Alan B. Kalin v. Semper Midas Fund, Ltd.

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ALAN B. KALIN,
Plaintiff-Appellant,
v.
SEMPER MIDAS FUND, LTD.;
GREGORY A. PARSONS; DAVID BREE;
SEMPER CAPITAL MANAGEMENT, L.P.;
SEMPER CAPITAL PARTNERS, LLC;
RDP I, LLC; RSL CAPITAL, LLC;
STEPHEN C. ELLWOOD; RICHARD D.
PARSONS; RONALD S. LAUDER;
GREGORY W. ELLIS,
Defendants-Appellees.
No. 22-16766
D.C. No. 4:21-cv-01062-YGR
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
Yvonne Gonzalez Rogers, District Judge, Presiding
Argued and Submitted December 11, 2023
San Francisco, California
Before: GOULD, KOH, and DESAI, Circuit Judges.
Plaintiff Alan Kalin sued Defendants Semper Midas Fund (the “Fund”) and
Semper Capital Management, and their parent companies and directors, alleging
* This disposition is not appropriate for publication and is not precedent except as
provided by Ninth Circuit Rule 36-3.
FILED
DEC 21 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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violations of a California statute prohibiting false or misleading statements in
securities transactions. Cal. Corp. Code §§ 25401, 25501, 25504.
Plaintiff appeals the district court’s order dismissing his complaint for
failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and
dismissing some defendants for lack of personal jurisdiction under FRCP 12(b)(2).
We have jurisdiction under 28 U.S.C. § 1291, and we affirm the district court’s
dismissal for failure to state a claim.1
1. There is a well-recognized distinction in commercial transactions
between factual representations and “[s]tatements of mere corporate puffery.”
Police Ret. Sys. of St. Louis v. Intuitive Surgical, Inc., 759 F.3d 1051, 1060 (9th
Cir. 2014); see also Apollo Cap. Fund, LLC v. Roth Cap. Partners, LLC, 70 Cal.
Rptr. 3d 199, 224 (Cal. Ct. App. 2007). Puffery is not actionable as a matter of law
because “a reasonable consumer would not interpret the statement as a reliably
factual claim.” Coastal Abstract Serv., Inc. v. First Am. Title Ins. Co., 173 F.3d
725, 731 (9th Cir. 1999). Actionable statements of fact can be distinguished from
puffery because “[factual] statements . . . can be [proven] true or false on an
objective standard” and thus are objectively verifiable, whereas subjective opinions
1 Because we affirm dismissal of the claims against the Fund and Semper
Capital Management, and all other claims depend on the claims against those
defendants, we need not reach the issue of personal jurisdiction over the other
defendants.

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and descriptors are not. Or. Pub. Emps. Ret. Fund v. Apollo Grp. Inc., 774 F.3d
598, 606 (9th Cir. 2014).
2. Plaintiff identifies three of Defendants’ statements as allegedly false
or misleading. The first statement is that “the Fund engaged in ‘rigorous cash flow
modeling, scenario analysis and stress testing.’” Plaintiff argues that this statement
is false or misleading because the Fund’s analysis was not “rigorous.” There is no
support for Plaintiff’s argument that a reasonable investor would interpret the term
“rigorous” as indicating that the Fund’s methods of analysis “conformed to
generally accepted standards.” Whether the Fund’s analysis was “rigorous” cannot
be proven objectively true or false, and this statement is nonactionable puffery.
3. The next statement Plaintiff claims is false or misleading states that
“the Fund maintained a ‘constant focus on liquidity, risk management and
downside protection.’” Plaintiff’s assertion that a reasonable investor would
interpret the Fund’s “constant focus” as implying a specific risk management plan
is unsupported. Whether the Fund maintained a “constant focus” on particular
topics cannot be proven objectively true or false, and this statement is
nonactionable puffery.
4. The final statement that Plaintiff claims is false or misleading states
that “repo agreements presented ‘a certain amount of collateral risk’ but that by
utilizing hedging strategies any decline in value would be ‘substantially, if not

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fully, offset by the hedging vehicle.’” A statement that the Fund’s investments
entail a “certain amount of risk” cannot be proven true or false, because a “certain
amount” can be any amount.
5. Defendants’ prediction that market declines would be “substantially,
if not fully, offset by the hedging vehicle” is an optimistic pitch for the Fund’s
strategy. At best, the statement represented that the Fund would use hedging
vehicles in an attempt to offset potential losses. Plaintiff alleges that “there was no
hedging vehicle in place to protect against a situation” like the one that resulted in
Plaintiff suffering substantial losses. Plaintiff does not, however, allege that the
Fund failed to use any hedging vehicle at all, that the Fund represented it had a
specific hedging strategy for volatile market conditions, or that the Fund
guaranteed success. The sales documents disclosed that “[a]n investment in the
Fund and the Partnership is speculative and involves a high degree of risk. There
is no assurance that the Fund or the Partnership will be profitable or that an
investor will not lose some or all of its investment in the Fund or the Partnership.”
The documents additionally disclosed that “[t]he higher the degree of leverage
obtained, the greater the chance of a collateral call”; that the investment “entails a
high degree of risk” and “an investor could suffer a substantial loss as a result of an
investment” in the Fund; and that “large and sudden movements in interest rates
could result in substantial losses,” including the loss of Plaintiff’s “entire

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investment.” Reading Defendants’ disclosures together, any reasonable investor
would have understood that the Fund’s hedging vehicles were not guaranteed to
substantially or fully offset losses. Plaintiff’s allegations to the contrary are “mere
conclusory statements” that “do not suffice” to state a claim for relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009).
6. None of the challenged statements are plausibly alleged to be false or
misleading. Accordingly, the district court correctly granted the motion to dismiss
under FRCP 12(b)(6).
AFFIRMED.

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