Opinion ID: 199631
Heading Depth: 2
Heading Rank: 1

Heading: Consideration of the 1998 Settlement Agreement

Text: 14 In evaluating appellee's motion to dismiss for failure to state a claim, the district court took into consideration an attached copy of the 1998 Settlement Agreement, even though it was not appended to or incorporated in appellants' complaint. 15 In ruling on a motion to dismiss, a court must accept as true all the factual allegations in the complaint and construe all reasonable inferences in favor of the plaintiffs. Id. Ordinarily, a court may not consider any documents that are outside of the complaint, or not expressly incorporated therein, unless the motion is converted into one for summary judgment. Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993). 16 There is, however, a narrow exception for documents the authenticity of which are not disputed by the parties; for official public records; for documents central to plaintiffs' claim; or for documents sufficiently referred to in the complaint. Id. When the complaint relies upon a document, whose authenticity is not challenged, such a document merges into the pleadings and the court may properly consider it under a Rule 12(b)(6) motion to dismiss. Beddall, 137 F.2d at 17; accord Clorox Co. P.R. v. Proctor & Gamble Commercial Co., 228 F.3d 24, 32 (1st Cir. 2000) (considering advertising material outside of the complaint in a motion to dismiss false advertising claim because material was integral to assessing the complaint's allegations). 17 In this case, the district court properly took into consideration the 1998 Settlement Agreement in ruling on defendant's motion to dismiss. 2 The First Amended Complaint for Declaratory Judgment refers to the 1998 Settlement Agreement or its terms numerous times. Moreover, appellee's alleged liability under the complaint depends directly upon whether the of counsel claims are interpreted to have been released under the 1998 Settlement Agreement. Although appellants challenge the relevancy of the agreement to their motion, 3 they do not dispute its authenticity. 18 Under First Circuit precedent, when a complaint's factual allegations are expressly linked to--and admittedly dependent upon--a document (the authenticity of which is not challenged), then the court can review it upon a motion to dismiss. Beddall, 137 F.3d at 17. Since the appellants' complaint fails to state a claim unless appellee retains some measure of liability, which depends upon the interpretation of the 1998 Settlement Agreement, the district court properly considered the agreement in granting defendant's motion to dismiss. 19 Having determined that the 1998 Settlement Agreement became part of the pleadings for the motion to dismiss, we next address the meaning of the release. 20