Studio 1220, Inc. v. Intralinks, Inc.
21-16066
| 9th Cir. | May 23, 2022Background
- Studio 1220 used Intralinks’ software platform to submit a PPP loan application to Bank of America and sued Intralinks for fraudulent concealment, alleging improper prioritization of larger loans.
- The district court dismissed Studio 1220’s fraudulent concealment claim under Federal Rule of Civil Procedure 12(b)(6).
- On appeal, the Ninth Circuit reviewed the dismissal de novo and affirmed the district court’s ruling.
- Studio 1220 did not have a direct contract or fiduciary relationship with Intralinks; its interaction was limited to using Intralinks’ platform to transmit documents to Bank of America.
- Studio 1220 pointed to an April 6, 2020 email (sent by Bank of America using Intralinks’ platform) and broad PPP loan statistics to support its concealment theory.
- The panel held Studio 1220 failed to plead either a duty to disclose (under California law) or with the particularity required by Rule 9(b) that Intralinks made misleading omissions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a duty to disclose existed (fraudulent concealment under CA law) | Intralinks had a duty based on its role in transmitting applications and alleged concealment | No fiduciary or transactional relationship with Studio 1220; mere platform use does not create a duty | No duty; plaintiff failed to plead fiduciary or transactional relationship |
| Whether the April 6, 2020 email created a transactional relationship | The email (sent via Intralinks’ platform) created a sufficient transactional relationship to impose a duty | The email was sent by Bank of America using Intralinks’ software; that alone does not create a duty | Email did not create the necessary relationship; commercial relationship alone is insufficient |
| Whether Studio 1220 pleaded concealment or misleading omissions with particularity (Rule 9(b)) | Broad PPP statistics and alleged prioritization permit an inference of concealment | Statistics are too generalized; no specific misleading statements or omissions by Intralinks were pleaded | Claim also fails for lack of particularity and no adequately pleaded concealed material facts |
Key Cases Cited
- United States v. Corinthian Colls., 655 F.3d 984 (9th Cir. 2011) (Rule 9(b) requires particularity for fraudulent concealment claims)
- Nguyen v. Endologix, Inc., 962 F.3d 405 (9th Cir. 2020) (de novo review standard for Rule 12(b)(6) dismissal)
- L.A. Mem'l Coliseum Comm'n v. Insomniac, Inc., 182 Cal. Rptr. 3d 888 (Ct. App. 2015) (circumstances giving rise to a duty to disclose under California law)
- Bigler-Engler v. Breg, Inc., 213 Cal. Rptr. 3d 82 (Ct. App. 2017) (no duty to disclose where relationship/transaction between parties is insufficient)
- Boschma v. Home Loan Ctr., Inc., 129 Cal. Rptr. 3d 874 (Ct. App. 2011) (fraudulent concealment requires proof of concealed or suppressed material facts)
- Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940 (9th Cir. 2005) (appellate court may affirm on any ground supported by the record)