Court Opinion

ID: 3164206
Source: CourtListenerOpinion
Date Created: 2015-12-19 01:00:49.211045+00
Date Added: 2024-06-11T12:03:21.590788
License: Public Domain

Case: 15-40067      Document: 00513313858         Page: 1    Date Filed: 12/18/2015

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                             United States Court of Appeals
                                                                                      Fifth Circuit
                                    No. 15-40067                                    FILED
                                  Summary Calendar                          December 18, 2015
                                                                               Lyle W. Cayce
                                                                                    Clerk

GEORGE FOXX,

                                                 Plaintiff–Appellant,

versus

MY VINTAGE BABY, INCORPORATED; JESSICA SMITH WISWALL;
VINTAGE COUTURE INCORPORATED,

                                                 Defendants–Appellees.

                   Appeal from the United States District Court
                        for the Eastern District of Texas
                             USDC No. 4:12-CV-593

Before REAVLEY, SMITH, and HAYNES, Circuit Judges.
PER CURIAM: *

       George Foxx appeals the dismissal of his purported securities fraud
complaint for failure to state a claim under Federal Rule of Civil Procedure

       * 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 R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH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.
    Case: 15-40067    Document: 00513313858     Page: 2   Date Filed: 12/18/2015

                                 No. 15-40067

12(b)(6). Appearing pro se, Foxx asserted claims of gross negligence, fraud,
and misrepresentation arising from a “pump and dump” scheme in which
third-party stock promoters falsely inflated the price of stock in My Vintage
Baby, Incorporated (“MVBY”), then sold it at substantial profit without making
legally required disclosures. Jessica Wiswall is the only appellee appearing;
the two corporate defendants seem to have been dissolved, though we make no
such finding.

      Claims may be dismissed if the plaintiff fails to allege facts that, if
accepted as true, would entitle him to relief. FED. R. CIV. P. 12(b)(6). We
review the “dismissal de novo, accepting all well-pleaded facts as true and
viewing those facts in the light most favorable to the plaintiffs.” Gonzalez v.
Kay, 577 F.3d 600, 603 (5th Cir. 2009) (citation omitted). But a court need “not
accept as true conclusory allegations, unwarranted factual inferences, or legal
conclusions.” Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir. 2005); see
Varela v. Gonzales, 773 F.3d 704, 710 (5th Cir. 2014). A plaintiff must offer
“more than labels and conclusions, and a formulaic recitation of the elements
of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555 (2007).

      Because Foxx alleged fraud, he also needed to meet the heightened
pleading standard of Federal Rule of Civil Procedure 9(b), which requires him
to “specify the statements contended to be fraudulent, identify the speaker,
state when and where the statements were made, and explain why the state-
ments were fraudulent.” Flaherty & Crumrine Preferred Income Fund, Inc. v.
TXU Corp., 565 F.3d 200, 207 (5th Cir. 2009) (citation omitted). “Although
Rule 9(b) by its terms does not apply to negligent misrepresentation claims,
this court has applied [it] when the parties have not urged a separate focus on
the negligent misrepresentation claims” or where, as here, the “fraud and

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    Case: 15-40067     Document: 00513313858     Page: 3   Date Filed: 12/18/2015

                                  No. 15-40067

negligent misrepresentation claims are based on the same set of alleged facts.”
Benchmark Electronics, Inc. v. J.M. Huber Corp., 343 F.3d 719, 723 (5th Cir.),
opinion modified on denial of reh’g, 355 F.3d 356 (5th Cir. 2003).

      In this court, Foxx has failed to address either the applicability of
Rule 9(b) or the district court’s conclusion that he did not make sufficient fac-
tual allegations. Foxx has thus waived the issues essential to his appeal. See
Yohey v. Collins, 985 F.2d 222, 224–25 (5th Cir. 1993) (stating that issues not
briefed are abandoned); American States Ins. Co. v. Bailey, 133 F.3d 363, 372
(5th Cir. 1998) (explaining that failure to provide legal or factual analysis of
issue results in its waiver).

      In any event, the dismissal must be affirmed because Foxx’s complaint
fails to allege facts that, if true, would have supported his bare assertions that
Wiswall was negligent and committed fraud. The complaint, like Foxx’s pro se
brief on appeal, consists of “conclusory allegations, unwarranted factual infer-
ences, or legal conclusions.” Plotkin, 407 F.3d at 696. Although Foxx may have
adequately alleged that the pump-and-dump scheme harmed him, he offers
nothing that, if true, would establish Wiswall’s involvement or culpability. The
complaint merits dismissal. See FED. R. CIV. P. 12(b)(6); Varela, 773 F.3d
at 710, 712.

      Because Wiswall established that Foxx failed to state a cause of action,
that defense inures to the benefit of the corporate defendants where Foxx offers
only bare assertions to the contrary. See Lewis v. Lynn, 236 F.3d 766, 768 (5th
Cir. 2001); American States, 133 F.3d at 372. Foxx was not entitled to a default
judgment as a matter of right, even if the corporate defendants were techni-
cally in default. See Lewis, 236 F.3d at 767.

      The judgment is AFFIRMED.

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