772 F. Supp. 2d 599
D. Del.2011Background
- Rader has filed four related actions arising from a 2009 error in entering his bank account number to a ShareBuilder online trading account, leading to delays and disputes about funds and fees.
- This action (Rader IV) follows prior decisions in Rader I, II, and III where the court granted judgment for ShareBuilder and stayed further proceedings, and where a counterclaim for attorney’s fees remained pending.
- ShareBuilder moved to dismiss under Rule 12(b)(6) and Rader cross-moved for summary judgment; a separate motion to remove the judge and counsel was also filed by Rader.
- A settlement letter dated May 6, 2010 offered to settle all claims for $125,000; the letter was labeled a confidential settlement communication under FRE 408.
- Rader alleges the settlement letter was a frivolous, blackmail-like demand; the court treats FRE 408 as addressing admissibility, not dismissal, and finds no basis for defamation-type privilege to dismiss the case.
- The court addresses the merits of several claimed causes of action (conspiracy to defraud, blackmail/extortion, constitutional claims) and possible recusal, ultimately granting the motion to dismiss and denying the other requests.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FRE 408/absolute privilege require dismissal | Rader argues the letter is an improper settlement tactic tainting claims. | ShareBuilder contends FRE 408/absolute privilege bars claims. | FRE 408 and absolute privilege do not mandate dismissal. |
| Whether civil conspiracy to defraud is plausibly alleged | Rader alleges a Settlement Letter was designed to defraud him of $125,000. | ShareBuilder contends there was no underlying actionable tort or damages pleaded. | Conspiracy to defraud is dismissed for lack of a separate actionable wrong and damages. |
| Whether blackmail/extortion claims are cognizable civilly | Rader characterizes the letter as blackmail/extortion. | ShareBuilder asserts no civil extortion/blackmail action exists and the claim is implausible. | Dismissed; no civil extortion/blackmail claim recognized and Twombly pleading standard not met. |
| Whether constitutional claims against a private entity survive | Rader asserts due process and takings-related constitutional rights. | Constitutional rights apply to state action, not private conduct. | Dismissed as private ShareBuilder actions do not involve government action. |
| Whether recusal of the judge is warranted and related relief | Rader contends ex parte communications taint proceedings and seeks recusal and disqualification. | No ex parte communications occurred; record shows routine chambers interactions. | Recusal denied; no basis shown for disqualification or for striking prior rulings. |
Key Cases Cited
- Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard requires plausible claims)
- In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410 (3d Cir. 1997) (summary judgment burden and standard of review)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (no genuine issue of material fact; favorable inferences to movant)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (U.S. 1986) (genuine dispute standard for summary judgment)
- Spruill v. Gillis, 372 F.3d 218 (3d Cir. 2004) (12(b)(6) standard and liberal construction for pro se)
- Gaffin v. Teledyne, Inc., 611 A.2d 467 (Del. 1992) (Delaware fraud elements and required showing)
- Barker v. Huang, 610 A.2d 1341 (Del. 1992) (absolute privilege in judicial proceedings)
- Williams v. First Nat'l Bank, 216 U.S. 582 (U.S. 1910) (public policy favoring settlement of disputes)