Opinion ID: 807798
Heading Depth: 2
Heading Rank: 2

Heading: standard of review

Text: We review de novo a district court’s order granting a motion to dismiss pursuant to Rule 12(b)(6). Stearns v. Ticketmaster Corp., 655 F.3d 1013, 1018 (9th Cir. 2011). To survive dismissal, the complaint must allege “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). “ ‘Factual allegations must be enough to raise a right to relief above the speculative level.’ ” Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008) (quoting Bell Atl. Corp., 550 U.S. at 555). We must accept “all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Rowe v. Educ. Credit Mgmt. Corp., 559 F.3d 1028, 1029-30 (9th Cir. 2009) (quoting Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005)). At the same time, “we can affirm a 12(b)(6) dismissal on any ground supported by the record, even if the district court did not rely on 10374 DAVIS v. HSBC BANK NEVADA the ground.” United States v. Corinthian Colls., 655 F.3d 984, 992 (9th Cir. 2011) (internal citation and quotation marks omitted). As we sit in diversity, California law governs our analysis of the state law claims. See, e.g., Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 338 (9th Cir. 1996). We take this opportunity to clarify what standard of review applies to a district court’s decision to incorporate by reference documents outside the pleadings. Our relevant case law has recognized consistently that the district court may, but is not required to incorporate documents by reference. See, e.g., Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (observing that a court “may consider” evidence that is incorporated by reference); Knievel, 393 F.3d at 1076 (noting that the incorporation doctrine “permits” the court to consider extrinsic documents); United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003) (explaining that a document “may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiff ’s claim”). Additionally, in Hamilton Materials, Inc. v. Dow Chemical Corp., 494 F.3d 1203, 1207 (9th Cir. 2007), we explained that “Federal Rule of Civil Procedure 12(b)(6) specifically gives courts the discretion to accept and consider extrinsic materials offered in connection with these motions, and to convert the motion to one for summary judgment when a party has notice that the district court may look beyond the pleadings.” Thus, we have held, for example, that a district court’s decision to take judicial notice of extrinsic evidence shall be reviewed for abuse of discretion. Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1016 n.9 (9th Cir. 2012). The foregoing leads us to conclude that the district court’s decision to incorporate by reference documents into the complaint shall be reviewed for an abuse of discretion.