281 F.R.D. 487
D.N.M.2012Background
- This matter involves Micron Technology, Inc.’s alleged misrepresentations during the wind-down of S2’s Fab 12 Fab operations in Israel.
- S2 Automation LLC provided chip-manufacturing services and owned inventory inherited from Numonyx
- Micron purchased Fab 12 from Numonyx in 2010 and assumed related contracts (including S2’s TSM and SOW).
- S2 alleges Micron terminated the S2 Agreements and seized inventory, tooling, and parts; S2 seeks damages for misrepresentation, breach, and related claims.
- S2 asserts two potential fraud theories tied to separate transactions: (i) an Inventory transaction; (ii) Aero Track Car and Battery purchases, arising during termination of the agreements.
- The court granted Micron’s 12(b)(6) motion as to the misrepresentation claim but allowed S2 leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether S2 pleads fraud with particularity under Rule 9(b) for the Inventory transaction | S2 incorporated surrounding facts; Rule 9(b) does not require detailed proof at pleading stage | Allegations lack who, what, when, where, how; no duty to disclose established | Rule 9(b) not satisfied; dismissal granted, but leave to amend granted |
| Whether S2 pleads fraud with particularity under Rule 9(b) for the Aero Track Car transaction | Allegations meet some 9(b) requirements; Bessor as speaker; misrepresentation by future promise alleged | No location of fraud; no state-of-mind or intent shown; deficient under 9(b) | Rule 9(b) not satisfied; dismissal granted, but leave to amend granted |
| Whether leave to amend should be granted | Amendment would cure pleading deficiencies under 9(b) | Not expressly opposed to amendment; concern about futility | Leave to amend granted for the fraud claim |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Sup. Ct. 2007) (complaint must plead plausible claims, not mere speculation)
- Ashcroft v. Iqbal, 556 U.S. 662 (Sup. Ct. 2009) (pleading must state plausible claims; not just conclusory)
- Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246 (10th Cir. 1997) (Rule 9(b) requires specificity in fraud pleadings; details vary by case)
- Robbins v. Oklahoma, 519 F.3d 1242 (10th Cir. 2008) (definitions of plausibility under Twombly/Iqbal in 9(b) context)
- Meiboom v. Carmody, 134 N.M. 699 (Ct. App. 2003) (New Mexico law recognizes fraud theories requiring intent to deceive; 9(b) linking to theory)