                 United States Court of Appeals
                            For the Eighth Circuit
                        ___________________________

                                No. 17-3533
                        ___________________________

     FCS Advisors, LLC; Brevet Direct Lending - Short Duration Fund, L.P.

                                     Plaintiffs - Appellants

                                        v.

                        State of Missouri; Douglas Nelson

                                    Defendants - Appellees
                                  ____________

                     Appeal from United States District Court
               for the Western District of Missouri - Jefferson City
                                 ____________

                          Submitted: February 12, 2019
                              Filed: July 9, 2019
                                ____________

Before SMITH, Chief Judge, BENTON and STRAS, Circuit Judges.
                              ____________

STRAS, Circuit Judge.

      An investor loaned $20 million to EngagePoint, Inc., which was the prime
contractor on a major software project for the State of Missouri. When Missouri
terminated the contract and EngagePoint was unable to repay its debts, the investor
sued and claimed that Missouri had fraudulently induced the loan and illegally
discriminated against EngagePoint. The district court1 dismissed the lawsuit, and
we affirm.

                                         I.

       Missouri hired EngagePoint, a minority-owned information-technology
company, to redesign the software for its health-benefits programs. Douglas Nelson,
the Commissioner of Missouri’s Office of Administration at the time, managed the
project, which had an estimated cost of $147 million financed through a combination
of state and federal funds.

       When EngagePoint’s costs ballooned, Nelson allegedly encouraged the
company to do something to improve its cash flow. Acting on this advice,
EngagePoint turned to Brevet Direct Lending - Short Duration Fund, L.P. and its
administrative agent, FCS Advisors, LLC (together, “Brevet”), for a loan. Brevet is
a private lender engaged in so-called “impact lending,” which focuses on promoting
social or environmental objectives such as, in this case, supporting a minority-owned
business.

      Before making the loan, Brevet held a conference call with Nelson, who
allegedly “led [Brevet] to believe, in words or substance,” that he was pleased with
EngagePoint’s work and that the company was likely to continue to serve as the
prime contractor through the end of the project. Shortly after the call, Brevet
approved the loan.

      Just days later, however, EngagePoint’s role diminished. And within months,
Missouri terminated EngagePoint altogether, refused to pay the company for its past
work, and found a new prime contractor. This sequence of events left the company
unable to repay its loan and Brevet looking for a way to recoup its losses.


      1
      The Honorable Nanette K. Laughrey, United States District Judge for the
Western District of Missouri.

                                        -2-
       Brevet sued Nelson and the State of Missouri in federal district court based
on two theories. The first was that Nelson fraudulently induced it into making what
turned out to be an ill-advised loan. The second was that Nelson’s alleged racial
animus toward EngagePoint’s “Asian-Indian American management” led to the
company’s termination, which violated federal anti-discrimination laws. The district
court rejected both theories and dismissed Brevet’s complaint.

                                         II.

       We review the dismissal de novo, “accepting as true the allegations . . . and
drawing all reasonable inferences in favor of the nonmoving party.” Star City Sch.
Dist. v. ACI Bldg. Sys., LLC, 844 F.3d 1011, 1016 (8th Cir. 2017). To survive a
motion to dismiss, the complaint had to contain “sufficient factual matter” to state a
facially plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The
fraudulent-inducement claim had to be pleaded with particularity, including “the
who, what, where, when, and how of the alleged fraud.” Mitec Partners, LLC v.
U.S. Bank Nat’l Ass’n, 605 F.3d 617, 622 (8th Cir. 2010) (citation omitted); see also
Fed. R. Civ. P. 9(b) (requiring fraud to be pleaded with particularity).

                                         A.

       We begin there. Brevet alleges that Nelson fraudulently induced the loan by
leading Brevet to “believe, in words or substance,” that EngagePoint would remain
through the end of the project. According to the complaint, Nelson had a different
plan, which was to terminate EngagePoint, and induced Brevet to complete the loan
to protect Missouri’s financial interests.

      Absent from the complaint, however, are any false representations of material
fact. See Hess v. Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758, 765 (Mo.
banc 2007). The closest it comes is the allegation that Nelson “led [Brevet] to
believe” that “EngagePoint was performing well” and would “likely . . . continue


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working on Phases II and III [of the project] so long as its access to liquidity
improved.” But these are, at most, mere expressions of Nelson’s opinion or
predictions of the future, not statements of material fact. See Clark v. Olson, 726
S.W.2d 718, 719–20 (Mo. banc 1987) (“[E]xpressions of opinion are insufficient to
authorize a recovery for fraudulent misrepresentation . . . .”); Arnold v. Erkmann,
934 S.W.2d 621, 626–27 (Mo. Ct. App. 1996) (“Statements and representations as
to expectations and predictions for the future are insufficient to authorize a recovery
for fraudulent misrepresentation.”); see also Constance v. B.B.C. Dev. Co., 25
S.W.3d 571, 587 (Mo. Ct. App. 2000) (distinguishing between statements of opinion
and statements of fact).

       To be sure, making a false “[s]tatement[] of present intent,” Craft v.
Metromedia, Inc., 766 F.2d 1205, 1218 (8th Cir. 1985), and stating an opinion
implying “the existence or non-existence of fact” are both actionable under Missouri
law, see Wion v. Carl I. Brown & Co., 808 S.W.2d 950, 955 (Mo. Ct. App. 1991).
But even when the complaint describes Nelson’s “comments,” it provides no detail
about what Nelson said or how he said it. For example, the complaint simply says
that Nelson led Brevet “to believe by his conduct and comments that his present
intent was to continue to use EngagePoint,” without describing his actual words or
conduct. This falls well short of pleading fraud with particularity.

                                          B.

       Brevet’s unlawful-discrimination claims fare no better. The Civil Rights Act
of 1866, as amended, protects the “right” of “[a]ll persons” to “make and enforce
contracts” and enjoy “all benefits, privileges, terms, and conditions of the contractual
relationship” free of racial discrimination. 42 U.S.C. § 1981(a), (b). Brevet alleges
that Nelson’s decision to terminate Missouri’s contract with EngagePoint was
motivated by racial animosity toward the company’s managers. See id. § 1981(b)
(making clear that the statute applies to decisions to terminate a contract).




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       There are at least two problems with Brevet’s theory. The first is that Brevet
has not “identif[ied] an impaired ‘contractual relationship’ under which [it] ha[d]
rights.” Gregory v. Dillard’s, Inc., 565 F.3d 464, 468–69 (8th Cir. 2009) (en banc)
(citation omitted). The software contract was between Missouri and EngagePoint,
not Brevet, and section 1981 does not allow Brevet to sue on EngagePoint’s behalf,
even if it too had a contractual relationship with the company. See Domino’s Pizza,
Inc. v. McDonald, 546 U.S. 470, 479–80 (2006) (clarifying that section 1981 does
not authorize derivative causes of action). To hold otherwise, the Supreme Court
explained in McDonald, would transform section 1981 into a “strange remedial
provision” allowing anyone to sue for the “hurt” associated with racial
discrimination as long as it is “somehow connected to somebody’s contract.” Id. at
476.

      To the extent Brevet is relying on its own agreement with EngagePoint, its
section 1981 claim fails for another reason. Brevet was not “the direct target of
discrimination,” nor did it experience discrimination based on its “relationship to,
association with, or advocacy” for EngagePoint. Bilello v. Kum & Go, LLC, 374
F.3d 656, 660 (8th Cir. 2004) (rejecting a section 1981 claim because the
“challenged practice . . . was not specifically targeted at” the plaintiff); see also
Combs v. The Cordish Cos., 862 F.3d 671, 684 (8th Cir. 2017) (“[T]he question is
not whether [the plaintiff] has presented evidence of discriminatory conduct on the
part of defendants . . . . The question is whether he has shown evidence that he
personally was the target of [the discriminatory conduct].”).

      To be sure, the complaint alleges that “Nelson also discriminated against
[Brevet] directly by making fraudulent and/or false or materially misleading
representations to it because of its association and work with EngagePoint’s Asian-
Indian American management.” But this is a conclusory allegation based on a fraud
theory that is itself inadequately pleaded. See supra Part II.A. The allegation is also
implausible, particularly given that Brevet’s complaint identifies independent non-
discriminatory reasons for Nelson’s actions. See Netterville v. Missouri, 800 F.2d
798, 801–02 (8th Cir. 1986) (explaining that the plaintiff’s section 1981 claim failed


                                         -5-
because the complained-of behavior was caused by neutral factors, not an “intent to
discriminate against [the plaintiff] because of her race”).

       For similar reasons, Brevet has failed to state a claim under Title VI of the
Civil Rights Act of 1964, which prohibits racial discrimination “under any program
or activity receiving Federal financial assistance.” 42 U.S.C. § 2000d. Brevet itself
was not a participant in any federal program, so the only way it can sue is if the
statute creates a cause of action for those who, like Brevet, have been incidentally
harmed by racial discrimination targeted at others. See Lexmark Int’l, Inc. v. Static
Control Components, Inc., 572 U.S. 118, 127–28 (2014) (referring to this inquiry as
the “zone-of-interests test”); see also Alexander v. Sandoval, 532 U.S. 275, 288–91
(2001) (examining the text and structure of Title VI to determine the availability of
a private remedy). We conclude that it does not.

       Title VI prohibits being “excluded from,” “denied the benefits of,” or
“subjected to discrimination under” a federally funded program “on the ground of
race, color, or national origin.” 42 U.S.C. § 2000d. Brevet has not alleged that it
has suffered any of these harms. Nor has it alleged that it suffered discrimination
because of the “race, color, or national origin” of its owners, managers, or
employees. Id.; see also Thompson v. Bd. of Special Sch. Dist. No. 1, 144 F.3d 574,
581 (8th Cir. 1998) (“To establish the elements of a prima facie case under Title VI,
a complaining party must demonstrate that his/her race, color, or national origin was
the motive for the discriminatory conduct.” (emphasis added)). And although
EngagePoint might have a claim under Title VI if it really suffered the
discrimination that Brevet alleges, nothing in the statute even hints that the “zone of
interests” protected by Title VI covers third parties owed money by victims of
discrimination. Lexmark, 572 U.S. at 129. Such an injury is simply beyond
Title VI’s reach.




                                         -6-
                                 III.

We accordingly affirm the judgment of the district court.
               ______________________________




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