IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 19-20244

Summary Calendar

IRON WORKERS BENEFIT AND PENSION FUND – IRON WORKERS 

DISTRICT COUNCIL PHILADELPHIA & VICINITY, individually and on 

behalf of all other persons similarly situated, 

 Plaintiff-Appellant,

v.

ANADARKO PETROLEUM CORPORATION; R. A. WALKER; DAVID J. 

MCBRIDE; JOHN M. CHRISTIANSEN, 

 Defendants-Appellees.

Appeal from the United States District Court 

for the Southern District of Texas

USDC No. 4:17-CV-1372

Before CLEMENT, ELROD, and OLDHAM, Circuit Judges.

PER CURIAM:*

The Iron Workers Benefit and Pension Fund – Iron Workers District 

Council Philadelphia & Vicinity (“Pension Fund”) appeals from the district 

court’s order dismissing its claims under Federal Rule of Civil Procedure 

 

* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not 

be published and is not precedent except under the limited circumstances set forth in 5TH 

CIR. R. 47.5.4.

United States Court of Appeals

Fifth Circuit

FILED

December 16, 2019

Lyle W. Cayce

Clerk

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12(b)(6) for failure to state a claim. The Pension Fund’s second amended 

complaint alleges that the individual defendants and Anadarko Petroleum 

Corporation (“Anadarko”) made misrepresentations in violation of §§ 10(b) and 

20(a) of the Securities Exchange Act and Rule 10b–5. The district court 

dismissed the claims against the individual defendants because the complaint 

failed to adequately allege scienter. See Ind. Elec. Workers’ Pension Tr. Fund 

IBEW v. Shaw Grp., Inc., 537 F.3d 527, 533 (5th Cir. 2008). And it dismissed 

the claim against Anadarko because a “defendant corporation is deemed to 

have the requisite scienter for fraud only if the individual corporate officer 

making the statement has the requisite level of scienter.” Southland Sec. Corp. 

v. INSpire Ins. Sols., Inc., 365 F.3d 353, 366 (5th Cir. 2004).

We review a district court’s grant of a motion to dismiss de novo. See 

Whitley v. BP, P.L.C., 838 F.3d 523, 526 (5th Cir. 2016). To withstand a Rule 

12(b)(6) motion, a complaint must allege “more than labels and conclusions,” 

as “a formulaic recitation of the elements of a cause of action will not do.” Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). It must instead state a 

“plausible claim for relief,” rather than facts “merely consistent with” liability. 

Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009) (quoting Twombly, 550 U.S. at 

557).

“Where, as here, the complaint involves an allegation of fraud, Federal 

Rule of Civil Procedure 9(b) imposes a higher standard on the complainant, 

requiring that he plead with ‘particularity the circumstances constituting 

fraud.’” Local 731 I.B. of T. Excavators & Pavers Pension Tr. Fund v. Diodes, 

Inc., 810 F.3d 951, 956 (5th Cir. 2016) (quoting FED. R. CIV. P. 9(b)). 

Furthermore, the Private Securities Litigation Reform Act “has raised the 

pleading bar even higher and enhances Rule 9(b)’s particularity requirement 

for pleading fraud in two ways.” Id. (citing Shaw Grp., 537 F.3d at 533). “First, 

the plaintiff must ‘specify each statement alleged to have been misleading, and 

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the reason or reasons why the statement is misleading.’” Id. (quoting Shaw 

Grp., 537 F.3d at 533). Second, “for ‘each act or omission alleged’ to be false or 

misleading, plaintiffs must ‘state with particularity facts giving rise to a strong 

inference that the defendant acted with the requisite state of mind.’” Id.

(quoting Shaw Grp., 537 F.3d at 533).

The Pension Fund first alleges a misrepresentation by John M. 

Christiansen, Anadarko’s Vice President for Corporate Communications,

relating to a factsheet posted to Anadarko’s website on February 8, 2016. The 

factsheet states that Anadarko’s operations center in Wattenberg, Colorado, 

“[p]rovides real-time remote-monitoring capabilities for 6,800+ wells” and 

“[e]nables employees to shut-in wells remotely.” According to the second 

amended complaint, this statement was false because “Anadarko could not 

remotely monitor or deactivate about 800 of its 6,800 wells.” But these

allegations do not give rise to a strong inference that he had “intent to deceive, 

manipulate, or defraud” or acted with “severe recklessness” when he 

authorized the factsheet to be posted to Anadarko’s website. Shaw Grp., 537 

F.3d at 533 (quoting Rosenzweig v. Azurix Corp., 332 F.3d 854, 866 (5th Cir. 

2003)). The allegations are merely consistent with liability and “do not permit 

the court to infer more than the mere possibility of misconduct.” Iqbal, 556 U.S. 

at 679.

The Pension Fund next alleges that R. A. Walker, Anadarko’s Chief 

Executive Officer, and David J. McBride, Anadarko’s Vice President for 

Health, Safety, and Environment, falsely stated that Anadarko was in 

compliance with applicable laws and regulations. The second amended 

complaint alleges that these statements were false because Anadarko was in 

violation of several rules of the Colorado Oil and Gas Conservation 

Commission.

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But once again, the Pension Fund inadequately alleged scienter. The 

Pension Fund alleges information was presented to Walker and McBride that 

could have led them to conclude that Anadarko’s Colorado operations weren’t

in compliance with Commission rules. And it points to the existence of a 

remediation budget as another reason they should’ve concluded that Anadarko 

wasn’t in compliance. But these allegations do not create a strong inference 

that at the time the allegedly false statements were made, Walker and 

McBride were aware that Anadarko was, as a matter of law, in violation of

Commission rules. Nor do the allegations create a strong inference of “severe 

recklessness,” which caselaw narrowly defines as “limited to those highly 

unreasonable omissions or misrepresentations” that “present a danger of 

misleading buyers or sellers which is either known to the defendant or is so 

obvious that the defendant must have been aware of it.” Shaw Grp., 537 F.3d 

at 533 (quoting Rosenzweig, 332 F.3d at 866). The district court was correct to 

dismiss the claims against Walker and McBride.

Because the second amended complaint fails to state a claim against any 

of the individual defendants, it also fails to state a claim against Anadarko.

See Southland, 365 F.3d at 366. Similarly, the § 20(a) claim against Walker

fails because control-person liability “is secondary only and cannot exist in the 

absence of a primary violation.” See id. at 383.

* * *

The district court’s judgment is AFFIRMED.

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