Martinez v. Market Traders Institute, Inc. et al

Filing 79

ORDER granting in part 35 motion to dismiss; granting in part 36 motion to dismiss; and dismissing case without prejudice. Signed by Judge Carlos E. Mendoza on 3/29/2017. (KMS)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
ORLANDO DIVISION

SUSAN MARTINEZ,
Plaintiff,
v.

Case No: 6:16-cv-2156-Orl-41GJK

MARKET TRADERS INSTITUTE,
INC., MARKET TRADERS INSTITUTE
FINANCIAL, INC., NEXT STEP
FINANCIAL HOLDINGS, INC.,
EFOREX, INC., FX CURRENCY
TRADERS, INC, I TRADE FX, LLC,
JACOB MARTINEZ, LISA K.
ESTRADA, ISAAC MARTINEZ and
INSTITUTIONAL LIQUIDITY, LLC,
Defendants.
/
ORDER
THIS CAUSE is before the Court on Defendants Market Traders Institute, Inc., FX
Currency Traders, Inc., and Jacob Martinez’s Motion to Dismiss (Doc. 35) and Defendants Market
Traders Institute Financial, Inc., Next Step Financial Holdings, Inc., EForex, Inc., Isaac Martinez,
and Lisa Estrada’s Motion to Dismiss (Doc. 36), and Plaintiff’s Response (Doc. 47) thereto.
I.

LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 12(b)(1), a party may move to dismiss the
claims against it for “lack of subject-matter jurisdiction.” “Attacks on subject matter
jurisdiction . . . come in two forms: ‘facial attacks’ and ‘factual attacks.’” Garcia v. Copenhaver,
Bell & Assocs., M.D.’s, P.A., 104 F.3d 1256, 1260–61 (11th Cir. 1997) (quoting Lawrence v.
Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990)). “Facial attacks challenge subject matter
jurisdiction based on the allegations in the complaint, and the district court takes the allegations as

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true in deciding whether to grant the motion.” Morrison v. Amway Corp., 323 F.3d 920, 925 n.5
(11th Cir. 2003). “However, where a defendant raises a factual attack on subject matter
jurisdiction, the district court may consider extrinsic evidence such as deposition testimony and
affidavits.” Carmichael v. Kellogg, Brown & Root Servs., Inc., 572 F.3d 1271, 1279 (11th Cir.
2009). “When jurisdiction is properly challenged, a plaintiff has the burden of showing jurisdiction
exists.” Kruse, Inc. v. Aqua Sun Invs., Inc., No. 6:07-cv-1367-Orl-19UAM, 2008 WL 276030, at
*2 (M.D. Fla. Jan. 31, 2008).
II.

ANALYSIS

This case arises out of alleged harms to Defendant Market Traders Institute, Inc., which
Plaintiff claims to hold a fifty-percent interest in by way of stock. Defendants argue, among other
things, that Plaintiff relinquished her fifty-percent ownership interest during divorce proceedings
with Defendant Jared Martinez. Defendants argue that because Plaintiff has no ownership interest
in the company and because the alleged harm is derivative of harm to the company, Plaintiff lacks
standing to bring this case.
In order to bring a case in federal court, a plaintiff must establish standing under Article III
of the United States Constitution and, if relying on a federal statute, any requirements thereof.
Lujan v. Defenders of Wildlife, 504 U.S. 555, 559–60 (1992); United States v. $38,000.00 in U.S.
Currency, 816 F.2d 1538, 1544 (11th Cir. 1987). To establish Constitutional, or Article III,
standing, a plaintiff must show: “1) that he personally has suffered an actual or prospective injury
as a result of the putatively illegal conduct; 2) that the injury can be fairly traced to the challenged
conduct; and 3) that the injury is likely to be redressed through court action.” Saladin v. City of
Milledgeville, 812 F.2d 687, 690 (11th Cir. 1987). Statutory standing is “a stricter standing
requirement that is analogous to, and not neatly distinguishable from, the injury element of a legal

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claim” that is imposed by Congress. Advanced Cartridge Techs., LLC v. Lexmark Int’l, Inc., No.
8:10-cv-486-T-23TGW, 2011 WL 6719725, at *2 (M.D. Fla. Dec. 21, 2011).
Defendants argue that Plaintiff cannot allege a sufficient injury because she was
contractually obligated to assign any interest she held in Market Traders Institute, Inc. to Jared
Martinez. It is undisputed that Plaintiff entered a partial marital settlement agreement with Jared
Martinez that obligated her to transfer her fifty-percent ownership interest in Market Traders
Institute, Inc. to Jared Martinez, who would then transfer his entire ownership interest to Jacob
and Isaac Martinez. (See Stipulated Order, Doc. 35-2, at 4). The partial marital settlement
agreement was approved by the state court presiding over the dissolution of marriage proceedings.
(Id. at 6). Nevertheless, Plaintiff contends that she has not assigned the shares in accordance with
the agreement. (Pl.’s Decl., Doc. 72-1, ¶ 7). Defendants have not disputed the assertion that
Plaintiff’s legal ownership of the shares has not been terminated. Furthermore, the state court
denied, without prejudice, a motion to enforce the agreement. (May 21, 2013 Order, Doc. 35-2, at
8). Accordingly, while it appears that Plaintiff’s retention of the shares is in violation of the parties’
agreement, it is not clear that the agreement is or has been deemed legally enforceable against
Plaintiff, and therefore, it is not clear that Plaintiff had sufficient protectable interest in the shares
to have suffered a cognizable injury. Thus, Plaintiff has not met her burden of establishing standing
as she has not established that she suffered an injury in fact. 1
Even assuming Plaintiff had sufficiently established an ownership interest in the shares,
this Court would still lack authority to hear Plaintiff’s claims. Plaintiff has asserted one claim for

1

Plaintiff has also not provided sufficient information by which this Court can determine
the proper ownership of the shares. Nevertheless, the state court is in a better position to determine
the rights of the parties vis-à-vis the shares, and any ruling by this Court would put the parties at a
substantial risk of inconsistent rulings.

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violation of the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C.
§ 1961 et seq. Plaintiff alleges that she was damaged by the diminution in value of Market Traders
Institute, Inc., which resulted in a devaluing of her shares of that entity. In other words, Plaintiff
alleges a derivative RICO claim for harm to Market Traders Institute, Inc. However, the Eleventh
Circuit has expressly held that a plaintiff that “primar[il]y allege[s] injuries flow[ing] from her
status as a shareholder and the diminution in the value of her shares” lacks standing to pursue a
RICO claim absent allegations that the plaintiff suffered a harm distinct from the other
shareholders as a result of racketeering activities directed toward her. Harris v. Orange S.A., 636
F. App’x 476, 481–83 (11th Cir. 2015); see also Beck v. Prupis, 162 F.3d 1090, 1096 n.10 (11th
Cir. 1998); Bivens Gardens Office Bldg., Inc. v. Barnett Banks of Fla., Inc., 140 F.3d 898, 906
(11th Cir. 1998). Plaintiff has not alleged that the purported conspirators targeted her specifically
or that she is complaining of an injury unique to her. Therefore, Plaintiff has not alleged a
cognizable claim. Plaintiff has not established standing, and this case will be dismissed without
prejudice for want of jurisdiction.
III.

CONCLUSION

In accordance with the foregoing, it is ORDERED and ADJUDGED as follows:
1. Defendants Market Traders Institute, Inc., FX Currency Traders, Inc., and Jacob
Martinez’s Motion to Dismiss (Doc. 35) is GRANTED in part.
2. Defendants Market Traders Institute Financial, Inc., Next Step Financial Holdings,
Inc., EForex, Inc., Isaac Martinez, and Lisa Estrada’s Motion to Dismiss (Doc. 36)
is GRANTED in part.
3. This case is DISMISSED without prejudice. The Clerk is directed to close this
case.

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DONE and ORDERED in Orlando, Florida on March 29, 2017.

Copies furnished to:
Counsel of Record

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