UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

________________ _________________ JUN LI, et al., Plaintiffs - Appellants, and DIANWEN CUI, et al., Plaintiffs,

v. COLORADO REGION AL CENTER I, LLC, et al., Defendants - Appellees.

––––––––––––––––––– –––––––––––––––– DIANWEN CUI, et al., Plaintiffs - Appellants, and JUN LI, et al., Plaintiffs,

v. COLORADO REGIONAL CENTER LLC, et al.,
De fendants - Appellees, and No. 21-1232 (D.C. No. 1:19-CV -02443-RM-STV) (D. Colo.)

No. 21-1253 (D.C. No. 1:19-CV -02443-RM-STV) (D. Colo.) FILED United States Court of Appeals Tenth Circuit 

### October 7, 2022 Christopher M. Wolpert Clerk of Court Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 12 PETER KNOBEL, Defendant.

________________ _________________ ORDER

________________ _________________ Before MATHESON , KELLY , and PHILLIPS , Circuit Judges.

________________ _________________ This matter is before the court on Peter Knobel’s Petition for Panel Rehearing for Purposes of Clarification (“Petition”). Upon careful consideration, the Petition is GRANTED to the extent of the modifications 1 in the attached revised order and judgment. The court’s September 12, 2022 orde r and judgment is w ithdrawn and replaced by the attached revised order and judgment, wh ich shall be filed as of today’s date.

Entered for the Court

CHRISTOPHER M. WOLPERT, Clerk

1 In addition to the modificati ons intended to prov ide the clarification requested in the Petition, the court has sua sponte further revised the order and judgment. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

________________ _________________ JUN LI; QI QIN; YI LIU; JIE YANG; YUQUAN NI; ZHONGZ AO SHI; FANG SHENG; SHUNLI SHAO; KAIYUAN WU; ZHIJIAN WU; ZHONGWEI LI; YUWEI DONG; LIN QIAO; JINGE HU; RUJUN LIU; FAN ZHANG; LU LI; SA WU; YING XU; CAO XIAOLONG; HSIN-YI WU, Plaintiffs - Appellants, and DIANWEN CUI; LEI GU; SUFEN LENG; XUE MEI; ZHOU MEI; YAN SONG; LU WANG; YUE WU; ZHOU YANG; JINGWEN ZHANG; LEI ZHANG; LING ZHANG; XIAOHONG ZHANG; QIN ZHOU; XUN ZHU; CHUNYI ZOU, Plaintiffs,

v. COLORADO REGION AL CENTER I, LLC; SOLARIS PROPERTY OWNER I LLC; PETER KNOBEL; COLORADO REGIONAL CENTER PROJECT SOLARIS LLLP, and a ll principals and ultimate owners of business entities pursuant to piercing of the limited liability veil, Defendants - Appellees.

––––––––––––––––––– –––––––––––––––– DIANWEN CUI; LEI GU; SUFEN LENG; No. 21-1232 (D.C. No. 1:19-CV -02443-RM-STV) (D. Colo.) FILED United States Court of Appeals Tenth Circuit 

### October 7, 2022 Christopher M. Wolpert Clerk of Court Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3XUE MEI; ZHOU MEI; YAN SONG; LU WANG; YUE WU; ZHOU YANG; JINGWEN ZHANG; LEI ZHANG; LING ZHANG; XIAOHONG ZHANG; QIN ZHOU; XUN ZHU; CHUNYI ZOU, Plaintiffs - Appellants, and JUN LI; QI QIN; YI LIU; JIE YANG; YUQUAN NI; ZHONGZ AO SHI; FANG SHENG; SHUNLI SHAO; KAIYUAN WU; ZHIJIAN WU; ZHONGWEI LI; LIN QIAO; JINGE HU; RUJUN LIU; FAN ZHANG; LU LI; SA WU; YING XU; CAO XIAOLONG; WU HSIN-YI; YUWEI DONG, Plaintiffs,

v. COLORADO REGIONAL CENTER LLC; COLORADO REGION AL CENTER I, LLC; SOLARIS PROPERTY OWNER LLC; SOLARIS PROPERTY OWNER I LLC; COLORADO REGIONAL CENTER PROJECT SOLARIS LLLP; WAVELAND VENTUR ES, LLC,
De fendants - Appellees, and PETER KNOBEL, Defendant. No. 21-1253 (D.C. No. 1:19-CV -02443-RM-STV) (D. Colo.)

________________ ________________ Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 41 ORDER AND JUDGMENT *

________________ _________________ Before MATHESON , KELLY , and PHILLIPS , Circuit Judges.

________________ _________________ Appellants are two groups of Chinese i nvestors, the Li Appellants and the Cui Appellants. Each investor purchased a limited partnership interest in Colorado Regional Center Project So laris LLLP (“CRCPS”). Thro ugh its general partner, CRCPS loaned the proceeds from the invest ments to a real es tate development project. After the project produced low re turns and defaulted on the loans, each group of Appellants separately sued CRCPS , its general partner, and other parties involved in the real-estate project. The district court dismissed both compla ints, denied severa l motions filed by Appellants, and ordered them to pay atto rney fees. Each group of Appellants appealed. We consolidated their appeals. Exercising jurisdic tion under 28 U.S.C. § 1291, we (A) affirm the district court’s dismissa l of Appellants’ cl aims under Federal Rule of Civil Procedure 12(b)(6) excep t for the Li Appellants’ claim for breach of fiduciary duty, which we af firm in part and reverse in part;

* After examining the briefs and appella te record, this pa nel has determined unanimously to honor the parties’ request for a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore submitted without oral argument. This Or der and Judgment is not binding precedent, except under the doctrines of la w of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 52 (B) affirm dismissal of the Cui Appellant s’ remaining state law claims for lack of subject-matter jurisdiction; (C) reverse the district court’s denial of the Cui Appellants’ motion to amend their complaint; (D) affirm the district court’s denial of the Li Appellants’ motion for default judgment; and (E) vacate the awards of attorney fees as described herein. We remand to the district court for further proceedings consistent with this Order and Judgment.
I. BACKGROUND
A. Factual Background 1
The Parties CRCPS is a limited liability limited p artnership created by Colorado Regional Center, LLC (“CRC”) and Wave land Ventures, LLC. It s erves as an EB–5 Regional Center, an entity approved by the federal government to promote economic growth by encouraging investments by foreign persons in exchange for permanent resident cards (green cards). As described in Liu v. SEC , 140 S. Ct. 1936, 1941 (2020), “[t]he EB–5 Program, administered by the U.S. Citizenship and Immigration Services,

1 The Li Appellants and Cui Appellants each amended their complaints three times. Their third amended complaints are the operative complaints, from which we draw the factual background presented a bove. “In reviewing a district court’s dismissal under . . . 12(b)(6), we accept as tr ue all well-pleaded f actual allegations in the complaint and view them in the light most favorable to the plaintiff[s].” Garling v. United States Env’t Prot. Agency , 849 F.3d 1289, 1292 (10th Cir. 2017) (quotations and alterations omitted). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 63 permits noncitizens to apply for permanen t residence in the Un ited States by investing in approved commercial ent erprises that are based on proposals for promoting economic growth.” (quotations omitted). Colorado Re gional Center I LLC (“CRC I”), 2 a subsidiary of CRC, manages CRCP S as its general partner. Appellants, two groups of Chinese investors, purch ased limited partnership interests in CRCPS. In total, 165 invest ors each paid approxi mately $500,000 for their limited partnership interests, totaling $82.5 m illion. CRCPS loaned the proceeds from these investments to Solari s Property Owner, LLC (“SPO”) to fund the completion of a condominium co mplex in Vail, Colorado. Governing Documents Three documents set forth the terms of the parties’ arrangements. First, CRCPS’s “Partnership Agreement” (undated) set the terms of CRCPS’s internal management. It provided that CRC I had the exclusive right to manage, operate, and control CRCPS. Neither CRCPS nor the limited partners could hold CRC I liable for any acts or omissions unless CRC I acted in bad faith, gross negligence, or willful misconduct. The Partnership Agreemen t allowed limited partners to exerci se a put option 3 to sell their interest to the partnership.

2 Although the Li Appella nts refer to this entity as “CRC 1,” the Cui Appellants refer to it as “CRC I,” which we adopt th roughout this order.

3 A put option is “[a]n option to sell some thing (esp. securities) at a fixed price even if the mark et declines.” Option , Black’s Law Diction ary (11th ed. 2019). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 74 Second, the “Loan Agreement,” dated November 5, 2010, provided for CRCPS to loan funds to SPO to complete deve lopment of SPO’s condo minium project. Third, the “Confidential Information Memorandum,” dated March 31, 2011, set the terms of each investo r’s purchase of the lim ited partnership stake. It stated that each investor woul d pay approximately $500,00 0 for a limited partnership interest in CRCPS. CRCPS wo uld loan the proceeds to SPO, which would use these funds to pay project development cost s for the condominium complex. The Memorandum also stated that certain condominium units in the building would be used as collateral fo r the loan. A related document designated 19 condominium units as collateral. The Confidential Information Memoran dum provided that CRCPS would fund the loan through multiple advances, and each advance would carry a 5% interest rate. The principal balance and accrued interest on each advance was due within five years of each advance. SPO could not prepay a ny of the balance for three years, but after the three-year-period, it coul d repay with cash or a co llateral condominium unit. CRCPS could refuse repayment through cash and compel SPO to convey the collateral condom inium unit.
Investments and Loans Based on the documents, CRCPS began solic iting investment s. Investors purchased limited partnership interests in CRCPS between 2012 and 2015. Before receiving any advances, SPO assigned its rights and obligations under the arrangement to its wholly ow ned subsidiary, Solaris Prop erty Owner I (“SPO I”). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 85 Between April 2012 and January 2015, CRCPS made 19 loan advances to SPO I. About three years after the first advance, CRCPS and SPO I entered into an agreement regarding the collateral condomin ium units (the “Agr eement Regarding Collateral Units” or “ARCU”). Under the ARCU, SPO I gave CRCPS notice that it would pay back the loan advances by c onveying the collateral condominium units. The ARCU stated that SPO I would not immediately transfer the deed to the condominium units but CRCPS w ould be responsible for all fees and costs associated with the units and would pause the accrual of interest on the advances. Thus, under the ARCU, SPO I was deemed to ha ve repaid the loan advances. In 2016, CRC I and CRCPS began sending no tices to the limited partners that identified the collateral condominium units as partnership property but acknowledged that SPO I still held title . The notices stated that CRCPS was coordinating with SPO I to transf er title.
B. District Court Proceedings 4 In 2019, the two groups of limited pa rtners—the Li and the Cui Appellants— filed lawsuits alleging stat e and federal claims agains t various defendants. In general, they alleged that SPO and SPO I misrepresented the va lue of the collateral condominium units and that CRC I violated its duties as the general partner of CRCPS. According to Appellants, Defenda nts-Appellees misrep resented that the

4 We summarize the district court pro ceedings here and elaborate on them as needed later in our analysis. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 96 loan was fully secured when it was not. Th ey alleged that thes e misrepresentations led to losses of over $40 million and that SPO and SPO I defaulted on their loans. In their operative compla int, the Li Appellants br ought several direct and derivative 5 claims against CRCPS, CRC, CRC I, Waveland Ventures, LLC, SPO, SPO I, and Peter Knobel (SPO’s owner). 6 Separately, the Cui Appellants sued CRCPS, CRC, CRC I, Waveland Ventures, LLC, SPO, SPO I, and Mr. Knobel

5 “A derivative action is a vehicle that enables the prosecution of claims on behalf of a corporati on or other entity.” S’holder Derivative Ac tions L. & Prac. § 1:1 (2022). A derivative suit enab les limited partners and othe r shareholders to assert claims on behalf of the entity, here CRCPS. A plaintiff in a derivative suit may assert claims against pa rties that owe fiduciary duties to the entity.

6 The Li Appellants brought: (1) a derivative breach-of-fiduc iary-duty claim against CRC I; (2) a derivative civil-theft cl aim against CRC, SPO, SPO I, and Mr. Knobel; (3) a derivative breach-of-contract claim based on the Loan Agreement against SPO I; (4) a derivative breach-of-transfe r-of-title claim ag ainst SPO I; (5) a derivative federal secur ities-fraud claim against CRC I; (6) a derivative Colorado secu rities-fraud claim against CRC and Mr. Knobel; (7) a derivative claim to remove CRC I as CRCPS’s general partner; (8) a direct fraud claim agai nst CRC, CRC I, Waveland Ventures, LLC, and Mr. Knobel; (9) a direct fraud claim against CRCPS; and (10) a direct claim to pierce th e corporate veil to hold CRC I’s and SPO I’s owners and members liable. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 107 alleging both direct and derivative claims. 7 In both complaints, the derivative claims were brought on behalf of CRCPS. 8
Motions to Dismiss and Other Motions Appellees moved to dismiss both operativ e complaints for failure to state a claim. CRC I also filed a counterclaim ag ainst the Li Appellants after the Li Appellants alerted the district court that CRC I had been removed as general partner of CRCPS for cause. CRC I argued its remova l as general partne r was improper. The Li Appellants moved to dismiss the counterclaim, and the Cui Appellants moved for a receiver to be appoin ted to manage CRCPS. Before the district court ruled on the motions to dismiss, Appellants voluntarily dismissed some of their claims. The Li Appellants’ remaining claims

were:

7 The Cui Appellants brought: (1) a direct fraud clai m against all Defendants; (2) a direct and derivative brea ch-of-fiduciary-duty claim against CRC and CRC I; (3) a direct Colorado consum er protection claim against all Defendants; (4) a direct federal securities-fr aud claim against CRCPS and CRC I; (5) a direct federal securities-fr aud claim against all Defendants; (6) a direct and derivative brea ch-of-contract claim against SPO I; (7) a direct and derivative decl aratory relief claim against CRC I, SPO, and SPO I; and (8) a direct claim to pierce th e corporate veil to hold CRC I’s and SPO I’s owners and members liable.

8 The Li and Cui Appellants also iden tified other Defendants that are not relevant to this appeal. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 118 (1) a derivative breach-of-fiducia ry-duty claim against CRC I; (2) a derivative civil-theft clai m against CRC, SPO, SPO I, and Mr. Knobel; 9 (3) a derivative breach-of-contract claim based on the Loan Agreement against SPO I; 10 (4) a derivative federal securities -fraud claim against CRC I; and (5) a derivative state securities-fraud claim against CRC, its principals, and Mr. Knobel. The Cui Appellants’ rema ining claims were: (1) a direct fraud claim against all Defendants; (2) a direct and derivative breach -of-fiduciary-duty claim against CRC and CRC I; (3) a direct federal se curities-fraud claim agai nst all Defendants; (4) a derivative breach-of-contract claim against SPO I; and (5) a direct and derivative claim for declaratory relief against CRC I, SPO, and SPO I. 11

9 The district court dismissed this clai m, and the Li Appellants mention it only in a footnote in their opening brief. They have thus waiv ed any arguments as to this claim. San Juan Citizens All. v. Stiles , 654 F.3d 1038, 1055-56 (10th Cir. 2011) (argument raised in a footnote and in adequately developed is waived).

10 The district court also dismissed th e Li Appellants’ surviving derivative breach-of-contract claim agains t SPO I for lack of subject-m atter jurisdiction. The Li Appellants do not challenge th is dismissal on appeal.

11 The district court order lists this cl aim as against CRCPS, SPO, and SPO I, but the complaint lists CRC I, SPO, and SPO I, so we descri be the claim as stated in the complaint. The Cui Appellants pled this as a sepa rate claim for relief under Colo. Rev. Stat. § 13-51-106, which allows a plaintif f to “have determined any question of construction or validity arising under the inst rument, statute, ordi nance, contract, or franchise and obtain a declaration of ri ghts, status, or ot her legal relations thereunder.” See Villa Sierra Condo. Ass’n v. Field Corp. , 878 P.2d 161, 164 Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 129 The district court granted the Appellees’ motions to dismiss in part and denied them in part. It (1) gran ted the motions as to Appella nts’ federal securities-law claims; (2) denied the motions as to Appe llants’ breach-of-contract claims and the Cui Appellants’ declaratory-relief claim against SPO and SPO I; and (3) dismissed the remaining state law claims. Because only state law claims agains t SPO and SPO I remained, the court ordered the parties to address whether di versity jurisdiction ex isted, and if not, whether it should exercise supplemental jurisdiction over those claims. After briefing, the court determined that it lack ed diversity subject-m atter jurisdiction over Appellants’ remaining state law claims agai nst SPO and SPO I, d eclined to exercise supplemental jurisdiction over those claims, and dismisse d them without prejudice. The district court next denied the Cui Ap pellants’ motion to appoint a receiver. It also denied the Li Appellants’ moti on to dismiss CRC I’s counterclaim. CRC I later withdrew its counterclaim. The Li Appellants moved for reconsiderat ion of the district court’s dismissal of their claims. They also moved for de fault judgment on their abandoned claim to remove CRC I as general partner. The Cu i Appellants also renewed their motion for appointment of a receiver. The dist rict court denied these motions.

(Colo. App. 1994) (Section 13-51-106 is “i ntended to provide a method to relieve parties from uncertainty and insecurity with respect to their rights, status, and other legal relations” (quotations omitted)). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 1310 Finally, the Cui Appellants moved to file a fourth amended complaint, which the district court denied. Attorney Fees Appellees then moved for attorney fees on multiple grounds. Waveland Ventures, LLC, CRC, and CRC I (collectiv ely “CRC Defendants”) sought attorney fees against the Li and Cui Appellants under Colorado law a nd the Private Securities Litigation Award Act (“PSLRA”). SPO, SPO I, and Mr. Knobel (collectively “SPO Defendants”) sought attorney fees against the Li and Cu i Appellants under the Loan Agreement, Colorado law, and the PSLRA. The district court addressed these requests in three orders, wh ich we describe below.

a. Order on the CRC Defendants’ motion for attorney fees The court awarded the CRC Defendants $3 90,056.25 against the Li Appellants and $139,539.75 against the Cui Appellant s under Colorado law, Colo. Rev. Stat. § 13-17-201. It explained that the CRC D efendants were entitled to attorney fees under Colorado law because (1 ) the Li and Cui Appellants asserted tort claims against the CRC Defendants and (2) the court had dismisse d the entire action against the CRC Defendants under Rule 12(b)(6). b. Order on the SPO Defendants’ motion for attorney fees The district court awarded the SPO D efendants attorney fee s against the Li Appellants and the Cui Appellants. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 1411 i. Li Appellants The court awarded the SPO Defendants $2 44,020.68 in attorney fees against the Li Appellants under the Loan Agreemen t and Colorado law, which each provided an independent basis for the award. First, the court granted attorney fees under the Loan Agreement. The Loan Agreement provided that the prevailing par ties in litigation arising from the loan were entitled to attorney f ees. The district court conc luded that the SPO Defendants were the prevailing parties. It then said that “[t]his should end the issue of fees as against the Li [Appellants] because the Court will not award a party, and the SPO Defendants cannot recover, the same fees more than once.” App., Vol. XIV at 3867. Nonetheless, the court proceeded to evaluate the remaining bases fo r attorney fees. Second, the court concluded that Mr. Knobel, but not the other SPO Defendants, was entitled to attorney fees u nder Colorado law. It determined that the entire action was dismissed with pr ejudice only as to Mr. Knobel under Rule 12(b)(6), not SPO and SPO I, 12 so only he could recover attorney fees under Colorado law. It then concluded that th e essence of the acti on against Mr. Knobel was in tort, which entitled him to fees under Colorado law.

12 The court dismissed certain state law claims against SPO and SPO I without prejudice for lack of diversity jurisdicti on and because it declined to exercise supplemental jurisdiction. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 1512 ii. Cui Appellants The court awarded the SPO Defendants $7 7,376.79 against the Cui Appellants under the Loan Agreem ent and Colorado law. First, the court awarded attorney fees under the Loan Agr eement because the SPO Defendants were the prevailing pa rties on the Cui Appellants’ claims. Second, the court awarded Mr. Knobel , but not the other SPO Defendants, attorney fees under Colorado law. It ag ain explained that only Mr. Knobel was dismissed entirely under Rule 12(b)(6). It also concluded that the Cui Appellants’ claims against Mr. Knobel were tort clai ms. The court declin ed to specify the amount of fees awarded to Mr. Knobel un der Colorado law because it had awarded him fees under the Loan Agreement and he could not recover those fees twice. 13

c. Order on fees under the PSLRA The court separately addressed the re quests for attorney fees against the Appellants’ counsel under the PSLRA. It c oncluded that the Li Appellants’ counsel and the Cui Appellants’ counsel had violated Federal Rule of Civil Procedure 11(b). Because the PSLRA imposes a rebuttable pres umption in favor of attorney fees for substantial Rule 11 violations, the court ev aluated whether each counsel’s violation was substantial and, if so, whether the pr esumption that attorney fees should be assessed had been rebutted.

13 On appeal, neither the Li Appellant s nor the Cui Appellants challenge the attorney fee awards to the SPO Defe ndants based on the Loan Agreement. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 1613 As to the Li Appellants’ counsel, the c ourt determined his Rule 11 violation was substantial, so the PSLRA’s presumption applied, and th at he had failed to rebut the presumption. It said that, excluding th e claims that the Li Appellants voluntarily dismissed, four of the five remaining claims were fr ivolous. The court awarded $390,056.25 to the CRC Defendants and $24 4,020.68 to the SPO Defendants against the Li Appellants’ counsel. As to the Cui Appellants’ c ounsel, the court determined that the entire amount of attorney fees should be assessed against him for the claims against the CRC Defendants. But it concluded that his Rule 11 violation was not substantial for the claims against the SPO Defenda nts, so the presumption that he should be liable for the full amount of attorney fees did not apply. The court thus awarded $139,539.75 to the CRC Defendants and $5,000 to th e SPO Defendants against the Cui Appellants’ counsel. Finally, the court noted that the attorn ey fee awards were not cumulative and that the CRC and SPO Defendants could onl y collect once even though fees were awarded under different theories. Appellants timely appealed. 14

14 We summarize here our understanding of the distri ct court’s subject-matter jurisdiction underlying its orde rs. Both sets of Appellant s filed claims for federal securities-fraud. The remainde r of their claims were based on state law. The district court had federal question jurisdiction ove r the federal securities claims under 28 U.S.C. § 1331 and 15 U.S.C. §§ 77v and 78aa. It dismissed them under Rule 12(b)(6). It also dismissed the state law claims against the CRC Defendants and Mr. Knobel under Rule 12(b)(6), apparen tly exercising supplemental jurisdiction under 28 U.S.C. § 1367. It denied th e Rule 12(b)(6) moti ons to dismiss the Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 1714 II. DISCUSSION On appeal: (A) The Appellants challenge the distri ct court’s Rule 12( b)(6) dismissal of their claims for (1) breach of fiduciary duty, (2) federal securities fraud, (3) Colorado securities fraud (Li Appellants only), and (4) Colorado common law fraud (Cui Appellants only). (B) The Cui Appellants argue the dist rict court erred in dismissing their remaining state law claims for lack of subject-matter jurisdiction. (C) The Cui Appellants contend the dist rict court abused its discretion in denying their motion to file a fourth amended complaint. (D) The Li Appellants assert the distri ct court improperly denied their motion for default judgment on their original claim seeking removal of CRC I as general partner. (E) The Appellants challenge the district court’s awards of attorney fees under Colorado law and the PSLRA. We address each issue in turn. 15 A. Rule 12(b)(6) Dismissals On appeal, both sets of Appellants challe nge the dismissal of (1) their breachof-fiduciary-duty claims agai nst CRC I and (2) their federa l securities-fraud claims. The Li Appellants contest dismissal of (3) their state securities- fraud claim, and the

derivative state breach-of-contract and decl aratory-judgment clai ms against SPO and SPO I. But, after asking for supplement al briefing on subject -matter jurisdiction regarding those claims, the court determined it lacked diversity jurisdiction under 28 U.S.C. § 1332 and declined to exercise supplemental jurisd iction under 28 U.S.C. § 1367.

15 The Li Appellants listed eight issues in their brief. Li Aplt. Br. at 5-6. The Cui Appellants listed seven is sues in their brief. Cui Ap lt. Br. at 5-6. We have consolidated the issu es into the foregoing five cate gories and have identified those which both sets of Appellants raise and thos e which each of them raise on their own. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 1815 Cui Appellants argue against dismissal of (4) their fraud claim. Although many of the arguments overlap, we address them based on each separate complaint. We review de novo the dismissal of a complaint under Rule 12(b)(6). Mayfield v. Bethards , 826 F.3d 1252, 1255 (10th Ci r. 2016). “We accept all well-pleaded factual allegations in the comp laint as true, and we view them in the light most favorable to the nonmoving party.” Sinclair Wyo. Re fin. Co. v. A&B Builders, Ltd. , 989 F.3d 747, 765 (10th Cir. 2021) (quotations and alterations omitted). To survive a Rule 12(b)(6) motion, a complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the re asonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009). “Threadbare reci tals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. We typically consider “only the conten ts of the complaint when ruling on a 12(b)(6) motion.” Berneike v. CitiMortgage, Inc. , 708 F.3d 1141, 1146 (10th Cir. 2013). But we will consider “documents incorporated by refere nce in the complaint [and] documents referred to in and central to the complaint, when no party disputes [their] authenticity.” Id. ; see Broker’s Choice of Am., In c. v. NBC Universal, Inc. , 861 F.3d 1081, 1103 (10th Cir. 2017). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 1916 “[W]e may affirm the judgment on any ground supported by the record” as long as the plaintiff “had a fair oppor tunity to address that ground.” Nakkhumpun v. Taylor , 782 F.3d 1142, 1157 (10th Cir. 2015). “Federal courts exercising diversity juri sdiction apply the substantive law of the forum state . . . .” Sinclair Wyo. Refin. Co ., 989 F.3d at 765-66; see Erie R.R. v. Tomkins , 304 U.S. 64, 78 (1938). We therefo re apply Colorado law to Appellants’ state law claims. Breach-of-Fiduciary-Duty Claims

a. Legal background i. Economic loss rule To state a breach-of-fiduciary-duty claim, a plaintiff must allege (1) “the defendant was acting as a fiduciary of the plaintiff,” (2) “[the defendant] breached a fiduciary duty to the plaintiff,” (3) “the plaintiff incurred damages,” and (4) “the defendant’s breach of fiduc iary duty was a cause of th e plaintiff’s damages.” Taylor v. Taylor , 381 P.3d 428, 431 (Colo. App. 2016) (quotati ons and emphases omitted). This claim may be based on breach of a cont ractual duty or breach of a tort duty. Compare Casey v. Colo. Higher Educ. Ins. Benefits All. Tr. , 310 P.3d 196, 204 (Colo. App. 2012) (breach of fiduciary duty co uld support a breach-of-contract claim), with
Castro v. Lintz , 338 P.3d 1063, 1069 (Colo. A pp. 2014) (construing breach-offiduciary-duty claim as a tort claim). The Appellants’ challenge to dismi ssal of their fiduc iary-duty claims implicates the “economic loss rule,” which bars a party to a contract from using a tort Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2017 claim to recover contract damages unles s the party can show it is owed an independent duty in tort creating a sepa rate entitlement to those damages. Under the economic loss rule, if a plai ntiff alleges “only economic loss from the breach of an express or im plied contractual duty,” he or she “may not assert a tort claim for such a breach ab sent an independent duty of care under tort law.” Town of Alma v. AZCO Const., Inc. , 10 P.3d 1256, 1264 (Colo. 2000). “Economic loss is defined generally as damages other than physical harm to persons or property.” Id. To be independent of a cont ractual duty, the duty must (1) “arise from a source other than the relevant contract,” and (2) “not be a duty also imposed by the contract.” Haynes Trane Serv. Agency, Inc. v. Am. Standard, Inc. , 573 F.3d 947, 962 (10th Cir. 2009) (applying Colorado law). “Fiduciary relationships may be the kind of special relationship that will tri gger an independent common la w duty of care,” but “not every fiduciary relationship implicates a risk of dama ges for which contract law cannot provide a remedy.” Casey , 310 P.3d at 202-03 (quotations omitted). ii. Federal Rule of Civil Procedur e 23.1 and the contemporaneous ownership rule The fiduciary-duty claims also impli cate Federal Rule of Civil Procedure 23.1(b), known as the contem poraneous ownership rule. Bangor Punta Operations, Inc. v. Bangor & A. R. Co. , 417 U.S. 703, 708 n.4 (1974). It provides that a plaintiff bringing a derivative action must allege that he or she “w as a shareholder or member Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2118 at the time of the transac tion complained of.” Fe d. R. Civ. P. 23.1(b). 16 Rule 23.1 is a procedural rule, but we apply the state’s substantive law in de termining whether the transaction at issue occurre d while the plaintiff was a shareholder or member. Cadle v. Hicks , 272 F. App’x 676, 678- 79 (10th Cir. 2008) (unp ublished) (cited as instructive under Fed. R. App. P. 32.1; 10th Cir. R. 32.1(A)). b. Analysis In their complaint, the Li Appellant s brought a derivative-breach-of-fiduciaryduty claim against CRC I. They alleged that CRC I, acting as general partner of CRCPS, failed to adequately ensure that th e loan agreement with the SPO Defendants was sufficiently collateralized . They also alleged that CRC I breached its fiduciary duty in failing to demand complete re payment of the loan and by providing misleading information about it. The Cui Appellants separately brought both direct and derivative breach-offiduciary-duty claims agai nst the CRC Defendants. Th ey alleged that the CRC Defendants provided them with misleading marketing materials and took advantage of the Cui Appellants’ lack of English prof iciency to convince them to invest in the limited partnership. The district court dismissed the br each-of-fiduciary-duty claims on two grounds. First, the court read both complaints as asserting the clai ms under tort law.

16 Under Colorado’s limited partnership statute, “‘Member’ means a general partner or a limited partner.” Colo Rev. Stat. § 7-61-102(2). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2219 It concluded the economic loss rule barre d the claims because the CRC Defendants’ duties arose from contract. Second, the co urt held that many of the allegations supporting the Li Appellants’ claim and al l of the allegations supporting the Cui Appellants’ derivative claim stemme d from the CRC Defendants’ conduct that preceded the plaintiffs’ investments in the limited partnership. Thus, under Federal Rule of Civil Procedure 23.1, the court he ld that Appellants could not recover based on those allegations. Appellants argue the district court erre d in construing thei r allegations as arising under tort and not un der contract. They contend their complaints make clear that their breach-of-fiduciary -duty claims arose from c ontract and are therefore properly construed as breach-of-contract claims. And because their claims are contractual, Appellants argue the economic loss rule does not bar their claims. Appellants also contend the district court improperly applied Rule 23.1. i. Li Appellants The Li Appellants brought this claim derivativel y against CRC I, arguing it breached its fiduciary duty to CRCPS an d therefore violated its contractual obligations. We employ a three-step analysis to determine whether the district court properly dismissed the Li Appellants’ brea ch-of-fiduciary-duty cl aim. First, we determine this is a contract claim, not, as the district c ourt concluded, a tort claim subject to the economic loss rule. So the district court should no t have dismissed it on that ground. Second, because part of this claim was base d on alleged misconduct Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2320 that occurred before the Li Appellants invest ed in CRCPS, the dist rict court correctly determined that Rule 23.1 and the “contempor aneous ownership rul e” barred that part of the claim. Third, we conclude that the remaining post-i nvestment allegations stated a claim for breach of c ontract. We thus affirm the district court’s dismissal of the pre-investment allegations supporting the claim and re verse the dismissal of the post-investment allegations. 1) The contractual nature of the Li Appellants’ claim Construing the complaint in the light most favorable to the Li Appellants, see Sinclair Wyo. Refin

. Co ., 989 F.3d at 765, we conclude that it pled a breach-ofcontract claim rather than a tort claim. The Li Appe llants’ complaint labeled its claim as a “Breach of Fiduciary Duty arising by Contract and Statute.” App., Vol. II at 299 (emphasis added). In describing this count, the comp laint identified the contractual language creating th e fiduciary relationship. Id. at 300 ¶ 114 (“The CRCPS [Partnership Agreement] at Section 8.04 states th at ‘In carrying out their duties and exercising their powers hereund er, the General Partner [CRC I] shall exercise reasonable skill, car e, and business judgment.”). It then described CRC’s breaches as “contractua l and fiduciary.” Id. at 301 ¶ 126. Finally, the complaint sought damages equaling the “shortfall between what it would have received i[f] the Loan had been paid in cash versus the valu e of what it actuall y received (hereafter, the ‘Damages’).” Id. at 302 ¶ 129. These allegations show that the legal predicate for the Li Appellants’ breach-of-fiducia ry-duty claim was contract, not tort. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2421 Casey v. Colorado Highe r Education Institute is instructive. 310 P.3d 196 (Colo. App. 2012). There, the plaintiffs brought a breach-of-cont ract claim alleging the defendants breached th eir fiduciary duties. Id. at 201. The defendants responded that, by alleging breach of fiduciary duties, the claim was based on tort and thus was barred. Id. The Colorado Court of Appeals reject ed this argument, concluding that the “[t]he complaint does not allege a tort claim for breach of fiduciary duty against the trustees. Rather it alleges that the tr ustees breached the cont ract . . . by ‘failing to perform their contractual obligations, in cluding contractuall y imposed fiduciary duties.’” Id. at 203 (alterations omitted). Because the complaint re ferred to the specific contractual duties cr eating the fiduciary duty, th e court concluded it was a contractual claim. Id. The Li complaint similarly alle ged a breach of fiduciary duty that breached the parties’ contract. Appellees’ assertion that the Li Appe llants alleged a tort-based breach of fiduciary duty is not persuasive. First, they point to the Li Appellants’ colloquy with the district court at the motion-to-dismiss hearing where counsel c onfirmed to the district court that the claim was a breach-of-fiduciary-duty claim. Appellees argue that the Li Appellants should have clarified then that its claim arose from contract or statute. But the Li Appellants were not asked whether the claim ar ose from tort or c ontract. They were asked only whether it was a breach-of-fiduc iary-duty claim, and they confirmed it was. App., Vol. X at 2723. Their respons e did not contradict the plain language of their complaint, which go verns in any event. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2522 Second, Appellees argue that the Li A ppellants’ assertion of breach-of-contract claims against SPO I shows that they knew how to assert breach-of-contract claims. But Appellees fail to explai n how the Li Appellants’ asse rtion of a breach-of-contract claim elsewhere in their co mplaint affects the substa nce of this claim. We conclude that the complaint allege d a contractual breach -of-fiduciary-duty claim and is thus not subject to the economic loss rule. The district court erred in dismissing the clai m on this ground. 2) Rule 23.1 The Li complaint alleged pre-investme nt misconduct as the basis for CRC I’s breach of its fiduciary duties. Rule 23. 1 barred its derivative claim based on these allegations. The complaint alleged that CRC I willfully and negligently structured the Loan Agreement with SPO . App., Vol. II at 300 ¶ 118. Because this alleged misconduct predated the Li Appellants’ invest ment, the district court dismissed these allegations. The Li Appellants contend the transaction supporting their derivative claim did not occur until they purchased the ownership stake in CRCPS. We disagree. The Loan Agreement was executed on November 5, 2010. Id. at 276 ¶ 31. Per the Li complaint, no i nvestors, including the Li A ppellants, received marketing materials regarding the limited partnershi p stakes until after th e Loan Agreement’s execution. Id. at 285 ¶ 61. Thus, the Li Appella nts did not own any interest in CRCPS when the transaction complained of—the Loan Agreement—was executed. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2623 The Li Appellants cite Elk River Assocs. v. Huskin , 691 P.2d 1148 (Colo. App. 1984), to argue that CRC I’s fiduciary obliga tion to the investors predated their actual investment. Li Aplt. Br. at 32. Huskin said “a fiduciary relationship between the parties to a limited partnership can attach during the negotiations which precede formal execution of the certificate of lim ited partnership.” 691 P.2d at 1152. This argument fails for two reasons. First, the Li Appellants sued derivativel y on behalf of CRCPS, so the relevant fiduciary duty is not between the limited pa rtners and the general partner but between the general partner and the CRCPS partnership. See Burks v. Lasker , 441 U.S. 471, 477 (1979) (“A derivative su it is brought by shareholde rs to enforce a claim on behalf of the corporation.”); Colo. Re v. Stat. § 7-62-1001( 1) (Colorado law permitting limited partners to bring derivative suits on behalf of the limited partnership). Because the Li Appellants were not limited partners of CRCPS when the Loan Agreement was ex ecuted, they could not sue CRC I on behalf of CRCPS. Second, even assuming the fiduciary re lationship between the Li Appellants and CRC I began during negotiations to sell the limited partnership interests in CRCPS and that the Li Appellants were sui ng directly, the negotia tions did not begin until after execution of the Lo an Agreement. Thus, Rule 23.1(b) barred the Li Appellants’ pre-investme nt derivative claims. 3) Remaining post-investment allegations Turning to the Li Appella nts’ remaining, post-inve stment allegations, we conclude they plausibly stated a claim for breach of contract. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2724 To plausibly state a breach of contract , a plaintiff must allege “(1) the existence of a contract; (2) performance by the plaintiff or some justification for nonperformance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff.” Marquardt v. Perry , 200 P.3d 1126, 1129 (Colo. App. 2008). The Li complaint alleged that (1) the Partnership Agreement was the contract governing the relationship between CRCPS and CRC I, A pp., Vol. II at 300 ¶ 114; (2) CRCPS paid management fees to CRC I, id. at 298 ¶ 104; (3) in failing to honor its fiduciary duties, CRC I fail ed to perform the contract, id. at 300-01 ¶¶ 114-18, 126; and (4) CRCPS incurred dama ges resulting from the breach, id. at 302 ¶ 129. The Li complaint thus plausibly alleged a breach of contract.
* * * * In sum, the breach-of-fiduciary-duty cl aim was validly pled as a contract claim, but Rule 23.1(b) barred the pre-invest ment part of the claim. We therefore reverse the district court’s dismissal of the Li Appellants’ breach-of-fiduciary-duty claim for allegations relating to post-investment conduct. ii. Cui Appellants In contrast, the Cui Appellant s’ complaint failed to al lege a contractual breachof-fiduciary-duty claim and wa s thus subject to the econom ic loss rule. The Cui complaint described this count generally as a breach of fiduciary duty by CRC and CRC I. App., Vol. VI at 1585. It did not mention any contractual creation of the fiduciary duty. Indeed, the Cui complaint stated that CRC owed the Cui Appellants a Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2825 duty “[a]s the regional center entr usted by the Plaintiffs to ov ersee their investment.” Id. at 1586 ¶ 107. Thus, the complaint on it s face does not allege a fiduciary duty arising out of contract. Because the Cui Appellants’ claim arises out of to rt, we must apply the economic loss rule. As described above, the rule bars recovery for economic losses under tort if the breach stemmed fro m a breach of a contractual duty. Town of Alma , 10 P.3d at 1264. Here, the breach ste mmed from a breach of contract, and the Cui complaint alleged only economic losses. Thus , the economic loss rule barred the Cui Appellants’ breach-of-fiduciary- duty claim. We therefore affirm the district court’s dismissal of the Cui Appellants’ breach-of-fiduciary-duty claim.
Federal Securities-Fraud Claims The Li Appellants appeal the dismissal of their derivative federal securitiesfraud claim against CRC I. The Cui Appella nts appeal dismissa l of their direct federal securities-fraud clai m against all Appellees. 17 We affirm the district court.

a. Li Appellants The Li Appellants brought a derivativ e federal securities-fraud claim only against CRC I. They allege that CRC I ma de material misrepresentations to the limited partners to induce them to exercise their put options at a loss. The district court dismissed their claim because it (1) was barred under the statute of repose and

17 The Cui complaint also included a di rect federal secur ities-fraud claim under 15 U.S.C. § 80a against CRCPS and CRC I in its capacity as the general partner. The Cui Appellants do not raise this claim on appeal. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 2926 (2) was not a proper derivative claim. We affirm on the second ground and do not address the first. A derivative action “permits an individual shareholder to bring ‘suit to enforce

a corporate cause of action against officers, di rectors, and third parties.’” Kamen v. Kemper Fin. Servs., Inc. , 500 U.S. 90, 95 (1991) (quoting Ross v. Bernhard , 396 U.S. 531, 534 (1970)). The derivative action a llows an individual shareholder “to protect the interests of the corporation from the misfeasance and malfeasance of faithless directors and managers.” Id. (emphasis added) (quotations omitted). 18 Here, the Li Appellants’ securities-fra ud claim did not alle ge violations by CRC I against CRCPS. Instead , they alleged harms th at CRC I and CRCPS caused the investors directly. For instance, the Li co mplaint alleged that “CRCPS - acting through CRC1 - issued an offering of secu rities when it grante d a put right to each limited partner to ‘put’ his unit back to CRCPS.” App., Vol. II at 310 ¶ 187. In making this “offering of the put option to investors ,” the Li complaint alleged, “CRC failed to explain the history and method by which it was over-valuing the collateral.” Id. at 310-11 ¶ 189 (emphasis added), see also id. at 311 ¶ 190 (“CRC never explained clearly to investor s the implications of allowi ng SPO to recharacterize the loan (a debt) as ‘investors equity.’ . . . This is a material omission of fact to induce

18 We treat limited partnerships and co rporations the same for purposes of a derivative suit. See Fed. R. Civ. P. 23.1(a) (treati ng unincorporated associations and corporations similarly for de rivative suits); Colo. Rev. St at. § 7-60-106(1) (defining a limited liability partnership as an association). The parties do not dispute this approach. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3027 the limited partners to invest and stay in the tr ansaction which has caused them continuing detriment.” (emphasis added)). These allegations described a direct and not a derivative claim. They do not allege any harm caused to CRCPS. It was thus an improper derivative claim, and the district court properly dismissed it. b. Cui Appellants The Cui Appellants brought direct federa l securities-fraud claims against all Appellees. They allege that Appellees made material mi srepresentations to convince them to purchase their limited partnership interests in CRCPS. 19 The district court dismissed their claim after concluding it was barred under the statute of repose. We
agree. “A statute of repose . . . put s an outer limit on the right to bring a civil action.” CTS Corp. v. Waldburger , 573 U.S. 1, 8 (2014). Unlik e a statute of limitations, whose limit begins after a cl aim accrues, a statute of repos e’s limit is measured “from the date of the last culpable act or omission of the defendant.” Id. Thus, it bars “any suit that is brought after a sp ecified time since the defendant acted . . . , even if this period ends before the plaintiff ha s suffered a resu lting injury.” Id. (quotations omitted).

19 The Cui Appellants’ complaint also alleged that Appellees violated section 78o of the Federal Securities Ac t by selling securities without being registered. They do not pr esent any argument regarding th ese allegations on appeal, so they have abandoned this claim. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3128 Under 28 U.S.C. § 1658(b)(2 ), a plaintiff alleging a federal securities violation may not bring a private cause of action later than “5 years after such violation.” Before the district court, th e Cui Appellants did not disput e Appellees’ assertion that they purchased their limited partnerships in 2012. App ., Vol. XI at 2955 n.43. They thus needed to bring their claims no later than 2017, but they failed to file their complaint until 2019. The Cui Appellant s’ federal securiti es-fraud claim was therefore time-barred. 20 Li Appellants’ Colorado Securities-Fraud Claim The Li Appellants brought a deriva tive securities-fra ud claim under the Colorado Securities Act against CRC, its principals, and Mr. Knobel. Their allegations were identical to their federal secu rities-fraud claims: CRC, along with Mr. Knobel, “sent misleading and fraudulent valuations to investors in connection with an attempt to get th em to exercise a put option offered to them, which would cause a loss to each investor.” App., Vol. II at 312 ¶ 200. As with their federal secu rities-fraud claims, Appella nts failed to allege a derivative action. They alleged that they, as investors, suffered harms, not CRCPS. We thus affirm the dismissa l of their Colorado Securitie s Act derivative fraud claims.

20 The Cui Appellants incorporate the Li Appellants’ arguments regarding the statute of repose. They s uggest that Appellees’ 2016-2019 notices offering to allow limited partners to exercise th eir put options each constitute d a new security. But the Cui complaint alleged only that the security at issue was the 2012 sale of the limited partnership interest. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3229 Cui Appellants’ Fraud Claims The Cui Appellants appeal dismissal of their Colorado fraud claim against all Appellees. To state a fraud clai m under Colorado law, a plaint iff must allege (1) “the defendant misrepresented a ma terial fact,” (2) “the defe ndant knew the representation was false,” (3) the plaintiff “did not kn ow the representation was false,” (4) “the defendant made the misrepresentation inte nding that the [plaintiff] act on it,” and (5) “damages resulted from th e [plaintiff’s] reliance.” Loveland Essential Grp., LLC v. Grommon Farms, Inc. , 251 P.3d 1109, 1116 (Colo. App. 2010). A plaintiff asserting a fraud claim mu st satisfy the heightened pleading requirements of Federal Rule of Civil Proce dure 9(b). Under Rule 9(b), the plaintiff “must state with particulari ty the circumstances constitu ting fraud or mistake.” Fed. R. Civ. P. 9(b). We ha ve interpreted this Rule to re quire a plaintiff to “set forth the time, place, and contents of the false representation, the id entity of the party making the false statements and the consequences thereof.” Toone v. Wells Fargo Bank, N.A. , 716. F.3d 516, 522 (10th Cir. 2013) (quotations omitted); United States ex rel. Polukoff v. St. Mark’s Hosp. , 895 F.3d 730, 745 (10th Cir. 2018) (allegations of fraud must “provide factual allegations regarding the who, what, when, where and how of the alleged claims” (quota tions and alterations omitted)). The district court dismi ssed the Cui Appellants’ fra ud claim after determining the Cui complaint failed to m eet Rule 9(b)’s heightened pleading standard. The Cui Appellants contend the complaint adequately alerted Appellees to the nature of their Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3330 claim, and any deficiency in the pleadings resulted from asymmetr ic information. We agree with the district court. As the district court dete rmined, the Cui Appellants’ allegations lacked the specificity needed to allege fraud. For instance, the co mplaint alleged that Waveland LLC “colluded with SPO to defraud the EB–5 investors by misrepre senting to them that the Loan was 100% collateralized and safe .” App., Vol. VI at 1564-65 ¶ 9. But this allegation contained no specifics rega rding which statements were fraudulent, nor did it identify when or where the fals e representation was made. Elsewhere in the complaint, the Cui Appe llants identified numerous pur ported misrepresentations in a marketing presentation to poten tial investors by Appellees’ agents, id. at 1573-75 ¶¶ 65-66, but the complaint ag ain failed to identify wher e, when, and to whom the misrepresentations were made. Indeed, as the district court noted, the complaint failed to allege that any of the Cui Appellants attended this presentation. These allegations lack the requisite spec ificity to allege a fraud claim. The Cui Appellants argue we should rela x Rule 9(b)’s heightened pleading standard because Appellees were better placed to have deta ils regarding their fraudulent scheme. We have held that “courts may cons ider whether any pleading deficiencies resulted from the plaintiff’s inability to obtain information in the defendant’s exclusive control.” Polukoff , 895 F.3d at 745 (quotations omitted). But the Cui Appellants’ complaint was deficient, not because they la cked information in Appellees’ exclusive control, but becau se they failed to identify necessary information that was squarely within their knowledge, such as the dates, locations, Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3431 and identities of relevant actors. We thus a ffirm the district cour t’s dismissal of the Cui Appellants’ fraud claim.
B. Dismissal of State Claims for Lack of Jurisdiction After the district court denied the motion to dismiss the Li Appellants’ derivative breach-of-contract claim against SPO I and the Cui Appellants’ derivative breach-of-contract and decl aratory-judgment claims ag ainst SPO and SPO I, it ordered the parties to address whether it ha d diversity jurisdiction over these claims, and if not, whether it should exer cise supplemental jurisdiction. After briefing, the district court c oncluded that because the Appellants’ remaining claims were derivative in natu re, it had to determine whether to align CRCPS as a plaintiff or a defe ndant. It conclude d CRCPS’s interests were adverse to the Appellants’ interests, so the court aligned it as a defe ndant. And because CRCPS, as a limited partners hip, takes on the citizenship of its limited partners, see Carden v. Arkoma Assocs. , 494 U.S. 185, 195- 96 (1990), the court concluded it had the same citizenship as the Appellants. It therefore determin ed it lacked subjectmatter jurisdiction. It then declined to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c)(3). 21 On appeal, the Li Appellants do not cha llenge the dismissal of their derivative breach-of-contract claim agains t SPO I for lack of subject -matter jurisdiction. We

21 On appeal, the Appellants do not challe nge this declination of supplemental jurisdiction. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3532 thus limit our analysis to the Cui Appella nts’ challenge to th e dismissal of their derivative breach-of-contract and declar atory-judgment claims against SPO and SPO I for lack of subj ect-matter jurisdiction. 22 The Cui Appellants do not address the district court’s determinati on of CRCPS’s alignment or its citizenship. Instead, they focus on the diversity of ci tizenship between themselves and the SPO Defendants. Because the district court de termined CRCPS and the Cui Appellants shared the same citizenship and therefore ther e was no complete diversity, the citizenship of SPO is not material to its holding that th ere was no diversity jurisdiction. See Strawbridge v.
Curtiss , 7 U.S. (3 Cranch) 267 (1806). Because the Cui Appellants fa il to dispute the alignment and citizenship of CRCPS, they have waived their challenge to the district court’s dismissal for lack of subject-matter jurisdiction. Krastev v. INS , 292 F.3d 1268, 1280 (10th Cir. 2002) (“Issues not raised on appeal are deemed to be waived.”). Any such challenge would fail in any event.
C. Leave to Amend the Complaint The Cui Appellants argue the district court should have granted their motion for leave to file a fourth am ended complaint. “A district court should refuse leave to amend only upon a showing of undue delay, undue prej udice to the opposing party, bad faith or dilatory motive, failure to cu re deficiencies by amendments previously

22 In their reply brief, the Cui Appella nts argue they alleged both direct and derivative claims that survived the motion to dismiss. This is incorrect. The district court dismissed the direct claims under Ru le 12(b)(6) and left only the derivative claims. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3633 allowed, or futility of amendment.” Wilkerson v. Shinseki , 606 F.3d 1256, 1267 (10th Cir. 2010) (quotations and alterations omitted). “We ordinarily apply the abuse-of-discretion standard when revi ewing a denial of leave to amend.” Moya v. Garcia , 895 F.3d 1229, 1239 (10th Cir. 2018). In a June 14, 2021 order, 23 the district court denied the Cui Appellants’ motion for leave to amend. It reasoned that amendment would be futile based on (1) its dismissal of the Cui Appellants’ breach-o f-fiduciary-duty and fraud claims with prejudice, (2) its refusal to exercise suppl emental jurisdiction ove r the surviving state law claims, and (3) the Cui Appellants’ previous three amendments of their complaint. See Anderson v. Suiters , 499 F.3d 1228, 1238 (10t h Cir.2007) (a district court may deny a motion to amend a complain t if the amendment would be futile, and “[a] proposed amendment is fut ile if the complaint, as am ended, would be subject to dismissal” (quotations omitte d)). We view the reque st to amend differently. To the extent the Cui Appellants proposed to amend their co mplaint to state a breach-of-contract claim base d on CRC I’s breach of its contractual fiduciary duty, 24 as we explained above in our discussion of the Li Appella nts’ fiduciary-duty claim, such a claim is not subject to the economic loss rule. In short, the proposed amended

23 Issued the same day the c ourt entered final judgment.

24 Although on appeal the Cui Appellant s focus on their fraud claim, they moved to amend to “clarify[] the Claims for Fraud; Breach of Fiduciary Duty; and Declaratory Relief,” and to plead “a Breach of Contract cause of action as an alternative to the Br each of Fiduciary Duty cause of action.” App., Vol. XIII at 3470; see also id. at 3477, 3482-3519. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3734 complaint does not appear to be futile, and “[i]f a proposed amendment is not clearly futile, then denial of leav e to amend is improper.” Seale v. Peacock , 32 F.4th 1011, 1029 (10th Cir. 2022) (quoti ng Wright & Miller, Fede ral Practice & Procedure § 1487). We reverse the dist rict court’s denial of the Cui Appellants’ request for leave to amend and remand fo r further consideration.
D. Motion for Default Judgment The Li Appellants challenge the distri ct court’s refusal to enter default judgment in their favor on their abandoned cl aim to remove CRC I as general partner of CRCPS. They initially included a count in their operative complaint seeking removal of CRC I as general partner. But they voluntarily dismissed this count. App., Vol. VIII at 2090. After CRC I fi led a counterclaim s eeking a declaratory judgment that its purported removal was improper, the Li Appellants moved to dismiss the counterclaim and “for [an] order declaring gene ral partner removed instanter.” Id. at 2079. The district court denied the Li Appella nts’ motion to dismiss the counterclaim and their request for a declaration sta ting that CRC I was properly removed as general partner. After this ruling, CRC I voluntarily dismis sed its counterclaim. The Li Appellants then moved for entry of default judgment ordering the removal of CRC I as general partner. The court de nied their motion during a hearing. See App., Vol. XIII at 3420-69. The Li Appellants argue this denial wa s erroneous. They appear to suggest that CRC I’s voluntary dismissal amounted to a concession that its removal was Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3835 proper. But as Appellees point out, the Li Appellants had alre ady dismissed their claim seeking removal of CRC I as general partner. The district court thus had no claims involving removal of CRC I before it, let alone a cl aim adjudicated in the Li Appellants’ favor. In short, when the Li Appellants moved for default judgment, there was no pending claim on which judgmen t could be entered. We therefore affirm.
E. Attorney Fees The district court awarded attorney fees to the CRC Defendants under Colorado law and the PSLRA. It also awar ded attorney fees to the SPO Defendants under the Loan Agreement, Colorado law (Mr. Knobel only), and the PSLRA. We vacate the award of attorn ey fees for the CRC Defendants under Colorado law and the awards of attorney f ees for all Defendants under th e PSLRA. We remand to the district court for further proceedings. “[A]lthough this appeal involves the revi ew of an award of attorneys’ fees under state law, the standard of review under which we revi ew an award of fees is a procedural matter controlled by federal precedent.” Xlear, Inc. v. Focus Nutrition,
LLC , 893 F.3d 1227, 1233 (10th Cir. 2018). “We review the decision to award attorney fees, and the amount awar ded, for abuse of discretion.” United Phosphorus, Ltd. v. Midland Fumigant, Inc. , 205 F.3d 1219, 1232 (10th Ci r. 2000). “A district court abuses its discretion if it commits legal error, relies on clearly erroneous factual findings, or issues a ruling without any rational evidentiary basis.” Xlear, Inc. , 893 Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 3936 F.3d at 1233. “Whether a litigant is a ‘pre vailing party’ is a le gal question we review de novo.” Id.
Colorado Law Under Colorado law, if a court grants a motion to dismiss a tort action, the “defendant shall have judgment for his re asonable attorney fees in defending the action.” Colo. Rev. Stat. § 13-17-201(1). If a plaintiff has pled tort and non-to rt claims, the cour t must determine “whether the essence of that part y’s action was one in tort.” Gagne v. Gagne , 338 P.3d 1152, 1167 (Colo. App. 2014). The cour t first assesses “whe ther the ‘essence of the action’ is tortious in nature (whether quantitatively by si mple number of claims or based on a more qualitative view of the re lative importance of the claims).” Id. at 1168 (quotations omitted). If this assessment fails to give a definitive answer, the court must then determine “w hether tort claims were as serted to unlock additional remedies.” Id. (quotations omitted). If the court determines the essence of the action was tortious, then attorney fees are mandatory. See Luskin Daughters 1996 Tr. v. Young , 448 P.3d 982, 987 (Colo. 2019). A court must also award at torney fees to a defenda nt even if claims remain live against a co-defendant. See Stauffer v. Stegemann , 165 P.3d 713, 718 (Colo. App. 2006). But “the statute does not authorize recovery if a defendant obtains dismissal of some, but not all, of a plaintiff’s tort claims.” Colorado Special Districts Prop. & Liab. Pool v. Lyons , 277 P.3d 874, 885 (Colo. 2012). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 4037 a. Li Appellants Because we reverse the dismissal of the Li Appellants’ breach-of-fiduciaryduty claim, we vacate the at torney fee award for the CRC Defendants against the Li Appellants. As discussed, the district court misconstrued the breach-of-fiduciaryduty claim as a tort claim ra ther than as a contract cl aim, and Colorado law does not permit an award of attorney fees if some of a plaintiff’s cl aims remain live. Falcon Broadband, Inc. v. Banning Le wis Ranch Metro. Dist. No. 1 , 474 P.3d 1231, 1244-45 (Colo. App. 2018) (statute does not apply “i f the court doesn’t dismiss all the tort claims against a certain defe ndant or if an action contai ns both tort and non-tort claims and the defendant obtains C.R.C.P 12(b) dismissal of only the tort claims” (quotations omitted)). Our reversal revives the breach-of-fi duciary-duty claim against CRC I. We therefore vacate the award of attorney fees for the CRC Defendants under Colorado law. 25

25 This does not affect the attorney fe e award for Mr. Knobel against the Li Appellants under Colorado law. As discu ssed above, the distri ct court awarded Mr. Knobel attorney fees under Colorado la w because the entire action was dismissed against him and the claims against him soun ded in tort. Because the Li Appellants asserted their breach-of-fiduciary-duty cl aim against CRC I, not Mr. Knobel, our revival of that claim does not af fect the award against him. In sum, (1) the fee award against the Li Appellants under Colorado law regarding the SPO Defendants was given onl y to Mr. Knobel and (2) our partial reversal of the breach-of-fiduciary-duty claim does not affect the award to him because that claim was not asserted against Mr. Knobel. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 4138 b. Cui Appellants Similarly, because we rev erse and remand on the Cu i Appellants’ motion for leave to amend their compla int, we vacate the award of attorney fees under Colorado law. As discussed, Colorado law awards atto rney fees for a tort action when the “action is dismissed on motion of the defendant.” Colo . Rev. Stat. § 13-17-201(1). But because we reverse the di strict court’s denial of the Cui Appellants’ proposed amendment, which included a breach-o f-contract claim based on a breach of fiduciary duty, the district court must re-ev aluate whether the st atutory basis for the attorney fee award applies. 26
Federal Law The PSLRA requires a court, “upon final adjudication of the action,” to make “specific findings regarding compliance by each party and each attorney representing any party with each requirement of Rule 11(b) of the Federal Rules of Civil Procedure as to any complaint, respons ive pleading, or dispositive motion.” 15 U.S.C. § 78u-4(c)(1). If th e court finds that a party vi olated Rule 11(b), it “shall impose sanctions on such party or attorney.” 15 U.S.C. § 78u-4(c)(2). Unlike other

26 It is unclear from the Cui Appellant s’ briefing on appeal how they will amend their complaint. Because we do not know the specifics of their amended claim, the district court is best situated to revisit the award of attorney fees for Mr. Knobel and the CRC Defendants under Colorado law on remand. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 4239 sanctions provisions, the PSLRA imposes a presumption in favor of sanctions. Id. § 78u-4(c)(3). After making its dismissal rulings and c oncluding that no cl aims were pending, the district court ordered the parties to a ddress whether it should award attorney fees under the PSLRA. The court concluded that four of the Li Appellants’ five claims— including their federal securities clai m—were frivolous and thus warranted a sanctions award. As to the Cui Appellants, the court concluded that tw o of the five claims it adjudicated—including the federal securiti es claim—were frivolous. The court determined that the Cui Appellants’ cl aims against the CRC Defendants contained substantial defects and that the Cui Appellants failed to rebut the presumption in favor of sanctions. But it concluded the Cui Appellants’ claims against the SPO Defendants were not as defective, so it awarded lower sanctions. The court then ordered (1) the Li Appella nts’ counsel to pay about $390,000 to the CRC Defendants and $244,000 to th e SPO Defendants; and (2) the Cui Appellants’ counsel to pay about $140,000 to the CRC Defendants and $5,000 to the SPO Defendants.

a. Li Appellants Because we reverse the district court’s dismissal of one of the Li Appellants’ claims, we vacate the PSLRA fee award. The PSLRA provides that, “[i]n any private action arising under” the secu rities statutes, the district court must award attorney fees “upon final adjudication of the action.” 15 U.S.C. § 78u-4(c)(1). The parties Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 4340 have not briefed, and the dist rict court did not address wh ether “final adjudication of the action” refers solely to federal securities-law claims or whether it refers to the entire action. If it refers to the latter, our reversal of the district court’s dismissal of the Li Appellants’ breach-of-fiduciary-dut y claim means that adjudication of the action is not final. 27 On remand, the district cour t must determine whether it should first resolve the Li Appellants’ surviv ing breach-of-fiduciary-duty claim before assessing attorney fees under the PSLRA. 28

27 We note the case law understanding of 15 U.S.C. § 78u-4(c)(1) is unsettled. The Fourth Circuit has said, but only in dicta, that the PSLRA “applies to any action with a claim arising under Chapter 2B of T itle 15 of the U.S. Code, 15 U.S.C. § 78a et seq.” Morris v. Wachovia Sec., Inc. , 448 F.3d 268, 276 (4th Cir. 2006). Relatedly, district courts have attempted to address the mean ing of “final adjudication.” See Blaser v. Bessemer Tr. Co. , 2002 WL 31359015, at *3 (S.D.N.Y. 2002) (noting “there is little case law on its meaning”); Manchester Mgmt. Co., LLC v. Echo Therapeutics, Inc. , 297 F. Supp. 3d 451, 465 (S.D.N.Y. 2018); Great Dynasty Int’l Fin. Holdings Ltd. v. Haiting Li , 2014 WL 3381416, at *5 (N.D. Cal. 2014).

28 The district court concluded that the breach-of-fiduciary-duty claim was frivolous, which is not correct in light of our reversal. We affirm the dismissal of the derivative federal securities-la w claim because it did not allege harm to CRCPS, the limited partnership. But the district court may have awar ded fees on a faulty basis because it seems to have br oadly concluded that a derivative federal securities-law claim against a general part ner would be a suit against the limited partnership itself and could not be maintained even if it al leged damage to CRCPS. App., Vol. XIV at 3823 (“It was not objectivel y reasonable for Li Plainti ffs to sue CRC I derivatively on behalf of CRCPS for allege d securities violations.”). The case law indicates that investors ma y pursue derivative fe deral securitieslaw claims against a corporat e manager (here, the genera l partner, CRC I) for alleged harm to the corporation (here, the limited partnership, CRCPS). See Frankel v. Slotkin , 984 F.2d 1328, 1332-33 (2nd Cir. 1993) (p laintiff could maintain derivative federal securities-law claim against major ity shareholder by showing damage to the corporation); Hill v. Vanderbilt Cap. Advisors, LLC , 834 F. Supp. 2d 1228, 1268-69 (D.N.M. 2011) (other circuits have establis hed that federal secu rities-law claims may be pursued derivatively). Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 4441 b. Cui Appellants Because we reverse the district court’ s order denying the Cui Appellants leave to amend their complaint, we vacate the district court’s PSLRA fee award. As with the award against the Li Appe llants, the district court mu st determine whether “final adjudication of the action” re fers solely to the Cui Appe llants’ federal securities-law claim or whether it cove rs the entire complaint. 29
III. CONCLUSION In sum, we (A) affirm the district court’s dismissa l of Appellants’ cl aims under Federal Rule of Civil Procedure 12(b)(6) excep t for the Li Appellants’ claim for breach of fiduciary duty, which we af firm in part and reverse in part; (B) affirm dismissal of the Cui Appellant s’ remaining state law claims for lack of subject-matter jurisdiction; (C) reverse the district court’s denial of the Cui Appellants’ motion to amend their complaint; (D) affirm the district court’ s denial of the Li Appe llants’ motion for default judgment; and (E) vacate the awards of attorney fees as discussed herein. 30

29 As noted above, the Appellants do not challenge on appeal the awards of attorney fees to the SPO Defendants unde r the Loan Agreement. Appellees argue this moots Appellants’ challenges to the fees awarded to the SPO Defendants under Colorado law and the PSLRA. See Aplee. Br. at 63-64. The district court is in the best position to consider th e relationship among the various bases for the fee awards and should address this m ootness argument on remand. Nothing in this Order and Judgment s hould necessarily prevent the district court from revisiting whether it should award attorney fees under Colorado law or the PSLRA at the conclusion of proceedings on remand.

30 We thus deny as moot the following mo tions addressing the district court’s orders regarding the attorney fee awards: (1) CRC I’s motion for leave to allow the Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 4542 The following chart lists the issues pr esented on appeal and our dispositions: Appeal Issue Li Appellants Cui Appellants (A) Rule 12(b)(6) Dismissal of: (1) Breach of fiduciary duty Affirmed in part Reversed in part Affirmed (2) Federal securities fraud Affirmed Affirmed (3) Colorado securitie s fraud Affirmed N/A (4) Colorado common law fraud N/A Affirmed (B) Dismissal for Lack of Subject-Matter Jurisdiction N/A Affirmed (C) Denial of Motion to Amend N/A Reversed (D) Denial of Motion for Default Judgment Affirmed N/A (E) Attorney Fees (1) Co lorado Vacated as to the CRC Defendants Vacated (2) PSLRA Vacated Vacated

district court to correct the amended fi nal judgment, Doc. 10870007; (2) the Li Appellants’ motion for affirmative relief striking the amended final judgment, Doc. 10878163; and (3) the Li Appellants’ mo tion to strike the second amended final judgment, Doc. 10874725. We also deny the Li Appellants’ motion for appointment of a neutral appellate counsel for CRCPS, Doc. 10847355. The Li Appellants provide no legal basis for this request. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 4643 We remand to the district court for furt her proceedings consistent with this Order and Judgment. 31

Entered for the Court

Scott M. Matheson, Jr. Circuit Judge

31 This court’s rulings on appeal revive the Li Appellants’ breach-of-fiduciaryduty claim and potentially revive certain of the Cui Appellants’ state law claims through amendment of their complaint. In either instance, th e district court on remand will need to consider wh ether to exercise supplement al jurisdiction in light of the dismissal of the federal claims. Appellate Case: 21-1232 Document: 010110750340 Date Filed: 10/07/2022 Page: 47