throbber
Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 1
`FILED
`United States Court of Appeals
`Tenth Circuit
`PUBLISH
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`August 21, 2023
`UNITED STATES COURT OF APPEALS
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`Christopher M. Wolpert
`FOR THE TENTH CIRCUIT
`Clerk of Court
`_______________________________________
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`No. 22- 5013
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`MEITAV DASH PROVIDENT
`FUNDS AND PENSION LTD.;
`GARY SMITH, individually and on
`behalf of all others similarly
`situated; CITY OF MIAMI FIRE
`FIGHTERS’ AND POLICE
`OFFICERS’ RETIREMENT TRUST,
`
` Plaintiffs - Appellants,
`
`and
`
`JACOB GOLDMAN, individually
`and on behalf of all others similarly
`situated; EMPLOYEES’
`RETIREMENT SYSTEM OF THE
`CITY OF PROVIDENCE,
`
` Plaintiffs,
`
`v.
`
`SPIRIT AEROSYSTEMS
`HOLDINGS, INC.; THOMAS C.
`GENTILE, III; JOSE GARCIA;
`JOHN GILSON; SHAWN
`CAMPBELL,
`
` Defendants - Appellees.
`___________________________________________
`
`APPEAL FROM THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF OKLAHOMA
`(D.C. No. 4:20 -CV-00054- SPF- JFJ)
`_________________________________________
`
`

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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 2
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`Irina Vasilchenko, Labaton Sucharow LLP, New York, New York (Brian
`Calandra, and Jeremy A. Lieberman, Pomerantz LLP, New York, New
`York; Patrick V. Dahlstrom, Pomerantz LLP, Chicago, Illinois ; James W.
`Johnson, David J. Schwartz, Geoffrey C. Jarvis, Kessler Topaz Meltzer &
`Check, LLP, Radnor, Pennsylvania; John W. Dowdell and James M. Reed,
`Hall Estill Law Firm, Tulsa, Oklahoma ; Peretz Bronstein, Bronstein,
`Gewirtz & Grossman, New York, New Yok, with her on the briefs ), for
`Plaintiffs- Appellants.
`
`John Wander, Vinson & Elkins, LLP, Dallas, Texas (C. Austin Birnie and
`R. Richard Love, III, Conner & Winters, LLP, Tulsa, Oklahoma; Michael
`Holmes and Robert Ritchie, Vinson & Elkins, LLP, Dallas, Texas; Mary
`Quinn Cooper, Jessica L. Dickerson and Spencer F. Smith, McAfee & Taft
`P.C., Tulsa, Oklahoma; Patrick Smith and Andrew Rodgers, Smith Villazor
`LLP, New York, New York; John Christopher Davis, Johnson & Jones,
`Tulsa, Oklahoma; Daniel Gold, Shearman & Sterling LLP, Dallas, Texas ,
`with him on the brief), for Defendant s-Appellees.
`__________________________________________
`
`Before BACHARACH, PHILLIPS, and MORITZ , Circuit Judges.
`___________________________________________
`
`BACHARACH, Circuit Judge.
`___________________________________________
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`This appeal involves claims for securities fraud against Spirit
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`AeroSystems, Inc., and four of its executives. Spirit produced shipsets of
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`components for jetliners, including Boeing’s 737 MAX. But Boeing
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`stopped producing the 737 MAX, and Spirit’s sales tumbled. At about the
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`same time, Spirit acknowledged an unexpected loss from inadequate
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`accounting controls.
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`After learning about Spirit’s downturn in sales and the inade quacies
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`in accounting controls, some investors sued Spirit and four executives for
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`2
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`

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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 3
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`securities fraud. See 17 C.F.R. § 240.10b–5. The district court dismissed
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`the suit, and the investors appealed.
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`For claims involving securities fraud, pleaders bear a stiff burden
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`when alleging scienter. In our view, the investors have not satisfied that
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`burden. So we affirm the dismissal.
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`1.
`
`Spirit reassures investors, but Boeing then halts production of the
`737 MAX.
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`When two jetliners crashed, the Federal Aviation Administration
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`grounded flights for the 737 MAX. After the grounding, Boeing reduced
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`production of the 737 MAX from 52 jetliners per month to 42. But Boeing
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`kept purchasing the same monthly number of shipsets (52) from Spirit.
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`These purchases proved critical to Spirit, which obtained roughly
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`half of its yearly revenue from sales of the shipsets to Boeing. So investors
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`nervously monitored Boeing’s continued purchases from Spirit.
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`Spirit’s chief executive officer (Thomas Gentile, III) allegedly
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`reassured investors in a call on October 31, 2019, stating that Spirit would
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`“be at 52 [shipsets of components produced per month] for an extended
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`period of time.” 1 Appellants’ App’x vol. 2, at 244. On the same day,
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`Mr. Gentile, Spirit’s chief financial officer (Jose Garcia), and Spirit’s
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`corporate controller (John Gilson) filed documents with the Securities and
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`The allegedly fraudulent statements are listed in the appendix. See
`1
`pp. 41–45, below.
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`3
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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 4
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`Exchange Commission, stating that Spirit expected to continue selling
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`Boeing 52 shipsets every month.
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`On November 24, 2019, a market observer reported on “takeaways”
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`from a meeting with Spirit executives. This report suggested that Spirit
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`would continue monthly sales of 52 shipsets until at least May 2020. On
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`December 16, 2019, Boeing announced that it would soon temporarily stop
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`producing the 737 MAX.
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`
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`Three days later, Boeing told Spirit to stop delivering shipsets for the 737
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`MAX. The next day, Spirit disclosed that it would stop producing the
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`shipsets. 2
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`The complaint sometimes frames Spirit’s economic hardship as a
`2
`decline in Spirit’s production rather than in its sales. See, e.g., Appellants ’
`App’x vol. 1, at 29 (alleging that “Boeing told Spirit to cut production of
`the 737 MAX in half”). But a decline in Spirit’s production led to a decline
`in sales. We thus refer to the decline in Spirit’s production as a decline in
`Spirit’s sales.
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`4
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`More bad news followed, this time about Spirit’s method of
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`accounting for contingent liabilities. Spirit had filed documents on October
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`31, 2019, certifying the adequacy of its accounting controls. Months later ,
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`Spirit disclosed that
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`•
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`material weaknesses had existed in the accounting controls and
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`two executives (Jose Garcia and John Gilson) had quit.
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`At about the same time, S pirit fired another executive (Shawn Campbell) .
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`•
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`When investors learned of Boeing’s halt in production and the
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`inadequacy of Spirit’s accounting controls, Spirit’s stock price plummeted .
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`2.
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`The plaintiffs must plead facts giving rise to a strong inference of
`scienter.
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`When considering the district court’s grant of the defendants’ motion
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`to dismiss, we conduct de novo review. Nakkhumpun v. Taylor, 782 F.3d
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`1142, 1146 (10th Cir. 2015). When conducting that review, we credit the
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`allegations in the complaint and view them in the light most favorable to
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`the plaintiffs. Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir. 2006).
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`Though we view the allegations favorably to the plaintiffs, federal
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`law creates a heavy burden on claimants alleging securities fraud. See In re
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`Level 3 Commc’ns, Inc. Sec. Litig., 667 F.3d 1331, 1333 (10th Cir. 2012)
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`(“A plaintiff suing under Section 10(b) [of the Exchange Act] bears a
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`heavy burden at the pleading stage.”). This burden requires the plaintiffs to
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`“state with particularity facts giving rise to a strong inference that the
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`5
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`defendant[s] acted with” scienter. Smallen v. W. Union Co., 950 F.3d 1297,
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`1305 (10th Cir. 2020) (emphasis & alteration in original) (quoting In re
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`Level 3, 677 F.3d at 1333); see 15 U.S.C. § 78u-4(b)(2)(A) (requiring the
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`pleader to “state with particularity facts giving rise to a strong inference”
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`of scienter).
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`To assess the strength of this inference, we “consider . . . competing
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`inferences rationally drawn from the facts alleged.” Tellabs, Inc. v. Makor
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`Issues & Rts. , Ltd., 551 U.S. 308, 314 (2007). An inference of scienter is
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`considered “strong” only if proof of the allegations would lead a
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`reasonable factfinder to determine that an inference of fraudulent intent or
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`recklessness is at least as compelling as an innocent inference. See
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`Smallen, 950 F.3d at 1305 (fraudulent intent); In re Zagg, Inc. Sec. Litig.,
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`797 F.3d 1194, 1200– 01 (10th Cir. 2015) (recklessness). “Conduct is
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`considered reckless only if the defendants (1) acted in ‘an extreme
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`departure from the standards of ordinary care’ and (2) presented ‘a danger
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`of misleading buyers or sellers’ that was [] known to the defendants or []
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`so obvious that the defendants must have been aware of the danger.”
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`Anderson v. Spirit Aerosystems Holdings, Inc., 827 F.3d 1229, 1237 (10th
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`Cir. 2016) (quoting In re Level 3, 667 F.3d at 1343 n.12).
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`The dissent suggests that a plaintiff can allege fraudulent intent or
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`recklessness through executives’ access to information that contradicts
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`their statements. Dissent at 3. For this suggestion, the dissent relies solely
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`6
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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 7
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`on a Second Circuit opinion: Novak v. Kasaks, 216 F.3d 300, 308 (2d Cir.
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`2000). But some other circuits regard allegations of access to contradictory
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`information as inadequate to plead scienter. See PR Diamonds, Inc. v.
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`Chandler, 364 F.3d 671, 688 (6th Cir. 2003) (stating that “fraudulent intent
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`cannot be inferred merely from the [two corporate officers’] positions in
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`the Company and alleged access to information”), abrogated on other
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`grounds by Tellabs, Inc. v. Makor Issues & Rt s., Ltd., 551 U.S. 308 (2007) ;
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`Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc., 759 F.3d 1051, 1063
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`(9th Cir. 2014) (“Mere access to reports containing undisclosed sales data
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`is insufficient to establish a strong inference of scienter.”); see also
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`Anderson, 827 F.3d at 1246 (“[M]ere attendance at meetings does not
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`contribute to an inference of scienter.”).
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`For the sake of argument, we can assume that access to contradictory
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`information can sometimes contribute to a strong inference of scienter.
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`Even with that assumption, however, the plaintiffs would need
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`particularized allegations that, if proven, would show a speaker’s
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`knowledge or reckless disregard of contradictory information. See City of
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`Dearborn Heights Act 345 Police & Fire Ret. Sys. v. Align Tech., Inc., 856
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`F.3d 605, 620 (9th Cir. 2017) (concluding that the plaintiff failed to
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`adequately allege the speaker’s direct knowledge of flawed accounting
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`even though access to the disputed information could contribute to a strong
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`inference of scienter). For example, it’s not enough for the plaintiffs to
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`7
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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 8
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`allege briefings to a speaker on the underlying data or the speaker’s access
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`to internal reports. See Anderson, 827 F.3d at 1246 (briefings and
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`attendance at meetings); In re Level 3 Commc’ns, Inc. Sec. Litig ., 667 F.3d
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`1331, 1344– 45 (10th Cir. 2012) (internal reports).
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`Through briefings and internal reports, Spirit’s top executives
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`presumably had access to a broad swath of information shared among
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`subordinates within Spirit. But an executive’s position in the company
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`doesn’t show knowledge of specific facts. See Anderson, 827 F.3d at 1245
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`(“We cannot infer scienter based only on a defendant’s position in a
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`company.”); In re Zagg, Inc. Sec. Litig., 797 F.3d 1194, 1205 (10th Cir.
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`2015) (rejecting “the notion that knowledge may be imputed solely from an
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`individual’s position within a company” (quoting Wolfe v. Asphenbio
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`Pharma, Inc., 587 F. App’x 493, 497 (10th Cir. 2014)) ). So it would make
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`little sense to draw a strong inference of scienter from access to
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`information. If access alone were enough, a strong inference of scienter
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`would exist for high- level executives whenever they make a public
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`statement contradicting something in the company’s files.
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`A plaintiff must thus allege facts with particularity showing not only
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`the executive’s access to contradictory information but also the executive’s
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`fraudulent intent or reckless disregard of accessible information. See p. 6,
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`above (discussing recklessness). So we must consider what Spirit’s
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`speakers knew when they made the public disclosures, focusing on the
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`8
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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 9
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`particularity of the plaintiffs’ allegations and the strength of the related
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`inferences.
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`3.
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`The plaintiffs didn’t adequately plead scienter for Spirit’s
`statements about continued sales to Boeing.
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`In these public disclosures, Spirit’s executives reassured investors
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`that Boeing would continue buying 52 shipsets each month. According to
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`the plaintiffs, the executives made these statements even though Boeing
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`had privately told Spirit about plans to reduce purchases of the shipsets.
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`The defendants deny such private statements from Boeing. So we
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`consider the particularity of the plaintiffs’ allegations of knowledge on the
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`part of Spirit’s speakers. These speakers include Mr. Gentile, Mr. Garcia,
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`and Mr. Gilson.
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`A. Mr. Gentile’s oral statements
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`In our view, the plaintiffs haven’t adequately alleged Mr. Gentile’s
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`awareness of Boeing’s plan to reduce purchases of the shipsets.
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`i.
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`The complaint lacks particularized allegations of
`Mr. Gentile’s scienter.
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`The plaintiffs complain that Mr. Gentile said on October 31, 2019,
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`that he expected to continue selling shipsets to Boeing at the same rate “for
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`an extended period of time.” Appellants’ App’x vol. 2, at 244. According
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`to the plaintiffs, Mr. Gentile knew that Boeing was planning to reduce the
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`purchases of shipsets. We thus consider the particularity of the plaintiffs’
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`allegations and the strength of an inference that Mr. Gentile had known by
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`October 31, 2019, of Boeing’s decision to reduce purchases of shipsets.
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`The plaintiffs argue that the complaint reflects Mr. Gentile’s
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`knowledge based on reports from Spirit’s former employees and his stock
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`sales. We disagree.
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`Two former Spirit employees (FE7 and FE8) allegedly reported that
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`unidentified employees of Boeing had told suppliers and Spirit
`executives that Boeing would cut production of the 737 MAX
`or reduce purchases of shipsets from Spirit and
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`Spirit had then projected the number of layoffs when Boeing
`implemented its plan to reduce production of the 737 MAX and
`purchases of shipsets.
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`Despite the reliance on the former employees, the complaint doesn’t allege
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`•
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` •
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`that the former employees
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`•
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`told Mr. Gentile that Boeing had planned to reduce purchases
`of shipsets or
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`knew of other statements to Mr. Gentile about Boeing’s plan to
`reduce purchases.
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`The two former employees allegedly heard that Boeing had planned
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` •
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`to cut production of the 737 MAX and purchases of shipsets. FE8’s
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`information came from suppliers who had worked with Boeing .
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`And FE7’s information came from Shawn Campbell and Angela Little, two
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`Spirit executives who in turn had obtained their information from
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`unidentified employees of Boeing. 3
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`No matter what FE7 or FE8 had heard, scienter would exist only if
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`Mr. Gentile was aware of what the Boeing employees had said. See Smallen
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`At oral argument, the plaintiffs acknowledged that they didn’t know
`3
`who at Boeing had made the statements.
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`11
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`v. W. Union Co., 950 F.3d 1297, 1313 (10th Cir. 2020) (stating that we
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`consider the state of mind of the corporate officials making the statement,
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`approving it, or furnishing the underlying information); accord Southland
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`Sec. Corp. v. INSpire Ins. Sols., Inc., 365 F.3d 353, 366 (5th Cir. 2004)
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`(“[T]he required state of mind must actually exist in the individual making
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`(or being a cause of the making of) the misrepresentation.”). But the
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`complaint doesn’t allege Mr. Gentile’s awareness of the information
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`allegedly reported to FE7, FE8, Mr. Campbell, or Ms. Little. To the
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`contrary, the complaint says only that two former Spirit employees had
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`heard others relay what unidentified Boeing employees had said; t he
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`complaint doesn’t allege that anyone at Spirit had informed Mr. Gentile
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`about these conversations.
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`Despite that gap in the complaint, the plaintiffs argue that
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`Mr. Gentile knew about layoff projections that FE7 had helped create. The
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`complaint states that the layoff projections had proceeded in four steps:
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`1.
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`2.
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`3.
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`4.
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`A supervisor told FE7 and other Spirit employees to provide
`data about the adjustments that Spirit would need to make.
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`Spirit used the data to create the layoff projections.
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`Spirit provided these layoff projections to FE7’s supervisor for
`his review.
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`If FE7’s supervisor agreed with the projections, he would send
`them to Mr. Gentile.
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`12
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`Appellants’ App’x vol. 1, at 71. Through these steps, the plaintiffs contend
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`that the layoff projections show Mr. Gentile’s knowledge about Boeing’s
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`impending production cuts.
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`The plaintiffs allege that Mr. Gentile saw the first round of the layoff
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`projections. But this allegation is conclusory, and the plaintiffs elsewhere
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`explain that the projections wouldn’t go to Mr. Gentile unless FE7’s
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`supervisor had agreed “with the results of the exercise (i.e., the number of
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`layoffs).” Id. And in the complaint, the plaintiffs don’t identify anyone
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`with personal knowledge of the supervisor’s approval of the layoff
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`projections or their delivery to Mr. Gentile. See Zucco Partners, LLC v.
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`Digimarc Corp., 552 F.3d 981, 995 (9th Cir. 2009) (“[T]he complaint must
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`provide an adequate basis for determining that the witnesses in question
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`have personal knowledge of the events they report.”). So the plaintiffs fail
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`to adequately allege that Mr. Gentile saw FE7’s input into the layoff
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`projections.
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`The complaint also lacks particularized allegations about the contents
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`of the final layoff projections. Given the limitations on FE7’s role, the
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`allegations address only some of the data incorporated at an early stage of
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`preparation. For example, the plaintiffs allege that
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`•
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`•
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`FE7 had submitted information about what would happen if
`Boeing reduced purchases of shipsets,
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`other individuals submitted additional information, and
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`13
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`•
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`still other individuals then combined the submissions into a set
`of projections.
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`If the supervisor were to approve these projections, they would go to
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`Mr. Gentile.
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`But the complaint contains no information beyond the contribution of
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`FE7’s own data: There’s nothing about the contributions from other Spirit
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`employees, the content of the final projections, or the supervisor’s
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`approval or rejection of the projections.
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`In light of these omissions, FE7’s input resembles the confidential
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`witness’s input that we considered insufficient in Anderson v. Spirit
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`Aerosystems Holdings, Inc., 827 F.3d 1229 (10th Cir. 2016). In Anderson,
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`the plaintiffs alleged securities fraud based on public statements that had
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`contradicted reports from confidential witnesses. Id. at 1240–41. We
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`concluded that the plaintiffs hadn’t adequately alleged the content of the
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`reports or the defendants’ receipt of the reports. Id. Though one
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`confidential witness had contributed data to the reports, we noted that
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`Spirit had
`
`•
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`combined this data with data collected from other employees
`and
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`revised the reports before they went to the defendants.
`
`•
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`Id. at 1241.
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`Like the confidential witness in Anderson, FE7 allegedly contributed
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`information to larger reports . But like the larger reports in Anderson,
`14
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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 15
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`Spirit’s final layoff projections included additional information from other
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`employees. The complaint thus doesn’t tell us what was in the final version
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`of the projections.
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`The dissent tries to distinguish Anderson. According to the dissent,
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`Anderson sensibly declined to infer scienter because the witnesses there
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`had lacked a close connection to the defendants. Dissent at 8. For example,
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`the dissent notes that
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`•
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`•
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`one witness “was four levels removed from” executives who
`made allegedly fraudulent statements and
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`other witnesses had no reporting relationship to those
`executives.
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`Id. But FE7 also lacked a “reporting relationship” to Mr. Gentile. FE7
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`instead reported to Ms. Little, who in turn reported to Spirit’s Senior Vice
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`President for the Boeing Program (Mr. Bill Brown), who in turn reported to
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`Mr. Gentile. See Appellants’ App’x vol. 1, at 45–46.
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`
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`In fact, the complaint acknowledges that FE7 had only “occasional contact
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`with [Mr.] Gentile” at meetings. Id. at 46.
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`Though Anderson undercuts the significance of the layoff
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`projections, FE7’s alleged knowledge could support an inference that
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`Mr. Gentile had obtained similar information from someone else. See
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`Dissent at 8– 9 (noting that unlike Anderson, the executives in this case
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`could have learned of the information from third parties). But the
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`possibility of that inference isn’t enough; the plaintiffs must identify facts
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`with particularity that create a strong inference of Mr. Gentile’s fraudulent
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`intent or recklessness. See p. 6, above. And the complaint contains no
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`particularized allegations that anyone told Mr. Gentile of Boeing’s plan to
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`reduce purchases.
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`Without such an allegation, the plaintiffs point to Spirit’s layoff
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`projections. But what did those projections say? Spirit characterizes the
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`final version as a compilation of various contingencies , including a drop in
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`Boeing’s purchases. And the plaintiffs have not questioned Spirit’s
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`characterization of the final version. Given the contingencies in the
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`projections, the plaintiffs’ allegations don’t create a strong inference of
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`Mr. Gentile’s knowledge of Boeing’s plan to reduce purchases of the
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`shipsets. See Smallen v. W. Union Co., 950 F.3d 1297, 1310 (10th Cir.
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`2020) (rejecting an inference of scienter when a complaint had failed to
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`provide “particularized facts tying the [officers]” to facts known by other
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`company executives).
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`The plaintiffs rely not only on the layoff projections but also on
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`allegations that Mr. Gentile actively participated in the 737 MAX program
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`and served as a hands- on executive with close ties to Boeing. Based on
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`these allegations, the plaintiffs argue that Mr. Gentile would have quickly
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`learned of any decision by Boeing to cut purchases. See, e.g., Appellants’
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`App’x vol. 1, at 162 (alleging in the complaint that Mr. Gentile had
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`“communicated with Boeing daily regarding the 737 MAX” (emphasis in
`
`original)) ; see also id. at 164 (alleging that Mr. Gentile had
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`“communicated daily with Boeing regarding the 737 MAX”); Appellants’
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`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 18
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`Opening Br. at 6 (“[T]hroughout the Class Period, Spirit and Boeing
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`employees worked onsite at each other’s facilities, and Gentile himself
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`communicated daily with Boeing.” (emphasis in original)); id. at 39–41
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`(stating that Mr. Gentile was a hands- on executive and that the 737 MAX
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`was “crucial” to Spirit’s bottom line); Appellants’ Reply Br. at 3 (arguing
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`that Mr. Gentile “had daily communications with Boeing” (emphasis
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`added)); id. at 9 (arguing that the plaintiffs had pleaded Mr. Gentile’s
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`close monitoring of production of the 737 MAX through “daily
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`communications with Boeing” (emphasis in original)). The plaintiffs point
`
`out that these daily communications led Mr. Gentile to express confidence
`
`that he would quickly learn from Boeing about plans to reduce purchases
`
`of the shipsets. Appellants’ App’x vo1. 1, at 162–63. But to show scienter,
`
`the plaintiffs can’t rely solely on Mr. Gentile’s active involvement in a
`
`“particular project” even when the project involves “Spirit’s co re
`
`operations.” Anderson v. Spirit Aerosystems Holdings, Inc., 827 F.3d 1229,
`
`1245–46 (10th Cir. 2016). The plaintiffs allege Mr. Gentile’s close
`
`involvement with the 737 MAX program, but don’t provide any
`
`
`
`18
`
`

`

`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 19
`
`particularized allegations that would create a strong inference of scienter.
`
`See id. 4
`
`In a footnote, the plaintiffs also point to their allegations that
`
`Mr. Gentile sold Spirit stock in early February 2020. By then, however,
`
`Spirit had already announced that it was no longer selling shipsets for the
`
`737 MAX. How can we infer scienter from Mr. Gentile’s sale of stock after
`
`the public had all of the same information about Spirit’s loss in business?
`
`Other allegations diminish the significance of Mr. Gentile’s sale of
`
`stock. For example, the complaint points out that Mr. Gentile had actually
`
`increased his holdings in late January 2020. Accor ding to the complaint,
`
`Mr. Gentile had acquired more than 60,000 shares of Spirit stock and then
`
`sold fewer than 48,000 shares. Appellants’ App’x vol. 1, at 170. So
`
`Mr. Gentile’s total shares increased despite his sales after the public
`
`announcement.
`
`
`For example, if a defendant makes a false statement about a data
`4
`point involving the company’s core operations, a claimant might base
`scienter on the defendant’s act of monitoring the data point. See Ind. Pub.
`Ret. Sys. v. Pluralsight, Inc., 45 F.4th 1236, 1263–64 (10th Cir. 2022). But
`no such allegations exist here. For example, the plaintiffs don’t allege with
`particularity that
`
`
`•
`
`•
`
`
`
`anyone told Mr. Gentile about Boeing’s plan to cut purchases
`of the shipsets or
`
`Mr. Gentile saw data that would have alerted him to Boeing’s
`plan.
`
`19
`
`

`

`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 20
`
`On appeal, the plaintiffs attribute the increase in Mr. Gentile’s stock
`
`to grants and options. But the plaintiffs forfeited this argument by failing
`
`to present it in district court. Richison v. Ernest Grp., Inc., 634 F.3d 1123,
`
`1127 (10th Cir. 2011). Even if the plaintiffs had preserved the argument,
`
`though, it wouldn’t support scienter. After all, Mr. Gentile received the
`
`new shares after Spirit had already announced that it was no longer selling
`
`the shipsets.
`
`* * *
`
`In summary, the complaint doesn’t allege facts with particularity that
`
`would reflect Mr. Gentile’s knowledge or reckless disregard of Boeing’s
`
`plan to cut purchases of the shipsets. Mr. Gentile presumably knew, as the
`
`public did, that Boeing might reduce purchases. But the complaint doesn’t
`
`contain particularized allegations showing that Mr. Gentile was aware, by
`
`October 31, 2019, that Boeing had decided to reduce purchases of shipsets.
`
`So the district court properly concluded that scienter was missing for the
`
`claims involving Mr. Gentile’s reassurance of continued sales to Boeing.
`
`ii.
`
`The district court considered the plaintiffs’ allegations
`holistically.
`
`
`The plaintiffs also criticize the district court for considering the
`
`allegations individually rather than holistically. We reject this criticism.
`
`The district court said four times that it was viewing the plaintiffs’
`
`allegations holistically. Meitav Dash Provident Funds & Pension Ltd. v.
`
`
`
`20
`
`

`

`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 21
`
`Spirit AeroSystems Holdings, Inc., No. 20- cv-00077- SPF- JFJ, 2022 WL
`
`377415, at *18, *21, *23, *25 (N.D. Okla. Jan. 7, 2022). We have no
`
`reason to question the district court’s statement. See Adams v. Kinder -
`
`Morgan, Inc., 340 F.3d 1083, 1093 (10th Cir. 2003) (“In light of the
`
`district court’s express statement that it considered the plead ings in their
`
`entirety, we have no reason to conclude otherwise.”); accord In re
`
`VeriFone Holdings, Inc. Sec. Litig., 704 F.3d 694, 702–03 (9th Cir. 2012)
`
`(stating that when courts have discussed specific allegations, “a brief
`
`statement that the court has also viewed the claims holistically has been
`
`sufficient”).
`
`Granted, the district court separately discussed each of the plaintiffs’
`
`allegations. But “[a] district court may best make sense of scienter
`
`allegations by first looking to the contribution of each individual
`
`allegation to a strong inference of scienter.” Owens v. Jastrow, 789 F.3d
`
`529, 537 (5th Cir. 2015). So the court can analyze the allegations
`
`separately before considering them as a whole. See id. at 536– 37. We take
`
`the same approach because of the need to consider each of the plaintiffs’
`
`allegations before considering them together.
`
`Though individual allegations might not suffice, they can sometimes
`
`complement each other. Yates v. Mun. Mortg. & Eq uity, LLC, 744 F.3d
`
`874, 893 (4th Cir. 2014). For example, the dissent argues that six factual
`
`allegations complement each other:
`
`
`
`21
`
`

`

`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 22
`
`1. Mr. Gentile was Spirit’s chief executive officer.
`
`Spirit obtained most of its revenue from sales to Boeing.
`
`2.
`
`3. Mr. Gentile acknowledged a close relationship with Boeing.
`
`4. Mr. Gentile may have received the layoff projections.
`
`5. Mr. Gentile had access to meetings where production cuts may
`have been discussed.
`
`6. Mr. Gentile sold stock during the class period.
`
`
`
`
`
`
`Dissent at 12–14.
`
`We view many of these allegations differently. For example, the
`
`complaint contains no particularized allegations stating what was in the
`
`layoff projections that went to Mr. Gentile. See Anderson v. Spirit
`
`Aerosystems Holdings, Inc., 827 F.3d 1229, 1241 (10 th Cir. 2016)
`
`(rejecting an inference of scienter because Spirit’s reports had undergone
`
`multiple revisions before the final versions would have gone to Spirit’s
`
`chief executive officer or chief financial officer). And the stock sales don’t
`
`reflect scienter because Mr. Gentile sold the stock months after Boeing had
`
`publicly announced that it would stop production of the 737 MAX and
`
`Spirit had announced that it would stop selling shipsets to Boeing. See
`
`p. 19, above.
`
`The other allegations involve Mr. Gentile’s position and the
`
`significance of Boeing to Spirit’s core operations. But Mr. Gentile’s
`
`position and Spirit’s core operations do little to create an inference of
`
`
`
`22
`
`

`

`Appellate Case: 22-5013 Document: 010110905883 Date Filed: 08/21/2023 Page: 23
`
`scienter. See Anderson, 827 F.3d at 1245–46 (concluding that the plaintiffs
`
`didn’t adequately allege scienter based on core operations, a defendant’s
`
`position within a company, or the opportunity to attend meetings); Smallen
`
`v. W. Union Co., 950 F.3d 1297, 1307–08 (10th Cir. 2020) (concluding that
`
`the plaintiffs didn’t adequately allege scienter based on a defendant’s
`
`position within a company and attendance at meetings); In re Level 3
`
`Commc’ns., Inc. Sec. Litig., 667 F.3d 1331, 1344 (10th Cir. 2012)
`
`(concluding that the plaintiff didn’t adequately allege scienter based on the
`
`defendants’ attendance at meetings and a motive to defraud).
`
`Whether we view these factual allegations in isolation or together,
`
`they don’t create a particularized basis to draw a strong inference of Mr.
`
`Gentile’s awareness of Boeing’s plan to cut purchases of the shipsets. E ven
`
`in combination, second- hand reports from other Spirit employees don’t
`
`show that Mr. Gentile knew of or consciously disregarded Boeing’s plans
`
`when he made the disputed statements.
`
`B.
`
`Spirit’s regulatory reports on October 31, 2019
`
`On October 31, 2019, Spirit not only made oral statements through
`
`Mr. Gentile but also filed documents with the federal government. These
`
`reports echoed Mr. Gentile’s optimistic projections of c

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