Filed: Jan. 21, 2015
Latest Update: Mar. 02, 2020
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-2491 JEREMY MARKS, Plaintiff - Appellant, v. THOMAS DANN, Defendant – Appellee, and NATHAN CUMMINGS; CARLO DINALLO; STANISLAV LICUL; MAXTENA, INC., Defendants. Appeal from the United States District Court for the District of Maryland, at Greenbelt. Deborah K. Chasanow, Senior District Judge. (8:13-cv-00347-DKC) Argued: December 9, 2014 Decided: January 21, 2015 Before KEENAN, FLOYD, and HARRIS, Circuit Judges. Affirmed by u
Summary: UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-2491 JEREMY MARKS, Plaintiff - Appellant, v. THOMAS DANN, Defendant – Appellee, and NATHAN CUMMINGS; CARLO DINALLO; STANISLAV LICUL; MAXTENA, INC., Defendants. Appeal from the United States District Court for the District of Maryland, at Greenbelt. Deborah K. Chasanow, Senior District Judge. (8:13-cv-00347-DKC) Argued: December 9, 2014 Decided: January 21, 2015 Before KEENAN, FLOYD, and HARRIS, Circuit Judges. Affirmed by un..
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-2491
JEREMY MARKS,
Plaintiff - Appellant,
v.
THOMAS DANN,
Defendant – Appellee,
and
NATHAN CUMMINGS; CARLO DINALLO; STANISLAV LICUL; MAXTENA,
INC.,
Defendants.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Deborah K. Chasanow, Senior District
Judge. (8:13-cv-00347-DKC)
Argued: December 9, 2014 Decided: January 21, 2015
Before KEENAN, FLOYD, and HARRIS, Circuit Judges.
Affirmed by unpublished opinion. Judge Harris wrote the
opinion, in which Judge Keenan and Judge Floyd joined.
ARGUED: John Da Grosa Smith, SMITH HORVATH LLC, Atlanta,
Georgia, for Appellant. Julia Doyle Bernhardt, OFFICE OF THE
ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellee.
ON BRIEF: Matthew A. Horvath, SMITH HORVATH LLC, Atlanta,
Georgia, for Appellant. Douglas F. Gansler, Attorney General of
Maryland, Robert N. Stokes, Assistant Attorney General, OFFICE
OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
2
PAMELA HARRIS, Circuit Judge:
Maxtena, Inc. (“Maxtena”) is a promising Maryland-based
manufacturer of custom antenna solutions. Since 2011, Maxtena’s
co-founders have been engaged in serial litigation over the
ownership stake held by Jeremy Marks (“Marks”), a co-founder and
former officer and employee of the company. In the complaint
that underlies this case, Plaintiff-Appellant Marks alleges that
his former colleagues entered into a sweetheart deal with the
Maryland Venture Fund (“MVF”), a Maryland state agency
responsible for investing in early-stage technology companies,
to dilute his stake in the company at an artificially low
valuation. In addition to Maxtena’s board members, Marks names
as a defendant Thomas Dann (“Dann”), the MVF’s managing
director. Marks alleges that Dann colluded with Maxtena’s board
members, breaching his own fiduciary duties to Maxtena and
aiding and abetting the others.
The district court dismissed Marks’s claims against Dann,
holding that Dann was entitled to immunity from personal
liability under the Maryland Tort Claims Act (“MTCA”), Md. Code
Ann., Cts. & Jud. Proc. § 5-522 (West 2000). The MTCA couples a
waiver of the state’s sovereign immunity from civil suits in
state court with protection for state officials who act without
malice and within the scope of their official duties. The
district court found that Marks’s complaint failed to plausibly
3
allege that Dann’s actions came within either the “malice” or
the “scope-of-duty” exception to the MTCA and dismissed the
complaint as against Dann under Rule 12(b)(6) of the Federal
Rules of Civil Procedure.
For the reasons that follow, we affirm. Under the MTCA,
Marks’s remedy for the MVF’s alleged misconduct was against the
state, not against Dann in his personal capacity.
I.
A.
Marks left his position at Maxtena in July, 2010. About
one year after what Marks alleges was his “ouster,” in April,
2011, Maxtena filed suit against Marks in the district court,
alleging that Marks had surreptitiously founded a competing
venture while still employed at Maxtena. Maxtena v. Marks, Civ.
A. No. 8:11-cv-9450-DKC (D. Md. Apr. 13, 2011). In the Maxtena
litigation, Maxtena seeks to enforce contractual provisions that
it claims entitle it to repurchase Marks’s 34% stake in the
company for a nominal sum. Maxtena and Marks agreed that they
would mediate the Maxtena litigation, after first engaging in
financial and valuation discovery intended to facilitate
settlement discussions. It was through that discovery that
Marks became aware of negotiations between Maxtena and the MVF
4
regarding a potential early-stage investment by the MVF in
Maxtena (the “MVF Transaction”).
Dann did not initiate those negotiations, which began under
the MVF’s former director, Frank Dickson, before Dann joined the
MVF. But shortly after he became the MVF’s managing director in
July 2012, Dann delivered a term sheet to Maxtena proposing a
short-term bridge investment. According to the complaint, Dann
designed that proposal to “exploit” the Maxtena board’s interest
in setting a low valuation for the company in advance of its
settlement discussions with Marks, in order to secure for the
MVF “ownership in a promising and rapidly growing technology
company at an exceptionally low price.”
Specifically, the MVF proposed to purchase a one-year note,
convertible into equity, from Maxtena. If the MVF were to
exercise its option to convert, it would be able to secure a 50%
interest in Maxtena for just $500,000. The MVF’s offer also
included a new employee stock options pool, which would give
Maxtena’s board members the option to reverse the dilutive
effect of the MVF Transaction, and regain their controlling
stake in the company, by buying back in at a higher valuation.
Marks alleges that this stock-options grant was intended to
shift the cost of the dilution caused by the MVF Transaction
onto Marks, the only significant shareholder who wasn’t also a
Maxtena employee.
5
The MVF’s offer as proposed by Dann was not accepted;
Maxtena thought the terms were “very expensive” and designed to
take advantage of the company’s situation. Instead, Maxtena CEO
Stanislav Licul (“Licul”) proposed various changes to the MVF’s
term sheet, all of which Marks contends were designed to benefit
Licul and the other Maxtena board members personally, but not
Maxtena itself. For example, Marks points out that Licul asked
for a more favorable options pool, but did not seek a higher
valuation for the company. Dann rejected many of these changes.
He was willing to invest directly in Maxtena’s equity in lieu of
the convertible note, but would not agree to a cap on the MVF’s
return or accept a less favorable place in the Maxtena capital
structure. He also rejected Licul’s changes to the employee
stock options pool, which he described as already “exceptional.”
After further negotiations, Dann and Licul signed a binding
“commitment letter” on September 20, 2012. The final terms of
the MVF Transaction retained the allegedly favorable valuation
Dann proposed initially, which Marks contends was designed to
manipulate the Maxtena litigation, but also included a slightly
larger employee stock options pool. The Maxtena board approved
the MVF Transaction on October 3, 2012. Dann became the MVF’s
representative on the board that same day, and the transaction
was publicly announced on November 13, 2012.
6
B.
Marks filed his complaint on February 1, 2013, alleging
that the MVF Transaction was an elaborate “scheme” intended to
dilute his stake in the company and provide Maxtena with an
artificially low valuation to anchor the ongoing settlement
discussions in the Maxtena litigation. Count I of the complaint
alleges that Licul and the other members of the Maxtena board
negotiated for themselves, rather than Maxtena, in breach of
their fiduciary duties. Those claims against Licul and the
other board members remain pending in the district court.
Counts II and III of the complaint allege the causes of
action against Dann that are the subject of this appeal. In
Count II, Marks contends that after becoming a member of the
Maxtena board, Dann breached his fiduciary duties by approving
the expanded stock options pool, and in Count III, he asserts
that Dann aided and abetted Licul and the other Maxtena board
members’ breach of their fiduciary duties when he “sold” them a
transaction intended to provide the MVF with a stake in Maxtena
for an “exceptionally low price,” at both Marks’s and Maxtena’s
expense.
Maxtena and the other defendants filed answers on February
22, 2013, in which they denied the substance of Marks’s
allegations. Dann separately filed a motion to dismiss the
claims against him under Rule 12(b)(6). In support, Dann argued
7
that the claims against him in his individual capacity were
statutorily barred by the MTCA because the complaint did not
plausibly allege that his actions were malicious or outside the
scope of his public duties as the managing director of the MVF. 1
The district court granted Dann’s motion to dismiss on July
24, 2013. Marks v. Dann, Civ. A. No. 8:13-cv-00347-DKC (D. Md.
July 24, 2013), ECF No. 30. In a detailed memorandum opinion,
the district court held that Marks’s claims against Dann were
barred by the MTCA because the complaint did not plausibly
allege that Dann’s actions fell within either of the statutory
exceptions upon which Marks relied. Marks v. Dann, Civ. A. No.
8:13-cv-00347-DKC, 2013 WL 8292331 (D. Md. July 24, 2013).
Canvassing extensive Maryland case law defining “malice” for
purposes of the MTCA, the district court found that even
crediting Marks’s allegation that Dann took advantage of the
Maxtena board’s conflict to gain a “substantial ownership
interest in Maxtena for the MVF at an exceptionally low price,”
Marks had not provided any facts in support of his theory that
Dann did so because of an improper motive, rather than in order
to advance the MVF’s legitimate commercial interests. The
1
In the alternative, Dann argued that Marks’s claims were
properly characterized as requests for relief against the state
and therefore barred in federal court by the state’s Eleventh
Amendment immunity. The district court rejected that argument
and Dann has not appealed.
8
district court also rejected Marks’s alternative theory that
Dann’s actions were beyond the scope of his role at the MVF, an
argument the court found completely lacking in factual support
and contradicted by the complaint’s allegations that Dann acted
to secure a stake in Maxtena for the MVF at a below-market
price.
Marks did not seek reconsideration of the district court’s
decision or leave to amend. Instead, he moved for certification
of the district court’s dismissal as a final and appealable
order under Rule 54(b) of the Federal Rules of Civil Procedure.
The district court granted the motion, and Marks timely noted
this appeal.
II.
A.
We review de novo the district court’s partial dismissal of
Marks’s action under Rule 12(b)(6). Wag More Dogs, LLC v.
Cozart, 680 F.3d 359, 364 (4th Cir. 2012). Like the district
court, we must credit the well-pleaded allegations in Marks’s
complaint as true, and construe “the facts in the light most
favorable” to Marks. U.S. ex rel. Oberg v. Pa. Higher Educ.
Assistance Agency,
745 F.3d 131, 136 (4th Cir. 2014). To
survive a motion to dismiss, however, Marks’s complaint must do
more than “plead facts that are ‘merely consistent with’ a
9
defendant’s liability.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (quoting Bell Atl. Corp. v. Twombly,
550 U.S. 544, 557
(2007)). Rather, the pleaded facts must “state a claim to
relief that is plausible on its face” and “allow[] the court to
draw the reasonable inference,”
id., that Dann is personally
liable under the MTCA for the misconduct alleged.
B.
The parties agree that the MTCA governs the immunity issue
in this diversity action. That statute provides, in relevant
part, that a state official like Dann is immune from liability
for any “tortious act or omission that is within the scope of
the public duties of the [official] and is made without malice
or gross negligence, and for which the State [has] waived
immunity.” Md. Code Ann., Cts. & Jud. Proc. § 5-522(b) (West
2000). And in a precisely complementary provision, the MTCA
waives the state’s immunity for tort actions brought in state
court except where a tortious act or omission by state personnel
is outside the scope of their public duties or made with malice
or gross negligence. Id. at § 5-522(a); see also Md. Code Ann.,
State Gov’t § 12-104(a), (b) (West 1999). The combined effect
is that in the ordinary case, the MTCA “substitutes the
liability of the State for the liability of the state employee.”
Lee v. Cline,
863 A.2d 297, 307 (Md. 2004); see also Newell v.
Runnels,
967 A.2d 729, 763 (Md. 2009) (“If the State is liable,
10
the individual is immune; if the individual is liable, the State
is immune.”).
Two general features of this statutory scheme help to frame
the dispute here. First, § 5-522(b) is designed to provide
state officials with “broad statutory immunity” from suit, going
beyond the protections of Maryland common law. Lee, 863 A.2d at
306. State common law, for instance, would permit suits against
Maryland officials for intentional, as opposed to negligent,
torts. But under the MTCA, state officials enjoy immunity even
as to intentional torts, consistent with the statutory purpose
of insulating state employees broadly from all forms of tort
liability.
Id.
Second, this expansive grant of immunity to state officials
is justified in part by its link to a reciprocal waiver of the
state’s own immunity.
Id. at 307. Where a state official is
immune from suit under § 5-522(b), then under the MTCA’s
interlocking immunity and waiver provisions, “the injured party
will ordinarily be able to recover against the State as long as
he or she complies with the procedural requirements” of the
statute.
Id. 2 At issue in MTCA cases like this one, in other
2
Those procedural requirements include the timely filing of
suit in state rather than federal court; Maryland’s waiver of
immunity under § 12-104(a) is restricted to tort actions in a
“court of the State.” Md. Code Ann., State Gov’t § 12-104(a)(1)
(West 1999). Section 12-104(a)(2) limits state liability to
(Continued)
11
words, is not whether a person injured by tortious state action,
as Marks alleges, will have any remedy, but whether that remedy
will lie against a state official in his or her personal
capacity or against the state itself.
C.
Marks argues that his remedy is against Dann, § 5-522(b)
notwithstanding. Because Dann specifically designed the MVF
Transaction to cause him harm, Marks contends, Dann’s actions
come within both the MTCA exception for malicious conduct and
the exception for conduct outside the scope of employment. In
response, Dann argues that there was nothing improper about his
desire to achieve the best possible economic outcome for the
MVF, and that there is no support in the complaint for Marks’s
theory that he colluded with the Maxtena board to purposefully
harm Marks. Like the district court, we agree with Dann. Read
in the light most favorable to Marks, the allegations in the
complaint fall short of what is required to show malice or
conduct outside the scope of public duties under Maryland law.
$200,000 for a single claimant and tortious incident, subject to
provisions for exceeding that cap laid out in § 12-104(c). Id.
at § 12-104(a)(2), (c).
12
1.
For purposes of the malice exception to MTCA immunity, a
state official’s conduct is “malicious” if it is “characterized
by evil or wrongful motive, intent to injure, knowing and
deliberate wrongdoing, ill-will or fraud.” Barbre v. Pope, 935
A.2d 699, 714 (Md. 2007) (citations and quotation marks
omitted); see also
Lee, 863 A.2d at 311–12 (characterizing
“malice” as “affirmative intent to bring harm,” “ill will,” or
other “improper motive”). As this formulation suggests, “intent
and motive are critical” to application of the malice exception
under Maryland law.
Lee, 863 A.2d at 311. The malice exception
thus differs significantly from the familiar federal qualified
immunity standard under 42 U.S.C. § 1983, asking not whether an
official’s conduct was objectively unreasonable, but instead
whether the official actually and subjectively intended to do
wrong or harm. See
Newell, 967 A.2d at 763; Shoemaker v. Smith,
725 A.2d 549, 557–59 (Md. 1999) (contrasting § 1983 and state-
law malice standards). That is a high bar, as Maryland’s courts
have emphasized, requiring more than “merely reckless or wanton
conduct,”
Shoemaker, 725 A.2d at 560–61, 3 and satisfied on a
3
As the Maryland Court of Appeals has explained, “reckless
or wanton conduct” is covered by a different statutory exception
to the MTCA state-official immunity for “gross negligence.”
Shoemaker, 725 A.2d at 561. At no point during this litigation
has Marks relied on the gross-negligence exception, and we thus
(Continued)
13
showing that an official acted with an “evil motive” to
“deliberately and willfully injure” a plaintiff, Thacker v. City
of Hyattsville, 762 A.2d 172, 189 (Md. Ct. Spec. App. 2000).
As the district court explained, this wrongful motive,
which is “seldom admitted,” need not be proven by direct
evidence under Maryland law, and is more commonly “inferred from
acts and circumstantial evidence.” But as the district court
also recognized, Maryland case law makes clear that inferring §
5-522(b) malice from circumstantial evidence can be especially
difficult in the commercial context, where behavior that might
be consistent with an intent to harm or some other improper
motive is often at least equally consistent with permissible
financial self-interest. See Postelle v. McWhite, 694 A.2d 529,
534 (Md. Ct. Spec. App. 1997) (inferring malice in a commercial
setting “particularly difficult because of the inherently
competitive and aggressive nature of the business environment
and the necessity to discern that conduct is motivated by malice
rather than the result of a legitimate commercial controversy”);
cf. Cozzarelli v. Inspire Pharm. Inc.,
549 F.3d 618, 626–28 (4th
Cir. 2008) (in securities fraud case where legitimate business
do not consider whether Marks’s complaint could be construed to
allege the requisite “utter[] indifferen[ce]” to the rights of
others,
Newell, 967 A.2d at 764 (quotation marks and citations
omitted), under that exception.
14
motivations could explain facts alleged in complaint, plaintiffs
have “difficult task” of establishing intent through
circumstantial allegations). That is not to say that malice can
never be inferred circumstantially in a commercial setting. But
there must be more to support the inference than the allegation
that a plaintiff has suffered economic injury as a result of
actions by a state official that advance the economic interests
of his or her state employer, because allegations as consistent
with the regular course of commercial dealings as they are with
malicious intent do not, on their own, “nudge[] [a claim] across
the line from conceivable to plausible.” Twombly, 550 U.S. at
570; see also Postelle,
694 A.2d 534–36; New Summit Assocs. L.P.
v. Nistle,
533 A.2d 1350, 1357 (Md. Ct. Spec. App. 1987).
This is where Marks’s complaint falls critically short.
Marks’s theory appears to be that Dann proposed and structured
the MVF Transaction not for the purpose of benefitting his
employer economically, but instead for the purpose of causing
harm to Marks. 4 But as support, Marks’s complaint offers only
4
As noted earlier, “malice” under § 5-522(b) is not limited
to an affirmative intent to harm, but also may take other forms,
such as “knowing and deliberate wrongdoing” or “fraud.” See
Barbre, 935 A.2d at 714. Marks rests, however, on specific
intent to injure, and does not argue, for instance, that his
complaint can be read to allege that Dann intended to defraud
Marks, or that Dann engaged in knowing and deliberate wrongdoing
by assisting Maxtena in wrongfully taking shares that he knew
belonged to Marks. In this case, that is a wise concession:
(Continued)
15
the allegation that he did indeed suffer economic injury as a
result of Dann’s commercial activities. There is nothing in the
complaint from which we could infer, even circumstantially, that
Dann’s conduct was driven by something other than ordinary
economic concerns – an effort, perhaps overzealous, to get a
good deal for the MVF.
First, most of the complaint’s allegations regarding intent
are directed not at Dann but at the Maxtena board, describing
the board’s desire to harm Marks. The few allegations bearing
directly on Dann’s intent identify only commercial motivations,
not a malicious intent to injure. Marks alleges, for instance,
that “Dann was able to secure a substantial ownership interest
in Maxtena for the MVF at an exceptionally low price,” and that
to do so he “played on the conflict of interest of [the Maxtena
board] to the detriment of Maxtena and Marks.” But under
Maryland law, there is nothing malicious about Dann’s allegedly
sharp-elbowed attempt to secure a better deal for his employer.
Marks’s complaint does not allege fraud at all, and the
transaction documentation provided by Marks expressly assumes
that Marks had no legal entitlement to any shares in the
company. But with proper support and stated with the requisite
particularity under Rule 9 of the Federal Rules of Civil
Procedure, plausible allegations of such fraud or deliberate
wrongdoing could meet the malice standard under Maryland law.
See Manders v. Brown, 643 A.2d 931, 943 (Md. Ct. Spec. App.
1994) (“corrupt or fraudulent motive” constitutes malice).
16
“A mere desire to realize commercial gain at the expense of
another does not, without more, reach the requisite mental state
for actual malice.” New Summit Assocs., 533 A.2d at 1357.
To support these insufficient allegations Marks provides
just one piece of direct evidence purported to show the
requisite malice: a series of emails in which Dann suggested
that structuring the transaction as an equity investment might
“facilitate resolution of the rogue shareholder issue.” Like
the district court, we do not think that an awareness of the
Maxtena litigation or interest in its settlement demonstrates
that Dann was motivated by anything other than a desire to
protect the MVF’s investment in Maxtena. Nor do we believe that
Dann’s characterization of Marks as a “rogue shareholder,” read
in context, is anything more than a factual description of
Marks’s status in the ongoing Maxtena litigation. Even giving
Marks the benefit of the doubt, as we must, this stray reference
alone is not enough to create a plausible inference of personal
animus.
Second, and equally important, the complaint lacks any
circumstantial evidence of malice. In the commercial context,
economically pointless or gratuitous conduct by a state official
may give rise to an inference of malice under the MTCA, because
it suggests that the official was motivated by something other
than the state’s financial interests. See Postelle, 694 A.2d at
17
534–36. But here, there is no allegation or indication that
Dann sought or agreed to terms unrelated to the economics of the
MVF Transaction. Nor has Marks alleged, for instance, that Dann
agreed to terms that are out of the ordinary for transactions of
this type; or that his stance in the negotiations, as detailed
above, was inconsistent with the MVF’s commercial interests; or
that Dann conceded more than was necessary to complete the
transaction. Whatever may be said about whether the Maxtena
board drove an appropriately hard bargain or improperly focused
on the employee stock options pool during negotiations, Dann can
hardly be faulted for failing to insist that the MVF pay a
higher price for its interest in Maxtena than Maxtena required.
In short, there is nothing in Marks’s complaint that would allow
us to “discern” from the circumstances “conduct [] motivated by
malice rather than the result of a legitimate commercial
controversy.”
Id. at 534.
2.
For similar reasons, we reject Marks’s alternative argument
that Dann’s actions fall within § 5-522(b)’s exception for
conduct “outside the scope” of an official’s public duties.
Under the MTCA, conduct is outside the scope of public duties if
it is undertaken for reasons of personal ambition or
unauthorized by the state employer. See Sawyer v. Humphries,
587 A.2d 467, 470–71 (Md. 1991) (scope-of-authority exception
18
coterminous with common law of respondeat superior). As to
personal ambition, as discussed above, the complaint offers no
facts from which we could infer that Dann was acting in his own
self-interest rather than in an effort to advance the economic
interests of his state employer, the MVF. Indeed, the complaint
itself insists that Dann secured an extremely advantageous
bargain for the MVF; by all accounts, Dann did quite well by his
employer. And without belaboring the point, we note that the
transaction documentation provided by Marks, deemed integral to
his complaint, establishes that Dann served on the Maxtena board
as the MVF’s representative and not for his personal benefit.
Marks’s chief contention seems to be that intentional torts
such as breach of fiduciary duty by definition cannot be
“authorized” by a state employer. In this regard, he is simply
mistaken. It is clear that the MTCA, unlike Maryland common
law, extends state-official immunity to intentional as well as
negligent torts. See Lee, 863 A.2d at 310 (“[W]e hold that the
immunity under the [MTCA], if otherwise applicable, encompasses
constitutional torts and intentional torts.”). We cannot adopt
a reading of the scope-of-immunity exception that would
effectively swallow that rule.
As we have explained, the most that can be inferred from
Marks’s complaint is that Dann was overzealous in his attempts
to secure a good deal for his employer, not that he advanced an
19
agenda to harm Marks or to derive some personal benefit. We do
not decide whether Dann’s actions in this regard were tortious,
even intentionally so, because the malice and scope-of-
employment exceptions to the MTCA require significantly more
before a state official may be held personally liable. See Lee,
863 A.2d at 309–10. We hold only that this is the ordinary, not
the exceptional, case under the MTCA, in which broad state-
official immunity protects Dann from suit in his personal
capacity.
III.
Marks contends that certain additional allegations and
documents, not presented with his original complaint, would
allow him to show Dann’s personal animus toward him, and thus to
meet the “malice” standard under the MTCA. Marks did not seek
leave in the district court to amend his complaint to include
these materials. Instead, without explanation, he provided
those new facts and allegations – along with transcripts of
Dann’s deposition in the Maxtena litigation, all of which were
available to him when he first filed his complaint – with his
brief in opposition to Dann’s motion to dismiss. The district
20
court properly deemed these matters outside the complaint and
refused to consider them as part of its Rule 12(b)(6) analysis. 5
Though under no obligation to do so, the district court
went on to review the additional allegations and deposition
excerpts. The court concluded that even the new materials did
not give rise to a plausible inference of malice, and thus that
there was no basis to invite Marks to amend his complaint. Cf.
Equal Rights Ctr. v. Niles Bolton Assocs., 602 F.3d 597, 602–03
(4th Cir. 2010) (a district court may deny leave to amend if
amendment would be futile).
Although he never moved for leave to amend in the district
court, Marks now argues that the district court erred by
refusing to invite an amendment. But a district court does not
abuse its discretion by declining to grant a motion that was
never made. See Drager v. PLIVA USA, Inc., 741 F.3d 470, 474–75
(4th Cir. 2014); see also
Cozzarelli, 549 F.3d at 630–31
(district court did not abuse discretion by denying motion for
leave to amend that was never properly made). The district
court’s conscientious review of Marks’s proffered materials,
even in the absence of a motion to amend, does not provide a
5
To the extent Marks argues otherwise, suggesting that the
district court improperly converted Dann’s motion to dismiss
into one for summary judgment under Rule 56 of the Federal Rules
of Civil Procedure, he is mistaken. The district court could
not have been clearer in this respect.
21
justification for appellate second-guessing. Accordingly, we do
not consider the merits of the district court’s futility
determination, holding only that the court did not abuse its
discretion by failing to provide for amendment in the absence of
a motion to amend and in dismissing Marks’s claims against Dann
with prejudice.
IV.
For the reasons stated above we affirm the district court’s
dismissal of Counts II and III of the complaint.
AFFIRMED
22
