Court Opinion

ID: 6221667
Source: CourtListenerOpinion
Date Created: 2022-02-15 01:00:31.730613+00
Date Added: 2024-06-11T08:57:23.400322
License: Public Domain

Case: 21-30222     Document: 00516201606          Page: 1    Date Filed: 02/14/2022

              United States Court of Appeals
                   for the Fifth Circuit                               United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                      February 14, 2022
                                   No. 21-30222
                                                                         Lyle W. Cayce
                                                                              Clerk

   Callais Capital Management, L.L.C.,

                                                            Plaintiff—Appellant,

                                       versus

   Brian Wilhite; Emmaleigh Wilhite; Michael Worley;
   Brian May; John Durham; Brett Favre; Dimitrios
   Bachadakis; Jon Gregg,

                                                         Defendants—Appellees.

                  Appeal from the United States District Court
                     for the Eastern District of Louisiana
                               No. 2:17-cv-12039

   Before Jolly, Willett, and Oldham, Circuit Judges.
   Per Curiam:*
          Callais Capital Management (“CCM”) bought securities law claims
   against former directors of Sqor, a digital marketplace platform. The district
   court dismissed CCM’s claims under Rules 12(b)(2) and 12(b)(6). We affirm.

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 21-30222     Document: 00516201606           Page: 2   Date Filed: 02/14/2022

                                    No. 21-30222

                                         I.
          Sqor was a digital marketplace platform and social media company
   directed at sports. CCM invested over $16 million in Sqor between July 2015
   and June 2016. Unfortunately, Sqor went bankrupt in 2017 and CCM lost its
   investment.
          CCM sued former managers and directors of Sqor for securities fraud
   under Section 10(b) of the Securities and Exchange Act of 1934 and Rule
   10b-5. See 15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5. CCM alleged that
   Sqor’s directors made a variety of misrepresentations to CCM to induce
   CCM to invest—for example, inflating Sqor’s user base and exaggerating
   Sqor’s relationships with various sports franchises.
          After permitting more than a year of jurisdictional discovery, the
   district court dismissed CCM’s claims in two orders issued on the same day.
   The first order ruled that the court lacked personal jurisdiction over one
   defendant, Dimitrios Bachadakis, and dismissed CCM’s claims against him
   under Federal Rule of Civil Procedure 12(b)(2). The second order dismissed
   CCM’s remaining claims under Rule 12(b)(6), finding that CCM’s pleadings
   failed to meet the applicable pleading standards under the Private Securities
   Litigation Reform Act of 1995 (“PSLRA”) and Rule 9(b). See 15 U.S.C.
   § 78u-4(b); Fed. R. Civ. P. 9(b).
                                        II.
          We have carefully considered CCM’s arguments, which are largely
   duplicative of the arguments the district court considered and rejected in its
   22- and 45-page orders dismissing CCM’s claims. For substantially the same
   reasons given in the district court’s thorough orders, we find CCM’s

                                         2
Case: 21-30222        Document: 00516201606              Page: 3       Date Filed: 02/14/2022

                                          No. 21-30222

   arguments unpersuasive and identify no reversible error.† Only two of
   CCM’s arguments merit additional discussion.
           First, regarding the 12(b)(2) dismissal, CCM urges that the district
   court abused its discretion by denying CCM leave to amend. “It is within the
   district court’s discretion to deny a motion to amend if it is futile.” Stripling
   v. Jordan Prod. Co., LLC, 234 F.3d 863, 872–73 (5th Cir. 2000). The district
   court reasonably concluded that leave to amend would be futile because
   CCM’s briefing relied on the fruits of extended jurisdictional discovery and
   CCM had already put forth its strongest arguments.
           Second, regarding the 12(b)(6) dismissal, the district court noted that
   CCM had already amended its complaint once and concluded that “granting
   an additional leave to amend would cause undue delay in an already
   longstanding case and cause undue prejudice to defendants.” Moreover,
   CCM does not indicate how it could or would amend its complaint to meet
   the pleading standards of Rule 12(b)(6), Rule 9(b), and the PSLRA. This
   court has found that denial of leave to amend was within the district court’s
   discretion in such circumstances. See Southland Sec. Corp. v. INSpire Ins.
   Solutions, Inc., 365 F.3d 353, 384–85 (5th Cir. 2004). The district court’s
   denial of leave to amend was not an abuse of discretion.
           The district court’s judgments are AFFIRMED.

           †
              Judge Willett disagrees with the district court’s holding that it lacked personal
   jurisdiction over Bachadakis. Accordingly, Judge Willett would affirm the Rule 12(b)(6)
   dismissal of CCM’s claims against all Defendants except Bachadakis, reverse the dismissal
   of Bachadakis on personal-jurisdiction grounds, and remand for the district court to
   consider in the first instance whether CCM stated a claim against Bachadakis.

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