09-1815-cv(L), 09-2324-cv(CON)

In re One Comm unications Corp.

UNI TED S TATES CO URT O F AP PEALS F O R T H E S E C O N D C IR C U IT S UM M ARY OR DER R ul i ngs by s um m ary or der do not have prec edent i al ef f ect . C i t at i on t o a s um m ary or der f i l ed on or af

t er January 1 , 2 0 0 7 , i s p e r m itte d a n d is g o v e r n e d b y F e d e r a l R u le o f A p p e lla te P r o c e d u r e 3 2 .1 a n d th is c o u r t’s L o c a l R u le 32. 1. 1. W hen ci t i ng a s um m ary order i n a docum ent f i l ed w i t h t hi s court , a part y m ust ci t e e i t her t he Federal A pp en dix or an el ectron i c datab ase ( w i t h the n otat i on “su m m ary ord er” ) . A pa rty ci t i ng a sum m ary ord er m ust se r v e a c o p y o f it on a n y p a r ty n o t r e p r e se n te d b y c o u n se l. 1 At a stated t erm of the United States Court of Appeals for the Sec ond Circuit, he ldat the 2 Daniel Patri ck Moynihan United St ates Courthouse , 500 Pearl Street, in t he City of New York, on 3 the 17 day of June, two thousand ten.

th 4 5 PRESENT : 6 7 AMALYA L . KEARSE , 8 ROBER T D. SACK , 9 DEBRAANN LIVING STON 10 Ci rcu it J ud ges . 11 12 13 14 One Communications Corp, as success or in inte rest to CTC 15 Communications Group, Inc., and CTC Communications Acquisiti on, 16 Plaintif f-Counter-Def

endant-Appell ant , 17 18 -v. - No s. 09 -18 15 -cv , 0 9-2 32 4-c v 19 20 JP Morgan SBIC LLC, Sixty W all Stre et SBIC Fund, L.P., 21 The Megunticook Fund II , L.P., The Megunticook Side Fund II , 22 L. P. , K ev in O ’H are , J ef fr eyKo est er, Mel lon

Inv est or S erv ice s 23 LL C, as n om ina l de fe nd ant, 24 De fen da nts -A

pp ellees , 25 26 Verizon New England Inc., as de fendants on a Declara tory 27 Ju dg m en t C lai m , N ort he rn N ewEn gland

Te lep ho ne Op eratio ns 28 LLC, Telephone Operating Company of Verm ont LLC, 29 De fen da nts -C

ou nte r-C lai ma nts -A

pp ellees , 30 31 Stockholder Repre sentati ve Committee, on behalf of Certain 32 Former Stockholders of Lightship Holdi ng, Inc., 33 Plain tif f-C ou nte r-D efe nd

an t-A pp ellee . 342

1 N I CH O LA S W. L OBE NT HAL (Jo hn M. Te itl er, Al anS. Ra

bin ow itz , 2 Paul Ettori , on thebr ief ; Mark S. Resnick, The R esnick Law Group 3 P.C., Boston, MA, of c ou ns el), Teit le r & Teitl er, LLP, New York, 4 NY, for Plaintif f-Counter-Def

endant-Appell ant . 5 6 J AYN E S. R OBI NS ON , (K. Ann McDona ld , BrettG. Canna, on the 7 br ief ) Robinson & McDonald LLP, New York, NY, for De fen da nts 8 Ap pe lle es JP Morgan SBIC LLC and Sixty W all Street SBIC Fund, 9 L.P., an d fo r P lai nti ff- Co un ter-D efe nd

an t-A pp ellee . 10 11 P AUL E. S U M M IT (Ira K. Gross, P hi ll ip Rakhunov, on thebr ief ), 12 Su llivan & W orcesterLLP, Boston, MA, for D e fe n d a n ts -A p p e llees 13 Th e Meg untic oo k Fund II, L. P. an d T he Meg untic oo k S ide Fund II, 14 L.P. 15 16 D AVI D B. M ACK (S ean T. Carnathan; Mic ha el H. Fe ren ce, Jo nathan 17 Kurta, Sichenzi a Ross Friedman Ference LLP, New York, NY, on the 18 br ief ), O’Connor, Carnathan and M ack LLC, Burlingt on , MA, for 19 De fen da nts -A

pp ellees Kevin O’Hare and Jeffrey Koester. 20 21 22 Ap pe als fr om a March 31 , 2 00 9 ju dg m ent an d a May 1, 2009 ord er o f t he Un ite d S tat es 23 DistrictCourt for the Southern Districtof New York. UPON DUE CONS IDERATION, it is hereby 24 OR

DE RE D, AD JU DG ED , A ND DE CREE D t

hat th e ju dg m ent and

ord er o f t

he dis tri ct c ourt are 25 AFFIRMED. 26 Plaintiff-Counter- Defendant-Appellant One Comm unications Corp. (“OCC”) appeal s from 27 a March 31, 2009, judgment and a May 1, 2009 or der of the United Stat es Distri ct Court for the 28 Sout he rn Districtof New York (Swain, J. ), d ism iss ingits fe de ral lawcla im s an d c ounte rcl aim s, 29 res pe c ti v e ly

w it hp re ju d ic e an d

d e c li n in g t o e x e rc is e j uri s d ic ti o no v e r th e r e m a in in g s tate l aw 30 cla im s. OCC argu es t hat L ightsh ip T ele co m

LL C, a co m

pe tit ive loc al e xc hang e carri er ( tog eth er 31 wi th L ightsh ip H old ing , In c. , a co rpo rat ion

hold ingall of

Lig hts hip Tele co m ’s st oc k, “L ightsh ip” ), 32 wa s o pe rat ingin v iol ati on of its co ntr act s an d f

ed era l an d s tat e tel eco mm un icatio ns law s an d th at 33 the defendants-appellees, who ar e major shareholders , director s, and hig h-l evel employees of 34 Li g h ts h ip , m a d e m is re p re sentat ion s d uri ng the sal e o f t

he co m panyto O CC ’s p red ece sso r in int ere st,3

1 CT C Co mm

un icatio ns G rou

p (“C TC ”), th at vio lat ed

S ect ion s 10 (b) , 15 U .S .C . § 7 8j( b), an d 2 0(a ), 2 15 U.S.C. § 78t(a), of the Securit ies Exchange Act of 1934, as well a s st at e la w. W e assume the 3 parties ’ familiarity with t he underlying fact s, proc edural history, and spec ification of the i ssues on 4 ap pe al. 5 W e rev iewa d istric t c ourt' s dis m iss al of a co m pla int pursu ant to Ru le 1 2(b )(6 ) deno vo . The 6 co urt

acc ep ts a ll w ell -pl ead ed

a lle gatio ns in

th e co m pla int as t rue , d raw ingall rea so na

ble inf ere nc es 7 in t

he p lai nti ff

' s favo r. I n o rde r to survi ve a m oti on to d ism iss un de r R

ule 12 (b) (6) , a

co m pla int m us t 8 all eg e a p lau sib le s et o f f act s suf fi cie nt “t o rai se a

rig ht t o re lie f a

bo ve the sp ecu lat ive lev el. ” Be ll 9 At l. C

or p. v. Tw om bly , 550 U.S. 544, 555 (2007). 10 In order t o state a c la im un de r § 10(b) and Rule 10b- 5, which implem ents it, “ [a] plaintiff 11 m us t al leg e th at i n c onne cti on wi th t he purch ase or s ale of

sec uri tie s, the de fe nd ant, a ctin g w ith 12 sci en ter , m ad e a f als e m ate ria l re pre sentat ion or o m itt ed

to d isc los e m ate ria l in fo rm ati on an d th at 13 pla int if

f’ s re lianc e o n d ef

en dant’ s co nd

uc t ca us ed pla int if f i nju ry. ” Op era ting Lo ca l 6

49An nu ity 14 Trust Fund v. Smith Barney Fund Mgm’t LLC , 595 F.3d 86, 92 (2d Cir. 20 10 ) (quoting Ca iol a v . 15 Citibank, N.A., N.Y. , 2 95 F. 3d 31 2, 32 1 (2 d C ir. 20 02 ) (i nte rna l qu otation marks an d b rac ke ts 16 omitted)). A complaint allegi ng securit ies fraud is r equired t o sat isfy the heighte ned pleading 17 standard of the Pri vate Liti gation Securi ties Refo rm Ac t, P ub. L. No. 104-67, 109 Stat. 737, a nd 18 Fe de ral Ru le o f C ivi l P roc ed ure 9(b ); the cir cum stanc es c on sti tut ingthe fr au d m us t be stated

wi th 19 particularity. ATSI Commc’ns, Inc. v. Shaar Fund, Ltd. , 4 93 F. 3d 87 , 9 9 (2 d C ir. 20 07 ). “ A 20 securit ies fraud complaint based on misstatements m ust (1) specify the statem ents thatthe plaint iff 21 co nte nd s w ere fr au du lent, ( 2) i de nti fy the sp eak er, (3) state whe re and wh enthe statem ents w ere 22 made, and (4) explain why the st atements were fraudulent. All egations t hat ar e co nc lu so ry or 23 un su

pp ort ed byfa ctu al a sse rti on s ar e in su ff ici ent.” Id. (inter

na l ci tat ion

om itt ed ).4

1 In additi on, the complaint mu st p ro vide “ particul ar alle gations givi ng rise to a strong 2 inf ere nc e of scie nte r” —

“th at the de fe nd ant ac ted wi th t he req uir ed state o f m ind .” ECA & Local 3 134 IBEW Joint Pension Trust of Chi. v. JP Morgan Chase Co. , 553 F.3d 187, 196 (2d Cir . 2009) 4 (inter

na l qu otatio n m ark s o m itt ed ). I n o rde r to satis fy the pl ead ingrequ ire m ents of § 1 0(b ) an d R

ule 5 10 b-5 wi th r esp ect to sc ienter , the plai nti ff

may “al leg [e ] f

act s (1) sho wi ng that

the de fe nd an ts h ad 6 bo th m oti ve an d o pp ort un ityto c om

m it the f rau d or (2) c on sti tut ings tro ng c irc um stanti al e vid en ce 7 of co ns cio us m isb eh av ior

or r eck les sn ess .” ATSI Commc’ns , 493 F.3d at 99. The court must take 8 into accountplausible opposing inferences when determining whether pleaded facts give rise to a 9 str on g in ference of sci enter, and t he inference of scient er must be at leastas compelling as any 10 opposing inference t hat could be dr awn from the alle ged facts in orderto satis fy the standard. 11 Tellabs, Inc. v . Makor Issue s & Rights, Ltd. , 1 27 S. Ct . 2 49 9 (2 00 7). 12 OCC argues with regard t o the a ll egations i n its complaint (1) that cer tain pre- agreement 13 represent ations made by Lightship and i ts officers and dir ectors may be the foundation of a § 10(b) 14 cla im

an d w ere fa lse , (2 ) th at, in a nyev ent, t

he rep res entat ion s in

the m erg er a gre em ent be tw een 15 Li gh tsh ip and

CT C w ere fa lse an d th at i t so ad eq uatel y p led

in t he co m pla int , (3 ) that th ere we re 16 po st- ag ree m ent re pre sentat ion s th at w ere no t co ns ide red bythe dis tri ct c ourt, and

(4) that th e se lle rs 17 acted with sc ienter t hroughout. 18 W ith respe ct to the pr e-agreement repre sent ati on s allegedly made by Lightship, we conclude 19 that th e m erg er a gre em ent f ore clo sed any re lianc e b y C TC on thos e re pre sentat ion s an d th at 20 the ref

ore no § 1 0(b ) cl aim

m aybe b rou gh t b ase d on the m . T he m erg er a gre em ent it sel f c ontai ne d 21 both a merger clause , sect ion 10( c), a nd a separate provi sion, s ection 6(d), specificall y disclai ming 22 the abili ty of CTC to rely on represe ntations or warr anties that were “i nconsistentwith or in addi tion 23 to the repr esentati ons and warranti es” se t forth in t he agreement. In assess ing whether a pl aintiff5

1 reasonably r elied on a r epresenta tion, a courtmust consider the enti re contextof the transact ion, 2 including t he sophisti cation of the par ties, the content of writt en agr eements, and the complexity and 3 magnitude of the transacti on. Em ergen t C ap ita l In ves tm en t Mgm ’t, LLC v. Sto ne pa th Gro up , In c. , 4 34 3 F .3 d 1 89 , 19 5 (2d Cir. 200 3). “Whe re t

he pla int if

f i s a s op his tic ate d inve sto r an d an integ rat ed 5 agreement between the par ties does notinclude the m isrepre sentati on at issue, the plaintiff cannot 6 est ab lis h re aso na

ble rel ian ce o n th at m isr ep res entat ion .” ATSI Commc’ns , 493 F.3d at 105. OCC 7 do es n ot all eg e that C TC w as no t a s op his tic ate d inv est or, and in de ed th e rec ord

re fl ect s that i t w as 8 su ch . S ect ion

10 (c) of the ag ree m ent cl early pro vid es t hat th e ag ree m ent is int eg rat ed an d, in 9 co m

bin ati on wi th s ect ion

6(d ), s uf fi ces to s ho w that r eli an ce on pre -ag ree m ent re pre sentat ion s w as 10 unwarranted as a matter of law. 11 OCC identifies a number of representati ons and warranti es within t he merger agreement 12 its elf

that it cla im s ar e m isr ep res entat ion s ac tio na ble un de r § 1 0(b ). O ne of the rep res entat ion s at 13 iss ue , s ection 4(h) o f t he ag ree m ent, w arr anted that L ightsh ip’ s f

inanc ial statem ents a ccu

rat ely 14 ref

lec ted the co m pany ’s f inanc ial co nd iti on

an d w ere pre pa

red in a ccord an ce w ithGe ne ral ly 15 A c c e p te d

A c c o un ti n g P ri n c ip le s (G A A P ). In it s c o m p la int, O C C s tate s : “ T h e L igh tsh ip 16 rep res entat ion s, warranti es and co ve nants set

fo rthin t he Mer ger Agre em ent, i nc lud ingtho se [ in 17 sec tio n 4 (h) ], we re f als e at the tim e th e Me rge r A gre em ent w as e xe cuted . They remain ed fa lse 18 throughout the remaining dil igence period, and the y were false at t he time the transac tion close d.” 19 W e agree with t he distri ct court t hat this i nsufficiently plea ds the fraudul ence of the 20 represent ation in se ction 4(h) . The complaint sets forth no information as to how or why the books 21 of account had not been m aintaine d in accordance with sound business pract ice, what provi sions of 22 GA AP we re b ein g v iol ate d b y th e fi nanc ial statem ents, ho w the all eg ed bil lin g d isc rep an cywa s a 23 lia

bil ityof the typ e re qu ire d byGA AP to be re co rde d on the b alanc e sh eet , whyany m isb ill ingwa s6

1 no t in

the ord inary c ourse of

bu sin ess , an d ho w L ightsh ip’ s inter na l co ntr ols an d p roc ed

ure s w ere 2 not being followed. Although OC C a rgues that fraudulent ly inflating r evenue is inhe rently not 3 so un d busine ss practi ce or GAAP-compliant, Lightship was actually coll ecting the revenue for 4 which it was all egedly over- billing a nd was recording it appropriatel y. OCC has thus failed to all ege 5 that th e accounting wa s f rau du lent or

to p rov ide any in fo rm ati on as t o whythe all egedly i nf lat ed 6 fi gure f

or e arn ing s b e f

o re inte re s t, tax e s , d e p re c ia ti o n an d am o rt iz ati o n

(“ E B IT D A ”) w as an in stanc e 7 of acc ounti ng fr au d. Th e com pla int fai ls to sati sf

y the stan dards this Cou

rt h as s et f

or p art icu lar ity 8 in the context of GAAP-related m isstat ements that are al leged to be fraudul ent. See, e.g. , ECA , 553 9 F. 3d

at 1 96 , 1 99 -20 0 (n oti ng that al leg ati on s o f a parti cu lar

GA AP vio lat ion

m aystate a

sec uri tie s 10 fr au d c lai m

in co nju nc tio n w ithev ide nc e o f c orr esp on din g f rau du lent intent); In re C

ar ter-Wa lla ce, 11 Inc. Sec. Liti

g. , 150 F.3d 153, 157 (2d Cir. 1998) (sa me). 12 Th e co m

pla int als o p oints t o s ect ion

4(i ) of the m erg er a gre em ent as co ns tit uti ng a v iol ate d 13 warranty: “ Section 4(i ) of the MergerAgreement addressed legal compliance. In t his secti on, LHI 14 rep resented that ex cep t as set fo rthon a S ch ed ule 4(i ), t he co m panyha d c om

pli ed in a ll m ate ria l 15 respects and was current ly in compliance in al l material res pects with all applicabl e laws.” Like the 16 all eg ati ons with respect t o s ect ion 4(h ), t his is i ns uf

fi cie ntl y s pe cif

ic. To say that th is w arr anty i s 17 fa lse w ith out p rov idi ngan ind icatio n o f what law w as b ein g b rok enbyLi gh tsh ip’ s b ill ingpra cti ce 18 is conclusor y and lacks par ticular ity. Although OCC does allege in the complaint that the pr ovision 19 of VN XXser

vic e w as p roh ibi ted

bylawin t

he rel ev ant states, it fai ls t o id entif y whic h n am ed 20 defendants were even awar e of VNXXservic e vi ol at io ns, much less thatany defendant had the 21 required scienter . Similarly, i n paragraph 94, t he complaint alleges that sect ions 4(e)( i), 4(e) (ii), a nd 22 4(e )(i ii) m ak e v ari ou s rep res entat ion s ab out co m pli an ce w ithpe rm its an d li cen sin g re qu ire m ents. 23 Th e co m

pla int do es n ot a lle ge wi th whic h re qu ire m ents L ightsh ip w as n ot i n c om plianc e, m ere ly7

1 that the r epresenta tions are false. This fails t o satisfy the st rict pl eading requi rements of a § 10(b) 2 claim. 3 Section 4(e) (v), which OCC also i de nt if ie s a s amis re pr es enta tion, accor ding to the complaint 4 “provided tha t as of the closi ng date, none of the Lights hip Companies had any liabil ity to any 5 affiliate of Verizon Communications, Inc. f or CAB S-relat ed billi ng of intercarr ier compensation.” 6 The actual provision states that “[a]s of the Closing Dat e, none of the Light ship Companies has any 7 Li ab ili ty: (A ) to any A ff ili ate of Ve riz on Co mm un icatio ns , In c. rel ate d to bil lin g f or C AB S w ith 8 respect to any intra-LATA toll traffic term inating on Lightship’s UNE-P lines, or (B) t o any CLEC 9 rel ate d to sw itc he d a cce ss c harge s in its no n-U NE -P acc ess bil ls t o o the r C LE Cs fo r U NE -P fe ature 10 gro up D a cce ss c harge s as so ciated wi th i ts l oc al i nte rco nn e c ti o n arr an g e m e nts . ” A s al l parti es a gre e, 11 the misrepresenta tions all eged here are not related to intra-LATA toll t raffic or UNE-P lines, so the 12 provision i s irrel evant. 13 Section 5( c) , wh ic h c on ta in s p re -c lo si ng co ve na nt s, re qu ir edLi gh ts hip t o refrain from taking 14 vario us act ion s th at w ou ld d elay the cl os ingor a dv ers ely im pa ct t he trans act ion . It

als o re qu ire d 15 Lightship to di sclose any knowledge of a breached representat ion acquire d between executi on and 16 clo sin g. OC C a sse rts that th is s ect ion co ns tit ute s a m isr ep res entation b y L ightsh ip b ut f ail s to 17 specify with part iculari ty which porti ons of section 5(c) were misrepresentat ions and why. 18 Fi na lly , th e c o m p la int c it e s s e c ti o n4 (k)( ii i) a s am is re p re s e n tati o n . 4 (k)( ii i) re late s to 19 Lightship’s compliance with co ntrac ts , and he nc e th e al leg ati on s ab out im proper b ill ingun de r 20 Lightship’s Maine Int er-Connecti on Agreem ent with Verizon (“ICA”) — the only interconne ction 21 ag ree m en t O CC all eg es wa s vio lat ed — c ou ld b e co ns ide red

to b e p led

wi th s uf fi cie nt p art icu lar ity 22 to e xp lai n why4(k)(i ii) wa s a m isr ep res entat ion . W e no ne the les s agr ee w iththe di str ict court that 23 4(k)(i ii) do es n ot a pp ly t o th e V eri zo n a gre em ent. T he pro vis ion rea ds in p art :8

1 (ii i) All of the Contracts set forth on Sched ul e 4 (k)( i) a nd (ii ) are 2 va lid , in fu ll f orc e an d e ff

ect an d b ind ingup on

the ap pli cab le 3 Li gh tsh ip C om panypartythe ret o . . . an d th e ap pli cab le L ightshi p 4 Co m panyis n ot i n m ate ria l de fa ult un de r any s uc h Co ntr act , no r, t o 5 Ho ldi ng ’s K no wl ed ge , does any c on dit ion ex ist that . . . w ou ld 6 constitut e a material default unde r any such Contrac t. 7 8 It i s unc ontes ted

that th e IC A d oe s n ot a

pp ear on Sc he du le 4 (k) (i) . S ect ion 4(k)(i i) s pe cif

ies that 9 Sc he du le 4 (k) (ii ) co ns ist s o f t wo CD s, on

wh ich the IC A d oe s n ot appear. Grante d, the pri nte d 10 lan gu ag e o f S ch ed ule 4(k)(i i) b oth

dir ect s th e rea de r t o the C Ds and in clu de s a p ara gra

phstatin g th at 11 “all of Lightship’ s int erconnecti on agre ements with Verizon have expir ed,” noting tha t those ICAs 12 were being o pe rat ed on a m onth- to- m onth b asi s. Co ntr ary to O CC ’s argum ent, h ow ev er, thi s 13 paragraph i s most logically int erprete d as e xplai ning why the ICAs are bei ng excluded from 14 Sc he du le 4 (k) (ii ), r ath er than in clu din g th em : if Sc he dule 4( k)(i i) w ere rea d to inc lud e th e IC As , 15 the n th e lang ua ge of Se cti on 4(k)(i i) i s in co m

ple te and inc orr ect . M ore ov er, Se cti on 4(k)(i ii) 16 specifies tha t the contr acts in sc hedules (i ) and (ii ) are va li d, i n ful l force and effect, and binding, 17 wh ich

wo uld co ntr ad ict

the de scr ipt ion

of th e Ve riz on

IC As as e xp ire d. In o rde r to giv e f ull ef fe ct 18 to a ll o f t

he lan gu ag e o f t

he co ntr act , th ere fo re, Sc he dule 4( k)( ii) is m os t ap pro pri ate ly r ead to 19 ex clu de the Ve riz on IC As . W e the ref

ore c on clu de th at the co m pla int do es n ot p lau sib ly a lle ge that 20 the rep res entat ion in S ect ion

4(k)(i ii) wa s n ot vi olated

by anyall eg ed

no nc om pli an ce w iththe IC As . 21 22 As for the further disclosure of f inancial data by Lightshi p to CTC between the signing of 23 the m erger agreement and the clos ing of the transa ction, OCC argues thatthe merger clauses do not 24 operate t o bar reli ance on post-s igning discl osure. See, e.g. , D r es n e r v . U ti lit y. co m, Inc . , 371 F. 25 Supp. 2d 47 6, 4 96 & n.10 ( S.D.N.Y. 2005). W e need not deci de here whetherpost-agre ement 26 represent ations ar e distinguishabl e from pre-agreement representati ons in this case because we find 27 that O CC ha s f

ail ed ad eq uatel y to all eg e sc ienter

wi th re sp ect

to thi s po rti on

of th e cl aim . O CC ha s9

1 offered nothing more than speculati on and vague allegati ons as to the knowledge and invol vement 2 of def

endants JP Morgan SB IC LLC , Sixty W all Street SBIC Fund, L.P., The Megunticook F und 3 II, L. P. , and

Th e Meguntico ok

Si de Fund

II, L. P. W ithreg ard

to t he ass ert ed

m isr ep res entat ion s, 4 m ere ly p lea din g th e inv olv em ent o f outsi de d ire cto rs Mat lac k an d Op pe nh eim er, ap po int ed bythe se 5 en tit ies , is ins uf

fi cie nt. W ithresp ect

to the corp orate of

fi cer s O’ Hare an d Ko est er, we co nc lud e th at 6 OCC’s allegations fai l th e te st laid outin Tellabs : with the al legations assessed hol istica lly, the 7 inference that the corporate officers were deliberatel y inflating their revenue via impr op erbil ling 8 pra cti ces i s n ot “ co ge nt and at l eas t as co m

pe lli ng ” as the inf

ere nc e th at the y re aso na

bly be lie ve d 9 that th eywe re b ill ingpro pe rlyan d a pp rop riatel y re po rti ng the ir E BI TD A, parti cu lar ly g ive n th at 10 Verizon had neverobjected t o the bill s. Tellabs , 127 S. Ct. at 2505. 11 Se cti on

20 (a) of the 19 34 Ac t m ak es “co ntr oll ingp ers on s” j ointlyan d s ev era llylia ble wi th 12 controll ed persons to a ny person to whom the controlle d person is l ia bl e forsecurit ies fraud. 15 13 U. S. C. § 7 8t( a); Boguslavsky v. Kaplan , 159 F.3d 715, 720 (2d Cir. 1998). In order to establish a 14 pri m a f

aci e ca se o f l iab ili ty u

nd er § 20 (a) , a

pla int if f m us t sh ow , am on g o the r th ing s, “a p rim ary 15 vio lat ion

bya co ntr oll ed

pe rso n. ” Id. Havin g c on clu de d a bo ve that plaintiff

s h av e f ail ed to 16 de m on str ate any p rim ary vio lat ion s, we af

fi rm the dis m iss al o f t

he § 2 0(a ) cl aim s. 17 Finally, thi s Court “review[s] a distri ct c ourt’s decision to dec line supple mental jurisdict ion 18 ov er p en de nt s tat e law c lai m s f or a bu se o f d isc ret ion .” WWBITV, Inc. v. Vil l. of Rouses Point , 589 19 F. 3d

46 , 4 9 (2 d C ir. 20 09 ). I f a ll o f a pla int if f’ s f ed era l cl aim s ar e d ism iss ed , a dis tri ct c ourt i s w ell 20 wi thi n it s d isc ret ion to d ecl ine to a sse rt su

pp lem ental ju

ris dic tio n ov er any state lawc lai m s, as i t di d 21 here. Id. at 5 2; seeals o Marcus v. AT&T Corp. , 1 38 F. 3d 46 , 5 7 (2d

C ir. 19 98 ). W e n ote that th ese 22 cla im s m aystill be bro ug ht in stat e cou rt an d that pla int if

fs may the re f

ind a rem ed y f or anyvia ble 23 fraud, misrepresentati on, or breach of repr esentati ons and warranti es claims.10

1 All arguments not otherwis e discussed i n this summ ary or der are found to be moot or without 2 m eri t. 3 For the foregoing re asons, the Mar ch 31, 2009 judgment and May 1, 2009 order of the 4 distri ct court a re hereby AFFIRMED. 5 6 FOR THE COURT : 7 Cathe rin e O ’H ag anW olf e, Cl erk 8 9 10