J. F. Rhode v. Divion Technology

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 99-2355
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J.F. Rhode; Peter W. Bick; Richard D. *
Cross; Burton F. Dahlberg; Paula S. *
Forte; Bill C. Fox; Dennis T. Grendahl; *
Donna B. Johnson; Lonnie G. Johnson; * Appeal from the United States
Ramone A. Johnson; Allen C. Kaiser; * District Court for the District
Margaret Kaiser; Nicholas E. Mezey; * of Minnesota
Ronald E. Moir; Mike R. Rejsa; James *
A. Robb, Jr.; Peter G. Robb; Gale L. *
Running; Irving A. Shepard; Douglas R. * [UNPUBLISHED]
Solseth, *
*
Plaintiffs-Appellants, *
*
v. *
*
Divion Technology, Inc.; *
*
Defendant, *
*
Gary J. Beeman; Ronald Buck; Robert *
C. Szymborski; Richard T. Sundal, *
*
Defendants-Appellees. *
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Submitted: May 12, 2000
Filed: June 9, 2000
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Before WOLLMAN, Chief Judge, FAGG, Circuit Judge and HENDREN,1 District
Judge
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PER CURIAM.
This is an appeal from the district court's order dismissing a complaint by
investors claiming they had been defrauded. Plaintiffs-appellants allege that the
dismissal was improper under Fed. R. Civ. P. 12(b)(6) and 9(b) and also under the
Private Securities Litigation Reform Act of 1995 ("Reform Act"), 15 U.S.C. § 78u-
4(b). We disagree and affirm the district court's order.
We review the district court's order de novo. That review convinces us that the
district court correctly applied the pleading requirements and standards of both federal
rules and the Reform Act in concluding that plaintiffs'-appellants' amended complaint
met neither.
The district court properly concluded that, even if the facts properly pleaded by
plaintiffs-appellants were deemed true, they would not establish the fraud asserted. We
agree and conclude, as did the district court, that plaintiffs-appellants at best asserted
"hindsight-fraud" and not legally actionable fraud. The investors (plaintiffs-appellants)
apparently agreed to and did infuse short-term working capital into a struggling
company which they knew might fail. When the company did fail, the investors cried
"foul" and attempted to assert an action for fraud. Their assertions, properly scrutinized
under the proper pleading standards, are insufficient to survive appellees' challenge.
Having satisfied ourselves that the district court, properly applying appropriate
pleading standards and requirements, reached the correct result in its well-reasoned
opinion, we believe further discussion of the matter is not warranted. Accordingly, we
affirm the order of the district court for the reasons set forth in the district court's order.
See 8th Cir. R. 47B.
1
The Honorable Jimm Larry Hendren, Chief Judge, United States District Court
for the Western District of Arkansas, sitting by designation.
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A true copy.
ATTEST:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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