Leonard Panella v. Tesco Corporation ( 2020 )

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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 19-20298 August 19, 2020
Lyle W. Cayce
Clerk
NORMAN HEINZE,
Plaintiff-Appellant,
v.
TESCO CORPORATION; FERNANDO R. ASSING; JOHN P. DIELWART; R.
VANCE MILLIGAN; DOUGLAS R. RAMSAY; ROSE M. ROBESON; ELIJIO
V. SERRANO; MICHAEL W. SUTHERLIN; NABORS INDUSTRIES,
LIMITED,
Defendants-Appellees.
************************************************************************
NORMAN HEINZE,
Plaintiff-Appellant,
v.
TESCO CORPORATION; MICHAEL W. SUTHERLIN; FERNANDO R.
ASSING; JOHN P. DIELWART; R. VANCE MILLIGAN; DOUGLAS R.
RAMSAY; ROSE M. ROBESON; ELIJIO V. SERRANO,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Texas
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Before OWEN, Chief Judge, and SOUTHWICK and OLDHAM, Circuit Judges.
ANDREW S. OLDHAM, Circuit Judge:
Norman Heinze brings this putative class action on behalf of himself and
other former shareholders of Tesco Corporation against Tesco, former
members of Tesco’s board of directors, and Nabors Industries, Ltd. Heinze
alleges that the defendants’ omissions from a proxy statement led Tesco
shareholders to approve an all-stock acquisition by Nabors. The district court
dismissed all claims against all defendants, and Heinze appealed. We hold that
Heinze failed to state a claim upon which relief can be granted. Therefore, we
affirm.
I.
Tesco provided certain technologies related to the drilling, servicing, and
completion of wells for the upstream energy industry. On July 6, 2017, Tesco
received an acquisition offer from Nabors, a company that provides drilling and
drilling-related services for oil and gas wells. Nabors proposed an all-stock
acquisition with an exchange ratio of 0.62 Nabors shares for each outstanding
share of Tesco common stock.
On July 12, Tesco engaged J.P. Morgan Securities LLC to analyze the
offer. During July and August 2017, Tesco and J.P. Morgan contacted various
parties who were potentially interested in acquiring Tesco. None expressed an
interest in doing so. Based on the lack of interest from third parties, Tesco’s
board focused on negotiations with Nabors.
On August 3, Tesco’s board met to consider the Nabors proposal. The
board determined that the 0.62 ratio was insufficient. Later that night, Nabors
proposed a new ratio of 0.66 Nabors shares for each outstanding share of Tesco
common stock. Tesco’s board rejected that offer the following day.
Over the next several days, the two companies continued negotiating. On
August 8, Nabors revised its proposal to 0.68 Nabors shares for each
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outstanding share of Tesco common stock. On August 9, the Tesco board
considered the offer and determined that it was acceptable. On August 13, J.P.
Morgan presented its oral opinion to the Tesco board that the proposed
transaction would provide Tesco shareholders with fair consideration. Tesco
and Nabors signed the agreement that evening and publicly announced the
transaction the following morning on August 14. The transaction valued Tesco
at $4.62 per share, which represented a 19% premium over Tesco’s closing price
on the last trading day before the transaction’s announcement.
Because Tesco was incorporated under Alberta law, the Court of Queen’s
Bench of Alberta had to approve the transaction. On October 18, the Alberta
court issued an interim order approving a special meeting of Tesco
shareholders and requiring a two-thirds majority vote of common shares, stock
options, and restricted stock units represented at the meeting. Dissenting
shareholders had the right under Alberta law to obtain an alternate payment
based on a judicial valuation of their shares by the Alberta court. The interim
order also called for the dissemination of a Schedule 14A proxy statement.
Tesco filed its final proxy statement on October 26. At the special meeting on
December 1, Tesco’s shareholders approved the transaction with the required
voting majority. The Alberta court approved it too.
Norman Heinze brought claims on behalf of himself and all other former
Tesco shareholders against Tesco, former members of Tesco’s board of
directors, and Nabors. 1 He alleged that the defendants violated Sections 14(a)
and 20(a) of the Securities Exchange Act of 1934 (“1934 Act”) and SEC Rule
14a-9. Specifically, Heinze alleged that the defendants made a number of
1Initially, Heinze and another plaintiff named Leonard Panella sought to block the
transaction. After the transaction consummated, the plaintiffs from Panella’s suit dismissed
themselves, leaving Heinze as the only remaining plaintiff. Heinze then amended his
complaint to seek damages. We review Heinze’s amended complaint.
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omissions in the proxy statement that rendered the proxy statement
misleading. The district court granted the defendants’ Rule 12(b)(6) motion
and dismissed all claims against all defendants. Heinze timely appealed.
II.
We review de novo a district court’s grant of a Rule 12(b)(6) motion to
dismiss. See Whitley v. BP, P.L.C., 838 F.3d 523, 526 (5th Cir. 2016). We “accept
all well-pleaded facts as true and construe the complaint in the light most
favorable to the plaintiff.” In re Great Lakes Dredge & Dock Co., 624 F.3d 201,
210 (5th Cir. 2010). But we “do not accept as true ‘conclusory allegations,
unwarranted factual inferences, or legal conclusions.’ ” Ibid. (quoting Ferrer v.
Chevron Corp., 484 F.3d 776, 780 (5th Cir. 2007)).
To withstand a motion to dismiss, a complaint must allege “more than
labels and conclusions,” as “a formulaic recitation of the elements of a cause of
action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). It must
state a “plausible claim for relief,” rather than facts “merely consistent with”
liability. Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009) (quoting Twombly, 550
U.S. at 557).
The heightened pleading requirements of the Private Securities
Litigation Reform Act (“PSLRA”) apply to this case. Heinze’s amended
complaint alleges that the defendants “omitted to state a material fact
necessary in order to make the statements made, in the light of the
circumstances in which they were made, not misleading.” 15 U.S.C. § 78u-
4(b)(1)(B). Therefore, the PSLRA says the 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, the complaint shall state with
particularity all facts on which that belief is formed.” Id. § 78u-4(b)(1). If the
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complaint fails to meet these requirements, “the court shall, on the motion of
any defendant, dismiss the complaint.” Id. § 78u-4(b)(3)(A).
Heinze has two causes of action. The first arises under Section 14(a) of
the 1934 Act. He claims that the proxy statement was misleading because it
omitted certain material facts. The second arises under Section 20(a) of the
1934 Act. He claims that the individual defendants are liable for any violations
of Section 14(a) committed by people they controlled. We examine Heinze’s
allegations in turn and conclude that he failed to state a claim upon which
relief can be granted.
III.
We start with Section 14(a) of the 1934 Act, which makes it unlawful for
any person “to solicit or to permit the use of his name to solicit any proxy or
consent or authorization” in violation of the rules of the Securities and
Exchange Commission (“SEC”). 15 U.S.C. § 78n(a). Heinze alleges that the
defendants violated SEC Rule 14a-9, which states:
No solicitation subject to this regulation shall be made by means
of any proxy statement, form of proxy, notice of meeting or other
communication, written or oral, containing any statement which,
at the time and in the light of the circumstances under which it is
made, is false or misleading with respect to any material fact, or
which omits to state any material fact necessary in order to make
the statements therein not false or misleading or necessary to
correct any statement in any earlier communication with respect
to the solicitation of a proxy for the same meeting or subject matter
which has become false or misleading.
17 C.F.R. § 240.14a-9(a).
The text of SEC Rule 14a-9 makes it clear that vague allegations about
the gestalt of a proxy statement will not suffice. Even for omission-based
claims, the plaintiff must identify specific “statements therein” that are
rendered “false or misleading” by the alleged omissions. This requirement
accords with the PSLRA, which requires the complaint to “specify each
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statement alleged to have been misleading” and “the reason or reasons why
the statement is misleading.” 15 U.S.C. § 78u-4(b)(1).
Heinze’s amended complaint identifies the following parts of the proxy
statement as allegedly misleading: (A) the statement on page 37 that Tesco
shareholders would receive a “significant” 19% premium over Tesco’s closing
price on the last day of trading before the transaction’s announcement; (B) the
table on page 43 containing Tesco management’s projections for revenue and
Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”)
in 2017 and 2018; and (C) the summary on pages 44–48 of the results of J.P.
Morgan’s fairness opinion. We examine these statements in turn.
A.
Heinze first claims that it was misleading to state on page 37 of the proxy
statement that Tesco shareholders would receive a “significant” 19% premium.
For a statement to be actionable under SEC Rule 14a-9, it must be “material.”
See 17 C.F.R. § 240.14a-9(a). A statement is material only if “there is a
substantial likelihood that a reasonable shareholder would consider it
important in deciding how to vote.” Va. Bankshares, Inc. v. Sandberg, 501 U.S.
1083, 1090 (1991) (quoting TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438,
449 (1976)).
In this case, the proxy statement specifically informed shareholders that
they would receive a 19% premium over Tesco’s closing price on the last day of
trading before the transaction’s announcement. Heinze doesn’t dispute the
factual accuracy of that calculation. Instead, he argues that it was misleading
to describe the premium as “significant.”
A reasonable shareholder would have relied on the actual quantity of the
premium to assess its significance, rather than the adjective “significant.” Cf.
City of Edinburgh Council v. Pfizer, Inc., 754 F.3d 159, 172 (3d Cir. 2014)
(holding at the motion to dismiss stage that the adjective “spectacular” was a
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vague and general statement of optimism that was not misleading). The use of
the word “significant” was therefore immaterial. With respect to this
statement, Heinze has failed to allege a “plausible claim.” Iqbal, 556 U.S. at
679.
B.
Heinze next alleges that the table on page 43 of the proxy statement was
misleading. That table contains Tesco management’s projections for revenue
and EBITDA in 2017 and 2018:
A footnote states that the “Growth Case” was “contingent upon and assumes
favorable market conditions and takes into account other assumptions related
to successful entry into several offshore contracts for tubular services and
additional product sales.” The table is followed by several paragraphs of
language cautioning that the projections are based on assumptions that “may
not prove to be accurate.”
Heinze argues that the revenue and EBITDA projections were rendered
misleading by the following four omissions from the proxy statement.
Projections of Unlevered Free Cash Flows. Heinze alleges that the
defendants omitted projections of unlevered free cash flows for fiscal years
2017–2022. He claims that these projections were important for two reasons.
First, they “reflected the widely-held expectation amongst industry observers
that growth in oil prices will accelerate significantly starting in 2019.” Heinze
alleges that without the cash-flow projections, Tesco shareholders were left
with an unduly pessimistic view of Tesco’s future growth potential. Second,
Heinze claims that the cash-flow projections were essential to a proper
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valuation of Tesco. Without the projections, Heinze alleges, Tesco shareholders
lacked a complete picture of Tesco’s worth.
Projections for 2019 and Beyond. Separate from his allegations about the
projections of unlevered free cash flows, Heinze also alleges that the
defendants omitted projections for revenue, EBITDA, and other metrics for the
years 2019 and beyond. He alleges that these projections also reflected the
“widely-held expectation” that “growth in oil prices will accelerate significantly
starting in 2019.” Hence, their omission also left Tesco shareholders with an
unduly pessimistic view of Tesco’s future growth potential.
Implied Per Share Equity Value Ranges for the “Growth Case” Projection.
Page 47 of the proxy statement includes two estimates by J.P. Morgan (using
two different methodologies) of the implied per share equity value of Tesco.
Each of those estimates presents one range with a low and a high estimate.
Heinze notes that the revenue and EBITDA projections on page 43 of the proxy
statement include two ranges of estimates— for the “Base Case” and “Growth
Case”—and he questions why J.P. Morgan did not likewise provide two ranges
for its estimates of Tesco’s per share equity value. Heinze speculates that
“[p]resumably, the ‘implied per share equity value’ ranges contained on page
47 of the Proxy were calculated utilizing the significantly lower ‘Base Case’
projections.” In Heinze’s view, the omission of the “Growth Case” ranges left
Tesco shareholders with yet another unduly pessimistic view of Tesco’s future
growth potential.
Details of J.P. Morgan’s Transactions Analysis. Heinze alleges that the
defendants failed to disclose the details of J.P. Morgan’s transactions analysis
comparing the Nabors-Tesco transaction with the publicly available financial
terms of similar transactions. The proxy statement disclosed the existence of
the transactions analysis and presented J.P. Morgan’s conclusion that the
transaction was fair. But Heinze alleges that, by omitting the specific
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transactions analyzed by J.P. Morgan, the defendants prevented shareholders
from realizing how much more compensation they could have been offered.
Heinze alleges that these four omissions, taken together, rendered Tesco
management’s revenue and EBITDA projections for 2017 and 2018 misleading.
There are two fundamental problems with this allegation.
1.
First, Heinze fails to identify how the four allegedly omitted pieces of
information were “necessary in order to make the statements therein not false
or misleading.” 17 C.F.R. § 240.14a-9(a). Heinze does not dispute that page 43
of the proxy statement accurately reflected the projections. Nor does he dispute
the accuracy of the assumptions underlying those projections with any
specificity.
Instead, Heinze vaguely alleges that the projections were misleading
because they failed to demonstrate the full extent of Tesco’s future growth
potential. His only allegation in support of that claim is his prophecy of oil
prices increasing from 2019–2022:
This oil price recovery was (at the time the Merger was
announced) and still is expected to accelerate significantly
between 2019 and 2021/2022, the same years that the
omitted Tesco Cash Flow Projections and the Later Year
Projections span. . . . By including only the projections
associated with years in which oil prices are expected to be lower
and omitting projections for years during which oil prices are
expected to be significantly higher, the table of projections set
forth on page 43 of the Proxy presented a truncated, incomplete,
misleading, and unduly pessimistic picture of Tesco’s financial
outlook.
(Emphases in original.) Heinze’s amended complaint includes a table with the
following predictions about future oil prices: $51.00/barrel in 2019,
$55.00/barrel in 2020, and $65.00/barrel in 2021.
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Nothing in our law requires projections to be based on such rank
speculation. See Omnicare, Inc. v. Laborers Dist. Council Constr. Indus.
Pension Fund, 575 U.S. 175, 186 (2015) (holding in the context of a claim under
Section 11 of the Securities Act of 1933 that whether a statement is
“misleading” is determined from “the perspective of a reasonable investor”); cf.
James 4:13–14. The principal appellate case upon which Heinze relies,
Campbell v. Transgenomic, Inc., 916 F.3d 1121 (8th Cir. 2019), considered an
allegation that a proxy statement overstated the acquiring company’s worth by
omitting its expenses. Id. at 1124. Even if that case bound the Fifth Circuit—
which it does not—it would suggest only that unduly optimistic
representations of a company’s worth can be misleading. If anything, Campbell
cautions against making the sorts of speculative predictions that Heinze claims
Tesco should have made.
The defendants’ alleged failure to communicate a more bullish forecast
in this case doesn’t come close to rendering the revenue and EBITDA
projections for 2017 and 2018 misleading. In Kapps v. Torch Offshore, Inc., 379
F.3d 207 (5th Cir. 2004), we upheld the dismissal of a misleading-omission
claim. We did so because the failure to include already-existing trends in
natural gas prices was not materially misleading when the statement included
cautionary language about the volatility of oil and natural gas prices. Id. at
216. That case arose under Section 11 of the Securities Act of 1933, which
contains language about omission-based claims that is virtually identical to
the language in SEC Rule 14a-9, 17 C.F.R. § 240.14a-9(a). If a company has no
obligation to provide already existing information about commodity price
trends, then the defendants in this case certainly had no obligation to include
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additional projections based on potentially inaccurate assumptions about
future price trends. 2
Without a viable claim alleging that the projections are misleading,
Heinze is left with only a pure-omission theory that is untethered to any
specific false or misleading representation in the proxy statement. Such pure-
omission claims are not cognizable. The texts of Section 14(a) and SEC Rule
14a-9 do not provide a freestanding cause of action to challenge any and all
material omissions from proxy statements. Instead, they allow an omission-
based claim only if the proxy statement “omits to state any material fact
necessary in order to make the statements therein not false or misleading.” 17
C.F.R. § 240.14a-9(a) (emphasis added). Without an affirmatively false or
misleading statement “therein,” there can be no claim. See, e.g., Montanio v.
Keurig Green Mountain, Inc., 237 F. Supp. 3d 163, 178 (D. Vt. 2017) (“Merely
asking for more detail or background regarding a particular decision is
insufficient.”); Greenthal v. Joyce, No. 4:16-CV-41, 2016 WL 362312, at *5 (S.D.
Tex. Jan. 29, 2016) (“Here, Plaintiff does not allege that the information in the
proxy statement is misleading; Plaintiff simply requests additional
information.”); Hysong v. Encore Energy Partners LP, No. 11-781, 2011 WL
5509100, at *8 (D. Del. Nov. 10, 2011) (“A plaintiff ’s desire to know information
that may be material, as the plaintiff repeatedly seeks in his Complaint, is not
enough to state a claim under Section 14(a) under ordinary pleading
requirements.”); cf. Omnicare, 575 U.S. at 194 (holding that Section 11 of the
2 Heinze cites other Fifth Circuit cases that also do not help him because they pre-
date the PSLRA and deal with very different facts. See Rubinstein v. Collins, 20 F.3d 160,
168–70 (5th Cir. 1994) (reversing a dismissal of an omission-based claim alleging that the
defendants made “various optimistic projections” but refused to disclose “material, firm-
specific adverse facts that affect[ed] the validity or plausibility of that prediction”); First Va.
Bankshares v. Benson, 559 F.2d 1307, 1312 (5th Cir. 1977) (affirming a jury verdict finding
defendants liable for “doctoring” records to present “inflate[d] assets and income”).
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Securities Act of 1933 “is not a general disclosure requirement; it affords a
cause of action only when an issuer’s failure to include a material fact has
rendered a published statement misleading”); Ind. Elec. Workers’ Pension Tr.
Fund IBEW v. Shaw Grp., 537 F.3d 527, 541–42 (5th Cir. 2008) (holding pure-
omission claims likewise are not actionable under Section 10(b) of the 1934 Act
and SEC Rule 10b-5, 17 C.F.R. § 240.10b-5).
2.
There is a second fundamental problem with Heinze’s claim about the
revenue and EBITDA projections for 2017 and 2018: the projections are
protected by the PSLRA’s safe harbor. In an omission-based claim such as this
one, the safe harbor provides that a defendant covered by the statute cannot
be held liable for a forward-looking statement that is “identified as a forward-
looking statement, and is accompanied by meaningful cautionary statements
identifying important factors that could cause actual results to differ
materially from those in the forward-looking statement.” 15 U.S.C. § 78u-
5(c)(1)(A)(i).
The district court’s order granting the defendants’ motion to dismiss held
that the “pure omission of more forward-looking statements” is covered by the
safe harbor. The defendants echo this framing of the issue on appeal, claiming
that three of the allegedly omitted projections (regarding unlevered cash flows,
other financial metrics, and per share equity values for the “growth case”) are
covered by the safe harbor. Heinze argues that this can’t be right because the
text of the safe harbor covers only forward-looking statements, not omissions.
We agree with Heinze that the text of the safe harbor provision deals with
forward-looking statements that were actually made rather than forward-
looking statements that were omitted. Because pure-omission claims are not
actionable, it would not make sense to have a safe harbor for omissions. But
we disagree with Heinze’s assertion that the safe harbor is inapplicable.
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The only forward-looking and allegedly misleading statement in the
proxy is the table on page 43 containing Tesco’s projections of revenue and
EBITDA for 2017 and 2018. Those figures are expressly prefaced as “forecasts”
and “projections” in the proxy statement. They are followed by several
paragraphs of cautionary language, including a warning stating that the
projections are based on “assumptions that are inherently uncertain” and “may
not prove to be accurate.” The factors listed in the cautionary paragraphs that
could affect the accuracy of the assumptions include commodity price volatility,
market trends, changes in the regulatory environment, and changes in foreign
exchange rates. The reader is then directed to two additional provisions
entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk
Factors,” which contain several additional pages of factors that can affect the
accuracy of projections, including terrorist attacks, natural disasters,
pandemic diseases, cybersecurity incidents, and the ability to recruit and
retain employees. Finally, there is also a warning stating that “the projected
results may not be realized, and actual results may differ.”
Heinze argues that instead of beginning our analysis with the text of the
statute, we should look as “an initial matter” to the “legislative history,” which
he claims “was intended to encourage companies to fully disclose their
projections.” Of course, when “a statute’s text is clear, courts should not resort
to legislative history.” Hoyt v. Lane Constr. Corp., 927 F.3d 287, 294 (5th Cir.
2019) (quoting Adkins v. Silverman, 899 F.3d 395, 403 (5th Cir. 2018)); see also,
e.g., Ali v. Barr, 951 F.3d 275, 282 (5th Cir. 2020); Whitlock v. Lowe (In re
DeBerry), 945 F.3d 943, 949–50 (5th Cir. 2019). We find that the legislative
history cited by Heinze is irrelevant in light of the statute’s unambiguous text.
And in all events, we fail to see how legislative history discussing the
importance of protecting companies from liability for the projections they make
has anything to say about their liability for allegedly omitted projections.
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The projections of revenue and EBITDA for 2017 and 2018 are clearly
identified as forward-looking statements and are accompanied by meaningful
cautionary statements identifying important factors that could cause actual
results to differ. They therefore fall comfortably within the safe harbor. See 15
U.S.C. § 78u-5(c)(1)(A)(i). 3
C.
The final statement that’s allegedly misleading is the summary of J.P.
Morgan’s fairness opinion on pages 44–48 of the proxy. Heinze doesn’t dispute
that this statement correctly summarizes J.P. Morgan’s analysis. Nor does he
dispute the accuracy of J.P. Morgan’s assumptions or calculations with any
specificity.
Instead, Heinze reiterates his vague and speculative assertion that the
proxy statement should’ve offered a more bullish picture of Tesco’s financial
future that included Heinze’s prophecy of ever-rising oil prices. He also
reiterates his pure-omission theory in a slightly different form. Specifically, he
alleges that the defendants had a duty to disclose the four allegedly omitted
pieces of information (regarding projections of unlevered cash flows, other
financial projections, per share equity value ranges for the “growth case,” and
J.P. Morgan’s transactions data) because J.P. Morgan had access to them. We
reject these arguments here for the same reasons we rejected them with
respect to the revenue and EBITDA projections for 2017 and 2018. See supra
Part III.B.
3 Heinze suggests for the first time on appeal that one of the defendants—Nabors—is
not covered by the statute. But he failed to preserve that argument in the district court and
raises it here in only a perfunctory manner, so we decline to consider it. See United States ex
rel. Drummond v. BestCare Lab’y Servs., L.L.C., 950 F.3d 277, 285 (5th Cir. 2020).
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IV.
Heinze’s second cause of action arises under Section 20(a) of the 1934
Act. It alleges that the individual defendants are liable for any violations
described in the first cause of action committed by a person they controlled.
See 15 U.S.C. § 78t(a). Because Heinze has failed to state a predicate claim
under Section 14(a) and SEC Rule 14a-9, he has also failed to state a claim
under Section 20(a). See Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 1021
n.8 (5th Cir. 1996).
V.
Finally, Heinze argues that the district court erred in not granting him
leave to further amend his complaint. See FED. R. CIV. P. 15(a)(2) (“The court
should freely give leave when justice so requires.”). “Whether leave to amend
should be granted is entrusted to the sound discretion of the district court, and
that court’s ruling is reversible only for an abuse of discretion.” Pervasive
Software Inc. v. Lexware GmbH, 688 F.3d 214, 232 (5th Cir. 2012) (quoting
Wimm v. Jack Eckerd Corp., 3 F.3d 137, 139 (5th Cir. 1993)). When the district
court provides no explanation for denying leave to amend, we can affirm if the
futility of amendment is “readily apparent” and the record reflects “ample and
obvious grounds for denying leave to amend.” Ibid. (quoting Mayeaux v. La.
Health Serv. & Indem. Co., 376 F.3d 420, 426 (5th Cir. 2004)).
Heinze already had one opportunity to amend his complaint. He makes
“only a general request for leave to amend” and has not identified how
amendment would cure the defects identified above. Ibid. We therefore hold
that amendment would be futile and that the district court did not abuse its
discretion in denying leave to amend.
* * *
The district court’s judgment is AFFIRMED.
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