Glen Barnes v. Edison International ( 2022 )

FILED
NOT FOR PUBLICATION
MAR 18 2022
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
GLEN BARNES, Individually and On No. 21-55589
Behalf of All Others Similarly Situated,
D.C. No.
Plaintiff, 2:18-cv-09690-CBM-FFM
and
MEMORANDUM*
IRON WORKERS LOCAL 580 JOINT
FUNDS; IRVING LICHTMAN, on behalf
of the Irving Lichtman Revocable Living
Trust,
Plaintiffs-Appellants,
v.
EDISON INTERNATIONAL; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Consuelo B. Marshall, District Judge, Presiding
Argued and Submitted March 8, 2022
Pasadena, California
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: IKUTA, LEE, and FORREST, Circuit Judges.
Irving Lichtman and Iron Workers Local 580 Joint Funds (collectively
“Appellants”) appeal the district court’s dismissal of their claims against Appellees
Edison International (Edison) under section 10(b) of the Exchange Act, 15 U.S.C.
§ 78j(b); see also Rule 10b-5, 17 C.F.R. § 240.10b-5, and section 11 of the
Securities Act, 15 U.S.C. § 77k(a). We have jurisdiction under 28 U.S.C. § 1291,
and we affirm.
The district court did not err in dismissing Appellants’ claims under section
10(b) of the Exchange Act because Appellants failed to plead particularized facts
showing false or misleading statements or omissions. See 15 U.S.C. § 78u–4(b);
Fed. R. Civ. P. 9(b). The challenged statements regarding Edison’s safety and
reliability, were not false or misleading because they were not literally false, see
Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1070 (9th Cir.
2008), and were not capable of objective verification, see Khoja v. Orexigen
Therapeutics, Inc., 899 F.3d 988, 1008 (9th Cir. 2018). Rather, they constituted
mere corporate puffery. See In re Alphabet, Inc. Sec. Litig., 1 F.4th 687, 708 (9th
Cir. 2021). Nor were the challenged statements misleading by omission due to
Edison’s failure to disclose publicly available information regarding its safety
practices and prior safety violations. There is no “rule of completeness for
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securities disclosures” requiring the disclosure of all such publicly available
information, Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc., 759 F.3d 1051,
1061 (9th Cir. 2014), and the challenged omissions here did not “affirmatively
create an impression of a state of affairs that differs in a material way from the one
that actually exists.” Id. (internal quotation marks omitted). For the same reasons,
Edison’s statements regarding the Long Beach fire, Edison’s “‘Risk’ Disclosures,”
Edison’s interactions with the California Public Utilities Commission (CPUC), and
Edison’s role in the Thomas Fire, are not actionable.
The district court also did not err in dismissing Appellants’ claims under
section 11 of the Securities Act. The face of the complaint establishes that those
claims are barred by the one-year statute of limitations. See 15 U.S.C. § 77m. The
complaint alleged that the purportedly concealed risks of Edison’s safety practices
materialized on December 5, 2017, when the market understood that Edison caused
the Thomas Fire. A “reasonably diligent” plaintiff could therefore have discovered
the facts constituting the alleged Securities Act violation on December 5, 2017, see
Merck & Co., Inc. v. Reynolds, 559 U.S. 633, 653 (2010), and the statute of
limitations began to run on that date. But Plaintiffs did not file their Securities Act
claims until April 29, 2019, well over one year after the statute of limitations began
to run. Accordingly, Appellants’ Securities Act claims are time-barred. Even if
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the statute of limitations had not run, Appellants’ Securities Act claim would fail
for the same reason their Exchange Act claim fails, namely, a failure to plead
particularized facts showing false or misleading statements or omissions.
Appellants’ argument that their Securities Act claim is subject to less stringent
pleading requirements than their Exchange Act claim fails because Securities Act
claims are based on the same purportedly false or misleading statements, in the
same filings, as the Exchange Act claim. Appellants’ Securities Act claim
therefore “sounds in fraud” and is subject to Rule 9(b)’s heightened pleading
standard. See Rubke v. Capitol Bancorp Ltd, 551 F.3d 1156, 1161 (9th Cir. 2009).
AFFIRMED.
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