Eminence Capital, Llc, and Jay Spechler v. Aspeon, Inc. Richard P. Stack

PER CURIAM Opinion; Concurrence by Judge REINHARDT.

OPINION

Eminence Capital, LLC, lead plaintiff in this class action securities fraud litigation, appeals the district court’s dismissal with prejudice under Fed.R.Civ.P. 12(b)(6) of its first amended consolidated complaint for failure to state a claim. Because the district court failed to provide sufficient reasons to overcome the presumption in favor of granting leave to amend, we reverse the judgment.

I. BACKGROUND

We summarize the facts set forth in appellant’s first amended consolidated complaint and assume them to be true for the purposes of our decision. See Epstein v. Washington Energy Co., 83 F.3d 1136, 1140 (9th Cir.1996).

A. Facts

Appellee Aspeon, Inc., a company based in Irvine, California, manufactures and sells touch-screen hardware systems for retail business computer networks, such as those used by waiters in restaurants to enter customer orders. 1 Appellee Richard Stack is Aspeon’s Chief Executive Officer, and appellee Horace Hertz is Aspeon’s former Chief Financial Officer. Lead plaintiff Eminence Capital, LLC, is an institutional investor and one of the share *1050 holders who purchased stock in Aspeon…

concurring separately:

The per curiam opinion concludes that none of the relevant factors compels dismissal without leave to amend. With this result I concur. I write separately, however, to express my concern regarding the use of cliches in judicial opinions, a technique that aids neither litigants nor judges, and fails to advance our understanding of the law. In particular, I regret the opinion’s use of the undeservedly common “three bites at the apple” cliche, slip op. at 891, (even more commonly, “two bites at the apple”) also employed by the district court, which in turn lifted it from the written submission of the prevailing party. Such cliches too often provide a substitute for reasoned analysis.

Not only did the district court here fail to identify any of the Foman factors that would have supported a dismissal with prejudice, but it also in effect adopted a “three strikes” rule for securities fraud pleading that has no support in precedent. In the district court’s view, appellant had had “three bites” and deserved no more opportunities to comply with the stringent requirements of the PSLRA. Simply counting the number of times a plaintiff has filed a complaint cannot,…

316 F.3d 1048 EMINENCE CAPITAL, LLC, Plaintiff-Appellant, and Jay Spechler, Plaintiff, v. ASPEON, INC.; Richard P. Stack, Defendants-Appellees. No. 01-56728. United States Court of Appeals, Ninth Circuit. Argued and Submitted October 9, 2002. Filed January 21, 2003. Solomon B. Cera, Gold Bennett Cera & Sidener LLP, San Francisco, CA, for the plaintiff-appellant. Donald A. Daucher, Paul, Hastings, Janofsky & Walker LLP, Costa Mesa, CA, for the defendants-appellees. Appeal from the United States District Court for the Central District of California; Alicemarie H. Stotler, District Judge, Presiding, D.C. No. CV-00-00995-AHS. Before REINHARDT, TROTT and SILVERMAN, Circuit Judges. PER CURIAM Opinion; Concurrence by Judge REINHARDT. OPINION PER CURIAM. 1 Eminence Capital, LLC, lead plaintiff in this class action securities fraud litigation, appeals the district court's dismissal with prejudice under Fed.R.Civ.P. 12(b)(6) of its first amended consolidated complaint for failure to state a claim. Because the district court failed to provide sufficient reasons to overcome the presumption in favor of granting leave to amend, we reverse the judgment. I. BACKGROUND 2 We summarize the…