Court Opinion

ID: 4432914
Source: CourtListenerOpinion
Date Created: 2019-08-24 00:00:24.194576+00
Date Added: 2024-06-11T14:53:02.904236
License: Public Domain

Case: 18-11206          Document: 00515090159              Page: 1      Date Filed: 08/23/2019

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                              United States Court of Appeals
                                                                                       Fifth Circuit

                                            No. 18-11206                             FILED
                                                                               August 23, 2019
                                                                                 Lyle W. Cayce
                                                                                      Clerk
MARGARET BUDDE, Lead Plaintiff pursuant to 7/29/2015 Order,

                 Plaintiff - Appellant

v.

GLOBAL POWER EQUIPMENT GROUP, INCORPORATED; RAYMOND K.
GUBA; LUIS MANUEL RAMIREZ,

                  Defendants - Appellees
------------------------------------------------------------------------------------------------------------

MARGARET BUDDE, Individually and On Behalf of All Others Similarly
Situated

               Plaintiff - Appellant

v.

GLOBAL POWER EQUIPMENT INCORPORATED; RAYMOND K. GUBA;
LUIS MANUEL RAMIREZ;

               Defendants - Appellees

                      Appeal from the United States District Court
                           for the Northern District of Texas
                               USDC No. 3:15-CV-1679-M
     Case: 18-11206      Document: 00515090159         Page: 2    Date Filed: 08/23/2019

                                      No. 18-11206

Before JOLLY, HO, and ENGELHARDT, Circuit Judges.
PER CURIAM:*
       Plaintiffs, Margaret Budde and Daniel Ream, on behalf of all persons
who acquired Global Power Equipment Group, Inc. (“Global Power”) stock
between September 7, 2011 and May 6, 2015, filed a securities fraud suit
against Global Power and some of its former officers alleging that the
executives knew of accounting errors in the company’s financial results. The
district court granted Defendants’ Motion to Dismiss after conducting a holistic
review of the allegations. It found that the only errors the Global Power’s
executives (Raymond K. Guba, Luis Manuel Ramirez, and David L. Willis)
knew of, or recklessly disregarded, were immaterial errors in a single small
division of the company. Plaintiffs, the district court concluded, had not plead
a strong inference of scienter.
       This court “review[s] a district court’s dismissal of federal securities
claims under Rule 12(b)(6) de novo.” Owens v. Jastrow, 789 F.3d 529, 535 (5th
Cir. 2015) (citation omitted). The court must “accept ‘all well-pleaded facts as
true and view[] those facts in the light most favorable to the plaintiffs.’” Id.
(alteration in original) (quoting Moffett v. Bryant, 751 F.3d 323, 325 (5th Cir.
2014)). Because the claims concern § 10(b) of the Securities and Exchange Act
of 1934, the pleading requirements of Federal Rule of Civil Procedure 9(b) and
the Private Securities Litigation Reform Act also control. Abrams v. Baker
Hughes Inc., 292 F.3d 424, 430 (5th Cir. 2002).               Thus, to plead scienter,
plaintiffs must have stated “with particularity facts giving rise to a strong
inference that the [defendants] knew that [they were] publishing materially

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

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    Case: 18-11206    Document: 00515090159     Page: 3   Date Filed: 08/23/2019

                                 No. 18-11206

false information, or the [defendants were] severely reckless in publishing such
information.” See Indiana Elec. Workers’ Pension Tr. Fund IBEW v. Shaw
Grp., Inc., 537 F.3d 527, 534 (5th Cir. 2008) (internal quotations omitted).
      Extensive and detailed briefs were filed by all parties, and the panel held
oral argument on Monday, August 5, 2019. Considering the briefs and oral
arguments of the parties, the applicable legal standards and the record before
us, including the accurate and detailed recitation by the district court of the
events in this matter, we do not find that the district court erred in granting
Defendants’ Motion to Dismiss. The panel agrees with the district court’s
analysis and conclusions. Accordingly, the district court’s decision is
AFFIRMED.

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