In re: Stratasys Ltd. Shareholder Securities Litigation
Stratasys Ltd.; David Reis; Erez Simha; Bre Pettis; Jennifer Lawton Defendants-Appellees Albert Smelko, Jr., Individually and on Behalf of All Others Similarly Situated Plaintiff Macomb County Employees Retirement System; Mineworkers' Pension Scheme Plaintiffs-Appellants
Submitted: March 9, 2017
from United States District Court for the District of
Minnesota - Minneapolis
LOKEN, MURPHY, and BENTON, Circuit Judges.
BENTON, Circuit Judge.
manufactures 3D printers, primarily for commercial use. Some
of its shareholders brought a securities fraud action,
claiming several promotional statements were knowingly false.
The district court determined that these statements were mere
puffery and that the shareholders failed to sufficiently
plead that Stratasys knew its statements were false when
made. In re Stratasys Ltd., 2016 WL 3636992 (D.
Minn. June 30, 2016) Having jurisdiction under 28 U.S.C.
§ 1291, this court affirms.
August 2013, Stratasys acquired MakerBot Industries, LLC-a
manufacturer of scaled-down desktop 3D printers-as an
indirect, wholly owned subsidiary. According to Stratasys,
this acquisition would allow it to expand into the emerging
desktop 3D printer market.
January 2014, MakerBot introduced a new line of desktop 3D
printers. called "5G printers." Each 5G printer had
a "Smart Extruder" replaceable print head, which
was designed to be swappable. Stratasys claimed these
printers were "unmatched" in quality, reliability,
ease of use, speed, and performance. They also made positive
statements about MakerBot's past and future finances.
of the 5G printers experienced significant issues with
clogging due to the Smart Extruders. Sales for the 5G
printers declined; many were returned. Stratasys stock
dropped, prompting this securities fraud action.
shareholders claim both the quality and financial statements
were misleading, and that Stratasys knew the 5G printers were
essentially inoperable but still rushed them to market while
publicly proclaiming their quality and reliability. The
district court found that most of statements about the
printers' quality were "mere puffery, " that
any verifiable statements about speed were not adequately
pled to be false, and that the shareholders failed to plead a
strong inference of scienter. The shareholders appeal.
court reviews de novo the dismissal of a complaint for
failure to state a claim. Florida State Bd. of Admin. v.
Green Tree Fin. Corp., 270 F.3d 645, 661 (8th Cir.
2001). The Private Securities Litigation Reform Act
("PSLRA") imposes heightened pleading standards in
securities-fraud cases. Id. at 656. This court must
"disregard 'catch-all' or 'blanket'
assertions that do not live up to the particularity
requirements of the statute." Id. at 660.
securities fraud "plaintiff must show that the defendant
made a statement that was misleading as to a material
fact." Matrixx Initiatives, Inc. v. Siracusano,
563 U.S. 27, 38 (2011) (internal quotation marks and emphases
omitted). A fact is material "when there is a
substantial likelihood that the disclosure of the omitted
fact would have been viewed by the reasonable investor as
having significantly altered the total mix of information
made available." Id. (internal quotation marks
omitted). An adequate complaint must "specify each