Cooper v. Bolton et al

Filing 132

ORDER and REASONS granting in part and denying in part 125 Partial Motion to Dismiss Plaintiffs' Superseding Complaint, as stated within document. Signed by Judge Kurt D. Engelhardt on 2/2/2015. (cbs)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SEAN C. COOPER

CIVIL ACTION

VERSUS

NO. 12-2934

GEORGE BOLTON,
WEST END CAPITAL MANAGEMENT, LLC,
CHRISTEN HARDY and CONSTELLATION
INVESTMENT CONSULTING CORPORATION

SECTION "N" (3)

ORDER AND REASONS
Presently before the Court is a "Partial Motion to Dismiss Plaintiffs' Superseding
Complaint" (Rec. Doc. 125) filed by Defendants, George Bolton, WestEnd Capital Management,
LLC, George Elliman, Christen Hardy, Gustave Ozag, and George Bolton Holdings, LLC
("Defendants"), pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. Having carefully
considered the parties’ supporting and opposing submissions, and applicable law, IT IS ORDERED
that Defendants’ motion seeking dismissal of three of Plaintiffs' claims is GRANTED IN PART
and DENIED IN PART.
Specifically, if Plaintiff desires to attempt to rectify the pleading shortcomings
identified herein, IT IS FURTHER ORDERED that he must file to file a second amended and
superseding complaint no later than twenty (20) days from the entry of this Order and Reasons. The
second amended and superseding complaint must include all of the allegations from Plaintiff's first

superseding and amending complaint (Rec. Doc. 116) on which he continues to rely, as well as his
additional allegations, such that the case can proceed on the basis of the second amended and
superseding complaint without requiring further reference to prior pleadings. Should Plaintiff fail
to timely make the necessary amendment, the Court shall, upon properly supported motion by the
Defendants, order that the affected claims be dismissed with prejudice.
LAW AND ANALYSIS
Rule 8 of the Federal Rules of Civil Procedure requires that complaints provide a
“short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ.
Proc. 8(a)(2). Although a complaint does not need “detailed factual allegations, . . . more than labels
and conclusions are necessary, and a formulaic recitation of the elements of a cause of action will
not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and quotations
omitted); Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“Threadbare recitals of the elements of a
cause of action, supported by mere conclusory statements, do not suffice.”). Similarly, in evaluating
motions to dismiss filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, courts
“are not bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v.
Allain, 478 U.S. 265, 286 (1986); see also Iqbal, 556 U.S. at 678 (“tenet that a court must accept
as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”). “Nor
does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’”
Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 557); see also Christopher v. Harbury, 536
U.S. 403, 416 (2002) (elements of a plaintiff's claim(s) “must be addressed by allegations in the
complaint sufficient to give fair notice to a defendant”).

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Further, to survive a motion to dismiss, a complaint must contain sufficient factual
matter, accepted as true, to “state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at
678 (quoting Twombly, 550 U.S. at 570). Facial plausibility exists “when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is liable for the
misconduct alleged.” Id. (emphasis added). “The plausibility standard is not akin to a ‘probability
requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.”
Id. Factual allegations that are “merely consistent with a defendant's liability, stop short of the line
between possibility and plausibility of entitlement to relief,” and thus are inadequate. Id. (internal
quotations omitted). Rather, a complaint’s allegations "must make relief plausible, not merely
conceivable, when taken as true." United States ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 186
(5th Cir. 2009); see also Twombly, 550 U.S. at 555 (“Factual allegations must be enough to raise
a right to relief above the speculative level . . . on the assumption that all the allegations in the
complaint are true (even if doubtful in fact).”).
“Determining whether a complaint states a plausible claim for relief” is “a
context-specific task that requires the reviewing court to draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 679 (internal citations omitted). See also Robbins v. Oklahoma,
519 F.3d 1242, 1248 (10th Cir. 2008) (degree of required specificity depends on context, i.e., the
type of claim at issue). And, in evaluating motions to dismiss filed under Rule 12(b)(6), the Court
"must accept all well-pleaded facts as true, and . . . view them in the light most favorable to the
plaintiff." Campbell v. Wells Fargo Bank, N.A., 781 F.2d 440, 442 (5th. Cir.), cert. denied, 476 U.S.
1159 (1986). Further, "[a]ll questions of fact and any ambiguities in the controlling substantive law
must be resolved in the plaintiff's favor." Lewis v. Fresne, 252 F.3d 352, 357 (5th Cir. 2001).

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Nevertheless, “where the well-pleaded facts do not permit the court to infer more than the mere
possibility of misconduct, the complaint has alleged – but it has not ‘show[n]’ – “that the pleader
is entitled to relief.’” Iqbal, 556 U.S. at 678 (quoting Fed. Rule Civ. P. 8(a)(2)).
In addition to Rule 8(a)(2)’s pleading demands, Rule 9(b) supplements Rule 8(a), if
fraud is alleged, by requiring circumstances allegedly constituting fraud be stated with particularity.
See Fed. R. Civ. Proc. 9(b); Grubbs, 565 F.3d at 185. Thus, Rule 9(b) generally requires the
plaintiff to set forth the “who, what, when, where, and how” of the alleged fraud.” See, e.g., United
States ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262, 266 (5th Cir. 2010); see also Sullivan
v. Leor Energy, LLC, 600 F.3d 542, 550-51 (2010) (claimant must "specify the statements contended
to be fraudulent, identify the speaker, state when and where the statements were made, and explain
why the statements were fraudulent"). Significantly, however, courts must realistically observe that
“there is no single construction of Rule 9(b) that applies in all contexts.” Grubbs, 565 F.3d at 188.
Indeed, the Fifth Circuit has explained that the “‘time, place, contents, and identity’ standard is not
a straitjacket for Rule 9(b).” Id. at 190. “Rather, the rule is context specific and flexible . . . .” Id.
On the other hand, a relator cannot bypass Rule 9(b)’s pleading requirements simply by premising
its allegations “on information and belief.” Thompson, 125 F.3d at 903. To the contrary, though
fraud may be alleged on information and belief if the “facts relating to the fraud are peculiarly within
the perpetrator’s knowledge,” the complaint nevertheless “must set forth a factual basis for such
belief.” Id.
Applying these principles to the allegations of Plaintiff's superseding and amending
Complaint (Rec. Doc. 116), the Court finds that Defendants' motion should be denied to the extent
it seeks dismissal of Plaintiff's fraud claim. The Court reaches this conclusion for essentially the

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reasons stated by Plaintiff in his opposition memorandum (Rec. Doc. 129). Further, Defendants can
obtain additional information regarding Plaintiff's fraud claim via discovery.
Regarding Plaintiff's claims pursuant to the Shared Wire and Electronic
Communications and Transactional Records Act ("SECTRA"), 18 U.S.C. § 2701, et seq., and the
Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030(a)(4), premised upon Defendant
Hardy's accessing (and then utilizing) his WestEnd email account and other documentation stored
on WestEnd's computer server pertaining to him, the Court focuses first on information found in
WestEnd's computer files by virtue of Plaintiff's (and his wife's) status as a WestEnd customer.
With respect to this information, Plaintiff sufficiently alleges WestEnd's 2012 Compliance Manual
restricted employee access of this information to that necessary for the provision of products or
services to clients. In other words, the Court finds Plaintiff to have sufficiently alleged that Hardy
lacked authority to access such information for use in her child custody dispute and/or for use in
membership related litigation. Accordingly, on the showing made, the Court finds Plaintiff's
allegations regarding this information satisfactorily allege unauthorized access for purposes of
establishing a violation of SECTRA and the CFAA.
The cited Compliance Manual provisions, however, do not appear to establish
parameters for access by WestEnd employees of information regarding current (or former) WestEnd
members, officers, or other employees found within WestEnd computer files by virtue of that
person's status as a WestEnd member or employee, rather than client. The same is true relative to
access by former WestEnd employees who, in the midst of their departure from employment,
temporarily maintain the practical ability (even if not authorization) to access such files.
Accordingly, with respect to this category of information, Defendants' motion is granted such that,

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if Plaintiff wishes to proceed further with this aspect of his claims, he must timely amend his
allegations to address the authorization (or lack thereof) that WestEnd gave to Defendant Hardy
relative to such files.
Additionally, with respect to Plaintiff's CFAA claim, the Court agrees with
Defendants' contention that Plaintiff's current allegations relative to "loss" are insufficient to state
a viable claim. Although Plaintiff may be correct that Defendant Hardy has refused to provide
Plaintiff with a copy of the records that she took from the WestEnd server, he does not sufficiently
set forth how such deprivation has yielded the monetary loss (based on economic damages) required
by 18 U.S.C. §§ 1030(g) and 1030(c)(4)(A)(i)(I). Nor is it apparent to the Court, on the showing
made, that the attorney's fees and costs incurred by Plaintiff in pursuing the claims asserted herein
satisfy this requirement. Accordingly, Defendant's motion is likewise granted to the extent that
Plaintiff must amend his CFAA claim relative to damages if he desires to pursue that claim any
further.
Finally, in denying Defendants' motion in part, as set forth herein, the Court
emphasizes that the instant ruling certainly does not insulate those aspects of Plaintiff's claims from
dismissal by means of a properly supported motion for summary judgment. Rather, the Court rules
on the Defendants' motion considering the information presently available to it and the principles
of law establishing the parameters of the Court's resolution of motions filed pursuant to Rule
12(b)(6).
New Orleans, Louisiana, this 2nd day of February 2015.

_________________________________
KURT D. ENGELHARDT
United States District Judge

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