Croft v. Computerized Thermal Imaging, Inc.

104 F. App'x 655

• Court: Court of Appeals for the Ninth Circuit
• Decided: August 11, 2004
• Docket: No. 03-35449; D.C. No. CV-02-00611-GMK
• Status: Published

Opinion

MEMORANDUM

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We review de novo a district court’s dismissal of a complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Howard v. Everex Sys., Inc., 228 F.3d 1057, 1060 (9th Cir.2000).

The plaintiffs’ complaint was properly, dismissed because it failed to adequately plead the element of scienter. The complaint employs language that was quoted verbatim from the defendant’s counterclaim allegations in the Packer matter. These general allegations are not detailed enough to satisfy 15 U.S.C. § 78u-4(b)(2), which requires plaintiffs to “state with particularity facts giving rise to a strong inference that [CTI and the individual defendants] acted with the required state of mind.” Because we find that these statements failed to meet the Private Securities Litigation Reform Act’s pleading requirements, we need not decide whether statements 1-4 also fall within the Act’s safe-harbor provision.

We also agree with the district court that statements 6 and 7 were immaterial as a matter of law. Athough both statements may have been incomplete, they were not misleading because they did not create the “impression of a state of affairs that differs in a material way from the one that actually exists.” Brody v. Transitional Hospitals Corp., 280 F.3d 997, 1006 (9th Cir.2002).

A district court’s denial of leave to amend is reviewed for abuse of discretion. Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir.2002). Here, the plaintiffs never requested leave to amend and the district court did not abuse its discretion by sua sponte offering them that opportunity with respect to a few selected statements.

AFFIRMED.

This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3.