directors, from March 2018 until his resignation from
GrafTech at the end of June 2022. (ECF #56, § 22).
Defendant Quinn Coburn served as GrafTech’s Chief Financial Officer from September
2015 until November 29, 2021. Prior to his role as Chief Financial Officer, he served as
GrafTech’s Vice President of Finance and as Treasurer. (ECF #56, 23).
Defendant Marcel Kessler served as GrafTech’s Chief Executive Officer following
Defendant David Rintoul’s resignation in June 2022, and he held that position until his departure
from GrafTech in November 2023. (ECF #56, 4 24).
Defendant Timothy K. Flanagan served as GrafTech’s Chief Financial Officer and Vice
President of Finance and Treasurer after Defendant Coburn’s resignation in November 2021.
Following the resignation of Defendant Kessler, he became GrafTech’s Interim Chief Executive
Officer from November 2023 to March 2024. Mr. Flanagan now currently serves as GrafTech’s
CEO and President. (ECF #56, § 25).
Paragraph 25 of the First Amended Complaint states that “Kessler currently serves as the
Company’s CEO and President,” but it is clear that the paragraph intended to state “Flanagan.”
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Defendant Jeremy S. Halford has served as GrafTech’s Executive Vice President, Chief
Operating Officer since October 2021. Prior to his role as Chief Operating Officer, he served as
GrafTech’s Senior Vice President, Operations and Development, beginning in May 2019. (ECF
#56, 26).
Defendant Brookfield Asset Management Ltd., is a global alternative asset management
firm based in Canada. (ECF #56, § 30).*
Defendant Brookfield Capital Partners Ltd., is the private equity arm of Defendant
Brookfield Asset Management Ltd. (ECF #56, { 29).°
Defendant BCP IV GrafTech Holdings LP is an indirect wholly-owned subsidiary of
Defendant Brookfield Capital Partners Ltd. (ECF #56, § 28).
B. Background Facts as Asserted in the First Amended Complaint
The following recitation of facts regarding Plaintiffs’ claims is drawn largely from the
paragraphs of the First Amended Complaint, as well as from information contained in
documents referenced in the First Amended Complaint.®
Paragraphs 28-30 of the First Amended Complaint identify Defendants BCP IV Graffech
Holdings LP, Brookfield Capital Partners, Ltd., and Brookfield Asset Management Ltd., in
“ascending” order. These entities are identified here in “descending” order, such that each
entity’s description is stated in relation to an earlier-named parent entity.
Paragraph 29 of the First Amended Complaint identifies Brookfield Capital Partners Ltd.,
as “the private equity arm of [D]efendant Brookfield Asset Management Jnc.” Both the original
Complaint (ECF #1) and Paragraph 31 of the First Amended Complaint appear to indicate that
this reference is intended to state Brookfield Asset Management Ltd.
In considering the Motions to Dismiss, well-pled factual allegations are taken as true.
The Court may also consider documents that are referenced in the complaint and matters of
which it may take judicial notice. See, e.g., Lim v. Hightower, No. 4:23-CV-01454, 2024 WL
4349409, at *6 (N.D. Ohio Sept. 30, 2024) (“Under the Private Securities Litigation Reform Act
-5-

GrafTech, headquartered in Brooklyn Heights, Ohio, is a global manufacturer of graphite
electrode products that are used in the production of electric arc furnace (“EAF”) steel — a
purportedly greener alternative to traditional steelmaking methods. (ECF #56, § 1 & 21).’
Over the nearly 54-month putative Class Period, from February 8, 2019 to August 3,
2023, GrafTech’s executives included Defendants David Rintoul (Chief Executive Officer from
the beginning of the period until June 2022), Marcel Kessler (Chief Executive Officer beginning
in June 2002 to the end of the period), Quinn Coburn (Chief Financial Officer from the
beginning of the period to November 2021), Timothy K. Flanagan (Chief Financial Officer
beginning in November 2021 to the end of the period),* and Jeremy S. Halford (Chief Operating
Officer beginning in October 2021).
GrafTech’s Manufacturing Operations
GrafTech’s customers are manufacturers that use GrafTech’s graphite electrode products
to produce EAF steel. (ECF #56, § 32). In contrast to conventional blast furnaces, which rely

of 1995, ‘courts must consider the complaint in its entirety, as well as other sources courts
ordinarily examine when ruling on Rule 12(b)(6) motions to dismiss, in particular, documents
incorporated into the complaint by reference, and matters of which a court may take judicial
notice.” ... The Court may consider documents that are ‘referred to in the complaint and [are]
central to the plaintiff's claim’ without converting a 12(b)(6) motion into a motion for summary
judgment.”) (citations omitted). In examining the Motions to Dismiss, the Court considers these
exhibits in order to “analyze the statements and omissions at issue in their full context.”
Plymouth Cnty. Ret. Ass’n vy. ViewRay, Inc., 556 F. Supp. 3d 772,784 (N.D. Ohio 2021), aff'd
2022 WL 3972478 (6" Cir. Sept. 1, 2022).
The company that is now GrafTech initially went public in 1995 as UCAR International
Inc., before changing its name to GrafTech International, Ltd., in 2002. (ECF #56, {[ 32).
As noted earlier, Mr. Flanagan later became Interim Chief Executive Officer of GrafTech,
after the putative Class Period, from November 2023 to March 2024, and began serving as
GrafTech’s Chief Executive Officer in March 2024. (ECF #56, § 25).
-6-

directly on coal, natural gas, and oil, EAF utilizes graphite electrodes to conduct electricity and
to generate sufficient heat to melt scrap metal, iron ore, or other raw materials used to produce
steel. (ECF #56, 9 32). To be utilized by GrafTech’s customers, each graphite electrode must be
affixed with one “connecting pin,” making the “pin stock” from which such devices are
machined a critical component of GrafTech’s manufacturing process. (ECF #56, 1).
The graphite electrodes and connecting pins used in electric arc furnaces (““EAFs”) must
be strong enough to withstand the steel-melting electricity they conduct and the very high
temperatures the furnaces produce. While the primary raw material used to make these
electrodes and connecting pins — needle coke — has properties that prevent fracturing, it is
GrafTech’s manufacturing process that gives its products their strength and conductivity. (ECF
#64-6, GrafTech International Ltd., Annual Report (Form 10-K), p.16 (Feb. 21, 2020) (“2019
10-K”)).’ There are six steps to GrafTech’s manufacturing process: (1) Screening and
Blending; (2) Extrusion (Forming); (3) Baking; (4) Impregnating; (5) Graphitizing; and
(6) Machining. (ECF #64-6, 2019 10-K, p.16).
GrafTech has four principal manufacturing facilities: (1) Monterrey, Mexico (the
“Monterrey Plant”), operated by a subsidiary called GrafTech México Sociedad Anénima de
Capital Variable (“GrafTech México”); (2) St. Marys, Pennsylvania (the “St. Marys Plant”);
(3) Pamplona, Spain; and (4) Calais, France. (ECF #56, 35). At various times throughout
Copies of the various GrafTech Securities and Exchange Commission filings and other
corporate documents referenced or incorporated into the First Amended Complaint are attached
as Exhibits to the Motion of Defendants GrafTech, Kessler, Coburn, Flanagan, and Halford to
Dismiss the First Amended Complaint for Violations of the Federal Securities Laws (ECF #64).
A full citation is given the first time each document is cited, with a short-form citation used
thereafter, e.g., “(ECF #64-6, 2019 10-K, p. 16).”

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GrafTech’s history, each facility ran all six steps of the manufacturing process. (ECF #56,
{J 38-39). In the second quarter 2016, GrafTech “warm idled” its St. Marys Plant. (ECF #56,
{ 38). By “warm idling” the St. Mary’s Plant, GrafTech could restart the facility in short order if
additional manufacturing volumes were needed, which would provide GrafTech with flexibility
and variability to meet peak demand or mitigate disruptions within its manufacturing footprint.
(ECF #56, § 38). Following the warm idling of the St. Marys Plant, GrafTech shifted all of its
graphite electrode manufacturing operations to its highest-capacity and lowest-cost facilities, the
Monterrey Plant, and the other Plants located in Pamplona, Spain and Calais, France. (ECF #56,
4 39). Although all three of these manufacturing facilities were each capable of being full-scale
manufacturing facilities, the Monterrey Plant was the sole supplier of connecting pins and pin
stock for all of GrafTech’s manufacturing facilities. (ECF #56, ¢ 39). As a result, the
uninterrupted operation of the Monterrey facility was of paramount importance for GrafTech’s
business and operational performance. (ECF #56, { 39).
All the allegations of the First Amended Complaint relate, either directly or indirectly, to
facts surrounding the Monterrey Plant. Specifically, the allegations relate to GrafTech’s
statements made about the environmental conditions at the Monterrey Plant over the course of
its operations (including a 2019 administrative proceeding brought against GrafTech México,
and a shutdown of the Monterrey Plant between September 16, 2022 and November 18, 2022),
the manufacturing capabilities of the St. Marys Plant during the Monterrey Plant shutdown, and
the financial impact of the Monterrey Plant shutdown."

10
A recitation of each of the statements at issue — including not only the portions cited in
the First Amended Complaint, but also the surrounding text accompanying those portions — is set
forth in full later in this Memorandum of Opinion, at the conclusion of this statement of facts.
-8-

The Monterrey Plant
The Monterrey Plant is located in the municipality of Apodaca within the Monterrey
metropolitan area, in the Mexican state of Nuevo Leon. (ECF #56, {9 1, 4 & 6). The Monterrey
Plant was established over 60 years ago as one of the first industrial investments in the area.
(ECF #64-9, GrafTech International Ltd., 2019 Sustainability Report, p.17 (Sept. 16, 2020)
(“2019 Sustainability Report’); cited at ECF #56, J 111-113). The area experienced significant
growth since the 1960s when it opened, leading some to express environmental concerns about
its operations over the years. (ECF #64-9, 2019 Sustainability Report, p.17).
The gist of Plaintiffs’ allegations related to GrafTech’s statements made about the
environmental conditions at the Monterrey Plant over the course of its operations is captured in
the opening paragraphs of the First Amended Complaint:
“Throughout the Class Period, Defendants repeatedly touted the competitive
advantages of GrafTech’s ‘low-cost’ manufacturing plants to investors, while also
extolling the Company’s purportedly ‘proactive’ commitment to reducing its
environmental impacts and complying with all environmental laws and
regulations. But these representations were materially false and misleading. The
undisclosed truth was that GrafTech’s purported cost leadership was achieved in
substantial part by the Company’s failure to adhere to its professed ‘rigorous
internal environmental protection standards’ at the Monterrey facility.” (ECF #56,
12)
direct contrast to Defendants’ representations, GrafTech had, for decades,
blatantly disregarded environmental regulations and chronically contaminated
neighboring communities with harmful dust and emissions at its Monterrey
facility, resulting in repeated warnings from local authorities. These warnings,
however, were ineffective at curbing GrafTech’s wanton disregard for the health
and wellbeing of the Monterrey facility’s surrounding communities.” (ECF #56,
{ 3).
“As aresult, in March 2019, the Department of Sustainable Development of the
State of Nuevo Leon initiated an administrative proceeding against GrafTech
concerning the Monterrey facility’s failure to control the dust emissions generated
by its manufacturing operations. Among other things, the resolution of the

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proceedings resulted in: (1) a finding that GrafTech’s Monterrey facility operated
‘without the means of control to ensure that dust emissions are avoided, which is
mandatory as established in Article 131 section II of the Environmental Law of
the State of Nuevo Leon, to ensure satisfactory air quality for population well-
being and ecological balance’; (ii) a finding that GrafTech ‘benefitted
economically by evading the expense generated by the implementation of
equipment or systems that guarantee avoiding the generation of dust emissions to
the atmosphere during its operation’; (iii) an order that GrafTech ‘immediately
and permanently .. . carry out the necessary actions, adaptations and/or maneuvers
that guarantee avoiding the generation of emissions of dust or any other
contaminant to the atmosphere’; and (iv) an agreement by Graftech to invest over
$2 million in dust collection and containment projects to remedy its violations.”
(ECF #56, { 4).
“Although Defendants disclosed the administrative proceeding in GrafTech’s SEC
filings, they concealed the full extent and severity of GrafTech’s environmental
misconduct by mischaracterizing the proceeding as ‘involving certain potential
violations of state environmental law’ and reporting that the Company had paid
‘certain fines that were not material to the Company,’ without disclosing
GrafTech’s agreement to invest more than $2 million in dust collection and
containment projects or the order requiring GrafTech to ‘immediately and
permanently’ remedy its deficient emission controls.” (ECF #56, { 5).
“TF Jollowing the administrative proceeding’s resolution, GrafTech quickly
resumed its decades-long practice of failing to follow through on its repeated
commitments to remedy the Monterrey facility’s deficient environmental
safeguards. The Company’s actions led to the filing of multiple environmental
complaints, including one by the mayor of local municipality Apodaca, César
Garza Villareal. Defendants, however, continued to tout their purported
commitment to environmental protections and compliance with environmental
laws and regulations, while concealing from investors the truth that the Monterrey
facility’s failure to operate in accordance with those representations exposed
GrafTech to known material risks regarding government enforcement actions and
corresponding business disruptions.” (ECF #56, § 6).
“There is no doubt that Defendants were aware of the environmental failures at
the Monterrey facility, given: (i) GrafTech’s long history of environmental
disputes with the Monterrey facility’s surrounding communities; (ii) the
significant fallout from the 2019 administrative proceeding, of which Defendants’
SEC filings confirm they were undoubtedly aware; and (iii) Defendants’ repeated
representations touting their active involvement in, and leadership of, GrafTech’s
environmental management systems and initiatives — which, among other things,
provided them with monthly environmental reports from site managers and
weekly communications concerning ‘observations from site walk-throughs.’”
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(ECF #56, § 7).
(ECF #56, First Amended Complaint, {{ 2-7).
The First Amended Complaint does not allege that the Monterrey Plant was the subject
of any environmental enforcement matters prior to the 2019 administrative proceeding. The July
30, 2019 Resolution issued by the Department of Sustainable Development, referenced in the
First Amended Complaint, shows that GrafTech was required to pay fines equivalent to
$140,253.40 and $9,800.84 as a result of the administrative proceeding. (ECF #64-10,
Resolution of the Department of Sustainable Development of Nuevo Leon, p.11 (July 30, 2019)
(“Resolution’’); cited at ECF #56, § 45). After paying the fines, GrafTech disclosed the
following in its Third Quarter 2019 10-Q Report:
On March 1, 2019, the Department of Sustainable Development of the State of
Nuevo Leon provided notice of an administrative proceeding with respect to the
Company’s Monterrey facility. The proceeding requires the Company to design
and implement certain corrective measures involving certain potential violations
of state environmental law relating to emissions. The Company cooperated with
the Department with respect to this matter, including payment of certain fines that
were not material to the Company. In September 2019, the Department of
Sustainable Development formally closed the proceeding.
(ECF #64-11, GrafTech International Ltd., Quarterly Report (Form 10-Q), p.40 (Nov. 7, 2019)
(“Third Quarter 2019 10-Q”)). At about the same time, GrafTech invested approximately $2
million in dust collection and containment projects at the Monterrey Plant. (ECF #56, { 46).
There was no shutdown of the Monterrey Plant.
The First Amended Complaint also states that, on March 11, 2020, the mayor of
Apodaca, César Garza Villareal, along with Apodaca’s Secretary of Urban Development,
Ecology/,] and Transportation, Andres M. Canto Ramirez, filed a complaint against GrafTech
with the Secretary of Sustainable Development for the Nuevo Leon State Government asserting
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violations of “environmental regulations, biosafety and wildlife, among others, affecting matters
of public order and social interest by expending risks or threats of environmental contingency in
neighborhoods, municipality[,] and surrounding municipalities,” and that on September 30,
2021, an individual filed a citizen’s complaint with the Federal Prosecutor’s Office for
Environmental Protection regarding the Monterrey Plant’s dust emissions. (ECF #56, □□ 49-51).
The First Amended Complaint further notes that, “[i]t is unclear what action, if any, the State
Attorney General’s Office of Sustainable Development took in response to the complaint filed
by Mayor Garza and Mr. Ramirez, (ECF #56, J 49), and “[a]s with the 2020 complaint filed by
Mayor Garza and Mr. Ramirez, it is unclear what action, if any, was taken in response to [the
later] citizen’s complaint, (ECF #56, § 51). The First Amended Complaint does not assert that
any enforcement action resulted from either complaint, or that GrafTech or the Individual
Defendants were aware of them. The First Amended Complaint further states that Mayor Garza
“addressed the Apodaca City Council with an impassioned plea for the Council to take action
against the Company” related to the emissions issues. (ECF #56, §] 67-69). The First Amended
Complaint does not allege that GrafTech or any of the Individual Defendants were aware of the
mayor’s remarks.
On September 15, 2022, Nuevo Leon officials (from the State Attorney’s Office for the
Secretary of Environment) inspected the Monterrey Plant’s “facility and certain of the facility’s
environmental and operating permits,” following which the Plant received a temporary
suspension notice requiring it to “wind down operations within seven days.” (ECF #56, § 70;
ECF #64-12, GrafTech International Ltd., [Third] Quarterly Report (Form 10-Q), p.41 (Nov. 4,
2022) (“Third Quarter 2022 10-Q”)). A parallel investigation by another Nuevo Leén official

-|2-

(the Director of Integral Air Management of the Undersecretary of Climate Change and Air
Quality of the Ministry of the Environment) concluded that the Plant’s operating license was no
longer in effect, resulting in the indefinite suspension of operations. (ECF #56, § 70; ECF #64-
12, Third Quarter 2022 10-Q, p.41). GrafTech disclosed the suspension one day later in a
“Current Report” filed with the SEC (as well as in its Quarterly Report filed in November 2022),
and noted “At this time, the Company is not able to assess how long operations at the
manufacturing facility will be temporarily suspended. While the Company strongly disagrees
with this course of action, the Company is actively evaluating the notice and the allegations
contained therein and the Company intends to work with the authorities to address these
allegations and will vigorously defend against these allegations.” (ECF #64-8, GrafTech
International Ltd., Current Report (Form 8-K), p.2 (Sept. 16, 2022) (“9/16/22 8-K”); ECF #64-
12, Third Quarter 2022 10-Q, p.24)).
As this is a case alleging that specific statements made by GrafTech were false or
misleading, and the Motions to Dismiss ask the Court to evaluate those statements in light of
whether a legally actionable claim has been stated in the First Amended Complaint based on
those statements, the Court is called upon to examine the actual statements. The specific
statements at issue are set forth at Appendix A of this Memorandum of Opinion and Order."

11
As noted, (see note 6, supra), the Court may look to the actual documents cited in the
First Amended Complaint, and not merely the portions of the allegedly false or misleading
statements cited in the Plaintiffs’ pleadings. The full statements are identified in Appendix A.
The portions of those statements, as quoted in the First Amended Complaint, are shown in plain
text. The remainder of the full statement is shown in italics.
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The St. Mary’s Plant
While the primary focus of Plaintiffs’ allegations of purported false and misleading
statements relate to statements made by GrafTech in various corporate filings made with the
Securities Exchange Commission, and in other communications with investors, about the
environmental conditions existing at the Monterrey Plant, the manufacturing capabilities and
operations of the St. Marys Plant are also a significant focus of the allegations of the First
Amended Complaint. A complete recitation of these statements is attached to this Memorandum
of Opinion and Order as Appendix B.
Plaintiffs’ allegations of misrepresentation about the manufacturing capabilities of the St.
Marys Plant prior to and during the Monterrey Plant shutdown are described in the First
Amended Complaint at paragraphs 53 to 65:"”
“In addition to deceiving investors about the Company’s purported
commitment to environmental compliance and the true basis for
GrafTech’s manufacturing cost advantages, Defendants further misled
investors during the Class Period regarding the Company’s purported
efforts to ‘de[-]risk’ its critical pin production, which was entirely
concentrated at GrafTech’s Monterrey facility, by supposedly
implementing pin production operations at the St. Mary’s facility. (ECF
#56, § 53).
“Specifically, during GrafTech’s August 6, 2021 earnings call for the
second quarter of 2021 (“2Q21”), defendant [Jeremy] Halford told

12
The full text assertions at issue related to the operations at the St. Marys Plant in the
First Amended Complaint are included within this Memorandum of Opinion and Order (as
Appendix B) in that the allegations made within that text are also central to the issues raised in
the Motion to Strike. The paragraphs at issue in the Motion to Strike are highlighted in
boldfaced text here. These paragraphs, as stated in the First Amended Complaint, contain
emphasis on certain words provided by Plaintiffs. Because the Court is highlighting the text of
the paragraphs pertinent to the Motion to Strike in boldfaced text in this portion of the
Memorandum of Opinion and Order, Plaintiffs’ emphasis, as included in the text of the First
Amended Complaint, is designated by italics.
-|4-

investors that Graftech was ‘investing in a pin production line at our St.
Marys, Pennsylvania facility that will be online in the third quarter.’ At
the time, Halford further represented that the St. Marys facility’s pin
production line ‘diversifies our pin capability and provides production
flexibility.’ The following quarter, during the Company’s November 5,
2021 earnings call for the third quarter of 2021 (“3Q21”), Halford
continued to promote the St. Mary’s facility’s pin production capabilities,
stating in pertinent part, that ‘[t]he pin production line at our St. Marys,
Pennsylvania facility is now operational, and we are ramping up
production.” Halford then went on to state” ‘Importantly, this provides us
with 2 connecting pin production facilities.” (ECF #56, J 54).
“Analysts and investors credited these representations. For example, in an
August 6, 2021 report, BMO Capital Markets (“BMO”) analyst David
Gagliano identified the ‘[rJestart of St. Marys graphite electrode facility’
as one of the ‘Key Catalysts’ for GrafTech.” (ECF #56, { 55).
“During GrafTech’s February 4, 2022 earnings call for the fourth quarter
and year-end of 2021 (“4Q21”), Halford again touted the purported
benefits of the St. Marys facility’s pin production line, specifically stating:
‘Our investment in the new automated pin line at St. Mary’s continues to
progress well and helps to de[-|risk our pin production capacity.’ The
following quarter, during the Company’s May 6, 2022 earnings call for the
first quarter of 2022 (“1Q22”), Halford reiterated these comments, stating:
‘[Ojur recent investment in the automated pin line at St. Marys continues
to progress and helps to de/-/risk our pin production capacity.” (ECF
#56, 56).
“Defendant Halford’s statements regarding the ‘de[-]risk[ing] of
GrafTech’s ‘pin production capacity’ through St. Mary’s facility’s
supposed ‘pin production line’ were important to investors, because they
conveyed that the Company was insulated from potential commercial
disruptions due to insufficient pin supply in the event that operations at the
Monterrey facility were interrupted.” (ECF #56, 457).
“But according to a former GrafTech Manufacturing Engineering
Lead (the “Former Engineering Lead”) — and Defendants’ own
subsequent admissions — Halford’s statements regarding the
purported ‘de|-]risking’ of GrafTech’s ‘pin production’ were false
and misleading. Contrary to Halford’s statements about the
supposedly “operational’ ‘pin production line’ at the St. Marys
facility, the truth was that the St. Marys facility produced no pins or
pin stock at all during 2021 or 2022 and, in fact, did not even have the
proper ‘operating permits’ to perform such activities.” (ECF #56,
-[5-

4 58).
“The Former Engineering Lead was hired by GrafTech in August
2022 to work as part of the team responsible for restarting the St.
Marys facility. In this role, the Former Engineering Lead reported to
GrafTech’s Director of Central Engineering and Reliability, Tom
Knoll. According to the Former Engineering Lead, at the time of his
hiring, the St. Marys facility was not involved in the production or
manufacturing of any pins.” (ECF #56, 4 59).
“One of the Former Engineering Lead’s primary responsibilities upon
being hired was to ensure that the St. Marys facility had the proper
equipment needed for manufacturing graphite electrode products and
pins, which included a large press for extruding graphite, a cooling
pond, and the tools needed to operate such equipment. At the time of
the Former Engineering Lead’s hiring, there was no water in the
cooling pond and it was apparent that the press had not been run in
well over a year, given that the tools for the press were rusted and
covered in dust. As such, it was clear to the Former Engineering Lead
that the St Marys facility had not produced or manufactured pins at
any point within the last year.” (ECF #56, 4 60).
“At the time of the Former Engineering Lead’s hiring, the objectives
for his team included preparing the St. Marys facility to be capable of
producing graphite electrode products at some point in late-2023 or
early-2024. However, shortly after the Monterrey facility was shut
down by Mexican regulators in September 2022, Knoll called an
emergency meeting, which was attended by the Former Engineering
Lead and other members of the team responsible for restarting the St.
Marys facility, during which the employees were informed that the
efforts to restart production at the St. Marys facility would need to be
accelerated. At the time, however, the St. Marys facility did not have
the appropriate operating permits to produce graphite electrode
products and pins, despite Halford’s statement to investors nearly one
year prior that “[t]he pin production line at our St. Marys,
Pennsylvania facility is now operational.’ Indeed, GrafTech did not
begin the process of obtaining the operating permits required for such
production until early 2023.” (ECF #56, ¢ 61).
“Moreover, it was not until late-2023 that the St. Marys facility
conducted its first “pin trial run.” According to the Former
Engineering Lead, the St. Marys facility conducted three trials, but
never actually got the pin production operation up and running.
Thus, according to this former employee, the St. Marys facility never
-16-

produced or manufactured any actual pins at any point during his
tenure with GrafTech, which came to an end in April 2024.” (ECF
#56, § 62).
“According to the Former Engineering Lead, defendant Halford was
aware of and familiar with the activities at the St. Marys facility, and
definitely would have known that the plant was not involved in actual
pin production during 2021 and 2022. According to the Former
Engineering Lead, Halford regularly visited the St. Marys facility,
was ultimately responsible for overseeing GrafTech’s efforts to restart
the plant, and was regularly informed about the activities and issues
at the St. Marys facility by Knoll.” (ECF #56, § 63).
“Because the St. Marys facility was not actually involved in any
manufacturing or production of pins during 2021 or 2022, and the
Monterrey facility remained the Company’s only facility capable of
producing the pin stock needed for all of GrafTech’s electrodes and pins,
Halford’s statements to investors regarding the St. Mary’s facility’s
supposedly ‘operational’ ‘pin production line,’ which purportedly helped
to ‘de[-Jrisk [GrafTech’s] pin production capacity,’ were materially false
and misleading. Halford’s statements misleadingly conveyed to investors
that GrafTech had secured an alternative source of pins through the St.
Marys facility’s ‘pin production,’ thereby insulating GrafTech from
potential commercial disruptions in the event that operations at the
Monterrey facility were interrupted. The truth, however, was that the
Company remained exposed to significant commercial disruptions in the
event that operations at the Monterrey facility were interrupted.” (ECF
#56, 64).
“Indeed, Defendants’ own subsequent admissions confirm as much, while
also serving to corroborate the above facts provided by the Former
Engineering Lead. Specifically, on November 4, 2022, during GrafTech’s
first earnings call following the Monterrey facility’s closure, defendant
Kessler told investors, for the first time, that the Monterrey facility was
‘the only site that produces the pin stock needed for all our electrodes.”
During that same call, Kessler further revealed: ‘We are now actively
pursuing approvals for operating permits to restart the [St. Marys] facility
for pin production.’ Then, on April 28, 2023, defendant Halford
responded to a question from an analyst by admitting that, “when we came
into [2023] our intent was to do the full restart of St. Marys really to de-
risk our pin supply chain,’ further confirming the falsity of his previous
statements from 2022 that the St. Marys facility’s “pin production line...
is now operational’ and ‘help[ing] to de/-/risk our pin production
capacity.” (ECF #56, § 65).
-{7-

(ECF #56, { 53-65) (emphasis as noted).”

13
The Motion to Strike also relates to the allegations of the First Amended Complaint
made at paragraphs 8, 213, and 214, which stated (highlighting conventions same as above
related to paragraphs 53-65: Court’s emphasis in bold highlighting paragraphs related to
Motion to Strike; Plaintiffs’ emphasis in italics):
“In addition, Defendants also misled investors about material facts
that directly bore on the potential impacts of any operational
disruptions at the Monterrey facility. Specifically, over the course of
four earnings calls between August 6, 2021, and May 6, 2022,
Defendants told investors that GrafTech had ‘de/-Jrisk{ed] [its] pin
production capacity,” by opening a ‘pin production line’ at its St.
Marys, Pennsylvania facility (“St. Marys facility”), which was
purportedly ‘operational’ by November 5, 2021, thus providing the
Company with two ‘pin production facilities.’ In truth, however, the
St. Mary’s facility was not actually involved in any production of pins
or pin stock during this time. Indeed, as confirmed by a former
GrafTech employee and Defendants’ own subsequent admissions,
Defendants had not even begun the process of obtaining the
appropriate operating permits required for pin production at the St.
Marys facility, and Monterrey remained GrafTech’s only facility
capable of producing the pin stock needed for all of the Company’s
electrodes. As a result, contrary to Defendants’ statements that they
had ‘de[-]risk[ed] all of GrafTech’s pin production, the Company
remained exposed to significant risks of commercial harm in the event
that the Monterrey facility’s operations were disrupted.” (ECF #56,
4 8).
* oe □ Ok

“Defendant Halford’s knowledge of and access to information directly
contradicting his misrepresentations is confirmed by the allegations
from the Former Engineering Lead, the specific nature of Halford’s
repeated false statements, and Defendants’ subsequent admissions
concerning the falsity of Halford’s statements.” (ECF #56, § 213).
“Specifically, according to the Former Engineering Lead, the St.
Mary’s facility did not produce any pins at all during the time frame
when Halford represented that the St. Marys facility had an
‘operational’ ‘pin production line.’ Indeed, during this time, the St.
Marys facility lacked the appropriate operating permits required for
-18-

The Financial Impact of the Monterrey Plant Shutdown
The final series of Plaintiffs’ allegations of false or misleading statements relates to
various statements released by GrafTech regarding the expected long-term impact of the
shutdown of the Monterrey Plant. Specifically, Plaintiffs contend that statements made in the
following releases of information regarding the effect of the shutdown were false or misleading:
(1) GrafTech International Ltd., Current Report (Form 8-K) (Sept. 16, 2022)
(ECF #64-8); see ECF #56, § 170;
(2) GrafTech International Ltd., Quarterly Report (Form 10-Q) (Nov. 4,
2022) (ECF #64-12); see ECF #56, J 172, 173;
(3) GrafTech International Ltd., Third Quarter 2022 Earnings Call (Nov. 4,
2022) (ECF #64-13); see ECF #56, 99 174, 175, 176; 177;
(4) GrafTech International Ltd., Current Report (Form 8-K) (Nov. 18, 2022)
(ECF #64-14); see ECF #56, § 179;
(5) GrafTech International Ltd., Fourth Quarter 2022 Earnings Call (Feb. 3,
2023) (ECF #64-15); see ECF #56, § 183;

pin production, and GrafTech had not yet even begun the process of
obtaining such permits — and, in fact, did not begin that process until
at least six months after the latest of Halford’s misrepresentations
regarding the St. Marys facility’s purported pin production.
Moreover, according to the Former Engineering Lead, Halford
regularly visited the St. Marys facility, was ultimtely responsible for
overseeing GrafTech’s efforts to restart the plant, and was regularly
informed about the activities and issues at the St. Marys facility by
Knoll [GrafTfech’s Directior of Central Engineering and Reliability].
As a result, it is inconceivable that Halford would have been unaware
that the St. Mary’s facility was not involved in actual pin production
at the time he made the above misrepresentations concerning the St.
Mary’s facility’s supposedly ‘operational’ ‘pin production line.’”
(ECF #56, § 214).
(ECF #56, ff 8, 213 & 214) (explanatory insert supplied).

-19-

(6) GrafTech International Ltd., First Quarter 2023 Earnings Press Release
on Form 8-K (Apr. 28, 2023) (ECF #64-16); see ECF #56, § 184;
(7) GrafTech International Ltd., First Quarter 2023 Earnings Call (Apr. 28,
2023) (ECF #64-33); see ECF #56, J 184
The actual statements at issue are reproduced within this Memorandum of Opinion and
Order, as Appendix C.

GrafTech Ownership and the Brookfield Defendants
Finally, Count II of the First Amended Complaint includes as Defendants three
“Brookfield” entities,'* which at times held various ownership interests in GrafTech: Brookfield
Asset Management Ltd., which is a global alternative asset management firm based in Canada,
(ECF #56, § 30); Brookfield Capital Partners Ltd., which is the private equity arm of Defendant
Brookfield Asset Management Ltd., (ECF #56, § 29); and BCP IV GrafTech Holdings LP, which
is an indirect wholly-owned subsidiary of Defendant Brookfield Capital Partners Ltd., (ECF #56,
{ 28). The specific claims of Count II are described in the First Amended Complaint as follows:
The Individual Defendants acted as controlling persons of GrafTech within the
meaning of § 20(a) of the Exchange Act. By reason of their positions with the
Company, the Individual Defendants had the power and authority to cause
GrafTech to engage in the wrongful conduct complained of herein. Defendant
Brookfield controlled GrafTech and the Individual Defendants for the reasons
detailed herein, including their ownership of a majority of GrafTech voting
stock, control of the Board, influence over GrafTech’s management, historical
relationship with the Company, and the various agreements that these
Defendants caused the Company to enter into. Graf[ech controlled the
Individual Defendants and all of its employees. By reason of such conduct,
Defendants are liable pursuant to § 20(a) of the Exchange Act.

14
The First Amended Complaint refers to Defendants Brookfield Asset Management Ltd.,
Brookfield Capital Partners Ltd., and BCP IV GrafTech Holdings LP collectively as “Defendant
Brookfield.” (ECF #56, § 31).
-20-

(ECF #56, §[ 265).
According to the First Amended Complaint, the history of the Brookfield Defendants’
acquisition of GrafTech traces its roots to 2011.
Beginning in 2011, GrafTech underwent a period of declining demand for its graphite
electrodes, which led to falling revenues and growing losses. By the end of 2014, GrafTech’s
annual net losses had ballooned to more than $285 million, growing 1,000% year-over-year from
a net loss of approximately $27 million in 2013. In April 2015, GrafTech’s then-CEO Joel
Hawthorne warned that the challenges were expected to continue, stating:
[Graphite electrode demand continued to soften as global electric are furnace
(EAF) steel production weakened. Lower end-market demand in certain steel
consuming sectors, continued high Chinese steel exports and other market
dynamics led to lower EAF customer utilization rates, particularly in North
America. These factors are expected to create a challenging environment for
our Company and the industry as a whole for the remainder of 2015.
(ECF #56, § 36). Amid this slump in the market for graphite electrodes, GrafTech announced on
May 17, 2015, that it had entered into an agreement to be purchased by Brookfield. Pursuant to
the Plan of Merger Agreement, Brookfield made a cash tender offer to purchase all outstanding
shares of GrafTech common stock. On August 17, 2015, GrafTfech announced that its
acquisition by Brookfield had been completed and that it had become a wholly owned affiliate of
Brookfield. As a result, trading of Graffech common stock on the New York Stock Exchange
ceased that day. (ECF #56, § 37).
Over the course of the next three years, GrafTech underwent an extensive transformation
that was intended to revamp the Company’s business and return it to profitability. As part of
this transformation, GrafTech “warm idled” its St. Marys facility — which had previously been a
full-scale production facility capable of manufacturing graphite electrodes and pins from their

-21-

primary raw material, needle coke — during the second quarter of 2016. By “warm idling” the
St. Marys facility, GrafTech would be in a position to restart the facility in short order if
additional manufacturing volumes were needed, which would provide GrafTech with flexibility
and variability to meet peak demand or mitigate disruptions within its manufacturing footprint.
(ECF #56, § 38).
Following the warm idling of the St. Marys facility, GrafTech shifted all of its graphite
electrode manufacturing operations to its highest-capacity and lowest-cost facilities, located in
Monterrey, Mexico, Pamplona, Spain, and Calais, France. Although all three of these facilities
were capable of being full-scale manufacturing facilities, the Monterrey facility was the sole
supplier of connecting pins and pin stock for all of GrafTech’s manufacturing facilities. (ECF
#56, ¥ 39).
On April 19, 2018, Brookfield conducted GrafTech’s second IPO (Initial Public
Offering),’° selling roughly 35 million shares, or 12% of its equity stake. An additional 3.1
million shares were sold by Brookfield pursuant to a partial exercise of the underwriters’
overallotment option. As part of the IPO, Brookfield also caused GrafTech to enter into an
agreement to pay Brookfield a special cash dividend, conditioned on GrafTech’s financial results
and certain other factors. (ECF #56, § 40).

C. The Class Action Period
As asserted in the First Amended Complaint, “[t|his is a federal securities class action on
behalf of all persons or entities that purchased or otherwise acquired GrafTech common stock

15
GrafTech first went public, through an IPO, in 1995 as UCAR International, Inc., before
changing its name to GrafTech International Ltd., in 2002. (ECF #56, § 32).
-22-

between February 8, 2019, and August 3, 2023, inclusive (the ‘Class Period’), and were harmed
thereby (the ‘Class’).... Excluded from the Class are: (1) Defendants, . . . and members of their
immediate families; (ii) the officers and directors of GrafTech, at all relevant times, and members
of their immediate families; (111) the legal representatives, heirs, successors, or assigns of any of
the foregoing; and (iv) any entity in which Defendants have or had a controlling interest.” (ECF
#56, First Amended Complaint, § 15 & n.2).

D. Procedural History
On January 25, 2024, Plaintiff John C. Porter filed this action in the U.S. District Court
for the Northern District of Ohio, on behalf of all purchasers of GrafTech common stock between
February 8, 2019 and August 3, 2023, inclusive (the “Class Period’’), against Defendants
asserting violations of Sections 10(b) and 20(a) of the Exchange Act, and Rule 10b-5
promulgated thereunder. (ECF #1, § 1). On May 7, 2024, the Court held a hearing related to two
competing motions to be named as Lead Plaintiff. On May 15, 2024, University of Puerto Rico
Retirement System was named as Lead Plaintiff to represent the interests of the proposed class
plaintiffs. (ECF #41, Memorandum of Opinion and Order & ECF #42, Order).

ll. THE MOTION TO STRIKE ALLEGATIONS
REGARDING “FORMER ENGINEERING LEAD”
Before addressing the three Motions to Dismiss now before the Court,’ the Court first

16
These motions are: (1) Motion of Defendants GrafTech, Kessler, Coburn, Flanagan, and
Halford to Dismiss the First Amended Complaint for Violations of the Federal Securities Laws
(ECF #64); (2) Defendant David Rintoul’s Motion to Dismiss the First Amended Complaint
(ECF #65); and (3) Motion of Defendants BCP IV Graflech Holdings LP, Brookfield Capital
Partners Ltd, and Brookfield Asset Management Ltd., to Dismiss the First Amended Complaint
-23-

turns to the Motion of Defendants GrafTech, Kessler, Coburn, Flanagan, and Halford to Strike
Allegations Regarding “Former Engineering Lead” (ECF #67).
The “Former Engineering Lead” referenced in the First Amended Complaint, and now the
Motion to Strike, is Joshua Geitner, who was employed at the St. Marys Plant between August
2022 and April 2024. (See ECF #56, 58-63, 8, 213 & 214; ECF #67-3, Declaration of Joshua
Geitner, §§ 1-2). Before the First Amended Complaint was filed, Mr. Geitner spoke with
representatives for Plaintiffs by telephone on two or three occasions. (ECF #67-3, { 3). In an
affidavit filed along with the Motion to Strike, Mr. Geitner states that he was never given a draft
of the First Amended Complaint prior to its filing, or a written summary of what statements
would be attributed to him, so that he could review it for accuracy or note any needed
corrections. (ECF #67-3, 3). Later, when he was shown a copy of the First Amended
Complaint by counsel for GrafTech after its filing, he saw that the First Amended Complaint
plainly misrepresented — or at best misconstrued — what he had said, causing him to later sign a
declaration under penalty of perjury stating, among other things, “Contrary to what is included in
Paragraph 59 of the First Amended Complaint, I do not recall telling the lawyers or investigators
that ‘the St. Marys facility was not involved in the production or manufacturing of any pins.’ I
specifically did not tell the lawyers or investigators for plaintiff that GrafTech was not
graphitizing or machining at St. Marys during my tenure with the Company” (ECF #67-3, { 5)
(emphasis supplied). Thus, the references to “graphitizing pin stock” and “machining pin stock”
made in the declaration confirm directly that the “Former Engineering Lead” does consider

for Violations of the Federal Securities Laws (ECF #66).

-24-

graphitizing and machining to be a part of the “pin production and manufacturing process,” and
thus directly refutes the statement attributed to him by Plaintiffs that “the St. Marys facility was
not involved in the production or manufacturing of any pins.”
The full text of the “Former Engineering Lead’s affidavit is set forth below:
1. During the period between August 2022 and April 2024, I was
employed by GrafTech International Holdings Inc., a subsidiary of GrafTech
International Ltd. (““GrafTech” or “the Company”). I began employment on
August 29, 2022 as a Manufacturing Engineering Lead, and my title changed
to Process Engineer on April 1, 2023. Throughout my employment with
GrafTech, I worked at the Company’s St. Marys, Pennsylvania plant. My
employment ended on April 13, 2024.
2. I believe that I am the individual referred to as “Former Engineering
Lead” in the First Amended Complaint, a copy of which has been provided to
me by counsel to GrafTech.
3. To the best of my recollection, I communicated verbally by
telephone with individuals who called me and identified themselves as
lawyers or investigators seeking information about GrafTech on two or three
occasions in the summer of 2024. The first call involved only one individual;
the second involved multiple. I recall informing the lawyers or investigators
that I did not wish to be referenced in court documents. I never received a
copy of the First Amended Complaint from them, either before or after the
plaintiff filed it. Nor did the lawyers or investigators provide me with a
written version of anything they thought I said, so that I could review it and
confirm its accuracy (or make any corrections).
4. My comments to the lawyers or investigators about operations,
equipment (including a press and cooling pond), and permits at the St. Marys
plant were limited to initial stages of the production process (e.g., forming).
The initial stages, not the later stages (e.g., graphitizing pin stock and
machining the pin stock to produce pins), were the portions of the process on
which I was focused during my employment at the St. Marys facility.
5. Contrary to what is included in Paragraph 59 of the First
Amended Complaint, I do not recall telling the lawyers or investigators that
“the St. Marys facility was not involved in the production or manufacturing
of any pins.” I specifically did not tell the lawyers or investigators for
Plaintiff that GrafTech was not graphitizing or machining at St. Marys
during my tenure with the Company.

-25-

6. To the contrary, during the entirety of my tenure at GrafTech, I
believe that the St. Marys facility was operational from the standpoint of
graphitizing and machining.
7. I declare under penalty of perjury that the foregoing is true and
correct.
Executed on this 26" day of November, /s/ Joshua Geitner
2024
(ECF #67-3, Declaration of Joshua Geitner) (emphasis supplied).
Against this, Plaintiffs represent to the Court in the First Amended Complaint that, “as
confirmed by a former GrafTech employee” or “according to a former GrafTech Manufacturing
Engineering Lead”:
“Tn truth, however, the St. Mary’s facility was not actually involved in any
production of pins or pin stock during this time. Indeed, as confirmed by a
former GrafTech employee ..., Defendants had not even begun the process of
obtaining the appropriate operating permits required for pin production at the
St. Marys facility.” (ECF #56, § 8).
“But according to a former GrafTech Manufacturing Engineering Lead . . . the
truth was that the St. Marys facility produced no pins or pin stock at all during
2021 or 2022 and, in fact, did not even have the proper ‘operating permits’ to
perform such activities.” (ECF #56, 4 58).
“According to the Former Engineering Lead, at the time of his hiring, the St.
Marys facility was not involved in the production or manufacturing of any
pins.” (ECF #56, 4 59).
“At the time of the Former Engineering Lead’s hiring, . . . it was clear to the
Former Engineering Lead that the St Marys facility had not produced or
manufactured pins at any point within the last year.” (ECF #56, § 60).
“According to the Former Engineering Lead, . . . the St. Marys facility never
produced or manufactured any actual pins at any point during his tenure
with GrafTech, which came to an end in April 2024.” (ECF #56, { 62).
“According to the Former Engineering Lead, defendant Halford was aware of
and familiar with the activities at the St. Marys facility, and definitely would
have known that the plant was not involved in actual pin production during

-26-

2021 and 2022. According to the Former Engineering Lead, Halford regularly
visited the St. Marys facility, was ultimately responsible for overseeing
GrafTech’s efforts to restart the plant, and was regularly informed about the
activities and issues at the St. Marys facility by Knoll.” (ECF #56, § 63).
“Specifically, according to the Former Engineering Lead, the St. Mary’s
facility did not produce any pins at all during the time frame when Halford
represented that the St. Marys facility had an ‘operational’ ‘pin production
line.” (ECF #56, § 214) (underlined emphasis in original).
While perhaps not every one of the statements offered by Plaintiffs as being “confirmed”
by the “Former Engineering Lead” is as directly misrepresented (and directly refuted by the
“Former Engineering Lead” as being his statement) as that found in paragraph 59 of the First
Amended Complaint, it is clear that all of these paragraphs are infused with some level of
misrepresentation by Plaintiffs in presenting their First Amended Complaint — or at minimum,
represent an attempt to manipulate the Court’s directive to “accept all factual allegations . . . as
true,” and construe them in the light most favorable to the plaintiff, see Tellabs, Inc. v. Makor
Issues & Rts., Ltd., 551 U.S. 308, 322-23 (2007), in an effort to avoid a well-pled motion to
dismiss under Federal Rule of Civil Procedure 12(b)(6), and the “exacting pleading
requirements” of the PSLRA intended to “screen out frivolous suits.”'’ Tellabs, 551 U.S. at
313, 319-21.
Federal Rule of Civil Procedure 12(f) allows a court to “strike from a pleading . . . any
redundant, immaterial, impertinent, or scandalous matter.” FED. R. Crv. P. 12(f). Immaterial
matters are those that have “no bearing on the subject matter of the litigation”; impertinent

17
The Court, by this reference to the pleading standards of the PSLRA, does not intend to
label the First Amended Complaint as “frivolous,” but rather to highlight that “[N]ot all
allegations that would survive a traditional motion to dismiss under Rule 12(b)(6) are sufficient
to survive dismissal in a private securities class action.” Lim y. Hightower, No. 4:23-CV-01454,
2024 WL 4349409, at *8 (N.D. Ohio Sept. 30, 2024).
-27-

matters are those that “are not necessary to the issues presented”; and scandalous matters are
those that “unnecessarily reflect[] on the moral character of an individual or state[] anything in
repulsive language that detracts from the dignity of the court.” McKinney v. Bayer Corp., No.
10-CV-224, 2010 WL 2756915, at *1 (N.D. Ohio July 12, 2010). Motions to strike “serve a
useful purpose by saving the time and expense which would otherwise be spent in litigating
issues which would not affect the outcome of the case.” Student Res. Ctr., LLC v. E. Gateway
Cmty. Coll., No. 2:22-CV-2653, 2024 WL 3849440, at *7 (S.D. Ohio Aug. 15, 2024). District
courts are endowed with “broad discretion in determining whether to grant a motion to strike.”
McKinney, 2010 WL 2756915, at *2. Courts may exercise this discretion when the allegations
at issue are “both irrelevant to the subject matter of the litigation and prejudicial to the objecting
party,” id., and when they are “designed to improperly illicit sympathy, to curry favor, or to cast
aspersions on the defendants.” Novolex Holdings, LLC v. Wurzburger, No. 19-145-DLB-CJS,
2022 WL 391307, at *3 (E.D. Ky. Feb 8, 2022).
The situation now before the Court presents an unusual, and hopefully rare, case in the
context of a motion to strike. It is not unusual for complaints filed in connection with claims
made under the Private Securities Litigation Reform Act to cite information obtained from
“confidential witnesses.” As the reliance on such confidential witnesses has grown, courts have
responded by closely examining the allegations and “sharply discounting” those that are vague,
conclusory, or irrelevant. Konkol v. Diebold, 590 F.3d 390, 399 (6" Cir. 2009) (“Bare-bones
statements, such as the allegation that the Scorecards were ‘of huge importance to the decision-
making of the Company,’ are the type of vague and conclusory allegations from confidential
witnesses that are properly discounted.”), abrogated on other grounds (related to establishing

-28-

the element of “scienter”) by Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 48-49 (2011);
Higginbotham v. Baxter Int'l, Inc., 495 F.3d 753, 757 (7" Cir. 2007) (“Usually that discount
will be steep.”). What is unusual is for a Court to be presented with a sworn affidavit by the
“confidential witness” directly refuting the statements attributed to him. This calls for more
than a “steep discount” of the allegations, and rather represents grounds to strike the noted
paragraphs as “immaterial and impertinent” by virtue of the fact that they directly misrepresent
what the confidential witness stated, injects unfair prejudice into the Court’s consideration of
the motions to dismiss, and only serves to confuse the issues before the Court. While “[t]he
falsity of a matter alleged is not specifically included among the grounds for a motion to
strike[,] Hughes [v. Lavender, No. 2:10-CV-674], 2011 WL 2945843, at *2 [(S.D. Ohio July 20,
2011)]; [hJowever, although caution is advised, a court may grant a motion to strike for falsity if
the court finds that the allegations are ‘obviously false and clearly injurious to a party.’”
Schlosser vy. Univ. of Tenn., No. 3:12-CV-534, 2014 WL 5325350, at *3 (E.D. Tenn. Oct. 20,
2014) (inserts supplied). This is such a case. Accordingly, the Court GRANTS the Motion of
Defendants GrafTech, Kessler, Coburn, Flanagan, and Halford to Strike Allegations Regarding
“Former Engineering Lead” (ECF #67).'* The Court notes here that this ruling does not have

18 .
In their Memorandum in Opposition to Motion to Strike, Plaintiffs argue that the Motion
to Strike is untimely under Federal Rule of Civil Procedure 12()(2) (“The court may act... □□
motion made by a party either before responding to the pleading or, if a response is not allowed,
within 21 days after being served with the pleading”) and “procedurally improper” under
Federal Rule of Civil Procedure 12(g)(2) (“[A] party that makes a motion under this rule must
not make another motion under this rule raising a defense or objection that was available to the
party but omitted from its earlier motion”). (ECF #70, p.9). As to the first argument, no
Defendant has filed an answer in response to the First Amended Complaint, thus Rule 12((2)
permits the motion. See Tracfone Wireless, Inc. v. Access Telecom, Inc., 642 F. Supp. 2d 1354,
1361 (S.D. Fla. 2009) (“Plaintiffs claim that this [m]otion is untimely under Rule 12(f) is
without merit; despite the fact that this [m]otion was filed over four months after the
-29-

the effect of otherwise altering its independent determination that Defendants are entitled to
judgment on their Motions to Dismiss, in that, as discussed later in this Memorandum of
Opinion and Order, the Court can consider documents that are referenced in the complaint and
matters of which it may take judicial notice, including the numerous times between 2018 and
2022 that GrafTech stated in its filings that the St. Marys Plant was engaged in the graphitizing
and machining steps in pin production and manufacturing at the St. Marys Plant.

Il. LEGAL STANDARDS RELATED TO MOTIONS TO DISMISS
The Motions to Dismiss raise three fundamental questions of law:
First, does the First Amended Complaint plead, with requisite particularity, claims of
materially false or misleading statements, or an omission that rendered another statement
materially misleading, as required to state a claim under Section 10(b) of the Securities Exchange
Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder?
Second, does the First Amended Complaint plead, with requisite particularity, facts
giving rise to a strong inference of scienter as to each Defendant and each alleged misstatement,
as required to state a claim under Section 10(b) of the Securities Exchange Act of 1934 (the

[c]omplaint,” and after the defendants had filed motions to dismiss, “it was timely filed before a
responsive pleading to the [c]omplaint was filed.”). Moreover, even when faced with an
allegedly untimely motion to strike, the Court may strike allegations “on its own.” FED. R. CIv.
P. 12(f)(1). As to the second argument, courts in the Sixth Circuit have long recognized that
“the purpose of Rule 12(g)(2) is to prevent the dilatory motion practice fostered by common law
procedure and many of the codes whereby numerous pretrial motions could be made, many of
them in sequence a course of conduct that often was pursued for the sole purpose of delay,”
Blick v. Ann Arbor Pub. Sch. Dist., No. 19-12127, 2021 WL 10132110, at *2 (E.D. Mich. Sept.
30 2021), “[bJut a line of precedent exists in which the district courts have been willing to
overlook a 12(g) defect where doing so would better serve the purpose underlying subdivision
(g).” Id. There is no indication that the Motion to Strike had any effect of delaying the
proceedings, as it was filed prior to Plaintiffs even responding to the Motions to Dismiss.
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“Exchange Act”) and Rule 10b-5?
Third, does the First Amended Complaint plead a viable claim under Section 20(a) of the
Exchange Act?
In determining the Motions to Dismiss in this case, the Court not only looks to the
standards applicable to motions to dismiss under Federal Rule of Civil Procedure 12(b)(6), but
also to the more exacting and heightened pleading standards applicable to cases alleging
securities fraud under Sections 10(b) and 20(a) of the Securities Act.

A. Motions to Dismiss Generally Under Federal Rule of Civil Procedure 12(b)(6)
In order to survive a motion to dismiss under Rule 12(b)(6), a complaint must contain
“sufficient factual material” which, if accepted as true, would state a valid “claim to relief that is
plausible on its face.” Sampson, 2020 U.S. Dist. LEXIS 231649, at *4; see also Askew v. True
Hearts of Care, LLC, No. 5:19-CV-01619, 2020 U.S. Dist. LEXIS 2187, at *4 (N.D. Ohio Jan. 7,
2020) (“While detailed factual allegations are not required, Fed. R. Civ. P. 8(a)(2) calls for
sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its
face.’”) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009), in turn quoting Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 570 (2007)).
“All well-pleaded material allegations of the pleadings of the opposing party must be
taken as true, and the motion may be granted only if the moving party is nevertheless clearly
entitled to judgment.” Colbert v. Cuyahoga Cnty, Ohio, No. 1:23-CV-01414, 2024 U.S. Dist.
LEXIS 173672, at *7 (N.D. Ohio Sept. 25, 2024) (quoting Poplar Creek Dev. Co. v. Chesapeake
Appalachia, L.L.C., 636 F.3d 235, 240 (6" Cir. 2011). Although a court must accept the well-
pleaded allegations of a complaint as true, it “need not accept as true legal conclusions or

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unwarranted factual inferences, and conclusory allegations or legal conclusions masquerading as
factual allegations will not suffice.” Willman v. Attorney General of the United States, 972 F.3d
819, 823 (6 Cir. 2020) (quoting Terry v. Tyson Farms, Inc., 604 F.3d 272, 276 (6" Cir. 2010)).
Under the general standard, as the Supreme Court noted in Twombly, a complaint is “not
require[d] [to include] heightened fact pleading of specifics, but only enough facts to state a claim
to relief that is plausible on its face.” Twombly, 550 U.S. at 570.”

B. The Heightened Standard Applied in Federal Securities Law Cases
Because Sections 10(b) and 20(a) of the Exchange Act involve fraud, the Court also must
apply the pleading requirements set forth in Federal Rule of Civil Procedure 9(b). While a court
interprets all facts in the complaint as true, a plaintiff must, at minimum, “detail[] the “who,
what, when, where, and how’ of the alleged fraud.” Bondali v. Yum! Brands, 620 F. App’x 483,
489 (6" Cir. 2015). In addition to this, for securities fraud cases, a plaintiff must satisfy the
“exacting pleading requirements” of the PSLRA. Tellabs, Inc. v. Makor Issues & Rights, Ltd.,
551 U.S. 308, 313 (2007). The legislative history of the PSLRA states that it was enacted by
Congress to act as a “check against abusive litigation by private parties” and to “screen out
frivolous suits,” Tellabs, 551 U.S. at 319-21, based on a concern that private securities actions
can be ripe for abuse. Jd. at 308-09. The PSLRA demands that a securities complaint state
“with particularity” “each statement alleged to have been misleading” and “the reason or reasons
why the statement is misleading.” /d. at 321. A complaint must also allege particularized facts

19
As noted below, in the discussion on the standards applied under the PSLRA, securities
fraud claims must meet a higher standard of specificity than that applied under the general
standard of FED. R. Civ. P. 12(b)(6) analysis.
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giving rise to a “strong” inference of scienter. Jd. “Scienter” is not the product of mistake,
miscalculation, overoptimism, or unfulfilled prediction, but rather a is a mental state embracing
an intent “to deceive, manipulate, or defraud.” Jd. at 313. Pleading a violation of the federal
securities laws is not easy. The pleading standards of the PSLRA have been described by the
Sixth Circuit as creating an “elephant-sized boulder” that must be surmounted to successfully
state a claim. Jn re Omnicare, Inc. Sec. Litig., 769 F.3d 455, 461 (6 Cir. 2014). “[N]ot all
allegations that would survive a traditional motion to dismiss under Rule 12(b) are sufficient to
survive dismissal in a private securities action.” Lim v. Hightower, No. 4:23-CV-1454, 2024
WL 4349409, at *8 (N.D. Ohio Sept. 30, 2024).

IV. THE LAW GOVERNING THE CLAIMS ASSERTED IN THIS CASE
A. Section 10(b) of the Exchange Act and Rule 10b-5
To state a claim under Section 10(b) of the Exchange Act and Rule 10b-5,” a plaintiff

20
Securities Exchange Act Rule 10b-5 is the vehicle by which violations of Securities
Exchange Act of 1934 Section 10(b) is pursued. Section 10(b) of the Exchange Act provides:
It shall be unlawful for any person, directly or indirectly, by the use of any
means or instrumentality of interstate commerce or of the mails, or of any
facility of any national securities exchange . . . (b) [t]o use or employ, in
connection with the purchase or sale of any security registered on a national
securities exchange . . . any manipulative or deceptive device or
contrivance in contravention of such rules and regulations as the
Commission may prescribe as necessary or appropriate in the public
interest or for the protection of investors.
15 U.S.C. § 78j(b).
Rule 10b-5 provides:
It shall be unlawful for any person, directly or indirectly, by the use of any
means or instrumentality of interstate commerce, or of the mails or of any
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must establish: “(1) a material misrepresentation or omission by the defendant; (2) scienter;
(3) a connection between the misrepresentation or omission and the purchase or sale of a
security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss
causation.” Bondali, 620 F. App’x at 489 (quoting Stoneridge Inv. Partners, LLC v. Scientific-
Atlanta, Inc., 552 U.S. 148, 157 (2008)). Here, the dispositive elements are those of “material
misrepresentation or omission” and “scienter.” The Court first examines the element of
“material misrepresentation or omission.”
1. Actionable Material Misrepresentations or Omissions
To successfully plead an actionable material misrepresentation or omission, a plaintiff
must allege facts demonstrating two things: (1) that a defendant made a statement or omission
that was false or misleading; and (2) that the statement or omission concerned a material fact.
Omnicare, 769 F.3d at 470. “Materiality” is dependent on the significance a reasonable investor
would place on the withheld or misrepresented information. Basic v. Levinson, 485 U.S. 224,
240 (1988); see also In re Nat’l Auto Credit, Inc. Sec.Litig., No. 1:98-CV-0264, 1999 WL
33919791, at *11 (N.D. Ohio Oct. 12, 1999) (holding that facts are material only if a reasonable
investor would have viewed the misrepresentation or omission as “having significantly altered
the total mix of information made available”) (citations omitted). It is not enough for a

facility of any national securities exchange, (a) [t]o employ any device,
scheme, or artifice to defraud, (b) [t]o make any untrue statement of a
material fact or to omit to state a material fact fact necessary in order to
make the statements made, in the light of the circumstances under which
they were made, not misleading, or (c) [t]o engage in any act, practice, or
course of business which operates or would operate as a fraud or deceit
upon any person, in connection with the purchase or sale of any security.
17 C.F.R. § 240.10b-5.
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statement to be “false or incomplete, if the misrepresented fact is otherwise insignificant.”
Basic, 485 U.S, at 238.
A key concept that almost always arises in determining whether an allegedly false or
misleading statement is “material,” and actionable, is whether the statement concerns “hard” or
“soft information.” “Hard information” is “typically historical information or other factual
information that is objectively verifiable” — and it is actionable if a plaintiff pleads facts showing
that the statement concerned a material fact and that it was objectively false or misleading.
Omnicare, 769 F.3d at 470 (citations omitted). If the statement is one concerning“soft
information,” which “includes predictions and matters of opinion,” a plaintiff must additionally
plead facts showing that the statement was “made with knowledge of its falsity.” Indiana State
Dist. Council of Laborers Pension & Welfare Fund v. Omnicare, 583 F.3d 935, 945-46 (6" Cir.
2009).
“Soft information,” and “‘puffery” do not constitute a material misrepresentation upon
which stockholders would reasonably rely. Lim, 2024 WL 4349409, at *9 (citing Zaluski v.
United Am. Healthcare Corp., 527 F.3d 564, 576 (6" Cir. 2008); Indiana State Dist. Council of
Laborers, 583 F.3d at 943). Statements are not actionable if they are overly general, “lack[ing]
the sort of definite projections that might require later correction.” Lim, 2024 WL 4349409, at
*9 (citing In re Express Scripts Holdings Co. Sec. Litig., 773 F. App’x 9,12 (6 Cir. 2019)).
Any generally optimistic or overly broad statements cannot be the basis for a Section 10(b)
claim. Jd. And, particularly pertinent to many of the claims at issue in this case, “a generic
claim of legal compliance, absent any specifics, does not form the basis for a misrepresentation
actionable under Rule 10b-5” (and thus Section 10(b) as well). Jn re Sotera Health Company

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Sec. Litig., No. 1:23-CV-00143, 2025 WL 860897, at *25 (N.D. Ohio Mar. 19, 2025) (citing
Dailey v. Medlock, 551 F. App’x 841, 849 (6" Cir. 2014), in turn citing Indiana State Dist.
Council of Laborers, 583 F.3d at 945-947). In Indiana State Dist. Council of Laborers,” the
Sixth Circuit affirmed a district court’s ruling that the company’s general assertions of legal
compliance — that it “complied with state law and regulations and had a policy of complying
with the law” — were not actionable because the plaintiffs failed to show the defendants knew the
statements were untruthful. Indiana State Dist. Council of Laborers, 583 F.3d at 945-47.
Plaintiffs’ allegations of “material misstatements or omissions” involve three categories:
(1) those related to purported non-disclosures about the Monterrey Plant, particularly about its
compliance with applicable environmental laws and the Administrative Proceeding in 2019;
(2) statements related to the operations and activities at the St. Marys Plant; and (3) statements
about the anticipated effects of the Monterrey Plant shutdown in November 2022.
The Court first looks to the statements related to the Monterrey Plant.

a. Statements About the Monterrey Plant
A key factor in determining whether an alleged statement or omission is actionably false
or misleading is whether the statement was false when made. An actionable assertion cannot be
based on what has come to be known as allegations of “fraud by hindsight.” See Jn re
Huntington Bancshares Inc. Sec. Litig., 674 F. Supp. 2d 951, 959 (S.D. Ohio 2009) (“[W]e have
refused to allow plaintiffs to proceed with allegations of ‘fraud by hindsight.’ Corporate

21
This cited case is often referred to as “Omnicare” or “Omnicare I,” but to avoid
confusion with the first-cited In re Omnicare, Inc. Sec. Litig., 769 F.3d 455 (6 Cir. 2014), this
case is referred to as “Jndiana State Dist. Council of Laborers.”
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officials need not be clairvoyant; they are only responsible for revealing those material facts
reasonably available to them. Thus, allegations that defendants should have anticipated future
events and made certain disclosures earlier than they actually did do not suffice to make out a
claim of securities fraud.”) (quoting Novak v. Kasaks, 216 F.3d 300, 309 (2™ Cir. 2000)); see
also City of Pontiac Policemen’s and Firemen’s Retirement Sys. v. UBS AG, 752 F.3d 173, 188
(2 Cir. 2014) (“We do not recognize allegations of ‘fraud by hindsight’”) (company’s failure to
recognize the vulnerability of all of its mortgage-related assets may have been “poor judgment,”
but not actionable misstatement); In re Century Bus. Servs. Sec. Litig., No. 1:99-CV-2200, 2002
WL 32254513 (N.D. Ohio June 27, 2002) (“Plaintiffs cannot simply set forth the relevant
statements and ‘summarily characterize the statements as “false and misleading.’” In other
words, plaintiffs must demonstrate a basis for the claim that the defendants’ statements were
false at the time they were made, rather than merely erroneous in hindsight.”). Here, the
Plaintiffs assertions regarding the Monterrey Plant amount to claiming that because the facility
was the subject of an Administrative Proceeding in 2019, and operations were temporarily
suspended in 2022, all of its earlier statements about having a competitive advantage and beliefs
about being in full compliance with applicable environmental laws must have been false. These
are not actionable claims.
(i) Cost and Competitive Advantage
Plaintiffs first challenge GrafTech’s statements about its competitive advantages and cost
advantages, such as statements about how it had an “advantaged low cost structure” (ECF #56,
qf 115-116, 124, 126), a “long-term competitive advantage” (ECF #56, § 119), and a “portfolio
of low-cost graphite electrode manufacturing facilities” (ECF #56, § 120). Plaintiffs state that

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these statements were misleading because the Defendants “concealed that GrafTech’s cost
advantages had been achieved in substantial part by the Company’s failure to implement
necessary environmental safeguards and comply with environmental regulations at its Monterrey
facility.” (ECF #56, J 123; see also 89, 94, 110, 131, 137, 143, 154, 163 & 169). Yet, there
are no identified facts or specific factual allegations about what GrafTech’s costs actually were,
or that they were different from what was reported as of the date of any alleged misstatement.
Nor are there any factual allegations comparing GrafTech’s costs and competitive advantages to
those of its competitors. Most significantly, the First Amended Complaint cites no documents,
communications, or data showing that the Monterrey Plant was in material violation of any
specific environmental regulation or requirement as of the date of any alleged misstatement — or
those showing that this purported “noncompliance” rendered any challenged statement about
costs materially misleading.

(ii) Environmental Compliance
The main focus of Plaintiffs’ claims about the Monterrey Plant concerns statements about
GrafTech’s efforts to comply with applicable environmental requirements, made months or even
years before the temporary shutdown in 2002, such as that GrafTech had “an on-going
commitment to rigorous internal environmental protection standards,” (ECF #56, 4 223),
“proactively [took] steps to reduce [environmental] impacts throughout [its] operations,” (ECF
#56, J 111), focused on “being good environmental stewards” and continued to “monitor
progress on [its] environmental initiatives,” (ECF #56, J 118), and was “in compliance in all
material respects with federal, state, local, and foreign environmental laws and regulations,”
(ECF #56, {jf 90, 106, 127, 159). Plaintiffs now assert that these statements were false because

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the Monterrey Plant was, at least at some points in time, not in compliance with all such
environmental requirements, as later revealed by the brief shutdown in 2022.
Plaintiffs do not identify any particularized facts showing that any of such statements (see
Appendix A of this Memorandum of Opinion) supporting their claim that they were false when
made. The First Amended Complaint does not identify any specific environmental requirement
that applied to the Monterrey Plant at the time of any challenged statement, or any particularized
facts showing known violation at the time of any such statement — such as any limits imposed by
law or regulation on plant emissions, the actual quantity of emissions that were occurring at the
time of any statement, or any data, documents, or reports identifying violations of a law or
regulation at the time of any alleged misstatement.
Nor does the First Amended Complaint identify any document, communication, data, or
other source showing that GrafTech was not committed to environmental compliance, that it was
not monitoring its progress on environmental efforts, or that it was knowingly aware that it was
not in compliance with any standard at the time of any statement. The fact that operations at the
Plant were briefly shut down in 2022, in some cases years after a statement, is not demonstrative
of contemporaneous falsity, and rather is best described as asserting “fraud by hindsight.” An
example of this is found in the facts asserted in the case of Bondali v. Yum! Brands, 620 F.
App’x 483 (6" Cir. 2015), where the Sixth Circuit affirmed the district court’s dismissal of the
claims. In Bondali, the plaintiff alleged that “Yum’s general statements touting its standards and
protocols” including that it “adhere[d] to a strict food safety testing program” and “[c]ontinually
monitor[ed] and improve[d] its procedures and practices to ensure food safety,” were false and
misleading because some of Yum’s products later tested positive for drug and antibiotic residue.

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Bondali, 620 F. App’x at 487-90. The district court dismissed the complaint. The Sixth Circuit
affirmed, finding that the complaint failed to state a claim because it “alleged no facts to suggest
that Yum did not require its suppliers to adhere to corporate food standards and safety
protocols.” Jd at 489. The Sixth Circuit further held that it was “not reasonable to interpret
Yum’s statements as a guarantee.” Jd. Such is also the case here.
Nor can contemporaneous falsity be established by the existence of the complaint filed by
the mayor of Apodaca, César Garza Villareal, along with Apodaca’s Secretary of Urban
Development, Ecology[,] and Transportation, Andres M. Canto Ramirez, filed in May 2020
against GrafTech with the Secretary of Sustainable Development for the Nuevo Leén State
Government, asserting violations of “environmental regulations, biosafety and wildlife, among
others, affecting matters of public order and social interest by expending risks or threats of
environmental contingency in neighborhoods, municipality[,] and surrounding municipalities,”
or the September 2021 citizen’s complaint filed with the Federal Prosecutor’s Office for
Environmental Protection regarding the Monterrey Plant’s dust emissions. (ECF #56, JJ 49-51).
First, as Plaintiffs’ admit, “‘[i]t is unclear what action, if any, the State Attorney General’s Office
of Sustainable Development took in response to the complaint filed by Mayor Garza and Mr.
Ramirez, (ECF #56, § 49), and “[a]s with the 2020 complaint filed by Mayor Garza and Mr.
Ramirez, it is unclear what action, if any, was taken in response to [the later] citizen’s complaint,
(ECF #56, § 51). Plaintiffs do not show that any enforcement action resulted from either
complaint, or that GrafTech or the Individual Defendants were aware of them. Nor is a claim of
contemporaneous falsity supported by Mayor Garza’s “address” to the Apodaca City Council
asking the Council to take action against the Company related to the emissions issues. (ECF

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#56, □□ 67-69). Again, Plaintiffs do not show, or even assert, that GrafTech or any of the
Individual Defendants were aware of the mayor’s remarks. These allegations also fall within the
description of “fraud by hindsight,” and are thus not actionable under the PSLRA.
(iii) 2019 Administrative Proceeding
The remaining allegations of “material misstatement or omission” in connection with the
Monterrey Plant relate to statements made by GrafTech regarding the Administrative Hearing
initiated in March 2019 by the Nuevo Leén Department of Sustainable Development, which
culminated in GrafTech paying fines amounting to approximately $150,000,” and being directed
to implement corrective measures to address violations of the environmental laws relating to
emissions. (ECF #56, 7] 95, 98, 102).
The First Amended Complaint does not identify any document, communication, or
statement that any of the disclosures or other statements made by Defendants on this matter were
either false or incorrect. The gist of Plaintiffs’ claims are that GrafTech should have included
more information in its public statements, such as the detailed findings of the Nuevo Leén
Department of Sustainable Development in its Resolution, as stated in the First Amended
Complaint:
Defendants concealed that, on July 30, 2019, the Department of Sustainable
Development issued a formal resolution of the administrative proceeding with
respect to the Company’s Monterrey facility, which: (i) determined that
GrafTech’s Monterrey facility operated “without the means of control to
ensure that dust emissions are avoided, which is mandatory as established in
Article 131 section II of the Environmental Law of the State of Nuevo Leon,
to ensure satisfactory air quality for population well-being and ecological

22
Specifically, $150,054.25, comprised of $140,253.40 and $9,800.84. (See ECF #64-10,
Resolution of the Department of Sustainable Development of Nuevo Leon, p.11 [PageID #1207]
(July 30, 2019)).
-4]-

balance”; (ii) found that GrafTech “benefitted economically by evading the
expense generated by implementation of equipment or systems that guarantee
avoiding the generation of dust emissions to the atmosphere during its
operation”; and (iii) ordered GrafTech to immediately and permanently . . .
carry out the necessary actions, adaptations and/or maneuvers that guarantee
avoiding the generation of emissions of dust or any other contaminant to the
atmosphere.”
(ECF #56, § 100; see also { 104, similar allegations).
An omission is actionable under Section 10(b) only if it renders another affirmative
statement materially misleading. Macquarie Infrastructure Corp. v. Moab Partners, L.P., 601
U.S. 257, 265 (2024). Corporate executives “have no general duty to disclose every problem
that arises.” Jn re Allscripts, Inc. Sec. Litig., No. 00-C-6796, 2001 WL 743411, at *9 (N.D. IIL.
June 29, 2001); see also Singh v. Cigna Corp., 277 F. Supp.3d 291, 310 (D. Conn. 2017) “A
reasonable investor’s interest is not sufficient, standing alone, to require disclosure”), aff'd 918
F.3d 57 (2™ Cir. 2019); In re United Am. Healthcare Corp. Sec. Litig., No. 2:05-CV-72112,
2007 WL 313491, at *6 (E.D. Mich. Jan. 30, 2007) (“A corporation not required to disclose a
fact merely because an investor would very much like to know that fact”) (quoting Jn re Time
Warner, Inc. Sec. Litig., 9 F.3d 259, 267 (2° Cir. 1993)). Nor are companies required to provide
an overly cautious or negative picture of current performance or future prospects. Albert Fadem
Tr. v. American Elec. Power Co., Inc., 334 F. Supp. 2d 985, 1026 (S.D. Ohio 2004); see also
Rombach v. Chang, 355 F.3d 164, 174 (2"! Cir. 2004) (“People in charge of an enterprise are not
required to take a gloomy, fearful or defeatist view of the future”).
A company or its officers is required to disclose information only if its absence would
“create an impression of a state of affairs that differs in a material way from the one that actually
exists.” Brody v. Transitional Hosps. Corp., 280 F.3d 997, 1006 (9" Cir. 2002); see also

-4)-

Macquarie, 601 U.S. at 265; United Am. Healthcare, 2007 WL 313491, at *10 (finding the
omission of information was immaterial when it did not render the defendant’s factual
statements inaccurate); Lim, 2024 WL 4349409, at *11 (“Because they did not result in an
affirmative misleading statement, Defendants had no duty to disclose the omitted details”).
Section 10(b) “do[es] not create . . . an affirmative duty to disclose any and all material

information.” Plymouth Cty. Ret. Assn. v. ViewRay, Inc., 556 F. Supp. 3d 772, 784 (N.D. Ohio
2021), aff'd, 2022 WL 3972478 (6" Cir. Sept. 1, 2022). It also merits mention here that
GrafTech’s full statements on such issues were often more than as identified in the First
Amended Complaint:
We believe that we are currently in compliance in all material respects with
the federal, state, local and foreign environmental laws and regulations to
which we are subject. We have experienced some level of regulatory
scrutiny at most of our current and former facilities and, in some cases,
have been required to take or are continuing to take corrective or remedial
actions and incur related costs, and may experience further regulatory
scrutiny, and may be required to take further corrective or remedial actions
and incur additional costs, in the future.
(See ECF #56, 7§ 90, 106, 127) (text omitted from statements as quoted in First Amended
Complaint shown in bold italic type).”
A review of the actual statements made by GrafTech (including the example quoted
above and others identified in Appendix A of this Memorandum of Opinion) shows that it
disclosed the existence of the 2019 Administrative Proceeding, that GrafTfech was required to

23
See ECF #64-19, PageID #1374 (partially quoted at ECF #56, § 90), GrafTech
International Ltd., 2018 Annual Report (Form 10-K), p.16 (Feb. 22, 2019); ECF #64-6, PageID
#1160 (partially quoted at ECF #56, § 106), GrafTech International Ltd., 2019 Annual Report
(Form 10-K), p.17 (Feb. 21, 2020); ECF #64-18, PageID #1300 (partially quoted at ECF #56,
{ 127), GrafTech International Ltd., 2020 Annual Report (Form 10-K), p.16 (Feb. 23, 2021).
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take corrective measures, that GrafTech paid a fine (and the specific amounts are stated in the
Resolution cited in the First Amended Complaint), and that the matter was closed — as admitted
by Plaintiffs in their First Amended Complaint:
The [Third Quarter 2019] Form 10-Q reiterated that “[o]n March 1, 2019, the
[Department of Sustainable Development] provided notice of an
administrative proceeding with respect to the Company’s Monterrey facility,”
which required the “Company to design and implement certain corrective
measures involving certain potential violations of state environmental law
relating to emissions.” The [Third Quarter 2019] Form 10-Q further
represented that GrafTech had “cooperated with the Department” with respect
to the proceeding, “including payment of certain fines that were not material
to the Company.” The [Third Quarter 2019] Form 10-Q also reported that, in
September 2019, “the Department of Sustainable Development formally
closed the proceeding.”
(ECF #56, § 102) (bracketed text in original, with exception of “[Third Quarter 2019]” added by
Court to replace “3Q19” of original). None of this information is alleged by Plaintiffs to be
false, nor do the statements create “an impression of a state of affairs that differs in a material
way from the one that actually exists.” Brody, 280 F.3d at 1006; see also Zaluski v. United Am.
Healthcare Corp., 527 F.3d 564, 574 (6" Cir. 2008) (“These statements are not the type . . . that
give rise to a duty to disclose; they are accurate portrayals of the status of the company and its
operations”); In re Yum! Brands, Inc. Sec. Litig., 73 F. Supp. 3d 846, 865 (W.D. Ky. 2014) □□□□
corporation is not required to disclose a fact merely because a reasonable investor would very
much like to know that fact.”), aff'd 620 F. App’x 483 (6" Cir. 2015).
In addition, many of the statements about the Monterrey Plant that Plaintiff now alleges
are false or misleading amount to non-actionable opinions. Opinions are actionable under
Section 10(b) only if the speaker did not hold the belief professed, or if the speaker possessed a
specific item of contradictory information that a reasonable person would have thought undercut

-44.

the opinion so strongly that the speaker knew it was misleading not to disclose that information.
Omnicare, Inc. v. Laborers Dist. Council Indus. Pension Fund, 575 U.S. 175, 183-96 (2015)
(describing that pleading an actionable opinion is “no small task’). The allegations of the First
Amended Complaint do not identify such “actional opinion” statements.
GrafTech’s or its officers’ statements on cost advantages, to the effect of “we believe our
facilities have significant cost advantages,” or “[w]e believe that we have the most competitive
portfolio” of production facilities, or “[w]e believe our facilities are among the most strategically
located and lowest cost graphite electrode manufacturing plants,” were plainly subjective
opinions about GrafTech and its business operations. See, e.g., Yum! Brands, 73 F. Supp. 3d at
863-64 (“opinions of management” with “no obvious, objective meaning” are not actionable); Jn
re TransDigm Grp., Inc. Sec. Litig., 440 F. Supp. 3d 740, 764 (N.D. Ohio 2020) (statements
about “value-based operating strategy,” “value drivers,” “value creation,” and “highly engineered
value-added products,” as well as statements regarding “strength” and “quality” of products,
were inactionable opinions). Plaintiffs do not identify particularized facts showing that any
Defendant was in possession of information contradicting these opinions, or that the speakers did
not genuinely hold such opinions. See, e.g., ViewRay, Inc., 556 F. Supp. 3d at 789-90
(statements about the value of certain backlogs were “estimate[s] and opinions,” and plaintiffs
offered no information to show “math” was wrong); Gregory v. ProNAi Therapeutics Inc., 297
F. Supp. 3d 372, 406 (S.D.N.Y.) (statements were opinions, as indicated by use of “phrases
classically indicative of opinion such as ‘I believe’ and ‘I think.’”), aff'd ,757 F. App’x 35 □□□
Cir. 2018).
GrafTech’s statements about its environmental efforts and compliance were also opinions

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that do not rise to the level of “actionable opinions” under Section 10(b). Statements such as
‘““we believe we are currently in compliance in all material respects with the federal, state, local
and foreign environmental laws and regulations to which we are subject,” (see ECF #56, □ 90,
106, 127), and “we believe we operate in compliance in all material respects with applicable
laws and regulations,” (ECF #56, J 159), are also the kind of statements consistently held to be

- inactionable opinions. See, e.g., Omnicare, 575 U.S. at 185-86 (“we believe we are obeying the
law” not an actionable misstatement). Again, Plaintiffs do not identify particularized facts
showing that any Defendant was in possession of information contradicting these opinions, or
that the speakers did not genuinely hold such opinions.
Finally, many of the statements Plaintiffs identify as “false or misleading” lack the
factual specificity required to be actionable statements. The Sixth Circuit has consistently held
that “soft” information, such as “puffery,” general predictions, aspirational statements, and
“corporate optimism” is not actionable because the information does not meaningfully alter the
total mix of information available to investors. See, e.g., Zaluski, 527 F.3d at 573 (“loosely
optimistic statements” that were “insufficiently specific” were not actionable); Jn re Ford Motor
Co. Sec. Litig., 381 F.3d 563, 570 (6" Cir. 2004) (“Immaterial statements include vague, soft,
puffing statements or obvious hyperbole” upon which a reasonable investor would not rely;
identifying numerous such inactionable statements).”

24
As stated by the Sixth Circuit:
[P]laintiffs allege that Ford made many misleading statements regarding its
commitment to quality, safety, and corporate citizenship, such as: (1) “[A]t Ford,
quality comes first.” (2) “We aim to be the quality leader”; (3) “Ford has its best
quality ever”; (4) Ford is “taking across-the-board actions to improve . . . [its]
quality.”; (5) Ford has made “quality a top priority”; (6) “Ford is a worldwide
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Several of the alleged misstatements expressed generic hopes or characterizations about
GrafTech’s growth and cost structure. (See, e.g., ECF #56, § 87 (“economies of scale and a
competitive cost structure”); {J 115-116, 124 (‘advantaged low cost structure”); ff 119, 126,
132, 135, 138, 141, 150 (“low-cost structure . . . sustainable and long term competitive
advantage”); Jf 96, 99, 132, 150 (“’manage capital expenditures by taking into account...
environmental and regulatory requirements”)). Courts in the Sixth Circuit and elsewhere.
routinely dismiss claims based on such generic characterizations or expressions, or “puffery.”
See, e.g., Kolominsky v. Root, Inc., 667 F. Supp. 3d 685, 706-07 (S.D. Ohio 2023) (statements
that company kept “acquisition costs much lower that [its] competitors” were “vague puffery by

leader in automotive safety”; (7) Ford has made “quality a top priority” [sic,
repeating the same statement identified as “(5)”]; (8) Ford is “designing safety
into... . [its] cars and trucks” because it wants its “customers to feel safe and
secure in their vehicles at all times”; (9) Ford “want[s] to make customers’ lives . .
. safer”; (10) Ford has “dedicated . . . [itself] to finding even better ways of
delivering .. . safer vehicles to [the] consumer”; (11) Ford “want[s] to be clear
leaders in corporate citizenship”; (12) Ford’s “greatest asset is the trust and
confidence ... [it] has earned from . . . [its] customers”; (13) Ford “is going to
lead in corporate social responsibility.” Such statements are either mere
corporate puffery or hyperbole that a reasonable investor would not view as
significantly changing the general gist of available information, and thus, are
not material, even if they were misleading. All public companies praise their
products and their objectives. Courts everywhere “have demonstrated a
willingness to find immaterial as a matter of law a certain kind of rosy
affirmation commonly heard from corporate managers and numbingly familiar
to the marketplace — loosely optimistic statements that are so vague, so lacking
in specificity, or so clearly constituting the opinions of the speaker, that no
reasonable investor could find them important to the total mix of information
available.”
Ford Motor Co., 381 F.3d at 570-71 (inserts and omissions in original; emphasis supplied).

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an executive that is immaterial as a matter of law”); ProNAi Therapeutics, Inc., 297 F. Supp. 3d
at 399 (statement about “competitive advantages” was puffery).
The statements on environmental efforts and commitment to sustainability, (see, e.g.,
ECF #56, { 103, 105 (“continue to invest in health, safety and environmental performance’’);
118 (‘being good environmental stewards”), are of the same character of immaterial “soft”
information or “puffery.” See Norfolk Cty. Ret. Sys. v. Tempur-Pedic Int’l, Inc., 22 F. Supp. 3d
669, 677 (E.D. Ky. 2014), aff'd, 614 F. App’x 237 (6" Cir. 2015); City of Pontiac Gen. Emps.
Ret. Sys. v. Stryker Corp., 865 F. Supp. 2d 811, 829 (W.D. Mich. 2012) (statements that
company was “committed to... manufacturing . .. medical products that are safe and effective
and that comply with applicable laws and regulations” were “[v]ague statements of opinion
[that] are not actionable under the federal securities laws”).
The statements regarding GrafTech believing itself to be “in compliance in all material
respects with federal, state, local and foreign environmental laws and regulations to which [it
was] subject,” (see ECF #56, {9 90, 10-6, 127, 159), also fit within this category. Generic
statements assuring “legal compliance” constitute “soft” information, as companies generally
“have no duty to opine about the legality of their own actions.” Indiana State Dist. Council of
Laborers, 583 F.3d at 945. This is especially so where the statement can be described as one
routinely included in a company’s public statements, as is the case here. Doshi v. General Cable
Corp., 386 F. Supp. 3d 815, 829 (E.D. Ky. 2019) (the “vague nature” of such statements and
their “borderline boilerplate quality” weigh against a finding of materiality, and generally lead to
dismissal).
Put simply, Plaintiffs have not stated an actionable claim under Section 10(b) of the

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Exchange Act and the PSLRA in connection with GrafTech’s statements regarding its Monterrey
Plant.

b. Statements About the St. Marys Plant
The First Amended Complaint’s allegations about GrafTech’s statements regarding the
St. Marys Plant fall into two categories. The first category involves statements about an
automated pin production line at the St. Marys Plant that became operational in 2021. The
second category is comprised of a single forward-looking statement from early 2019 that
GrafTech could operate the St. Marys Plant as a peaking plant if needed in the future.
(i) Statements About Production at St. Marys
As to the first category, the First Amended Complaint alleges that certain statements
made by GrafTech or its officers between August 2021 and May 2022 regarding GrafTech’s
investment in an automated pin production line at the St. Marys Plant were false or misleading,
as stated in the First Amended Complaint:”
“TGrafTech was] investing in a pin production line at our St. Marys,
Pennsylvania facility that will be online in the third quarter. ... This
diversifies our pin capacity and provides production flexibility.” (See ECF
#56, 99 54, 142);”°
“Tn the third quarter of 2021, we introduced additional connecting pin
production capabilities at our St. Marys, Pennsylvania facility.” (See ECF

25
The full statements as made by GrafTech and/or its officers are collected in Appendix B
to this Memorandum of Opinion.
26
Referencing GrafTech International Ltd., Second Quarter 2021 Earnings Call, p.3 (Aug.
6, 2021) (“Second Quarter 2021 Earnings Call”) (ECF #64-55, PageID #1629).
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#56, § 151);7”
“The pin production line at our St. Marys, Pennsylvania facility is now
operational, and we are ramping up production. Importantly, this provides us
with 2 connecting pin production facilities.” (See ECF #56, J 153);
“Our investment in the new automated pin line at St. Marys continues to
progress well and helps to de[-]risk our pin production capacity.” (See ECF
#56, 7 158);”
‘“°"'Ojur recent investment in the automated pin line at St. Marys continues to
progress and helps to de[-]risk our pin production capacity.” (See ECF #56,
1 56, 168).°
As asserted in the First Amended Complaint, the Third Quarter 2022 10-Q filing, (ECF
#64-12, PageID #1241, GrafTech International Ltd. Quarterly Report (Form 10-Q), p.24 (Nov.
4, 2022), issued during the Monterrey Plant shutdown, allegedly revealed that these earlier
statements about operations at the St. Marys Plant were false. Specifically, Plaintiffs contend that
GrafTech, for the first time in that filing, disclosed that the St. Marys Plant was not running the
full manufacturing process and that it was not producing the “pin stock” from which connecting
pins were machined:
[Monterrey is] currently [GrafTech’s] only site that produces the pin stock

27
Referencing GrafTech International Ltd., Quarterly Report (Form 10-Q), p.25 (Nov. 5,
2021) (“Third Quarter 2021 10-Q”) (ECF #64-25, PageID #1467).
28
Referencing GrafTech International Ltd., Third Quarter 2021 Earnings Call, p.3 (Nov. 5,
2021) (“Third Quarter 2021 Earnings Call”) (ECF #64-7, PageID #1179).
29
Referencing GrafTech International Ltd., Fourth Quarter 2021 Earnings Call, p.3 (Feb. 4,
2022) (“Fourth Quarter 2021 Earnings Call”) (ECF #64-28, PageID #1516).
30
Referencing GrafTech International Ltd., First Quarter 2022 Earnings Call, p.3 (May 6,
2022) (“First Quarter 2022 Earnings Call”) (ECF #64-30, PageID #1532).
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utilized for all [of GrafTech’s graphite] electrodes .... [W]e are pursuing
several alternatives with respect to production and sourcing of pin stock as
well as other mitigation activities to minimize the impact on our business and
our customers if the Monterrey suspension continues for the foreseeable
future. These include a potential restart of our St. Marys, Pennsylvania
facility, where the scope of production is currently limited to graphitizing and
machining of electrodes and pins. We are actively pursuing approvals for
operating permits for a restart of the facility for pin production.
(ECF #56, § 172) (quoting the Third Quarter 2022 10-Q filing, ECF #64-12, PageID #1241).
An examination of GrafTech’s prior statements about the operations of the St. Marys
Plant as contained in documents referenced in the First Amended Complaint, (which the Coutt is
entitled to do, see note 6, supra), shows that this statement does not contradict any of GrafTech’s
prior statements about the operations of the St. Marys plant or otherwise show falsity regarding
any such prior statement. Plaintiffs have not identified any prior statement that claimed that the
St. Marys made the “pin stock” from which connecting pins were made.
From well before the putative Class Period (which is asserted to begin in February 2019),
GrafTech repeatedly disclosed that it had idled the St. Marys Plant in 2016, except for the
operational functions of performing the final two steps of the pin manufacturing process,
machining, and then later, starting in 2018, graphitizing. Numerous statements identified that the
St. Marys Plant was machining semi-finished product received from other plants - indicating that
the St. Marys Plant was not engaged in the processes of making the semi-finished materials from
raw materials itself. See, e.g., GrafTech International Ltd., 2018 Annual Report (Form 10-K),
p.49 (Feb. 22, 2019) (“2018 10-K”) (ECF #64-19, PageID #1380) (“The St. Marys, Pennsylvania
facility was temporarily idled effective the second quarter of 2016 except for the machining of

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semi-finished products sourced from other plants.”).*’ And, in 2018, GrafTech began also
graphitizing a limited number of electrodes at the St. Marys Plant. See (ECF #64-19, 2018 10-K,
PageID #1384) (“In the first quarter of 2018, our St. Marys facility began graphitizing a limited
amount of electrodes sourced from our Monterrey, Mexico facility.”). GrafTech’s public
statements appear to have always disclosed that the St. Marys Plant was sourcing semi-finished

31
This same disclosure was made repeatedly by GrafTech throughout the purported Class
Period prior to the statement identified by Plaintiffs in the Third Quarter 2022 10-Q filing
(boldface type used in ECF citations to distinguish individual documents): (1) GrafTech
International Ltd., 2018 Annual Report (Form 10-K), pp.8, 10, 11, 41, 49, 53 (Feb. 22, 2019)
(“2018 10-K”) (ECF #64-19, PageID #1368, #1370, #1371, #1377, #1380, #1384); (2) GrafTech
International Ltd., Quarterly Report (Form 10-Q), p.25 [misidentified as p.26, at ECF #64-1,
p.24, n.15| (May 1, 2019) (“First Quarter 2019 10-Q”) (ECF #64-20, PageID #1398);
(3) GrafTech International Ltd., Quarterly Report (Form 10-Q), p.28 [misidentified as pp.29-30,
at ECF #64-1, p.24, n.15] (Nov. 7, 2019) (“Third Quarter 2019 10-Q”) (ECF #64-11, PageID
#1225); (4) GrafTech International Ltd., 2019 Annual Report (Form 10-K), p.6, 16, 24, 42, 48-49
(Feb. 21, 2020) (“2019 10-K”) (ECF #64-6, PageID #1149, #1159, #1162, #1166, #1169);
(5) GrafTech International Ltd., Quarterly Report (Form 10-Q), p.26 (Nov. 3, 2020) (“Third
Quarter 2020 10-Q”) (ECF #64-22, PageID #1433); (6) GrafTech International Ltd., 2020
Annual Report (Form 10-K), pp. 7, 14, 24, 43 (Feb. 23, 2021) (“2020 10-K”) (ECF #64-18,
PageID #1295, #1298, #1303, #1306); (7) GrafTech International Ltd., Quarterly Report (Form
10-Q), p.25 (May 5, 2021) (“First Quarter 2021 10-Q”) (ECF #64-23, PageID #1446);
(8) GrafTech International Ltd., Quarterly Report (Form 10-Q), p.26 (Aug. 6, 2021) (“Second
Quarter 2021 10-Q”) (ECF #64-24, PageID #1455); (9) GrafTech International Ltd., Quarterly
Report (Form 10-Q), p.26 (Nov. 5, 2021) (Third Quarter 2021 10-Q”) (ECF #64-25, PageID
#1468); (10) GrafTech International Ltd., 2021 Annual Report (Form 10-K), pp.6, 14, 20, 36
(Feb. 22, 2022) (“2021 10-K”) (ECF #64-26, PageID #1480, #1483, #1486, #1489);
(11) GrafTech International Ltd., Quarterly Report (Form 10-Q), p.25 (May 6, 2022) (“First
Quarter 2022 10-Q”) (ECF #64-27, PageID #1507).
Defendants also reference similar disclosures as appearing on page 29 of GrafTech
International Ltd., Quarterly Report (Form 10-Q) (July 31, 2019) (‘Second Quarter 2019 10-Q”)
(ECF #64-21) and page 38 of the Third Quarter 2019 10-Q (ECF #64-11), see Memorandum of
Law in Support of the Motion of Defendants GrafTech, Kessler, Coburn, Flanagan, and Halford
(ECF #64-1, p.24, n.15), but the Court finds no such reference at the cited page or any nearby
page of such documents. Given the accuracy of each of the many other references to such
disclosures, the Court suspects this is due to citation error or inadvertent omission of the correct
page of these documents rather than the statement not appearing elsewhere in them.
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product from other plants to then conduct its machining and graphitization processes. (See ECF
#64-19, PageID #1370, #1380). Plaintiffs identify no public statement that the St. Marys facility
was performing all six steps of the pin manufacturing and production process.
In fact, the record of GrafTech’s public disclosures and statements prior to the Third
Quarter 2022 10-Q show that it never made representations that all the steps of the pin
manufacturing process were being conducted at the St. Marys facility, or that any more activities
than pin machining and graphitizing were being conducted. Numerous statements issued by
GrafTech show that the activities of the St. Marys Plant were limited to machining and later
eraphitization. As an example, the transcript of GrafTech’s Third Quarter Earnings Call shows
the following exchange, where, in response to a question from an analyst about whether GrafTech
had “given any thought to be starting [restarting] St. Marys outside of the pin machining,”
GrafTech’s then-CEO David Rintoul noted that “In terms of St. Marys, we need to finish ramping
up this pin machining operation. That’s a critical addition and provides us more flexibility.”
(ECF #64-7, p.7, PageID #1181). The documents cited in the First Amended Complaint show
that in the following Earnings Call, in February 2022, Rintoul again noted that GrafTech was not
running the full production process at St. Marys, by stating “Please bear in mind that is all-in and
we’re not currently running the front end of St. Marys.” (See GrafTech International Ltd., Fourth
Quarter 2021 Earnings Call, p.7 (Feb. 4, 2022) (“Fourth Quarter 2021 Earnings Call”) (ECF #64-
28, PageID #1520). In GrafTech’s 2021 10-K Annual Statement, released shortly afterward, it
noted “In 2021, we shifted graphitization and machining of a portion of semi-finished products
from Monterrey to St. Marys, Pennsylvania, in order to improve environmental performance,
production flexibility and overall cost efficiencies across the two facilities.” (GrafTech

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International Ltd., 2021 Annual Report (Form 10-K), pp. 6, 14 (Feb. 22, 2022) (2021 10-K’”)
(ECF #64-26, PageID #1480, #1483). Finally, just prior to the Monterrey Plant shutdown in
September 2022, and shortly before the referenced Third Quarter 2022 10-Q filing, GrafTech
Chief Operating Officer Jeremy Halford, at the Second Quarter 2022 Earnings Call, again stated
that operations at St. Marys were limited to a pin machining line and graphitization activities:
[I]n response to your question on St. Mary’s [sic], we’ve increased the amount
of activity in the St. Mary’s [sic] facility with the installation of the new pin
machining line that complements the graphitization activities that were already
taking place there. And, I would point out that, I’m actually quite pleased
with the St. Marys team and their performance on commissioning and ramping
up that equipment.
GrafTech International Ltd., Second Quarter 2022 Earnings Call, p.10 (Aug. 5, 2022) (“Second
Quarter 2022 Earnings Call”) (ECF #64-29, PageID #1525).
Thus, it is evident that, rather than the referenced Third Quarter 2022 10-Q statement
having the effect of contradicting GrafTech’s prior statements about the St. Marys Plant
operations, the referenced statement confirms what had been previously reported. None of the
alleged misstatements about GrafTech’s St. Marys facility — that it “diversifies our pin capacity
and provides production flexibility,” (ECF #64-55, Second Quarter 2021 Earnings Call, p.3,
PageID #1629), that it “introduced additional connecting pin production,” (ECF #64-25, Third

32
The First Amended Complaint does not reference the transcript of the Second Quarter
2022 Earnings Call. Because this statement, provided in GrafTech’s Memorandum in Support
of Motion to Dismiss, places the overall statements about the St. Marys facility in context, the
Court may consider it. See Plymouth Cnty. Ret. Ass’n v. ViewRay, Inc., 556 F. Supp. 3d
772,784 (N.D. Ohio 2021) (courts may “analyze the statements and omissions at issue in their
full context”), aff'd 2022 WL 3972478 (6" Cir. Sept. 1, 2022); see also FED. R. Evip. 201 (“The
court may judicially notice a fact that is not subject to reasonable dispute because it . . . can
accurately and readily be determined from sources whose accuracy cannot reasonably be
questioned.”).
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Quarter 2021 10-Q, p.25, PageID #1467), that the “pin production line at our St. Marys,
Pennsylvania facility is now operational” or that it “provides us with two connecting pin
production facilities,” (ECF #64-7, Third Quarter 2021 Earnings Call, p.3, PageID #1179), that it
“helps to de[-|risk our pin production capacity,” (ECF #64-28, Fourth Quarter 2021 Earnings
Call, p.3, PageID #1516; ECF #64-30, First Quarter 2022 Earnings Call, p.3, PageID #1532) —
claimed that the operations at St. Marys fully de-risked pin production, only that it “helped” to de-
risk it. No facts are alleged that diversifying production with machining and graphitization at St.
Marys did not help to de-risk production, or did not make GrafTech’s overall operations more
flexible. A statement is not materially misleading simply because a company might have said it
better. See In re Yum! Brands, Inc. Sec. Litig., 620 F. App’x 483, 490 (6" Cir. 2015) (description
of its protocols as “strict” was “reasonably grounded in objective fact and thus, is not ‘disproven’
just because Yum could have strengthened its standards and protocols.”).
The record this Court is entitled to review in determining the Motions to Dismiss does not
support Plaintiffs’ allegations that GrafTech concealed the true state of affairs at its St. Marys
facility. Thus, the First Amended Complaint fails to allege with particularity that any of the
statements about operations at St. Marys were false when made, or that GrafTech’s statements
were incorrect.
(ii) Statement About Being a “Peaking Plant”
As to the second “category” of alleged misstatement about St. Mary’s (effectively, a
single statement from a 2018 Earnings Call), the First Amended Complaint alleges that an initial
statement and follow up statement made by GrafTech from early 2019 that GrafTech could
operate the St. Marys Plant as a “peaking plant” if needed in the future was a material

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misstatement:
We will ramp up production at St. Marys if required by the market at any point
in the future. St Marys can be thought of as essentially the equivalent of a
peaking plant, and we will operate in that fashion. ... We will use St. Marys
to allow us flexibility and variability. We expect the degree to which we run
that will move up and down based upon the market dynamics, not unlike that
of, again, in the analogy of a peaking plant.
(ECF #56, 88) (quoting GrafTech International Ltd., Fourth Quarter 2018 Earnings Call, pp.2, 5
(Feb. 8, 2019) (“Fourth Quarter 2018 Earnings Call,” ECF #64-31, PageID #1535, #1538).
However, the First Amended Complaint does not include any particularized fact
demonstrating that GrafTech did not consider St. Marys as a potential peaking plant in February
2019 when the statement made, and thus, the statements are not actionable. See In re Century
Bus. Servs. Sec. Litig., No. 1:99-CV-2200, 2002 WL 32254513 (N.D. Ohio June 27, 2002)
(plaintiffs must demonstrate a basis for the claim that the defendants’ statements were false at the
time they were made, rather than merely erroneous in hindsight.”’).
Moreover, the statements amount to “forward looking statements” protected by the “safe
harbor” provisions of the PSLRA, which encourages companies to provide forward-looking
information without “[flear that inaccurate projections will trigger the filing of a securities fraud
lawsuit.” (See S. Rep. 104-98, at 16 (1995)). The safe harbor provision protects “statements
concerning a company’s future economic performance; and statements about the assumptions
underlying forward-looking statements.” Norfolk Cty. Ret. Sys. v. Tempur-Pedic Int'l, Inc., 614
F. App’x 237, 242 (6" Cir. 2015). Forward looking statements are actionable only if “(1) a
reasonable investor would find the statement material (2) the defendant failed to identify its
statement as forward looking or provide meaningful cautionary statements identifying important
factors that could cause actual results to differ materially from those in the forward looking
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statement, and (3) the defendant made the statement with actual knowledge that it was false or
misleading.” Jd. at 242, 246-48.
GrafTech’s statements regarding its possible use of the St. Marys Plant as a “peaking
plant” are comprised entirely of future-looking language, such as “[ w]e will ramp up,” “at any
point in the future,” “we will operate,” “we will use,” “we expect,” and “will move up and
down.” The transcript of the Fourth Quarter 2018 Earnings Call, during which the statements
were made, began with an announcement of the following:
[A]s a reminder, some of the matters discussed on this call may include
forward-looking statements regarding, among other things, results,
performance and strategies. These statements are based on current
expectations and are subject to risks and uncertainties. Factors that could
cause actual results to differ materially from those indicated by forward-
looking statements are shown here.
(Fourth Quarter 2018 Earnings Call, p.1, ECF #64-31, PageID #1534). One of the factors that
could “cause actual results to differ” identified in the call was “the possibility that plant capacity
expansions may be delayed or may not achieve the expected benefits. (GrafTech International
Ltd., Fourth Quarter 2018 Earnings Presentation, slide 1 (Feb. 8, 2019) (“Fourth Quarter 2018
Earnings Presentation”) (N/A) (ECF #64-32, PageID #1541).
Again, as there are no particularized factual allegations demonstrating that these
statements were false when made, they are not actionable.

c. Statements About the Anticipated Effects of Monterrey Shutdown
The final category of Plaintiffs’ allegations of “material misstatements or omissions”
concerns GrafTech’s and its officers’ statements about the anticipated effects of the Monterrey

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Plant shutdown in November 2022.*? These allegations are based on the premise that becau

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11122758. Public record. Not legal advice.