NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAY 24 2012
MOLLY C. DWYER, CLERK
OMAR G. SCARBOROUGH and GAY E. No. 11-55313 U .S. C O U R T OF APPE ALS
SCARBOROUGH, Trustees of The
Scarborough Family Trust, dated 1/5/07, D.C. No. 2:10-cv-05491-JHN-
on behalf of themselves and all others MAN
similarly situated,
Plaintiffs - Appellants, MEMORANDUM *
v.
BERTHEL FISHER & COMPANY
FINANCIAL SERVICES, INC., an Iowa
corporation; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Jacqueline H. Nguyen, District Judge, Presiding
Argued and Submitted May 10, 2012
Pasadena, California
Before: PREGERSON, GRABER, and BERZON, Circuit Judges.
Plaintiffs appeal from the dismissal with prejudice of their First Amended
Complaint in this securities fraud case. Reviewing de novo, WPP Luxembourg
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Gamma Three Sarl v. Spot Runner, Inc., 655 F.3d 1039, 1047 (9th Cir. 2011),
petition for cert. filed, 80 U.S.L.W. 3531 (U.S. Feb. 27, 2012) (No. 11-1069), we
affirm.
Claims One and Two
Plaintiffs failed to plead misrepresentation and scienter adequately. See 15
U.S.C. § 78u-4(b)(1) (requiring particularity); Fed. R. Civ. P. 9(b) (same); WPP,
655 F.3d at 1048 (stating the elements of a claim under § 10(b) of the Securities
Exchange Act of 1934 and Securities and Exchange Commission Rule 10b-5). The
complaint fails to identify any affirmative misrepresentation. The complaint also
fails to identify any material omission, because there is no allegation that the
inclusion of further information about the cross-collateralization agreement would
have revealed any specific problems with the other properties at the time the
Private Placement Memorandum ("PPM") was issued.
Even assuming that the complaint adequately pleads a misrepresentation or
material omission, the facts alleged, taken collectively, do not "give rise to a strong
inference of scienter." Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308,
323 (2007).
Claims Three and Four
2
The district court dismissed Plaintiffs’ Securities Act of 1933 claims on the
ground that the PPM did not qualify as a prospectus. Plaintiffs’ opening brief does
not challenge that conclusion. Accordingly, Plaintiffs have waived any challenge
to the district court’s dismissal of their Securities Act of 1933 claims. See Arpin v.
Santa Clara Valley Transp. Agency, 261 F.3d 912, 919 (9th Cir. 2001) ("[I]ssues
which are not specifically and distinctly argued and raised in a party’s opening
brief are waived.").
Claims Five and Six
Plaintiffs’ opening brief fails to contest the district court’s decision not to
exercise supplemental jurisdiction over their state law claims. Accordingly,
Plaintiffs have waived their right to appeal the dismissal of their state law claims.
See Fields v. Palmdale Sch. Dist., 427 F.3d 1197, 1203 n.6 (9th Cir. 2005)
(concluding that, by failing to raise the issue in their opening brief, the plaintiffs
waived any right to appeal the district court’s decision not to exercise supplemental
jurisdiction over their remaining state law claims).
AFFIRMED.
3