                                _____________

                                No. 96-1521WM
                                _____________

Scott L. Silver, on behalf of         *
himself and all others                *
similarly situated,                   *
                                      *
                  Appellant,          *   Appeal from the United States
                                      *   District Court for the Western
     v.                               *   District of Missouri.
                                      *
H&R Block, Inc.; Thomas M.            *
Block; Ozzie Wenich,                  *
                                      *
                  Appellees.          *
                                _____________

                       Submitted:   December 12, 1996

                         Filed: January 23, 1997
                               _____________

Before FAGG, FLOYD R. GIBSON, and LOKEN, Circuit Judges.
                              _____________


FAGG, Circuit Judge.


     Scott L. Silver, an investor in H&R Block, Inc.'s common stock,
brought this action against H&R Block, its president and chief executive
officer, Thomas M. Block, and its controller and vice-president of finance,
Ozzie Wenich, asserting federal and state securities fraud claims.   See 15
U.S.C. § 78j(b) (1994); 17 C.F.R. § 240.10b-5 (1996).   Silver contends H&R
Block made materially false and misleading public statements reported in
news articles on October 27 and 28, 1994, the first and second days after
the Internal Revenue Service terminated its direct deposit indicator (DDI),
on which H&R Block's refund anticipation loan (RAL) program relied.        In
Silver's view, H&R Block's October statements were too optimistic about the
effect of the IRS change, and thus artificially inflated the price of H&R
Block's stock.   Silver contends Block disclosed the true adverse impact of
the IRS
change on November 22, causing the stock price to fall 17%.                  Eight days
later, on November 30, Silver filed this action.         In his complaint, Silver
selectively quoted the October statements without attaching the full text.


        H&R Block filed a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(6) and submitted the entire text of the October statements
with the motion.          The parties then filed a joint motion to stay all
discovery pending a decision on the motion to dismiss.             Later, the court
advised the parties that because it would consider the entire text of the
statements, which were technically not presented in the complaint, the
court would convert H&R Block's motion to one for summary judgment.                   The
parties filed supplemental briefs and Silver filed a Rule 56(f) affidavit
stating discovery was necessary.             Without permitting discovery, the
district court granted summary judgment to H&R Block, holding the October
statements were not misleading as a matter of law.         Silver appeals, and we
affirm.


        To prevail on his securities fraud claims, Silver must show, among
other things, that H&R Block made materially misleading statements or
omissions.    See Alpern v. Utilicorp United, Inc., 84 F.3d 1525, 1533-34
(8th Cir. 1996); Fecht v. Price Co., 70 F.3d 1078, 1080 (9th Cir. 1995),
cert. denied, 116 S. Ct. 1422 (1996).              Whether a public statement is
misleading is a mixed question normally for the trier of fact.               See Fecht,
70 F.3d at 1081.     The issue is appropriately decided as a matter of law,
however, when reasonable minds could not differ.           See id. at 1081, 1082.
In other words, if no reasonable investor could conclude public statements,
taken    together   and    in   context,   were   misleading,   then   the    issue   is
appropriately resolved as a matter of law.           See In re Syntex Corp. Secs.
Litig., 95 F.3d 922, 926 (9th Cir. 1996); I. Meyer Pincus & Assocs., P.C.
v. Oppenheimer & Co., 936 F.2d 759, 761 (2d Cir. 1991).




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     Silver contends the statements were misleading, but does not dispute
their content.   The first statement ran in the Dow Jones News Wire on
October 27:

     H&R Block said today that it is reviewing its approach to Refund
     Anticipation Loans (RAL) in light of the Internal Revenue
     Service's announcement that it will eliminate the procedure that
     it uses to notify electronic filers of expected refunds. The
     Company plans to explore with its lending group the possibility
     of developing a new refund-related product for the 1995 tax
     season that will offer customers speed, affordability and
     convenience and at the same time control the risk to lenders. .
     . .

     As a result of concerns relating to fraudulent tax refund claims
     by taxpayers, the IRS reported yesterday that, beginning with the
     upcoming 1995 tax season, it will eliminate the Direct Deposit
     Indicator (DDI). . . . The DDI was a key element of the RAL
     program because it helped control the risk of loan losses and
     thus encouraged participating financial institutions to make RALs
     under relatively favorable terms to taxpayers.

     The consequences of the IRS decision are potentially significant
     to H&R Block, Inc.       The Company believes that financial
     institutions providing RALs may institute certain measures to
     offset the anticipated increased credit risk that would result
     from the removal of the DDI.      These measures may include an
     increase in cost to the consumer or the adoption of more
     stringent criteria for use in the loan approval process.

     H&R Block company-owned and franchised offices electronically
     filed about 7.5 million or 56% of the total tax returns filed
     electronically in the U.S. during the 1994 tax season.
     Approximately one-third of Block's electronically filed returns
     were for taxpayers who did not use the Company's tax preparation
     service.    Electronic filing fee volume in fiscal 1994 was
     $202,266,000.   In addition, the RAL banks paid H&R Block Tax
     Services and its franchises a $7 license fee for each RAL made to
     an H&R Block electronic filing customer. . . .

     . . . .

The next day, the following article appeared in the Wall Street Journal:

     New Treasury Department procedures designed to curb fraud




                                  -3-
     related to electronic filing of tax returns are being criticized
     by H&R Block, Inc., which says the change will hurt its loan
     business.    Block . . . said the consequences to it are
     "potentially significant."

     . . . .

     Ozzie Wenich, H&R Block's vice president of finance, said in an
     interview that the change means the government will no longer
     tell lenders whether there is a government lien against a
     taxpayer who is due a refund. As a result, lenders basing loans
     on expected refunds will be taking on more risk. . . . He said
     that while the change could hurt Block's business in refund-
     anticipation loans, it could also gain some business because the
     changes could put smaller competitors out of business.

     Mr. Wenich estimated that about 75% of the 13 million taxpayers
     who filed electronically in the 1994 tax season received a
     refund-anticipation loan. He said Block filed about 7.5 million
     of the total electronic returns.

     Block . . . said it plans to explore with its lending group the
     possibility of coming up with a new refund-related product.

     . . . .


     Silver contends these two October statements were misleading because
they omitted predictions contained in H&R Block's November 22 press release
about its projected earnings for the 1995 tax season, ending the following
April.    In its discussion of the IRS's decision to eliminate DDI, the
November 22 release stated it was likely that revenues and earnings of H&R
Block Tax Services would decline in fiscal 1995, and it was possible that
Block Financial Corporation would report lower earnings or a loss.


     The gist of the October statements is that the IRS's termination of
DDI is bad news for H&R Block.   The October 27 article explains why DDI was
a key element of the RAL program and the financial importance of the RAL
program to H&R Block and its subsidiary, Block Financial Corporation.   The
October   28 article states the IRS change "will hurt [Block's] loan
business" and the




                                    -4-
consequences are potentially significant to the company.                    As a whole, the
October statements cautioned investors rather than encouraged them, and
would not mislead any reasonable investor.                 See In re Syntex, 95 F.3d at
928.    Rather than contradicting the October statements, the November
statement merely quantifies the same message.                  It would be improper to
infer that the October statements warning investors were misleading simply
from the lack of a specific financial projection.                   Likewise, we cannot
infer that the statements were false or misleading from the movement of the
stock price alone, as Silver suggests, given the abundance of market
variables.


       Silver contends the district court committed error in granting
summary judgment without allowing discovery or addressing his Rule 56(f)
affidavit.      We need not reach the discovery issue because the district
court could have granted H&R Block's motion to dismiss rather than convert
the motion to one for summary judgment.              It is true that when a motion to
dismiss presents matters outside the pleadings, the motion is generally
treated   as    one    for    summary    judgment.     See Fed.      R.   Civ.   P.   12(b).
Nevertheless,     in     this    case,   the    district    court   could    have   properly
considered the complete statements in granting the motion to dismiss.                   See
In re Syntex, 95 F.3d at 926; I. Meyer Pincus, 936 F.2d at 762.                     Silver's
entire lawsuit is based only on the statements, and he does not dispute
their content.    See I. Meyer Pincus, 936 F.2d at 762.              Silver cannot defeat
a motion to dismiss by choosing not to attach the full statements to the
complaint.     See id.       In considering a motion to dismiss, courts accept the
plaintiff's factual allegations as true, but reject conclusory allegations
of law and unwarranted inferences.                See In re Syntex, 95 F.3d at 926.
Applying these principles, we conclude reasonable minds could only agree
the challenged statements were not misleading, so Rule 12(b)(6) dismissal
is proper.     See id. at 928.


       We thus affirm the district court on this alternative ground.




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A true copy.


     Attest:


           CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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