Stacy Ryan v. Constance Ryan, 889 F.3d 499

Background

Streck, a closely held Nebraska company founded by Dr. Wayne Ryan, issued voting and nonvoting shares to his five children; redemption agreements (RRAs) provided Streck the right to repurchase shares at book or fair market value determined by annual JVA valuations.
In 2012, Streck exercised its repurchase right and paid Stacy Ryan $9,280,235 for her shares based on a 2011 JVA valuation ($3.49 voting; $3.32 nonvoting); Stacy initially refused to sign the SPA but ultimately signed in August 2012 after crossing out a mutual release.
Stacy later alleged a 2014 appraisal (and a 2012 JVA excerpt produced post‑briefing) showed substantially higher per‑share values, and she sued Streck and sister Connie asserting federal and Nebraska securities claims, fraud, breach of fiduciary duty, shareholder oppression, conversion, unjust enrichment, tortious interference, and breach of contract relating to the redemption.
The district court took judicial notice of the October 2011 JVA per‑share valuations and dismissed the complaint for failure to plausibly plead loss causation and manipulation of the 2011 valuation; it also dismissed other state claims as duplicative or inadequately pleaded.
Stacy moved under Rule 59(e) to alter or amend and for leave to amend, attaching a July 27, 2012 JVA excerpt she said she received after briefing; the district court denied relief, but the Eighth Circuit found one piece of newly discovered evidence (the 2012 JVA excerpt) warranted limited remand as to the breach of contract claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Judicial notice of 2011 JVA valuation	District court erred by considering outside document without converting to summary judgment	2011 valuation is embraced by the complaint and authentic	Court: Judicial notice appropriate; document embraced by complaint can be considered on 12(b)(6) review
Pleading manipulation of valuation	Stacy alleged manipulation of appraisal process; higher later appraisals suggest manipulation	Complaint lacks plausible facts showing manipulation of 2011 JVA that caused loss	Court: Allegations insufficiently particular; mere later higher valuations do not show manipulation
Loss causation for securities/fraud claims	Misconduct induced sale at below‑fair value; SPA negotiation superseded RRA timing	RRA gave Streck absolute right to repurchase at its election, so defendants' conduct could not have caused sale	Court: Dismissed securities, fraud, fiduciary duty, and oppression claims for failure to plausibly plead loss causation
Post‑judgment newly discovered evidence (2012 JVA excerpt) and leave to amend	The 2012 excerpt, discovered after briefing, may show the relevant valuation date was after July 27, 2012, supporting breach of contract	Evidence was in defendants' custody and known earlier; would not change dismissal	Court: Remanded limitedly — vacate dismissal of Count IX (breach of contract) to permit district court to consider the 2012 valuation as newly discovered evidence and further proceedings

Key Cases Cited

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (pleading must state a plausible claim)
Ashcroft v. Iqbal, 556 U.S. 662 (plausibility standard for pleadings)
Enervations, Inc. v. Minn. Mining & Mfg. Co., 380 F.3d 1066 (documents embraced by complaint may be considered on 12(b)(6))
St. Louis Union Trust Co. v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 562 F.2d 1040 (sales pursuant to absolute repurchase right are not proximately caused by nondisclosures)
Stoneridge Inv. Partners v. Scientific‑Atlanta, 552 U.S. 148 (loss causation required in private Rule 10b‑5 actions)
Ayres v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 538 F.2d 532 (distinguishable Third Circuit decision on causation where redemption may be affected by nondisclosure)
Miller v. Baker Implement Co., 439 F.3d 407 (standards for newly discovered evidence on post‑judgment motions)
Roop v. Hypoguard USA, Inc., 559 F.3d 818 (Rule 15(a)(2) considerations when denying leave to amend)