The Freeman Group v. Royal Bank of Scotland Group PLC, 092513 FED2, 12-3642-cv

Docket Nº:12-3642-cv
Party Name:THE FREEMAN GROUP, Plaintiff-Appellant, v. THE ROYAL BANK OF SCOTLAND GROUP PLC, SIR THOMAS FULTON MCKILLOP, SIR FREDERICK ANDERSON GOODWIN, GUY WHITTAKER, JOHN CAMERON, LAWRENCE FISH, GORDON FRANCIS PELL, COLIN ALEXANDER MASON BUCHAN, SIR STEPHEN ARTHUR ROBSON, ROBERT AVISSON SCOTT, PETER DENIS SUTHERLAND, ARCHIBALD HUNTER, JOSEPH PATRICK MACHALE,
Attorney:For Plaintiff-Appellant: Jonathan K. Levine (Daniel C. Girard, Amanda M. Steiner, on the brief), Girard Gibbs LLP, San Francisco, CA For Defendants-Appellees: Seth P. Waxman (Andrea J. Robinson, David S. Lesser, Nolan J. Mitchell, on the brief), Wilmer Cutler Pickering Hale and Dorr LLP, Boston, ...
Judge Panel:Present: ROBERT A. KATZMANN, Chief Judge, DENNIS JACOBS, Circuit Judge, KEVIN THOMAS DUFFY, District Judge.
Case Date:September 25, 2013
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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THE FREEMAN GROUP, Plaintiff-Appellant,

PUBLIC EMPLOYEES' RETIREMENT SYSTEM OF MISSISSIPPI, IRVING FIREMEN'S RELIEF AND RETIREMENT FUND, EDWARD P. ZEMPRELLI, on behalf of himself and all others similarly situated, GARY KOSSEFF, individually and on behalf of all others similarly situated, Plaintiffs,

v.

THE ROYAL BANK OF SCOTLAND GROUP PLC, SIR THOMAS FULTON MCKILLOP, SIR FREDERICK ANDERSON GOODWIN, GUY WHITTAKER, JOHN CAMERON, LAWRENCE FISH, GORDON FRANCIS PELL, COLIN ALEXANDER MASON BUCHAN, SIR STEPHEN ARTHUR ROBSON, ROBERT AVISSON SCOTT, PETER DENIS SUTHERLAND, ARCHIBALD HUNTER, JOSEPH PATRICK MACHALE, MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., GREENWICH CAPITAL MARKETS, INC., WACHOVIA CAPITAL MARKETS, LLC, MORGAN STANLEY & CO. INC., UBS SECURITIES LLC, BANK OF AMERICA SECURITIES LLC, RBC DAIN RAUSCHER INC., CITIGROUP GLOBAL MARKETS, INC., A.G. EDWARDS & SONS, INC., GOLDMAN SACHS & CO., Defendants-Appellees. [**]

No. 12-3642-cv

United States Court of Appeals, Second Circuit

September 25, 2013

UNPUBLISHED OPINION

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 25th day of September, two thousand thirteen.

Appeal from the United States District Court for the Southern District of New York (Batts, J.).

For Plaintiff-Appellant: Jonathan K. Levine (Daniel C. Girard, Amanda M. Steiner, on the brief), Girard Gibbs LLP, San Francisco, CA

For Defendants-Appellees: Seth P. Waxman (Andrea J. Robinson, David S. Lesser, Nolan J. Mitchell, on the brief), Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA Lewis J. Liman (Mitchell A. Lowenthal, Roger A. Cooper, Matthew M. Bunda, Erica J. Klipper, on the brief), Cleary Gottlieb Steen & Hamilton LLP, New York, NY

Present: ROBERT A. KATZMANN, Chief Judge, DENNIS JACOBS, Circuit Judge, KEVIN THOMAS DUFFY, District Judge. [*]

ON CONSIDERATION WHEREOF, it is hereby ORDERED, ADJUDGED, and DECREED that the judgment of the district court be and hereby is AFFIRMED.

Plaintiff-Appellant The Freeman Group ("Freeman") appeals from a judgment entered on September 6, 2012 by the United States District Court for the Southern District of New York (Batts, J.). That judgment enforced a Memorandum and Order dated September 4, 2012, which granted the Defendants-Appellees' motion to dismiss Freeman's claims under sections 11, 12(a)(2), & 15 of the Securities Act of 1933 ("the '33 Act"), 15 U.S.C. §§ 77k, 77l(a)(2), & 77o. On appeal, Freeman argues that the district court should not have dismissed those claims because Freeman's Amended Complaint ("the complaint") had plausibly alleged that the offering documents for five securities issued and underwritten by the Defendants-Appellees: (1) misstated the exposure of the Royal Bank of Scotland Group PLC ("RBS") to subprime assets; (2) falsely claimed that RBS had effective risk controls; (3) failed to disclose that RBS had maintained an inadequate capital base; and (4) attributed nonexistent benefits to the acquisition of a part of ABN AMRO Bank N.V. ("ABN AMRO"). We assume the parties' familiarity with the relevant facts, the procedural history, and the issues presented for review.

"We review de novo the dismissal of a complaint under [Federal] Rule [of Civil Procedure] 12(b)(6), accepting all factual allegations as true and drawing all reasonable inferences in favor of the plaintiff." Litwin v. Blackstone Grp., L.P., 634 F.3d 706, 715 (2d Cir. 2011) (internal quotation marks omitted). On a motion to dismiss a complaint under Rule 12(b)(6), a court must assess whether the complaint "contain[s] sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

In general, §§ 11 and 12(a)(2) of the '33 Act impose liability on those who issue and underwrite a security whenever that security's registration statement or prospectus (collectively, its "offering documents") contains: "(1) a material misrepresentation; (2) a material omission in contravention of an affirmative legal disclosure obligation; or (3) a material...

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