Kazim Acar v. Tesla Motors, Inc. , 671 F. App'x 670 ( 2016 )

FILED
NOT FOR PUBLICATION
DEC 21 2016
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: TESLA MOTORS, INC. No. 14-17501
SECURITIES LITIGATION.
______________________________ D.C. No. 3:13-cv-05216-CRB
KAZIM ACAR; WILLIAM LANDRUM;
PANKAJ MODI, M.D., Ph.D., on behalf MEMORANDUM*
of themselves and all others similarly
situated,
Plaintiffs-Appellants,
v.
TESLA MOTORS, INC.; ELON MUSK,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted December 15, 2016
San Francisco, California
Before: LUCERO,** GRABER, and HURWITZ, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Carlos F. Lucero, Circuit Judge for the United States Court
of Appeals for the Tenth Circuit, sitting by designation.
Plaintiffs appeal from the district court’s order dismissing their complaint
for failure to state a claim. Plaintiffs allege that Defendants Tesla Motors, Inc., and
Elon Musk (collectively, "Tesla") made false or misleading statements during a
three-month period in 2013 concerning the safety of Tesla’s Model S car, causing
the price of Tesla’s stock to be inflated artificially at the time Plaintiffs purchased
that stock. Plaintiffs sue both Defendants under section 10(b) of the Securities
Exchange Act of 1934 and the Securities and Exchange Commission’s Rule 10b-5,
and they sue Defendant Musk under section 20(a) of the Securities Exchange Act.
The heightened pleading standards of the Private Securities Litigation
Reform Act of 1995 ("PSLRA"), 15 U.S.C. § 78u-4(b), apply. "We review the
district court’s Rule 12(b)(6) dismissal of the . . . complaint de novo and examine
the securities fraud complaint to determine whether [Plaintiffs] have complied with
the stringent pleading required by the PSLRA." DSAM Glob. Value Fund v. Altris
Software, Inc., 288 F.3d 385, 388 (9th Cir. 2002).
1. Plaintiffs have failed to allege any materially false or misleading
statements made by Defendants. Almost all of the allegedly false or misleading
statements were true, and those few statements that arguably were misleading were
not materially misleading. See Reese v. Malone, 747 F.3d 557, 568 (9th Cir. 2014)
(defining materiality). Nor have Plaintiffs alleged any omission the disclosure of
2
which was "necessary to make statements made, in the light of the circumstances
under which they were made, not misleading." In re NVIDIA Corp. Sec. Litig.,
768 F.3d 1046, 1054 (9th Cir. 2014) (internal quotation marks and alterations
omitted).
2. Because Plaintiffs have failed to allege any materially false or misleading
statements or omissions, we need not reach the question whether they have pleaded
scienter adequately.
3. The district court did not abuse its discretion in dismissing the second
amended complaint without further leave to amend. See Gompper v. VISX, Inc.,
298 F.3d 893, 898 (9th Cir. 2002) (stating standard of review). It is clear that the
new allegations that Plaintiffs would include in a third amended complaint1 would
not "save" the complaint. Polich v. Burlington N., Inc., 942 F.2d 1467, 1472 (9th
Cir. 1991).
AFFIRMED.
1
The new allegations were included in Plaintiffs’ response to Tesla’s Rule
59 motion in the district court.
3