of fraud." Seville, 742 F.2d at 791. On the whole, complaints must be sufficient "to place the defendants on notice of the precise misconduct with which they are charged, and to safeguard defendants against spurious charges of immoral and fraudulent behavior." Id.
Plaintiffs' complaint fails to meet even Seville's liberal interpretation of Federal Rule 9(b)'s particularity requirement. Unlike the complaint in Seville, which referred to a unique piece of machinery as part of the challenged transaction, the present complaint contains no reference point that can help to establish (a) defendant's alleged misstatements or omissions of material facts or (b) the details of the purchase that underlies this entire action. In contrast to the level of detail provided by the second amended complaint in Cecil (the pleading this court identified to the Brantleys as a model for amending their complaint) the Brantleys' sole identification of themselves remains: "Plaintiffs are purchasers of limited partnership interests in Energy resources [sic] and purchased their interest through Hutton." Complaint para. 5.
Paragraph 12 of the complaint contains the first claim of "misrepresentations to plaintiffs" by defendant's personnel -- misrepresentations allegedly made not only to plaintiffs, but to investors nationwide. See complaint, para. 11. These misrepresentations related to the risk of investment in Energy Resources. However, the complaint does not connect any of these apparently oral statements to the Brantleys by specifying the following: who -- or even which of defendant's alleged 245 nationwide offices -- made these statements to plaintiffs; when the statements were made; and in what context and form. The complaint's two references in paragraphs 11 and 15 to "David Van Dyck [sic]," identified as "plaintiffs'" Hutton broker, do not allege that he made any misrepresentations to plaintiffs.
Plaintiffs also claim that "the Private Offering Memorandum blatantly misrepresented that the offering, in compliance with Rule 146 of the SEC, would be limited to no more than 35 purchasers." Complaint at para. 13. However, plaintiffs do not allege whether, when, how, or from whom they received a copy of this Memorandum. The complaint does not recite the specific language of the alleged misrepresentation; nor is a copy of the Memorandum appended to the complaint -- a device suggested in Alfaro. Alfaro v. E.F. Hutton, Inc., 606 F. Supp. 1100, 1109 (E.D. Pa. 1985). As a consequence, it is at best speculative what deception is being alleged and whether it is material.
Nor does the allegation, as pled, present a prima facie transgression of Rule 146 -- a rule which was rescinded as of June 30, 1982. The fact that an offering may not have been limited to 35 purchasers would not, without more, have violated Rule 146; the crucial question would be whether the offeror had "reasonable grounds to believe" that the number of purchasers would be so limited. Rule 146(g)(1), Reg. 230.146 (rescinded effective June 30, 1982).
However plaintiffs do not address defendant's scienter; to the contrary, their primary comment on the Memorandum is that "in order to compel potential investors to secure their information from Hutton brokers, that memorandum was deliberately general, and did not provide potential investors with much of the more detailed information needed . . . ." Complaint para. 9.
The allegations of the sale and alleged subsequent concealment of the financial condition of Energy Resources similarly fail to identify with any precision the alleged acts of wrongdoing. Plaintiffs only state that they "submitted a subscription agreement and check to one of E.F. Hutton's offices in mid-1981." Complaint, para. 14. The allegations in paragraphs 17 through 22 suggest details of activity -- Hutton's conversations with other investors, mailings to 263 persons, letters from Energy Resources -- but only paragraphs 19 and 20 facially connect the defendant's acts with the Brantleys. Neither of these two paragraphs identifies what was misleading or who communicated it.
"There is no reason that the defendants or the Court should be forced to edit or 'cut and paste' the plaintiff's complaint to be able to determine what misconduct is being alleged." Wildman v. Wills, 81 F.R.D. 588, 590 (E.D. Pa. 1978). In this case, even an exhaustive analysis fails to yield sufficient information to meet the pleading requirements of Federal Rule 9(b) that are applicable to this 10(b) claim. See Summers v. Lukash, 562 F. Supp. 737, 739-40 (E.D. Pa. 1983); cf. Seville, 742 F.2d at 791.
Plaintiffs' amended complaint is similar to, and presents the same basic allegations as, the complaint of the purported class in Alfaro, the first suit filed. In Alfaro, I found that some of the complaint's allegations of fraud were sufficient, but noted:
These conclusions regarding the sufficiency of the fraud allegations assume that this action will continue as a class action. Should this action not be certified to proceed in that manner, but only as an action on behalf of the two named plaintiffs, plaintiffs will be required to amend the complaint to provide much greater specificity.