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Martin v. Scottrade, Inc.

United States District Court, M.D. Florida, Tampa Division

December 28, 2017

ANGELA LYNN MARTIN, on behalf of herself and all others similarly situated, Plaintiff,
v.
SCOTTRADE, INC., Defendant.

          ORDER

          SUSAN C. BUCKLEW, UNITED STATES DISTRICT JUDGE.

         This cause comes before this Court on three motions filed by Defendant Scottrade, Inc. (“Scottrade”): 1) Scottrade's motion to dismiss Plaintiff Angela Martin's original class action complaint (Doc. 61); 2) Scottrade's motion to transfer this case to the United States District Court for the Eastern District of Missouri (Doc. 62); and 3) Scottrade's motion to strike Martin's amended complaint class action complaint or, alternatively, motion to dismiss the amended class action complaint (Doc. 67). As explained below, Scottrade's motion to dismiss the original complaint (Doc. 61) is DENIED AS MOOT, its motion to strike or, alternatively, to dismiss the amended complaint (Doc. 67) is DENIED to the extent it seeks to strike the amended complaint and DENIED AS MOOT to the extent it seeks dismissal of the amended complaint, and its motion to transfer this case to the Eastern District of Missouri is GRANTED.

         I. Procedural and Factual Background

         This action stems from a security breach in which hackers accessed Scottrade's internal database in 2013. The hackers were purportedly able to access and export personal identifying information of Martin and other Scottrade customers. As set forth in her complaint, Martin alleges that the hack was the result of Scottrade's failure to utilize adequate security measures.

         This is the second time Martin's claims have been before this Court. On December 4, 2015, Martin filed a putative nationwide class action in this Court against Scottrade, alleging claims for breach of express contract, breach of implied contract, violations of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201, et. seq. (“FDUTPA”) and substantially similar laws of other states, bailment, and negligence. (See Martin v. Scottrade, 8:15-cv-02791-T24-EAJ, Doc. 1 (M.D. Fla. Dec. 4, 2015)). In that case, Martin and Scottrade filed a joint motion to transfer the case to the Eastern District of Missouri, asserting transfer was appropriate because Scottrade's headquarters and principal place of business were located in the Eastern District of Missouri, because the Eastern District of Missouri was a more convenient forum for the vast majority of witnesses in the case, and because there were currently three other related putative class actions alleging similar claims arising from the same alleged data breach pending in the Eastern District of Missouri. (Martin v. Scottrade, 8:15-cv-02791-T24-EAJ, Doc. 11 (M.D. Fla. Jan. 25, 2016)). This Court granted the motion and transferred the case. (Martin v. Scottrade, 8:15-cv-02791-T24-EAJ, Doc. 12 (M.D. Fla. Jan. 26, 2016)).

         After being transferred to the Eastern District of Missouri, Martin's case was consolidated with three similar putative class actions arising from the same data breach. (Duqum v. Scottrade, Inc., 4:15-cv-1537-SPM, Doc. 38 (E.D. Mo. Feb. 9, 2016)). A consolidated class action complaint was then filed. (Duqum v. Scottrade, Inc., 4:15-cv-1537-SPM, Doc. 40 (E.D. Mo. Feb. 19, 2016)). In the consolidated class action complaint, the plaintiffs sought certification of a nationwide class or, alternatively, of separate California, Florida, Missouri, and Nevada classes, and asserted claims for breach of contract, breach of implied contract, negligence, unjust enrichment/assumpsit, declaratory relief, and violations of the FDUTPA, among other claims. (Duqum v. Scottrade, Inc., 4:15-cv-1537-SPM, Doc. 40 (E.D. Mo. Feb. 19, 2016)). The Eastern District of Missouri dismissed the consolidated complaint for lack of Article III standing, finding that the plaintiffs failed to plead facts to demonstrate that they had suffered an injury in fact. (Duqum v. Scottrade, Inc., 4:15-cv-1537-SPM, Doc. 79 (E.D. Mo. July 12, 2016)). One of Martin's co-plaintiffs appealed this dismissal to the Eighth Circuit, but Martin did not join in that appeal. (See Duqum v. Scottrade, Inc., 4:15-cv-1537-SPM, Doc. 81 (E.D. Mo. Aug. 11, 2016)).

         In lieu of joining in the appeal to the Eighth Circuit, Martin re-filed her action in state court in Pasco County, Florida on March 24, 2017. (Doc. 2). Another plaintiff in the Eastern District of Missouri consolidated complaint, Stephen Hine, who is represented by the same counsel as Martin, took the same action and re-filed his case in the San Diego Superior Court. Hine's case was subsequently removed to the Southern District of California. The Southern District of California then transferred Hine's case to the Eastern District of Missouri. (See Hine v. Scottrade, Inc., 4:17-cv-02803, Doc. 24 (E.D. Mo. Dec. 1, 2017)).

         In her original complaint filed in Pasco County, Martin sought the certification of a Florida class and alleged five state law claims for breach of contract, breach of implied contract, unjust enrichment/assumpsit, declaratory relief, and violations of the FDUTPA. (Doc. 2). Scottrade removed Martin's action to this Court under the Class Action Fairness Act of 2005 and the Securities Litigation Uniform Standards Act. (Doc. 1). Martin moved to remand the case to Pasco County (Doc. 8), and Scottrade moved to dismiss Martin's complaint (Doc. 15) and to transfer the case to the Eastern District of Missouri (Doc. 16). This Court sua sponte struck Scottrade's motions to dismiss and transfer based on Local Rule 3.01(a). (Doc. 17). On July 26, 2017, the Court stayed this action pending a decision from the Eighth Circuit and terminated all pending motions. (Doc. 46). The parties had agreed that a stay was appropriate because the Eight Circuit's ruling could be determinative of the issues before this Court. (See Doc. 46).

         On August 21, 2017, the Eighth Circuit rendered its opinion. See Kuhns v. Scottrade, Inc., 868 F.3d 711 (8th Cir. 2017). The Eighth Circuit held that the plaintiffs had Article III standing to bring their claims but nevertheless affirmed the Eastern District of Missouri's “dismissal with prejudice because the Consolidated Complaint did not state claims upon which relief [could] be granted.” Id. at 714. In light of the Eight Circuit's opinion, the Court re-opened this action and directed the parties to re-file their pre-stay motions (Docs. 57, 59).

         Scottrade then filed a motion to dismiss (Doc. 61) and motion to transfer (Doc. 62). Martin gave notice that she would not be re-filing her motion to remand (Doc. 60). In response to Scottrade's motion to dismiss, Martin filed an amended complaint. (Doc. 65). In the amended complaint, Martin brought claims for breach of contract, breach of implied contract, unjust enrichment/assumpsit, violations of the FDUTPA, and fraudulent inducement. (Doc. 65). Scottrade then moved to strike the amended complaint, arguing that it was filed without consent or leave of court. (Doc. 67). Alternatively, Scottrade moved to dismiss the amended complaint, arguing that Plaintiff's claims were barred by res judicata, that Martin failed to plead actual damages as a result of the cyber-attack, that Martin's claims were foreclosed by the Eighth Circuit's decision in Kuhns, that Martin failed to allege a claim for fraudulent inducement, and that there was no personal jurisdiction over Scottrade in Florida. (Doc. 67).

         Scottrade's motion to dismiss the original complaint (Doc. 61), motion to transfer (Doc. 62), and motion to strike the amended complaint or, alternatively, dismiss the amended complaint (Doc. 67), are currently pending before this Court.

         II. Motion to Strike

         The Court first addresses Scottrade's request that the Court strike Martin's amended complaint, which was filed in response to Scottrade's motion to dismiss. Rule 15 of the Federal Rules of Civil procedure provides in pertinent part:

(a) Amendments Before Trial.
(1) Amending as a Matter of Course. A party may amend its pleading once as a ...

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