                                                                       [DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT
                             ________________________
                                                                   FILED
                                     No. 07-11682         U.S. COURT OF APPEALS
                                                            ELEVENTH CIRCUIT
                              ________________________           May 14, 2008
                                                             THOMAS K. KAHN
                           D.C. Docket No. 06-20710 CV-PCH        CLERK

LEONARDO LOPEZ,
JIMA IBEROAMERICA, S.A.,

                                                                   Plaintiffs-Appellants,


                                            versus


RICA FOODS, INC.,

                                                                   Defendant-Appellee.

                              ________________________

                      Appeal from the United States District Court
                          for the Southern District of Florida
                            ________________________

                                       (May 14, 2008)

Before WILSON, COX and BOWMAN*, Circuit Judges.

PER CURIAM:

       *
        Honorable Pasco M. Bowman II, United States Circuit Judge for the Eighth Circuit, sitting
by designation.
       The Plaintiffs, Leonardo Lopez and Jima Iberoamerica, S.A. (“Plaintiffs”),

challenge on this appeal the district court’s order granting the Defendant’s, Rica

Foods, Inc. (“Rica”), Motion to Dismiss Plaintiffs’ Second Amended Complaint

(“SAC”). Plaintiffs argue that the district court erred in dismissing their securities

and common law fraud claims for failure to state a claim upon which relief can be

granted.1 Alternatively, they argue that even if dismissal was proper, the court

erred in dismissing with prejudice.

       We review de novo the propriety of the district court’s order granting a

motion to dismiss under Fed. R. Civ. P. 12(b)(6). Oxford Asset Mgmt., Ltd. v.

Jaharis, 297 F.3d 1182, 1187 (11th Cir. 2002). Although the plaintiff’s allegations

are accepted as true, id., “conclusory allegations, unwarranted deductions of facts

or legal conclusions masquerading as facts will not prevent dismissal.” Jackson v.

BellSouth Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004) (quoting Jaharis,

297 F.3d at 1188) (internal quotation marks omitted).

       The district court did not err in granting Rica’s motion to dismiss with

respect to Plaintiffs’ federal and state securities fraud claims, Counts I-III of the

SAC. The SAC does not allege with particularity how Rica’s representations were



       1
              Plaintiffs do not challenge the district court’s dismissal of their promissory estoppel
claims, Counts VIII and IX of the SAC.

                                                 2
misleading, nor does it allege that Rica made the representations with the level of

scienter required under the Private Securities Litigation Reform Act (“PSLRA”) §

101(b), 15 U.S.C. § 78u-4(b)(2).

      The district court did err, however, in dismissing Plaintiffs’ fraudulent and

negligent misrepresentation claims, Counts IV-VII of the SAC. The court found

that Plaintiffs failed to allege that Rica’s misrepresentations proximately caused

their economic loss as required by Dura Pharmaceuticals, Inc. v. Broudo, 544

U.S. 336, 125 S. Ct. 1627 (2005) (“Dura Pharm”). The court held that Plaintiffs

adequately pleaded their fraud claims except for this defect.

      Dura Pharm involved the interpretation of 15 U.S.C. § 78u-4(b)(4), which

requires that “[i]n any private action arising under this chapter, the plaintiff shall

have the burden of proving that the act or omission of the defendant alleged to

violate this chapter caused the loss for which the plaintiff seeks to recover

damages.” The “chapter” referenced in § 78u-4(b)(4) is Chapter 2B of Title 15 of

the United States Code, commonly known as the “Securities Exchange Act of

1934.”

      The Court held that to satisfy § 78u-4(b)(4)’s causation requirement “a

plaintiff [must] prove that the defendant’s misrepresentation (or other fraudulent

conduct) proximately caused the plaintiff’s economic loss.” Id. at 346, 125 S. Ct.

                                           3
at 1633. Thus, Dura Pharm involved a “[p]rivate federal securities fraud action[] .

. . based upon federal securities statutes and their implementing regulations.” Id. at

341, 125 S. Ct. at 1630. The narrow scope of the holding is perhaps best reflected

in the Court’s opening statement: “A private plaintiff who claims securities fraud

must prove that the defendant’s fraud caused an economic loss.” Id. at 338, 125 S.

Ct. at 1629 (emphasis added).

      The district court erred by requiring Plaintiffs to plead Dura Pharm’s loss

causation analysis because Counts IV-VII of the SAC do not allege securities

fraud, i.e., these claims do not “arise under” the Securities Exchange Act of 1934.

Rather, these counts allege basic common law fraud. Specifically, they allege that

Rica (through its president and CEO) misrepresented—both fraudulently and

negligently—its intention to hold a private stock sale for the Plaintiffs, and, as a

result, they were forced to sell their stock at a lower price. Curiously, the district

court at times refers to these counts as “common law fraud claims” and “common

law misrepresentation” claims (R.4-104 at 32), but appears to treat them as claims

for “securities fraud” in discussing the loss causation requirement (R.4-104 at 35).

But, because these claims do not arise under the Securities Exchange Act, § 78u-

4(b)(4)’s heightened causation requirement, as interpreted by Dura Pharm, does

not apply.

                                           4
        To adequately plead causation in a fraud claim under Florida law, a plaintiff

must only allege damage or injury as a result of the misrepresentation. Lance v.

Wade, 457 So. 2d 1008, 1011 (Fla. 1984) (listing as the fourth element of fraud

“reliance on the representation to the injury of the other party”). The SAC satisfies

this requirement.

        Finally, Plaintiffs argue that the district court erred in dismissing their

complaint with prejudice. We review the district court’s decision to grant or deny

leave to amend for abuse of discretion, Jennings v. BIC Corp., 181 F.3d 1250,

1254 (11th Cir. 1999), and we find no abuse of discretion here in the dismissal

with prejudice of the securities claims. Plaintiffs were given several chances to

correct previously defective complaints, and before granting leave to file the SAC,

the court admonished Plaintiffs they had only one more shot at pleading properly.

        In summary, we affirm dismissal with prejudice of Plaintiffs’ federal and

state securities fraud claims, Counts I-III of the SAC. We reverse dismissal of

Plaintiffs’ fraudulent and negligent misrepresentation claims, Counts IV-VII of the

SAC.2

        AFFIRMED IN PART, REVERSED IN PART.


        2
                Rica argues on appeal that it is entitled to attorney’s fees under Florida law as the
“prevailing party” on Plaintiffs’ state law securities fraud claim. An application for fees in this court
should be filed with the clerk of this court. See 11th Cir. R. 39-2. An application for fees in the
district court must first be addressed in the district court.

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