Regina Warshaw and John D. Kaufman, on Behalf of Themselves and All Others Similarly Situated v. Xoma Corporation Steven C. Mendell

This is a class action brought under Section 10(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 788 (b), and Rule 10b-5 promulgated by the Securities and Exchange Commission, 17 C.F.R. § 240 .10b-5. The district court allowed plaintiffs to amend their complaint three times and then dismissed the third amended complaint (the Complaint) under Fed.R.Civ.Pro. 12(b)(6) for failure to state a claim upon which relief can be granted.

We review a district court’s 12(b)(6) dismissal of a federal securities claim de novo. Holden v. Hagopian, 978 F.2d 1115, 1118 (9th Cir.1992). Our review is limited to the contents of the complaint. Argabright v. United States, 35 F.3d 472, 474 (9th Cir.1994). We take as true all allegations of material fact stated in the complaint and construe them in the light most favorable to the nonmoving party. National Wildlife Federation v. Espy, 45 F.3d 1337, 1340 (9th Cir.1995).

We have jurisdiction under 28 U.S.C. § 1291 . We reverse and remand.

BACKGROUND

For the purposes of reviewing this 12(b)(6) dismissal, we relate the facts in this case as stated in the Complaint.

Xoma Corporation is a biotech company that develops and produces protein…