FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`WESTON FAMILY PARTNERSHIP
`LLLP; THE TWITTER INVESTOR
`GROUP,
`
`Plaintiffs-Appellants,
`
` No. 20-17465
`
`D.C. No.
`4:19-cv-07149-
`YGR
`
`
`OPINION
`
`and
`
`
`KHAN M. HASAN; KHAFRE
`BARCLIFT,
`
`Plaintiffs,
`
`
`
`
`
`v.
`
`
`TWITTER, INC.; JACK DORSEY; NED
`SEGAL,
`
`Defendants-Appellees.
`
`Appeal from the United States District Court
`for the Northern District of California
`Yvonne Gonzalez Rogers, District Judge, Presiding
`
`Argued and Submitted November 10, 2021
`Pasadena, California
`
`Filed March 23, 2022
`
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`WESTON FAMILY PARTNERSHIP
`LLLP; THE TWITTER INVESTOR
`GROUP,
`
`Plaintiffs-Appellants,
`
` No. 20-17465
`
`D.C. No.
`4:19-cv-07149-
`YGR
`
`
`OPINION
`
`and
`
`
`KHAN M. HASAN; KHAFRE
`BARCLIFT,
`
`Plaintiffs,
`
`
`
`
`
`v.
`
`
`TWITTER, INC.; JACK DORSEY; NED
`SEGAL,
`
`Defendants-Appellees.
`
`Appeal from the United States District Court
`for the Northern District of California
`Yvonne Gonzalez Rogers, District Judge, Presiding
`
`Argued and Submitted November 10, 2021
`Pasadena, California
`
`Filed March 23, 2022
`
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`Before: Daniel P. Collins and Kenneth K. Lee, Circuit
`Judges, and Jill A. Otake,* District Judge.
`
`Opinion by Judge Lee
`
`
`SUMMARY**
`
`2
`
`
`
`
`
`Securities Fraud
`
`
`The panel affirmed the district court’s dismissal of a
`
`securities fraud lawsuit under §§ 10(b) and 20(a) of the
`Securities Exchange Act and Rule 10b-5, alleging that
`Twitter, Inc., misled investors by hiding the scope of
`software
`bugs
`that
`hampered
`its
`advertisement
`customization.
`
`Twitter shares users’ cell phone location data with
`
`companies that pay more for ads tailored to certain users, but
`it permits users to opt out of such data-sharing. In May 2019,
`Twitter announced that it had discovered software bugs that
`caused sharing of cell phone location data of its users, but it
`told its users that it had fixed the problems. In August 2019,
`Twitter announced that it had again accidentally shared user
`data with advertisers, even for those who had opted out, but
`it had “fixed these issues.” Twitter had not resolved the
`software bugs, but instead had stopped sharing user data
`altogether for its Mobile App Promotion advertising
`
`* The Honorable Jill A. Otake, United States District Judge for the
`District of Hawaii, sitting by designation.
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`
`
`program, resulting in a drop in revenue. In October 2019,
`Twitter disclosed the software bugs and reported a revenue
`shortfall, and its share price dropped.
`
`The panel held that it had jurisdiction because plaintiffs
`
`appealed a non-final order dismissing with leave to amend,
`but the district court ultimately issued a final order and thus
`cured the premature notice of appeal under Federal Rule of
`Appellate Procedure 4(a)(2).
`
`The panel held that plaintiffs’ complaint failed to state a
`
`claim under § 10(b) because Twitter’s statements were not
`false or materially misleading. The panel held that the
`securities laws do not require real-time business updates or
`complete disclosure of all material information whenever a
`company speaks on a particular topic. To the contrary, a
`company can speak selectively about its business so long as
`its statements do not paint a misleading picture. The panel
`held that Twitter’s statements about its advertising program
`were not false or misleading because they were qualified and
`factually true, and the company had no duty to disclose more
`than it did under federal securities law. Specifically,
`securities laws did not require Twitter to provide real-time
`updates about the progress of its Mobile App Promotion
`program. Further, plaintiffs did not plausibly or with
`particularity allege that the software bugs disclosed in
`August had materialized and affected revenue in July. In
`addition, Twitter’s July 2019 statements fell within the
`Exchange Act’s safe harbor provision for forward-looking
`statements.
`
`
`
`
`3
`
`
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`4
`
`
`COUNSEL
`
`
`Tamar Weinrib (argued) and Jeremy A. Lieberman,
`Pomerantz LLP, New York, New York; Jeffrey P. Campisi,
`Robert N. Kaplan, and Jason A. Uris, Kaplan Fox &
`Kilsheimer LLP, New York, New York; Laurence D. King
`and Mario M. Choi, Kaplan Fox & Kilsheimer LLP,
`Oakland, California; Shannon L. Hopkins and Andrew E.
`Lencyk, Levi & Korinsky LLP, Stamford, Connecticut; for
`Plaintiffs-Appellants.
`
`Susan E. Engel (argued), Andrew B. Clubok, and Matthew
`Peters, Latham & Watkins LLP, Washington, D.C.;
`Michele D. Johnson, Latham & Watkins LLP, Costa Mesa,
`California; Elizabeth L. Deeley and Nicholas Rosellini,
`Latham & Watkins LLP, San Francisco, California; for
`Defendants-Appellees.
`
`
`
`OPINION
`
`LEE, Circuit Judge:
`
`Every day, millions of people use Twitter to share and
`read news, offer (often horrendous) hot takes, and fire off
`mean tweets. Twitter, in turn, mines the personal data of its
`users to better target advertisements. In August 2019,
`Twitter revealed that it had inadvertently shared with
`advertisers the personal data of users who had opted out of
`data-sharing, but it reassured its users that it had “fixed these
`issues.” A few months later during its quarterly earnings
`announcement, Twitter disclosed that software bugs had
`hampered its advertisement customization and that it had
`suffered a $25 million revenue shortfall. The plaintiffs then
`filed this securities fraud lawsuit, alleging that Twitter had
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`
`
`misled investors by hiding the scope of its software bugs
`when it touted its latest advertisement initiative.
`
`5
`
`Securities laws, however, do not require real-time
`business updates or complete disclosure of all material
`information whenever a company speaks on a particular
`topic. To the contrary, a company can speak selectively
`about its business so long as its statements do not paint a
`misleading picture. Twitter’s
`statements about
`its
`advertising program were not false or misleading because
`they were qualified and factually true. The company had no
`duty to disclose any more than it did under federal securities
`law. We thus affirm the district court’s dismissal of the
`lawsuit.
`
`BACKGROUND1
`
`Twitter operates a social media platform that allows
`people to share short 280-character messages to the public.
`Like most social media outlets, Twitter does not charge its
`users but rather earns money through advertising. Twitter
`shares certain user data—e.g., cell phone location data—
`with companies that pay more for ads tailored to certain
`users. But because of privacy concerns, Twitter has
`permitted users to opt out of such data-sharing since 2017.
`
`At issue is Twitter’s Mobile App Promotion (“MAP”)
`product, which allows advertisers to prompt users to
`download their apps onto their phones or tablets. MAP is
`most effective when an advertiser knows information about
`the user’s device settings, such as its operating system or
`
`
`1 These facts come from the Consolidated Class Action Complaint
`and are accepted as true for this appeal. See Nguyen v. Endologix, Inc.,
`962 F.3d 405, 408 (9th Cir. 2020).
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`6
`
`which apps the user has already downloaded. Twitter has
`highlighted MAP as an important driver of Twitter’s future
`revenue growth, and has invested in an improved, next
`generation MAP product.
`
`Despite its earlier pledge to allow user opt-outs, Twitter
`announced in a May 13, 2019 blog post that it had discovered
`software bugs that caused sharing of cell phone location data
`of its users. Twitter, however, told its users that it had fixed
`the problems. Then about three months later on August 6,
`Twitter announced in a tweet that it had again accidentally
`shared user data with advertisers, even for those who had
`opted out. The accompanying web post stated:
`
`At Twitter, we want to give you control over
`your data, including when we share that
`data. . . . [W]e recently found issues where
`our setting choices may not have worked as
`intended. . . .
`
`We fixed these issues on August 5, 2019.
`We know you will want to know if you were
`personally affected, and how many people in
`total were involved. . . .
`
`What is there for you to do? Aside from
`checking your settings, we don’t believe
`there is anything for you to do.
`
`When Twitter said that it had “fixed these issues,” it did
`not mean resolving the software bugs, which proved to be
`difficult. Rather, Twitter had stopped sharing user data for
`its MAP advertising program altogether. This meant no data-
`sharing for all users and thus also less revenue from MAP.
`Twitter did not disclose these facts at that time. And
`
`
`
`7
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`
`
`according to the complaint, Jack Dorsey, Twitter’s Chief
`Executive Officer, and Ned Segal, its Chief Financial
`Officer, had access to the company’s key performance
`metrics,
`including Cost Per Ad Engagement, which
`allegedly would have flagged this brewing problem with
`MAP.
`
`Finally, about 11 weeks later on October 24, Twitter in
`its quarterly earnings report disclosed the software bugs
`hampering MAP and reported a $25 million revenue
`shortfall. In response
`to
`this news, some analysts
`downgraded the stock and the share price dropped over 20%.
`
`Within five days of this announcement, Khan Hasan, an
`individual investor, filed a putative class action on behalf of
`all persons who bought Twitter’s stock between July 26,
`2019 and October 23, 2019 against Twitter and its two top
`executives, Dorsey and Segal. Under the Private Securities
`Litigation Reform Act of 1995 (“PSLRA”), 15 U.S.C. § 78u-
`4, the district court consolidated it with another similar
`action, and named the Weston Family Partnership, LLP and
`the Twitter Investor Group as co-lead plaintiffs and counsel
`for the class. Plaintiffs then filed a consolidated class action
`complaint. The complaint alleged violations of Section 10(b)
`of the Securities and Exchange Act of 1934, 15 U.S.C.
`§ 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5. It also
`included a claim against Dorsey and Segal for control person
`liability under Section 20(a) of the Exchange Act, 15 U.S.C.
`§ 78t.
`
`Plaintiffs allege that these statements were false or
`materially misleading:
`
`(1) Twitter’s July 26, 2019 shareholder letter and July
`31, 2019 Form 10-Q stated the company is
`“continuing [its] work to increase the stability,
`
`
`
`8
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`performance, and flexibility of [its] ads platform and
`[MAP],” but that it is “not there yet” and that this
`work will “take place over multiple quarters, with a
`gradual impact on revenue.” Segal added that the
`company is “still in the middle of that work” [relating
`to MAP improvements], and that it is “still at the
`state where [he] believe[s] that you would see its
`impact be gradual in nature.” Plaintiffs allege that
`these statements are false because the defendants did
`not disclose the software bugs allegedly plaguing
`MAP then and suggested that MAP was on track.
`
`(2) The Form 10-Q also contained warnings that the
`company’s products and services “may contain
`undetected software errors, which could harm [its]
`business and operating results.” Plaintiffs claim that
`this statement
`is misleading because Twitter
`supposedly knew by this time that “software errors”
`would—not just “may”—harm the bottom line.
`
`(3) Because of the allegedly false or misleading
`statements in the 10-Q filing, Twitter’s Sarbanes-
`Oxley (SOX) certifications signed by Dorsey and
`Segal were also false or misleading.
`
`(4) On August 6, 2019, the company issued a tweet that
`stated: “We recently discovered and fixed issues
`related to your settings choices for the way we
`deliver personalized ads, and when we share certain
`data with trusted management and advertising
`partners,” and Twitter’s Help Center claimed that it
`“fixed these issues on August 5, 2019.” Plaintiffs
`assert that this statement misleadingly suggested
`Twitter had solved the software bugs, not just the
`privacy leak.
`
`
`
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`9
`
`(5) On September 4, 2019 at an investor conference,
`Segal stated that the company’s “MAP work is
`ongoing” and that Twitter “continued to sell the
`existing MAP product.” Plaintiffs again claim that
`Twitter failed to disclose the scope of the software
`bugs hindering MAP.
`
`(6) At the same conference, Segal stated that “Asia . . .
`has tended to be more MAP-focused historically.”
`This statement, according to Plaintiffs, glossed over
`MAP’s software bugs.
`
`The defendants filed a Rule 12(b)(6) motion to dismiss,
`arguing that Plaintiffs failed to (1) allege statements that are
`materially false or misleading, or are otherwise actionable;
`(2) establish a strong inference of scienter; and (3) establish
`loss causation. The district court granted the motion on the
`first two grounds, but it did not address loss causation. And
`because the Section 20(a) control liability claim relies on the
`same allegations as the Section 10(b) claim, the district court
`also dismissed it. The district court granted leave to amend,
`but Plaintiffs did not file an amended complaint and instead
`filed the notice of appeal. Then several days later, the district
`court sua sponte considered the claims dismissed and closed
`the case.
`
`STANDARD OF REVIEW
`
`We review de novo a district court’s dismissal of a
`complaint under Federal Rule of Civil Procedure 12(b)(6).
`See Reese v. Malone, 747 F.3d 557, 567 (9th Cir. 2014). The
`court may consider all materials incorporated into the
`complaint by reference, as well as evidence properly subject
`to judicial notice. See Metzler Inv. GMBH v. Corinthian
`Colls., Inc., 540 F.3d 1049, 1061 (9th Cir. 2008) (citation
`omitted). When assessing the adequacy of a complaint, we
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`10
`
`accept all factual allegations as true and view them in the
`light most favorable to the plaintiff. Id. (citation omitted).
`We can affirm the dismissal of a complaint on any grounds
`supported by the record. See Salameh v. Tarsadia Hotel,
`726 F.3d 1124, 1129 (9th Cir. 2013).
`
`Under Rule 12(b)(6), a complaint should be dismissed if
`it fails to include “enough facts to state a claim to relief that
`is plausible on its face.” Bell Atl. Corp. v. Twombly,
`550 U.S. 544, 570 (2007). A complaint’s claims are
`plausible when the pleaded facts “allow[] the court to draw
`the reasonable inference that the defendant is liable for the
`misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
`(2009). Actions for securities fraud brought under the
`Exchange Act
`face
`“more
`demanding
`pleading
`requirements” set out in Rule 9(b) and the PSLRA, which
`are detailed below. In re Rigel Pharms., Inc. Sec. Litig.,
`697 F.3d 869, 876 (9th Cir. 2012).
`
`ANALYSIS
`
`I. We Have Appellate Jurisdiction Because the District
`Court Ultimately Issued a Final Order.
`
`To start, the defendants argue that this court lacks
`jurisdiction to hear this appeal because Plaintiffs appealed a
`non-final order.
`
`28 U.S.C. § 1291 provides that the “courts of appeals . . .
`shall have jurisdiction of appeals from all final decisions of
`the district courts of the United States.” A decision is “final”
`under § 1291 if it “(1) is a full adjudication of the issues, and
`(2) clearly evidences the judge’s intention that it be the
`court’s final act in the matter.” Disabled Rts. Action Comm.
`v. Las Vegas Events, Inc., 375 F.3d 861, 870 (9th Cir. 2004)
`(citation omitted). So typically, orders dismissing claims
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`
`
`with leave to amend are considered not final and thus not
`appealable as of right. See WMX Techs., Inc. v. Miller,
`104 F.3d 1133, 1136 (9th Cir. 1997).
`
`11
`
`But that does not end our analysis. Citing Rule 4(a)(2) of
`the Federal Rules of Appellate Procedure,2 we have
`recognized that “[w]hether Plaintiffs’ notice of appeal was
`premature or not, the final disposition of the case by the
`district court cures any timeliness defects of their appeal.”
`Floyd v. Am. Honda Motor Co., 966 F.3d 1027, 1032 (9th
`Cir. 2020). In Floyd, the district court filed its final order of
`dismissal two weeks after the plaintiff’s notice of appeal and
`six weeks after the order dismissing the claims. Id. at 1031.
`Stating that there is “no penalty for filing a premature notice
`of appeal,” the court held that it had jurisdiction to review
`the appeal because the district court effectively cured the
`premature notice of appeal when it later issued a final order.
`Id. at 1032 (quoting Orr v. Plumb, 884 F.3d 923, 931 (9th
`Cir. 2018)); accord Hall v. N. Am. Van Lines, Inc., 476 F.3d
`683, 686 (9th Cir. 2007) (considering a premature appeal to
`have been taken from the judgment entered subsequent to a
`notice to appeal). See also Fed. R. App. P. 4(a)(2) advisory
`committee’s note to 1979 amendments (explaining that it
`was “designed to avoid the loss of the right to appeal by
`filing the notice of appeal prematurely”).
`
`This case is analogous to Floyd and Hall. Plaintiffs filed
`a premature notice of appeal because the district court had
`given leave to amend when it dismissed the complaint. If we
`heard the case just after the notice of appeal had been filed,
`we would not have had appellate jurisdiction because the
`
`2 “A notice of appeal filed after the court announces a decision or
`order—but before the entry of the judgment or order—is treated as filed
`on the date of and after the entry.” Fed. R. App. P. 4(a)(2).
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`12
`
`order was not final. But the district court within a few days
`issued a final order, thus vesting this court with appellate
`jurisdiction.
`
`The defendants rest their argument on WMX Techs. v.
`Miller, 104 F.3d 1133 (9th Cir. 1997). In that case, WMX
`sought appellate review of an order in which the district
`court dismissed some of its claims with leave to amend. Id.
`at 1134. We dismissed for lack of appellate jurisdiction
`because “a plaintiff, who has been given leave to amend,
`may not file a notice of appeal simply because he does not
`choose to file an amended complaint. A further district court
`determination must be obtained.” Id. at 1136. That last
`sentence is key: unlike here, the district court in that case had
`not received a “further district court determination”—a final
`order dismissing the case—by the time we heard the appeal.
`So the district court never cured the premature appeal under
`Rule 4(a)(2). In our case, the district court issued a final
`order dismissing the case, giving us jurisdiction to hear the
`appeal. Id. at 1136–37 (“[W]hen a district court expressly
`grants leave to amend, it is plain that the order is not
`final. . . . [and] [a] final judgment must be obtained before
`the case becomes appealable.”).
`
`II. The Complaint Fails to State a Claim Under Section
`10(b) Because Twitter’s Statements Are Not False or
`Materially Misleading.
`
`Section 10(b) of the Exchange Act makes it unlawful:
`
`To use or employ, in connection with the
`purchase or sale of any security registered on
`a national securities exchange
`. . . any
`manipulative or deceptive device or
`contrivance in contravention of such rules
`and regulations as the [SEC] may prescribe
`
`
`
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`13
`
`as necessary or appropriate in the public
`interest or for the protection of investors.
`
`15 U.S.C. § 78j(b). The SEC, in turn, issued Rule 10b-5,
`which declares it unlawful:
`
`(a) To employ any device, scheme, or artifice
`to defraud,
`
`(b) To make any untrue statement of a
`material fact or to omit to state a material fact
`necessary in order to make the statements
`made, in the light of the circumstances under
`which they were made, not misleading, or
`
`(c) To engage in any act, practice, or course
`of business which operates or would operate
`as a fraud or deceit upon any person,
`
`in connection with the purchase or sale of any
`security.
`
`17 C.F.R. § 240.10b-5.
`
`To state a claim under Section 10(b) of the Exchange Act
`and Rule 10b-5, the complaint must plausibly allege: “(1) a
`material misrepresentation or omission by the defendant;
`(2) scienter; (3) a connection between the misrepresentation
`or omission and the purchase or sale of a security;
`(4) reliance upon
`the misrepresentation or omission;
`(5) economic loss; and (6) loss causation. Halliburton Co. v.
`Erica P. John Fund, Inc., 573 U.S. 258, 267 (2014) (citations
`omitted).
`
`For a statement to be false or misleading, it must
`“directly contradict what the defendant knew at that time” or
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`14
`
`information.” Khoja v. Orexigen
`“omit[] material
`Therapeutics, Inc., 899 F.3d 988, 1008–09 (9th Cir. 2018);
`see also 15 U.S.C. § 78u-4(b)(1)(A)–(B).
`
`Plaintiffs must also overcome several hurdles to
`successfully plead a claim under Section 10(b). First, under
`the PSLRA’s particularity requirements and Federal Rule of
`Civil Procedure 9(b), allegations of “fraud must be
`accompanied by the who, what, when, where, and how of the
`misconduct charged.” Kearns v. Ford Motor Co., 567 F.3d
`1120, 1124 (9th Cir. 2009) (cleaned up); see also 15 U.S.C.
`§ 78u-4(b)(1). Second, an allegedly misleading statement
`must be “capable of objective verification.” Or. Pub. Emps.
`Ret. Fund v. Apollo Grp. Inc., 774 F.3d 598, 606 (9th Cir.
`2014). For example, “puffing”—expressing an opinion
`rather than a knowingly false statement of fact—is not
`misleading. Id.; see also Lloyd v. CVB Fin. Corp., 811 F.3d
`1200, 1206–07 (9th Cir. 2016). Third, a statement is not
`actionable just because it is incomplete. In re Vantive Corp.
`Sec. Litig., 283 F.3d 1079, 1085 (9th Cir. 2002). Section
`10(b) and Rule 10b-5(b) “do not create an affirmative duty
`to disclose any and all material information. Disclosure is
`required . . . only when necessary ‘to make . . . statements
`made, in the light of the circumstances under which they
`were made, not misleading.’” Matrixx Initiatives, Inc. v.
`Siracusano, 563 U.S. 27, 44 (2011) (quoting 17 C.F.R.
`§ 240.10b-5(b)). Finally, even if a statement is objectively
`false or misleading, the PSLRA provides a “safe harbor” for
`forward-looking statements if such statements are either
`identified as forward-looking and accompanied by a
`meaningful cautionary statement, or if the plaintiff fails to
`show that the statement was made with actual knowledge
`that it was false or misleading. See 15 U.S.C. § 78u-5(c)(1);
`see also In re Cutera Sec. Litig., 610 F.3d 1103, 1108 (9th
`Cir. 2010).
`
`
`
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`15
`
`A. Securities laws do not require Twitter to provide
`real-time updates about the progress of its MAP
`program.
`
`Plaintiffs suggest that Twitter—when faced with a
`setback in dealing with software bugs plaguing its MAP
`program—had a legal duty to disclose it to the investing
`public. Not so. While society may have become accustomed
`to being instantly in the loop about the latest news (thanks in
`part to Twitter), our securities laws do not impose a similar
`requirement. Section 10(b) and Rule 10b-5 “do not create an
`affirmative duty
`to disclose any and all material
`information.” Matrixx, 563 U.S. at 44.
`
`Put another way, companies do not have an obligation to
`offer an instantaneous update of every internal development,
`especially when it involves the oft-tortuous path of product
`development. See Vantive, 283 F.3d at 1085 (“If the
`challenged statement is not false or misleading, it does not
`become actionable merely because it is incomplete.”).
`Indeed, to do so would inject instability into the securities
`market, as stocks may wildly gyrate based on even fleeting
`developments. A company must disclose a negative internal
`development only if its omission would make other
`statements materially misleading. Matrixx, 563 U.S. at 45
`(“Even with respect to information that a reasonable investor
`might consider material, companies can control what they
`have to disclose under these provisions by controlling what
`they say to the market.”).
`
`Plaintiffs argue that Twitter’s failure to disclose the
`software bugs’ impact on MAP in July 2019 was materially
`misleading because its prior statements had allegedly left a
`“misimpression” that the work to improve MAP was “on
`track.” But a closer examination of the statements reveals a
`much more qualified and less definitive characterization of
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`16
`
`the MAP program. For example, the July 2019 shareholder
`letter and 10-Q stated that Twitter is “continuing [its] work
`to increase the stability, performance, and flexibility of [its]
`ads platform and [MAP] . . . but we’re not there yet.”
`Similarly, the CFO explained that the company is “still in the
`middle of that work” relating to MAP. And later in
`September of that same year, the CFO again reiterated that
`the “MAP work is ongoing.”
`
`None of these statements suggests that Twitter’s MAP
`program was “on track.” Rather, they suggest a vaguely
`optimistic assessment that MAP, like almost all product
`developments, has had its ups and downs, even as the
`company continues to make progress.3 Perhaps if Twitter
`had set a specific deadline or revenue impact for MAP, its
`somewhat optimistic statements could seem like an implied
`affirmation of that target.4 But Twitter never made such
`specific or unqualified guidance. And with no such
`guidance, Twitter’s statements are so imprecise and
`noncommittal
`that
`they are
`incapable of objective
`verification. See Apollo, 774 F.3d at 606 (distinguishing
`non-actionable vague puffery from statements capable of
`objective verification); In re Cutera Sec. Litig., 610 F.3d
`
`
`3 Even in everyday conversation, such phrases do not reflect that
`everything is on track without a hitch. Suppose someone is building an
`item of IKEA furniture and a spouse asks about its status. A response
`such as “I’m in the middle of it but I’m not there yet,” “I’m continuing
`it,” or “It’s ongoing” does not misleadingly suggest that the person has
`not suffered setbacks (e.g., finding a mysterious extra screw) in building
`that piece of furniture.
`
`4 Even then, an express statement of the company being “on track”
`to meet a target would likely be protected as a forward-looking statement
`under the safe harbor provision of the PSLRA. Wochos v. Tesla, Inc.,
`985 F.3d 1180, 1192 (9th Cir. 2021).
`
`
`
`17
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`
`
`at 1111 (“[M]ildly optimistic, subjective assessment hardly
`amounts to a securities violation.”). Nor can it be said that
`the company “tout[ed] positive information to the market”
`such that it “[became] bound to do so in a manner that
`wouldn’t mislead investors, including disclosing adverse
`information that cuts against the positive information.”
`Khoja, 899 F.3d at 1009.
`
`In short, Twitter had no legal duty to disclose
`immediately the software bugs in its MAP program,
`especially given that its earlier statements about MAP’s
`progress were qualified and vague.
`
`B. Plaintiffs have not plausibly or with particularity
`alleged that the software bugs disclosed in August
`had materialized and affected revenue in July.
`
`Because Twitter disclosed “issues” about its legacy
`MAP product on August 6, 2019, the defendants must have
`known about those issues in July, according to Plaintiffs.
`Plaintiffs thus argue that it is reasonable to infer that the
`defendants must have taken steps to address those issues in
`July (which decreased revenue in July), and that the
`defendants’ challenged statements were therefore false and
`misleading. But it is simply not enough to assume or
`implausibly infer that the defendants must have known about
`these issues in July based on later facts or developments. Yet
`Plaintiffs repeatedly rely on future statements to leap to that
`conclusion.
`
`For example, the complaint alleges that the defendants
`misled investors in their July 2019 shareholder letter and 10-
`Q filing when they asserted that they are “continuing [their]
`work to increase the stability, performance and scale of
`[their] ads platform and [MAP] . . . . but we’re not there yet.”
`According to Plaintiffs, these statements created the
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`18
`
`“misimpression that [d]efendants’ work to improve MAP
`was on track[] and would lead to increased revenue,” even
`as the company struggled to fix the software bugs in the
`MAP program. They similarly allege that Twitter’s risk
`warning in its July 2019 10-Q filing that its “product and
`services may contain undetected software errors, which
`could harm our business and operating results,” was
`misleading because the risk had materialized by then.
`
`Plaintiffs’ falsity allegations thus presume that the
`defendants knew (i) in July 2019 about the software bugs in
`its legacy MAP product and (ii) that those bugs have caused
`a delay the development of the next generation MAP. But
`the complaint does not plausibly allege either.
`
`First, Plaintiffs do not adequately allege that the
`defendants knew of the software bugs as of July 2019 when
`they discussed MAP’s progress. Plaintiffs hitch their wagon
`on Twitter’s August 6, 2019 statement that it “recently
`discovered” the issues to leap to the conclusion that it knew
`about them in July 2019. But nothing in the complaint
`suggests that the company knew of the bugs in July 2019.
`And this court has held that, without more, temporal
`proximity alone does not satisfy
`the particularity
`requirements of Rule 9(b). See Yourish v. Cal. Amplifier,
`191 F.3d 983, 997 (9th Cir. 1999). So Plaintiffs have not
`adequately alleged that Twitter even knew about these
`software bugs when it discussed MAP’s progress in July
`2019.
`
`Plaintiffs argue that “the only plausible inference” from
`the timeline is that Twitter must have discovered the
`software bugs in July 2019 because these types of bugs,
`according to their confidential informant, take three to six
`months to fix. Put differently, Plaintiffs assume that
`Twitter’s August 6, 2019 tweet and blog post—which
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`
`
`announced the discovery and the fix of the data-sharing
`privacy issues—was referring to the fix of the software bugs,
`and not just a halt to the data-sharing.
`
`19
`
`But Twitter’s August 6 Help Center blog post said no
`such thing. The context makes clear that Twitter had “fixed”
`the inadvertent data-sharing; there is no mention of software
`bugs, let alone ridding of them. See Retail Wholesale &
`Dep’t Store Union Local 338 Ret. Fund v. Hewlett-Packard
`Co., 845 F.3d 1268, 1278 (9th Cir. 2017) (“[A] duty to
`provide information exists only where statements were made
`which were misleading in light of the context surrounding
`the statements.” (emphasis added)). The blog post starts off
`by noting that Twitter wants “to give you control over your
`data” but that it had “recently found issues” of inadvertent
`data-sharing. The post then states: “We fixed these issues on
`August 5, 2019. We know you will want to know if you were
`personally affected . . . . What is there to do? Aside from
`checking your settings, we don’t believe there is anything for
`you to do.” These statements address Twitter users’
`concerns about their privacy, and thus the “fix” related to
`privacy leaks, not software bugs that are not even mentioned
`in the blog post. In short, an ordinary investor would not read
`Twitter’s Help Center blog post as saying that Twitter had
`remediated the software issues.
`
`Second, even if Twitter knew of the software bugs in
`July 2019, Plaintiffs’ theory of deception makes sense only
`if those software bugs in the legacy MAP program delayed
`the new version of MAP. In support of that assumption,
`Plaintiffs can marshal only Segal’s statement that “[t]he
`biggest impact from a resourcing perspective when things
`like [the software bugs] come up is that we—people, we end
`shifting, or people are spending their time sometimes where
`we work on remediation when we may have preferred to
`
`
`
`WESTON FAMILY PARTNERSHIP V. TWITTER
`
`20
`
`work on other things.” But that statement says nothing about
`the software bugs supposedly delaying the next generation
`MAP. To the contrary, the complaint acknowledges that as
`of February 2020—after Twitter disclosed the bugs in legacy
`MAP and continued to work on them—the company made
`progress on the next generation MAP. At one point in their
`brief, Plaintiffs veer from their allegations in their complaint,
`and make the new bold claim that Twitter’s efforts on the
`next generation MAP “stopped cold” because of the privacy
`bugs in legacy MAP. But the complaint contains no such
`allegations, let alone provides sufficient particularity to
`support them.5
`
`In sum, Plaintiffs have failed to plausibly allege falsit
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