Unreported / Non-Citable
Background
Resonant shareholders brought a putative class action after Murata acquired the company in a tender offer. They claimed the board and executives omitted material information and accepted an unfairly low $4.50-per-share price, violating Sections 14(e) and 20(a) of the Securities Exchange Act.
The Central District of California dismissed the second amended complaint without further leave to amend. The shareholders argued that fuller disclosure would have produced a higher bid and later pointed to factual findings discussed in related Delaware litigation.
The Court’s Holding
The Ninth Circuit affirmed in a nonprecedential memorandum. A Section 14(e) plaintiff must plausibly plead loss causation—a causal connection between the alleged misstatement or omission and the economic loss. The complaint did not explain how additional disclosure would have caused Murata or another buyer to pay more, particularly after Murata characterized $4.50 as its fourth and final offer.
Assertions that Murata possessed unspecified insider information were too conclusory under the heightened securities-pleading rules. The shareholders also had not asked the district court for leave to add allegations drawn from the Delaware ruling, so they forfeited that request. In any event, a court cannot take judicial notice of another opinion’s factual recitals for their truth.
Key Takeaways
- Tender-offer plaintiffs must plead a plausible price mechanism, not merely an inadequate disclosure and disappointing price.
- Loss causation requires facts showing how truthful disclosure likely would have changed bidding or consideration.
- Claims of informational advantage must identify the information and explain its effect.
- Parties seeking another amendment must request it below and present the proposed facts directly.
Why It Matters
Deal litigators should investigate alternative bidders, negotiation history, valuation evidence, and concrete paths to a higher price before filing federal disclosure claims. Corporate defendants can attack the causal bridge even where an omission is arguably material. Parallel Delaware proceedings may provide leads, but their factual statements are not a substitute for well-pleaded allegations in federal court.