Court Opinion

ID: 9940948
Source: CourtListenerOpinion
Date Created: 2024-02-15 18:01:32.03441+00
Date Added: 2024-06-11T13:46:04.268480
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        FEB 15 2024
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

LOCAL 282 PENSION TRUST FUND                    No.    23-15433
AND LOCAL 282 ANNUITY TRUST
FUND DISTRICT NO. 9, Lead Plaintiff, On         D.C. No. 3:21-cv-08254-MMC
Behalf of Themselves and All Others
Similarly Situated,
                                                MEMORANDUM*
                Plaintiff-Appellant,

 v.

BIOMARIN PHARMACEUTICAL, INC.; et
al.,

                Defendants-Appellees.

                   Appeal from the United States District Court
                      for the Northern District of California
                   Maxine M. Chesney, District Judge, Presiding

                          Submitted February 13, 2024**
                            San Francisco, California

Before: MILLER, BADE, and VANDYKE, Circuit Judges.

      Local 282 Pension Trust Fund appeals from the district court’s order

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
dismissing its complaint under Federal Rule of Civil Procedure 12(b)(6) in this

securities class action. We have jurisdiction under 28 U.S.C. § 1291. We affirm.

      “We review de novo the district court’s grant of a motion to dismiss under

Rule 12(b)(6), accepting all factual allegations in the complaint as true and

construing them in the light most favorable to the nonmoving party.” Skilstaf, Inc.

v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir. 2012). To survive a motion

to dismiss in a securities-fraud case brought under section 10(b) of the Securities

Exchange Act of 1934 or Rule 10b-5, plaintiffs must adequately allege several

elements, including falsity. See In re NVIDIA Corp. Secs. Litig., 768 F.3d 1046,

1052 (9th Cir. 2014).

      Because “a complaint stating claims under section 10(b) and Rule 10b-5

must satisfy the dual pleading requirements of Federal Rule of Civil Procedure

9(b) and the PSLRA [Private Securities Litigation Reform Act],” Zucco Partners,

LLC v. Digimarc Corp., 552 F.3d 981, 990 (9th Cir. 2009), plaintiffs face

“exacting” and “heightened” pleading standards, Tellabs, Inc. v. Makor Issues &

Rts., Ltd., 551 U.S. 308, 313, 321 (2007). To adequately allege falsity, a complaint

must “specify each statement alleged to have been misleading, the reason or

reasons why the statement is misleading, and, if an allegation regarding the

statement or omission is made on information and belief . . . state with particularity

all facts on which that belief is formed.” 15 U.S.C. § 78u–4(b)(1). To meet the

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particularity requirements of Rule 9(b), a complaint must also “state with

particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b).

Those standards represent an “unusual deviation from the usually lenient

requirements of federal rules pleading.” Ronconi v. Larkin, 253 F.3d 423, 437 (9th

Cir. 2001), abrogated on other grounds by Tellabs, 551 U.S. at 315–18; Matrixx

Initiatives, Inc. v. Siracusano, 563 U.S. 27, 37–49 (2011). They “prevent[] a

plaintiff from skirting dismissal by filing a complaint laden with vague allegations

of deception unaccompanied by a particularized explanation.” Metzler Inv. GMBH

v. Corinthian Colls., Inc., 540 F.3d 1049, 1061 (9th Cir. 2008).

      Local 282’s falsity allegations rest on a single premise: BioMarin

Pharmaceutical, Inc. executives learned by November 2019 that the company’s

“Highest Dose Study” of its new gene therapy drug, BMN 307, yielded alarming

results, but they publicly represented until September 2021 that it displayed

“great,” safe testing data and significant future promise. Because Local 282’s

crucial allegation—that the Highest Dose Study results predated the challenged

statements—lacks particularity and substantiation, Local 282 does not sufficiently

plead that BioMarin’s statements were “untrue or misleading when made.” In re

GlenFed, Inc. Secs. Litig., 42 F.3d 1541, 1548–49 (9th Cir. 1994) (en banc).

      Local 282 relies on multiple statements by BioMarin executives to allege

that BioMarin knew the Highest Dose Study results by November 2019, including

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the following: “All of our nonclinical studies will be done in the first half of

[2019]”; “We plan to complete preclinical studies in the first half of 2019”; “We

finished our nonhuman primate and mass GLP studies”; and “BMN 307 ha[s]

moved beyond the ‘Preclinical’ stage and ha[s] transitioned to [human trials].” But

those generalized statements do not establish when the Highest Dose Study itself

began, when the study concluded, or when executives learned of its results.

Although BioMarin said that it “plan[ned] to complete preclinical studies in the

first half of 2019,” that expression of intent does not establish when the Highest

Dose Study was actually completed, especially because the company also said that

“[l]ong-term preclinical tests . . . may continue after the IND [investigational new

drug application] . . . is submitted.” And the Highest Dose Study was a non-GLP,

preclinical study on mice—not a nonclinical, mass-GLP, or primate study. Local

282 pleads no facts indicating either that BioMarin categorically completed all

BMN 307 preclinical testing by November 2019 or that its transition to human

trials ended all such testing.

      Local 282 also relies on BioMarin’s 10-Q SEC filings, which show that

BMN 307’s development moved from “Preclinical” during the third quarter of

2019 to “Clinical Phase 1/2” in the first quarter of 2020. Without additional

explanation, simply pointing to that transition is not sufficient to allege that

BioMarin executives knew the Highest Dose Study results by November 2019.

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      Local 282’s allegations of falsity depend on a specific chronology of events.

Because Local 282 does not allege sufficient, particularized facts to support that

proffered chronology, it fails to adequately plead falsity. See Glazer Cap. Mgmt.,

L.P. v. Forescout Techs., Inc., 63 F.4th 747, 769 (9th Cir. 2023) (holding that

securities plaintiffs must plead “with particularity the facts supporting each of their

beliefs as to why the challenged statements were false or misleading”).

      AFFIRMED.

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