UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA BOOMER DEVELOPMENT, LLC, et al. , : : Plaintiffs, : Civil Action No.: 16-2225 (RC) : v. : Re Document No.: 10 : NATIONAL ASSOCIATION OF HOME : BUILDERS OF THE UNITED STATES, : : Defendant. : MEMORANDUM OPINION G RANTING IN P ART AND D ENYING IN P ART D EFENDANT ’ S M OTION TO D ISMISS
I. INTRODUCTION Beginning in 2014, the National Asso ciation of Home Builders of the United States (“NAHB”), a Nevada nonprofit trad e association, allegedly beganpromoting a loan program offered by North Star Finance LLC ( “North Star”) to NAHB member s and prospective members. Compl. ¶¶ 9, 13–14, ECF No. 1–13. Under the program, members w ere allegedly offered nonrecourse debt financing for building projects up to $10 million at attractive interest rates and with other favorable terms. Compl . ¶ 13. Plaintiffs, who were membe rs or prospective members of NAHB, allege that they applied to the loan program and paid app lication fees r anging from $30,000 to $190,000 in reliance on representations made by NAHB , which they claim suggested NAHB had reviewed and approved of North Star. 1 See Compl. ¶¶ 83, 102, 125–28. Ultimately,

1 The ten Plaintiffs that have brought this action are Boomer De velopment, LLC (“Boomer”), Sierra’s Glen Partner s II and Sierra’s Glen Partner s V, LP (collectively “Sierra’s Glen”), Cotswold Homes, LLC and S kywatch Group (collectively “S kywatch”), Davis Contracting and Development, Inc . (“Davis”), Biltmore Developme nt LLC (“Biltmore”), Bloomfield Construction, Inc. (“B loomfield”), Thomas Dostal Dev elopers, Inc. (“Dostal”), and Concord Development Co., LLC ( “Concord”). Compl. ¶¶ 1–8.2 however, North Star’s financing ne ver materialized because that program was, in reality, a fraudulent investment schem e carried out by North Star. See Compl. ¶¶ 28–29. In addition to losing monies paid for applicati on fees, Plaintiffs also claim they lost expect ed profits and incurred development costs i n connection with construction proj ects that they were unable to complete in the absence of the promised financing. Compl. ¶ 12 8. In June 2016, Plaintiffs filed this lawsuit, not against North S tar, but directly against the NAHB for fraudulent misrepresentation (Count I), negl igent misrepresentation (Count II), breach of fiduciary duty (Count III), and fraudulent indu cement (Count IV), Compl. at 20 –24, though Plaintiffs later conceded their fraudulent inducement claims, 2 Pls.’ Opp’n at 22, ECF No. 20. This matter now comes before the Court on Defendant’s motion to dismiss pursuant to Rule 12(b)(6) of the Federal R ules of Civil Procedure. See generally Def.’s Mot. to Dismiss, ECF No. 10. For the reasons below, the Court grants the motionin part and denies the motion in part; dismissing without prejudi ce the fraudulent and negligent misrepresentation claims (Counts I and II) as to Plaintiffs Boome r, Davis, Biltmore, Bloomfield, and Dostal and dismissing the breach of fiduciary duty claims (Count III) in their entirety w ithout prejudice.

II. FACTUAL BACKGROUND 3 In late 2013 and early 2014, the NAHB, a Nevada nonprofit trade association with its principal place of business i n Washington, D.C., entered into an agreement with North Star to offer a financing program for cu rrent and prospective members o f the NAHB. Compl. ¶¶ 9, 13. Under the program, members c ould obtain non-recourse debt finan cing for projects up to $10

2 For this reason, the Court fo rmally dismisses Count IV. 3 At the motion to dismiss stage, the Court accepts the plaintif f's factual allegations as true. See, e.g., United States v. Philip Morris, Inc. , 116 F.Supp.2d 131, 135 (D.D.C. 2000).3 million at interests rates that were at or below available mark et rates and included other favorable terms. Compl. ¶ 13. NAHB first announced the North S tar program in February 2014 atthe NAHB’s annual Home Builders Show in Las Vegas, Nevada. See Compl. ¶¶ 14–15. The program was introduced at various points th roughout the Show by prominent N AHB representatives. Compl. ¶¶ 15–16. Indeed, among others, th e program was touted by Rick Judson, the Chairman of NAHB’s Board of Directors and the supposed first loan applicant of the North Star program, and by Thomas Vetter, an NAHB Executive Board Member who the NAHB a warded a Lifetime Achievement Award in the area of building finance at the confer ence. Compl. ¶ 16. During the presentations, attendees were told that the program was an NAHB program available only to NAHB members and that, if they w ere interested in applying, the y should provide their contact information to NAHB personnel. Compl. ¶ 17–18. Attendees were also advised that NAHB and North Star intended to enter int o an “affinity” program wherebythe NAHB would receive a share of the application fees tha t loan applicants paid to North Star. Compl. at ¶ 19. Plaintiffs allege their belief that NAHB a nd North Star ultimately entered into such an arrangement. See Compl. ¶ 19. The NAHB also perm itted North Star to indicate onits website that the North Star program was being “conducted i n conjunction with and under the auspices of the NAHB.” Compl. ¶ 20. Following the conference, the NAHB continued to promote and di sseminate information about the North Star program t o its members and others. The NA HB provided information about the program to its state and lo cal affiliates and recommended t hat they refer any interested persons to NAHB for additional details. Compl. ¶ 21. When con tacted, the NAHB provided information about the program, i nstructed interested persons onhow to contact North Star to4 apply, and also provided certai n assurances. Compl. ¶ 23. Acc ording to the Complaint, the NAHB assured many of the Plainti ffs, either before or after the y applied for loans, of the “soundness,” “integrity[,] and saf ety of the North Star program .” Compl. ¶¶ 22, 50, 51, 60, 85, 106, 116. Furthermore, some Plaintiffs allege that the NAHB cl aimed that it was “well informed about the North Star program, ” Compl. ¶¶ 22, 103, or that “the North Star program had been vetted by the NAHB,” Compl ¶ 111. The se alleged representation s were made by senior NAHB officers and directors, incl uding Mr. Judson, Mr. Vetter, Rebec ca Froass, a Director for NAHB’s Financial Institutions and Capital Markets, and Richard Krump, legal counsel to NAHB, via telephone conversations and email correspondence. See Compl. ¶¶ 22, 50, 51, 60, 85, 103, 106, 111, 116. According to Plaintiffs, the NAHB both intended and expected that its various actions endorsing the North Star program w ould result in NAHB members a nd prospective members applying to the program because it was being offered at a time when “conventional financing at reasonable rates was generall y not available for home building projects costing up to $10 million.” Compl. ¶¶ 26 121–123. Despite the NAHB’s general pr omotion of the North Star program or its assurances con cerning its soundness, the NAHB ha d never undertaken any reasonable steps to confirm inde pendently the qualifications of North Star’s operators, the accuracy of North Star’s repres entations about the program, or the merits of the program generally. Compl. ¶ 25. The ten Plaintiffs in this case allege that they applied for the North Star program and paid substantial fees to North S tar and an associated firm, cal led Capital Source Funding (“Capital Source”), in reliance on various representations made by the NAHB. See Compl. ¶¶ 39, 53, 58, 63–64, 74, 83, 92–93, 101–102, 115, 125–127. Ac cording to Plaintiffs, these representations suggested that “t he NAHB had reviewed and appro ved of the North Star5 program.” Compl. ¶ 125. The Plaintiffs then spent months atte mpting to obtain the loan proceeds, but the North Star financing never materialized. See Compl. ¶¶ 40, 55, 66, 77, 87, 96, 108, 118. Although Capital Source agr eed to refund portions of the Plaintiffs’ application fees, North Star refused to provide P laintiffs with any refunds whats oever. See Compl. ¶¶ 40, 55, 66, 77, 87, 96, 108, 118. In May 2015, it was revealed that the No rth Star program was, in reality, a fraudulent investment scheme wh en the Securities and Exchange C ommission filed a federal lawsuit against North Star and others. Compl. ¶ 28. On June 21, 2016, Plaintiffs commence d this suit against the N AHB in the Pennsylvania Court of Common Pleas alleging i ntentional misrepresentation, n egligent misrepresentation, breach of fiduciary duties, a nd fraudulent inducement. See Compl. at 20–24. The NAHB subsequently removed the action t o the United States District C ourt for the Middle District of Pennsylvania on July 11, 2016, invoki ng diversity jurisdiction under 28 U.S.C. § 1332. See Notice of Removal at 2, ECF No. 1. Thereafter, on August 1, 20 16, NAHB filed a motion to dismiss the action for improper venue, lack of jurisdiction, an d for failure to state a claim under Rules 12(b)(2), 12(b)(3), and 12(b )(6) of the Federal Rules of Civil Procedure. See Def.’s Mot. to Dismiss, ECF No. 10. In the course of briefing that motion, Plaintiffs conceded their fraudulent inducement claims. See Pls.’ Opp’n at 22. Once the motion was fully briefed, the district court concluded that i t did not have personal jurisdic tion over the NAHB, but declined to dismiss the case, finding tha t such dismissal would not be in t he interests of justice. See Mem. at 11–12, ECF No. 24. Instead, it transf erred the matter to this Court pursuant to 28 U.S.C. § 1631 after it determined that jurisd iction existed and that venue wa s proper. See Mem. at 11–12. Because the district court di d not have jurisdiction over the m atter, it did not reach the merits of6 Defendant’s motion under Rule 12(b )(6) and deferred the resolut ion of that part of the motion to this Court. See Order at 1, ECF No. 25.

III. ANALYSIS NAHB has moved to dismiss the th ree remaining counts of Plainti ffs’ Complaint pursuant to Federal Rule of Civ il Procedure 12(b)(6). As descr ibed below, the Court grants the motion in part and denies the m otion in part, dismissing Counts I and II with respe ct to Plaintiffs Boomer, Davis, Bloomfield, Biltmore, and Dostal and dismissing Count III in its entirety. A. Choice of Law Before reaching the merits of the NAHB’s motion, the Court must first determine which state’s laws should govern Plainti ffs’ claims. In cases transf erred pursuant 28 U.S.C. § 1631, “the action or appeal shall pr oceed as if it had been filed or noticed for the court to which it is transferred . . .” 28 U.S.C. § 1631. I n such cases, federal c ourts “apply the choice-of-law rules of the forum state—here, th e District of Columbia.” In re APA Assessment Fee Litig. , 766 F.3d 39, 51 (D.C. Cir. 2014). The District of Columbia “employ[s] a modified governmental interests analysis which seeks to identify t he jurisdiction with the most significant relationship to the dispute.” Washkoviak v. Student Loan Mktg. Ass’n , 900 A.2d 168, 180 (D.C. 2006) (citations omitted). Under this approach, a court must first “determine w hether a ‘true conflict’ exists— that is, whether more than one j urisdiction has a potential int erest in having its law applied and, if so, whether the law of the com peting jurisdictions is differ ent.” GEICO v. Fetisoff , 958 F.2d 1137, 1141 (D.C. Cir. 1992) (citing Eli Lilly & Co. v. Home Ins. Co. , 764 F.2d 876, 882 (D.C. Cir. 1985); Fowler v. A & A Co. , 262 A.2d 344, 348 (D.C. 1970)). If “there is no ‘true confli ct’” among the purportedly interested jurisdictions, and where one o f those jurisdictions is the District of Columbia, a court wi ll “apply the law of the Distri ct of Columbia by default.”7 GEICO , 958 F.2d at 1141 (citing Fowler , 262 A.2d at 348; Restatement (Second) of Conflict of Laws § 186 cmt. c (Am. Law Inst. 19 71)). But if a “true confli ct” does exist, “the court must go on to determine which of the relev ant jurisdictio ns has the ‘mo re substantial interest’ in having its law applied to the case under review.” GEICO , 958 F.2d at 1141 (citation omitted). To make that determination, a court must consider the four significant relationship factors “enumerated in the Restatement (Second) of Conflict of Laws § 145” which are: (1) “the place where the injury occurred,” (2) “the place whe re the conduct causing the injury occurred,” (3) “the domicile, residence, nationality, place of incorporation and place of bus iness of the parties,” and (4) “the place where the relationship is centered.” District of Columbia v. Coleman , 667 A.2d 811, 816 (D.C.1995) (quoting Restatement ( Second) of Conflict of Laws § 145). In cases involving multiple claims, a court “need not decide all issues under a si ngle jurisdiction’s law.” Paxton v. Wash. Hosp. Ctr. Corp. , 991 F. Supp. 2d 29, 31 (D.D.C. 2013); see also Logan v. Providence Hosp., Inc. , 778 A.2d 275, 280 (D.C. 2001) (“[D]iffe rent law may apply to different issues in a lawsuit.”). Here, the Court finds that it is appropriate to a pply Nevada la w to Plaintiffs’ breach of fiduciary duty claims and D.C. l aw to Plaintiffs’ fraudulent an d negligent misrepresentation claims. Nevada law governs Plaintiffs’ breach of fiduciary duty claims because Nevada, as the state where the NAHB is incorporated, has the most substantial interest in those claims. The District of Columbia, like most other states, adheres to the ch oice of law principle known as the “internal affairs doctrine.” U nder that doctrine, the District of Columbia applies the law of the state of incorporation with res pect to claims involving an orga nization’s corporate governance and internal affairs . See, e.g., Labovitz v. Wash. Times Corp. , 900 F. Supp. 500, 503 (D.D.C.1995) (“When a particular claim addresses matters of cor porate governance or other8 internal affairs of the organization, most states apply the lawof the state where the corporation is incorporated, and the District of Columbia follows suit.”) (cit ations omitted); see also Edgar v. MITE Corp. , 457 U.S. 624, 645 (1982) (describing the doctrine as “a confl ict of laws principle which recognizes that only one S tate should have the authority to regulate a corporation’s internal affairs”). The District of Columbia recognizes that t he “state of incorporation has a strong interest in having its lawapplied to matters of corpora te governance and other internal affairs for the obvious reason tha t the corporation exists unde r its laws.” Labovitz , 900 F. Supp. at 503 (D.D.C. 1995). Here, the sole basis for the parties’ al leged fiduciary relationship is the Plaintiffs’ membership in the NAHB. Because this claim concern s the existence and extent of the fiduciary duties that the NAHB owes to members of its nonpr ofit trade association and the NAHB is incorporated in Nevada, this Court must apply Nevada law. See Edgar , 457 U.S. at 645 (explaining that internal affa irs doctrine applies to matte rs “peculiar to the relationships among or between the corporation a nd its current officers, dire ctors, and shareholders”). Determining the law to apply t o Plaintiffs’ fraudulent and negl igent misrepresentation claims, however, is more compli cated. Under the facts alleged in the Complaint , there are ten jurisdictions with poten tial interests in having their laws app lied: the District of Columbia (where NAHB’s principal place of business is located), Nevada (where N AHB is incorporated and where NAHB first announced the N orth Star program), and eight o ther states where the Plaintiffs maintain their principal places of business. 4 See Compl. ¶¶ 1–9, 14. Each of these jurisdictions has an equally powerful interest in having its laws applied bec ause, while the states where the Plaintiffs reside have “a power ful interest in protecting [thei r] residents from fraud and

4 Those states are Florida, Georg ia, Iowa, Michigan, Minnesota, New York, Pennsylvania, and Texas. Compl. ¶¶ 1–8.9 misrepresentation,” the District of Columbia and Nevada have “a n equally strong interest in ensuring that [their] corporate citizens refrain from fraudulen t activities.” Washkoviak, 900 A.2d at 180–81. Despite the large number of pot ential jurisdic tions, neither pa rty has made any attempt to identify which state’s laws gove rn these claims. Indeed, the N AHB expressly noted in its memorandum in support of its moti on that it had “not engaged inan exhaustive analysis of the tort law in all states whose laws could conceivably apply,” opt ing instead to cite cases from “jurisdictions that appear to be consistent with the prevailing law in most states.” Def.’s Mem. Supp. Mot. to Dismiss at 14 n.10, ECF No. 11 (“Def.’s Mem.”). Plaintiffs similarly did not address the choice of law inqui ry nor did they dispute the NAHB ’s citation to the general “prevailing law.” See generally Pls.’ Opp’n. Even after the cas e was transferred, both parties continued to agree that the m otion was “fully briefed and ripe for consideration and resolution by this Court.” Joint Status Report ¶ 2, ECF No. 32. Because the parties appear to be content relying on the “prevailing law,” instead of the laws of any particular state or states, the Court understands the parties to have assumed that there is no “true conflict” among the jurisdictions and deems the parties to have wai ved any argument to the contra ry for purposes of this motion. See CSX Transp., Inc. v. Commercial Union Ins. Co. , 82 F.3d 478, 482–83 (D.C. Cir. 1996) (parties may waive choice-of-law arguments); C & E Servs., Inc. v. Ashland, Inc. , 498 F. Supp. 2d 242, 255 n.5 (D.D.C. 2007) (same). Where parties make such assumptions with respect to matters pertaining to choice of l aw, the Court need not second- guess them. See In re Korean Air Lines Disaster of Sept. 1, 1983 , 932 F.2d 1475, 1495 (D.C. Cir. 1991) (“[C]ourts need not address choice of law questions sua sponte ”); Davis v. Grant Park Nursing Home LP , 639 F. Supp. 2d 60, 65 (D.D.C. 2009) (explaini ng that, where all parti es assume that D.C. law applies,10 “[t]he Court need not and does not question the parties’ assump tions on that point”). Thus, in the absence of a “true conflict,” i t is appropriate to apply D.C. l aw by default. See GEICO , 958 F.2d at 1141 (applying D.C. law because “ there is no ‘true conflict’ ” among the jurisdictions). However, for the avoidance of doubt, the Court finds that it wo uld still be appropriate to apply D.C. law even if it were to assume that some true conflic t existed because, on balance, the four significant rel ationship factors enum erated in the Restate ment (Second) of Conflict of Laws § 145 do not clearly point to any particular jurisdiction. The first factor—the place where Plaintiffs’ injuries occurre d—weighs in favor of applying the l aws of the states where the Plaintiffs reside. In a typical misrepresentation case, the in jury occurs where the plaintiff “received the alleged misrepresentations” or made the alleged p ayments. See Washkoviak, 900 A.2d at 181. Here, the Plaintiffs allege that they relied uponmisrepresentations that the NAHB made via telephone or email. 5 See Compl. ¶¶ 37–38, 45–46, 49–51, 59–60, 70–71, 74–75, 82, 84–85, 104–106, 111–113. Although the Complaint does not speci fy where the Plaintiffs received the telephone or email communications or where the Pla intiffs made their payments to North Star, it is reasonable to i nfer that they occurred in the states where Plaintiffs maintain their principal places of business. See In re APA Assessment Fee Litig. , 766 F.3d 39, 54 (D.C. Cir. 2014) (“[T]he place of injury here w as California, where the re levant subclass of plaintiffs received their dues statements a nd presumably paid the special assessments.”); In re U.S. Office Prod. Co. Sec. Litig. , 251 F. Supp. 2d 77, 92 (D.D.C. 2003) (“[P]laintiffs’ financia l losses most likely occurred where they lived, though this is not specifical ly alleged in the complaint.”).

5 Although Plaintiffs allege that NAHB first announced the NorthStar program at NAHB’s 2014 Home Builders Show in Las Vegas, Nevada, Compl. ¶¶ 14–15, they do not allege that NAHB made any misrepresentat ions at the conference. Thus, this factor does not weigh in favor of applying Nevada law.11 Accordingly, the Court finds tha t the first factor weighs in fa vor of applying the laws of the various states in whi ch each of the Plaintiffs maintain their p rincipal places of business. The Court next considers “the place where the conduct causing the injury occurred” and finds that this factor weighs mode rately in favor of applying D .C. law. In cases such as this, both the D.C. Court of Appeals and the D.C. Circuit have looked to the place where the statements at issue were “formulated and transmitted.” See In re APA Assessment Fee Litig. , 766 F.3d at 54; Washkoviak , 900 A.2d at 181. Here, neither the C omplaint nor the parties have suggested any place where the NAHB conceived of any misrepresentation or any place from which it transmitted misstatements through telephone calls or emails. 6 However, the Complaint does allege that NAHB maintains its pr incipal place of business in W ashington, D.C., Compl. ¶ 9, and it is therefore reasonable to inf er that NAHB either formulated or transmitted some or all of the representations from there. As a result, the Court finds that this factor weighs at least moderately in favor of D.C. law. See In re APA Assessment Fee Litig. , 766 F.3d at 54 (holding that “second factor weighs at least moderate ly towards D.C. law given that n either side has suggested any other location where the conduc t could have occurred” and compl aint alleged only that “defendants had their principal place of business in Washington , D.C. and that significant events giving rise to this case took place in this District.”) (intern al quotations omitted). The third factor, which involves consideration of the parties’ residences and places of business, does not weigh in fa vor of any jurisdiction. The NAH B is incorporated in Nevada with its principal place of business in the District of Columbia and the ten Plaintiffs maintain their

6 As discussed above, Plaintiffs do notallege that NAHB made an y misrepresentations at NAHB’s 2014 Home Builders Show. T hus, the Court does not find that this factor weighs in favor of applying Nevada law.12 principal places of business across eight other states. 7 See Compl. ¶¶ 1–9. Because all of the parties hail from various locati ons across the United States, t he Court finds that the third factor “splits evenly” among the various jurisdictions. See In re APA Assessment Fee Litig. , 766 F.3d at 54. Finally, the Court considers the fourth § 145 factor—“the place where the relationship, if any, between the parties is cente red”—and finds that it too doe s not favor any jurisdiction. In In re APA Assessment Fee Litigation , the D.C. Circuit he ld that the fourth factor did not weigh strongly in favor of any jurisdi ction because “the parties cite [d] no case law directly addressing where the relationship betwee n a national nonpro fit organizatio n and its members [was] ‘centered.’” 766 F.3d at 54. Here, as in In re APA Assessment Fee Litigation , the parties have neither advanced any argument nor pointed to any case law sugge sting where the relationship between NAHB, a national nonprofit organization, and its member s is centered. Thus, the Court finds that this factor also doe s not weigh in favor of any juri sdiction. Because the § 145 factors, on balance, do not weigh in favor of any particular jurisdiction or jurisdictions, D.C. law shoul d be applied to Plaintiffs’ mis representation claims. In weighing the various factors, the Court mu st compare and evaluate them o n “a qualitative rather than quantitative scale.” Washkoviak , 900 A.2d at 181 (citations omitted). Although the place-ofinjury factor weighs in favor of t he states where the Plaintiff s maintain their principal places of business, the District of Columbi a courts give this factor less weight in fraud cases because the

7 The only two states that are s hared by any of the Plaintiffs a re Pennsylvania, where Sierra’s Glen Partners II and Sie rra’s Glen Partners V, LP main tain their principle places of business, and Minnesota, where Cotswold Homes, LLC and Skywatch Group maintain theirs. See Compl. ¶¶ 2–3. In each case, a si ngle person was acting on beh alf of the paired companies and the same set of facts and cir cumstances gave rise to their alleged injuries. See Compl. ¶¶ 42–67.13 “place of injury is less signifi cant in the case of fraudulent misrepresentations” than “in the case of personal injuries and of inj uries to tangible things.” Washkoviak, 900 A.2d at 181–82. And while the conduct-at-issue factor weighs in favor of the Distri ct of Columbia, it does so only moderately “due to a dearth of f actual allegations concerning the location of [NAHB’s] conduct.” In re APA Assessment Fee Litigation , 766 F.3d at 54. Given that the third and fourth factors also do not favor any jur isdiction, the Court cannot say that a qualitativ e weighing of the relevant factors suggests any cle ar answer. D.C. law therefore applies because “D.C. choice-oflaw rules require, in a case wher e the [Restatement] factors do not point to a clear answer, that we apply D.C. tort law, the law of the forum state.” Wu v. Stomber , 750 F.3d 944, 949 (D.C. Cir. 2014) (citation omitted); see also In re APA Assessment Fee Litigation , 766 F.3d at 54–55. Having determined that Nevada lawapplies to Plaintiffs’ breachof fiduciary duty claims and D.C. law applies to Plaintiffs ’ misrepresentation claims, the Court now turns to the merits of the NAHB’s motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure. B. Legal Standard The Federal Rules of Civil Proce dure require that a complaint c ontain “a short and plain statement of the claim” in order to give the defendant fair not ice of the claim and the grounds upon which it rests. Fed . R. Civ. P. 8(a)(2); accord Erickson v. Pardus , 551 U.S. 89, 93 (2007) ( per curiam ). A motion to dismiss under Rule 12(b)(6) does not test a pla intiff’s ultimate likelihood of success on the merits; rather, it tests whether a plaintiff has properl y stated a claim.
See Scheuer v. Rhodes , 416 U.S. 232, 236 (1974), abrogated on other grounds by Harlow v. Fitzgerald , 457 U.S. 800 (1982). A court cons idering such a motion presu mes that the complaint’s factual allegations are true and construes them lib erally in the pl aintiff’s favor. See, e.g., United States v. Philip Morris, Inc. , 116 F. Supp. 2d 131, 135 (D.D.C.2000). Nevertheless,14 “[t]o survive a motion to dismiss, a complaint must contain suf ficient factual matter, accepted as true, to ‘state a claim to rel ief that is plausible on its face .’” Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). This means that a plaintiff’s factual allegati ons “must be enough to raise a righ t to relief above the speculative level, on the assumption that all the allegations in the compla int are true (even if doubtful in fact).” Twombly , 550 U.S. at 555–56 (citations omitted). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements,” ar e therefore insufficient to withstand a motion to dismiss. Iqbal , 556 U.S. at 678. A court need not ac cept a plaintiff’s legal conclusions as true, see id. , nor must a court presume the ve racity of the legal conclusion s that are couched as factual allegations. See Twombly , 550 U.S. at 555. Furthermore, when a plaintiff a lleges fraud or negligent misrep resentation, as the Plaintiffs in this case do, the c omplaint must “state with part icularity the circumstances constituting fraud or mista ke.” Fed. R. Civ. P. 9(b); see, e.g., Jefferson v. Collins , 905 F. Supp. 2d 269, 286 (D.D.C. 2012); 3D Global Solutions, Inc. v. MVM, Inc. , 552 F. Supp. 2d 1, 7–9 (D.D.C. 2008); Anderson v. USAA Cas. Ins. Co. , 221 F.R.D. 250, 254 (D.D.C. 2004). This heightened pleading standard req uires a complaint to “state the time, place and content of the false misrepresentations, the f act misrepresented and what was retained or given up as a consequence of the fraud.” United States ex rel. Williams v. Martin-Baker Aircraft Co. , 389 F.3d 1251, 1256 (D.C. Cir. 2004) (internal quotation marks omitted) (quoting Kowal v. MCI Commc’ns Corp. , 16 F.3d 1271, 1278 (D.C. Cir. 1994)). The plaintiff must also “identify individuals allegedly i nvolved in the fraud.” United States ex rel. Williams , 389 F.3d at 1256.15 C. Fraudulent Misrepresentation (Count I) Count One of Plaintiffs’ Complain t asserts common law claims ag ainst the NAHB for fraudulent misrepresentation. 8 Compl. ¶¶ 120–128. To establis h a claim for fraudulent misrepresentation under District of Columbia law, a plaintiff must allege: “(1) that a false representation was made, (2) in reference to a material fact, ( 3) with knowledge of its falsity, (4) with intent to deceive, and (5) a ction taken in detrimental rel iance upon the representation.” Sibley v. St. Albans Sch. , 134 A.3d 789, 808–09 (D.C. 2016) (citation omitted). The NAH B attacks the Plaintiffs’ claims on multiple grounds, which the C ourt addresses in turn. 1. False Representations of Material Fact NAHB’s primary argument for dism issing the fraudulent misrepres entation claims is its assertion that Plaintiffs have f ailed to adequately allege that the NAHB made any false representations of material fact. See Def.’s Mem. at 15–19; Def.’s Reply at 2–5. “A false representation may be either an a ffirmative misrepresentation o r a failure to disclose a material fact when a duty to disclose that fact has arisen.” Saucier v. Countrywide Home Loans , 64 A.3d 428, 438 (D.C. 2013) (quoting Rothenberg v. Aero Mayflower Transit Co. , 495 F. Supp. 399, 406 (D.D.C.1980)). A misrepresentati on is “material” if it is “lik ely to induce a reasonable person to manifest his assent, or if the maker knows that it would be lik ely to induce the recipient to do so.” Id. at 438–39 (quoting Sarete, Inc. v. 1344 U Street Ltd. P’ship , 871 A.2d 480, 493 (D.C. 2005) (citing Restatement (Second) of Contracts, § 162 (1981))) . Although the non-disclosure of material information may consti tute fraud when there is a duty to disclose, “mere silence does

8 Although the Plaintiffs style the ir claim as “intentional misr epresentation” claims, the substance of their claims equate s to what the District of Colum bia calls “fraudulent misrepresentation.” The Court th erefore uses the District of C olumbia’s terminology to reflect more accurately the law being applied.16 not constitute fraud unless th ere is a duty to speak.” Id. at 439 (quoting Kapiloff v. Abington Plaza Corp. , 59 A.2d 516, 517 (D.C. 1948)). Plaintiffs contend that NAHB made several misrepresentations th at suggested to the Plaintiffs that NAHB had “review ed and approved of the North St ar program when in fact it had conducted no such review.” Com pl. ¶ 125. First, many of the P laintiffs allege that the NAHB assured them of the “soundness,” “integrity[,] and safety of th e North Star program” in discussions that they had with NAHB representatives both before and after they applied for the North Star Program. 9 Compl. ¶¶ 50, 51, 60, 85, 106, 116. The NAHB argues, however , that claims premised on these statement s must fail because they repr esent statements of opinions, rather than statements of mater ial facts. Def.’s Mem. at 17; D ef.’s Reply at 4 n.3. The Court disagrees. Typically, “[o]pinions or predi ctions of future events do not c onstitute representations of material fact upon which a plaintiff successfully may place dis positive reliance.” Howard v. Riggs Nat’l Bank , 432 A.2d 701, 706 (D.C. 1981). For example, in Howard v. Riggs National Bank , the District of Columbia Court of Appeals agreed with the pre vailing case law that, generally, “defendants’ statement s regarding third parties who ultimately fail to come up to plaintiff’s expectations are not actionable in fraud.” Id. In that case, a customer of Riggs National Bank attempted to bring a fraud action against the ban k because a bank employee assured her that a particular con tractor’s “work product was ‘v ery good . . . very beautiful,’ when she should have known that in fact , [the contractor] was not a reputable firm and ‘had defrauded numerous individuals thr oughout the Washington area.” Id. at 706–07. The Court of Appeals

9 Specifically, Plaintiffs Sierra’ s Glen, Skywatch, Biltmore, Do stal, and Concord have all alleged receiving some variation of these assurances from the N AHB.17 held, however, that the bank could n ot be liable for fraudulent misrepresentation because there was nothing in the record sugges ting that the bank acted in bad faith or knew about any fraudulent behavior. Id. at 707. Furthermore, it held tha t “referrals do not amount to guarantees by the one making the recommendati on as to the quality of the w ork to be performed.” 10 Id. at 707. The Court of Appeals noted, howe ver, that its predecessor court, the D.C. Circuit, had previously found that representa tions made by an “agent[ ] of a party to the transaction in question” could rise to the lev el of a fraudulent misrepresenta tion if it “evinced apretense that his representation was true as a matter of fact.” Id. at 707 (citing Stein v. Treger , 182 F.2d 696, 699 (D.C. Cir. 1950)). 11 Stein v. Treger , 182 F.2d 696 (D.C. Cir. 1950), is one such case. There, the defendants, who were whiskey brokers, contact ed a retail liq uor dealer and informed him that they were authorized to take whisky orders on behalf of a wholesale firm in Chicago. See id. at 697. The retailer asked the brokers wheth er they had investigated the wh olesale firm and they responded that “they had investigated them , and they were financially all right.” Id. Relying on those statements, among others, the ret ailer ordered six hundred case s of whisky from the wholesaler through the defendant-brokers and paid a $6,000 deposit. See id . Plaintiff, however, only ever received one hundred cases of whis ky before the wholesaler enco untered financial difficulties and bankruptcy proceedi ngs were initiated. See id . Despite the fact that the brokers’ assurance that the wholesaler was “financ ially all right” ostensibly cons tituted an opinion, the D.C. Circuit

10 In addition, the court held that , even if the statements were false or misleading, the plaintiff was not “entitled t o place dispositive reliance” uponsuch statements be cause plaintiff had an adequate opportunity to cond uct an independent investiga tion of the contractor and because this was not information that was held exclusively by the bank. Id. at 706–07. 11 In M.A.P. v. Ryan , 285 A.2d 310, 312 (D.C. 1971), the D.C. Court of Appeals held that decisions by the D.C. Circuit r endered prior to February 1, 197 1 “constitute the case law of the District of Columbia” and ma y only be overruled by the D.C. Court of Appeals en banc.18 held that the plaintiff “was e ntitled to rely upon the represen tations of the broker concerning their principal’s financial standing.” Id. at 699. Here, the NAHB’s alleged represe ntations assuring Plaintiffs of the “soundness,” “integrity[,] and safety of the North Star program” without und ertaking any investigation of North Star are actionable. This case presents two notable diff erences from Howard that necessitate a different result. First, in Howard , the Court found that there was no evidence that the bank acted in bad faith because the bank had a basis for it s representation. See Howard, 432 A.2d at 707. Here, on the other hand , the Plaintiffs’ claims are premised on the notion that the NAHB made representations concerning the relative safety of the loan program without any basis whatsoever. See Compl. ¶¶ 125–126. Second, unlike Howard , the Complaint in this case alleges that the NAHB was not merely ref erring its members to a program in which it had no personal stake. Indeed, the Complaint a lleges that the NAHB and North S tar entered into an agreement involving the promotion of the North Star program to NAHB membe rs and prospective members and for which the NAHB would receiv e a share of the applicationfees. See Compl. ¶¶ 13, 19. The program was then purportedly touted as an “NAHB program,” w hich required NAHB membership to participate, see Compl. ¶¶ 17–18, and it is alleg ed that the “NAHB permitted North Star to indicate on its website that the North Star progr am was being conducted in conjunction with and under the au spices of the NAHB.” Compl. ¶ 20. Thus, as in Stein , the Plaintiffs were entitled to re ly on the NAHB’s statements as im plicit representations that the NAHB had some factual basis fo r its stated opinions because the y involved or apparently involved NAHB’s “own business or pr operty as to which [it] is b ound and must be presumed to know the truth.” Howard , 432 A.2d at 707 (quoting Darnell v. Darnell , 200 F.2d 747, 749 (1952)); see also Stein , 182 F.2d at 699 (“Where a party i nnocently misrepresents a ma terial fact19 . . . without reasonable grounds for believing it to be true[] such representation will support an action for fraud.”) (citations omitted); Restatement (Second) o f Torts § 539(1) (1977) (“A statement of opinion as to facts not disclosed and not otherwis e known to the recipient may, if it is reasonable to do so, be inte rpreted by him as an implied sta tement . . . that he knows facts sufficient to justify him in forming it.”). The NAHB also argues, however, t hat claims premised on these st atements must fail because such “broad descriptions of alleged misrepresentations” are “insufficient as a matter of law” under Rule 9(b) of the Feder al Rules of Civil Procedure. Def.’s Reply at 4; see also Def.’s Mem. at 15. The NAHB apparently faults Plaintiffs for failing to quote the precise language of the NAHB’s alleged assurances. See Def.’s Reply at 5. Although R ule 9(b) does require the Plaintiffs to state the “time , place, and content” of the misst atement, Plaintiffs are not necessarily required to plead with the exact itude that the NAHB suggests. “[T]he requirement of particularity does not abrogate Rule 8, and it should be harmon ized with the general directives in subdivisions (a) and (e) of Rul e 8 that the pleadings should co ntain a ‘short and plain statement of the claim or defense’ and tha t each averment should be ‘simp le concise and direct.’” United States ex rel. Joseph v. Cannon , 642 F.2d 1373, 1386 (D.C. Cir. 1981) (quoting 2A J. Moore, Federal Practice ¶ 9.03, at 9–28 ( 2d ed.1980)). The Complaint in this case suggests that the Plaintiffs received multiple assu rances concerning the North St ar program from various individuals, some of which w ere made orally, over a period of t ime. Plaintiffs that relied on these assurances have plead the period ov er which the representations took place (alleging when discussions with the NAHB began a nd when the Plaintiffs applied for the program), the method through which they occurred (by pho ne or by email), specificall y identified the various individuals who allegedly made each of the representations, and specified that the nature of the20 assurances concerned the “soundne ss,” “integrity[,] and safety of the North Star program.” See Compl. ¶¶ 49–50, 59–60, 84–85, 103–106, 116. This is sufficien t to meet Plaintiffs’ burden under Rules 8 and 9 of the Federal Rules of Civil Procedure. 12 See Daisley v. Riggs Bank, N.A. , 372 F. Supp. 2d 61, 79 (D.D.C. 2005) (When a “complaint include s the subject matter of the alleged misrepresentation, ident ifies which defendant allegedly made the misrepresentation, and attributes the misrepresentati on to a particular period of time ,” plaintiff has pled “sufficient information, as contemplated by R ule 9(b), to give defendants ‘ adequate notice of the specifics’ of [Plaintiff]’s fraud claim.”); United States ex rel. Folliard v. CDW Tech. Servs., Inc. , 722 F. Supp. 2d 20, 31–32 (D.D.C. 2010) (alleging fraud over a period of time is permissible when the “time span of the scheme is not open-ended, and it give[s] the [defendant] sufficient information to allow for preparation of a response.”) (internal quotes and citations omitted); McWilliams Ballard, Inc. v. Broadway Mgmt. Co. , 636 F. Supp. 2d 1, 6 (D.D.C. 2009) (“[P]laintiff’s allegations that misrepresenta tions were made over the telephon e or via e-mail are sufficient to meet the ‘place’ element.”). Although more specificity might b e preferable, the Court finds that this level of pleading provides the NAHB with “sufficient infor mation to respond to [Plaintiffs’]

12 For similar reasons, the Court finds that the NAHB’s argument concerning the sufficiency of Concord’s pleadi ng is also without merit. While the NAHB concedes that Concord “alleges that it was told by [Mr.] Vetter that NAHB had vetted the North Star program,” the NAHB argues that Concord does not “provide specific informa tion as to when this representation allegedly occurred.” Pls.’ Mem at 18–19. The C omplaint, however, belies that claim. It states that Concord ha d “contact with [ Mr.] Vetter f rom April to June 2014” and that, during these contacts, Mr. Vette r “assured [Concord] of the int egrity and safety of the North Star program.” Compl. ¶¶ 113, 116. Because Concord alleges multipl e misrepresentations over a period of time that is not open-en ded, with sufficient informat ion to allow for preparation of a response, the Court finds that C oncord has satisfied its pleadi ng obligation under Rule 9(b). See U.S. ex rel. Folliard v. CDW Tech. Servs., Inc. , 722 F. Supp. 2d 20, 31–32 (D.D.C. 2010).21 claims.” 13 Firestone v. Firestone , 76 F.3d 1205, 1211 (D.C. Cir. 1996); see also U.S. ex rel. Pogue v. Diabetes Treatment Ctrs. of Am., Inc. , 238 F. Supp. 2d 258, 267 (D.D.C. 2002) (“the main purpose of Rule 9(b) is to e nsure that defendants have not ice of the charges against them adequate to prepare a defense.”). The Court does agree with the NAHB, however, that some of the P laintiffs have failed to adequately plead false represe ntations. To start, unlike many of the other Plaintiffs, Plaintiffs Boomer and Dostal do not allege that they relied upon any speci fic misstatements made by the NAHB before applying to the North Star program. 14 Rather, they allege th at they relied upon the “manner and timing of the announcement of the North Star Progra m” at the NAHB’s 2014 Home Builders Show, which caused them to “reasonably believe[] that the NAHB had diligently investigated the North Star pr ogram prior to allowing it to be offered at the Show.” See Compl. ¶¶ 34, 98. But an announcement of the North Star program alone is not tantamount to an affirmative representation of anything that the Plaintiffs may reasonably rely upon. Indeed, the Court finds that, without more , the announcement amounted to li ttle more than a referral, which, as explained by the District of C olumbia Court of Appeals, is n ot a guarantee as to the quality of the referred party. See Howard , 432 A.2d at 707. Because Boomer and Dostal do not allege tha t the NAHB, at the conference, made any misstatements concerning its due diligence of North Star or that it made any other material representations for which NA HB lacked the requisite basis,

13 However, as discussed infra , because some of these alleged representations were made after some of the Plaintiffs applied f or the program, the Court finds that those representations may not form the basis of amisrepresentation claim. 14 Plaintiffs Boomer and Dostal do a llege that the NAHB made stat ements after they applied to the North Star program, but as described infra , they could not have relied on those statements and therefore they ca nnot form the basis for their m isrepresentation claims.22 Plaintiffs Boomer and Dostal have failed to adequately plead th eir misrepresentation claims. Accordingly, their claims of f raudulent misrepresentation must be dismissed. The allegations for Plaintiffs D avis and Bloomfield are similar ly deficient. They allege that they would not have applied for a loan from the North Star program in the absence of the “assurances,” “assistance,” a nd “support” provided by NAHB, butthey offer no details about any alleged NAHB misrepresentations. 15 Compl.¶ ¶ 75, 94. Indeed, they do not allege any time or place of a misrepresentation nor do they even attempt to descri be the nature of the “assurances,” “assistance,” and “support.” S uch allegations do not suffice f or purposes of pleading fraud under Rule 9(b). See e.g., Carter v. Bank of Am., N.A. , 888 F. Supp. 2d 1, 14 (D.D.C. 2012) (“plaintiff has not stated with any particulari ty the circumstances constit uting fraud, as required by Rule 9(b), because she has not provi ded even approximate dates of wh en fraudulent statements were made to her nor the specific nature of the assurances.”). Ther efore, Plaintiffs Davis and

15 Bloomfield’s and Davis’s other allegations of representations do not save their claims. Although Bloomfield alleges that it received certain “informati on” about North Star, including information that NAHB had “done d ue diligence on the program,” Bloomfield does not allege who provided the information, where it originated, or when it w as provided. Compl. ¶ 90. Indeed, the Complaint raises a significant question about NAHB’ s involvement in those representations at all because, a s Bloomfield alleges, it origi nally learned about the North Star program—not from the NAHB—but fro m Plaintiff Biltmore. Compl. ¶¶ 89, 95. Similarly, Davis alleges that it first l earned of the North Star program f rom an article in Builder Magazine , but does not provide any other info rmation about the article or even identify any purported misrepresentations that it contains. Compl. ¶ 69. Thus, neith er the allegations about the “information” Bloomfield receive d nor the article that Davis re viewed can satisfy Rule 9(b)’s heightened pleading necessary t o support a claim for fraudulent misrepresentation. See United States ex rel. Keaveney v. SRA Int'l, Inc. , No. 13-855, 2016 WL 6988787, at *11 (D.D.C. Nov. 29, 2016) (claims failed under Rule 9(b) when “[r]elators [did] not allege when the purported misrepresentations were made, who made the misrepresentation, and whether [defendants] were involved.”). Furthermore, while Davis alleges that it engaged in telephone or email communications with Mr. Vette r in early 2014, it does not alleg e any representations that Mr. Vetter made pertaining to North S tar, let alone a false represe ntation of material fact. See Compl. ¶¶ 70–73.23 Bloomfield have failed to state c laims for fraudulent misrepres entation for which relief can be granted. Finally, to the extent that the Plaintiffs also allege fraudule nt misrepresentation as a result of a material omission, that clai m too must fail. “[M]ere sile nce does not constitute fraud unless there is a duty to speak.” Saucier v. Countrywide Home Loans , 64 A.3d 428, 439 (D.C. 2013) (quoting Kapiloff v. Abington Plaza Corp. , 59 A.2d 516, 517 (D.C.1948)). Plaintiffs allege that the NAHB owed them fiduciary duti es by virtue of their membersh ip in the NAHB organization.
See Pls.’ Opp’n at 19–20. However, as discussed infra , there is no basis for the existence of such a fiduciary relationship under the law. Thus, because the Plai ntiffs have not identified any duty owed to them by the NAHB, there can be no liability for the NAH B’s failure to speak. 2. Intent to Deceive The NAHB also argues that the P laintiffs claims should be dismi ssed because they have failed to allege that the NAHB ha d the requisite intent to dece ive. See Def.’s Mem. at 19–20. The NAHB argues that Plaintiffs’ claims fail to allege fraudule nt intent because they do not allege that the NAHB was aware of North Star’s fraudulent schem e. Def.’s Mem. at 19–20. But, as Plaintiffs point out, knowledge of North Star’s fraudulent s cheme is not necessary for the Plaintiffs to plead intent. P ls.’ Opp’n at 19. Indeed, intent to deceive can be inferred “from the fact that [a] defendant made an affirmative statement that he knew to be false.” Djourabchi v. Self , 571 F. Supp. 2d 41, 50 (D.D.C. 2008) (citing Nader v. Allegheny Airlines, Inc. , 512 F.2d 527, 547 (D.C. Cir. 1975)). And although Rule 9(b) of the Fede ral Rules requires heightened pleading when alleging “fraud or m istake,” “[m]alice, intent, knowledge and other conditions of a person’s mind may be alleged ge nerally.” Fed. R. Civ. P. 9(b ).24 Here, the Complaint adequately a lleges that the NAHB intended t o deceive the Plaintiffs when it assured them that the N orth Star program was safe, know ing it had no basis for that claim. The Plaintiffs fairly a llege that the NAHB’s assurances concerning the loan program suggested “that the NAHB had r eviewed and approved of the NorthStar program when in fact it had conducted no such review” and that the NAHB allegedly “knewor should have known that it had not conducted [such an] e xamination.” Compl. ¶¶ 125–126. Plaintiffs allege further that the NAHB made these representations because it sought to induce its members to apply for North Star loans “to receive remunera tion through increased membershi p dues and payments though an affinity program.” See Compl. ¶¶ 18–19, 124. Because Plaintiffs allege that the NAHB was aware that it had no basis for th e claims that it represented, there are sufficient grounds to infer the NAHB’s intent to deceive. See Djourabchi v. Self , 571 F. Supp. 2d 41, 50–51 (D.D.C. 2008) (defendant’s statement “that he was a licensed home improvement contractor in the District of Columbia; a statement he knew t o be false” was sufficient to “i mply the defendant’s intent to deceive the plaintiffs.”); Stein , 182 F.2d at 699 (“Where a party inno cently misrepresents a material fact . . . without reasonable grounds for believing it to be true[] such representation will support an action for fraud.”). 3. Reliance In addition to their other argumen ts, the NAHB argues that Plai ntiffs Biltmore, Boomer, and Dostal have not sufficiently alleged reliance because the p urported misrepresentations that they relied upon occurred after they applied for the loan pr ogram. Def.’s Mem. at 17–18. The Court agrees. A plaintiff cannot premise a claim of fraudulentmisrepresentation on statements that were made after his or her alleged reliance. See Sundberg v. TTR Realty, LLC , 109 A.3d 1123, 1128, 1131–33 (D.C. 2015) (agreeing with trial court thatplaintiffs “failed to show25 detrimental reliance because the alleged misrepresentations and omissions occurred after the contract [for the purchase of land] was signed”); accord Baker v. Gurfein , 744 F. Supp. 2d 311, 318–19 (D.D.C. 2010) (“the purported m isrepresentation was made ‘several days after the conversion of the’ jewelry and thus , Baker did not lose her pro prietary interest in the jewelry ‘as a consequence’ of the misrepres entation.”) (internal citations omitted). In this case, Plaintiff Biltmore does not specifically allege that NAHB made any repres entation about the loan program prior to applying for the program and submitting paymen t. See Compl. ¶¶ 79–83. Biltmore alleges, however, that the NAHB eventually assured it of the “integrity and safety of the North Star program,” but that it did so in “the months following the application.” Compl. ¶¶ 84–85 (emphasis added). Similarly, and as discussed above, Pla intiffs Boomer and Dostal allege that they both applied to the North Star program after attendin g NAHB’s 2014 Home Building Show, but neither alleges any misst atements that they relied up on when they did so. Although they also allege that the NAHB told them that it was “well info rmed about the North Star program and that the program was safe,” these representations w ere made nearly a year after Boomer and Dostal applied. See Compl. ¶¶ 22, 103. Because the NAHB’s purported statements occurred after Plaintiffs Biltmor e, Boomer, and Dostal applied for the North Star program, they have failed to plead any actions that they took in detrimental reliance upon the NAHB’s representations. 16 See Sundberg v. TTR Realty, LLC , 109 A.3d 1123, 1128, 1131–33 (D.C. 2015). Accordingly, their claims f or fraudulent misrepresentat ion must be dismissed.

16 While Dostal does allege that th ese statements were made “prio r to the time Dostal paid additional money for North Star loans,” it does not allege that it relied on those statements in paying the additional money nor does it specify the amount o f money it paid. Compl. ¶ 103. The Court cannot reasonably infer reliance when Dostal had prev iously submitted multiple applications and paid tens of thousands of dollars in the absen ce of those assurances. Therefore, the allegations still fail under Rule 9(b).26 4. Proximate Causation Finally, the NAHB urges the Court to dismiss the Plaintiffs’ fr audulent misrepresentation claims because the Complaint fails to allege proximate causatio n. Def.’s Mem. at 24–25. Under D.C. law, a plaintiff seeking reco very for fraudulent misrepres entation must prove “that the defendant’s challenged conduct pr oximately caused [the] plainti ff’s injury.” Steele v. Isikoff , 130 F. Supp. 2d 23, 34 (D.D.C. 2000) (citing Thompson v. Shoe World, Inc. , 569 A.2d 187, 189 (D.C. 1990)). A defendant’s chall enged conduct is the proximat e cause of a plaintiff’s injury “only if ‘the injury is the natural and probable consequence of the negligence or wrongful act and ought to [have been] foreseen in light of the circumstances.’” Steele , 130 F. Supp. 2d at 34 (quoting Sanders v. Wright , 642 A.2d 847, 849 (D.C. 1994)). The NAHB argues that the fraudulent misrepresentation claims sh ould be dismissed for all Plaintiffs because their alleged harm was caused by North S tar’s criminal scheme, which NAHB is not alleged to have known about and could not have beenforeseeable to the NAHB. Def.’s Mem. at 24–25. The Court is not persuaded. The fact th at the NAHB is not alleged to have known about the fraudulent sche me is beside the point; Pla intiffs’ claim is that the NAHB should not have suggested that th e North Star program was reput able or safe when the NAHB had no basis for those representa tions. The harm that Plaintif fs allegedly suffered was both a natural and foreseeable conse quence of those actions. Indeed, it was foreseeable that the Plaintiffs might rely on represent ations giving th em comfort inthis new, but attractive loan program, particularly when “conven tional financing at reasonabl e rates was generally not available for home building pr ojects costing up to $10 million. ” Compl. ¶¶ 121–122. Furthermore, the NAHB should have recognized the risk that memb ers who might rely on those assurances could be harmed because it is reasonably foreseeable that un-vetted companies may27 be unqualified or unscrupulous. See e.g. , Ret. Program for Emps. of the Town of Fairfield v. NEPC, LLC , 642 F. Supp. 2d 92, 96 (D. Conn. 2009) (pr oximate causation a dequately alleged when plaintiffs claimed that if “KPMG had acted in accordance w ith its duty as an auditor . . . it would have uncovered Madoff’s fr aud and prevented the future fi nancial losses by the Plans” and that plaintiffs “suffered fin ancial damages as a result.”). Thus, the Plaintiffs have sufficiently alleged proximate causation.
* * * Because Plaintiffs Boomer, Dav is, Bloomfield, Biltmore, and Dos tal have failed to adequately allege their claims of fraudulent misrepresentation in accordance with Rule 9(b)’s particularity requirement, the C ourt dismisses their claims without prejudice, and grants them leave to amend their Complai nt to cure deficiencies. See Firestone v. Firestone , 76, F.3d 1205, 1209 (D.C. Cir. 1996) (“Failure to p lead fraud with particulari ty . . . does not support a dismissal with prejudice. To the contrary, leave to amend is ‘almost alw ays’ allowed to cure deficiencies in pleading fraud.”). D. Negligent Misreprese ntation (Count II) In addition to their fraudulent mi srepresentation claims, Plain tiffs also allege negligent misrepresentation claims agai nst the NAHB. C ompl. at 22. To s tate a claim for negligent misrepresentation under D.C. law, aplaintiff must allege “(1) that [the defendant] made a false statement or omitted a fact th at he had a duty to disclose; (2) that it involved a material issue; and (3) that [the plaintiff] reas onably relied upon the false state ment or omission to his detriment.” Kumar v. D.C. Water & Sewer Auth ., 25 A.3d 9, 15 n.9 (D.C. 2011) (quoting Redmond v. State
Farm Ins. Co. , 728 A.2d 1202, 1207 (D.C. 1999)). Thus, “the elements of a n egligent misrepresentation claim are the same as those of a fraudulent m isrepresentation claim, except a28 negligent misrepresentation cla im does not include the state of mind requirements of fraud.” Regan v. Spicer HB, LLC , 134 F. Supp. 3d 21, 38 (D.D.C. 2015). F urthermore, “like cla ims for fraudulent misrepresentation, Rul e 9(b)’s particularity require ments apply to claims for negligent misrepresentation.” Jacobson v. Hofgard , 168 F. Supp. 3d 187, 206 (D.D.C. 2016) (citing Jefferson v. Collins , 905 F. Supp. 2d 269, 286 (D.D.C. 2012)). In this case, Plaintiffs’ claims of negligent misrepresentationrest on the same statements and omissions as their fraudulent misrepresentation claims. See Pls.’ Opp’n at 18. Because of the parallel nature of the claim s, Plaintiffs’ negligent misrep resentation claims survive to the same extent—and for the same reasons—as their fraudulent misrep resentation claims. Thus, the Court dismisses the negligent mi srepresentation claims as to Pl aintiffs Boomer, Davis, Bloomfield, Biltmore, and Dostal without prejudice. E. Breach of Fiduciary Duty (Count III) Finally, Plaintiffs assert a cla im against the NAHB for breach of fiduciary duties. Compl. at 22–23. To state a claim for breach of fiduciary duty under Nevada law, a plaintiff must allege facts sufficient to show “(1) th e existence of a fiduciary duty ; (2) breach of that duty; and (3) the breach proximately caused the damages.” Klein v. Freedom Strategic Partners, LLC , 595 F. Supp. 2d 1152, 1162 (D. Nev. 2009). Plaintiffs allege that the NAHB owed them fiduciary duties as members of NAHB and t hat NAHB breached those duties, injuring Plaintiffs, when it “assured [loan] applicants that No rth Star was financially soun d and could be trusted when it had done nothing to confirm such accolades.” Pls.’ Opp’n at 20. T he NAHB argues, however, that Plaintiffs’ claim for breach of fiduciary duty must be dismisse d because Plaintiffs have failed to allege facts demonstrating any f iduciary relationship between N AHB and Plaintiffs. See Def.’s Mem. at 20–23. For the foregoing r easons, the Court finds that there was no fiduciary29 relationship between the parties and, accordingly, dismisses Pl aintiffs’ breach of fiduciary duty claims. “[A] ‘fiduciary relation exis ts between two persons when one o f them is under a duty to act for or to give advice for th e benefit of another upon matte rs within the scope of the relation.’” Stalk v. Mushkin , 199 P.3d 838, 843 (Nev. 2009) (quoting Restatement (Second) o f Torts § 874 cmt. a (1979)). “The essence of afiduciary or confidential re lationship is that the parties do not deal on equal terms, since the pe rson in whom trust and confide nce is reposed and who accepts that trust and confidence is in a superior position to exert un ique influence over the dependent party.” Hoopes v. Hammargren , 725 P.2d 238, 242 (Nev. 1986). The Nevada Supreme Court has held that certain relationships gi ve rise to fiduciary duties as a matter of law. See, e.g. , Powers v. United Servs. Auto. Ass’n , 979 P.2d 1286, 1288 (Nev. 1999) (insurers and insured); Cook v. Cook , 912 P.2d 264, 266 (Nev. 1996) (attorney and client); id. (spouses); Fick v. Fick , 851 P.2d 445, 449–50 (Nev. 1993) (fiancés); Leavitt v. Leisure Sports Inc. , 734 P.2d 1221, 1224 (Nev. 1987) (corporate officers or direct ors and corporation). Beyond these categor ies, Nevada law recognizes d uties owed in “confidential relationships,” where “one party gains the confidence of the other and purports to act or advise with the other’s i nterests in mind.” Perry v. Jordan , 900 P.2d 335, 338 (Nev. 1995) (per curiam) (internal quotation marks and cit ation omitted). A confidentia l relationship “may arise by reason of kinship or professional, busines s, or social relationships b etween the parties.” Id. at 337. “When a confidential relationshi p exists, the person in whom th e special trust is placed owes a duty to the other party similar t o the duty of a fiduciary, req uiring the person to act in good faith and with due regard to the inter ests of the other party.” Id. To prove the existence of a confidential relations hip, a party must show that (1) “the cond itions would cause a reasonable30 person to impart special confidence” and (2) the trusted party reasonably should have known of that confidence. Mackintosh v. Cal. Fed. Sav. & Loan Ass’n , 935 P.2d 1154, 1160 (Nev. 1997) (per curiam). Here, the Court need only consider the existence of a categoric al fiduciary relationship because Plaintiffs do nothing to allege circumstances that migh t give rise to an otherwise confidential relati onship. Plaintiffs do not allege that the N AHB ever made them promises, that the NAHB ever had—or that Plainti ffs ever sought—any special ex pertise that Plaintiffs lacked, that the NAHB ever held property in trust for their benefit, no r do they allege any other facts from which to infer that the Plai ntiffs “imparted special confi dence” into the NAHB or that the NAHB “should have known of that confidence.” 17 Indeed, Plaintiffs’ sole allegation concerning their relationship with the NAHB is their claim that the NAHB i s a nonprofit, trade association that provides its members, inc luding Plaintiffs, with various p roducts and services in exchange for a membership fee. Thus, the only question for this Court i s whether a fiduciary relationship could have arisen between the NAHB and Plaintiffs simply by virtue of the Plaintiffs’ membership in the organizati on. However, this is a question th at the Supreme Court of Nevada has never squarely addressed. T hus, this Court must choose the rule that it believes the Supreme Court of Nevada is “likely t o adopt in the future.” Hull v. Eaton Corp. , 825 F.2d 448, 453 (D.C. Cir. 1987) (citing 19 C. Wright , A. Miller & Cooper, Federal Practice and Procedure § 4507,

17 Although Plaintiffs have attempte d to allege new facts in thei r opposition memorandum suggesting why member s may have relied on assurances from NAHB, see Pls.’ Opp’n at 17–18, a court reviewi ng a motion to dismiss, “need no t accept additional allegations inserted in a document, such as an opposition memorandum, that is not a complaint or amendment to the complaint.” Sheller-Paire v. Gray , 888 F. Supp. 2d 34, 39 n.3 (D.D.C. 2012) (citation omitted). Accordingly, this Court will consider only those allegations that appear in the Complaint.31 103 (1982)); see also Boley v. Atl. Monthly Grp. , 950 F. Supp. 2d 249, 255 (D.D.C. 2013) (“Where, as here, ‘the substantiv e law of the forum state is un certain or ambiguous, the job of the federal courts is carefully to pr edict how the highest court of the forum state would resolve the uncertainty or ambiguity.’”) (quoting Travelers Ins. Co. v. 633 Third Assocs. , 14 F.3d 114, 119 (2d Cir. 1994)). Plaintiffs argue that “officer s and directors of a corporation owe a fiduciary duty to the corporation and its shareholders ” and that this principle “appl ies to membership organizations as well.” Pls.’ Opp’n at 19–20. The problem with Plaintiffs’ arg ument, however, is that they are bringing claims against NAHB—not NAHB’s officers or directors. While it is certainly true and uncontroversial that officers a nd directors owe fiduciary dutie s to their respective organizations and to their members or shareholders, see e.g. , Shoen v. SAC Holding Corp. , 122 Nev. 621, 632, 137 P.3d 1171, 1178 (2006); Leavitt v. Leisure Sports Inc. , 734 P.2d 1221, 1224 (Nev. 1987), it is widely understood that the organizations themselves do not owe such duties, see e.g. Radol v. Thomas , 772 F.2d 244, 258 (6th Cir. 1985) (“There is not, and coul d not conceptually be any authority that a corporation as an entity has a fiduciary duty to its shareholders.”). Indeed, numerous courts from across the country have rej ected that prop osition. See e.g., id. ; Burcham v. Unison Bancorp, Inc. , 77 P.3d 130, 146 (Kan. 2003) (rejecting argument that “a corp oration owes a fiduciary duty t o its stockholders”); Arnold v. Soc’y for Sav. Bancorp, Inc. , 678 A.2d 533, 539 (Del. 1996) (same); ULQ, LLC v. Meder , 666 S.E.2d 713, 718 (Ga. Ct. App. 2008) (“[A] limited liability company owes no fiduciary duty to its members , either directly or vicariously.”); Ballard v. 1400 Willow Council of Co-Owners, Inc. , 430 S.W.3d 229, 241 (Ky. 2013) (“[W]e cannot say that the [nonprofit co rporation] has a fiduciary dut y to the individual owners . . . . Rather, we believe it is the o fficers and directors that have a fiduciary duty, and that duty is to32 the nonprofit corporation.”); Oakland Raiders v. Nat’l Football League , 32 Cal. Rptr. 3d 266, 278 (2005) (rejecting argument tha t “unincorporated associationand/or its leaders stand in a fiduciary relationship with res pect to its members under all ci rcumstances.”); Hussey v. Operating Engineers Local Union No. 3 , 42 Cal. Rptr. 2d 389, 394 (1995) (rejecting argument that “union owes a fiduciary duty to its members”). The Plaint iffs have not identified a single authority anywhere in the country suggesting that nonprofit tra de associations, as opposed to their officers or directors, owe fiduciary duties to their memb ers. 18 The Plaintiffs have also not advanced any argument as to why s uch a relationship might exist

. Upon consideration of the relatio nship at issue and the current state of the law in Nevada, the Court discerns no persuasive reason why nonprofit trade ass ociations should be categorically held to occupy positions of special trust with respect to their members. Indeed, the Court has identified no authority in Nevadathat contemplates the existen ce of such a relationship nor any authority or line of r easoning indicating tha t Nevada law is li kely to recognize th is relationship in the future. Therefore, the Court is unable to find that the Su preme Court of Nevada is likely to recognize a fiduciary duty owe d by nonprofit trade associations to their members. The Court also finds that acknowledgement of a fiduciary relationship between nonprofit trade associations and its members would be particul arly inappropriate here becaus e it would “represent a significant change to the exi sting matrix of duties” governing the internal affairs of Nevada nonprofit trade associations, see Arnold , 678 A.2d at 539, and would “expand state law in ways not foreshadowed by state precedent,” Philadelphia v. Beretta U.S.A. Corp. , 277 F.3d 415, 421

18 The only case cited by Plaintiffs in support of their argument , Wisconsin Avenue Associates, Inc. v. 2720 Wisconsin Avenue Cooperative Association , 441 A.2d 956 (D.C. 1982), is inapposite. Indeed, that case involved the fiduciary duties owed by developers and directors of a cooperative housing association, i.e. agents of the cooperative, to the cooperative and its members—not the duties owed by the organization to its members. Id. at 963.33 (3d Cir. 2002). See also Torres v. Goodyear Tire & Rubber Co. , 867 F.2d 1234, 1238 (9th Cir. 1989) (Federal courts sitting in d iversity should “hesitate pre maturely to extend the law . . . in the absence of an indication from the [state] courts or the [state] legislature that such an extension would be desirable.”); Combs v. Int’l Ins. Co. , 354 F.3d 568, 577–78 (6th Cir. 2004) (“Federal courts sitting in a diversity cas e are in a particularly poor p osition . . . to endorse [ a] fundamental policy innovation. . . . Absent some authoritative signal from the legislature or the courts of [the state], we see no basis for eve n considering the pros and cons of innovative theories”) (internal quotes omitted). Because the Court finds that the Plaintiffs h ave failed to allege the existence of a fiduciary relationship with the NAHB, Plaintiffs’ breach of f iduciary duty claims must be dismissed. 19

IV. CONCLUSION For the foregoing reasons, Defe ndant’s Motion to Dismiss is GRANTED IN PART AND DENIED IN PART . An order consistent with this Memorandum Opinion is separate ly and contemporaneously issued.

Dated: June 16, 2017 RUDOLPH CONTRERAS United States District Judge

19 Even if the Court did rec ognize a fiduciary duty owed by nonpr ofit trade associations to its members, the claims asserted by Sierra’s Glen and Skywat ch would still fail because, not only do they not allege any confid ential relationship, they do not allege that they were ever members of the NAHB. See Compl. ¶¶ 42–67.