Bray v. Bank of America
MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that the defendants motion to dismiss Count I of the complaint is granted. IT IS FURTHER ORDERED that all other motions are denied as moot. An order of dismissal will be filed separately. Signed by District Judge Carol E. Jackson on 2/19/2016. (KMS)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
PATRICK RYAN BRAY,
BANK OF AMERICA, N.A.,
Case No. 4:14-CV-1336-CEJ
MEMORANDUM AND ORDER
On February 2, 2014, plaintiff Patrick Bray initiated this action against
defendant Bank of America, N.A. in the United States District Court for the Middle
District of Florida.
In the complaint, plaintiff asserts a violation of the anti-tying
provisions of the Bank Holding Company Act, 12 U.S.C. § 1972(1), (Count I) and
claims of defamation (Count II), slander (Count III), and harassment (Count IV).
The case was transferred to this district on July 29, 2014.
On November 6, 2014, the court granted plaintiff’s motion to voluntarily
dismiss Count IV.
The Court also granted defendant’s motion to dismiss the
remaining counts in the complaint.
As to Count I, the court found that plaintiff
lacked both Article III and “statutory standing” to maintain a § 1972(1) claim
Bray v. Bank of America, N.A., No. 4:14-CV-1336-CEJ, 2014
WL 5783039 (E.D. Mo. Nov. 6, 2014).
On appeal, the dismissal of Counts II through IV was affirmed. However, the
court of appeals reversed the order dismissing Count I and remanded the case with
directions that the court “consider in the first instance whether [plaintiff] has
standing” to maintain a § 1972(1) claim in light of Lexmark Int'l, Inc. v. Static
Control Components, Inc., 134 S. Ct. 1377 (2014). Bray v. Bank of America, N.A.,
611 Fed. App’x 888 (8th Cir. 2015).
After remand, the parties were given the
opportunity to file supplemental briefs addressing that question, and the matter is
now ready for disposition.
According to the complaint, plaintiff, an independent financial advisor, began
managing certain assets of InteliSpend Prepaid Solutions in 2004. InteliSpend was
an entity that was wholly-owned by Maritz, LLC.
Defendant was the administrative agent for a six-bank syndicated line of
credit that was being renewed for Maritz.
As collateral for the renewed line of
credit, Maritz pledged the assets of InteliSpend. The defendant then required that
Maritz move the assets to Merrill Lynch where they would be held as collateral.
Plaintiff alleges that the move to Merrill Lynch was the result of an “explicit and
implicit tying arrangement.” Because plaintiff wanted to continue managing
InteliSpend’s assets, he was “forced” to begin working for defendant and Merrill
Lynch in March 2010.
Plaintiff alleges that “[b]y forcing [InteliSpend’s] assets to [Merrill Lynch],
the [d]efendant would now receive revenue from both the syndicated loan and fees
for being the [a]dministrative [a]gent on the loan.” The revenue stream was “the
sole reason” for “forc[ing]” InteliSpend’s assets “to move to” Merrill Lynch, a
putative tying arrangement in violation of § 1972(1). Plaintiff continued to work for
Merrill Lynch, servicing the InteliSpend account, until he resigned in October 2011.
However, prior to his resignation, plaintiff became aware that the InteliSpend
assets were going to be released from the collateral assignment and would no
longer be tethered to Merrill Lynch.
Plaintiff alleges that immediately after his resignation, defendant issued a
threat to Maritz that its loan would be put into default if Maritz allowed plaintiff to
continue to manage the InteliSpend assets. However, there is no allegation that
Maritz wanted to transfer the management of the InteliSpend assets to plaintiff
after he resigned.
Also, there is no allegation that Maritz discontinued Merrill
Lynch’s management after March 2012, when the assets were no longer
collateralized and the alleged tying arrangement ended.
Dismissal under Rule 12(b)(1) of the Federal Rules of Civil Procedure is
appropriate if the party asserting jurisdiction has failed to satisfy a threshold
jurisdictional requirement. See Herden v. United States, 726 F.3d 1042, 1046 (8th
The plaintiff bears the burden of establishing standing.
Anthony List v. Driehaus, 134 S. Ct. 2334, 2342 (2014) (party invoking federal
jurisdiction has burden of proving standing). “To establish Article III standing, a
plaintiff must show (1) an injury in fact, (2) a sufficient causal connection between
the injury and the conduct complained of, and (3) a likelihood that the injury will be
redressed by a favorable decision.”
Id. at 2341 (quotation marks and citation
“An injury sufficient to satisfy Article III must be concrete and
particularized and actual or imminent, not conjectural or hypothetical.”
(quotation marks and citation omitted). “[T]he actual-injury requirement may be
satisfied solely by the invasion of a legal right that Congress created.” Hammer,
754 F.3d at 498.
A “plaintiff generally must assert his own legal rights and interests, and
cannot rest his claim to relief on the legal rights or interests of third parties.”
Glickert v. Loop Trolley Transp. Dev. Dist., 792 F.3d 876, 881 (8th Cir. 2015)
(quotation marks and citation omitted). Further, “[a]n alleged injury cannot be too
speculative for Article III purposes.”
Wallace v. ConAgra Foods, Inc., 747 F.3d
1025, 1030 (8th Cir. 2014) (quotation marks and citation omitted); see Annex
Med., Inc. v. Burwell, 769 F.3d 578, 582 (8th Cir. 2014). A plaintiff’s “theory of
standing, which relies on a highly attenuated chain of possibilities, . . . [and] which
amounts to mere speculation . . . cannot satisfy the requirement that any injury in
fact must be fairly traceable to” a defendant’s statutory violation.
Amnesty Int'l USA, 133 S. Ct. 1138, 1148 (2013). A plaintiff therefore does not
have standing to maintain a cause of action against a defendant where “[t]he
existence of one or more of the essential elements of standing depends on the
unfettered choices made by independent actors not before the courts . . . .” Lujan,
504 U.S. at 562 (quotation marks and citation omitted). “[I]t becomes the burden
of the plaintiff to adduce facts showing that those choices have been . . . made in
such manner as to produce causation and permit redressability of injury.” Id. In
other words, “‘mere speculation’ that injury did or might occur ‘cannot satisfy the
requirement that any injury in fact must be fairly traceable to’ the alleged source.”
Wallace, 747 F.3d at 1030 (quoting Clapper, 133 S. Ct. at 1148); see also Lexmark,
134 S. Ct. at 1386–88 (finding Article III’s requirement of but-for causation
satisfied where a plaintiff’s lost sales were plausibly attributable to the defendant’s
alleged statutory violation but then proceeding to a proximate cause analysis).
“Each element must be supported in the same way as any other matter on
which the plaintiff bears the burden of proof, i.e., with the manner and degree of
evidence required at the successive stages of the litigation.” Driehaus, 134 S. Ct.
at 2342 (quotation marks and citation omitted).
When determining whether to
dismiss “a complaint for lack of standing,” a court is to “constru[e] the allegations
of the complaint, and the reasonable inferences drawn therefrom, most favorably to
the plaintiff.” Glickert, 792 F.3d at 880 (quotation marks and citations omitted).
“Where, as here, the case has progressed only to the pleading stage, general
factual allegations of injury resulting from the defendant’s conduct may suffice, for
on a motion to dismiss [a court is to] presume that general allegations embrace
those specific facts that are necessary to support the claim.” Hutterville Hutterian
Brethren, Inc. v. Sveen, 776 F.3d 547, 553 (8th Cir. 2015) (quotation marks and
III. Lexmark v. Static Control
In Lexmark v. Static Control, the Supreme Court considered a claim of false
advertising brought under the Lanham Act, 15 U.S.C. § 1125(a). 134 S. Ct. at
1383. Lexmark manufactured laser printers and the toner cartridges used in those
printers. To encourage customers to return their used cartridges instead of selling
them to a remanufacturer, Lexmark instituted the “Prebate” program that allowed
its customers to receive a discount if they returned their empty cartridges to
Lexmark. Lexmark also placed a microchip in its Prebate cartridges so that they
could not be reused.
Static Control was a supplier of toner and components used
by toner cartridge remanufacturers.
Static Control developed a microchip that
could replace the microchip in Lexmark’s Prebate cartridges, thus allowing
remanufacturers to refurbish and resell them.
Id. at 1384.
Lexmark sued Static Control for various copyright violations. Static Control
counterclaimed, asserting violations of 15 U.S.C. § 1125(a). Id. Specifically, Static
Control alleged that Lexmark had “‘purposefully mis[led] end-users’” to believe that
they were legally obligated to return the Prebate cartridges after a single use; that
Lexmark had “materially misrepresented ‘the nature, characteristics and qualities’
of Static Control’s products by falsely stating that the sale of refurbished Prebate
cartridges was illegal; and that Lexmark had led consumers and others to believe
that Static Control was engaged in illegal conduct.” Id.
The issue before the Supreme Court was whether Static Control had standing
to assert a claim based on § 1125(a), which permits recovery “in a civil action by
any person who believes that he or she is or is likely to be damaged by” a
defendant’s false advertising. 15 U.S.C. § 1125(a). Following conflicting decisions
in the lower courts, the Supreme Court granted certiorari “to decide ‘the
appropriate analytical framework for determining a party’s standing to maintain an
action for false advertising under the Lanham Act.’” Id. at 1385.
Critically, and contrary to the litigants’ position here, Lexmark’s analytical
framework is not limited to Lanham Act claims. Rather, it “applies to all statutorily
created causes of action.” Id. at 1388. In other words, though Lexmark does not
specifically address the issue of standing under § 1972(1), the decision articulates
the precise framework by which the court is to answer that question in the instant
In Lexmark, the Supreme Court did not alter the well-established test for
determining Article III standing. Id. at 1386 (citing Lujan, 504 U.S. at 560). The
Supreme Court recapitulated Lujan’s holding that, “[t]he plaintiff must have
suffered or be imminently threatened with a concrete and particularized ‘injury in
fact’ that is fairly traceable to the challenged action of the defendant and likely to
be redressed by a favorable judicial decision.” Id. (quoting Lujan, 504 U.S. at 560).
The Court found that Static Control’s “allegations of lost sales and damage to its
business reputation,” caused by Lexmark’s actions, were sufficient to “give it
standing under Article III to press its false-advertising claim.” Id. Lexmark thus
calls for continued application of the principles of Lujan and its progeny to
determine whether a plaintiff has Article III standing to maintain a claim.
Also, Lexmark announced a sea-change in the framework applicable once a
court determines that a plaintiff has successfully pleaded Article III standing. Id. at
1386–95. The Court explained that the term “prudential standing,” i.e., “statutory
standing,” is “not derived from Article III” and “is a misnomer.” Id. at 1386–87 &
n.4 (quotation marks and citations omitted). Instead, where a plaintiff asserts a
statutory cause of action and establishes Article III standing, a court must next
“ascertain, as a matter of statutory interpretation, the scope of the private remedy
created by Congress . . . and the class of persons who [can] maintain a private
damages action under that legislatively conferred cause of action.”
Id. at 1386
(quotation marks and citations omitted).
To make that determination, a court must ask whether a particular “plaintiff
has a cause of action under the statute” and must answer that question “using
traditional tools of statutory interpretation . . . .”
Id. at 1387–88.
relevant background principles” a court applies when conducting that statutory
analysis are “zone of interests and proximate causality.” Id. at 1388.
zone of interests test, litigation is foreclosed only when the plaintiff’s “‘interests are
so marginally related to or inconsistent with the purposes implicit in the statute that
it cannot reasonably be assumed that’ Congress authorized that plaintiff to sue.”
Id. at 1389 (quoting Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v.
Patchak, 132 S. Ct. 2199, 2210 (2012)). Under the proximate cause inquiry, “[t]he
question . . . is whether the harm alleged has a sufficiently close connection to the
conduct the statute prohibits.” Id. at 1390.
The precise contours of the zone of interest and proximate cause inquiries do
not warrant further explication here, however, because the Article III framework
that Lexmark reemphasizes is dispositive.
IV. Application of Lexmark
Applying Lexmark’s analytical framework, plaintiff’s § 1972(1) claim fails
because he has not established Article III standing. Even if the court were to find
that the complaint plausibly states a violation of § 1972(1) resulting from the
required transfer of the assets to Merrill Lynch, there still is no allegation that
plaintiff suffered an injury because of the violation. The complaint is bereft of facts
explicitly stating or from which it could reasonably be inferred that the § 1972(1)
violation was a but-for cause of plaintiff’s injury, i.e., the loss of his client.
Driehaus, 134 S. Ct. at 2341 (citing Lujan, 504 U.S. at 560–61).
There is no allegation that InteliSpend had a contractual obligation to
continue its broker-client relationship with plaintiff, whether before, during, or after
his employment with defendant. Therefore, for plaintiff to have Article III standing
to maintain a claim that the § 1972(1) violation was a but-for cause of his injury,
the complaint would have to set forth facts plausibly suggesting: (1) that
InteliSpend wanted to transfer its assets from Merrill Lynch to plaintiff after he
resigned and thereby reestablish the client-broker relationship; and (2) that the
§ 1972(1) tying arrangement was a reason that InteliSpend did not do so.
The complaint does not say that, and the facts as pleaded do not give rise to
a reasonable inference that that was the case. See Clapper, 133 S. Ct. at 1150
(explaining the Supreme Court’s “reluctan[ce] to endorse standing theories that
require guesswork as to how independent decisionmakers [have] exercise[d] their
judgment”). Though the complaint alleges defendant threatened Maritz, it does not
allege that Maritz communicated that information to InteliSpend, that Maritz
forbade InteliSpend from acting, and, even if Maritz did, that InteliSpend had hoped
to reestablish the broker-client relationship with plaintiff until it learned of the
See id. at 1148 (holding “reli[ance] on a highly attenuated chain of
possibilities . . . cannot satisfy the requirement that any injury in fact must be fairly
traceable to” a defendant’s conduct); Wallace, 747 F.3d at 1030 (holding “an
alleged injury cannot be too speculative for Article III purposes”).
At most the
complaint expresses plaintiff’s hope that InteliSpend would follow him after he left
defendant’s employ. But, plaintiff’s hope is not sufficient to establish a § 1972(1)
violation. See Driehaus, 134 S. Ct. at 2341 (“An injury sufficient to satisfy Article
III must be concrete and particularized . . . not conjectural or hypothetical.”
(quotation marks and citation omitted)). Finally, it is conceded that any tying
arrangement ended by March 2012.
The fact that InteliSpend did not thereafter
reestablish its relationship with plaintiff runs counter to the contention that the
tying arrangement prevented it from doing so.
For the above reasons, the court concludes that the allegations of the
complaint are insufficient to establish that the alleged § 1972(1) violation was a
but-for cause of plaintiff’s injuries, and plaintiff lacks Article III standing to pursue
Because plaintiff has not met the Article III standing threshold, it is
unnecessary to address the zone of interests inquiry described in Lexmark. Count
I, the sole remaining claim, will be dismissed.
IT IS HEREBY ORDERED that the defendant’s motion to dismiss Count I of
the complaint is granted.
IT IS FURTHER ORDERED that all other motions are denied as moot.
An order of dismissal will be filed separately.
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 19th day of February, 2016.
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