N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT R OOFER S LOC A L NO. 149 PENSION FUND, individually

and on be ha lf of a ll othe rs sim ila

rly situa te d, Pla i ntiff-Appe lla

nt,
v. DREAM W ORKS ANIM ATION SKG, INC .; JEFFREY KATZENB ER G; LEW IS W . C OLEM A

N, De fe nda n ts-Appe lle e s. No. 15-55945 D.C . No. 2:14-c v-06053-SJO-E
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the C e ntra l Distric t of C a lifornia S. Jam e s Ote ro, Distric t Judge , Pre siding Argue d a nd Subm itte d Fe brua

ry 8, 2017 Pa sa de n a , C a l ifornia B e fore : GR

AB E R , B YB EE, a

nd C HR ISTEN, C irc u it Judge s. Pla intiff R oofe rs Loc a l No. 149 Pe nsion Fund a ppe a ls the judgm e nt dism issing the c o m

pla i nt for fa ilure to sta

te a c la i m . In this puta

tive c la ss a c tion, Pla i ntiff a lle ge s tha

t De fe nda nts Dre amW orks Anim a tion SKG, Inc ., Je ffre y



# FIL ED FEB 17 2017 M OLLY C. DW Y ER, CLERK U
. S

. CO URT O F APPEALS

* This disposition is not a

ppropria te for public a tion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.Katz e nbe rg, a nd Le wis W
. C ole m an m a de fa lse or m isle a ding sta te m e nts
c onc e rning the ultim a te p rofita b ility of the anim a te d m ovie Turbo during the ir
announc e m e nts of se c ond- a nd third-qua

rte r fina nc ia l re sults in 2013. Pla intiff
a lle ge s tha

t those sta t e m e nts a rtific ia lly infla te d the stoc k pric e of Dre amW orks a t
a tim e whe n Pla intiff bought stock. Pla intiff sue d De fe nda nts unde r § 10(b) of the Se c uritie s Exc ha

nge Ac t of 1934 a

n d Se c uritie s a

nd Exc ha nge C o m m ission (" SEC " ) R

ule 10b-5, a

nd sue d the individual De fe nda nts unde r § 20(a ) of the Se c uritie s Exc ha

nge Ac t.

" W e re vie w a

dism i ssa l for fa ilure to sta te a c la im de nov o , a c c e pting a ll
we ll-ple a de d a lle gat ions a s true . Se c uritie s fra ud c la im s m

ust sa tisfy the e xa c ting ple a ding sta

nda rds of Fe de ra l R

ule of C ivil Proc e dure 9(b) a nd the Private Se c uritie s Litiga

tion R e form

Ac t (PSLR

A)." Lloy d v. C VB Fin. C orp., 811 F.3d 1200, 1205 (9th C ir. 2016) (c ita tion a nd inte rna l quota

tion m arks om i tte d). W e
a ffirm be c a use Pla intiff ha s not a de quate l y ple a de d two e sse ntia l e l e m e nts of a
c la im for se c uritie s fra

ud unde r § 10(b) a

nd R ule 10b-5. 1. First, Pla intiff doe s not a lle ge m a te ria lly fa lse or m i sle a ding sta te m e nts. Asse ssing thea lle g e d m issta te m e nts m a de in July

and Oc t obe r of 2013, in the
c onte xt of the " SEC filings inc orporate d by re fe re nc e in the c om

pla int," R o nc oni v. Larkin, 253 F.3d 423, 427 (9th C ir. 2001), we c onc lude tha t De fe nda nts provide d
2a c c ura te inform a tion a b out the m ovie ’ s c ha lle nge s a nd tha t a ny pre dic tions of profita bility we re a c c om

pa nie d by a de q u a te c ave a ts distinguishing this film from prior re l e a se s. The a lle gations in the c om pla int do not e sta

blish tha t De fe nda nts ha d " no re a sona

ble ba sis for the be lie f" that Turbo c ould be profita ble . R e e se v. M a l one , 747 F.3d 557, 579 (9th C ir. 2014) (inte rna l quota t ion m arks om itte d). 2. Se c ond, Pla intiff doe s not a lle ge loss c a usation. Thec om

p la i nt a sse rts that the truth a

b out De fe nda

nts’ a c c ounting fra

ud wa s re ve a le d

at two diffe re nt tim e s: first, whe n the y

announc e d a

write -down on Turbo in Fe brua ry 2014, a fte r whic h the stoc k pric e droppe d; a nd in July 2014, whe n De fe nda

n ts a nnounc e d tha

t Turbo wa s unlike ly

to be profita

ble and tha

t the SEC ha d la

unc he d an inve stiga

tion into Turbo’ s a c c o unting, a fte r whic h the stoc k pric e droppe d a ga in. As to thesta

te m e nt in Fe brua

ry 2014, we have " re

je c t[e d] th[e ] a sse rtion"

" that [pla intiffs] should bea

ble to prove loss c a

usation by

showing tha

t the m arke t
re a c te d to the purporte d ‘ im p a c t’ of the a lle ge d fra

ud— the e arnings m iss—

ra the r tha n to the fra udule n t a c ts the m se lve s." In re Ora c le C orp. Se c . Litig., 627 F.3d 376, 392 (9th C ir. 2010). Pla intiff doe s not a de quate ly a lle ge tha

t the write -down
and re sulting stoc k de c line re sulte d from a re ve lation of fra

ud, rathe r tha

n from inve stors’ disa

p pointm e n t .

3W ith re spe c t to theannounc e m e nt of a n SEC inve stiga

tion in July

2014, we have pre v iously

e xpla ine d tha

t " the announc e m e nt of a

n inve stiga

tion, sta nding
a lone and without a

ny subse que nt disc losure of a c tua l wrongdoing, doe s not re ve a l to the m arke t

the pe rtine nt truth of a

nything." Loos v. Im

m e rsion C orp., 762 F.3d 880, 890 n.3 (9th C ir. 2014) (inte rna l quota tion m arks om itte d). The pa rtie s do not dispute tha

t the SEC e nde d its inve stiga tion without ta

king e nforc e m e nt a c t ion
a ga inst De fe nda

nts. Ac c ordingly , Pla i ntiff a lso ha s not a l le ge d loss c a usation. 3. The re i s no " c ontrol pe rson" lia bility unde r § 20(a ) be c a

use Pla i ntiff ha s not " a de quate ly

a lle ge d viola tions of se c tion 10(b) a

nd R ule 10b-5." Or. Pub. Em ps. R e t. Fund v. Apollo Grp. Inc ., 774 F.3d 598, 610 (9th C ir. 2014). The re fore , we a ffirm

the dism issa l of this c la im a s we l l. AFFIRM E D.

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