Court Opinion

ID: 4109748
Source: CourtListenerOpinion
Date Created: 2016-12-21 21:01:11.59212+00
Date Added: 2024-06-11T07:46:10.019414
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            DEC 21 2016
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

In re: TESLA MOTORS, INC.                        No. 14-17501
SECURITIES LITIGATION.
______________________________                   D.C. No. 3:13-cv-05216-CRB

KAZIM ACAR; WILLIAM LANDRUM;
PANKAJ MODI, M.D., Ph.D., on behalf              MEMORANDUM*
of themselves and all others similarly
situated,

              Plaintiffs-Appellants,

 v.

TESLA MOTORS, INC.; ELON MUSK,

              Defendants-Appellees.

                    Appeal from the United States District Court
                      for the Northern District of California
                    Charles R. Breyer, District Judge, Presiding

                     Argued and Submitted December 15, 2016
                             San Francisco, California

Before: LUCERO,** GRABER, and HURWITZ, Circuit Judges.

      *
        This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
       The Honorable Carlos F. Lucero, Circuit Judge for the United States Court
of Appeals for the Tenth Circuit, sitting by designation.
      Plaintiffs appeal from the district court’s order dismissing their complaint

for failure to state a claim. Plaintiffs allege that Defendants Tesla Motors, Inc., and

Elon Musk (collectively, "Tesla") made false or misleading statements during a

three-month period in 2013 concerning the safety of Tesla’s Model S car, causing

the price of Tesla’s stock to be inflated artificially at the time Plaintiffs purchased

that stock. Plaintiffs sue both Defendants under section 10(b) of the Securities

Exchange Act of 1934 and the Securities and Exchange Commission’s Rule 10b-5,

and they sue Defendant Musk under section 20(a) of the Securities Exchange Act.

      The heightened pleading standards of the Private Securities Litigation

Reform Act of 1995 ("PSLRA"), 15 U.S.C. § 78u-4(b), apply. "We review the

district court’s Rule 12(b)(6) dismissal of the . . . complaint de novo and examine

the securities fraud complaint to determine whether [Plaintiffs] have complied with

the stringent pleading required by the PSLRA." DSAM Glob. Value Fund v. Altris

Software, Inc., 288 F.3d 385, 388 (9th Cir. 2002).

      1. Plaintiffs have failed to allege any materially false or misleading

statements made by Defendants. Almost all of the allegedly false or misleading

statements were true, and those few statements that arguably were misleading were

not materially misleading. See Reese v. Malone, 747 F.3d 557, 568 (9th Cir. 2014)

(defining materiality). Nor have Plaintiffs alleged any omission the disclosure of

                                            2
which was "necessary to make statements made, in the light of the circumstances

under which they were made, not misleading." In re NVIDIA Corp. Sec. Litig.,

768 F.3d 1046, 1054 (9th Cir. 2014) (internal quotation marks and alterations

omitted).

      2. Because Plaintiffs have failed to allege any materially false or misleading

statements or omissions, we need not reach the question whether they have pleaded

scienter adequately.

      3. The district court did not abuse its discretion in dismissing the second

amended complaint without further leave to amend. See Gompper v. VISX, Inc.,

298 F.3d 893, 898 (9th Cir. 2002) (stating standard of review). It is clear that the

new allegations that Plaintiffs would include in a third amended complaint1 would

not "save" the complaint. Polich v. Burlington N., Inc., 942 F.2d 1467, 1472 (9th

Cir. 1991).

      AFFIRMED.

      1
       The new allegations were included in Plaintiffs’ response to Tesla’s Rule
59 motion in the district court.
                                          3