CAROL WILDING, STANLEY RIFKEN, SHARON CRAWFORD, WILLIAM SCOTT FRANZ, DAVID PULASKI, MARY JASMINE WELCH, JOSE ALBERTO GONZALEZ, JANE ELLEN PLATTNER, KIM MARIE HOULE, et al., Plaintiffs - Appellants, versus DNC SERVICES CORPORATION, DEBORAH WASSERMAN SCHULTZ, Defendants - Appellees.
No. 17-14194
United States Court of Appeals for the Eleventh Circuit
October 28, 2019
D.C. Docket No. 0:16-cv-61511-WJZ
Appeal from the United States District Court for the Southern District of Florida
(October 28, 2019)
JORDAN, Circuit Judge:
In his classic treatise on the United States and its political system, Alexis de Tocqueville famously remarked that “[t]here is almost no political question in the United States that is not resolved sooner or later into a judicial question.” Alexis de Tocqueville, Democracy in America, Vol. I, at 257 (U. Chicago Press 2000) [1835]. This case, which pits a political party against some of its supporters, confirms de Tocqueville‘s reputation as an astute observer of American life.
The plaintiffs in this putative class action are donors to the Democratic National Committee, donors to the 2016 presidential campaign of Senator Bernie Sanders, and voters affiliated with the Democratic Party in various states. The defendants are the DNC and its former chairwoman (and current U.S. Representative) Deborah Wasserman Schultz. The plaintiffs essentially allege that during the 2016 Democratic presidential primaries the DNC and Ms. Wasserman Schultz improperly tipped the scales in favor of former Secretary of State Hillary Clinton, who was challenging Senator Sanders for the Democratic presidential nomination.
In their complaint against the DNC and Ms. Wasserman Schultz, the plaintiffs asserted a number of common-law and statutory claims, including fraud, negligent misrepresentation, and unjust enrichment. The district court dismissed
I
We set out the facts as alleged in the operative complaint, and accept them as true for purposes of our discussion. See Wood v. Moss, 572 U.S. 744, 755 n.5 (2014).
A
The Democratic Party charter states that its chair “shall exercise impartiality and evenhandedness as between the Presidential candidates and campaigns,” and is “responsible for ensuring” that the DNC‘s national officers and staff also “maintain impartiality and evenhandedness during the Democratic Party Presidential nominating process.” First Amended Complaint at ¶ 159.
From September of 2015 through May of 2016, Ms. Wasserman Schultz and Holly Shulman, the DNC‘s spokesperson, made public statements promising that the DNC would conduct a neutral and impartial primary process. First, on September 3, 2015, Ms. Wasserman Schultz was quoted in a Politico article as saying that she was committed to running a “neutral primary process.” Second, in Daily Beast and Daily Mail Online articles appearing in September and October of 2015, Ms. Shulman was quoted as saying that the DNC “runs an impartial primary
B
These statements of impartiality, according to the complaint, were false. The DNC was allegedly “biased in favor of one candidate—[Secretary] Clinton []—from the beginning and throughout the process. The DNC devoted its considerable resources to supporting [Secretary] Clinton above any of the other Democratic candidates.” Id. at ¶ 161. And “[t]hrough its public claims of being neutral and impartial, the DNC actively concealed its bias from its own donors as well as donors to the campaigns of [Secretary] Clinton‘s rivals, including [Senator] Sanders[.]” Id.
In June of 2016, someone using the name “Guccifer 2.0” published a number of DNC documents on a publicly accessible website. See id. at ¶ 165. The DNC claimed that those documents had been obtained by Russian government hackers who had penetrated its computer network. See id. at ¶¶ 163–64. Among the documents was a two-page memorandum (marked “confidential” and dated May 26, 2015) written to the DNC regarding the 2016 Republican presidential candidates. See id. at ¶ 166. This memorandum stated that the DNC‘s goals in the coming months were to “frame the Republican field and the eventual nominee
This memorandum, the plaintiffs claim, was not the only document showing the DNC‘s favoritism towards Secretary Clinton. Other documents obtained by hackers included research apparently prepared by DNC staff and Secretary Clinton‘s campaign staff relating to Secretary Clinton‘s vulnerabilities, potential attacks, and policy positions, as well as “opposition research on the other Democratic candidates.” Id. at ¶ 170. In sum, the complaint alleges that, “in spite of” the Democratic Party‘s charter and multiple public statements, the “DNC devoted its resources to propelling [Secretary] Clinton‘s candidacy ahead of all of her rivals, even if it meant working directly against the interests of Democratic Party members, including [Senator] Sanders’ supporters.” Id. at ¶ 171.
A number of the named plaintiffs made donations to the DNC in 2015 and 2016. Some of these plaintiffs donated money after at least some of the statements of impartiality made by Ms. Wasserman Schultz and Ms. Shulman and before the hacked documents were published in June of 2016. For example, Emma Young made donations to the DNC in December of 2015 and January of 2016, and Phyllis Criddle made donations to the DNC in May of 2016. See id. at ¶¶ 105, 109. All of the plaintiffs who donated money to the DNC or the Sanders campaign expressly alleged that they relied on the defendants’ false statements and omissions “to their injury.” Id. at ¶¶ 188, 195.
Senator Sanders endorsed Secretary Clinton as the Democratic Party‘s presidential nominee on July 12, 2016. This allegation is not in the complaint, but we take judicial notice of this undisputed historical and political fact under
The plaintiffs filed suit against the DNC and Ms. Wasserman Schultz, invoking jurisdiction under the Class Action Fairness Act,
The DNC and Ms. Wasserman Schultz moved to dismiss the claims, arguing both that the plaintiffs lacked Article III standing and that they failed to state claims for relief. See
II
We begin with the claims of the DNC donor class and the Sanders donor class for fraud, negligent misrepresentation, violations of the CPPA, and unjust enrichment. All of these claims are based on the theory that the plaintiffs in these classes were harmed financially by the allegedly false statements concerning the DNC‘s impartiality and neutrality in the Democratic primary process. We first address standing.
A
Our review of the district court‘s rulings on standing is plenary. See Simpson v. Sanderson Farms, Inc., 744 F.3d 702, 705 (11th Cir. 2014); Bochese v. Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir. 2005). As explained below, we conclude that some of the named plaintiffs representing the DNC donor class have
Article III of the Constitution limits the jurisdiction of federal courts to “cases” and “controversies,” and “[s]tanding to sue is a doctrine rooted in the traditional understanding of a case or controversy.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (quotation marks omitted). To have standing, plaintiffs must therefore establish that they “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id.
The three elements of Article III standing—injury, causation, and redressability—must be supported “with the manner and degree of evidence required at the successive stages of the litigation.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). See also 31 Foster Children v. Bush, 329 F.3d 1255, 1263 (11th Cir. 2003) (“How much evidence is necessary to satisfy [the standing requirement] depends on the stage of litigation at which the standing challenge is made.“). At the “pleading stage, general factual allegations of injury resulting from the defendant‘s conduct may suffice, for on a motion to dismiss we ‘presum[e] that general allegations embrace those specific facts that are necessary to support the claim.‘” Bennett v. Spear, 520 U.S. 154, 168 (1997) (citation omitted). See also Moody v. Warden, 887 F.3d 1281, 1286 (11th Cir. 2018).
The plaintiffs, as noted, are asserting only state-law claims. But we have held that Article III‘s standing requirements apply to state-law claims brought in federal court. See Nicklaw v. Citimortgage, Inc., 839 F.3d 998, 1002–03 (11th Cir. 2016) (holding that the plaintiff lacked standing to assert claims under New York law because he did not allege that he sustained a concrete injury). Accord Hagy v. Demers & Adams, 882 F.3d 616, 624 (6th Cir. 2016); Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 933–35 (8th Cir. 2012); Cantwell v. City of Long Beach, 241 F.3d 674, 683–84 (9th Cir. 2001); 13B Charles A. Wright, Arthur
B
At least some of the named plaintiffs representing the DNC donor class and the Sanders donor class have sufficiently alleged injury-in-fact for their fraud, negligent misrepresentation, CPPA, and unjust enrichment claims. The named plaintiffs for the DNC donor class plaintiffs and the Sanders donor class allege that they suffered a financial loss resulting from their donations to the DNC and to the Sanders campaign. See First Amended Complaint at ¶¶ 2–109, 176–77. Such economic harm is a well-established injury for purposes of Article III standing. See, e.g., Chevron Corp. v. Donzinger, 833 F.3d 74, 120 (2d Cir. 2016) (“Any monetary loss suffered by the plaintiff satisfies the injury-in-fact element.“). The alleged economic injury is also concrete and particularized, see Lujan, 504 U.S. at 560, because all named plaintiffs for the DNC donor class and the Sanders donor class alleged that they donated a specific amount of money and suffered a corresponding loss. Indeed, the complaint lists the precise dollar amount of each named plaintiff‘s donation(s). See Sweigert v. Perez, 334 F. Supp. 3d 36, 42 (D.D.C. 2018) (holding, in a similar case against the DNC and some of its officials, that the plaintiff‘s “alleged loss of $30 [made as a donation to the Sanders
Causation is next. To satisfy Article III‘s causation requirement, the named plaintiffs must allege that their injuries are “connect[ed] with the conduct of which [they] complain.” Trump v. Hawai‘i, 138 S. Ct. 2392, 2416 (2018). See also Duke Power Co. v. Envtl. Study Grp., 438 U.S. 59, 75 n.20 (1978) (explaining that Article III standing “require[s] no more than a showing that there is a substantial likelihood” of causation) (quotation marks omitted). Significantly, “[p]roximate causation is not a requirement of Article III standing, which requires only that the plaintiff‘s injury be fairly traceable to the defendant‘s conduct.” Lexmark Int‘l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 134 n.6 (2014). “[E]ven harms that flow indirectly from the action in question can be said to be ‘fairly traceable’ to that action for standing purposes.” Focus on the Family v. Pinellas Suncoast Transit Auth., 344 F.3d 1263, 1273 (11th Cir. 2003). A plaintiff therefore need not show (or, as here, allege) that “the defendant‘s actions are the very last step in the chain of causation.” Bennett, 520 U.S. at 168-69. See also Moody, 887 F.3d at 1285 (explaining that we “must not confuse weakness on the merits with absence of Article III standing“) (citation and quotation marks omitted).
That leaves redressability for the DNC donor class with respect to their claims. At least some of the named plaintiffs representing the DNC donor class have satisfied that element. To have Article III standing, a plaintiff need not
III
Because of its rulings on standing, the district court did not reach the defendants’
Before addressing the claims, we confront the issue of the applicable law. The complaint is silent on what law governs each of the common-law claims, but in their reply brief the plaintiffs apply Florida law to their claims for fraud, negligent misrepresentation, and unjust enrichment. See Reply Br. for Appellants at 18-20 (citing Florida cases). Where necessary, we will do the same. Cf. Sun Life Assurance Co. of Can. v. Imperial Premium Fin., LLC, 904 F.3d 1197, 1208 (11th Cir. 2018) (“Under our precedents, a party waives its opportunity to rely on non-forum law where it fails to timely provide—typically in its complaint or the first motion in response when choice-of-law matters—the sources of non-forum law on which it seeks to rely.“).
Plaintiffs alleging fraud must “state with particularity the circumstances constituting fraud or mistake.”
“[P]ursuant to Rule 9(b), a plaintiff must allege: (1) the precise statements, documents, or misrepresentations made; (2) the time, place and person responsible for the statement; (3) the content and manner in which these statements misled [him]; and (4) what the defendants gained by the alleged fraud.” Am. Dental Ass‘n v. Cigna Corp., 605 F.3d 1283, 1291 (11th Cir. 2010) (quotation marks omitted). A bare allegation of reliance on alleged misrepresentations, bereft of any additional detail, will not suffice under Rule 9(b). See 5A Charles A. Wright, Arthur R. Miller, & A. Benjamin Spencer, Federal Practice & Procedure § 1297, at 46 (4th ed. 2018) (“[S]imply alleg[ing] the technical elements of fraud without providing . . . underlying supporting details will not satisfy the rule‘s pleading-with-particularity requirement.“).
B
Whether a plaintiff has Article III standing is a question distinct from whether she has a statutory cause of action. See Lexmark, 572 U.S. at 126-28. We conclude, for a number of reasons, that the CPPA claim of the DNC donor class fails the plausibility standard set out in cases like Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556–57 (2007).
The named plaintiffs representing the DNC donor class made their donations directly to the DNC, which is a non-profit corporation. See First Amended Complaint at ¶¶ 103–09, 153. Because there are no allegations that any of them purchased or received any consumer goods or services, they are not “consumers” under the CPPA. See Silvious v. Coca-Cola Co., 893 F. Supp. 2d 233, 236 (D.D.C. 2012) (prisoner who had not purchased Coca-Cola was not a “consumer”
We note, as well, that the DNC is not subject to liability under the CPPA for the conduct set out in the complaint. As the plaintiffs alleged, the DNC is a non-profit entity, and the CPPA limits the liability of non-profit organizations: “An action brought . . . against a non-profit organization shall not be based on membership in such organization, membership services, training or credentialing services, . . . or any other transaction, interaction, or dispute not arising from the purchase or sale of consumer goods or services in the ordinary course of business.”
C
The elements of an unjust enrichment claim in Florida are “a benefit conferred upon a defendant by the plaintiff, the defendant‘s appreciation of the benefit, and the defendant‘s acceptance and retention of the benefit under circumstances that make it inequitable for him to retain it without paying the value thereof.” Fla. Power Corp. v. City of Winter Park, 887 So. 2d 1237, 1241 n.4 (Fla. 2004). “In Florida, a claim for unjust enrichment is an equitable claim based on a legal fiction which implies a contract as a matter of law even though the parties to such an implied contract never indicated by deed or word that an agreement existed between them.” 14th & Heinberg, LLC v. Terhaar & Cronley Gen. Contractors, Inc., 43 So. 3d 877, 880 (Fla. Dist. Ct. App. 2010) (citation omitted).
The DNC and Ms. Wasserman Schultz argue that the unjust enrichment claim of the DNC donor class fails because the complaint does not allege facts which imply a contract as a matter of law, which they say is required in Florida.
Instead of responding to these arguments, and addressing the cases cited by the defendants, the plaintiffs merely set out the elements of an unjust enrichment claim and say—without any elaboration—that they have alleged these elements. See Reply Br. for Appellants at 23-24. That conclusory assertion, “without supporting arguments and authority,” Sappuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014), is the same response that the plaintiffs submitted in the district court, see D.E. 48 at 15, and fails to address the defendants’ arguments.
We agree with the defendants that the plaintiffs in the DNC donor class have failed to state a claim for unjust enrichment. Under Rule 8, a complaint must allege sufficient underlying facts to make a claim plausible, and the mere formulaic recitation of elements or legal conclusions will not suffice. See, e.g., Twombly, 550 U.S. at 555-56. And that pleading standard applies to state-law claims litigated in federal court. See Palm Beach Golf Center-Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245, 1259–60 (11th Cir. 2015). The unjust
IV
The plaintiffs in the Democratic voter class separately alleged a breach of fiduciary duty by the DNC and Ms. Wasserman Schultz. As we explain, these plaintiffs have failed to allege an injury-in-fact sufficient to confer Article III standing.
In their brief, the plaintiffs assert that “[v]iolations of common law rights protected by the common law of torts and restitution are sufficient for standing purposes.” Br. for Appellants at 13 (quoting United States v. Real Property, All Furnishings Known as Bridwell‘s Grocery, 195 F.3d 819, 821 (6th Cir. 1999)). There is admittedly some support for the notion that the mere violation of a state-law right satisfies Article III even in the absence of an identifiable injury. See FMC Corp. v. Boesky, 852 F.2d 981, 993 (7th Cir. 1988) (plurality opinion: “Properly pleaded violations of state-created rights . . . must suffice to satisfy Article III‘s injury requirement.“). But our precedent is to the contrary. We require plaintiffs asserting violations of state-created rights to demonstrate a concrete injury; the defendant‘s violation of those rights is not enough. See Nicklaw, 839 F.3d at 1002–03. Cf. Trustees of Upstate N.Y. Eng‘rs Pension Fund v. Ivy Asset Mgmt., 843 F.3d 561, 569 (2d Cir. 2016) (“[A] breach of fiduciary duty
The plaintiffs in the Democratic voter class do not allege any injury resulting from the defendants’ alleged breaches of their fiduciary duty. The complaint says only that the plaintiffs in the Democratic voter class were “proximately damaged” by the alleged breaches. See First Amended Complaint at ¶ 215. Indeed, the plaintiffs conceded at oral argument that the complaint does not specify any resulting injuries. See Recording of Oral Argument, Dec. 11, 2018, at 2:20-2:45 (“The complaint does not, with respect to the fiduciary duty claim, spell out the nature of the damages.“). That concession, which confirms the complaint‘s deficiencies, is fatal to the standing of the plaintiffs in the Democratic voter class. Cf. DiMaio v. Democratic Nat‘l Comm., 520 F.3d 1299, 1302 (11th Cir. 2008) (Florida Democratic voter who claimed that the DNC would violate his Article II and Fourteenth Amendment rights by not seating delegates from Florida at the Democratic National Convention failed to plead the invasion of a legally protected right because, among other things, he failed to allege that he had cast a ballot in the Florida Democratic Primary).4
Part of the problem is caused by the complaint‘s complete failure to say anything at all about the source, nature, or scope of the alleged fiduciary duty. Under District of Columbia law, on which the plaintiffs rely, a fiduciary duty requires circumstances such that a “relationship of trust may properly be implied.” Kemp v. Eiland, 139 F. Supp. 3d 329, 343 (D.D.C. 2013). All the complaint alleges is that the DNC and Ms. Wasserman Schultz “had a fiduciary duty” to the plaintiffs in the Democratic voter class. See First Amended Complaint at ¶ 213.
“Although standing in no way depends on the merits of the plaintiffs’ contention that particular conduct is illegal, it often turns on the nature and source of the claim alleged.” Warth v. Seldin, 422 U.S. 490, 500 (1975) (citation
In their brief, the plaintiffs argue that the district court should have granted them leave to amend the complaint‘s allegations regarding standing. We disagree.
The plaintiffs had already amended their complaint once as of right, and district courts are not required to sua sponte grant counseled plaintiffs leave to amend their complaint in the absence of a request for such relief. See Wagner v. Daewoo Heavy Indus. Am. Corp., 314 F.3d 541, 542 (11th Cir. 2002) (en banc). The plaintiffs did not seek to amend their complaint a second time to cure any standing or substantive deficiencies, and they did not explain “how the complaint could be amended to save the[ir] claim[s].” U.S. ex rel. Atkins v. McInteer, 470 F.3d 1350, 1362 (11th Cir. 2006). We therefore conclude that the district court did not err in dismissing the complaint without sua sponte granting the plaintiffs leave to file a second amended complaint.
VI
We are mindful that there are deep disagreements within (and outside) the Democratic Party about the DNC‘s alleged conduct during the 2016 primaries. See, e.g., John Baglia, Legal Solutions to a Political Party National Committee Undermining U.S. Democracy, 51 John Marshall L. Rev. 107, 108–09, 118–19 (2017). But federal courts can only adjudicate cognizable claims, and the complaint here fails on a number of jurisdictional and substantive grounds.
AFFIRMED.