NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS MAR 26 2019

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

HOWARD WELGUS, No. 18-15084

Plaintiff-Appellant, D.C. No. 5:15-cv-03625-BLF

v.

MEMORANDUM*

TRINET GROUP, INC.; BURTON M.

GOLDFIELD; WILLIAM PORTER;

MARTIN BABINEC; H. RAYMOND

BINGHAM; DAVID C. HODGSON;

GENERAL ATLANTIC, LLC;

KATHERINE AUGUST-DEWILDE;

KENNETH GOLDMAN; JOHN KISPERT;

WAYNE LOWELL; J.P. MORGAN

SECURITIES, LLC; MORGAN STANLEY

& CO. LLC; DEUTSCHE BANK

SECURITIES, INC.; JEFFERIES, LLC;

STIFEL, NICOLAUS & COMPANY,

INCORPORATED; WILLIAM BLAIR &

COMPANY, LLC,

Defendants-Appellees.

Appeal from the United States District Court for the Northern District of California Beth Labson Freeman, District Judge, Presiding

Argued and Submitted March 14, 2019 San Francisco, California

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Before: M. SMITH, WATFORD, and HURWITZ, Circuit Judges.

Howard Welgus appeals the district court’s dismissal of this putative class

action under Rule 12(b)(6). The operative second amended complaint alleged that

TriNet Group, Inc., its officers, directors, majority shareholder, and underwriters

(collectively “TriNet”) made false or misleading statements in connection with an

initial public offering (“IPO”) and a secondary public offering (“SPO”).

We review the dismissal for failure to state a claim de novo. Metzler Inv.

GMBH v. Corinthian Colls., Inc., 540 F.3d 1049, 1061 (9th Cir. 2008). Applying

the heightened pleading standards of the Private Securities Litigation Reform Act of

1995 (“PSLRA”), 15 U.S.C. § 78u–4(b), we affirm. See Or. Pub. Emp. Ret. Fund

v. Apollo Grp. Inc., 774 F.3d 598, 604 (9th Cir. 2014).

1. The operative complaint failed to plausibly allege that TriNet made

materially false or misleading statements. At least one statement claimed to be false,

that TriNet’s “risk management is a core competency,” is an opinion, and thus only

actionable for “subjective falsity.” See City of Dearborn Heights Act 345 Police &

Fire Ret. Sys. v. Align Tech., Inc., 856 F.3d 605, 615 (9th Cir. 2017). But rather than

citing “contemporaneous” evidence that TriNet did not believe this statement to be

true when made, the operative complaint refers only to subsequent evidence casting

doubt on whether TriNet’s subsequent risk management was competent. Those

allegations do not suffice to plausibly allege subjective falsity. See Ronconi v.

2 Larkin, 253 F.3d 423, 432 (9th Cir. 2001).

2. To the extent the operative complaint alleges that statements of fact were

untrue when made, it also does not meet the PSLRA heightened pleading standards.

Contrary to Welgus’ assertions, TriNet did not state that it had access to data for all

its claims; rather it stated that it received “claims data” and had access to analytics

on claims. Similarly, the IPO and SPO disclosures state only that TriNet assesses

risk on an individual client (employer) basis, not, as Welgus claims, for each

individual claim. TriNet’s statements that it offered “fully-insured” plans were not

misleading, because both disclosures expressly described TriNet’s risk exposure.

Nor were TriNet's later statements that it did not have aggregate stop losses in place

enough to suggest that TriNet did not previously have any stop losses in place, so as

to render its earlier statements misleading. Finally, TriNet’s CFO’s statement that

“we are able to predict pretty accurately . . . exactly how we are going to do” was

explicitly described as a consequence of “the law of large numbers,” and did not

suggest that TriNet employed unusual risk management practices.

3. Because the operative complaint failed to plausibly allege any materially

false or misleading statements or omissions, the district court did not err in

dismissing each of its claims. We therefore need not consider whether the complaint

adequately pleaded scienter or whether the claims against the underwriters were

barred by the applicable statute of limitations.

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AFFIRMED.

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