Court Opinion

ID: 9908621
Source: CourtListenerOpinion
Date Created: 2023-12-11 15:00:49.366805+00
Date Added: 2024-06-11T12:49:21.564349
License: Public Domain

22-1952-cv
Chen v. China Green Agriculture, Inc.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                        SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT.
CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS
PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A
SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE
(WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A
SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT
REPRESENTED BY COUNSEL.

      At a stated term of the United States Court of Appeals for the Second Circuit,
held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the
City of New York, on the 11th day of December, two thousand twenty-three.

       PRESENT: ROBERT D. SACK,
                        RAYMOND J. LOHIER, JR.,
                        MARIA ARAÚJO KAHN,
                                Circuit Judges.
       ------------------------------------------------------------------
       GANG CHEN,

                       Plaintiff-Appellant,

                               v.                                           No. 22-1952-cv

       CHINA GREEN AGRICULTURE, INC.,
       ZHUOYU LI, YONGCHENG YANG, DAQING
       ZHU, KABANI & COMPANY, INC.,
       AMERICAN CORPORATE LEARNING
       CENTER, ABDUL HAMID KABANI, KSP
       GROUP, INC., SHAHNAZ KABANI, YIRU SHI,
       JASLYN HUYNH AKA JASLYN SELLERS,

                                                    1
                       Defendants-Appellees. *
      ------------------------------------------------------------------

      FOR APPELLANT:                                        Gang Chen, pro se, Vero Beach, FL

      FOR APPELLEES CHINA                                   Angus F. Ni, AFN Law PLLC,
      GREEN AGRICULTURE,                                    New York, NY
      INC., ZHUOYU LI,
      YONGCHENG YANG,
      DAQING ZHU:

      FOR APPELLEES KABANI                                  Baruch S. Gottesman, Gottesman
      & COMPANY, INC.,                                      Legal PLLC, New York, NY
      AMERICAN CORPORATE
      LEARNING CENTER,
      ABDUL HAMID KABANI,
      SHAHNAZ KABANI:

      FOR APPELLEES KSP                                     Judd R. Spray, Law Office of Judd
      GROUP, JASLYN HUYNH,                                  R. Spray, New York, NY
      YIRU SHI:

      Appeal from a judgment of the United States District Court for the

Southern District of New York (Mary Kay Vyskocil, Judge).

      UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the judgment of the District Court is AFFIRMED.

      Plaintiff-Appellant Gang Chen appeals from an August 30, 2022 order of

the United States District Court for the Southern District of New York (Vyskocil,

* The Clerk of Court is directed to amend the caption as set forth above.
                                            2
J.) dismissing his claims against China Green Agriculture, Inc. and several of its

officers and auditors for violating Sections 10(b) and 20(a) of the Securities

Exchange Act of 1934, 15 U.S.C. § 78a et seq., and Rule 10b-5 promulgated

thereunder, 17 C.F.R. § 240.10b-5. 1 We assume the parties’ familiarity with the

underlying facts and the record of prior proceedings, to which we refer only as

necessary to explain our decision to affirm.

      Chen alleges that China Green, with the help of its auditors,

misrepresented its financial condition and the status of its operations. On

August 30, 2022, the District Court dismissed Chen’s claims on the ground that

Chen failed adequately to allege loss causation. Chen v. China Green Agric. Inc.,

No. 20-CV-09232, 2022 WL 3868111, at *4–5 (S.D.N.Y. Aug. 30, 2022). In the

same order, the District Court directed any defendants who sought sanctions

under the Private Securities Litigation Reform Act of 1995 to file their

applications “on or before September 30, 2022.” Id. at *5. Chen appealed that

order on September 2, 2022. Nearly a year later, on August 14, 2023, while

Chen’s appeal was pending, the District Court denied the defendants’ motion for

1We do not address Chen’s other claims because Chen does not challenge their
dismissal.
                                         3
sanctions and directed the Clerk of Court to close the case. Chen v. China Green

Agric. Inc., No. 20-CV-09232, 2023 WL 5210813, at *2 (S.D.N.Y. Aug. 14, 2023).

      On the merits of Chen’s appeal of the August 30, 2022 order, we affirm for

substantially the reasons stated in the District Court’s opinion. 2 “To maintain a

private damages action under § 10(b) and Rule 10b–5, a plaintiff must prove (1) a

material misrepresentation or omission by the defendant; (2) scienter; (3) a

connection between the misrepresentation or omission and the purchase or sale

of a security; (4) reliance upon the misrepresentation or omission; (5) economic

loss; and (6) loss causation.” Carpenters Pension Tr. Fund of St. Louis v. Barclays

PLC, 750 F.3d 227, 232 (2d Cir. 2014) (quotation marks omitted). The only

allegation pertaining to loss causation in the operative complaint is that “[w]hen

2
  We have jurisdiction over Chen’s appeal even though the District Court never entered
judgment in a separate document as required by Federal Rule of Civil Procedure 58
with respect to either its August 30, 2022 order or its August 14, 2023 order denying the
motions for sanctions. As Federal Rule of Appellate Procedure 4(a)(7)(B) provides, “[a]
failure to set forth a judgment or order on a separate document when required by [Rule]
58(a) does not affect the validity of an appeal from that judgment or order” in a civil
case. Fed. R. App. P. 4(a)(7)(B). In any event, under Rule 58 the judgment became
final on January 27, 2023, 150 days after the order was entered on the docket. See Fed.
R. Civ. P. 58(c)(2)(B). Separately, statutory attorney’s fees and Rule 11 sanctions are
“collateral to, and separate from, the decision on the merits” such that they “normally
will not be part of the final judgment.” Cooper v. Salomon Bros. Inc., 1 F.3d 82, 85 (2d
Cir. 1993). Accordingly, the District Court’s failure to enter a separate judgment for the
August 14, 2023 order does not affect the appealability of the August 30, 2022 order.
                                              4
Defendants’ misrepresentations and fraudulent conduct were disclosed and

became apparent to the market, the prices of CGA’s securities fell.” App’x at

387. As the District Court observed, that allegation standing alone is inadequate

because it fails to identify “when the disclosure happened, how or by whom it

was made, what effect it had on the market, or when [Chen] sold his stock in

relation to that disclosure.” Chen, 2022 WL 3868111, at *4.

      Urging a contrary conclusion, Chen claims on appeal that China Green’s

fraud came to light in a movie called “China Hustle” posted on a Yahoo forum in

2018. Because Chen did not advance any argument related to—or even refer

to—“China Hustle” below, we decline to consider it. See Amara v. Cigna Corp.,

53 F.4th 241, 257 n.8 (2d Cir. 2022). Chen separately claims that the sale of China

Green stock through various private placements from October and November

2019 likewise indicated that China Green fraudulently inflated its financial

condition, but he fails to adequately explain with sufficient particularity how the

private placements did so.

      We have considered Chen’s remaining arguments and conclude that they

are without merit. For the foregoing reasons, the judgment of the District Court

is AFFIRMED.
                                         5
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court

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