Opinion ID: 739980
Heading Depth: 2
Heading Rank: 3

Heading: The Newspaper Articles

Text: 18 The allegations of fraud perpetrated in the press suffer from the same deficiencies as Williams and Dreiling's other allegations. They do not attempt to parse the articles to demonstrate which statements were fraudulent and attributable to WMX, EIA, or Buntrock. Although newspaper articles attached to a pleading may be considered by this court, Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017 (5th Cir.1996), plaintiffs must also set forth an explanation as to why the statement or omission complained of was false or misleading. In re GlenFed, Inc., Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.1994)(en banc). 19 The articles are referenced in a section of the complaint titled The Myth is Perpetrated in the Marketplace, which reads: 20 WMX and its trade association the NSWMA were disseminating the false and fraudulent myth of a landfill crises [sic] in a huge number of ways and means. Attached hereto as Exhibit 1 are excerpts of news articles that either quote WMX and/or NSWMA, or, on information and belief, rely on information supplied by these defendants. 21 The failure of this section of the complaint to identify specific statements made by any of the defendants is fatal to Williams and Dreiling's action. See generally, Hershfang v. Citicorp, 767 F.Supp. 1251, 1259 (S.D.N.Y.1991)(decrying the use of a patchwork of newspaper clippings to establish a claim of securities fraud). 22 These vague pleadings illustrate the practical basis for the requirement that a plaintiff point to specific statements made by the defendants. Many of the newspaper excerpts attached to Williams and Dreiling's complaint quote the NSWMA, the predecessor to the EIA, without specifying who gave information to the paper. These excerpts, standing alone, cannot satisfy the who, what, when, where, and how required by Rule 9(b). Melder v. Morris, 27 F.3d 1097, 1100 n. 5 (5th Cir.1994)(citing DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir.), cert. denied, 498 U.S. 941, 111 S.Ct. 347, 112 L.Ed.2d 312 (1990)). San Leandro Emergency Medical Group Profit Sharing Plan v. Philip Morris Co., 75 F.3d 801 (2d Cir.1996), is not to the contrary. In Philip Morris, the court found that unattributed newspaper statements were actionable where the article contained numerous other attributed quotes. Id. at 810. Here, the article excerpts contain no quotes from named officers or directors of WMX. 23 Many of the other article excerpts cited by Williams and Dreiling are along the lines of the one from the August 30, 1989, Houston Post. The excerpt of an article titled Waste firm, 17 subdivisions sharing profits from trash recycling program reads:The program to encourage recycling not only gives Waste Management a cash dividend--the other 50 percent from the sale of recyclables--but saves valuable space in the company's landfills. 24 This excerpt discloses nothing about a statement by an employee of WMX or EIA. Indeed, it is unclear what fraudulent assertion Williams and Dreiling are challenging. The only statement that can be construed as commenting upon landfill availability is that space in landfills is valuable, hardly actionable. 25 Other articles are just as innocuous. It is unclear what purpose Williams and Dreiling have in mind when they cite articles that attribute to the NSWMA the notion that, although ensuring adequate garbage disposal now ranks third on a list of problems facing local officials, it had previously been ranked second. Similar infirmities pervade all of the articles attached to the complaint. This lack of specificity stands in contrast to the widespread nature of the conspiracy that Williams and Dreiling attempt to allege. 26 Excerpts of the articles that appear in the body of the complaint are unaccompanied by specific allegations. No attempt is made to isolate statements and particularize their falsity. In a section of the complaint titled WMX/NSWMA Spread the Myth of a Landfill Crisis, Williams and Dreiling cite a Wall Street Journal article asserting that Big trash-handling companies certainly knew there was no landfill crisis but helped spread the word of one anyway.... Complaint, at 8. This section of the complaint continues, noting that the article stated that: 27 Dean L. Buntrock, chairman and chief executive officer of WMX Technologies, Inc., had loaded up on dump space in the 1970s and 1980s. He had also started a trade group and lobbying arm, the National Solid Waste Management Association. After the Mobro voyage, the group was widely quoted asserting that dump capacity was shrinking. 28 . . . . . 29 WMX was ... telling customers as recently as 1993: This nation is quickly running out of places to dispose of trash. 30 These excerpts are insufficient to put any of the defendants on notice as to which of their assertions are challenged. Indeed the excerpts do not quote a defendant, they merely say that the defendants were widely quoted or paraphrase previous statements.