NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS MAY 1 2018

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

POMPANO BEACH POLICE & No. 17-15216 FIREFIGHTERS' RETIREMENT SYSTEM and ALASKA ELECTRICAL PENSION D.C. No. FUND, Lead Plaintiffs, On Behalf of 2:10-cv-00765-APG-GWF Themselves and All Others Similarly Situated,

MEMORANDUM*

Plaintiffs-Appellants,

v.

LAS VEGAS SANDS CORPORATION; et al.,

Defendants-Appellees.

Appeal from the United States District Court for the District of Nevada Andrew P. Gordon, District Judge, Presiding

Argued and Submitted April 12, 2018 San Francisco, California

Before: W. FLETCHER and TALLMAN, Circuit Judges, and MORRIS,** District Judge.

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Brian M. Morris, United States District Judge for the District of Montana, sitting by designation. The Pompano Beach Police & Firefighters’ Retirement System and Alaska

Electrical Pension Fund (collectively “Plaintiffs”) appeal an adverse summary

judgment in their securities fraud class action under §§ 10(b) and 20(a) of the

Securities Exchange Act, 15 U.S.C. § 78a et seq., against Las Vegas Sands

Corporation (“LVS”), Sheldon Adelson, LVS’s majority stockholder and

controller, and William Weidner, the Chief Operating Officer. We have

jurisdiction under 28 U.S.C. § 1291, and we affirm.

Plaintiffs challenge five sets of statements: (1) Senior VP Henry’s

reassurances to investors that LVS had sufficient liquidity and access to credit

markets; (2) Adelson’s statements during the July 30, 2008, conference call; (3)

Defendants’ claims that the development in Southeast Asia was progressing and

the opening dates were on track; (4) Stone’s statement that Weidner had been

misquoted regarding the 40% increase in costs in Singapore; and (5) Weidner’s

substitution of quarterly revenues for annual earnings on the April 30, 2008,

earnings call. Finally, Plaintiffs allege control person liability against Adelson and

Weidner under § 20(a).

1. The district court properly found that Henry’s April 30, 2008, statements

regarding LVS’s financing prospects and the interest from Asian banks were

future-oriented, looking to possible financing sources in the coming months. The

“Disclaimer” at the outset of the call was a “meaningful cautionary statement” as

2 required by 15 U.S.C. § 78u-5(c)(1)(A). These future-looking statements are

protected by the safe harbor provision in federal securities law.

Henry’s other statements from April 30, 2008, about prior conversations with

banks and evaluating non-equity alternatives were not misleading because LVS

was, in fact, meeting with banks and discussing financing options. See Lloyd v.

CVB Fin. Corp., 811 F.3d 1200, 1206 (9th Cir. 2016).

Even though Henry’s “ample access” statement may be misleading,

Plaintiffs failed to demonstrate how disclosing Henry’s misstatement resulted in

dropping stock prices, rather than “changed economic circumstances” from the

contemporaneous global financial recession. Dura Pharms. Inc. v. Broudo, 544

U.S. 336, 342–43 (2005). Plaintiffs allege an August 2008 report in the South

China Post, other statements in September, October, and November, and the Bank

of America Equity Research Report were corrective disclosures. While these may

provide some evidence that the financing options may not have been as “ample” as

Henry had made it seem, the South China Post article blames LVS’s problems on

“the global credit crunch” and “banks’ reluctance to lend in the current credit

market climate,” not on Henry’s previous statement. When looking at the

disclosures identified by Plaintiffs, there is no evidence to establish a “causal

connection between the fraud and the loss.” Mineworkers’ Pension Scheme v.

First Solar Inc., 881 F.3d 750, 753 (9th Cir. 2018) (per curium) (citing Nuveen

3 Mun. High Income Opportunity Fund v. City of Alameda, CA, 730 F.3d 1111, 1119

(9th Cir. 2013)). Therefore, Plaintiffs cannot establish a genuine issue of material

fact as to loss causation resulting from Henry’s April 30 statements.

2. Further, Plaintiffs cannot establish a triable issue regarding Adelson’s July,

30, 2008, earnings call statements. Adelson’s statements that the company would

not seek equity financing, was considering various financing alternatives, had

flexibility in financing, the “fundamentals” of LVS had not changed, and the

pipeline was still continuing were not misleading. In fact, they were true.

Adelson’s statements about liquidity and flexibility of the projected or

possible financing of LVS were forward-looking. There is no evidence that, at the

time, Adelson had knowledge or believed that the statement was false or

misleading as required by 15 U.S.C. § 78u-5(c)(1)(B)(i). Adelson participated in

discussions about financing options and flexibility in early 2008. Adelson also

eventually did provide additional money to LVS to resolve liquidity issues.

Plaintiffs failed to raise a genuine issue of material fact as to falsity for Adelson’s

July 30 statements and the remaining statements fall within the safe harbor rule.

3. All of the statements regarding the progress of the projects on the Cotai Strip

were true. None “affirmatively create[d] an impression of a state of affairs that

differ[ed] in a material way from the one that actually exist[ed].” Brody v.

Transitional Hosps. Corp., 280 F.3d 997, 1006 (9th Cir. 2002).

4 The statement that Sites 5 and 6 were “on track” falls within the safe harbor

of forward-looking statements. It discusses “plans and objectives of management

for future operations” and was accompanied by cautionary language. Police Ret.

Sys. of St. Louis v. Intuitive Surgical, Inc., 759 F.3d 1051, 1058 (9th Cir. 2014)

(holding growth and revenue projections fell within the safe harbor); see 15 U.S.C.

§ 78u-5(c)(1)(A)(i).

4. While there may be a genuine issue of fact that Stone’s statement was

misleading and made with scienter, Plaintiffs cannot establish loss causation.

Plaintiffs have not “show[n] that the revelation of that misrepresentation . . . was a

substantial factor in causing the decline in the security’s price.” Nuveen, 730 F.3d

at 1119 (quoting McCabe v. Ernst & Young, LLP, 494 F.3d 418, 425–26 (3d Cir.

2007)).

5. Plaintiffs failed to raise a genuine issue of material fact as to loss

causation for Weidner’s statement. Even if the Bank of America Report impacted

the stock price, Plaintiffs do not demonstrate how Weidner’s false statement

months before was a “substantial factor” in the decline when the disclosure does

not mention EBITDAR or Weidner’s April statement. Id.

6. Plaintiffs cannot raise a genuine dispute under § 20(a) for controlling

person liability against Weidner or Adelson because, as discussed above, they

5 cannot “prove a primary violation of underlying securities laws.” In re NVIDIA

Corp. Sec. Litig., 768 F.3d 1046, 1052 (9th Cir. 2014).

Appellants shall bear the costs of appeal. See Fed. R. App. P. 39(a)(2).

AFFIRMED.

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