The U.S. Court of Appeals for the Ninth Circuit affirmed the dismissal of a securities fraud class action lawsuit against Comerica Incorporated and two of its top executives in a memorandum opinion filed February 6, 2026. The decision upholds a lower court ruling that dismissed claims brought by Nova Scotia Health Employees' Pension Plan and David Ramos under federal securities laws.
The appellants, Nova Scotia Health Employees' Pension Plan and David Ramos, filed the putative securities class action under Sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5. The defendants included Comerica Incorporated, the Detroit-based financial services company, along with CEO Curtis C. Farmer and CFO James J. Herzog.
The case originated in the U.S. District Court for the Central District of California, where District Judge Stanley Blumenfeld Jr. presided over the matter. The district court dismissed the Third Amended Complaint for failure to state a claim, denied leave to amend, and denied reconsideration. The plaintiffs appealed these rulings to the Ninth Circuit.
On appeal, the plaintiffs argued that the district court erred in its dismissal of their Third Amended Complaint for failure to state a claim. They also challenged the court's denial of leave to amend their pleadings and its denial of their motion for reconsideration. However, the Ninth Circuit panel found no error in the lower court's rulings.
The appeals court decision was rendered by a three-judge panel consisting of Circuit Judges Lee, Koh, and De Alba. The panel unanimously concluded that the case was suitable for decision without oral argument, pursuant to Federal Rule of Appellate Procedure 34(a)(2). The case was submitted for decision on February 4, 2026, and the memorandum opinion was filed just two days later.
In reviewing the district court's dismissal, the Ninth Circuit applied the de novo standard of review for failure to state a claim motions. Under this standard, the appeals court accepts the plaintiffs' allegations as true and construes them in the light most favorable to the plaintiffs, as established in precedent such as *In re Gilead Sciences Securities Litigation*.
The court's memorandum opinion is marked "NOT FOR PUBLICATION," indicating that it is not appropriate for publication and does not serve as precedent except as provided by Ninth Circuit Rule 36-3. This designation is common for cases where the legal principles are well-established and the decision does not break new legal ground.
Nova Scotia Health Employees' Pension Plan served as the lead plaintiff in the proposed class action, a role typically assigned to the plaintiff with the largest financial stake in the litigation under the Private Securities Litigation Reform Act. Pension funds and other institutional investors often serve as lead plaintiffs in securities class actions due to their substantial holdings and resources to pursue complex litigation.
The case appears to be part of a broader trend of securities litigation involving financial institutions. Comerica Incorporated, headquartered in Dallas with significant operations in Michigan, is one of the largest commercial banks in the United States, providing business and retail banking services across multiple states.
Securities fraud claims under Section 10(b) of the Securities Exchange Act and Rule 10b-5 require plaintiffs to prove that defendants made material misrepresentations or omissions in connection with the purchase or sale of securities. Section 20(a) provides for liability of controlling persons, typically targeting corporate executives who had authority over the allegedly misleading statements or conduct.
The specific allegations underlying the lawsuit were not detailed in the available portion of the memorandum opinion. However, the fact that the case proceeded through multiple amended complaints suggests that the plaintiffs attempted to cure pleading deficiencies identified by the court in earlier versions of their complaint.
The district court's denial of leave to amend indicates that the court determined that further amendments would be futile or that the plaintiffs had already been given sufficient opportunity to state viable claims. Courts have discretion in granting or denying leave to amend, though such leave should be freely given when justice so requires.
The Ninth Circuit's affirmance of all three district court rulings represents a complete victory for the defendants. The decision effectively ends the litigation unless the plaintiffs seek further review by the Supreme Court, though such petitions for certiorari are rarely granted in securities cases that do not present novel legal issues or circuit splits.
For investors in Comerica and similar financial institutions, the decision provides clarity that the specific claims alleged in this case did not meet the heightened pleading standards required for securities fraud litigation. The outcome also demonstrates the continued challenges faced by private litigants seeking to pursue securities fraud claims against financial institutions and their executives in federal court.