On June 10, 2020, the US Court of Appeals for the Ninth Circuit affirmed the dismissal of a putative securities fraud class action against Endologix, Inc., a medical device company, on the grounds that the shareholder’s core theory of liability had “no basis in logic or common experience.” In that case, Nguyen v. Endologix, Inc., the plaintiff alleged that Endologix and certain of its executives misled investors about whether the Food and Drug Administration (FDA) would approve the company’s new aneurysm sealing product, Nellix. The Ninth Circuit held that the shareholder’s complaint, for all its “girth,” lacked “a critical ingredient under the Private Securities Litigation Reform Act (PSLRA):  allegations that state with particularity facts giving rise to a strong inference” that the defendant acted with scienter—namely, that the defendants made false or misleading statements either intentionally or with deliberate recklessness. This Legal Update further discusses the Ninth Circuit’s holding and the implications.