T hi s di s pos i t i on i s notappr opr i a t e f orpubl i c a t i on and i s notpr e c e de nt * e xc e pta s pr ovi de d byN i nth C i r c ui tR ul e 36- 3. NOT F OR P UB L I CAT I ON UN I TE D STATE S C OU RT OF APPE ALS FOR T HE NI NTH CI RC UI T J A M E S M . K E L L E Y ; e t a l., P l ai n t i ffs - A p p el l an t s, v. R A M B U S , I N C .; e t a l., D efen d an t s - A p p el l ees, P AU L MI C HA E L F AR MW AL D, D ef

endant- A pp el l ee , and J O H N D A N F O R T H ; e t a l., D efen d an t s. N o. 08- 17720 D . C . N o . 5 : 0 7 -cv -0 1 2 3 8 -JF ME MOR AN DU M *

A pp ea l fr om the U ni t ed S t at es D i stri ctC ou rt f o rth e N o rth e rn D is tr ic t o f C a lif o rn ia J e r e m yD . F oge l , D i s tr i c tJudge , P r e s i di ng 

# FI LED JU N 16 2010 M OLLY C. DW Y ER, CLERK U . S. C O U R T OF APPE ALST he pane l una ni m ous l yc onc l ude s thi s c a s e i s s ui t abl e f orde c i s i on ** w ith o u t o r a l ar g u m e n t. See F ed. R . A pp . P . 34 (a )( 2). 2 S ubm i tt e d J anuary2, 2010 ** S an F r an c is c o , C a lif

o rn ia B efo re: H U G , B E E Z E R an dH A L L , C i rcu i tJu d g es.

P l ai nt i ff s- appel l ant s J am es M . K el l ey , M i ki W . L ar son and D ou gl as B . K e lle y( c o lle c tiv e ly“K e lle y ” ) ap p e a l p r o s e th e d is tr ic t c o u rt’s d is m is s a l o f th e ir sui ti n favor of defendant s- appel l ee s R am bu s, Inc. (“ R am bu s” ) and se vera l others (c ol l ec t i vel y “ the D ef

endant s” ). K el l eysued the D ef endant s und erS ec t i on s 10(b), 14( a ) , 18( a ) a nd 20( a ) of the S e c ur i t i e s a nd E xc hange A c tof 1934 ( the “ E xc hange A c t ” ) , 17 C . F . R . § 240. 10b- 5 ( “ R ul e 10b- 5” ) a nd C a l i f orni ac om m on l aw , a l l e gi ng tha tthe D e f

e nda nt s ha d e nga ge d i n a nd c onc e a l e d an e xt e ns i ve s c he m e of ba c kda t e d opt i ons , unde r s t a t e d c om pe ns a t i on e xpe ns e s a nd de c e pt i ve pa t e nt s tr a te g ie s . W e h a v e j u r i s d i c t i o n p u r s u an tt o 2 8 U . S. C. § 1 2 9 1 , a n dw e a f f i rm. Th e f a c t s o f th i s c a s e a r e k n o w n t o th e p art i e s . W e d o n o tr e p e a tth e m.

I W e r e v ie w th e d is m is s a l o f ac la im p u r s u an t to F e d e r a l R u le o f C iv il P r o c e du r e 1 2 ( b ) ( 6 ) d e n o v o . G i bs on v . O f f i c e of A t t y . G e n. , 5 6 1 F .3 d9 2 0 , 9 2 5 ( 9 th C i r . 2009) . W e m aya f

f i rm “ on a nypr ope rgr ound, e ve n i f the di s tr i c tc ourtdi d not3

re ac h the i ss ue or re l i ed on di ff er entgrou nd s or r ea soni ng . ” Steckm a n v. H a rt B re w i ng, Inc. , 14 3 F . 3d 12 93 , 12 95 (9th C i r. 19 98 ). W e r e vi e w the de ni a l of l e a ve t o a m e nd ac om pl a i ntf ora n abus e of d is c r e tio n . Met

zlerInv. GM

B H v. C ori nthi an C ol leges , Inc. , 540 F . 3d 1049, 1072 ( 9th C i r . 2008) . W e a l s o r e vi e w the di s m i s s a l of ac om pl a i ntpur s uantt o R ul e 8 of th e F e d e r a l R u le s o f

C iv il P r o c e du r e ( “R u le 8 ” ) f o ra n ab u s e o f

d is c r e tio n . McH e nr yv . R e nne , 84 F . 3d 11 72 , 11 77 (9th C i r. 19 96 ). II T he di stri ctcourtprop er l y e xerc i se d i t s di sc re t i on by orderi ng thatK el l ey l i m i tth e o ri g i n al 2 2 7 -p ag e C o n so l i d at edC o m p l ai n tt o 5 0 p ag es so as t o n o ti m p o se a “ w ho l l y unn ec es sarystra i n o n [the] defe nd ant s and on the courtsy st em . ” In re G le nFe d, I

nc . Se c . L i t i

g. , 42 F . 3d 15 41 , 15 53 –5 4 (9th C i r. 19 94 ) ( en banc) (dee m i ng a 113 -page com pl ai nt“ un w i el dy i n the extre m e” ). III K e l l e yr a i s e d num e r ous i s s ue s i n the C ons ol i da t e d C om pl a i nttha tw e r e not in c lu d e din th e C o n s o lid a te dA m e n d e dC o m p la in t o ra n yc o m p la in t th e r e a f te r . K e l l e y“ w a i ve [ d] a l l c l a i m s di s m i s s e d w i th l e a ve t o a m e nd byf a i l i ng t o r e a l l e ge tho se cl ai m s i n h i s am ended com pl ai nt . ” P arri no v. F H P, Inc. , 146 F . 3d 699, 704 (9th C i r. 19 98 ).4 IV T he di s tr i c tc ourtpr ope r l ydi s m i s s e d a l l of K e l l e y ’ s c l a i m s unde rS e c t i ons 1 4 ( a ) , 1 8 ( a ) , 1 0 ( b ) a n d2 0 ( a ) o f th e E x c h an g e A c t, 1 7 C .F .R . § 2 4 0 .1 0 b - 5 ( “R u le 1 0 b - 5 ” ) an dC a l i f

o rn i as t a t e l aw. A T he di s tr i c tc ourtpr ope r l yc onc l ude d tha tK e l l e yf a i l e d t o s uf

f i c i e nt l ya l l e ge th e e le m e n ts o f

aS e c tio n 1 4 ( a ) c la im . See D esa i g o u da r v. Meyerco rd , 223 F . 3d 10 20 , 10 22 (9th C i r. 20 00 ). A l l of K el l ey ’ s a ss ert i on s r egar di ng al l eged m at er i al m i ss t at em ent s or om i ss i on s f ai l t o “ se tforth a bel i ef

thatce rt ai n u nspeci fi ed source s w i l l re veal , af

t erapprop ri at e di sc ov ery, fa ct s thatw i l l val i dat e [ the] cl ai m . ” See Sou th FerryL P, N

o. 2 v. Ki l l i ng er , 54 2 F . 3d 77 6, 78 3 (9th C i r. 20 08 ). K el l ey ha s a l s o f

a i l e d t o s how a n “ e s s e nt i a l l i nk” be tw e e n R a m bus ’ a l l e ge dl yf a l s e pr oxy s ta te m e n ts a n dc o rp o r a te a c tio n s th a t o c c u rr e dy e ar s b e f o r e th o s e p r o x ys ta te m e n ts w e r e r e le a s e d . Se e I

n r e A s ys t T e c h. , I nc . D e r i v . L i t i

g. , No . C- 0 6 - 0 4 6 6 9 EDL, 20 08 W L 21 69 02 1, at*9 (N . D . C al . M ay23 , 20 08 ) ( re j ec t i ng a S ec t i on 14 (a ) cl ai m prem i se d o n the fa i l ure t o d i sc l ose opt i on s bac kd at i ng ). B T he di s tr i c tc ourtpr ope r l yc onc l ude d tha tK e l l e yf a i l e d t o s uf

f i c i e nt l ya l l e ge a c tu a l r e lian c e o n R a m b u s ’ f in an c ia l an dp r o x ys ta te m e n ts . See H ow ard v. E ve rexB e c au s e K e lle y ’s c la im f o raR u le 1 0 b - 5 v io la tio n w a s in s u f f ic ie n tly 1 p le a d e d , K e lle y ’s S e c tio n 2 0 ( a ) c o n tr o llin g p e r s o n c la im w a s a ls o in s u f f ic ie n tly p le a d e ddu e to th e la c ko f u n d e r ly in g s e c u r itie s f

r au d . 5 Sys. , Inc. , 228 F . 3d 1057, 1063 ( 9th C i r . 2000) ( not i ng tha t“ c ourt s ha ve r e qui r e d a p u r c h a s e r ’s a c tu a l r e lian c e o n th e f r au du le n t s ta te m e n t u n d e r§ 1 8 ( a ) , a s o p p o s e dto th e c o n s tru c tiv e r e lian c e ” ) . K e lle yf a ile dto a lle g e th a t th e a c tu a l p u r c h a s e o rs a le of s ha r e s i n r e l i anc e on the s t a t e m e nt s , a nd anya l l e ga t i on of r e l i anc e i n the co m p l ai n ti s stro n g l y co n trad i ct edb y K el l ey’ s b u yi n g an dsh o rt i n g o f R am b u s’ s to c kb o th b e f

o r e a n da f

te rth e r e le v an t s ta te m e n ts w e r e m a d e .

C K e lle y ’s c la im s u n d e rS e c tio n 1 0 ( b ) a n dR u le 1 0 b - 5 f a il to s u f f ic ie n tly a lle g e “p a rtic u larf

a c ts g iv in g r is e to as tr o n g in f e r e n c e o f d e lib e r a te r e c k le s s n e s s .” Se e I

n r e Si l i c on G raphi c s I

nc . Se c . L i t i

g. , 1 8 3 F .3 d9 7 0 , 9 7 9 ( 9 th 1 C i r. 19 99 ). D K e l l e y ’ s s t a t e l aw c l a i m s f orc om m on l aw f

r aud and ne gl i ge nt m i s r e pr e s e nt a t i on f

a i l t o m e e tthe he i ght e ne d pl e a di ng s t anda r ds of R ul e 9( b) of

the F e d e r a l R u le s o f

C iv il P r o c e du r e . Se e B e ll A tla n tic C o r p . v . T w o m b ly , 5 5 0 U . S. 54 4, 57 6 n . 3 (20 07 ). M oreover, K el l eyhas f ai l ed t o adequ at el y a l l ege r el i ance as to b o th c la im s .6 V T he di s tr i c tc ourta c t e d w i thi n i t s di s c r e t i on i n de ny i ng K e l l e yf urthe rl e a ve to a m e n dth e S e c o n dR e v is e dC o n s o lid a te dA m e n d e dC o m p la in t. See Met zler , 540 F .3 da t 1 0 7 2 ( h o ld in g th a t a“d is tr ic t c o u rt’s d is c r e tio n to d e n yle a v e to a m e n dis part i cul ar l y broad w here [apl ai nt i ff ] has pre vi ou sl y am ended the com pl ai nt ”) . VI K e lle y ’s o th e ra r g u m e n ts a r e w ith o u t m e r it. AF F I RME D.