Ronald Grassi v. Moody's Investors Services

MEMORANDUM

Ronald and Sally Grassi brought suit against three bond rating agencies, Moody’s, Standard & Poor’s, and Fitch. The Grassis allege that they relied on the agencies’ ratings before they purchased bonds offered by Lehman Brothers. When Lehman collapsed, the Grassis lost their investment. They filed a complaint alleging that the rating agencies negligently and intentionally misrepresented the investment quality of the bonds. The district court dismissed the Grassis’ complaint, but gave the Grassis instructions on how to cure the deficiencies in their pleading. This appeal rises from the district court’s judgment dismissing their amended complaint for failure to satisfy the pleading standards of Federal Rules of Civil Procedure 8 and 9. We have jurisdiction under 28 U.S.C. § 1291 . We review dismissals under Rules 8, 9(b), and 12(b)(6) de novo. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir.2003). We affirm.

Under Rule 8, a complaint must be a “plain statement” that “show[s] that the pleader is entitled to relief.” We apply the plausibility standard the Supreme Court articulated in Twombly and Iqbal Hebbe v. Pliler, 627 F.3d 338, 341-42 (9th Cir.2010).…