Opinion ID: 2971804
Heading Depth: 3
Heading Rank: 2

Heading: Broker-dealer Liability

Text: Excel argues that its complaint also alleges a claim of broker-dealer liability, under section 292.480(2), against Commonwealth, and that the district court erred in failing to read this claim into the pleadings. We conclude that, even when we view these pleadings in the most forgiving light, we have no choice other than to affirm the district court’s reading of the complaint. A plaintiff must set forth pleadings that contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). Even under our liberal pleading standards, a plaintiff must at least “give the defendant fair notice of what [the] claim is and the grounds upon which it rests,” Conley v. Gibson, 355 U.S. 41, 47 (1957), by providing “either direct or inferential allegations respecting all the material elements to sustain a recovery.” Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434, 436 (6th Cir. 1988). Excel’s pleadings do not satisfy even the liberal standard. The pleadings fail to allege any facts or state any law to indicate that it was pleading a broker-dealer theory of liability. The theory holds liable “every broker-dealer or agent who materially aids in the sale” of a security. Ky. Rev. Stat. § 292.480(2). Excel’s pleadings do not set forth any allegations, directly or by inference, suggesting that Commonwealth materially aided any sale. Even if we read the pleadings in the most forgiving light, we find no claim of broker-dealer liability.