Robert Goodrich, Individually v. Bank of America N.a., Trading As U.s. Trust Bank of America Private Wealth…

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 12, 2024 Decided May 6, 2025
No. 24-7025
ROBERT GOODRICH, INDIVIDUALLY AND IN HIS CAPACITY AS
TRUSTEE OF THE ROBERT D. GOODRICH REVOCABLE TRUST,
APPELLANT
v.
BANK OF AMERICA N.A., TRADING AS U.S. TRUST BANK OF
AMERICA PRIVATE WEALTH MANAGEMENT, AS SUCCESSOR TO
COUNTRYWIDE FINANCIAL CORP. AND MATTHEW LETTINGA,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:21-cv-01344)
Thomas C. Costello argued the cause for appellant. With
him on the brief was Anne L. Preston.
Alan L. Rosca was on the brief for amicus curiae Public
Investors Advocate Bar Association in support of appellant.
Brian D. Schmalzbach argued the cause for appellees. On
the brief was Jodie H. Lawson.

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Before: WILKINS, KATSAS and CHILDS, Circuit Judges.
Opinion for the Court filed by Circuit Judge WILKINS.
WILKINS, Circuit Judge: Disruptions to supply chains and
workforces in early 2020 squeezed financial markets in ways
not seen since the 2008 crash. Feeling the angst of that
disruption, Plaintiff–Appellant Robert Goodrich liquidated his
stock portfolio in March 2020. That decision cost him millions.
Goodrich now looks to recoup his losses.
After Goodrich requested the sale, his wealth advisor
pulled the proverbial trigger, emptying Goodrich’s significant
portfolio within hours. Goodrich says he never would have
directed his advisor to sell had he appreciated the myriad risks.
Unfortunately for him, his investment account contract with his
advisor’s employer—U.S. Trust Bank of America Private
Wealth Management, a division of Bank of America
(“BOA”)—protects BOA and its agents from liability for
actions taken pursuant to an account owner’s instructions. And
it protects BOA and its agents from liability for breaching any
implied duties.
Undeterred, Goodrich turned to the courts, waging an
uphill battle against his contract’s plain terms: Goodrich sued
his wealth advisor, Matthew Lettinga, and BOA (collectively,
“Defendants”), in the U.S. District Court for the District of
Columbia for gross negligence, breach of fiduciary duty, and
violations of the D.C. Securities Act. Because Goodrich’s
claims are either precluded by contract or implausibly pleaded,
we affirm the District Court.

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I.
A.
In 2014, Goodrich hired Defendants for private wealth
management services. Goodrich signed an “Investment
Services Agreement” (“the Agreement”), which gave BOA
discretionary authority over his accounts. By signing the
Agreement, Goodrich certified that he “received, read,
understood, and agreed to” the “Investment Services Terms
and Conditions Booklet” (“the Terms”), which the Agreement
incorporated. The Terms shield Defendants from liability
when acting at an account owner’s instruction and disclaim
liability for any duties not outlined in the Agreement.1
Goodrich’s investment accounts served as collateral for two
lines of credit with BOA, through which Goodrich covered
business expenses.
In March 2020, Goodrich began to worry about how the
COVID-19 pandemic’s effect on financial markets might
negatively affect his accounts’ cash flow. BOA advised
customers (including Goodrich) to patiently ride out the storm,
but on Friday, March 20, 2020, the stock market closed at its
worst performance since 2008. The following Monday,
Goodrich called Lettinga and told him to liquidate his
investment portfolio. “Lettinga explained to Goodrich that he
would miss some of the upside of an equity market recovery if
his portfolio was fully invested in cash and advised him against
liquidating his portfolio.” Appellant’s Br. 9 (emphasis added)
(citing J.A. 401–02). Lettinga did not, however, explain every
potential downside or loss that Goodrich ultimately
experienced. Unable to persuade him otherwise, Lettinga
1 BOA updated the Terms in 2020, but the updates had no material
effect on the portions relevant to this dispute. See Appellant’s Br. 29
n.4.

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ultimately followed instructions and liquidated Goodrich’s
portfolio.
The market bounced back almost immediately, much to
Goodrich’s dismay. The day after the sale, he emailed
Lettinga, “When you’re right, you’re right.” J.A. 335, 368. A
few weeks later, Goodrich emailed another BOA advisor
acknowledging regretfully that Lettinga had followed his
instruction. Goodrich does not dispute that he told Lettinga to
sell; instead, he disputes whether any such instruction relieved
Defendants of liability for inadequately explaining the risks
involved. Goodrich alleges that Defendants’ failure to explain
“the ramifications and/or consequences of selling the
investments” caused him to “agree[]” to liquidate his portfolio
at great cost. Appellant’s Br. 9 (citing J.A. 380).
B.
Seeking to recover his losses from the sale, Goodrich sued
Defendants in D.C. Superior Court, alleging gross negligence,
breach of fiduciary duty, and violations of the D.C. Securities
Act. Defendants removed the case to the U.S. District Court
for the District of Columbia and moved to dismiss all claims
under Federal Rule of Civil Procedure 12(b)(6). The District
Court granted the motion for all but the fiduciary duty claim,
which proceeded because it hinged on factual questions—the
contours of the parties’ contractual relationship and whether
Goodrich instructed Defendants to sell.
The District Court thereafter requested supplemental
briefing on “whether, under [D.C.] law, an explicit instruction
from a customer to his discretionary investment manager
precludes an action for breach of fiduciary duty.” J.A. 58.
After concluding that liability turned on such an instruction, the
District Court limited discovery to uncovering whether
Goodrich explicitly told Defendants to sell.

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Goodrich moved to file an Amended Complaint, in which
he added back the gross negligence and D.C. Securities Act
claims. The District Court granted the motion. Defendants
moved to dismiss or (in the alternative) for summary judgment
on all claims. The District Court again dismissed Goodrich’s
gross negligence and D.C. Securities Act claims as implausibly
pleaded. Because it found that Goodrich unquestionably
instructed Lettinga to sell, the District Court granted summary
judgment for Defendants on the breach of fiduciary duty claim.
Goodrich timely appealed, challenging the District Court’s
final orders disposing of his claims and interlocutory orders
limiting discovery.
II.
We review de novo orders granting motions to dismiss
under Rule 12(b)(6) or granting summary judgment under Rule
56. Atherton v. D.C. Off. of the Mayor, 567 F.3d 672, 681 (D.C.
Cir. 2009); 3534 E. Cap Venture, LLC v. Westchester Fire Ins.
Co., 104 F.4th 913, 915 (D.C. Cir. 2024). Dismissal under
Rule 12(b)(6) is appropriate where, taking all factual
allegations as true and construing all inferences in the
plaintiff’s favor, a plaintiff’s pleadings do not present “enough
facts to state a claim to relief that is plausible on its face.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009); FED. R. CIV. P. 12(b)(6).
Summary judgment is warranted when—accepting the
nonmovant’s evidence as true and drawing all reasonable
inferences in his favor—there is no genuine issue of material
fact precluding judgment as a matter of law. FED. R. CIV. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
We review the District Court’s “limits on discovery for
abuse of discretion,” Eddington v. U.S. Dep’t of Def., 35 F.4th
833, 836 (D.C. Cir. 2022) (citation omitted), and overturn the

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District Court’s “exercise of its broad discretion to manage the
scope of discovery only in unusual circumstances,” SafeCard
Servs., Inc. v. SEC, 926 F.2d 1197, 1200 (D.C. Cir. 1991)
(citation omitted). Such unusual circumstances exist only
when a challenger can show that the District Court’s decision
was “clearly unreasonable, arbitrary, or fanciful.” Bowie v.
Maddox, 642 F.3d 1122, 1136 (D.C. Cir. 2011) (citation
omitted).
III.
A.
We begin with Goodrich’s challenge to the District
Court’s entry of judgment for Defendants on the breach of
fiduciary duty claim. “To state a claim for breach of fiduciary
duty under District of Columbia law,2 a plaintiff must allege
facts that establish: (1) the defendant owed plaintiff a fiduciary
duty; (2) a breach of that duty; and (3) proximate cause and
injury [inferable] from those facts.” Xereas v. Heiss, 987 F.3d
1124, 1130 (D.C. Cir. 2021) (citations omitted). Whether a
fiduciary relationship exists is a “fact-intensive question” that
focuses on “the nature of the relationship, the promises made,
the type of services or advice given and the legitimate
2 The Agreement provides that it is governed by the “laws of the state
where the Account is principally administered,” and that any suit to
enforce its terms “must be brought” in that state. J.A. 99. Although
there is no indication that Goodrich’s account was administered in
the District of Columbia, the parties assume that D.C. law governs
the non-statutory issues in this dispute. See Appellees’ Br. 11–12,
32; Appellant’s Br. 14, 20–21. Because choice-of-law issues are
waivable and do not bear on our jurisdiction, we adopt the parties’
assumption. See Perry Cap. LLC v. Mnuchin, 864 F.3d 591, 626 n.24
(D.C. Cir. 2017) (per curiam); Patton Boggs LLP v. Chevron Corp.,
683 F.3d 397, 403 (D.C. Cir. 2012).

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expectations of the parties.” Id. at 1131 (citation omitted).
Contracting parties do not owe “fiduciary dut[ies] beyond the
terms of the[ir] agreement.” MobilizeGreen, Inc. v. Cmty.
Found. for the Cap. Region, 267 A.3d 1019, 1026 (D.C. 2022)
(internal quotation marks and citation omitted).
The parties do not dispute that investment advisors like
Defendants ordinarily owe their clients fiduciary duties.3 Their
disagreement instead turns on whether the Agreement’s
exculpatory clauses validly limit the duties that Goodrich says
the Defendants breached.
1.
Goodrich’s opening position is that investment advisors,
as fiduciaries, may never limit their duties. In support,
Goodrich cites the Investment Advisers Act (“IAA”) of 1940,
ch. 686, 54 Stat. 847, 852 (codified as amended at 15 U.S.C.
§ 80b-6), and the “anti-waiver provisions in the Securities
Exchange Act of 1934,” which he characterizes as federal laws
“aimed at preventing financial institutions from contracting
away their fiduciary duties.” Appellant’s Br. 25. But this
Court has no occasion to consider the implications of those
laws because, as Goodrich concedes, he “has not brought a
3 Though Goodrich and Amicus devote considerable space to
establishing that investment advisors generally owe fiduciary duties,
Defendants do not dispute that their status as fiduciaries would
ordinarily—but for a contrary contractual agreement—impose
corresponding duties. See Appellees’ Br. 19 (“The question is not
whether [BOA] is a fiduciary but whether a fiduciary . . . may limit
or define the scope of their duties by contract.”).

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federal cause of action” under these or other federal statutes.4
Id.
Goodrich also calls our attention to the D.C. Securities
Act’s anti-waiver provision, D.C. Code § 31-5606.05(i), which
voids any “condition, stipulation, or provision that binds a
person who acquires a security or asset, or receives investment
advice” that “waive[s] compliance with a provision of” the Act.
Id. He does not, however, identify any provision in the
Agreement that is arguably void under D.C. Code § 31-
5606.05(i)—until his reply brief. See Appellant’s Reply Br. 3
(citing D.C. Code § 31-5605.02(d)).5 Such dilatory arguments
are forfeited. Jones v. Kirchner, 835 F.3d 74, 83 (D.C. Cir.
2016) (“We apply forfeiture to unarticulated legal and
evidentiary theories . . . .”) (cleaned up)); Wilkins v. United
States, 598 U.S. 152, 157 (2023) (“For purposes of efficiency
and fairness, our legal system is replete with rules like
forfeiture, which require parties to raise arguments . . . at
certain times.”) (cleaned up)).
4 Nor could he, at least in the context of IAA Section 80b-6, because
that Act confers no private cause of action. See Transamerica Mortg.
Advisors, Inc. v. Lewis, 444 U.S. 11, 14–15 (1979). And the U.S.
Securities and Exchange Commission (“SEC”) authority Goodrich
relies upon expressly disavows any intent to articulate “the scope or
substance of any fiduciary duty that applies to an adviser under
applicable state law.” Appellees’ Br. 21 (quoting SEC. EXCH.
COMM’N, COMMISSION INTERPRETATION REGARDING STANDARD
OF CONDUCT FOR INVESTMENT ADVISERS 11 n.31 (2019)).
5 Goodrich quotes D.C. Code § 31-5605.02(d) in a portion of his
opening brief setting forth the plain text of “pertinent statutes and
regulations,” Appellant’s Br. 4, but he nowhere develops that statute
as a basis for his claims. Such a “skeletal” reference does not
preserve Goodrich’s final-hour argument. Cf. Consol. Edison Co. of
N.Y. v. FERC, 510 F.3d 333, 340 (D.C. Cir. 2007).

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Amicus likewise fails to persuade us that the parties’
relationship is not governed by ordinary contract principles.
Indeed, in the case Amicus heralds as most persuasive on this
point, Trumball Investments, Ltd. I v. Wachovia Bank, N.A., the
Court looked not to public policy or federal statutory law but
to state law and the parties’ contract in resolving the defendant
bank’s duties. 436 F.3d 443, 446–49 (4th Cir. 2006).
In sum, we are not persuaded that financial advisors and
their clients are prohibited from generally limiting an advisor’s
fiduciary duties or liability by contract. In fact, the contrary is
true—a financial advisor’s duty to his client “turns on the
application of basic principles of agency law,” Merrill Lynch
Pierce Fenner & Smith, Inc. v. Cheng, 901 F.2d 1124, 1128
(D.C. Cir. 1990) (applying D.C. law), which allow “an agent’s
fiduciary duties to the principal [to] vary depending on the
parties’ agreement and the scope of the parties’ relationship,”
RESTATEMENT (THIRD) OF AGENCY § 8.01 cmt. c (AM. L. INST.
2006).
2.
Having established that ordinary contract principles apply,
we turn now to Goodrich’s attacks against the Agreement’s
enforceability. Goodrich argues that to the extent fiduciaries
may lawfully limit duties in the abstract, Defendants did not
achieve that end here because there was no mutual assent and
the Agreement’s disclaimer was unclear and ambiguous.
As to mutual assent, Goodrich admits that he signed the
Agreement, acknowledging that he “received, read,
understood, and agreed to” the Terms. J.A. 67; see Appellant’s
Br. 6. Under D.C. law, a signature is almost always sufficient
to show mutual assent. Davis v. Winfield, 664 A.2d 836, 838
(D.C. 1995). And that is the case even if the signer was
unaware of the terms. Hart v. Vt. Inv. Ltd. P’ship, 667 A.2d

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578, 582 (D.C. 1995) (“In the absence of fraud or its equivalent,
one is obligated by his contract, though signed without
knowledge of its terms.”) (cleaned up)). Thus, Goodrich’s
argument that he did not assent because he did not review the
Terms before signing the Agreement falls flat.
Goodrich also argues that the exculpatory clause does not
bind him because its terms are unclear and ambiguous. Under
D.C. law, exculpatory provisions are enforceable so long as
they do not shield a defendant from liability for “gross
negligence, willful act[s], or fraud” and are “clear and
unambiguous.” Moore v. Waller, 930 A.2d 176, 179–81 (D.C.
2007); Bragdon v. Twenty-Five Twelve Assocs. Ltd. P’ship,
856 A.2d 1165, 1170 (D.C. 2004) (“[T]he written language
embodying the terms of an agreement will govern the rights
and liabilities of the parties, . . . unless the written language is
not susceptible of a clear and definite undertaking, or unless
there is fraud, duress, or mutual mistake.”) (cleaned up)).
Ambiguity exists only when a contract’s terms are “reasonably
or fairly susceptible of different constructions or
interpretations, or of two or more different meanings.”
Holland v. Hannan, 456 A.2d 807, 815 (D.C. 1983) (quoting
Burbridge v. Howard Univ., 305 A.2d 245, 247 (D.C. 1973));
see also Bolle v. Hume, 619 A.2d 1192, 1196 (D.C. 1993)
(quoting Holland, 456 A.2d at 815).
There is no disagreement about the substance of the key
terms here:
• “The Bank is responsible for the performance of
only such duties as are specifically set forth in this

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Agreement with no implied duties or
responsibilities.” J.A. 94.6
• “[T]he Bank shall be entitled to rely on written or
oral instructions from Owner . . . . Owner will be
liable for any losses resulting from [the account]
Owner’s instructions to the Bank.” J.A. 85.
• “The Bank is not liable for actions
taken . . . pursuant to . . . [an account] Owner’s
instructions . . . .” J.A. 95.
Goodrich argues that the first provision—disclaiming
liability for implied duties—is ambiguous because it “do[es]
not reference fiduciary duties in any way.” Appellant’s Br. 30.
But lack of specificity, particularly when the general (all
implied duties) necessarily includes the specific (fiduciary
duties), does not create ambiguity. See RESTATEMENT (THIRD)
OF AGENCY § 8.08 cmt. b (explaining that agreements to limit
an agent’s duty of care may be crafted in “general terms”).
Goodrich also submits that the implied-duties waivers are
ambiguous because they contradict a clause in the Managed
Account Addendum, which supplements the Agreement, and
clarifies that the Bank and its agents will not be liable to the
account owner “except for (1) individual, and not joint, liability
for willful misfeasance, bad faith or gross negligence in the
performance of their respective duties and obligations under
the Agreement, and (2) any liabilities that cannot be waived
6 In 2020, this provision was amended to state that “the relationship
between the Bank and Owner with respect to the Account is
contractual only and governed solely by the provisions of the
Agreement to the exclusion of any concepts of tort or common law.”
J.A. 135. The parties agree this change is immaterial. Supra note 2.

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under any applicable state or Federal law, including state and
Federal securities laws.” J.A. 104, 110 (emphasis added).
The Addendum’s announcement that only lawful waivers
protect Defendants from liability does not make the
Agreement’s implied-duties waivers ambiguous. It merely
reflects a bedrock principle of contract law: Contracts are void
when they announce illegal terms. RESTATEMENT (SECOND) OF
CONTRACTS § 178 (AM. L. INST. 1981); Carleton v. Winter, 901
A.2d 174, 181 (D.C. 2006). Construing the Agreement as a
whole, the Addendum’s text does not alter the plain meaning
of the implied-duties waivers or otherwise introduce
ambiguity. See Wilson v. Hayes, 77 A.3d 392, 402 (D.C. 2013)
(“We interpret a contract as a whole, . . . [but] this approach
does not permit us to read one provision of a contract as altering
the plain meaning of another.”).
Finally, Goodrich argues that promotional materials not
directly incorporated into the Agreement contradict the waiver
by representing that Defendants will act as fiduciaries. But, as
explained, the issue presented is not whether Defendants were
fiduciaries but whether the Agreement limited their attendant
duties. Having found it does, we agree with the District Court
that the Agreement is enforceable.
3.
We now look for any dispute of material fact that Goodrich
instructed Defendants to liquidate his portfolio. We find none.
As Goodrich himself concedes, he “expressed his desire
that his investment portfolio be liquidated on March 23, 2020.”
Appellant’s Br. 8. Several pieces of evidence, including
Goodrich’s contemporaneous statements, put this issue beyond
dispute. See J.A. 367–68, 438–39. Though Goodrich
maintains that this Court should not credit the evidence on this

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point, his legal argument “cannot create a triable issue of fact.”
Haynes v. D.C. Water & Sewer Auth., 924 F.3d 519, 529 n.2
(D.C. Cir. 2019) (citing FED. R. CIV. P. 56(c)(1)).
There is no question Defendants liquidated Goodrich’s
account at his request. Such a request put Defendants’ conduct
squarely within the scope of the Agreement’s waiver. We thus
affirm summary judgment for Defendants on the fiduciary duty
claim.
B.
Goodrich also appeals dismissal of his gross negligence
claim.7 The D.C. Court of Appeals has defined gross
negligence as “[t]he failure to exercise even slight care” to the
degree it “would shock fair-minded men.” District of
7 Defendants urge that this claim fails as a matter of law because D.C.
law does not recognize a “standalone” claim for gross negligence.
Appellees’ Br. 32–33 & n.20. Relying on Atchison v. Wills, 21 App.
D.C. 548, 561 (D.C. Cir. 1903) (“There can be . . . no degrees of
negligence . . . .”), several of our district courts have dismissed gross
negligence claims as duplicative when brought alongside an ordinary
negligence claim. E.g., Taylor v. United States, No. 12-cv-894, 2014
WL 2854496, at *2–3 (D.D.C. June 23, 2014); Hawkins v. WMATA,
311 F. Supp. 3d 94, 105 (D.D.C. 2018); Hernandez v. District of
Columbia, 845 F. Supp. 2d 112, 115–16 (D.D.C. 2012). But see
Piedmont Resolution, LLC. v. Johnston, Rivlin & Foley, 999 F. Supp.
34, 58 (D.D.C. 1998) (recognizing negligence and gross negligence
as separate claims). But Goodrich has not brought an ordinary
negligence claim. And, as Goodrich points out, the D.C. Court of
Appeals has recognized a standalone gross negligence claim where
contracting parties waived liability for ordinary negligence. See
Carleton, 901 A.2d at 181–82. Because the Agreement waives
liability for ordinary negligence, J.A. 135, the Court assumes without
deciding that Goodrich’s gross negligence claim does not fail as a
matter of law.

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Columbia v. Walker, 689 A.2d 40, 44 (D.C. 1997) (quoting
Shea v. Fridley, 123 A.2d 358, 363 (D.C. 1956)). Such “an
extreme deviation” must “support a finding of wanton,
willful[,] and reckless disregard or conscious indifference for
the rights and safety of others.” Tillery v. District of Columbia,
227 A.3d 147, 151 (D.C. 2020) (quoting Walker, 689 A.2d at
44). “That standard ‘connote[s] that the actor has engaged in
conduct so extreme as to imply some sort of bad faith.’” Id.
(quoting Walker, 689 A.2d at 44). “Where there is no evidence
of subjective bad faith,” a plaintiff must show extreme
recklessness, evinced by “a risk so obvious that the actor must
be taken to be aware of it and so great as to make it highly
probable that harm would follow.” Id. (cleaned up).
As the District Court aptly observed, Goodrich does not
allege facts demonstrating bad faith or extreme recklessness.
At bottom, his allegations are that Defendants did not explain
the contours of every dire or “practical” consequence of
liquidation. J.A. 192–98; Appellant’s Br. 36. Though
Goodrich argues on appeal that Defendants’ conduct illustrates
a “conscious indifference for [his] financial well-being,”
Appellant’s Br. 15, he concedes that Lettinga told him he was
likely to lose money and “advised him against liquidating his
portfolio” before the market recovered, id. at 9; see also J.A.
191. Those concessions are inconsistent with Goodrich’s claim
that Defendants acted “with deliberate indifference to and in
reckless disregard of [their] obligations.” J.A. 198.
In the face of contradictory allegations and no evidence of
bad faith, we are “not bound to accept” Goodrich’s legal
conclusions “as true” factual allegations. Iqbal, 556 U.S. at

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678 (quotation omitted). We thus affirm the District Court’s
dismissal of the gross negligence claim.8
C.
Goodrich sought relief under two provisions of the D.C.
Securities Act, codified at D.C. Code §§ 31-5605.02(a)(1)(A),
31-5606.05(a)(3)(B)(ii), which prohibit and impose penalties
(respectively) for using “a device, scheme, or artifice to
defraud.” J.A. 199; Appellant’s Br. 17.
1.
The at-issue provisions do not expressly require scienter,
and the D.C. Court of Appeals has not squarely decided
whether scienter is required. We must thus first determine
whether Goodrich was required to plausibly plead scienter. See
Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
As the District Court observed, D.C. Code §§ 31-
5605.02(a)(1)(A) and 31-5606.05(a)(3)(B)(ii) mirror the
language in SEC Rule 10b-5(a), which proscribes
“employ[ing] any device, scheme, or artifice to defraud”
another “in connection with the purchase or sale of any
8 Goodrich also argues that the District Court erred in prematurely
dismissing his gross negligence claim without expert testimony on
the standard of care. The standard of care is certainly a “useful
beginning point for analysis” of a negligence claim. Tillery, 227
A.3d at 151 (quoting Walker, 689 A.2d at 45). But we see no abuse
of discretion in the District Court’s dismissal without discovery on
this issue, especially given that Goodrich did not argue below that
standard-of-care discovery was necessary to rule on the gross
negligence claim. See J.A. 51, 55, 166, 176 (requesting expert
testimony but nowhere linking it to his gross negligence claim).

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security.” 17 C.F.R. § 240.10b-5(a), (c); see also 15 U.S.C.
§ 77q. Rule 10b-5(a)’s scienter requirement was well-
established over a decade before the D.C. Council passed the
provisions on which Goodrich relies. Because a phrase
“obviously transplanted from another legal source . . . brings
the old soil with it,” Hall v. Hall, 584 U.S. 59, 73 (2018)
(quoting Felix Frankfurter, Some Reflections on the Reading of
Statutes, 47 COLUM. L. REV. 527, 537 (1947)), we thus
conclude that the D.C. Council intended to import Rule
10b-5(a)’s scienter requirement to the identical provisions on
which Goodrich relies.
The plain text underscores our agreement with the District
Court. We are guided by the Supreme Court in Aaron v.
Securities & Exchange Commission, which observed that the
phrase “to employ any device, scheme, or artifice to defraud,”
as it appears in Section 17(a)(1) of the Securities Act of 1934,
“plainly evinces” Congress’s intent “to proscribe only knowing
or intentional misconduct.” 446 U.S. 680, 696 (1980). It thus
held “that the language of § 17(a) requires scienter under
§ 17(a)(1).” Id. at 697. The Court’s conclusion rested on what
the words, “device,” “scheme,” and “artifice” meant in 1934:
Webster’s International Dictionary (2d ed.
1934) defines (1) “device” as “[t]hat which is
devised, or formed by design; a contrivance; an
invention; project; scheme; often, a scheme to
deceive; a stratagem; an artifice,” (2) “scheme”
as “[a] plan or program of something to be
done; an enterprise; a project; as, a
business scheme[, or] [a] crafty, unethical
project,” and (3) “artifice” as a “[c]rafty
device; trickery; also, an artful stratagem or
trick; artfulness; ingeniousness.”

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Id. at 696 n.13. Those words had the same meaning when the
D.C. Council passed the at-issue provisions in the Investment
Advisors Act of 1992, D.C. Law 9-216, 40 D.C. Reg. 37 (Mar.
17, 1993). See WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY (1993) (defining (1) “device” as “a scheme to
deceive or overreach”; (2) “scheme” as “to devise or contrive
a scheme for . . . accomplish[ing] by clever contriving”; and
(3) “artifice” as “an ingenious or skillful device or expedient,”
synonymous with “trick”); WEBSTER’S NINTH NEW
COLLEGIATE DICTIONARY (1990) (defining (1) “device” as
“something devised or contrived . . . a scheme to deceive”;
(2) “scheme” as “a plan or program,” especially “a crafty or
secret one”; and (3) “artifice” as “an ingenious device or
expedient” and “a clever or artful skill,” synonymous with
“trick”).
Guided by the old soil of Rule 10b-5(a) and the plain text,
we hold that plaintiffs seeking relief under D.C. Code
§§ 31-5605.02(a)(1)(A) and 31-5606.05(a)(3)(B)(ii) must
plausibly plead scienter. We turn next to considering whether
Goodrich did so here.
2.
Scienter requires allegations of “intentional wrongdoing”
or “extreme recklessness.” Liberty Prop. Trust v. Rep. Props.
Corp., 577 F.3d 335, 342 (D.C. Cir. 2009) (citation omitted).
Plaintiffs staking their claims on extreme recklessness must
show more than “merely a heightened form of ordinary
negligence.” SEC v. Steadman, 967 F.2d 636, 641 (D.C. Cir.
1992). To the contrary, they must plead an “extreme departure
from the standards of ordinary care, . . . which presents a
danger of misleading . . . that is either known to the defendant
or is so obvious that the actor must have been aware of it.” Id.
at 641–42 (first alteration in original) (quoting Sundstrand

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Corp. v. Sun Chemical Corp., 553 F.2d 1033, 1045 (7th Cir.
1977)).
We agree with the District Court that Goodrich did not
plausibly allege scienter. Though it recognized that Goodrich
repeatedly accuses Defendants of acting in a “reckless, wanton,
and willful manner,” it found no alleged facts showing an
“intent to deceive, manipulate, or defraud” or “an extreme
departure from the standards of ordinary care.” J.A. 36. The
District Court did not need to credit Goodrich’s “[t]hreadbare
recitals” and “mere conclusory statements” of scienter. Iqbal,
556 U.S. at 678.
On appeal, Goodrich argues that these factual allegations
constituted “conscious misbehavior or recklessness”:
• not “discuss[ing] the proposed transaction with the
other BOA team members assigned to Goodrich’s
accounts” prior to making the sale;
• “fail[ing] to explain . . . the risks and dire
ramifications of liquidating the portfolio in the
light of the line of credit restrictions”; and
• “exercis[ing] an investment strategy which was in
total contradiction of Goodrich’s investment
objectives.”
Appellant’s Br. 19 (citations omitted). These acts cross the
scienter threshold, Goodrich argues, because Defendants
“knew Goodrich would suffer irreversible damages in light of
the line of credit restrictions.” Id. at 19–20 (citation omitted).
In support, Goodrich cites two non-binding cases, Kehr v.
Smith Barney, Harris Upham & Co., 736 F.2d 1283 (9th Cir.
1984), and Burman v. Phoenix Worldwide Industries, Inc., 384

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F. Supp. 2d 316 (D.D.C. 2005), which are unpersuasive and
distinguishable.
In Kehr, the Ninth Circuit affirmed the lower court’s
denial of a motion for judgment notwithstanding the verdict in
a Rule 10b-5 case because evidence of the plaintiff’s “limited
education” and ability “to understand the mechanics of
sophisticated, speculative investments” was sufficient to
support the jury’s finding of scienter. 736 F.2d at 1286. Unlike
the defendant in Kehr, Goodrich was a sophisticated investor.
Moreover, the evidence in Kehr showed that the defendant
affirmatively misled the plaintiff concerning her investment’s
risk profile, whereas Goodrich has not pleaded that Defendants
affirmatively misrepresented any information. In Burman, the
District Court identified factual allegations illustrating “the
falsity of” the alleged misrepresentations, as opposed to
“merely stating that this was a false representation,” 384 F.
Supp. 2d at 333–34, as Goodrich does. These non-binding
authorities thus do not cast doubt on our conclusion that
Goodrich has not plausibly pleaded scienter.
D.
Finally, Goodrich asks us to review the District Court’s
discovery rulings. Defendants urge that the District Court’s
rulings—distilling discoverable information to the dispositive
legal issue—did not constitute an abuse of discretion. We
agree.
The challenged orders limited discovery to matters
concerning the parties’ contractual relationship and Goodrich’s
instruction. District courts have broad discretion to limit
discovery to dispositive issues like these. See Citizens for
Resp. & Ethics in Wash. v. Off. of Admin., 566 F.3d 219, 225–
26 (D.C. Cir. 2009). The limits here were crafted after both
parties briefed the issue, and they resulted in production of

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thousands of pages of documents and Goodrich’s deposition of
Lettinga. After discovery concluded, Goodrich asked to
“conduct additional discovery regarding his assent to the
contractual disclaimers relied upon by Defendants” via a court-
ordered status report. Appellant’s Br. 11 (citing J.A. 174–76).
The District Court advised him to formally move for further
discovery under Rule 56(d)(2) if he wished to pursue the
matter, J.A. 182, which he did not do.
Given all this, the District Court’s rulings were anything
but “fanciful” and certainly not “clearly unreasonable.” Bowie,
642 F.3d at 1136. We thus will not disturb them.
* * * * *
For the foregoing reasons, we affirm the District Court.
So ordered.

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