Court Opinion

ID: 24260
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:19:49+00
Date Added: 2024-06-11T15:04:40.263814
License: Public Domain

UNITED STATES COURT OF APPEALS
                       For the Fifth Circuit

                           No.    00-20230

         JOHN C. WELD, JR., On Behalf of Himself and all
                    others Similarly Situated,

                                               Plaintiff-Appellant,

                                 VERSUS

   STAGE STORES INC.*, CARL TOOKER, TYLER INTERNATIONAL, TYLER
   MASSACHUSETTS L P; TYLER CAPITAL FUND L P, BCIP ASSOCIATES,
BAIN CAPITAL INC., BAIN VENTURE CAPITAL, ACADIA PARTNERS L P,
ACADIA FW PARTNERS L P, ACADIA MGP INC., OAK HILL PARTNERS INC.,
SANDRA BORNSTEIN, ERNEST R. CRUSE, RIGO HERNANDEZ, JERRY C. IVIE,
JOANNE SWARTZ, MARK SHULMAN, MEL WARD, DONALD R. WESTBROOK, JAMES
MARCUM, STEPHEN LOVELL, CHARLES SLEDGE, ADAM KIRSCH, JOSHUA
BEKENSTEIN, PETER G. MULVIHILL, CREDIT SUISSE FIRST BOSTON, BEAR
STEARNS & CO., INC., BCIP TRUST ASSOCIATES L P,

                                              Defendants-Appellees.

           Appeal from the United States District Court
                For the Southern District of Texas
                            H-99-CV-957

                           May 16, 2001

Before DAVIS, WIENER and STEWART, Circuit Judges

PER CURIAM:**

  *
   The appeal is stayed as to Stage Stores pending bankruptcy
proceedings.
  **
    Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
     The only significant issues presented in this appeal are: (1)

whether the district court erred in dismissing the appellants’

petition because it failed to comply with Rule 9(b) F.R.C.P. and

allege with sufficient particularity facts which would support an

inference of fraud; and (2) whether the district court abused its

discretion in refusing to permit appellant to file an amended

complaint.

     As to issue 1, our review of the record persuades us that the

plaintiffs’ conclusory allegations are insufficient to give rise to

a “strong inference” that each defendant acted with the requisite

fraudulent intent.   See 15 U.S.C. § 78u-4(b)(2).       We need not reach

the issue of whether allegations of motive and opportunity are

sufficient to establish scienter under the Reform Act because even

under this standard the plaintiff’s allegations are insufficient to

raise a strong inference of fraud.

     As to issue 2, we agree with the appellants that Rule 15(a)

gave them the absolute right to file an amended petition in this

case at any time before judgment was entered.       Although more than

five months elapsed between the time the defendants moved to

dismiss the   petition   and   the   court’s   ruling   on   that   motion,

plaintiff did not file an amended petition.         After the district

court granted defendants’ motion to dismiss, the plaintiff did seek

permission to amend which the court denied.             In denying that

the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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motion, the court explained that plaintiff had failed to provide it

with a proposed amending complaint or provide, in some other form,

an   explanation    of     how    it     proposed       to    improve   its     earlier

allegations.     Although there is certainly no universal requirement

that a party seeking to amend provide a copy of a proposed

amendment, we conclude that under the facts and circumstances of

this case, the district court did not abuse its discretion in

refusing to allow the amendment without some explanation of how the

plaintiff   proposed       to    improve        his   complaint    so   as    to   avoid

dismissal under Rule 12(b)(6).              Plaintiff, with full knowledge of

the defendant’s         arguments      as   to    the   defects    in   the    original

petition, allowed over five months to elapse without amending his

petition to correct these deficiencies.                       The plaintiff made a

strategic decision to stand on his complaint as filed, which

required the district court to analyze the defendant’s motion in

light of the existing complaint.                 Under these circumstances, the

district court did not abuse its discretion in declining to allow

an   amendment     to    that     petition        after      it   entered     judgment,

particularly where the plaintiff declined to provide a proposed

amended complaint or give the court any information about how it

proposed to improve his original complaint so as to avoid a

12(b)(6) motion.

      AFFIRMED.

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