Caption: State Teacher Retirement System of Ohio v. ZoomInfo Technologies, Inc., et al.
Case No.: 3:24-cv-05739-TMC
Jurisdiction: U.S. District Court, Western District of Washington
Judge: Hon. Tiffany M. Cartwright
Summary
On October 28, 2025, the Court granted in part and denied in part motions to dismiss. The Court dismissed all claims against TA Associates Management, L.P., Carlyle Group Inc., and DO Holdings (WA), LLC, but allowed claims to proceed against ZoomInfo Technologies Inc., Henry Schuck, Cameron Hyzer, and Joseph Christopher Hays.
Allegations Against ZoomInfo Technologies Inc.
Plaintiffs said ZoomInfo inflated Remaining Performance Obligations (RPO) by ignoring high-risk SMB contracts with known collectability issues, allowing delinquent accounts to remain in receivables for hundreds of days, and using coercive renewal tactics. The complaint alleged these practices hid nonpayment risks despite internal metrics showing low utilization and customer delinquency.
Defendants’ Motion to Dismiss
ZoomInfo, the Individual Defendants, and DO Holdings argued the RPO statements were forward-looking estimates or opinions, not actionable misstatements. The Sponsor Defendants contended the complaint failed to allege they made any statements or engaged in deceptive conduct.
Plaintiffs’ Opposition
Plaintiffs countered that they alleged then-presently known facts undermining RPO accuracy, including specific former employee accounts of sales practices and internal data. They said the complaint met particularity for falsity, scienter, and scheme liability against all defendants.
Court’s Ruling
The Court dismissed all claims against TA Associates, Carlyle Group, and DO Holdings. Section 10(b) and Rule 10b-5 claims survived against ZoomInfo, Schuck, Hyzer, and Hays, with maker liability for Schuck and Hyzer and scheme liability for Hays. Section 20(a) claims survived against the Individual Defendants but were dismissed against the Sponsor Defendants.
Court’s Rationale
Falsity: The Court found RPO statements actionable as misrepresentations of then-present facts, not protected opinions, given allegations of ignored collectability risks and specific metrics.
Scienter: The Court held plaintiffs raised a strong inference through holistic review of former employee statements, core operations, SOX certifications, and post-class admissions.
Loss Causation: The Court found plaintiffs adequately tied stock drops to disclosures of growth declines and bad debt, noting defendants did not contest this element.
Section 20(a): The Court allowed control-person claims against Individual Defendants based on their titles and signing authority but dismissed them against Sponsor Defendants for lack of day-to-day control allegations.
Other Issues: The Court allowed plaintiffs to seek leave to amend claims against dismissed defendants and ordered a joint status report by November 12.
Case Status
The case continues in part against ZoomInfo Technologies Inc., Henry Schuck, Cameron Hyzer, and Joseph Christopher Hays.
