Ghorab v. P

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF LOUISIANA

LAKE CHARLES DIVISION

KHALED GHORAB CASE NO. 2:19-CV-00718

VERSUS JUDGE JAMES D. CAIN, JR.

DONNIE P MAGISTRATE JUDGE KAY

MEMORANDUM RULING

Before the Court is Plaintiffs’ Motion for Partial Summary Judgment on the Issue

of Liability on Main Demand (Doc. 59), wherein Plaintiffs Khaled Ghorab, M.D. and

Ghorab Surgical, LLC, move the Court to rule on the issue of whether Donnie P’s alleged

non-disclosure of highly material facts regarding the business and prospects of the limited

liability company interest (“LLC”) he sold to Dr. Ghorab results in civil liability under

Louisiana Revised Statutes sections 51:701, et seq. Defendant Donnie Pecantte’s (“Donnie

P”) opposes the motion. Doc. 75. Plaintiffs have replied. Doc. 84.

I. BACKGROUND

This action involves the February 19, 2019 sale of a member-managed limited

liability company, A Plus Family and Community Services, LLC, (“A Plus”), wherein

Plaintiffs seek rescission of a contract because Defendants, Donnie P and brother Omar P,

failed to fully disclose material financial information regarding the business. Doc. 1.

Plaintiffs also seek damages and attorney’s fees for breach of contract, violations of the

Louisiana Blue Sky Law, Louisiana Revised Statutes sections 51:701, et seq, and the

Securities Act of 1933. Id.

A Plus was an out-patient behavioral health clinic that provided counseling and

treatment services to Medicaid patients. Doc. 1, p. 1. During the relevant time period, A

Plus’s primary source of revenue was derived from providing psychosocial therapy

services, and/or treatment to Medicaid recipients/patients and billing the health insurance

providers for same, namely, Louisiana Healthcare Connections, Amerihealth, and Healthy

Blue. Id.

Plaintiffs allege that shortly after Dr. Ghorab assumed management of A Plus, he

discovered that the business and prospects of A Plus had been grossly misrepresented. Id.

at 4. Dr. Ghorab discovered that the three insurance providers had either been terminated

as sources of income, and/or were in jeopardy of being terminated as sources of income

because A Plus failed to obtain the accreditation required by the Louisiana Department of

Health pursuant to Louisiana Revised Statute 40:2162. Id. at 9–10. As such, Dr. Ghorab

alleges that Donnie P failed to make full disclosure and made fraudulent misstatements of

fact and omissions of material facts. Id. at 11. To be sure, Dr. Ghorab alleges that these

three insurance providers were A-Plus’s sole source of income. Id. at 12.

On December 14, 2022, a First Amended, Supplemental and Restated Complaint

(Doc. 61) was filed by Ghorab, adding Ghorab Surgical Associates (“GSA”) as a Plaintiff

and Omar P as a Defendant. On December 20, 2022, the trial date was cancelled without

date. The Amended Complaint asserts that Donnie P allegedly solicited the purchase of the

Company by Plaintiffs through the use of material misstatements and omissions of fact and

alleges that purchase by Plaintiffs of the membership interests in the Company allegedly

constitutes the purchase and sale of “securities” under federal and state securities laws. Id.

at 4.

The Amended Complaint alleges claims by Plaintiffs against Defendants premised

on the Louisiana Blue Sky Laws, La. R.S. 51:701, et seq. (Count One of the Amended

Complaint); Rescission of Contract on the basis of fraud, Louisiana Civil Code Article

1953, and nullity (Count Three of the Amended Complaint); and for Breach of Contract

(Count Four of the Amended Complaint). Id. at 19–21. Count Two of the Amended

Complaint asserts alleged claims against Donnie P only based on purported violations of

Section 12(2) of the Securities Act of 1933, 15 USC 77a, et seq. Id. at 20. Currently pending

but not before the court are the following motions: Motion for Summary Judgment by

Donnie P (Doc. 54); Motion for Summary Judgment by Plaintiffs (Doc. 58); Motion for

Partial Summary Judgment as to Liability on the Main Demand by Plaintiffs (Doc. 59);

and a Rule 12(b)(6) Motion by Omar P (Doc. 71). Bench trial set for March 11, 2024, at

9:00 AM. Doc. 93.

II. LEGAL STANDARD

A court should grant a motion for summary judgment when the movant shows “that

there is no genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56. The party moving for summary judgment is initially

responsible for identifying portions of pleadings and discovery that show the lack of a

genuine issue of material fact. Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995).

The court must deny the motion for summary judgment if the movant fails to meet this

burden. Id.

If the movant makes this showing, however, the burden then shifts to the non-

moving party to “set forth specific facts showing that there is a genuine issue for trial.”

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quotations omitted). This

requires more than mere allegations or denials of the adverse party's pleadings. Instead, the

nonmovant must submit “significant probative evidence” in support of his claim. State

Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990). “If the evidence is

merely colorable, or is not significantly probative, summary judgment may be granted.”

Anderson, 477 U.S. at 249 (citations omitted). The Court is not required to search the record

for material fact issues. RSR Corp. v. Int'l Ins. Co., 612 F.3d 851, 857 (5th Cir. 2010).

A court may not make credibility determinations or weigh the evidence in ruling on

a motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S.

133, 150 (2000). The court is also required to view all evidence in the light most favorable

to the non-moving party and draw all reasonable inferences in that party’s favor. Clift v.

Clift, 210 F.3d 268, 270 (5th Cir. 2000). Under this standard, a genuine issue of material

fact exists if a reasonable trier of fact could render a verdict for the nonmoving party.

Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008).

III. LAW & ANALYSIS

This Motion involves only Plaintiffs’ claims under Sections 51:701, et seq., which

are referred to as Louisiana Blue Sky Law or Louisiana Securities Law. La. R.S. §§ 51:701,

et seq. Thereunder,

[t]o offer to sell or to sell a security1 by means of any oral or written untrue

statement of a material fact or any omission to state a material fact necessary

in order to make the statements made, in the light of the circumstances under

which they are made, not misleading, the buyer not knowing of the untruth

or omission, if such person in the exercise of reasonable care could not have

known of the untruth or omission.

La. R.S. § 51:712(A)(2) (2023) (emphasis added). “Any person who violates R.S.

51:712(A) shall be liable to the person buying such security . . . .” La. R.S. § 51:714(A)

(2023). Plaintiffs ask the Court to rule on the issue of the liability of the Seller, Donnie P,

under Sections 51:701, et seq. Doc. 59-1, p. 6. Plaintiffs claim that A Plus had lost 100%

of its sources of revenue in the ninety-day period prior to the sale because of lack of

accreditation from regulatory and oversight authorities. Id. Furthermore, Plaintiffs claim

that this information was not disclosed to Plaintiffs. Id. Donnie P, however, claims that

Sections 51:701, et seq. do not apply to the sale of A Plus. Doc. 75, p. 24.

Specifically, Plaintiffs’ Motion for Partial Summary Judgment seeks a

determination and judgment that Donnie P is liable to Plaintiffs as the “seller” of a security

under Section 51:712(A)(2). Plaintiffs contend that “[i]t is well settled law that limited

liability company interests in this context meet the seminal “investment contract” test first

set forth by the United States Supreme Court in U.S. v. W.J. Howey Co., 328 U.S. 293

1 “Security” means any note; stock; treasury stock; bond; debenture; evidence of indebtedness; certificate of interest

or participation in any profit-sharing agreement; collateral-trust certificate; preorganization certificate or subscription;

transferable share; investment contract; voting-trust certificate; certificate of deposit for a security; fractional

undivided interest in oil, gas, or other mineral rights; any put, call, straddle, option, or privilege on any security,

certificate of deposit, or group or index of securities (including any interest therein or based on the value thereof); or,

in general, any interest or instrument commonly known as a “security”; or any certificate of interest or participation

in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any

of the foregoing. La. R.S. § 51:702(15)(a) (2023) (emphasis added).

(1946) and, accordingly are deemed “securities” pursuant to state and federal securities

law.” Doc. 59-1, p. 18.

Plaintiffs claim that it is “well settled law” that LLC interests “in this context” are

investment contracts under Howey is untenable. First, Plaintiffs buttress their proposition

by citing—with the interlocutory signal “see, e.g.,”—the Fifth Circuit case Meadaa v.

Karsan, 822 F.3d 202 (5th Cir. 2016). Id. The introductory signal, “See, e.g.,” is typically

used to indicate that numerous sources indirectly support the proposition, which as

Plaintiffs proposition offered here is that LLC interests are securities under federal and

securities law. Doc. 59-1, p. 18. As of this Memorandum Ruling, Meadaa has been cited

twice by courts and neither of which stand for the proposition that LLCs are securities.2

As to Meadaa itself, it involved purchasers of the Louisiana Hotel and Convention

Center in Alexandria, Louisiana through a whole owned company. Meadaa, 822 F.3d at

204. Many of the purchasers’ “colleagues had expressed an interest in participating in the

project, so the [purchasers] decided to offer them a chance to invest.” Id. At an investor

presentation, the purchasers offered potential investors interests as either a “Private Debt”

holder or an “Equity” holder. The purchasers stressed to potential investors that equity

holders “would be members of a limited liability company that would own the Hotel.” Id.

The purchasers created an LLC, which they represented to the investors owned the hotel

but in actuality the LLC never owned the hotel. Id. All the investors selected the equity

option, purchasing fractional interests of twenty-eight units in the LLC for $125,000 each,

2 Broyles v. Commonwealth Advisors, Inc., 936 F.3d 324, 325 (5th Cir. 2019); Creative Intellects Inc. v. Haygood,

No. 221CV02670RGKAGM, 2022 WL 3099734, at *5 (C.D. Cal. July 13, 2022).

totaling $3,500,000. Id. Meadaa does not stand for the proposition that it is well settled

that LLC interests are security interests; they may in some instances but not in every case.

Furthermore, the Meadaa Court’s ruling does not mention Howey.

Second, Plaintiff does not attempt to apply the Howey test to “this context,” which

is necessary because “LLCs are particularly difficult to categorize under the securities laws

. . . because they are hybrid business entities that combine features of corporations, general

partnerships, and limited partnerships.” See, e.g., Robinson, 349 F.3d at 174. LLCs are

noncorporate business entities that offer their members limited liability, tax benefits, and

organizational flexibility.” Id. at 168. Furthermore, “members in a member-managed LLC

will often have powers too significant to be considered passive investors under the

securities laws . . . while interests in manager-managed LLCs may often be securities.” Id.

at 174.

A. Louisiana Courts apply the Howey Test

Sections 51:701, et seq. are modeled after the federal system, specifically, the

Securities Act of 1933 and the Securities Exchange Act of 1934. Ek v. Nationwide Candy

Div., Ltd., 403 So. 2d 780, 785 (La. Ct. App. 3d Cir. 1981), writ denied, 407 So. 2d 732

(La. 1981). Therefore, to determine whether a particular transaction is an “investment

contract” and thus a security under Section 51:701, Louisiana courts apply the Howey Test

from SEC v. W. J. Howey, 328 U.S. 293 (1946). TMJ Grp. LLC v. IMCMV Holdings Inc.,

311 F. Supp. 3d 834, 856 (E.D. La. 2018); Ek, 403 So. 2d at 785–86.

In Howey, the Supreme Court stated that “an investment contract for purposes of

the Securities Act means a contract, transaction or scheme whereby a person invests his

money in a common enterprise and is led to expect profits solely from the efforts of the

promoter or a third party.” Howey, 328 U.S. at 298–99. Under the Fifth Circuit’s Howey

test, “an investment contract qualifies as a security if it meets three requirements: (1) an

investment of money; (2) in a common enterprise; and (3) on an expectation of profits to

be derived solely from the efforts of individuals other than the investor.” E.g., SEC. &

Exch. Comm'n v. Arcturus Corp., 928 F.3d 400, 409 (5th Cir. 2019).3

B. The Howey test applied to the purchase of A Plus

1. Investment of Money

Here, the issue is whether the investor risked a financial loss by committing assets

to the enterprise and whether the purchaser of the purported security was required to give

up something of value in exchange. See Howey, 328 U.S. at 298–99. Here, Ghorab Surgical

Associates, LLC, a sole-member LLC, purchased 100% of the LLC interest in A Plus on

February 19, 2019, for $279,000,000.00 made payable in cash and by promissory note.

Doc. 59-15, p. 1. Thus, the first Howey prong is satisfied.

2. Common Enterprise

The second prong of the Howey test requires there to be a common enterprise,

whereby the focus is on whether the profitability of an individual’s investment is

intertwined with the success or failure of other parties in the enterprise. For this prong, the

focus is on the relationship between the investors and the promoter, wherein “the critical

3 Some courts use a four-factor Howey Test to determine if a financial arrangement is an “investment contract” and

thus a “security”: “(1) an investment of money, (2) in a common enterprise, (3) with an expectation of a profit, and

(4) reliance by the investor upon the efforts of others.” Ek, 403 So. 2d at 786. The Court, however, will apply the

Fifth Circuit’s three prong Howey test, which merges prongs three and four.

inquiry is confined to whether the fortuity of the investments collectively is essentially

dependent upon promoter expertise.” Long v. Shultz Cattle Co., 881 F.2d 129, 140 (5th Cir.

1989); see Ek, 403 So. 2d at 788 (concluding that the sale of the vending machines coupled

with the guaranteed income policy constituted a common enterprise when the defendant

company sought by widely circulated newspaper advertisement a number of persons to

invest in a vending machine enterprise whereby each investor serviced his own machines,

however, the money which they invested financed the essential managerial efforts

undertaken in their behalf by defendant company, which ultimately determined the success

or failure of the business enterprise).

Here, A Plus was formed as a Louisiana LLC and solely owned by Donnie P, the

seller, at all times prior to February 19, 2019. Doc. 59-3; doc. 59-15. The buyer, Dr. Ghorab

as the sole member of Ghorab Surgical Associates, L.L.C. and a full-time

physician/surgeon, purchased 100% of A Plus’s member-managed LLC interests from

Donnie P. Doc. 59-3, p. 6; doc. 59-10, p. 1. A Plus’s articles of organization state that

“there is no operating agreement in effect,” which is typically written to establish the

allocation of income, deductions, losses, and credits among the member interests. Doc. 59-

3. Moreover, the February 19, 2019 purchase was neither a fractional purchase of LLC

interest nor a pooling together of funds for sharing in profits and losses with other investors.

Consequently, there is no common enterprise; the purchase of A Plus was for the entire

membership interest, assets and liabilities, from one owner, Donnie P, to Ghorab Surgical

Associates, L.L.C. Doc. 59-15, p. 1-2. This prong is not satisfied.

3. Expectation of profits derived solely from the efforts of other

Under the third prong of the Howey Test, the inquiry focuses on whether the investor

provided consideration with the expectation of a profit or return on investment.4 Also with

the third prong, “the Supreme Court has endorsed relaxation of the requirement that an

investor rely only on others’ efforts, by omitting the word ‘solely’ from its restatements of

the Howey test.” Robinson, 349 F.3d at 170. In the Fifth Circuit, “[t]he proper inquiry . . .

is whether ‘the efforts made by those other than the investor are the undeniably significant

ones, those essential managerial efforts which affect the failure or success of the

enterprise.’” Youmans v. Simon, 791 F.2d 341, 345 (5th Cir. 1986) (quoting Williamson v.

Tucker, 645 F.2d 404, 418 (5th Cir.), cert. denied, 454 U.S. 897 (1981)). Thus, the third

prong is not satisfied if, at the time of the investment, the investor reasonably expects

significant investor control, which requires a case-by-case analysis into the economic

realities of the underlying transaction. See Long, 881 F.2d at 133, 136 (“It is axiomatic in

federal securities law that in order to give effect to the remedial purposes of the Acts,

substantive “economic realities” must govern over form.”) (observing that it impossible to

conclude that the “with profits to come solely from the efforts of others” prong of the

Howey test is not satisfied without ignoring entirely the economic realities of publicly-

offered cattle feeding partnership program).

4 By profits, the Supreme Court means either capital appreciation resulting from the development of the initial

investment, such as the sale of oil leases conditioned on promoters’ agreement to drill exploratory well, or a

participation in earnings resulting from the use of investors’ funds, such as dividends on the investment based on

savings and loan association’s profits. In such cases the investor is attracted solely by the prospects of a return on his

investment. By contrast, when a purchaser is motivated by a desire to use or consume the item purchased, such as to

occupy the land or to develop it themselves, the securities laws do not apply. United Hous. Found., Inc. v. Forman,

421 U.S. 837, 852–53 (1975) (cleaned up).

In the context of situations involving partnerships, the Fifth Circuit applies the

following Williamson factors to Howey’s third prong:

(1) an agreement among the parties leaves so little power in the hands of the

partner or venturer that the arrangement in fact distributes power as would a

limited partnership; or (2) the partner or venturer is so inexperienced and

unknowledgeable in business affairs that he is incapable of intelligently

exercising his partnership or venture powers; or (3) the partner or venturer is

so dependent on some unique entrepreneurial or managerial ability of the

promoter or manager that he cannot replace the manager of the enterprise or

otherwise exercise meaningful partnership or venture powers.

Arcturus, 928 F.3d at 410–11. Similar to general partners, owners of a sole member-

managed LLCs “can guard their own interests with their inherent powers and do not need

protection from securities laws—they can act on behalf of the [LLC]; bind [the LLC] by

their actions; [and] dissolve the [LLC].” Cf. Arcturus, 928 F.3d at 410 (quoting Youmans,

791 F.2d at 346) (internal quotation omitted) (general partner’s powers are analogous to

single member LLC owner’s powers; however, the latter’s personal assets are shielded

from any debts and liabilities incurred by the LLC whereas the former’s are not). General

partners and owners of sole member-managed LLCs are “entrepreneurs, not investors,” of

which “interests typically do not qualify as securities.” Cf. id. (internal quotations omitted).

Furthermore, “a litigant trying to prove otherwise must overcome the strong presumption

that [the business interest] is not a security.” Id. (quoting Nunez v. Robin, 415 F. App'x

586, 589 (5th Cir. 2011) (internal quotation omitted)).

a. The First Williamson Factor

Under the first Williamson factor, to determine whether an arrangement deprives an

investor of power, courts look to the legal documents setting up the arrangement and how

the arrangement functions to limit or serve as a barrier to the investor using his or her

power. Id. Because Arcuturs involved a partnership not an LLC, comparing the LLC

interests in Robinson to the instant matter is apposite. In Robinson, an investor purchased

a partial interest in an LLC doing business in the telecommunications field brought suit

against the LLC, its former chairman, the former chairman's technical services company,

alleging securities fraud when the chairman sold him an interest in the LLC. 349 F.3d at

168. The investor asserted that he was merely a passive investor and thus the sale

represented an investment contract and thus a security. Id. Under Howey, the court

indicated that by “looking at the powers accorded [the investor] under [the LLC’s]

operating agreement, as well as [the investor’s] activity as an executive at [the LLC], it is

clear that [the investor] was no passive investor heavily dependent on the efforts of others.”

Id. at 170. The investor had the power to appoint board members to the board of managers,

of which he was a member and vice-chairman, to select financial and legal consultants, to

assemble an executive committee, and to vary the LLC’s operating plan. Id. at 171. The

court concluded that the investor had “a level of control antithetical to the notion of member

passivity required to find an investment contract under the federal securities laws.” Id.

(internal quotations omitted).

Here, in Plaintiffs Amended Complaint they claim that “[s]hortly after Dr. Ghorab’s

assumption of the management of A Plus, Dr. Ghorab began to discover that the business

and prospects of A Plus had been grossly misrepresented and that Donnie P had failed to

disclose material facts necessary in order to make the statements made to Dr. Ghorab,

considering the circumstances under which they were made, not misleading.” Doc. 61, p.

5. It is evident from the pleadings that Dr. Ghorab assumed management and took control

over A Plus. Furthermore, Dr. Ghorab is the sole member of A Plus, a member-managed

LLC. If an LLC’s organizational documents indicate that the LLC is a member-managed

LLC without centralized management, its interests resemble those of a general partnership

and will typically not be considered to be securities. See Youmans v. Simon, 791 F.2d 341,

346 (5th Cir. 1986) (“[F]ederal securities laws are usually held not generally to apply to

general partners.”). Thus, Dr. Ghorab, as purchaser of 100% ownership interests in the

member-managed LLC, A Plus, possessed undistributed formal power as evidenced by the

lack of operating agreement, which resembles a level of authority even greater than the

authority wielded by Robinson investor with his fractional interests in that LLC. Cf.

Robinson, 349 F.3d at 171. In practice, Dr. Ghorab exercised his powers by assuming

management of A Plus. See Arcturus, 928 F.3d at 413. In short, the distribution of power

in the purchase of A Plus resembles nothing of a limited partner’s interest because it

singularly resides in the sole member-manager of the LLC, Ghorab Surgical Associates,

L.L.C. which is owned solely by Dr. Ghorab who assumed management of A Plus after the

purchase on February 19, 2019.

b. The Second Williamson Factor

“Generally, an interest in a partnership is more likely to be a security if it is sold to

“inexperienced and unknowledgeable members of the general public.” Id. at 417. Applying

this standard to an LLC, Dr. Ghorab purchased A Plus through an LLC, Ghorab Surgical

Associates, LLC, again, of which he is the sole member. Accordingly, the Court finds that

his experience and knowledge is greater than a member of the general public. See id.

c. The Third Williamson Factor

The inquiry here “is whether the investors are so dependent on some unique

entrepreneurial or managerial ability of the Managers that they cannot replace the manager

of the enterprise or otherwise exercise meaningful partnership or venture powers.” Id. at

422 (cleaned up). The Court need not look any further than the First Amended Complaint

which shows that the sole investor and manager of A Plus are one in the same, Dr. Ghorab.

Doc. 61, p. 5. (“Shortly after Dr. Ghorab and Ghorab Surgical Associate LLC’s assumption

of the management of A Plus . . . .”). Thus, all Williamson factors and a comparison to the

LLC interests in Robinson indicate that Ghorab and Ghorab Surgical Associate LLC’s

interests purchased with A Plus resemble those of a general partner.5

4. Howey Test Summary

The instant Motion calls the February 19, 2019 transaction and purchase of A Plus

a sale of a limited partnership interest, doc. 59-1, p.6, then claims [t]here is no dispute that

[A Plus] was a limited liability company,” id. at 18, and then pitvots to its final claim that

the transaction was a “STOCK SALE,” id. (emphasis in original). Despite Plaintiffs

mélange of business entity classifications, the articles of organization filed with the

Louisiana Secretary of State, see Doc. 59-3, indicate that A Plus was sold as a sole member-

managed LLC. Furthermore, the purchase was for 100% of the interest in A Plus, which

means full control of ownership was transferred to Ghorab Surgical Associates, LLC, of

5 Technically, there is no such thing as a single member partnership. Thus, the comparison between a single member

LLC and general partner is illustrative of the level of control that a sole member-managed LLC owner possesses. And

because all ownership interests reside in one member in a sole member-managed LLC, the rationale applied by the

court in Arcturus applies here even more strongly.

which is owned solely by Dr. Ghorab. With the 100% ownership of A Plus, Dr. Ghorab

therefore assumed full control of A Plus with all authority residing in him as the ultimate

controlling interest holder. In addition to ownership, the pleadings patently state that Dr.

Ghorab assumed management of A Plus. Doc. 61, p. 5. The filings with the Secretary of

State reveal there is no operating agreement that accords power to anyone else other than

the sole member-manger. Doc. 59-3. Thus, Dr. Ghorab role in A Plus at the time of

purchase is not so much akin to a passive investor, e.g., a limited partner with at least one

general partner; rather, he is the sole member-manager of a single member LLC who

assumed management and—as 100% owner—possess all authority to act on the behalf of

A Plus. In all, the purchase of A Plus on February 19, 2019, was not a purchase of a

common enterprise with the expectation of profits derived solely from the efforts of others.

Consequently, the purchase of A Plus was neither the purchase of an investment contract

nor a security under the Howey test, the 1933 Act, or Louisiana Blue Sky Law. QED.

Despite the broad remedial purpose behind the state and federal securities laws, they

were not intended to provide a remedy for all fraud or misconduct arising out of

commercial transactions. See Youmans v. Simon, 791 F.2d 341, 346 (5th Cir. 1986).

Accordingly, Plaintiffs claims under Louisiana Revised Statutes sections 51:701, et seq.

and the 1933 Act, Counts One and Two respectively, are stricken. Plaintiffs’ other claims

remain viable. The Court has reviewed Plaintiffs proposed Second Amended,

Supplemental and Restated Complaint (Doc. 89-2) and that proposed pleading does not

affect this Ruling.

IV. CONCLUSION

For the aforesaid reasons,

IT IS ORDERED that Plaintiffs’ Motion for Partial Summary Judgment on the

Issue of Liability on Main Demand (Doc. 59) will be DENIED.

IT IS FURTHER ORDERED that Counts One and Two are stricken from the

pleadings.

THUS DONE AND SIGNED in Chambers on this 21st day of March 2023.

JAMES D. CAIN, JR.

UNITED STATES DISTRICT JUDGE

Page 16 of 16