Opinion ID: 589636
Heading Depth: 2
Heading Rank: 4

Heading: MBank's Liability

Text: 70 In ruling on MBank's motion to dismiss or alternatively for summary judgment, the district court held that MBank was entitled to summary judgment because the plaintiffs had conceded that MBank was only secondarily liable for any alleged breach of federal securities laws by the other defendants. Having granted summary judgment in favor of all of the other defendants, the court held that MBank can only be liable insofar as the other defendants were liable. As a result, the court granted summary judgment in favor of MBank. See XI R. (Pleadings) Doc. 245, at 22-23. 71 On appeal, plaintiffs allege that MBank is secondarily liable under Rule 10b-5 as an aider and abettor and as a coconspirator with the other defendants. However, we adopt the reasoning of the district court and hold that MBank was entitled to summary judgment because its liability under federal law is contingent on that of the other defendants. For reasons already expressed, we have found the judgments in favor of the other defendants to be proper. 72 Plaintiffs also argue that MBank is directly liable under state law fiduciary duty principles as a Controlling Person following the Bouchiers' default on the secured notes held by the bank. The district court did not reach this issue because it dismissed plaintiffs' state law claims without prejudice. Although plaintiffs' state and federal claims derived from a common nucleus of operative facts, United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966), the district court declined to exercise its discretion to retain pendent jurisdiction over plaintiffs' remaining state law claims, and we find no abuse of discretion in that ruling. IV