Opinion ID: 163762
Heading Depth: 3
Heading Rank: 1

Heading: Review of the Complaint In Its Entirety

Text: The plaintiffs first attack the district court’s decision to dismiss their complaint by arguing that the court failed to consider the complaint’s allegations in their entirety. When evaluating a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the district court must evaluate “the totality of the pleadings” to determine if the plaintiffs have stated an actionable claim of securities fraud. See City of Philadelphia v. Fleming Cos., Inc., 264 F.3d 1245, 1261–62 (10th Cir. 2001). The plaintiffs contend that while the district court did consider the allegations about the acceleration of income under the three Bushton contracts, the court did not consider Kinder-Morgan’s public statements about Bushton’s having made a “positive impact” on earnings, which the plaintiffs allege were false and misleading. The plaintiffs state that their complaint “alleges a blackand-white contradiction between what Defendants said during the Class Period about Bushton’s purported ‘positive impact’ on the Company’s earnings and the value of the assets, and what they really knew or recklessly disregarded regarding the plant’s money-losing operations and impaired condition.” We conclude that the district properly considered the complaint in its entirety for two reasons. First, the district court said that it did. In the hearing at - 15 - which the district court gave its oral ruling dismissing the second amended complaint, the court said: The next question is whether the pleading in this case . . . is sufficient to raise a strong inference of scienter. And once again, I’ve examined the authorities and the pleadings. I’ve considered the pleadings in their totality to determine whether the plaintiffs have pleaded facts supporting a strong inference of scienter. Hr’g on Mot. to Dismiss at 7 (emphasis added). In light of the district court’s express statement that it considered the pleadings in their entirety, we have no reason to conclude otherwise. See Abrams v. Baker Hughes, Inc., 292 F.3d 424, 431 (5th Cir. 2002) (“[I]n its conclusion, the district court also stated that the facts in the complaint were insufficient when viewed in the aggregate . . . . The district court’s clear statement that it considered the allegations insufficient in the aggregate, although without analysis, is difficult for us to contradict.”). Although the court did not explicitly refer to the plaintiffs’ allegations that KinderMorgan’s statements about Bushton’s “positive impact” on 1997 third quarter earnings were misleading, the court was not required to make explicit findings of fact and conclusions of law when making a Rule 12(b)(6) ruling. See Fed. R. Civ. P. 52(a) (“Findings of fact and conclusions of law are unnecessary on decisions of motions under Rule 12 . . . .”). Second, in the written final judgment dismissing the second amended complaint, the court expressly referred to the press release and SEC filings that - 16 - contained the Bushton statement. The court specifically mentioned “plaintiffs’ allegations concerning defendants’ press releases and 1997 10-Q and 10-K filings with the Securities and Exchange Commission.” Final J. at 2. This reference to the sources of the Bushton statement supports the conclusion that the district court did, in fact, consider the statement when it decided to dismiss the complaint. For these reasons, we reject the plaintiffs’ contention that the district court failed to consider its allegations about the Bushton statement.