Petition for Writ of Certiorari — Macquarie Infrastructure Corporation, et al., Petitioners v. Moab Partners, L.P., et al.

APPENDIX

TABLE OF APPENDICES

Page

APPENDIX A: Summary Order and Judgment

(2d Cir. Dec. 20, 2022) ........................................ 1a

APPENDIX B: Opinion & Order Granting

Defendants’ Motion To Dismiss (S.D.N.Y.

Sep. 7, 2021) ..................................................... 14a

APPENDIX C: Order Denying Defendants’

Petition for Rehearing En Banc (2d Cir.

Jan. 27, 2023) ................................................... 49a

APPENDIX D: Statutes and Rules Involved ......... 51a

15 U.S.C. § 78j .................................................. 51a

17 C.F.R. § 240.10b-5 ....................................... 51a

17 C.F.R. § 229.303 .......................................... 52a

APPENDIX E: Number and Percentage of

Item 303 Cases in Relevant Circuits ............... 62a

APPENDIX F: List of Item 303 Cases in

Relevant Circuits ............................................. 64a

APPENDIX G: List of Law Firm

Communications and Commentary

Addressing MD&A Disclosures ...................... 76a

1a

APPENDIX A

21-2524

City of Riviera Beach General Employees Retirement

System et al. v. Macquarie Infrastructure Corporation

et al.

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT

HAVE PRECEDENTIAL EFFECT. CITATION TO

A SUMMARY ORDER FILED ON OR AFTER

JANUARY 1, 2007, IS PERMITTED AND IS

GOVERNED

BY

FEDERAL

RULE

OF

APPELLATE PROCEDURE 32.1 AND THIS

COURT’S LOCAL RULE 32.1.1. WHEN CITING A

SUMMARY ORDER IN A DOCUMENT FILED

WITH THIS COURT, A PARTY MUST CITE

EITHER THE FEDERAL APPENDIX OR AN

ELECTRONIC

DATABASE

(WITH

THE

NOTATION “SUMMARY ORDER”). A PARTY

CITING A SUMMARY ORDER MUST SERVE A

COPY OF IT

ON ANY PARTY NOT

REPRESENTED BY COUNSEL.

At a stated term of the United States Court of

Appeals for the Second Circuit, held at the

Thurgood Marshall United States Courthouse,

40 Foley Square, in the City of New York, on the

20th day of December, two thousand twenty-two.

2a

PRESENT:

PIERRE N. LEVAL,

REENA RAGGI,

MYRNA PÉREZ,

Circuit Judges.

______________________________

Moab Partners, L.P.,

Lead Plaintiff-Appellant,

City of Riviera Beach General

Employees Retirement System,

on behalf of itself and all

others similarly situated,

Plaintiff,

v.

No. 21-2524

Macquarie Infrastructure

Corporation, James Hooke,

Jay Davis, Liam Stewart,

Richard D. Courtney, Barclays

Capital Inc., Robert Choi, Martin

Stanley, Norman H. Brown, Jr.,

George W. Carmany, III, Henry E.

Lentz, Ouma Sananikone, William H.

Webb, Macquarie Infrastructure

Management (USA) Inc.,

Defendants-Appellees.

______________________________

FOR LEAD

PLAINTIFFAPPELLANT:

SALVATORE J. GRAZIANO,

Lauren A. Ormsbee,

Jesse L. Jensen, James

M. Fee, Bernstein

Litowitz Berger &

3a

Grossmann LLP, New

York, NY.

FOR DEFENDANTSAPPELLEES:

Macquarie

Infrastructure

Corporation, James

Hooke, Jay Davis, Liam

Stewart, Richard D.

Courtney, Robert Choi,

Martin Stanley, Norman

H. Brown, Jr., George W.

Carmany, III, Henry E.

Lentz, Ouma

Sananikone, and

William H. Webb

JOHN E. SCHREIBER,

Frank S. Restagno,

Winston & Strawn LLP,

New York, NY.

Linda T. Coberly,

Winston & Strawn LLP,

Chicago, IL.

Lauren Gailey, Winston

& Strawn LLP,

Washington, DC.

Richard W. Reinthaler,

Pinehurst, NC.

Macquarie

Infrastructure

Management (USA) Inc.

Christopher M.

Paparella, Justin BenAsher, Steptoe &

4a

Johnson LLP, New

York, NY.

Barclays Capital Inc.

Susanna M. Buergel,

Paul, Weiss, Rifkind,

Wharton & Garrison

LLP, New York, NY

Appeal from a judgment of the United States

District Court for the Southern District of New York

(Vernon S. Broderick, J.).

UPON DUE CONSIDERATION, IT IS

HEREBY

ORDERED,

ADJUDGED,

AND

DECREED that the October 7, 2021 judgment of the

district court is VACATED and the case is

REMANDED for further proceedings.

Plaintiff Moab Partners, L.P. appeals from a

judgment of the United States District Court for the

Southern District of New York dismissing Plaintiff’s

consolidated amended complaint (the “Complaint”)

under Rule 12(b)(6) of the Federal Rules of Civil

Procedure. The Complaint alleges Defendants made

material omissions and false and misleading

statements regarding one of Macquarie Infrastructure

Corporation’s (“MIC”) top-performing subsidiaries,

International-Matex Tank Terminals (“IMTT”), in

violation of various provisions of the Securities

Exchange Act of 1934 (“Exchange Act”), the Securities

Act of 1933 (“Securities Act”), and the regulations

promulgated thereunder. Defendants are MIC, MIC’s

manager, Macquarie Infrastructure Management

(USA) Inc. (“MIMUSA”), MIC’s underwriter for its

November 2016 secondary public offering, Barclays

Capital Inc., and certain former executives and

directors of MIC, IMTT, and MIMUSA.

5a

Because we hold that Plaintiff adequately pleaded

material omissions and facts giving rise to a strong

inference of scienter, we vacate the judgment and

remand for further proceedings. We assume the

parties’ familiarity with the underlying facts,

procedural history, and issues on appeal, which we

only recount in a limited manner to explain our

decision.

DISCUSSION

I.

Standard of Review

We review a dismissal under Rule 12(b)(6) de novo,

accepting all factual allegations in the complaint as

true, and drawing all reasonable inferences in the

plaintiff’s favor. ATSI Commc’ns, Inc. v. Shaar Fund,

Ltd., 493 F.3d 87, 98 (2d Cir. 2007). In doing so, we

consider “any written instrument attached to the

complaint as an exhibit or any statements or

documents incorporated in it by reference, as well as

public disclosure documents required by law to be, and

that have been, filed with the SEC, and documents

that the plaintiffs either possessed or knew about and

upon which they relied in bringing the suit.” StratteMcClure v. Morgan Stanley, 776 F.3d 94, 100 (2d Cir.

2015) (alterations omitted) (quoting Rothman v.

Gregor, 220 F.3d 81, 88 (2d Cir. 2000)).

II.

Material Misstatements or Omissions

The Complaint adequately alleges Defendants

made material omissions and false or misleading

statements. Section 10(b) of the Exchange Act (and

Rule 10b-5 thereunder) and Sections 11 and 12(a)(2) of

the Securities Act prohibit material omissions or

misstatements in certain documents in connection

with purchases and sales of securities. See Matrixx

Initiatives, Inc. v. Siracusano, 563 U.S. 27, 37 (2011)

6a

(Section 10(b) and Rule 10b-5 claims); see also Panther

Partners Inc. v. Ikanos Commc’ns, Inc., 681 F.3d 114,

119–20 (2d Cir. 2012) (Sections 11 and 12(a)(2)

claims). That said, “a corporation is not required to

disclose a fact merely because a reasonable investor

would very much like to know that fact.” In re Time

Warner Inc. Sec. Litig., 9 F.3d 259, 267 (2d Cir. 1993).

Rather, as relevant here, there are two circumstances

which impose a duty on a corporation to disclose

omitted facts. First, “a duty [to disclose] may arise

when there is . . . ‘a statute or regulation requiring

disclosure,’” Stratte-McClure, 776 F.3d at 101 (quoting

Glazer v. Formica Corp., 964 F.2d 149, 157 (2d Cir.

1992)), such as Items 303 and 503 of SEC Regulation

S-K. Second, “[e]ven when there is no existing

independent duty to disclose information, once a

company speaks on an issue or topic, there is a duty to

tell the whole truth.” Meyer v. JinkoSolar Holdings

Co., 761 F.3d 245, 250 (2d Cir. 2014) (citing Caiola v.

Citibank, N.A., 295 F.3d 312, 331 (2d Cir. 2012)).

Plaintiff alleges that Defendants omitted material

information and made affirmative misstatements, to

conceal (1) the extent of IMTT’s exposure to No. 6 fuel

oil, which was subject to an impending regulation

(“IMO 2020”) and the anticipated resulting losses of

revenue; (2) the fact that IMTT’s customer base

included speculative commodities traders who

typically move in and out of the market based on shortterm opportunities; (3) the extent of IMTT’s need to

undertake significant capital expenditures to

repurpose No. 6 fuel oil storage tanks so that they

would be suitable to store other liquid commodities;

and (4) the related risks to MIC’s historically

predictable quarterly dividends (together, the “Alleged

Omissions or Misstatements”).

7a

We agree with the district court that the majority

of Defendants’ alleged misstatements are not

actionable, including several constituting nonactionable puffery or expression of corporate

optimism. 1 Nonetheless, the federal securities laws

require plaintiffs to adequately allege that defendants

make material omissions or materially false or

misleading statements, and we find that Plaintiff has

satisfied that burden by pleading actionable

omissions.

A. Affirmative Duty Under Item 303 of

Regulation S-K

Plaintiff has adequately alleged a “known trend[]

or uncertaint[y]” that gave rise to a duty to disclose

under Item 303. Stratte-McClure, 776 F.3d at 101

(quoting 17 C.F.R. § 229.303(a)(3)(ii)). Item 303

requires that a company disclose certain information

“where a trend, demand, commitment, event or

uncertainty is both presently known to management

and reasonably likely to have material effects on the

registrant’s financial conditions or results of

operations.” Id. (quoting Management’s Discussion

and Analysis of Financial Condition and Results of

Operations at 13, Exchange Act Release No. 6835, 43

S.E.C. Docket 1330 (May 18, 1989) (hereinafter “SEC’s

Interpretive Release”)); see also 17 C.F.R. § 229.303.

1For example, certain of the identified misstatements (such as

those claiming MIC’s businesses had been “boringly predictable”

and “just the kind of unsexy business model we want”) are “too

general to cause a reasonable investor to rely upon them.” ECA,

Loc. 104IBEW Joint Pension Tr. of Chi. v. JP Morgan Chase Co.,

553 F.3d 187, 206 (2d Cir. 2009). The same is true of MIC’s

statement describing infrastructure generally as an “inherently

more stable asset class.” Accordingly, on remand, the court need

not consider them.

8a

The failure to make a material disclosure required by

Item 303 can serve as the basis for claims under

Sections 11 and 12(a)(2), and for a claim under Section

10(b) if the other elements have been sufficiently

pleaded. See Panther Partners, 681 F.3d at 120–22

(Sections 11 and 12(a)(2) claims); Stratte-McClure, 776

F.3d at 101–04 (Section 10(b) and Rule 10b-5 claim).

The SEC has explained that Item 303 requires

disclosure “where a trend, demand, commitment,

event or uncertainty is both presently known to

management and reasonably likely to have material

effects on the registrant’s financial condition or results

of operation.” SEC’s Interpretive Release at 14.

Pertinently, the SEC’s Interpretive Release sets forth

an example relating to disclosure of “the reasonably

likely material effect of a known uncertainty regarding

implementation of recently adopted legislation”:

Where a trend, demand, commitment, event or

uncertainty is known, management must make

two assessments:

(1) Is the known trend, demand,

commitment, event or uncertainty likely to

come to fruition? If management determines

that it is not reasonably likely to occur, no

disclosure is required.

(2) If management cannot make that

determination, it must evaluate objectively

the consequences of the known trend,

demand, commitment, event or uncertainty,

on the assumption that it will come to

fruition. Disclosure is then required unless

management determines that a material

effect on the registrant’s financial condition

9a

or results of operations is not reasonably

likely to occur.

Each final determination resulting from the

assessments made by management must be

objectively reasonable, viewed as of the time the

determination is made.

Id. at 19–20.

Crediting Plaintiff’s allegations as true, IMO

2020’s significant restriction of No. 6 fuel oil use was

known to Defendants and reasonably likely to have

material effects on MIC’s financial condition or results

of operation. In these circumstances, even if

Defendants could not determine with certainty that

IMO 2020 would be implemented, they were required

to evaluate IMO 2020’s consequences on the

assumption that it would come to fruition and to

disclose its potential impact unless Defendants

“determine[d] that a material effect on the registrant’s

financial condition or results of operations is not

reasonably likely to occur.” Id. As pleaded, it would not

have been “objectively reasonable” for Defendants to

determine that IMO 2020 would not likely have a

material effect on MIC’s financial condition or

operations. See Stratte-McClure, 776 F.3d at 102–03

(internal quotation marks omitted) (explaining that

Item 303 materiality analysis requires “balancing . . .

both the indicated probability that the event will occur

and the anticipated magnitude of the event in light of

the totality of the company activity” (emphases

omitted) (quoting Basic Inc. v. Levinson, 485 U.S. 224,

238 (1988))). 2

2 The complaint also alleged that Defendants failed to meet their

disclosure obligations under Item 503 of Regulation S-K (“Item

503”), since recodified as Item 105. FAST Act Modernization and

10a

When reviewing the sufficiency of a complaint, a

district court may not dismiss for lack of materiality

unless the alleged misstatements or omissions “are so

obviously unimportant to a reasonable investor that

reasonable minds could not differ on the question of

their importance.” Litwin v. Blackstone Group, L.P.,

634 F.3d 706, 717 (2d Cir. 2011) (quoting Ganino v.

Citizens Utilities Co., 228 F.3d 154, 162 (2d Cir. 2000)).

As pleaded, a reasonable investor would consider the

omitted information important.

B. Affirmative Duty to Disclose Information to

Prevent Statements from Being Inaccurate,

Incomplete, or Misleading

The district court also erred in determining that

Plaintiff failed to plead any actionable omissions or

“half-truths.” Having chosen to speak about their base

of customers, Defendants had a duty to speak

accurately, giving all material facts in addressing

those issues to permit investors to evaluate the

potential risks. Setzer v. Omega Healthcare Investors,

Inc., 968 F.3d 204, 214 n.15 (2d Cir. 2020) (holding

that the company need not “disclose all the facts that

pertain to a subject (many of which would be

immaterial), but instead [must] not . . . omit material

facts whose omission, in the light of what was stated,

would be misleading.”). The omissions are not cured by

disclosures MIC did make—including those regarding

“changes in government regulations” and “capital

expenditures” related to repurposing tanks—which

did not reveal the information necessary for the

Simplification of Regulation S-K, 2019 WL 1437180, at *1 (1268889) (Apr. 2, 2019). It requires that a prospectus include a

“discussion of the material factors that make an investment in

the registrant or offering speculative or risky.” 17 C.F.R.

§ 229.105(a) (formerly 17 C.F.R. § 229.503(a)(c)).

11a

investing public to make a proper assessment of the

alleged risks. See JinkoSolar Holdings Co., 761 F.3d

at 251 (“A generic warning of a risk will not suffice

when undisclosed facts on the ground would

substantially

affect

a

reasonable

investor’s

calculations of probability.”). Accordingly, the generic

cautionary language here does not satisfy Defendants’

disclosure obligations.

III.

Scienter

We further conclude that the Complaint

adequately alleges that Defendants acted with

scienter in making the material omissions or false or

misleading statements. The scienter requirement may

be satisfied “either (a) by alleging facts to show that

defendants had both motive and opportunity to

commit fraud, or (b) by alleging facts that constitute

strong

circumstantial

evidence

of

conscious

misbehavior or recklessness.” Ganino, 228 F.3d at

168–69 (quoting Shields v. Citytrust Bancorp., 25 F.3d

1124, 1128 (2d Cir. 1994)).

If we credit the allegations in the Complaint, there

is sufficient circumstantial evidence that Defendants

Hooke, Davis, Stewart, and Courtney were each in the

unique position of knowing that IMTT had a

significant portion of its storage reserved for No. 6 fuel

oil, that significant upfront costs and lost revenues

were associated with repurposing No. 6 oil tanks, that

IMTT’s customers in the shipping industry—the last

remaining market for No. 6 fuel oil—would be

undergoing a significant shift in the time leading up to

IMO 2020’s enforcement, and that it was likely that

revenue contributions would be down from IMTT,

MIC’s “top asset and largest profit-driver.”

Nonetheless, these Defendants did not make

12a

corresponding disclosures and, instead, allegedly

minimized the exposure that IMTT faced from IMO

2020. See Novak v. Kasaks, 216 F.3d 300, 308 (2d Cir.

2000) (“[Under Second Circuit precedent], securities

fraud claims typically have sufficed to state a claim

based on recklessness when they have specifically

alleged defendants’ knowledge of facts or access to

information contradicting their public statements.”).

Plaintiff further alleges that discussions regarding

contract renewals were likely taking place at least as

early as February 2017, and that around the same

time, MIC began pursuing Epic Midstream, an

operator of storage terminals focused on jet fuel, in an

effort to diversify its portfolio and minimize the risk

posed by IMTT’s reliance on No. 6 fuel oil. The timing

of these events allegedly permitted Defendants to

announce the Epic acquisition at the same time they

announced that IMTT’s utilization rates were

beginning to decrease, allowing Defendants to divert

attention away from IMTT’s declining performance.

Considering “all of the facts alleged, taken

collectively,” Tellabs, Inc. v. Makor Issues & Rights,

Ltd., 551 U.S. 308, 323 (2007), Plaintiff adequately

pleaded strong circumstantial evidence of conscious

recklessness “at least as strong as any opposing

inference,” id. at 326.

IV.

Control Person and Insider Trading

Claims

The district court dismissed Plaintiff’s claims

under Section 15 of the Securities Act and Sections

20(a) and 20A of the Exchange Act based on Plaintiff’s

failure to plead a primary violation of securities law.

See Rombach v. Chang, 355 F.3d 164, 177–78 (2d Cir.

2004) (explaining that control person claims brought

13a

under Sections 15 and 20(a) are “necessarily

predicated on” primary underlying violations of

securities law); see also Arkansas Pub. Emps. Ret. Sys.

v. Bristol-Myers Squibb Co., 28 F.4th 343, 356 (2d Cir.

2022) (discussing primary violation requirement for

Section 20A claims). Because we vacate and remand

the district court’s dismissal of Plaintiff’s claims under

Sections 11 and 12(a)(2) of the Securities Act and

Section 10(b) of the Exchange Act and Rule 10b-5

thereunder, we similarly vacate and remand the

judgment on Plaintiff’s claims under Section 15 of the

Securities Act and Sections 20(a) and 20A of the

Exchange Act for further consideration by the district

court.

CONCLUSION

We have considered all of the parties’ remaining

arguments and conclude they are without merit. For

the foregoing reasons, we VACATE the judgment of

the district court dismissing Plaintiff’s Complaint, and

we REMAND this case for further proceedings

consistent with this order.

FOR THE COURT:

Catherine O’Hagan Wolfe,

Clerk of Court

14a

APPENDIX B

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

-------------------------------------X

: USDC SDNY

CITY OF RIVIERA

: DOCUMENT

BEACH GENERAL

: ELECTRONICALLY

EMPLOYEES

: FILED

RETIREMENT SYSTEM, : DOC #: __________

on behalf of itself and all : DATE FILED:

others similarly situated, : 9/7/2021

:

Plaintiff,

:

:

v.

:

18-CV-3608 (VSB)

:

MACQUARIE

:

INFRASTRUCTURE

: OPINION & ORDER

CORPORATION, et al.,

:

:

Defendants. :

:

-------------------------------------X

VERNON S. BRODERICK, United States District

Judge:

In this action, Lead Plaintiff Moab Partners, L.P.

(“Plaintiff” or “Moab”) asserts various securities law

claims against Defendant Macquarie Infrastructure

Corporation (“Macquarie” or “MIC”), Macquarie

Infrastructure Management (USA) Inc. (“MIMUSA”),

Barclays Capital Inc. (“Barclays”), James Hooke, Jay

15a

Davis, Liam Stewart, Richard D. Courtney, (Hooke,

Davis, Stewart and Courtney together known as the

“Officer Defendants”), Robert Choi, Martin Stanley,

Norman H. Brown, Jr., George W. Carmany III, Henry

E. Lentz, Ouma Sananikone, and William H. Webb

(together with the Officer Defendants, “Individual

Defendants”). 1 Plaintiff’s claims center on its assertion

that MIC and the other Individual Defendants made

“material misrepresentations and omissions” about

potential risks facing what it characterizes as MIC’s

“most important operating division,” and specifically

that Defendants were “actively conceal[ing] [MIC’s]

exposure” to a soon-to-be-effective environmental

regulation. (CAC 1 & ¶ 1.)2

Currently before me are various Defendants’

motions to dismiss Plaintiff’s Consolidated Complaint.

Because I find that Plaintiff does not plausibly allege

false statements or omissions, nor does it allege facts

from which to draw a strong inference of scienter,

Defendants’ motions to dismiss the Consolidated

Complaint are GRANTED.

I. Factual Background 3

The relevant time period for all of Plaintiff’s alleged

claims, the “Class Period,” is February 22, 2016 to

MIMUSA, Barclays and Individual Defendants Robert Choi,

Martin Stanley, Norman H. Brown, Jr., George W. Carmany III,

Henry E. Lentz, Ouma Sananikone, and William H. Webb are not

identified as defendants in the caption.

2 “CAC” or “Consolidated Complaint” refers to the Consolidated

Class Action Complaint for Violations of the Federal Securities

Laws filed in this action. (Doc. 56.)

3 In evaluating a motion to dismiss in a securities action, a court

may consider “any written instrument attached to the complaint,

statements or documents incorporated into the complaint by

reference, legally required public disclosure documents filed with

1

16a

February 21, 2018. (CAC ¶¶ 3, 41; Doc. 101 (“MIC

MTD”) at 12; Doc. 110 (“MTD Opp.”) at 10.)

A. The Primary Defendants

Defendant Macquarie is a publicly traded

Delaware holding company that owns and operates

various infrastructure and infrastructure-related

businesses. (CAC ¶ 28.) Central to the allegations in

the Consolidated Complaint is what Plaintiff calls

Macquarie’s “most important operating division,”

International-Matex Tank Terminals-Bayone, Inc.

(“IMTT”). (Id. ¶ 1.) IMTT is a wholly-owned MIC

subsidiary that operates large “bulk liquid storage

terminals” within the United States. (See id. ¶¶ 1, 33.)

IMTT’s terminals handle and store various liquid

commodities, most notably “petroleum,” but also

“biofuels, chemicals, and vegetable/tropical oil

products.” (Id. ¶ 63.) IMTT does not buy and sell

petroleum or other liquid products; it is solely a service

provider to those who have title to various liquid

products and need those products stored and handled.

(Id. ¶¶ 37, 63.)

Just before the start of the alleged “Class Period” of

February 22, 2016 to February 21, 2018, (CAC ¶¶ 3,

41; see also MTD Opp. 10), MIC’s market

capitalization was approximately $5.75 billion, with

around 80,084,457 shares of common stock

outstanding that had traded in the first quarter of

the SEC, and documents possessed by or known to the plaintiff

and upon which it relied in bringing the suit.” See ATSI

Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.

2007). For the purpose of resolving this motion to dismiss, I will

consider such documents, and I assume all well-pleaded facts in

the Consolidated Complaint, see supra note 2, to be true, and

draw all reasonable inferences in favor of Plaintiffs, see Koch v.

Christie’s Int’l PLC, 699 F.3d 141, 145 (2d Cir. 2012).

17a

2016 at a high of $71.82. 4 Just before the close of the

Class Period, MIC’s market capitalization was still

approximately $5.75 billion, with around 84,819,268

shares of common stock outstanding that had traded

in the first quarter of 2018 at a high of $67.84. 5 By May

of 2018, after the Class Period, MIC’s market

capitalization had declined to around $3.2 billion. 6

Defendant MIMUSA acts as MIC’s manager. (CAC

¶ 29.) Through a management service agreement with

MIC, MIMUSA assigns its employees to work at MIC

as MIC’s officers. (Id.) MIMUSA is compensated based

on how MIC performs financially, which considers

factors including MIC’s market capitalization. (Id.

¶ 58.)

Defendants Hooke and Stewart were both

MIMUSA employees assigned to work as MIC officers;

Hooke served as Chief Executive Officer (“CEO”) of

MIC from May 8, 2009 to December 31, 2017, and

Stewart has served as Chief Financial Officer (“CFO”)

of MIC since June 2015. (Id. ¶¶ 29, 30, 32.) Since 2008,

Defendant Davis has been MIC’s Head of Investor

Relations and a Vice President of MIC, (id. ¶ 31), and

Defendant Courtney has served as CEO and President

of IMTT since February 2015, (id. ¶ 33).

B. MIC’s Business in No. 6 Fuel Oil

The disputes in this case arise out of MIC’s

business, through IMTT, in storing a category of

refined petroleum known as “No. 6 fuel oil.” (Id. ¶¶ 1,

4 See Macquarie Infrastructure Co., Annual Report (Form 10-K),

at 51 (Feb. 23, 2016).

5 See Macquarie Infrastructure Co., Annual Report (Form 10-K),

at 54 (Feb. 21, 2018).

6 MIC Market Cap History, https://www.marketcaphistory.com/

mic/ (last visited Sept. 3, 2021).

18a

109.) No. 6 fuel oil refers to a “group of heavy and

residual fuel oils” that “are generally what is left in the

bottom of the barrel at the end of petroleum

refinement process.” (Id. ¶ 81.) Because No. 6 fuel oil

has various environmentally noxious qualities,

including a relatively high percentage sulfur content

compared to other oils, governments and other

institutions with regulatory authority have sought to

limit or ban No. 6 fuel oil’s use for over a decade. (See

id. ¶¶ 87–88, 91.) Regulation has led to declines in the

usage of No. 6 fuel oil, though this “the decline in

residual fuel oil usage [was] masked by increase in its

use as a fuel for maritime bunkering.” 7 (Id. ¶ 89.)

Indeed, “large shipping vessels” were generally

thought of as the main users of No. 6 fuel oil by the

start of the Class Period. (Id.)

According to the allegations in the Consolidated

Complaint, the use of No. 6 fuel oil was threatened by

a pending regulation known as “IMO 2020.” First

adopted in October 2008 by the International

Maritime Organization (“IMO”), the United Nations

body charged with regulating global shipping, IMO

2020 sought to ban the use of fuels with a sulfur

content of 0.5% or more by the beginning of 2020. (See

id. ¶¶ 90–91.) Because No. 6 fuel oil “typically” has a

“sulfur content” of closer to “3%,” (id. ¶ 91), many

believed “IMO 2020 w[ould] effectively eliminate the

use of No. 6 fuel oil for global shipping,” (id. ¶ 92; see

also id. ¶ 99 (recounting the U.S. Energy Information

7 “In shipping, bunkering refers to the fueling of ships with

marine (bunker) fuels used to power them, and also includes food

and drinking water supplies for the crew.” Marquard & Bahls,

Glossary, Bunkering (Marine Fuelling), https://www.marquardbahls.com/en/news-info/glossary/detail/term/bunkering-marinefuelling.html (last visited Sept. 3, 2021).

19a

Administration’s “significantly lowered expectations

for future” global use of products like No. 6 fuel oil)).

At the same time, others believed that shippers might

opt to continue using No. 6 fuel oil even after IMO

2020’s adoption by “installing abatement technology

such as scrubbers” that would remove sulfur content

in excess of regulations from emissions. (Schreiber

Decl. Ex. O, 8 at 4 (explaining that “the production and

supply of” higher sulfur fuels like No. 6 fuel oil “would

need to continue until the day before” IMO 2020 “kicks

in”) (cited in CAC ¶ 97).) Since 2013, IMO 2020 has

been mentioned in the securities filings of at least one

publicly-traded fuel storage business; one of these

filings states that IMO 2020 has the potential to

“reduce demand for our products and services.” (CAC

¶ 98.) On October 27, 2016, IMO 2020 was “formally

fixed” to place a 0.5% cap on sulfur in fuels like No. 6

fuel oil, (id. ¶ 120), a fact that was “widely reported”

and about which there was a plethora of market

analysis, (id. ¶¶ 121–23).

C. Relevant Pre-Class Period Statements

Plaintiff identifies Defendants’ first alleged

statements relating to No. 6 fuel oil as occurring

during a May 3, 2012 earnings call. (Id. ¶ 105.)

Specifically, during this earning call, Hooke stated

that due to the “shutter[ing]” and “idl[ing]” of certain

“refineries in the Northeast,” MIC expected “less short

term demand for storage of heavy oil residual product

in the Northeast,” and that MIC “ha[d] a reasonable

8 “Schreiber Decl.

Ex. __” refers to the Declaration of John E.

Schreiber in Support of the Motion to Dismiss and the exhibits

thereto. (Doc. 104.) The Schreiber Declaration includes many of

the public statements quoted or otherwise referenced in the

Complaint. I may refer to these in resolving this motion. See

supra note 3.

20a

number of heavy oil tanks at” one of IMTT’s main

storage sites. (See id.; Schreiber Decl. Ex. B.) As a

result, Hooke said, MIC “may” make “a one-off

increase in capital expenditures to convert the heavy

product tanks to service the clean product.” (Id.) Hooke

cautioned that MIC’s approach was not to convert its

tanks over right away, but to “wait-and-see” and

evaluate what mix of petroleum products customers

may want to store at its facilities. (Id.)

Defendants only referred to converting IMTT’s

“heavy product” storage tanks on two other occasions

prior to the Class Period. On August 2, 2012, during

an earnings call, Hooke reported that MIC did not “see

an immediate need to convert large amounts of

existing heavy oil storage” over to handle “clean

product.” (CAC ¶ 106.) Next, on a November 1, 2012

earnings call, Hooke said that MIC had, in “the past

couple of months[,] . . . concluded that it would be in

IMTT’s long-term best interest to begin to convert a

portion of the residual oil storage at Bayonne,” one of

IMTT’s largest storage terminals, “to clean product

storage.” (Id. ¶ 107.) 9 Hooke added that converting

storage capacity “from residual oil or six oil to” other

product classes would require capital expenditures.

(Id.)

D. Mid-Class Period Statements

Defendants did not again “publicly discuss the

storage of No. 6 fuel oil” until “near the end of the Class

Period.” (Id. ¶ 108.) For example, a few days after the

See also Macquarie Infrastructure’s CEO Discusses Q3 2012

Results - Earnings Call Transcript, Seeking Alpha (Nov. 5, 2014,

4:18 PM ET), https://seekingalpha.com/article/979731-macq

uarie-infrastructures-ceo-discusses-q3-2012-results-earningscall-transcript.

9

21a

IMO made a late October 2016 announcement that

IMO 2020 would go into effect at the start of 2020, as

it had previously publicly stated it would, (id. ¶ 120),

MIC held a November 2016 earnings call and “did not

mention IMO 2020,” (id. ¶ 124). Speaking for MIC,

Hooke did say that, based on MIC’s customers’

behavior around storage contracts, he thought

“shippers and others probably” thought commodity

prices “will not be either as low or as volatile as has

been the case over the last couple of years.” (Id. ¶ 124.)

He then added “none of MIC’s businesses are exposed

directly to the price of crude oil or petroleum products.”

(Id. ¶ 124.) Next, during conferences held in May 2017,

Davis stated that MIC’s storage business had “no

commodity exposure other than the very broad

macroeconomic factors influencing supply and demand

more broadly.” (Id. ¶¶ 144–45.) By comparison, one of

MIC’s main competitors used its November 2016

earnings call to discuss the implications of IMO 2020

on the “storage of” “diesel and fuel oil.” (Id. ¶ 128

(Chief Financial Officer for MIC’s competitor stated

“‘the implications for global imbalances of diesel and

fuel oil’ as a result of IMO 2020, which he said raised

the questions ‘what does it mean for the storage of the

products?’ and ‘what we are doing . . . as a business?’”).)

E. The Offering

On November 13, 2016, Defendants announced

that MIMUSA would hold a secondary public offering

of 2,870,000 shares of MIC common stock, which

represented about 40% of MIMUSA’s holdings (the

“Offering”). (Id. ¶ 131.) The Offering documents “did

not discuss” No. 6 fuel oil or IMO 2020. (Id. ¶ 132; cf.

id. ¶ 133 (mentioning a separate fuel distributor that

discussed IMO 2020 as an “adverse condition” in its

public securities filings).) Investors purchased “over

22a

$235 million of [MIC] common stock” through the

Offering from the underwriter, Barclays. (Id. ¶ 132.)

MIMUSA had previously sold “27.6% of its holdings”

in MIC “in June 2015.” (Id. ¶ 309.)

F. The Epic Acquisition

Around August 2017, Defendants announced that

MIC would acquire Epic Midstream (“Epic”), another

operator of storage terminals, for $171.5 million. (Id.

¶ 153.) At the time, the Epic acquisition price

represented less than 3% of MIC’s market

capitalization. See supra note 5 and accompanying

text. Epic offered MIC diversity in its storage offerings

as it “principally stored jet fuel,” a business that would

not be impacted by IMO 2020. (Id.) MIC paid for Epic

“largely in shares of [its] stock,” (id.), with stock

representing about 72% of the acquisition price, (see

id. ¶ 155).

G. MIC’s Stock Downturn

At the end of the Class Period, on February 21,

2018, MIC announced that IMTT’s utilization—the

amount of its storage tank capacity actually contracted

for use by IMTT’s customers—had dropped to 89.6%.

(Id. ¶ 170.) Previously, at the end of the second quarter

of 2017, IMTT’s utilization was 94%, (id. ¶ 150), and

at the end of the third quarter of 2017, utilization had

been 93.2%, (id. ¶ 170). MIC also announced that it

had missed its financial projections and would be

cutting its dividend guidance. (Id. ¶¶ 180–82.) 10

On February 22, 2018, MIC held an earnings call

in which its new CEO, Christopher Frost, who had

replaced Hooke, said that MIC’s financial downturn

10 Prior to this, MIC’s stock’s desirability was based in part on “its

stable and growing dividend.” (CAC ¶ 4.)

23a

was in large part due to the “structural decline in the

6 oil market.” (Id. ¶ 184.) Frost said that “[i]n

December [2017] and early January [2018],” many of

IMTT’s customers “terminated contracts for a

significant amount of 6 oil capacity at IMT’s facility in

St. Rose” and even “shut down their operations and

exited the industry.” (Id. ¶ 185.) Frost called this

sudden downturn “a surprise.” (Id.) That same day,

MIC’s stock price fell around 41%, from a price of

$63.62 per share the previous day to $37.41.

II. Procedural History

On April 23, 2018, Plaintiff City of Riviera Beach

General Employees Retirement System began this

securities fraud class action by filing its complaint.

(Doc. 1.) On January 30, 2019, I granted a motion to

consolidate this action with the related action

numbered 18-cv-3744 because it “set forth

substantially identical questions of law and fact,” and

I appointed Moab as Lead Plaintiff. (Doc. 52 at 2–3.)

Moab then filed the Consolidated Complaint on

February 20, 2019. (Doc. 56.) The Consolidated

Complaint alleges violations of (i) Section 10(b) of the

Securities Exchange Act of 1934 (“’34 Act”) and SEC

Rule 10b-5 against MIC and the Officer

Defendants 11—Count I (CAC ¶¶ 317–25); (ii) Section

20(a) of the ’34 Act against MIMUSA and the Officer

Defendants—Count II (id. ¶¶ 326–29); (iii) Section

20A of the ’34 Act against MIMUSA—Count III (id.

¶¶ 330–35); (iv) Section 11 of the Securities Act of 1933

(“ ’33 Act”) against MIC, Barclays, and the Individual

11 Although MIMUSA is listed in the caption for Count I, by

stipulation filed April 4, 2019, Moab and Defendants MIC and

MIMUSA agreed that the Consolidated Complaint does not name

MIMUSA in Count I, but does name MIMUSA in Counts II, III,

and VI. (See Doc. 83.)

24a

Defendants—Count IV (id. ¶¶ 373–83); (v) Section

12(a)(2) of the Securities Act against MIC and

Barclays—Count V (id. ¶¶ 384–92); and (vi) Section 15

of the Securities Act against MIMUSA and the

Individual Defendants—Count VI (id. ¶¶ 393–98).

The Individual Defendants filed their motion to

dismiss and memorandum of law on April 22, 2019.

(Docs. 100–101.) That same day MIC and MIMUSA

filed their motion to dismiss, memorandum of law, and

declarations with exhibits. (Docs. 102–104.) Barclays

also filed its motion and joinder memorandum of law—

joining in the arguments made by the other

Defendants in their motions to dismiss—on April 22,

2019. 12 (Docs. 104–105.) Moab filed its opposition brief

and declaration with exhibits on June 21, 2019, (Docs.

110–11), and Defendants MIC and MIMUSA filed

their reply brief on July 22, 2019, (Docs. 112). The

Individual Defendants filed their reply brief and reply

declaration, (Docs. 113, 115), and Barclays filed its

joinder to the replies of the other defendants on July

22, 2019, (Doc. 114).

III. Legal Standard

To survive a motion to dismiss under Federal Rule

of Civil Procedure 12(b)(6), “a complaint must contain

sufficient factual matter, accepted as true, to ‘state a

claim to relief that is plausible on its face.’” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007)). A claim will

have “facial plausibility when the plaintiff pleads

12 Barclays also filed a letter motion requesting oral argument on

April 22, 2019. (Doc. 107.) By endorsement the following day, I

informed Barclays that pursuant to my Individual Rule 4.J, I

would inform the parties if I deemed oral argument necessary.

(Doc. 108.)

25a

factual content that allows the court to draw the

reasonable inference that the defendant is liable for

the misconduct alleged.” Id. This standard demands

“more than a sheer possibility that a defendant has

acted unlawfully.” Id. “Plausibility . . . depends on a

host of considerations: the full factual picture

presented by the complaint, the particular cause of

action and its elements, and the existence of

alternative explanations so obvious that they render

plaintiff’s inferences unreasonable.” L-7 Designs, Inc.

v. Old Navy, LLC, 647 F.3d 419, 430 (2d Cir. 2011).

In considering a motion to dismiss, a court must

accept as true all well-pleaded facts alleged in the

complaint and must draw all reasonable inferences in

the plaintiff’s favor. Kassner v. 2nd Ave. Delicatessen

Inc., 496 F.3d 229, 237 (2d Cir. 2007). A complaint

need not make “detailed factual allegations,” but it

must contain more than mere “labels and conclusions”

or “a formulaic recitation of the elements of a cause of

action.” Iqbal, 556 U.S. at 678 (internal quotation

marks omitted). Although all allegations contained in

the complaint are assumed to be true, this tenet is

“inapplicable to legal conclusions.” Id. A complaint is

“deemed to include any written instrument attached

to it as an exhibit or any statements or documents

incorporated in it by reference.” Chambers v. Time

Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002) (quoting

Int’l Audiotext Network, Inc. v. Am. Tel. & Tel. Co., 62

F.3d 69, 72 (2d Cir. 1995)).

“Securities fraud claims are subject to heightened

pleading requirements that the plaintiff must meet to

survive a motion to dismiss.” ATSI, 493 F.3d at 99; see

also Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551

U.S. 308, 322 (2007). Federal Rule of Civil Procedure

9(b) requires a securities fraud claim to “state with

26a

particularity the circumstances constituting fraud or

mistake.” Fed. R. Civ. P. 9(b). This standard requires

that the complaint “(1) specify the statements that the

plaintiff contends were fraudulent, (2) identify the

speaker, (3) state where and when the statements

were made, and (4) explain why the statements were

fraudulent.” ATSI, 493 F.3d at 99. “Allegations that

are conclusory or unsupported by factual assertions

are insufficient.” Id.

The Private Securities Litigation Reform Act (the

“PSLRA”) also imposes a heightened pleading

standard on securities fraud complaints. See 15 U.S.C.

§ 78u–4(b); Lewy v. SkyPeople Fruit Juice, Inc., No. 11

Civ. 2700(PKC), 2012 WL 3957916, at *7 (S.D.N.Y.

Sept. 10, 2012) (“Courts must dismiss pleadings that

fail to adhere to the requirements of the PSLRA.”). To

satisfy the PSLRA, a securities fraud complaint must

“‘specify’ each misleading statement”; “set forth the

facts ‘on which a belief’ that a statement is misleading

was ‘formed’”; and “state with particularity facts

giving rise to a strong inference that the defendant

acted with the required state of mind.” Dura Pharms.,

Inc. v. Broudo, 544 U.S. 336, 345 (2005) (quoting 15

U.S.C. § 78u–4(b)). Although a court ordinarily draws

all reasonable inferences in favor of the plaintiff, the

PSLRA “establishes a more stringent rule for

inferences involving scienter because the PSLRA

requires particular allegations giving rise to a strong

inference of scienter.” ECA, Local 134 IBEW Joint

Pension Trust of Chi. v. JP Morgan Chase Co., 553

F.3d 187, 196 (2d Cir. 2009) (internal quotation marks

omitted).

27a

IV. Discussion

A. Section 10(b) and Rule 10-b5

1. Applicable Law

a. Misstatements or Falsity

Section 10(b) of the Exchange Act and Rule 10b-5

promulgated thereunder prohibit fraud in connection

with the purchase or sale of securities. See 15 U.S.C.

§ 78j; 17 C.F.R. § 240.10b-5. Rule 10b-5(b) targets

misleading disclosures, and Rules 10b-5(a) and (c)

target deceptive conduct. See SEC v. Lee, 720 F. Supp.

2d 305, 325 (S.D.N.Y. 2010); see also Wilson v. Merrill

Lynch & Co., 671 F.3d 120, 129 (2d Cir. 2011) (“Section

10(b), in proscribing the use of a manipulative or

deceptive device or contrivance, prohibits not only

material misstatements but also manipulative acts.”

(citation omitted)); United States v. Finnerty, 533 F.3d

143, 148 (2d Cir. 2008) (“‘Conduct itself can be

deceptive,’ and so liability under § 10(b) or Rule 10b-5

does not require ‘a specific oral or written statement.’”

(quoting Stoneridge Inv. Partners, LLC v. ScientificAtlanta, 552 U.S. 148, 158 (2008)).

“To succeed on a claim under Section 10(b) of the

Exchange Act and Rule 10b-5, ‘a plaintiff must allege

that each defendant (1) made misstatements or

omissions of material fact, (2) with scienter, (3) in

connection with the purchase or sale of securities,

(4) upon which the plaintiff relied, and (5) that the

plaintiff’s reliance was the proximate cause of its

injury.’” Indiana Pub. Ret. Sys. v. SAIC, Inc., 818 F.3d

85, 93 (2d Cir. 2016) (quoting ATSI, 493 F.3d at 105).

“A false statement was made with the requisite

scienter if it was made with the ‘intent to deceive,

manipulate, or defraud.’” SEC v. Frohling, 851 F.3d

28a

132, 136 (2d Cir. 2016) (quoting SEC v. Obus, 693 F.3d

276, 286 (2d Cir. 2012)).

The PSLRA, which amended the Exchange Act,

provides for “a statutory safe-harbor for forwardlooking statements.” Slayton v. Am. Express Co., 604

F.3d 758, 765 (2d Cir. 2010). Under the PSLRA, a

forward-looking statement is “(i) identified as a

forward-looking statement, and is accompanied by

meaningful

cautionary

statements

identifying

important factors that could cause actual results to

differ materially from those in the forward-looking

statement; or (ii) immaterial.” 15 U.S.C. § 78u5(c)(1)(A). The safe harbor provision “requires

dismissal if the plaintiffs do not ‘prove that the

forward-looking statement . . . was . . . made or

approved by an executive officer with actual

knowledge by that officer that the statement was false

or misleading.’” Slayton, 604 F.3d at 773 (quoting 15

U.S.C. § 78u-5(c)(1)(B)).

2. Application

Plaintiff pleads a host of allegedly actionable

misstatements and omissions. The crux of Plaintiff’s

argument is that the “statements were false and

misleading” because MIC “concealed from investors

that IMTT’s single largest product . . . was No. 6 fuel

oil,” which “constitute[ed] over 40% of [IMTT’s] storage

capacity” and which “faced a near-cataclysmic ban on

the bulk of its worldwide use through IMO 2020.”

(MTD Opp. 28.) Accordingly, as Plaintiff frames the

case, a key issue is whether “Defendants ha[d] a duty

to disclose” the extent to which IMTT’s storage

capacity was devoted to No. 6 fuel oil. (Id. at 28–29.)

Section 10 “do[es] not create an affirmative duty to

disclose any and all material information.” Matrixx

29a

Initiatives, Inc. v. Siracusano, 563 U.S. 27, 44 (2011).

“A company has no duty to disclose information

‘merely because a reasonable investor would very

much like to know’ that information.” S.C. Ret. Sys.

Grp. Trust v. Eaton Corp. PLC, 791 F. App’x 230, 234

(2d Cir. 2019) (quoting In re Time Warner Inc. Sec.

Litig., 9 F.3d 259, 267 (2d Cir. 1993)).

Nevertheless, there are two relevant situations

where a company will be bound to disclose facts. The

first is when a company or its officers makes a

statement that is only a “half-truth[],” i.e. where a

defendant’s affirmative statement, albeit “literally

true,” “create[s] a materially misleading impression”

due to defendant’s choice to omit that information. In

re Vivendi, S.A. Sec. Litig., 838 F.3d 223, 239–40 (2d

Cir. 2016) (collecting cases); see, e.g., Menaldi v. OchZiff Cap. Mgmt. Grp. LLC, 277 F. Supp. 3d 500, 513

(S.D.N.Y. 2017); Meyer v. Jinkosolar Holdings Co., 761

F.3d 245, 250 (2d Cir. 2014) (“The literal truth of an

isolated statement is insufficient; the proper inquiry

requires

an

examination

of

defendants’

representations, taken together and in context.”

(citation omitted)). As such, although many cases talk

about how “once a company speaks on an issue or topic,

there is a duty to tell the whole truth,” Plumbers &

Steamfitters Loc. 137 Pension Fund v. Am. Express

Co., 15 Civ. 5999 (PGG), 2017 WL 4403314, at *13

(S.D.N.Y. Sept. 30, 2017) (quoting Jinkosolar, 761 F.3d

at 250), aff’d sub nom. Pipefitters Union Loc. 537

Pension Fund v. Am. Express Co., 773 F. App’x 630 (2d

Cir. 2019), there is no “boundless” “duty” to “reveal all

facts on the subject” just because a company or its

officers speak on a subject, see id. (internal quotation

marks omitted). In particular, the statement made

and the fact that allegedly should have been disclosed

30a

must share a reasonable level of specificity. Compare

Jinkosolar, 761 F.3d at 247, 250 (finding an actionable

half-truth where a public offering described specific

“pollution abatement equipment . . . to process, reduce,

treat, and where feasible, recycle the waste materials

before

disposal”

and

commenting

on

the

“environmental teams at each of our manufacturing

facilities” while at the same time not disclosing “that

the prophylactic steps were then failing to prevent

serious ongoing pollution problems”) with Luo v.

Sogou, Inc., 465 F. Supp. 3d 393, 409–10 (S.D.N.Y.

2020) (“To the extent [the company] made any

disclosures at all about its compliance measures, those

disclosures were tentative and generic”, not “a

testament to the adequacy of [the company]’s

compliance program” (internal quotation marks

omitted)), and Menaldi v. Och-Ziff Cap. Mgmt. Grp.

LLC, 277 F. Supp. 3d 500, 513 (S.D.N.Y. 2017) (no

actionable half-truth from statements describing a

“global compliance program,” “comprehensive policies

and supervisory procedures,” “mandatory compliance

training,” and “strong relationships with a global

network of local attorneys” because these statements

“did not describe specific regions, specific initiatives,

or make any assurances of efficacy.”); see Diehl v.

Omega Protein Corp., 339 F. Supp. 3d 153, 163

(S.D.N.Y. 2018) (“it is the specificity” of a statement

that may require a defendant to speak more fully).

The second relevant situation is when “a statute or

regulation require[es] disclosure.” Stratte -McClure v.

Morgan Stanley, 776 F.3d 94, 101 (2d Cir. 2015)

(citation omitted). One such regulation is “Item 303 of

SEC Regulation S–K, 17 C.F.R. § 229.303(a)(3)(ii),”

SAIC, 818 F.3d at 88, which obligates a company to

make a disclosure in its SEC filings “where a trend,

31a

demand, commitment, event or uncertainty is both

presently known to management and reasonably likely

to have material effects on the registrant’s financial

conditions or results of operations.” Id. at 94 (quoting

Stratte–McClure, 776 F.3d at 101). To allege a

violation of Item 303 sufficient to support a Section

10(b) claim, a plaintiff must allege, first, that some

“trend, event, or uncertainty” was “actually know[n]”

to a company’s management “when [the company] files

the relevant report with the SEC,” id. at 95, and

second, that the omission in violation of Item 303 “was

material,” which requires “balancing . . . both the

indicated probability that the event will occur and the

anticipated magnitude of the event in light of the

totality of the company activity.” Stratte-McClure, 776

F.3d at 102–03 (internal quotation marks omitted)

(“Item 303’s disclosure requirement can only sustain a

claim under Section 10(b) and Rule 10b-5 if the

allegedly omitted information satisfies the [balancing]

test” just stated).

a. Alleged Misleading Affirmative

Statements

Here, Plaintiff does not identify any statements

that are actionable as half-truths due to Defendants’

failure to disclose its business reliance on storing No.

6 fuel oil. None of Defendants’ alleged statements were

literally true but misleading absent a disclosure about

how much No. 6 fuel oil IMTT’s facilities could store,

nor does Plaintiff identify any statements that share a

reasonable level of specificity with a breakdown of how

much No. 6 fuel oil IMTT stored or what other uses

could be made of the IMTT’s storage tanks. For

example, Plaintiff argues that Defendants made

misleading statements when they stated on earnings

calls that MIC’s business performance had been

32a

“boringly predictable” and that MIC had an “unsexy

business model.” (MTD Opp. 19 (citing CAC ¶¶ 8, 38,

110, 112, 129, 144–45, 150, 230, 232–33, 247–48, 269,

354).) These non-specific, generic statements, as with

many others Plaintiff identifies, are the “type of

milquetoast corporate-speak” that do not create a duty

to disclose more facts. See Menaldi, 277 F. Supp. 3d at

513. 13 Moreover, many of Defendants’ alleged

statements, when actually read “in context” in which

they were made, cf. Jinkosolar, 761 F.3d at 250, are

not forward-looking accounts of IMTT’s business, but

backward-looking explanations of “historical fact[s,]”

which are not actionable absent some reason to believe

that they were false when made or that Defendants

later learned to be untrue but failed to correct, see In

re Sanofi-Aventis Sec. Litig., 774 F. Supp. 2d 549, 562,

569 (S.D.N.Y. 2011). For example, Plaintiff points to

SEC filings in which MIC reported that it had seen

13 As yet another example, Plaintiff alleges that Defendants

“misled investors about IMTT’s considerable storage of No. 6 fuel

oil” because a MIC officer stated in May of 2016 that IMTT had

“the ‘flexibility’ and ‘optionality’ to change when ‘one day our

customer . . . [sic] want gasoline in his tanks, next day he may

want distillate.’” (CAC ¶116). Plaintiff alleges that this was

misleading because any tank used to store No. 6 fuel oil “could

take up to nine months” to be repurposed for other uses. (Id.)

Putting to the side that the source transcript quoted is obviously

riddled with errors, a review of the transcript shows that the

officer was not making a claim about the amount of “flexibility”

or “optionality” IMTT had in its tanks. (Schreiber Decl. Ex. H, at

21.) Telling people that it is beneficial to have flexibility is quite

different from saying that a business has even a qualitative

amount of flexibly to store different categories of products. As

such, Plaintiff has offered me no reason to think that these

statements would have done anything to give investors an

impression about the extent of IMTT’s business in No. 6 fuel oil.

I also note that throughout the relevant period IMTT did have the

capacity to store products other than No. 6 fuel oil.

33a

“continued strong demand for the products stored” at

IMTT during a reporting period, (CAC ¶¶ 111, 271),

which is not only a backwards-looking account of what

happened in a particular reporting period, but a

statement made in the context of explaining how

“sizeable and largely unforeseen volatility in

petroleum product prices recently has impacted

IMTT,” (Schreiber Decl. Ex. F, at 8). As such, far from

being an assurance to investors that “none of IMTT’s

stored commodities were susceptible to any known

market trends” as Plaintiff argues, (MTD Opp. 28),

this statement and others like it confirm precisely

what it says: that “volatility in petroleum product

prices” has “impact[s]” on IMTT.

Moreover, Plaintiff never pleads facts to support its

argument that Defendants knew any alleged

statement was untrue or a half-truth when made. 14 To

14 One statement Plaintiff argues Defendants must have known

was false when made concerns IMTT’s “utilization”—meaning the

amount of IMTT’s storage capacity in use at a particular time.

Specifically, Plaintiff says, in December 2017, when Defendants

said that IMTT’s utilization “was “[c]onsistently high,” (CAC

¶ 169), Defendants knew this had become untrue. Plaintiff argues

that IMTT’s utilization must have fallen to below its higher

historic rate by late October 2017 because, while “IMTT

utilization at the end of the third quarter 2017 was 93.2%,” the

“utilization at the end of the fourth quarter was 89.6%. To

reconcile that decline with the reported average utilization rate

for the fourth quarter of 90.6% means that there must have been

at least 66 days of 89.6% utilization rate, or that IMTT lost the

utilization as early as October 25, 2017. [CAC] ¶170.” (MTD Opp.

42.) Defendants counter that Plaintiff’s “flawed math equation

. . . assumes a steady, linear rate of utilization decline.” (Doc. 113

at 8 n.3). I agree; Defendants are correct to call Plaintiff’s math

“flawed.” The equation Plaintiff provides in the CAC appears to

be an erroneous extrapolation of the formula for calculating an

arithmetic mean. If there are 92 days in the Q4 2017 period, and

if the mean utilization for the period is 90.6%, then 90.6% =

34a

the contrary, Plaintiff pleads that Christopher Frost,

who replaced Hooke as MIC’s CEO after the end of

2017 (see CAC ¶¶ 30, 259), stated that it was not until

“December [of 2017] and early January” of 2018 that

“a number of [IMTT] customers terminated contracts,”

and that this loss of business was “quite sudden” and

“a surprise.” (CAC ¶ 185.) Plaintiff attempts to

contradict this account of “surprise” with statements

from three of MIC’s former employees, (id. ¶¶ 187,

189), but none of these statements suggest Frost spoke

untruthfully. Indeed, the most directly allegedly

“contradictory” account concerns whether “the decline

in No. 6 fuel oil markets snuck up on [Defendants] in

one quarter,” (id. ¶ 187), but Frost only spoke about

surprise as to the much more specific circumstance of

sudden contract cancellations and the fact that certain

customers were leaving the business entirely, (id.

¶ 185). 15 Moreover, the Consolidated Complaint does

not plead that the former employees whose statements

, where each x1, x2, etc., is the utilization rate on

each of the days during the period. But Plaintiff writes “90.6% =

89.6% *

+ 93.2% *

.” Plaintiff’s equation thus proceeds

from the assumption that IMTT’s utilization rate on each day of

Q4 2017 was either 89.6% or 93.2%. Plaintiff does not point to any

allegations to support this assumption.

15 Further cutting against Plaintiff’s misstatement theory,

market analysis articles quoted in the CAC indicate that the

precise moment of any IMO 2020-related downturn in No. 6 fuel

oil was always going to catch the industry by surprise. For

example, one article states that, under IMO 2020, the “production

and supply of [high-sulfur fuels like No. 6 fuel oil would need to

continue until the day before the 0.5% requirement kicks in, and

immediately demand for [these heavy fuels] will shrink

dramatically the day after, creating a [sic] never before known

situation of severe supply/demand mismatch.” (Schreiber Decl.

Ex. O, at 4 (cited in CAC ¶ 97).)

35a

it recounts were in any position to know if Frost or

MIC as a whole were “surprised” by sudden contract

cancellations or by customers leaving the business.

Two of these employees had left MIC before the Class

Period began—one in 2011, (id. ¶ 59), and the other in

December 2014, (id. ¶ 74)—and the third simply told

Plaintiff that “IMTT was already working on the

renewals of No. 6 fuel oil contracts” “by February

2017,” (id. ¶ 189). As such, none of these statements

provide facts from which I can infer that Frost lied

about being surprised by sudden contract

cancellations and customers leaving the business in

December of 2017 and January of 2018. Cf. Galestan

v. OneMain Holdings, Inc., 348 F. Supp. 3d 282, 301

(S.D.N.Y. 2018) (“[T]he FEs identified which reports

were circulated during the Class Period; they stated

that these reports reached senior executives; they

described the Symphony platform reports to which

Defendants had access during the Class Period; and

they described the Individual Defendants’ attendance

at meetings and on conference calls during which

integration-related issues were discussed.”).

Thus, despite Plaintiff’s various arguments to the

effect that Defendants must have already known that

IMTT was experiencing a downturn or at a major risk

for a downturn, (e.g., MTD Opp. 40), Plaintiff falls

short of pleading facts showing that Defendants’

statements were “not honestly believed when they

were made,” In re Pretium Res. Inc. Sec. Litig., 256 F.

Supp. 3d 459, 472 (S.D.N.Y. 2017), aff’d sub nom.

Martin v. Quartermain, 732 F. App’x 37 (2d Cir. 2018)

(internal quotation marks omitted).

Plaintiff’s position with regard to many of

Defendants’ affirmative statements seems to boil down

to the view that securities fraud defendants must “be

36a

forthright about the present facts, risks, and threats

facing [their company] when affirmatively disclosing

its business and environment.” (MTD Opp. 29.) This

statement misses the mark, because simply speaking

on one’s business does not trigger a duty to disclose all

facts an investor may want to know no matter how

tangential they are to what the speaker is talking

about. Rather, the cases cited by Plaintiff show that

the duty to be forthright is triggered when a defendant

speaks with sufficient “specificity” while omitting

information that one would normally expect the

defendant to have included had the defendant known

it. See Diehl, 339 F. Supp. 3d at 163. In Jinkosolar, for

example, the Second Circuit held that it was

misleading for a company to make detailed, comforting

statements about how it handled environmental

compliance, 761 F.3d at 247, while at the same time

withholding that, at the very moment it spoke, the

company had known, ongoing issues “prevent[ing]

substantial violations of” particular environmental

regulations, id. at 251. Similarly, a company makes a

misleading statement if it says it “anticipate[s]

‘relatively flat’ revenues” from a particular customer

while its management already knows that the

company has lost substantial business from that

customer. In re BioScrip, Inc. Sec. Litig., 95 F. Supp.

3d 711, 737 (S.D.N.Y. 2015); see also Darquea v.

Jarden Corp., No. 06 CV 0722(CLB), 2007 WL

1610146, at *8 (S.D.N.Y. May 31, 2007) (holding

statements were misleading when defendants spoke in

“present tense” about a business’s positive

performance when they already knew that “sales fell

$20 million short of its projections”).

In contrast to these cases, Plaintiff does not allege

that Defendants made comforting statements while

37a

they already knew that MIC’s business storing No. 6

fuel oil was waning. For example, Plaintiff identifies

an email that Defendant Davis exchanged with

representatives of the Plaintiff, in which Plaintiff’s

employees directly asked about “new regulations

coming in 2020”—i.e., IMO 2020—“that prevent fuel

ships from using heavy oils unless improved scrubbers

are also installed to clean exhaust – how will this

impact demand for heavy oil?” (Schreiber Decl. Ex. BB,

at 2 (cited in CAC ¶ 166).) In response, Davis writes

that Plaintiff’s “information” about what IMO 2020

will do “is consistent with our understanding of the

proposed regulatory changes.” (Id.) He goes on to say

that, because black oil is always produced as part of

the petroleum refinement process, the producing

industry will try to find other uses for it. (Id.) Davis

then speculates on a potential “positive” impact on

“storage demand at IMTT-Bayonne” if producers

decide to start selling “the [No. 6 fuel oil]” to “other

parts of the world” where its burning will not be

banned. (Id.) Nothing in this email amounts to a

specific “comforting statement[]” about IMTT’s ability

to withstand IMO 2020, much less a comforting

statement made while Davis knew or should have

known that IMTT’s business had already been

negatively impacted by IMO 2020. 16 See In re

16 Plaintiff also argues that Davis’ email was an actionable

misstatement because Plaintiff’s representatives asked “What

percent of IMTT’s storage is in heavy oil?” Davis responded

“About 20%.” (Schreiber Decl. Ex. BB, at 2). Plaintiff argument

assumes that the answer concerns MIC’s total storage capacity

for No. 6 fuel oil; however, Plaintiff’s citation does not provide the

context within which this question was asked and answered: that

of MIC’s storage business in a region around New York.

Specifically, the individual questions were preceded by a

preamble stating that the “questions” are meant to get at

previously “highlighted weakness in the NY harbor” and how

38a

Lululemon Sec. Litig., 14 F. Supp. 3d 553, 571

(S.D.N.Y. 2014) (“without contemporaneous falsity,

there can be no fraud”), aff’d, 604 F. App’x 62 (2d Cir.

2015). Far from comforting Plaintiff, Davis confirmed

that Plaintiff, “a sophisticated institutional investor,”

(CAC ¶ 27), correctly understood that IMO 2020 could

prevent the shipping industry from burning No. 6 fuel

oil.

Finally, Plaintiff argues that Defendant Davis

affirmatively misrepresented IMTT’s reliance on No. 6

fuel oil during the Class Period based on remarks he

made a conference in November 16, 2017, but, once

again, these arguments fail to account for the context

within which the statements were made. Specifically,

Davis told conference attendees that IMTT’s business

is in storing “primarily refined petroleum products”

and that IMTT does “very little [business storing]

crude” petroleum products. (Schreiber Decl. Ex. CC, at

4 (cited in CAC ¶ 258).) Davis then said that “[a] little

over half the capacity is in service and petroleum

products, and as I say, very little of that is in crude or

asphalt, any heavy product.” (Id.) Plaintiff argues this

was an assurance that IMTT did “very little” business

in “heavy products” including “No. 6 fuel oil.” (MTD

Opp. 30.) But Plaintiff’s argument ignores the

distinction Davis had already drawn between “refined

petroleum products” and “crude” products, a

distinction that he reiterated when he said “as I say,

very little of that is in crude.” I do not read the

subsequent qualifying statement of “any heavy

product” as undoing the distinction Davis drew not

“IMTT[’s] results” in the New York harbor have “h[eld] up pretty

well” in spite of these weaknesses. (Id.) Moreover, both the first

and third enumerated questions are explicitly stated as

concerning the New York harbor. (Id.)

39a

just once but twice. Moreover, Plaintiff in fact pleads

that “No. 6 fuel oil” is a “refined petroleum product.”

(CAC ¶ 109.) As such, I cannot conclude that Davis

was including No. 6 fuel oil as part of the “crude” side

of the ledger in his remarks, and Plaintiff does not

point to well-pleaded facts that suggest otherwise.

b. Alleged Omission

Plaintiff’s argument that Defendants violated

disclosure obligations under Item 303 also fails.

Although Plaintiff submits that Item 303 required

Defendants to speak to “th[e] ‘increasing uncertainty’”

MIC faced, (MTD Opp. 28), Plaintiff does not actually

plead an uncertainty that should have been disclosed,

nor does Plaintiff plead in what SEC filing or filings

Defendants were supposed to disclose it. Instead,

Plaintiff pleads that Item 303 required MIC to

“disclose that its profits, revenues, and dividends were

at risk due to the implementation of IMO 2020,” (CAC

¶ 278); however, Plaintiff pleads at length that IMO

2020 “was widely understood” as threatening the

businesses of everyone “in the supply chain for No. 6

fuel oil,” (e.g., id. ¶¶ 9, 98). Indeed, Plaintiff

specifically asked Davis about IMO 2020 and its

potential impact on “fuel ships.” (Schreiber Decl. Ex.

BB, at 2 (cited in CAC ¶ 166).) Plaintiff also does not

“allege that” any “omitted information was material”

under the relevant “probability/magnitude test” for

assessing Item 303 violations. Stratte-McClure, 776

F.3d at 103. Thus, even if Plaintiff had identified some

known trend or uncertainty that implicated disclosure

of IMTT’s reliance on No. 6 fuel oil, Plaintiff would still

have to allege that the “probability” of the event or

uncertainty coupled with “the anticipated magnitude”

of it were enough to make it material “in light of the

totality of [MIC’s] company activity.” Id. at 102–03

40a

(quoting Basic, Inc. v. Levinson, 485 U.S. 224, 238

(1988)). Pleading materiality does not require much,

see SAIC, 818 F.3d at 96, but it does require a plaintiff

to say why there is “a substantial likelihood that the

disclosure of the omitted fact would have been viewed

by the reasonable investor as having significantly

altered the total mix of information made available,”

ECA, Loc. 134 IBEW Joint Pension Tr. v. JP Morgan

Chase Co., 553 F.3d 187, 197 (2d Cir. 2009) (internal

quotation marks omitted).

More to the point, Plaintiff does not allege when

Defendants “actually kn[ew]” of some uncertainty that

rose to the level of requiring an Item 303 disclosure.

Cf. SAIC, 818 F.3d at 95. Unlike in the Second

Circuit’s leading cases about when Item 303 violations

can support Section 10(b) claims, Plaintiff does not

allege that MIC “had already” taken on losses related

to its No. 6 fuel oil business before the Class Period

began, cf. Stratte-McClure, 776 F.3d at 104–05, or that

Defendants “actually knew” of an extant liability that

it could be obligated to repay, SAIC, 718 F.3d at 95.

Although, as stated, this is not meant to be a

burdensome pleading requirement, at minimum,

Plaintiff must plead facts supporting an inference that

Defendants had actual knowledge of a material trend

or uncertainty facing MIC’s No. 6 fuel oil storage

business, and that it had this knowledge early enough

to require disclosure in some pre-February 2018

securities filing.

B. Scienter

1. Applicable Law

Pursuant to the PSLRA, a well-pleaded securities

fraud claim must “state with particularity facts giving

rise to a strong inference that the defendant acted with

41a

the required state of mind.” 15 U.S.C. § 78u-4(b)(2)(A).

“The requisite state of mind in a section 10(b) and Rule

10b-5 action is an intent ‘to deceive, manipulate, or

defraud.’” ECA, 553 F.3d at 198 (quoting Tellabs, 551

U.S. at 313). In the Second Circuit, a strong inference

of scienter “can be established by alleging facts to show

either (1) that defendants had the motive and

opportunity to commit fraud, or (2) strong

circumstantial evidence of conscious misbehavior or

recklessness.” Id.

“In order to raise a strong inference of scienter

through ‘motive and opportunity’ to defraud,” a

plaintiff must allege that the defendant or its officers

“benefitted in some concrete and personal way from

the purported fraud.” Id. (quoting Novak v. Kasaks,

216 F.3d 300, 307–08 (2d Cir. 2000)). “Motives that are

common to most corporate officers, such as the desire

for the corporation to appear profitable and the desire

to keep stock prices high to increase officer

compensation, do not constitute ‘motive’ for purposes

of this inquiry.” Id.

As an alternative to the motive and opportunity to

defraud, a plaintiff can raise a strong inference of

scienter under the “strong circumstantial evidence”

prong, requiring a plaintiff to show conscious

misbehavior or recklessness. Id. at 199 (citation

omitted). Conscious misbehavior “encompasses

deliberate illegal behavior,” Novak, 216 F.3d at 308,

whereas

recklessness

includes

“conscious

recklessness” or “a state of mind approximating actual

intent, and not merely a heightened form of

negligence,” S. Cherry St., LLC v. Hennessee Grp. LLC,

573 F.3d 98, 109 (2d Cir. 2009) (quoting Novak, 216

F.3d at 312). If motive to commit fraud has not been

shown, “the strength of the circumstantial allegations

42a

must be correspondingly greater.” Kalnit v. Eichler,

264 F.3d 131, 142 (2d Cir. 2001) (quoting Beck v. Mfrs.

Hanover Tr. Co., 820 F.2d 46, 50 (2d Cir. 1987)).

Additionally, a strong inference of scienter “must

be more than merely plausible or reasonable—it must

be cogent and at least as compelling as any opposing

inference of nonfraudulent intent.” Tellabs, 551 U.S.

at 314. There are at least four circumstances that “may

give rise to a strong inference of the requisite scienter:

where the complaint sufficiently alleges that the

defendants (1) ‘benefitted in a concrete and personal

way from the purported fraud’; (2) ‘engaged in

deliberately illegal behavior’; (3) ‘knew facts or had

access to information suggesting that their public

statements were not accurate’; or (4) ‘failed to check

information they had a duty to monitor.’” ECA, 553

F.3d at 199 (quoting Novak, 216 F.3d at 311).

2. Application

Plaintiff argues that they have pleaded scienter

both through Defendants’ motive and opportunity,

(MTD Opp. 44), and through Defendants’ recklessness

or conscious misbehavior, (id. at 47).

As an initial matter, it does not appear that the

motive and opportunity theory is viable under the

circumstances presented here. Plaintiff’s theory of the

case is that Defendants “actively concealed from

investors” the extent of “IMTT’s” business in “No. 6

fuel oil.” (MTD Opp. 28.) This is an assertion of

“conscious

misbehavior

or,”

at

minimum,

“recklessness,” and thus seems like a theory that

cannot be supported by a motive and opportunity

theory. See Stratte-McClure, 776 F.3d at 106 (citing

ECA, 553 F.3d at 202). Nevertheless, I will address

43a

both Plaintiff’s arguments related to recklessness or

conscious misbehavior and on motive and opportunity.

First, with regard to recklessness or conscious

misbehavior, Plaintiff rehashes its already rejected

arguments that Defendants made “numerous

statements” that it later “admitted” were false and

that Defendants had actual knowledge “contradicting

their public statements.” (MTD Opp. 47–48 (quoting In

re Scholastic Corp. Sec. Litig., 252 F.3d 63, 76 (2d Cir.

2001).) With regard to establishing scienter, “Second

Circuit cases uniformly rely on allegations that

[1] specific contradictory information was available to

the defendants [2] at the same time they made their

misleading statements.” In re PXRE Grp., Ltd. Sec.

Litig., 600 F. Supp. 2d 510, 536 (S.D.N.Y. 2007)

(citation omitted). Although Plaintiff “do[es] not have

to fix the exact date and time” that Defendants were

aware that their statements were false, “they must

supply some factual basis for the allegation that the

defendants had reached this conclusion at some point

during the time period alleged.” Rothman v. Gregor,

220 F.3d 81, 91 (2d Cir. 2000) (internal quotation

marks omitted). As I have already determined,

however, “nowhere in the [CAC] do[es] Plaintiff[]

identify with specificity” the knowledge Defendants

had or when they acquired this knowledge that their

statements were false. Cf. Pretium, 256 F. Supp. 3d at

481 (citing Teamsters Local 445 Freight Div. Pension

Fund v. Dynex Capital Inc., 531 F.3d 190, 196 (2d Cir.

2008)). Without actual, contemporaneous knowledge,

Plaintiff’s scienter arguments appear to be a “seiz[ing]

upon disclosures made . . . later” coupled with

unsupported assertions that Defendants “should have”

made disclosures sooner. See Denny v. Barber, 576

F.2d 465, 470 (2d Cir. 1978).

44a

Second, with regard to pleading scienter through

motive and opportunity, Plaintiff also fails. As an

initial matter, I find that one of Plaintiff’s arguments

simply cannot provide a motive. The fact that certain

Defendants’ compensation increased with MIC’s

“market capitalization,” (MTD Opp. 45), does not move

the ball for Plaintiff, as “[m]otives that are common to

most corporate officers, such as the desire . . . to keep

stock prices high to increase officer compensation” do

not suffice to show scienter. ECA, 553 F.3d at 198;

Pretium, 265 F. Supp. 3d at 481. Plaintiff’s argument

that Defendants wanted to prop up MIC’s stock price

so that it could purchase Epic in a majority-stock

transaction and thereby increase MIC’s capacity for

storing fuels not affected by IMO 2020, (MTD Opp. 45–

46), is not precluded by the case law as a motive, since

“the artificial inflation of stock price in the acquisition

context may be sufficient for securities fraud,”

Rothman, 220 F.3d at 93. There is thus some merit to

Plaintiff’s argument that the Epic acquisition

benefited Defendants since it provided MIC with more

capacity to store fuels unaffected by IMO 2020. (MTD

Opp. 46.) “But the incentive to boost stock price to

stimulate an impending acquisition or optimize the

terms for the corporation, without more, does not

constitute an adequate motive to defraud investors.”

In re Yukos Oil Co. Sec. Litig., No. 04 CIV. 5243(WHP),

2006 WL 3026024, at *18 (S.D.N.Y. Oct. 25, 2006)

(citing Kalnit v. Eichler, 264 F.3d 131, 141 (2d Cir.

2001) (“[a]chieving a superior [merger] agreement . . .

does not demonstrate defendants’ intent to benefit

themselves at the expense of the shareholders”)). In

the circumstances of this case, I recognize that there

could not have been much of a “concrete” “benefit[.]”

Cf. ECA, 553 F.3d at 198 (internal quotation marks

omitted). MIC’s market capitalization was around

45a

$5.75 billion through the end of the Class Period, see

supra 3–4 & n.6, whereas MIC acquired Epic for only

around $171.5 million, (CAC ¶ 153). Even after the

Class Period and the substantial loss to MIC’s stock’s

value, MIC was still so much larger than Epic that it

is hard to believe that this acquisition motivated any

alleged securities fraud. In other words, the

acquisition did not impact MIC’s value as a company

in a material way. Moreover, although Plaintiff asserts

that MIC acquired Epic “to buffer” it “against IMO

2020,” (id.), Plaintiff neither pleads facts to support

the inference that MIC thought about IMO 2020 at all

when it acquired Epic—much less that Epic could

bolster MIC against any anticipated downturn that

may result from IMO 2020—nor does Plaintiff

demonstrate that the Epic acquisition “benefited

[MIC] in some concrete . . . way,” as the law requires,

see ECA, 553 F.3d at 198 (internal quotation marks

omitted), since no facts suggest that Epic buffered MIC

at all against whatever forces caused the eventual in

its stock price.

Plaintiff also argues that the Offering

demonstrates motive and opportunity. Specifically, in

the Offering, MIMUSA sold roughly 40% of its

holdings in MIC for about $235 million dollars, and it

did so shortly after IMO 2020 was re-affirmed as going

into effect on schedule. (MTD Opp. 44; CAC ¶¶ 130–

31.) The Offering is thus helpful to Plaintiff’s scienter

argument, since, if the Class Period high stock price

was propped up by misrepresentations or omissions,

then MIMUSA could be said to have timed the

Offering to maximize its profit. See ECA, 553 F.3d at

198 (motive and opportunity “is generally met when

corporate insiders allegedly make a misrepresentation

in order to sell their own shares at a profit.”).

46a

However, Defendants’ other relevant behavior

around MIC’s stock cuts against a finding of scienter

here. First, no individual Defendant is alleged to have

sold any MIC stock during the Class Period. See

Rombach, 355 F.3d at 177 (no motive established

where plaintiffs failed to allege “that defendants sold

stock or profited in any way during the relevant

period”). Second, pursuant to its management service

agreement with MIC, MIMUSA continually elected to

accept its base management fee in stock rather than in

cash, including in both the third and fourth quarters

of 2016. (Schreiber Decl. Ex. N, at 9–10); Macquarie

Infrastructure Corp., Annual Report (Form 10-K), at

60 (Feb. 21, 2017); see Avon Pension Fund v.

GlaxoSmithKline PLC, 343 F. App’x 671, 673 (2d Cir.

2009) (no scienter where “[t]hree of the four individual

defendants increased their net holdings of GSK stock

during the class period, and the fourth individual

defendant did not sell any shares at all.”). Third,

Defendants point out that there was a fifteen- month

gap between the Secondary Public Offering and the

drop in MIC’s stock price at the end of the class period.

See In re Take-Two Interactive Sec. Litig., 551 F. Supp.

2d 247, 279 (S.D.N.Y. 2008) (“The lapsing . . . of

approximately four months between these substantial

sales and the revelation of the alleged falsity,

inescapably attenuates any inference of scienter that

may be drawn in Lead Plaintiffs’ favor.”). Fourth,

MIMUSA made a pre-Class Period sale of 27.6% of its

holdings of MIC stock in June 2015, (CAC ¶ 309),

which suggests that the Secondary Public Offering

was not all that unusual.

Even considering “all of the facts alleged, taken

collectively,” Tellabs, 551 U.S. at 323, I cannot find

that Plaintiff has adequately pleaded facts giving rise

47a

to a strong inference of scienter. At best, it appears

that Defendants were negligent concerning the risks

IMTT faced in its exposure to a potential downturn in

the demand to store No. 6 fuel oil. However, that is not

legally sufficient to demonstrate scienter.

C. Plaintiff’s Remaining Claims

Plaintiff’s remaining claims all fail because they

depend on Plaintiff’s having successfully pleaded, at

minimum, material misrepresentations or omissions,

which Plaintiff failed to do, see supra. Specifically,

each of the other statutes Plaintiff claims have been

violated require a primary violation and/or material

misrepresentations or omissions. See Slayton, 604

F.3d at 778 (pleading a section 20(a) claim requires “a

primary violation” of the ’34 Act) (internal quotation

marks omitted); In re Keyspan Corp. Sec. Litig., 383 F.

Supp. 2d 358, 389 (E.D.N.Y. 2003) (“In the absence of

a primary violation of Section 10(b) or Rule 10b-5,

plaintiffs cannot state a claim . . . for insider trading

under Section 20A.”); In re Initial Pub. Offering Sec.

Litig., 241 F. Supp. 2d 281, 296 (S.D.N.Y. 2003)

(Section

11

liability

requires

“material

misrepresentations”); City of Roseville Emps. Ret. Sys.

v. EnergySolutions, Inc., 814 F. Supp. 2d 395, 423

(S.D.N.Y. 2011) (“Section 12(a)(2) . . . imposes liability”

when “a prospectus . . . ‘includes an untrue statement

of material fact or omits to state a material fact’”

(quoting 15 U.S.C. § 77l(a)(2)); In re Lehman Bros.

Mortg.-Backed Sec. Litig., 650 F.3d 167, 185 (2d Cir.

2011) (“Section 15 imposes . . . liability” on those who

“control[] any person liable under § 11.” (internal

quotation marks omitted).

48a

V. Conclusion

For the foregoing reasons, Defendants’ motion to

dismiss is GRANTED. The Clerk’s office is directed to

terminate the open motions on the docket and to post

notice of this Opinion & Order on the docket for the

related action numbered 18-cv-3744.

SO ORDERED.

Dated: September 7, 2021

New York, New York

_s/_____________________

Vernon S. Broderick

United States District Judge

49a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE

SECOND CIRCUIT

At a stated term of the United States Court of

Appeals for the Second Circuit, held at the Thurgood

Marshall United States Courthouse, 40 Foley Square,

in the City of New York, on the 27th day of January, two

thousand twenty-three.

______________________________

Moab Partners, L.P.,

Lead Plaintiff-Appellant,

City of Riviera Beach General

Employees Retirement System,

on behalf of itself and all

others similarly situated,

ORDER

Docket No: 21-2524

Plaintiff,

v.

Macquarie Infrastructure

Corporation, James Hooke,

Jay Davis, Liam Stewart,

Richard D. Courtney, Barclays

Capital Inc., Robert Choi, Martin

Stanley, Norman H. Brown, Jr.,

George W. Carmany, III, Henry E.

Lentz, Ouma Sananikone, William H.

50a

Webb, Macquarie Infrastructure

Management (USA) Inc.,

Defendants-Appellees.

______________________________

Appellees filed a petition for panel rehearing, or, in

the alternative, for rehearing en banc. The panel that

determined the appeal has considered the request for

panel rehearing, and the active members of the Court

have considered the request for rehearing en banc.

IT IS HEREBY ORDERED that the petition is

denied.

FOR THE COURT:

Catherine O’Hagan Wolfe,

Clerk

51a

APPENDIX D

15 U.S.C. § 78j. Manipulative and deceptive

devices

It shall be unlawful for any person, directly or

indirectly, by the use of any means or instrumentality

of interstate commerce or of the mails, or of any facility

of any national securities exchange—

*

*

*

(b) To use or employ, in connection with the purchase

or sale of any security registered on a national

securities exchange or any security not so registered, or

any

securities-based

swap

agreement[,]

any

manipulative or deceptive device or contrivance in

contravention of such rules and regulations as the

Commission may prescribe as necessary or appropriate

in the public interest or for the protection of investors.

*

*

*

17 C.F.R. § 240.10b-5 Employment of manipulative and deceptive devices.

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of

interstate commerce, or of the mails or of any facility of

any national securities exchange,

(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

52a

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. § 229.303 (Item 303) Management’s

discussion and analysis of financial condition

and results of operations.

(a) Objective. The objective of the discussion and

analysis is to provide material information relevant to

an assessment of the financial condition and results of

operations of the registrant including an evaluation of

the amounts and certainty of cash flows from

operations and from outside sources. The discussion

and analysis must focus specifically on material events

and uncertainties known to management that are

reasonably likely to cause reported financial

information not to be necessarily indicative of future

operating results or of future financial condition. This

includes descriptions and amounts of matters that

have had a material impact on reported operations, as

well as matters that are reasonably likely based on

management’s assessment to have a material impact

on future operations. The discussion and analysis must

be of the financial statements and other statistical data

that the registrant believes will enhance a reader’s

understanding of the registrant’s financial condition,

cash flows and other changes in financial condition and

results of operations. A discussion and analysis that

meets the requirements of this paragraph (a) is

expected to better allow investors to view the registrant

from management’s perspective.

53a

(b) Full fiscal years. The discussion of financial

condition, changes in financial condition and results of

operations must provide information as specified in

paragraphs (b)(1) through (3) of this section and such

other information that the registrant believes to be

necessary to an understanding of its financial

condition, changes in financial condition and results of

operations. Where the financial statements reflect

material changes from period-to-period in one or more

line items, including where material changes within a

line item offset one another, describe the underlying

reasons for these material changes in quantitative and

qualitative terms. Where in the registrant’s judgment

a discussion of segment information and/or of other

subdivisions (e.g., geographic areas, product lines) of

the registrant’s business would be necessary to an

understanding of such business, the discussion must

focus on each relevant reportable segment and/or other

subdivision of the business and on the registrant as a

whole.

(1) Liquidity and capital resources. Analyze the

registrant’s ability to generate and obtain adequate

amounts of cash to meet its requirements and its plans

for cash in the short-term (i.e., the next 12 months from

the most recent fiscal period end required to be

presented) and separately in the long-term (i.e., beyond

the next 12 months). The discussion should analyze

material cash requirements from known contractual

and other obligations. Such disclosures must specify

the type of obligation and the relevant time period for

the related cash requirements. As part of this analysis,

provide the information in paragraphs (b)(1)(i) and (ii)

of this section.

(i) Liquidity. Identify any known trends or any

known demands, commitments, events or uncertainties

54a

that will result in or that are reasonably likely to result

in the registrant’s liquidity increasing or decreasing in

any material way. If a material deficiency is identified,

indicate the course of action that the registrant has

taken or proposes to take to remedy the deficiency. Also

identify and separately describe internal and external

sources of liquidity, and briefly discuss any material

unused sources of liquid assets.

(ii) Capital resources.

(A) Describe the registrant’s material cash

requirements, including commitments for capital

expenditures, as of the end of the latest fiscal period,

the anticipated source of funds needed to satisfy such

cash requirements and the general purpose of such

requirements.

(B) Describe any known material trends, favorable

or unfavorable, in the registrant’s capital resources.

Indicate any reasonably likely material changes in the

mix and relative cost of such resources. The discussion

must consider changes among equity, debt, and any offbalance sheet financing arrangements.

(2) Results of operations.

(i) Describe any unusual or infrequent events or

transactions or any significant economic changes that

materially affected the amount of reported income from

continuing operations and, in each case, indicate the

extent to which income was so affected. In addition,

describe any other significant components of revenues

or expenses that, in the registrant’s judgment, would

be material to an understanding of the registrant’s results of operations.

(ii) Describe any known trends or uncertainties that

have had or that are reasonably likely to have a

55a

material favorable or unfavorable impact on net sales

or revenues or income from continuing operations. If

the registrant knows of events that are reasonably

likely to cause a material change in the relationship

between costs and revenues (such as known or

reasonably likely future increases in costs of labor or

materials or price increases or inventory adjustments),

the change in the relationship must be disclosed. 1

(iii) If the statement of comprehensive income

presents material changes from period to period in net

sales or revenue, if applicable, describe the extent to

which such changes are attributable to changes in

prices or to changes in the volume or amount of goods

or services being sold or to the introduction of new

products or services.

(3) Critical

accounting

estimates.

Critical

accounting estimates are those estimates made in

accordance with generally accepted accounting

principles that involve a significant level of estimation

uncertainty and have had or are reasonably likely to

have a material impact on the financial condition or

results of operations of the registrant. Provide

qualitative and quantitative information necessary to

understand the estimation uncertainty and the impact

1 Before Item 303 was amended in 2021, Section 229.303(b)(2)(ii)

was codified at Section 229.303(a)(3)(ii), which provided:

Describe any known trends or uncertainties that have had

or that the registrant reasonably expects will have a

material favorable or unfavorable impact on net sales or

revenues or income from continuing operations. If the

registrant knows of events that will cause a material

change in the relationship between costs and revenues

(such as known future increases in costs of labor or

materials or price increases or inventory adjustments),

the change in the relationship shall be disclosed.

56a

the critical accounting estimate has had or is

reasonably likely to have on financial condition or

results of operations to the extent the information is

material and reasonably available. This information

should include why each critical accounting estimate is

subject to uncertainty and, to the extent the

information is material and reasonably available, how

much each estimate and/or assumption has changed

over a relevant period, and the sensitivity of the

reported amount to the methods, assumptions and

estimates underlying its calculation.

Instructions to paragraph (b): 1. Generally, the discussion must cover the periods covered by the financial

statements included in the filing and the registrant

may use any presentation that in the registrant’s

judgment enhances a reader’s understanding. A

smaller reporting company’s discussion must cover the

two-year period required in §§ 210.8–01 through 210.8–

08 of this chapter (Article 8 of Regulation S–X) and may

use any presentation that in the registrant’s judgment

enhances a reader’s understanding. For registrants

providing financial statements covering three years in

a filing, discussion about the earliest of the three years

may be omitted if such discussion was already included

in the registrant’s prior filings on EDGAR that

required disclosure in compliance with § 229.303 (Item

303 of Regulation S-K), provided that registrants

electing not to include a discussion of the earliest year

must include a statement that identifies the location in

the prior filing where the omitted discussion may be

found. An emerging growth company, as defined in

§ 230.405 of this chapter (Rule 405 of the Securities

Act) or § 240.12b-2 of this chapter (Rule 12b-2 of the

Exchange Act), may provide the discussion required in

paragraph (b) of this section for its two most recent

57a

fiscal years if, pursuant to Section 7(a) of the Securities

Act of 1933 (15 U.S.C. 77g(a)), it provides audited

financial statements for two years in a Securities Act

registration statement for the initial public offering of

the emerging growth company’s common equity

securities.

2. If the reasons underlying a material change in

one line item in the financial statements also relate to

other line items, no repetition of such reasons in the

discussion is required and a line-by-line analysis of the

financial statements as a whole is neither required nor

generally appropriate. Registrants need not recite the

amounts of changes from period to period if they are

readily computable from the financial statements. The

discussion must not merely repeat numerical data

contained in the financial statements.

3. Provide the analysis in a format that facilitates

easy understanding and that supplements, and does

not duplicate, disclosure already provided in the filing.

For critical accounting estimates, this disclosure must

supplement, but not duplicate, the description of

accounting policies or other disclosures in the notes to

the financial statements.

4. For the liquidity and capital resources disclosure,

discussion of material cash requirements from known

contractual obligations may include, for example, lease

obligations, purchase obligations, or other liabilities

reflected on the registrant’s balance sheet. Except

where it is otherwise clear from the discussion, the

registrant must discuss those balance sheet conditions

or income or cash flow items which the registrant

believes may be indicators of its liquidity condition.

5. Where financial statements presented or

incorporated by reference in the registration statement

58a

are required by § 210.4-08(e)(3) of this chapter (Rule 408(e)(3) of Regulation S-X) to include disclosure of

restrictions on the ability of both consolidated and

unconsolidated subsidiaries to transfer funds to the

registrant in the form of cash dividends, loans or

advances, the discussion of liquidity must include a

discussion of the nature and extent of such restrictions

and the impact such restrictions have had or are

reasonably likely to have on the ability of the parent

company to meet its cash obligations.

6. Any forward-looking information supplied is

expressly covered by the safe harbor rule for

projections. See 17 CFR 230.175 [Rule 175 under the

Securities Act], 17 CFR 240.3b-6 [Rule 3b-6 under the

Exchange Act], and Securities Act Release No. 6084

(June 25, 1979).

7. All references to the registrant in the discussion

and in this section mean the registrant and its

subsidiaries consolidated.

8. Discussion of commitments or obligations,

including contingent obligations, arising from

arrangements with unconsolidated entities or persons

that have or are reasonably likely to have a material

current or future effect on a registrant’s financial

condition, changes in financial condition, revenues or

expenses, results of operations, liquidity, cash

requirements or capital resources must be provided

even when the arrangement results in no obligations

being reported in the registrant’s consolidated balance

sheets. Such off-balance sheet arrangements may

include: Guarantees; retained or contingent interests

in assets transferred; contractual arrangements that

support the credit, liquidity or market risk for

transferred assets; obligations that arise or could arise

59a

from variable interests held in an unconsolidated

entity; or obligations related to derivative instruments

that are both indexed to and classified in a registrant’s

own equity under U.S. GAAP.

9. If the registrant is a foreign private issuer, briefly

discuss any pertinent governmental economic, fiscal,

monetary, or political policies or factors that have

materially affected or could materially affect, directly

or indirectly, its operations or investments by United

States nationals. The discussion must also consider the

impact of hyperinflation if hyperinflation has occurred

in any of the periods for which audited financial

statements or unaudited interim financial statements

are filed. See § 210.3-20(c) of this chapter (Rule 3-20(c)

of Regulation S-X) for a discussion of cumulative

inflation rates that may trigger the requirement in this

instruction 9 to this paragraph (b).

10. If the registrant is a foreign private issuer, the

discussion must focus on the primary financial

statements presented in the registration statement or

report. The foreign private issuer must refer to the

reconciliation to United States generally accepted

accounting principles, and discuss any aspects of the

difference between foreign and United States generally

accepted accounting principles, not discussed in the

reconciliation, that the registrant believes are

necessary for an understanding of the financial

statements as a whole, if applicable.

11. The term statement of comprehensive income is

as defined in §210.1-02 of this chapter (Rule 1-02 of

Regulation S-X).

(c) Interim periods. If interim period financial

statements are included or are required to be included

by 17 CFR 210.3 [Article 3 of Regulation S-X], a

60a

management’s discussion and analysis of the financial

condition and results of operations must be provided so

as to enable the reader to assess material changes in

financial condition and results of operations between

the periods specified in paragraphs (c)(1) and (2) of this

section. The discussion and analysis must include a

discussion of material changes in those items

specifically listed in paragraph (b) of this section.

(1) Material changes in financial condition. Discuss

any material changes in financial condition from the

end of the preceding fiscal year to the date of the most

recent interim balance sheet provided. If the interim

financial statements include an interim balance sheet

as of the corresponding interim date of the preceding

fiscal year, any material changes in financial condition

from that date to the date of the most recent interim

balance sheet provided also must be discussed. If

discussions of changes from both the end and the

corresponding interim date of the preceding fiscal year

are required, the discussions may be combined at the

discretion of the registrant.

(2) Material changes in results of operations.

(i) Discuss any material changes in the registrant’s

results of operations with respect to the most recent

fiscal year-to-date period for which a statement of

comprehensive income is provided and the

corresponding year-to-date period of the preceding

fiscal year.

(ii) Discuss any material changes in the registrant’s

results of operations with respect to either the most

recent quarter for which a statement of comprehensive

income is provided and the corresponding quarter for

the preceding fiscal year or, in the alternative, the most

recent quarter for which a statement of comprehensive

61a

income is provided and the immediately preceding

sequential quarter. If the latter immediately preceding

sequential quarter is discussed, then provide in

summary form the financial information for that

immediately preceding sequential quarter that is

subject of the discussion or identify the registrant’s

prior filings on EDGAR that present such information.

If there is a change in the form of presentation from

period to period that forms the basis of comparison

from previous periods provided pursuant to this

paragraph, the registrant must discuss the reasons for

changing the basis of comparison and provide both

comparisons in the first filing in which the change is

made.

Instructions to paragraph (c): 1. If interim financial

statements are presented together with financial

statements for full fiscal years, the discussion of the

interim financial information must be prepared pursuant to this paragraph (c) and the discussion of the full

fiscal year’s information must be prepared pursuant to

paragraph (b) of this section. Such discussions may be

combined. Instructions 2, 3, 4, 6, 8, and 11 to paragraph

(b) of this section apply to this paragraph (c).

2. The registrant’s discussion of material changes

in results of operations must identify any significant

elements of the registrant’s income or loss from

continuing operations which do not arise from or are

not necessarily representative of the registrant’s ongoing business.

62a

APPENDIX E 2

Number of § 10(b) Cases Using Item 303 Theory

Year

2d Cir.

3d Cir.

9th Cir.

2014

10

1

6

2015

8

3

2

2016

6

0

2

2017

15

3

2

2018

16

3

3

2019

15

5

2

2020

12

1

5

2021

14

2

6

2022

12

2

3

Percent of § 10(b) Cases Using Item 303 Theory

Year

2d Cir.

3d Cir.

9th Cir.

2014

25.0%

5.0%

16.7%

2015

18.2%

20.0%

4.0%

2016

10.5%

N/A

3.6%

2017

21.4%

9.4%

4.9%

2018

25.8%

13.0%

5.4%

2019

16.3%

22.7%

4.9%

2020

20.3%

5.3%

7.4%

2021

19.2%

14.3%

12.0%

2022

20.7%

13.3%

6.3%

2 The Section 10(b)/Rule10b-5 filings data are based on data from

the Stanford Law School Securities Class Action Clearinghouse

(SCAC), https://securities.stanford.edu/, which tracks federal

securities class actions by compiling data from PACER. For

purposes of SCAC’s numbers, suits that raise the same allegations

against the same defendant(s) (which are often consolidated) are

63a

treated as a single “filing.” This data, which reflect information

from the initial complaints, was searched by year, circuit, and

allegation (e.g., Section 10(b)) to generate an initial list of all

Section 10(b) claims in the most relevant circuits from 2014

through 2022. The Eleventh Circuit, which did not answer the

question presented in this case until 2019, is excluded.

To identify which of these Section 10(b) class actions were based

on an Item 303 theory, the docket of each was manually reviewed

to identify the operative complaint. The operative complaint was

then searched for “Item 303,” and the results manually reviewed

to confirm that each operative complaint expressly alleged a

violation of Rule 10b-5 based on a failure to disclose under Item

303. These cases, which are listed in Appendix F infra, are

accounted for on these charts under the year of their initial filing

(regardless of the date of the operative complaint). Operative

complaints based solely on Securities Act claims, or otherwise

alleging that defendants “negligently” failed to disclose

information as required by Item 303 or that defendants should

have known of a duty to disclose even if Item 303 does not apply,

were excluded from the count.

64a

APPENDIX F

List of Item 303 Cases Filed in Each Relevant

Circuit 3:

SECOND CIRCUIT

Date filed

5/21/2014

5/27/2014

5/28/2014

8/1/2014

8/22/2014

9/30/2014

10/20/2014

11/7/2014

11/12/2014

12/29/2014

1/30/2015

Case

City of Pontiac General Employees’

Retirement System v. Dell (S.D.N.Y.

No. 14-3644)

Perez v. Higher One Holdings

(D. Conn. No. 14-755)

Winkler v. Prospect Capital Corp.

(S.D.N.Y. No. 14-3761)

Patel v. L-3 Communications

Holdings (S.D.N.Y. No. 14-6038)

In re EZCORP, Inc. (S.D.N.Y.

No. 14-6834)

In re Millennial Media, Inc. (S.D.N.Y.

No. 14-7923)

In re Retrophin, Inc. (S.D.N.Y.

No. 14-8376)

In re Salix Pharmaceuticals, Ltd.

(S.D.N.Y. No. 14-8925)

Gauquie v. Albany Molecular

Research, Inc. (E.D.N.Y. No. 14-6637)

Weston v. RCS Capital Corp.

(S.D.N.Y. No. 14-10136)

Khunt v. Alibaba Group Holding, Ltd.

(S.D.N.Y. No. 15-759)

3 The methodology used to compile this list is described in Pet.

62a–63a n.2 supra. “Date filed” refers to the date of the initial (as

opposed to operative) complaint.

65a

Date filed

2/27/2015

5/13/2015

7/30/2015

9/9/2015

9/21/2015

10/1/2015

12/9/2015

1/8/2016

2/24/2016

6/28/2016

6/28/2016

8/8/2016

10/25/2016

2/24/2017

3/24/2017

3/31/2017

Case

Lopez v. CTPartners Executive

Search, Inc. (S.D.N.Y. No. 15-1476)

Altayyar v. Etsy (E.D.N.Y.

No. 15-2785)

Plumbers and Steamfitters Local 137

Pension Fund v. American Express

Co. (S.D.N.Y. No. 15-5999)

Levin v. Resource Capital Corp.

(S.D.N.Y. No. 15-7081)

Thomas v. Shiloh Industries, Inc.

(S.D.N.Y. No. 15-7449)

Randall v. Fifth Street Finance Corp.

(S.D.N.Y. No. 15-7759)

In re Supercom, Ltd. (S.D.N.Y.

No. 15-9650)

Ong v. Chipotle Mexican Grill, Inc.

(S.D.N.Y. No. 16-141)

In re BHP Billiton, Ltd. (S.D.N.Y.

No. 16-1445)

Wilbush v. Ambac Financial Group

(S.D.N.Y. No. 16-5076)

Jackson v. Halyard Health, Inc.

(S.D.N.Y. No. 16-5093)

Kukkadapu v. Embraer (S.D.N.Y.

No. 16-6277)

Speakes v. Taro Pharmaceutical

Industries, Ltd. (S.D.N.Y.

No. 16-8318)

Finger v. Pearson PLC (S.D.N.Y.

No. 17-1422)

In re Tempur Sealy International,

Inc. (S.D.N.Y. No. 17-2169)

Culhane v. U.S. Physical Therapy,

Inc. (S.D.N.Y. No. 17-2347)

66a

Date filed

5/10/2017

6/29/2017

7/20/2017

7/26/2017

7/28/2017

8/23/2017

10/20/2017

10/23/2017

10/30/2017

11/7/2017

11/16/2017

12/15/2017

1/18/2018

Case

City of Warwick Municipal

Employees Pension Fund v.

Rackspace Hosting, Inc. (S.D.N.Y.

No. 17-3501)

Rex and Roberta Ling Living Trust v.

B Communications Ltd. (S.D.N.Y.

No. 17-4937)

Oklahoma Firefighters Pension and

Retirement System v. Lexmark

International, Inc. (S.D.N.Y.

No. 17-5543)

City of Warren Police and Fire

Retirement System v. Zebra

Technologies Corp. (E.D.N.Y.

No. 17-4412)

Scheufele v. Tableau Software, Inc.

(S.D.N.Y. No. 17-5753)

Brady v. Top Ships Inc. (E.D.N.Y.

No. 17-4987)

Steamfitters Local 449 Pension Plan

v. Skechers U.S.A., Inc. (S.D.N.Y.

No. 17-8107)

Robinson v. Diana Containerships

Inc. (E.D.N.Y. No. 17-6160)

Holbrook v. Trivago N.V. (S.D.N.Y.

No. 17-8348)

Sjunde AP-Fonden v. General

Electric Co. (S.D.N.Y. No. 17-8457)

In re Omega Healthcare, Inc.

(S.D.N.Y. No. 17-8983)

In re Liberty Tax, Inc. (E.D.N.Y.

No. 17-7327)

Salazar v. General Electric Co.

(D. Conn. No. 18-106)

67a

Date filed

2/5/2018

3/7/2018

3/9/2018

4/4/2018

4/23/2018

4/24/2018

8/2/2018

8/27/2018

8/30/2018

9/4/2018

10/4/2018

11/6/2018

11/6/2018

Case

Parchmann v. Metlife, Inc. (E.D.N.Y.

No. 18-780)

In re Henry Schein, Inc. (E.D.N.Y.

No. 18-1428)

City of Warren Police and Fire

Retirement System v. Foot Locker,

Inc. (E.D.N.Y. No. 18-1492)

Shreiber v. Synacor, Inc. (S.D.N.Y.

No. 18-2979)

City of Riviera Beach General

Employees Retirement System v.

Macquarie Infrastructure Corp.

(S.D.N.Y. No. 18-3608)

In re Aceto Corp. (E.D.N.Y.

No. 18-2425)

In re Helios and Matheson Analytics

Inc. (S.D.N.Y. No. 18-6965)

Construction Laborers Pension Trust

for Southern California v. CBS Corp.

(S.D.N.Y. No. 18-7796)

Oklahoma Law Enforcement

Retirement System v. Papa John’s

International, Inc. (S.D.N.Y.

No. 18-7927)

In re Skechers USA, Inc. (S.D.N.Y.

No. 18-8039)

In re Adient PLC (S.D.N.Y.

No. 18-9116)

In re Evoqua Water Technologies

Corp. (S.D.N.Y. No. 18-10320)

City of Birmingham Firemen’s and

Policemen’s Supplemental Pension

System v. Ryanair Holdings

(S.D.N.Y. No. 18-10330)

68a

Date filed

12/12/2018

12/14/2018

1/2/2019

1/23/2019

1/29/2019

2/1/2019

2/25/2019

3/4/2019

4/1/2019

5/14/2019

5/16/2019

5/24/2019

6/12/2019

6/26/2019

7/31/2019

Case

In re Tenaris S.A. (E.D.N.Y.

No. 18-7059)

Labul v. XPO Logistics, Inc. (D. Conn.

No. 18-2062)

Lewis v. YRC Worldwide, Inc.

(N.D.N.Y. No. 19-1)

In re Micron Technology, Inc.

(S.D.N.Y. No. 19-678)

In re Proshares Trust II (S.D.N.Y.

No. 19-8)

In re General Electric Co. (S.D.N.Y.

No. 19-1013)

Gordon v. Vanda Pharmaceuticals

Inc. (E.D.N.Y. No. 19-1108)

In re Weight Watchers International

Inc. (S.D.N.Y. No. 19-2005)

In re AT&T/DirectTV Now (S.D.N.Y.

No. 19-2892)

In re Jumia Technologies AG

(S.D.N.Y. No. 19-4397)

In re Dynagas LNG Partners

(S.D.N.Y. No. 19-4512)

Gluck v. Hecla Mining Co. (S.D.N.Y.

No. 19-4883)

Woolgar v. Kingstone Cos. (S.D.N.Y.

No. 19-5500)

In re FedEx Corp. (S.D.N.Y.

No. 19-5990)

City of Miami General Employees’ &

Sanitation Employees’ Retirement

Trust v. Venator Materials PLC

(S.D.N.Y. No. 19-7182)

69a

Date filed

9/26/2019

11/1/2019

1/22/2020

1/24/2020

2/13/2020

3/17/2020

4/10/2020

6/19/2020

7/28/2020

9/16/2020

10/24/2020

10/30/2020

11/12/2020

11/13/2020

2/17/2021

Case

Gordon v. Tencent Music

Entertainment Group (E.D.N.Y.

No. 19-5465)

UA Local 13 & Employers Group

Insurance Fund v. Sealed Air Corp.

(S.D.N.Y. No. 19-10161)

Benedetto v. Qudian Inc. (S.D.N.Y.

No. 20-577)

Brown v. Opera Ltd. (S.D.N.Y.

No. 20-674)

In re Luckin Coffee Inc. (S.D.N.Y.

No. 20-1293)

Rotunno v. Wood (S.D.N.Y.

No. 20-2357)

Ruttenberg v. ServiceMaster Global

Holdings, Inc. (S.D.N.Y. No. 20-2976)

In re U.S. Oil Fund, LP (S.D.N.Y.

No. 20-4740)

Di Scala v. Proshares Ultra

Bloomberg Crude Oil (S.D.N.Y.

No. 20-5865)

Ko v. Nano-X Imaging Ltd. (E.D.N.Y.

No. 20-4355)

In re JPMorgan Chase & Co.

(E.D.N.Y. No. 20-5124)

In re Citigroup Inc. (S.D.N.Y.

No. 20-9132)

Swanson v. Interface, Inc. (E.D.N.Y.

No. 20-5518)

In re Alibaba Group Holding Ltd.

(S.D.N.Y. No. 20-9568)

Africa v. Jianpu Technology Inc.

(S.D.N.Y. No. 21-1419)

70a

Date filed

2/19/2021

2/26/2021

3/8/2021

4/16/2021

7/2/2021

7/6/2021

7/23/2021

7/26/2021

8/16/2021

9/24/2021

10/5/2021

12/10/2021

12/10/2021

1/24/2022

2/4/2022

2/23/2022

Case

Pitman v. Immunovant, Inc.

(E.D.N.Y. No. 21-918)

In re Infinity Q Diversified Alpha

Fund and Infinity Q Volatility Alpha

Fund (E.D.N.Y. No. 21-1047)

In re Plug Power Inc. (S.D.N.Y.

No. 21-2004)

In re Romeo Power Inc. (S.D.N.Y.

No. 21-3362)

In re DraftKings Inc. (S.D.N.Y.

No. 21-5739)

In re Didi Global Inc. (S.D.N.Y.

No. 21-5807)

In re Piedmont Lithium Inc.

(E.D.N.Y. No. 21-4161)

In re Oatly Group AB (S.D.N.Y.

No. 21-6360)

In re SelectQuote, Inc. (S.D.N.Y.

No. 21-6903)

In re AppHarvest, Inc. (S.D.N.Y.

No. 21-7985)

In re Nano-X Imaging Ltd. (E.D.N.Y.

No. 21-5517)

Dong v. Cloopen Group Holding Ltd.

(S.D.N.Y. No. 21-10610)

Meyer v. Organogenesis Holdings Inc.

(E.D.N.Y. No. 21-6845)

Parot v. Clarivate PLC (E.D.N.Y.

No. 22-394)

New Mexico State Investment

Council v. TAL Education Group

(S.D.N.Y. No. 22-1015)

Lozada v. Taskus, Inc. (S.D.N.Y.

No. 22-1479)

71a

Date filed

3/16/2022

6/9/2022

6/15/2022

8/5/2022

8/19/2022

9/23/2022

10/3/2022

10/31/2022

12/5/2022

Case

In re Grab Holdings Ltd. (S.D.N.Y.

No. 22-2189)

In re Waste Management, Inc.

(S.D.N.Y. No. 22-4838)

City of St. Clair Shores Police and

Fire Retirement System v. Unilever

PLC (S.D.N.Y. No. 22-5011)

In re Kiromic Biopharma, Inc.

(S.D.N.Y. No. 22-6690)

RTD Bros LLC v. Lottery.com, Inc.

(S.D.N.Y. No. 22-7111)

Maeshiro v. Yatsen Holding Ltd.

(S.D.N.Y. No. 22-8165)

Trivedi v. General Electric Co.

(S.D.N.Y. No. 22-8453)

Maschhoff v. Polished.com Inc.

(E.D.N.Y. No. 22-6606)

Diaz v. The Gap, Inc. (E.D.N.Y.

No. 22-7371)

THIRD CIRCUIT

Date filed

6/13/2014

2/2/2015

9/29/2015

10/1/2015

2/27/2017

3/12/2017

Case

Ansfield v. Hertz Corp. (D.N.J.

No. 14-3790)

Sun v. Han (D.N.J. No. 15-703)

Silverstein v. Globus Medical, Inc.

(E.D. Pa. No. 15-5386)

Messner v. USA Technologies, Inc.

(E.D. Pa. No. 15-5427)

Roper v. Sito Mobile Ltd. (D.N.J.

No. 17-1106)

In re Toronto-Dominion Bank (D.N.J.

No. 17-1665)

72a

Date filed

8/18/2017

2/6/2018

6/21/2018

9/28/2018

1/15/2019

3/22/2019

7/11/2019

7/15/2019

11/27/2019

4/14/2020

1/20/2021

7/12/2021

8/4/2022

10/4/2022

Case

SEB Investment Management v.

Endo International PLC (E.D. Pa.

No. 17-3711)

Public Employees’ Retirement

System of Mississippi v. Advance

Auto Parts, Inc. (D. Del. No. 18-212)

In re Newell Brands, Inc. (D.N.J.

No. 18-10878)

In re Campbell Soup Co. (D.N.J.

No. 18-14385)

Ito-Stone v. DBV Technologies S.A.

(D.N.J. No. 19-525)

Utah Retirement Systems v.

Healthcare Services Group, Inc. (E.D.

Pa. No. 19-1227)

Tanaskovic v. Realogy Holdings Corp.

(D.N.J. No. 19-15053)

City of Sterling Heights Police & Fire

Retirement System v. Reckitt

Benckiser Group PLC (D.N.J.

No. 19-15382)

City of Warren Police & Fire

Retirement System v. Prudential

Financial, Inc. (D.N.J. No. 19-20839)

Vitello v. Bed Bath & Beyond Inc.

(D.N.J. No. 20-4240)

Holland v. 9F Inc. (D.N.J. No. 21-948)

Bell v. Kanzhun Ltd. (D.N.J.

No. 21-13543)

In re Coinbase Global, Inc. (D.N.J.

No. 22-4915)

In re PayPal Holdings, Inc. (D.N.J.

No. 22-5864)

73a

NINTH CIRCUIT

Date filed

1/15/2014

3/17/2014

4/3/2014

4/24/2014

9/3/2014

11/6/2014

10/9/2015

11/16/2015

3/25/2016

5/16/2016

3/27/2017

5/3/2017

3/9/2018

3/22/2018

3/30/2018

Case

Hatamian v. Advanced Micro Devices

(N.D. Cal. No. 14-226)

Angley v. UTi Worldwide Inc. (C.D.

Cal. No. 14-2066)

In re Allied Nevada Gold Corp.

(D. Nev. No. 14-175)

Cowan v. Axesstel, Inc. (S.D. Cal.

No. 14-1037)

In re Rocket Fuel Inc. (N.D. Cal.

No. 14-3998)

In re Barrett Business Services, Inc.

(W.D. Wash. No. 14-5884)

Xu v. ChinaCache International

Holdings Ltd. (C.D. Cal. No. 15-7952)

In re Capstone Turbine Corp. (C.D.

Cal. No. 15-8914)

Murphy v. Precision Castparts Corp.

(D. Or. No. 16-521)

In re LendingClub Corp. (N.D. Cal.

No. 16-2627)

Schoenfeld v. Inventure Foods Inc.

(D. Ariz. No. 17-910)

In re Sunrun Inc. (N.D. Cal.

No. 17-2537)

In re Wageworks, Inc. (N.D. Cal.

No. 18-1523)

Shah v. A10 Networks, Inc. (N.D.

Cal. No. 18-1772)

Milbeck v. Truecar, Inc. (C.D. Cal.

No. 18-2612)

74a

Date filed

7/25/2019

8/14/2019

1/2/2020

3/26/2020

8/24/2020

9/16/2020

11/23/2020

3/3/2021

4/16/2021

5/17/2021

6/25/2021

8/13/2021

11/18/2021

2/15/2022

3/8/2022

Case

North Miami Beach Police Officers’

and Firefighters’ Retirement Plan v.

National General Holdings Corp.

(C.D. Cal. No. 19-6468)

Smith v. NetApp, Inc. (N.D. Cal.

No. 19-4801)

Sayce v. Forescout Technologies, Inc.

(N.D. Cal. No. 20-76)

Killyoung Oh v. Hanmi Financial

Corp. (C.D. Cal. No. 20-2844)

Sakkal v. Anaplan Inc. (N.D. Cal.

No. 20-5959)

Kendall v. Odonate Therapeutics,

Inc. (S.D. Cal. No. 20-1828)

Hessong v. Pinterest, Inc. (N.D. Cal.

No. 20-8243)

Farhar v. Ontrak Inc. (C.D. Cal.

No. 21-1987)

Ali v. Franklin Wireless Corp. (S.D.

Cal. No. 21-687)

Boehning v. ContextLogic, Inc. (N.D.

Cal. No. 21-3671)

Wang v. Athira Pharma, Inc. (W.D.

Wash. No. 21-861)

Sieggreen v. Live Ventures Inc.

(D. Nev. No. 21-1517)

Bernstein v. Ginkgo Bioworks

Holdings, Inc. (N.D. Cal. No. 21-8943)

In re Acutus Medical, Inc. (S.D. Cal.

No. 22-206)

Plumbers and Steamfitters Local 60

Pension Trust v. Meta Platforms, Inc.

(N.D. Cal. No. 22-1470)

75a

Date filed

5/6/2022

Case

Joyce v. Amazon.com (W.D. Wash.

No. 22-617)

76a

APPENDIX G

List of Law Firm Communications and

Commentary Addressing MD&A Disclosures:

1. When Rules Collide – Leidos, the Supreme Court,

and the Risk to the MD&A, BNA Securities

Regulation & Law Report, Morgan Lewis (Sept.

25, 2017), https://perma.cc/MN63-YSWT.

2. Robert L. Hickok and Gay Parks Rainville, Are

Item 303 Omissions Actionable Under Rule

10b-5?, Troutman Pepper (June 7, 2017), https://

perma.cc/5NPN-VRS2.

3. Supreme Court to Consider Whether NonCompliance with SEC Regulation Can Give Rise

to Securities Fraud Liability, Dechert LLP (May

3, 2017), https://perma.cc/7BLF-N4ZQ.

4. Stephen J. Crimmins and James K. Goldfarb,

Murphy & McGonigle, Will the Supreme Court

Expand Silence as a Basis for Securities Fraud?,

Colum. L. Sch. Blue Sky Blog (Apr. 4, 2017),

https://perma.cc/VXE7-H38K.

5. U.S. Supreme Court To Consider Registrant’s

Liability For Non-Disclosure Under Item 303 of

Regulation S-K, Shearman & Sterling (Apr. 4,

2017), https://perma.cc/ZMZ5-BPWQ.

6. Supreme Court Grants Review in Securities Case

About Duty to Disclose, Gibson Dunn (Apr. 3,

2017), https://perma.cc/VHL8-ASMR.

77a

7. Michelle S. Kallen, Supreme Court to Examine

Key Question of Securities Fraud Liability Based

Solely on Omissions, Paul Weiss (Mar. 30, 2017),

https://perma.cc/KT9N-EZLM.

8. Securities and Shareholder Litigation & Class

Actions, Sidley (Mar. 29, 2017), https://perma.cc/

7HVH-U4EU.

9. Thomas O. Gorman, U.S. Supreme Court Agrees

To Hear Securities Fraud Omissions Case, Dorsey

& Whitney LLP (Mar. 29, 2017), https://perma.cc/

58BN-J7D7.

10. Carmen Germaine, Silence May Not Be Golden

For Cos. After High Court Review, Law360 (Mar.

27, 2017, 11:09 PM), https://perma.cc/K3QGAHRR (quoting Cohen Milstein Sellers & Toll

PLLC partner).

11. Mark T. Plichta and Garrett F. Bishop, Failure to

Disclose Known Trends or Uncertainties in Public

Filings May Create Liability Under Section 10(b),

Foley & Lardner (Feb. 27, 2015), https://perma.cc/

SA5X-ASR7.

12. Second Circuit Warns That Omission In Public

Filings May Constitute Actionable Securities

Fraud, Kleinberg Kaplan (Feb. 18, 2015), https://

perma.cc/A27K-GF3M.

13. Douglas Flaum et al., Second Circuit Finds That

Failure to Make Required Item 303 Disclosure

Can Provide Basis for Securities Fraud Claim,

Paul Hastings (Jan. 29, 2015), https://perma.cc/

DBZ9-7MP3.

78a

14. Jonathan C. Dickey and Noah F. Stern, Creating

a Clear Circuit Split, the Second Circuit Holds

That Failure to Disclose Known Trends or

Uncertainties Under Item 303 of Regulation S-K

Creates Liability Under Section 10(b), Gibson

Dunn (Jan. 22, 2015), https://perma.cc/BF3EBF38.

15. Michael Eisenkraft, Cohen Milstein Sellers &

Toll PLLC, Can Silence Keep You Safe? New

Debate on 10b-5 Liability, Law360 (Jan. 20, 2015,

10:57 AM), https://perma.cc/9JYD-7974.