United States Eighth Circuit

In a putative consolidated class action against H&R Block, Inc. (Block), and individual corporate officers and directors of Block involving allegations of securities fraud claims under section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, dismissal of the action is affirmed in part and reversed in part where: 1) district court did not err in dismissing plaintiff's claims against the individual defendants with respect to the false statements as plaintiff has not raised a strong inference that the defendants made any of the statements with the requisite scienter; 2) district court did not err in dismissing the consolidated complaint as plaintiff failed to plead scienter adequately with respect to Block or the individual defendants; 3) because the control-person claims under section 20(a) of the Securities Exchange Act of 1934 are predicated on some underlying primary violation, plaintiff also failed to state a claim under section 20(a); and 4) while district court's consolidation of the nine securities and derivative actions against Block under Federal Rules of Civil Procedure 42(a) was not an abuse of discretion, it was error to appoint plaintiff as the sole lead plaintiff to prosecute a single consolidated complaint, and thus, district court's order designating plaintiff as the lead plaintiff for the derivative claims brought by other parties is reversed and the separate complaints filed by those plaintiffs are reinstated on remand.

Appellate Information

• Decided 09/09/2009
• Published 09/09/2009

Judges

• COLLOTON, Circuit Judge., Before RILEY, BOWMAN, and COLLOTON, Circuit Judges.

Court

• United States Eighth Circuit

Counsel

• For Appellant:
  
• Solomon B. Cera, argued, Thomas C. Bright and Gwendolyn R. Giblin, San Francisco, CA and Patrick J. Stueve and Matthew L. Dameron, Kansas City, MO, on the brief, for appellant Horizon., Michael W. Stocker, argued, Ira A Schochet, Laurence D. Paskowitz, and Roy L. Jacobs, New York, NY and Diane A. Nygaard, Kansas City, MO on the brief, for Local 16.


• For Appellees:
  
• Thomas Walsh, argued St. Louis, MO, W. Perry Brandt and Robert M. Thompson, Kansas City, MO, Thomas H. Golden and Deirdre N. Hykal, New York, NY on the brief, for appellees in 08-1593; Thomas H. Golden, New York, NY Steven M. Schatz, Jerome F. Birn, Jr., and Gregory L. Watts, Palo Alto, CA, on the brief, for appellees in 08-1670.