Andrew Bradshaw v. Slm Corp.

MEMORANDUM *

Appellants appeal the district court’s dismissal of their claims against SLM Corporation and Sallie Mae, Inc, We have jurisdiction pursuant to 28 U.S.C. § 1291 , and we affirm.

1. Appellants failed to state a claim for aiding and abetting fraud against defendants. See Gordon v. Virtumundo, Inc., 575 F.3d 1040, 1047 (9th Cir. 2009) (“We ... may affirm on any basis supported by the record.”). To plead a claim sounding in fraud, Appellants “must state with particularity the circumstances constituting fraud or mistake,” and they must plead enough facts so that a court may draw the “reasonable inference that the defendant is liable for the misconduct alleged.” Fed. R. Civ. P. 9(b); Ashcroft v. Iqbal, 556 U.S. 662, 678 , 129 S.Ct. 1937 , 173 L.Ed.2d 868 (2009) (citation omitted).

In order to plead a claim for aiding and abetting fraud, Appellants must plead facts that make it plausible that defendants either “(a) [knew] the other’s conduct constitute[d] a breach of duty and [gave] substantial assistance or encouragement to the other to so act or (b) [gave] substantial assistance to the other in accomplishing a tortious result and the person’s own conduct, separately…

dissenting in part:

The majority holds that Bradshaw’s complaint failed to state a claim that SLM aided and abetted CCA’s fraud. I disagree.

Under California law, all Bradshaw had to allege is that SLM had actual knowledge of CCA’s fraudulent conduct and substantially assisted CCA’s wrongdoing. Casey v. U.S. Bank Nat’l Ass’n, 127 Cal.App.4th 1138, 1145 , 26 Cal.Rptr.3d 401 (2005). There’s no doubt that Bradshaw’s complaint does so. First, it states that SLM knew that CCA was making fraudulent sales pitches to students in order to induce them to enroll. This is not a mere conclusory allegation because the complaint provides a plausible basis for SLM’s knowledge: SLM worked hand-in-glove with CCA in providing loans to CCA’s students, SLM’s employees and agents regularly visited the CCA campus and regularly interacted with CCA staff, and *596 CCA’s recruiting materials were available in published form. At a minimum, these allegations raise a reasonable inference that SLM had actual knowledge of CCA’s fraudulent modus operandi in recruiting students. See Ashcroft v. Iqbal, 556 U.S. 662, 678 , 129 S.Ct. 1937 , 173 L.Ed.2d 868 (2009).

Because Bradshaw’s complaint adequately pleads…

FILED

NOT FOR PUBLICATION

JUN 21 2016

UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

ANDREW BRADSHAW; TANIF No. 14-16252

STEPHENSON; ADAM CORRIVEAU;

JESELL GONZALES, on behalf of D.C. No. 4:12-cv-06376-JSW themselves and similarly situated individuals,

MEMORANDUM*

Plaintiffs - Appellants,

v.

SLM CORPORATION, a Delaware corporation; SALLIE MAE, INC., a Delaware corporation,

Defendants - Appellees.

Appeal from the United States District Court for the Northern District of California Jeffrey S. White, District Judge, Presiding

Argued and Submitted May 13, 2016* San Francisco, California

Before: KLEINFELD, IKUTA, and WATFORD, Circuit Judges.

* This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3. Appellants appeal the district court’s dismissal of their claims against SLM

Corporation and Sallie Mae, Inc. We have jurisdiction pursuant to 28 U.S.C. §

1291, and we affirm.

1. Appellants failed to state a claim for aiding and abetting fraud against

defendants. See Gordon v. Virtumundo, Inc.,…