Court Opinion

ID: 6324892
Source: CourtListenerOpinion
Date Created: 2022-03-18 20:01:35.946741+00
Date Added: 2024-06-11T09:21:55.584628
License: Public Domain

FILED
                              NOT FOR PUBLICATION
                                                                              MAR 18 2022
                     UNITED STATES COURT OF APPEALS                        MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                              FOR THE NINTH CIRCUIT

GLEN BARNES, Individually and On                 No.   21-55589
Behalf of All Others Similarly Situated,
                                                 D.C. No.
              Plaintiff,                         2:18-cv-09690-CBM-FFM

 and
                                                 MEMORANDUM*
IRON WORKERS LOCAL 580 JOINT
FUNDS; IRVING LICHTMAN, on behalf
of the Irving Lichtman Revocable Living
Trust,

              Plaintiffs-Appellants,

 v.

EDISON INTERNATIONAL; et al.,

              Defendants-Appellees.

                   Appeal from the United States District Court
                       for the Central District of California
                  Consuelo B. Marshall, District Judge, Presiding

                           Argued and Submitted March 8, 2022
                                  Pasadena, California

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: IKUTA, LEE, and FORREST, Circuit Judges.

      Irving Lichtman and Iron Workers Local 580 Joint Funds (collectively

“Appellants”) appeal the district court’s dismissal of their claims against Appellees

Edison International (Edison) under section 10(b) of the Exchange Act, 15 U.S.C.

§ 78j(b); see also Rule 10b-5, 17 C.F.R. § 240.10b-5, and section 11 of the

Securities Act, 15 U.S.C. § 77k(a). We have jurisdiction under 28 U.S.C. § 1291,

and we affirm.

      The district court did not err in dismissing Appellants’ claims under section

10(b) of the Exchange Act because Appellants failed to plead particularized facts

showing false or misleading statements or omissions. See 15 U.S.C. § 78u–4(b);

Fed. R. Civ. P. 9(b). The challenged statements regarding Edison’s safety and

reliability, were not false or misleading because they were not literally false, see

Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1070 (9th Cir.

2008), and were not capable of objective verification, see Khoja v. Orexigen

Therapeutics, Inc., 899 F.3d 988, 1008 (9th Cir. 2018). Rather, they constituted

mere corporate puffery. See In re Alphabet, Inc. Sec. Litig., 1 F.4th 687, 708 (9th

Cir. 2021). Nor were the challenged statements misleading by omission due to

Edison’s failure to disclose publicly available information regarding its safety

practices and prior safety violations. There is no “rule of completeness for

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securities disclosures” requiring the disclosure of all such publicly available

information, Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc., 759 F.3d 1051,

1061 (9th Cir. 2014), and the challenged omissions here did not “affirmatively

create an impression of a state of affairs that differs in a material way from the one

that actually exists.” Id. (internal quotation marks omitted). For the same reasons,

Edison’s statements regarding the Long Beach fire, Edison’s “‘Risk’ Disclosures,”

Edison’s interactions with the California Public Utilities Commission (CPUC), and

Edison’s role in the Thomas Fire, are not actionable.

      The district court also did not err in dismissing Appellants’ claims under

section 11 of the Securities Act. The face of the complaint establishes that those

claims are barred by the one-year statute of limitations. See 15 U.S.C. § 77m. The

complaint alleged that the purportedly concealed risks of Edison’s safety practices

materialized on December 5, 2017, when the market understood that Edison caused

the Thomas Fire. A “reasonably diligent” plaintiff could therefore have discovered

the facts constituting the alleged Securities Act violation on December 5, 2017, see

Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 653 (2010), and the statute of

limitations began to run on that date. But Plaintiffs did not file their Securities Act

claims until April 29, 2019, well over one year after the statute of limitations began

to run. Accordingly, Appellants’ Securities Act claims are time-barred. Even if

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the statute of limitations had not run, Appellants’ Securities Act claim would fail

for the same reason their Exchange Act claim fails, namely, a failure to plead

particularized facts showing false or misleading statements or omissions.

Appellants’ argument that their Securities Act claim is subject to less stringent

pleading requirements than their Exchange Act claim fails because Securities Act

claims are based on the same purportedly false or misleading statements, in the

same filings, as the Exchange Act claim. Appellants’ Securities Act claim

therefore “sounds in fraud” and is subject to Rule 9(b)’s heightened pleading

standard. See Rubke v. Capitol Bancorp Ltd, 551 F.3d 1156, 1161 (9th Cir. 2009).

      AFFIRMED.

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