no. 17-14194 for the eleventh circuit carol wilding, et...

No. 17-14194

IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

CAROL WILDING, et al.,

Appellants/Plaintiffs,

vs.

DNC SERVICES CORPORATION, et al.,

Appellees/Defendants.

Appeal from the United States District Court for the Southern District of Florida

APPELLANTS/PLAINTIFFS’ REPLY BRIEF

Cullin O’Brien, Esq. Cullin O’Brien Law, P.A. 6541 NE 21st Way Ft. Lauderdale, FL 33308 [email protected] Tel: (561) 676-6370 Fax: (561) 320-0285 Antonino G. Hernandez, Esq. Antonino G. Hernandez, P.A. 4 SE 1st St. 2nd Floor Miami, FL 33131 Tel: (305) 282-3698 Fax: (786) 513-7748 [email protected] Counsel for Appellants/Plaintiffs

Jared H. Beck, Esq. Elizabeth Lee Beck, Esq. Beverly Virues, Esq. Beck & Lee Trial Lawyers 12485 SW 137th Ave., Suite 205 Miami, FL 33186 Tel: (305) 234-2060 Fax: (786) 664-3334 [email protected] [email protected] [email protected] Counsel for Appellants/Plaintiffs

Case: 17-14194 Date Filed: 04/19/2018 Page: 1 of 50

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CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT

To the best of undersigned’s knowledge, the following is a complete list of the

trial judges, attorneys, persons, associations of persons, firms, partnerships, or

corporations that have or may have an interest in the outcome of this case, including

subsidiaries, conglomerates, affiliates, and parent corporations, including any publicly

held company that owns 10% or more of the party’s stock, and other identifiable legal

entities related to a party.

1. Kimberly Alberts, Plaintiff/Appellant.

2. Connie Anderson, Plaintiff/Appellant.

3. Antonino Hernandez, P.A., trial and appellate counsel for

Plaintiffs/Appellants.

4. Kayite Ashcraft, Plaintiff/Appellant.

5. Lester John Bates, Plaintiff/Appellant.

6. Beck & Lee P.A., trial and appellate counsel for Plaintiffs/Appellants.

7. Elizabeth Lee Beck, trial and appellate counsel for


8. Jared H. Beck, trial and appellate counsel for Plaintiffs/Appellants.

9. Mark Bedard, Plaintiff/Appellant.

10. Nancy Berners-Lee, Plaintiff/Appellant.


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11. Jen Betterley, Plaintiff/Appellant.

12. Harris Bierhoff, Plaintiff/Appellant.

13. Timothy Bingen, Plaintiff/Appellant.

14. Stephanie Birdsong, Plaintiff/Appellant.

15. Marianne Blair, Plaintiff/Appellant.

16. Richard Booker, Plaintiff/Appellant.

17. Barbara Bowen, Plaintiff/Appellant.

18. Richard Boylan, Plaintiff/Appellant.

19. Matthew Joseph Brady, Plaintiff/Appellant.

20. Kyle Braund, Plaintiff/Appellant.

21. Chris Bubb, Plaintiff/Appellant.

22. Tristan Burgener, Plaintiff/Appellant.

23. D.J. Buschini, Plaintiff/Appellant.

24. Bruce Busto, Plaintiff/Appellant.

25. Joseph Callan, Plaintiff/Appellant.

26. Mark R. Caramanica, counsel for Defendants/Appellees.

27. Patricia Cassidy, Plaintiff/Appellant.

28. Susan Catterall, Plaintiff/Appellant.

29. Vincent Cauchi, Plaintiff/Appellant.

30. Cynthia Chan, Plaintiff/Appellant.


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31. Torsha Childs, Plaintiff/Appellant.

32. Karlie Cole, Plaintiff/Appellant.

33. Aimee Coleman, Plaintiff/Appellant.

34. Rosalie Consiglio, Plaintiff/Appellant.

35. Daniel Cooper, Plaintiff/Appellant.

36. Yalonda Dye Cooper, Plaintiff/Appellant.

37. Suzanne Cork, Plaintiff/Appellant.

38. Rhiannon Crandall, Plaintiff/Appellant.

39. William Crandall, Plaintiff/Appellant.

40. Sharon Crawford, Plaintiff/Appellant.

41. Phyllis Criddle, Plaintiff/Appellant.

42. John Crowe, Plaintiff/Appellant.

43. Cullin O’Brien Law P.A., trial and appellate counsel for


44. Craig Richard Currier, Plaintiff/Appellant.

45. Catherine Cyko, Plaintiff/Appellant.

46. Heather Dade, Plaintiff/Appellant.

47. Alecia Davis, Plaintiff/Appellant.

48. Sherry Davis, Plaintiff/Appellant.

49. Tammy Deitch-Coulter, Plaintiff/Appellant.


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50. DNC Services Corporation, Defendant/Appellee.

51. Kathleen Dodge, Plaintiff/Appellant.

52. Diane Emily Dreyfus, Plaintiff/Appellant.

53. Dan Ellis Dudley, Plaintiff/Appellant.

54. Amalie Duvall, Plaintiff/Appellant.

55. Marc. E. Elias, counsel for Defendants/Appellees.

56. Eliza Feero, Plaintiff/Appellant.

57. Erik Michael Ferragut, Plaintiff/Appellant.

58. Elizabeth Figueroa, Plaintiff/Appellant.

59. Diana Flores , Plaintiff/Appellant.

60. William Scott Franz, Plaintiff/Appellant.

61. Susan Frisbie, Plaintiff/Appellant.

62. Elisabeth C. Frost, counsel for Defendants/Appellees.

63. Erik Furreboe, Plaintiff/Appellant.

64. Lisa Gale, Plaintiff/Appellant.

65. Laura Genna, Plaintiff/Appellant.

66. Ryan Ghan, Plaintiff/Appellant.

67. Joseph Gleason, Plaintiff/Appellant.

68. Jeffrey Goldberg, Plaintiff/Appellant.

69. Estrella Gonzalez, Plaintiff/Appellant.


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70. Jose Alberto Gonzalez, Plaintiff/Appellant.

71. Prabu Gopalakrishnan, Plaintiff/Appellant.

72. Luke Grim, Plaintiff/Appellant.

73. Lucille Grooms, Plaintiff/Appellant.

74. Anthony Grudin, Plaintiff/Appellant.

75. Lauren Hale, Plaintiff/Appellant.

76. Julie Hampton, Plaintiff/Appellant.

77. Zachary James Haney, Plaintiff/Appellant.

78. Gayle Ann Harrod, Plaintiff/Appellant.

79. Jarath Hemphill, Plaintiff/Appellant.

80. Antonino Hernandez, trial and appellate counsel for


81. Kirsten Hoffman, Plaintiff/Appellant.

82. Rebecca Hohm, Plaintiff/Appellant.

83. Kim Marie Houle, Plaintiff/Appellant.

84. Stephen Houseknecht, Plaintiff/Appellant.

85. Lewis Humiston, Plaintiff/Appellant.

86. United States Magistrate Judge Patrick M. Hunt.

87. Kirsten Hurst, Plaintiff/Appellant.

88. Benjamin Ilarraza, Plaintiff/Appellant.


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89. Bakh Inamov, Plaintiff/Appellant.

90. Danielle Ingrassia, Plaintiff/Appellant.

91. Carolyn Jacobson, Plaintiff/Appellant.

92. Tukoi Jarrett, Plaintiff/Appellant.

93. Timo Johann, Plaintiff/Appellant.

94. Tamara Johnston, Plaintiff/Appellant.

95. Heather Jordan, Plaintiff/Appellant.

96. Rana Kangas-Kent, Plaintiff/Appellant.

97. Brandy Kincaid, Plaintiff/Appellant.

98. Amber Rae Knowlton, Plaintiff/Appellant.

99. Theda Larson-Wright, Plaintiff/Appellant.

100. Peggy Lew, Plaintiff/Appellant.

101. Melissa Liang, Plaintiff/Appellant.

102. Sarah Lopez, Plaintiff/Appellant.

103. Ruthzee Louijeune, counsel for Defendants/Appellees.

104. Edwin Lugo, Plaintiff/Appellant.

105. John Lynch, Plaintiff/Appellant.

106. Sean Lynch, Plaintiff/Appellant.

107. Christine Maiurano, Plaintiff/Appellant.

108. Melissa Marcotte, Plaintiff/Appellant.


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109. Raymond Maxwell, Plaintiff/Appellant.

110. Lisa Anne Meneely, Plaintiff/Appellant.

111. David Meuli, Plaintiff/Appellant.

112. Greta Mickey, Plaintiff/Appellant.

113. Carl Miller, Plaintiff/Appellant.

114. Teri Monaco, Plaintiff/Appellant.

115. Angela Monson, Plaintiff/Appellant.

116. Brittany R. Musick, Plaintiff/Appellant.

117. Cullin O'Brien, trial and appellate counsel for Plaintiff/Appellant

118. Daniel O'Meara, Plaintiff/Appellant.

119. Andrew Orrino, Plaintiff/Appellant.

120. Perkins Coie LLP, counsel for Defendants/Appellees.

121. Steve Philipp, Plaintiff/Appellant.

122. Susan Phillips, Plaintiff/Appellant.

123. Jane Ellen Plattner, Plaintiff/Appellant.

124. Alette Prichett, Plaintiff/Appellant.

125. Kenneth Puckett, Plaintiff/Appellant.

126. David Pulaski, Plaintiff/Appellant.

127. David Pyles, Plaintiff/Appellant.

128. Valerie Elyse Rasch, Plaintiff/Appellant.


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129. Michael Reed, Plaintiff/Appellant.

130. Susan Reed, Plaintiff/Appellant.

131. Daniel Reynolds, Plaintiff/Appellant.

132. Stanley Rifken, Plaintiff/Appellant.

133. Diane Robinson, Plaintiff/Appellant.

134. Rachel Roderick, Plaintiff/Appellant.

135. Jeff Rogers, Plaintiff/Appellant.

136. Dominic Ronzani, Plaintiff/Appellant.

137. Susan Lynne Roppel, Plaintiff/Appellant.

138. Andrew Rosseau, Plaintiff/Appellant.

139. Deborah Wasserman Schultz, Defendant/Appellee.

140. Lisa Settle, Plaintiff/Appellant.

141. Julianna Seymour, Plaintiff/Appellant.

142. Matthew Shaw, Plaintiff/Appellant.

143. Zeke Shaw, Plaintiff/Appellant.

144. James Simon, Plaintiff/Appellant.

145. Susan Singer, Plaintiff/Appellant.

146. Erika Sitzer, Plaintiff/Appellant.

147. Brenda Lee Smith, Plaintiff/Appellant.

148. Elesha Snyder, Plaintiff/Appellant.


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149. Erich Sparks, Plaintiff/Appellant.

150. Bruce Spiva, counsel for Defendants/Appellees.

151. Marlowe St. Cloud Primack, Plaintiff/Appellant.

152. Alaina Talboy, Plaintiff/Appellant.

153. Felicia Michelle Taylor, Plaintiff/Appellant.

154. Brett Teegardin, Plaintiff/Appellant.

155. Thomas & Locicero PL, counsel for Defendants/Appellees.

156. George Thomas, Plaintiff/Appellant.

157. Gregg Thomas, counsel for Defendants/Appellees.

158. Laura Michelle Vaughn, Plaintiff/Appellant.

159. Carlos Villamar, Plaintiff/Appellant.

160. Beverly Virues, trial and appellate counsel for Plaintiff/Appellant.

161. Rick Washik, Plaintiff/Appellant.

162. Duffy Robert Weiss, Plaintiff/Appellant.

163. Mary Jasmine Welch, Plaintiff/Appellant.

164. Rebecca White-Hayes, Plaintiff/Appellant.

165. Carol Wilding, Plaintiff/Appellant.

166. Catherine Willott, Plaintiff/Appellant.

167. AnnMarie Wilson, Plaintiff/Appellant.

168. Graham Wilson, counsel for Defendants/Appellees.


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169. Gregory Witkowski, Plaintiff/Appellant.

170. Emma Young, Plaintiff/Appellant.

171. United States District Court Senior Judge William J. Zloch.


TABLE OF CONTENTS

Page

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I. SUMMARY OF THE ARGUMENT ON REPLY ......................................... 1

II. ARGUMENT ................................................................................................... 5

A. As In Any Fraud Case, Loss Of Money Means There Is A Redressable Injury-In-Fact .................................................................... 5

B. As Alleged, Plaintiffs’ Injuries Are “Fairly Traceable” To Defendants’ Conduct ........................................................................... 12

C. All Of Defendants’ Arguments Under Federal Rule Of Civil Procedure 12(b)(6) Are Barred Under Rule 12(g)(2), Because They Failed To Make Such Arguments In Their Initial Motion To Dismiss ........................................................................................... 17

D. Alternatively, Plaintiffs State Viable Causes Of Action And This Court Should Deny Defendants’ Rule 12(b)(6) Motion ............. 18

1. Plaintiffs State A Cause Of Action For Fraud .......................... 19

2. Plaintiffs State A Cause of Action For Negligent Misrepresentation ...................................................................... 20

3. Plaintiffs Properly Allege A Violation Of The District Of Columbia Consumer Protection Procedures Act ...................... 21

4. Plaintiffs Properly Allege Unjust Enrichment .......................... 23

5. Plaintiffs Properly Allege Breach of Fiduciary Duty ............... 24

6. Plaintiffs Properly Allege Negligence ...................................... 27

III. CONCLUSION .............................................................................................. 28

IV. CERTIFICATE OF COMPLIANCE ............................................................ 31


TABLE OF CITATIONS

Page

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CASES

Barbour v. Haley, 471 F.3d 1222 (11th Cir. 2006) ................................................. 12

Beck v. Test Masters Educ. Servs., Inc., 994 F. Supp. 2d 90 (D.D.C. 2013) .............................................................................................................. 21

Bennett v. Spear, 520 U.S. 154 (1997) .................................................................... 12

Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008) ...................................................................................... 18

Buckley v. Valeo, 424 U.S. 1 (1976) .......................................................................... 2

Butler v. Yusem, 44 So. 3d 102 (Fla. 2010) ............................................................. 19

Calvetti v. Antcliff, 346 F. Supp. 2d 92 (D.D.C. 2004) ............................................ 23

Cardenas v. Smith, 733 F.2d 909 (D.C. Cir. 1984) ................................................... 6

Church of Scientology Int’l v. Eli Lilly Co. 848 F. Supp. 1018 (D.D.C. 1994) .............................................................................................................. 24

Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) ...............2, 8

Czeremcha v. Int’l Ass’n of Machinists & Aerospace Workers, 724 F.2d 1552 (11th Cir. 1984) .................................................................................... 16

Dependable Component Supply, Inc. v. Carrefour Informatique Tremblant, Inc., 572 Fed. Appx. 796 (11th Cir. July 18, 2014) .................... 16

DiMaio v. Democratic National Committee, 520 F.3d 1299 (11th Cir. 2008) .............................................................................................................. 16

Firestone v. Firestone, 76 F.3d 1205 (D.C. Cir. 1996) ........................................... 24


Page

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Focus on the Family v. Pinellas Suncoast Transit Auth., 344 F.3d 1263 (11th Cir. 2003) ............................................................................................. 12

Fort Lincoln Civic Ass’n, Inc. v. Fort Lincoln New Town Corp., 944 A.2d 1055 (D.C. 2008) ........................................................................................... 21

Friends of Tilden Park, Inc. v. District of Columbia, 802 A.2d 1201 (D.C. 2002) .................................................................................................... 25

GCL, LLC v. Schwab, No. 11–04593, 2012 WL 4321972 (E.D. Pa. Sept. 21, 2012) ........................................................................................................ 17

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) ..................................................... 9

Grayson v. K-Mart Corp., 79 F3d 1086 (11th Cir. 1996) ....................................... 15

Harding v. Harrington, 484 N.Y.S.2d 571 (N.Y. Sup. Ct. 1984) ........................... 27

Illinois ex rel. Madigan v. Telemarketing Associates, Inc., 538 U.S. 600 (2003) ...........................................................................................................7, 8

In re Application of Roosevelt, 160 N.Y.S.2d 747 (N.Y. Sup. Ct. 1957) ................ 25

In re Micron Technology, 875 F.3d 1091 (Fed. Cir. 2017) ..................................... 18

Kemp v. Eiland, 139 F. Supp. 3d 329 (D.D.C. 2015) .............................................. 24

Klay v. Humana, Inc., 382 F.3d 1241 (11th Cir. 2004) ........................................... 18

Lee v. Bos, 874 F. Supp. 2d 3 (D.D.C. 2012) .......................................................... 25

Millennium Square Residential Ass’n v. 2200 M Street LLC, 952 F. Supp. 2d 234 (D.D.C. 2013) .................................................................................... 24

Modern Mgmt. Co. v. Wilson, 997 A.2d 37 (D.C. 2010) ......................................... 21

Natural Resources Defense Council, Inc. v. FDA, 710 F.3d 71 (2d Cir. 2013) ................................................................................................................ 6


Page

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NFA Mutual Ins. Co v. Kelly, 274 Ark. 281 (Ark. 1981) .......................................... 4

Paterson v. Deeb, 472 So. 2d 1210 (Fla. 1st DCA 1985) ........................................ 27

Randolph v. ING Life Ins. & Annuity Co., 973 A.2d 702 (D.C. 2009) .................... 26

Remijas v. Neiman Marcus Group, LLC, 794 F.3d 688 (2d Cir. 2015) .................. 28

Riley v. Nat’l Fed. Of Blind of N.C., Inc., 487 U.S. 781 (1988) ................................ 7

Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) ................................................... 12

S.E.C. v. DiBella, 587 F.3d 553 (2d Cir. 2009) ....................................................... 26

Shelby Cty. v. Holder, 570 U.S. 2 (2013) .................................................................. 8

Silver v. Digges, Case No. 6:06-CV-290-Orl-19DAB, 2006 WL 2024935 (M.D. Fla. July 17, 2006) .............................................................................. 23

Speedmark Transp., Inc. v. Mui, 778 F. Supp. 2d 439 (S.D.N.Y. 2011) ................. 18

Stalley ex rel. U.S. v. Orlando Regional Healthcare Sys., Inc., 524 F.3d 1229 (11th Cir. 2008) ............................................................................. 15, 16

Stargel v. Suntrust Banks, Inc., 2014 WL 12538887 (N.D. Ga. June 7, 2014) .............................................................................................................. 16

Teltschik v. Williams & Jensen, PLLC, 683 F. Supp. 2d 33 (D.D.C. 2010) ............ 24

Timmons v. Twin Cities Area New Party, 520 U.S. 351 (1997) ................................ 2

Town of Poughkeepsie v. Espie, 402 F. Supp. 2d 443 (S.D.N.Y. 2005) ................. 26

U.S. v. Halloran, 821 F.3d 321 (2d Cir. 2016) ........................................................ 25

U.S. v. Margiotta, 688 F.2d 108 (2d Cir. 1982)....................................................... 25

U.S. v. Rybicki, 354 F.3d 124 (2d Cir. 2003) ............................................................. 9


Page

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U.S. v. Smith, 985 F. Supp. 2d 547 (S.D.N.Y. 2014) .................................... 9, 25, 27

U.S. v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S. 669 (1973)......................................................................................... 6

Va. State Board of Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S. 748 (1976).....................................................................................4, 9

Wallerstein v. Hospital Corp. of America, 573 So. 2d 9 (Fla. 4th DCA 1990) .............................................................................................................. 20

Ward v. Atl. Sec. Bank, 777 So. 2d 1144 (Fla. 3d DCA 2001) ................................ 19

Wernsing v. Thompson, 423 F.3d 732 (7th Cir. 2005) .............................................. 6

Williams v. Purdue Pharma Co., 297 F. Supp. 2d 171 (D.D.C. 2003) ................... 23

Wis. Ave. Associates, Inc. v. 2720 Wis. Ave. Co-op Ass’n, Inc. 441, A.2d 956 (D.C. 1982) ............................................................................................. 25

STATUTES

DC Code - § 28–3901 ................................................................................. 21, 22, 23

DC Code - § 28-3901(a)(2) ...................................................................................... 22

DC Code - § 28-3901(a)(7) ...................................................................................... 22

DC Code - § 28-3904 ............................................................................................... 21

DC Code - § 28-3905(k) .......................................................................................... 22

OTHER AUTHORITIES

Lisa Jane Disch, Tyranny of the Two-Party System 4 (Columbia University Press, 2002) .................................................................................... 2

Prosser, Law of Torts, p. 685 (4th Ed. 1971) ............................................................. 4


Page

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RULES

Fed. R. Civ. P. 12(b)(1) ............................................................................................ 17

Fed. R. Civ. P. 12(b)(5) ............................................................................................ 17

Fed. R. Civ. P. 12(b)(6) ..................................................................................... 17, 18

Fed. R. Civ. P. 12(g)(2) ..................................................................................... 17, 18

Fed. R. Civ. P. 12(h)(2) ............................................................................................ 17

Fed. R. Civ. P. 12(h)(3) ............................................................................................ 17

Fed. R. Civ. P. 15(a)(1) ............................................................................................ 16

CONSTITUTIONAL PROVISIONS

U.S. Const. Amend I. ....................................................................................... passim

U.S. Const. Amend IX. .............................................................................................. 3

U.S. Const. Amend VII. ............................................................................................. 3

U.S. Const. Art. III .................................................................................... 5, 6, 12, 15


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I. SUMMARY OF THE ARGUMENT ON REPLY

Stripped to its essence, the Brief for Defendants (“DNC Br.”) is little more than

a thinly disguised plea by the Democratic National Committee and its former

chairperson, Congresswoman Deborah “Debbie” Wasserman Schultz, for this Court to

afford political parties an extraordinary blanket of immunity under the First

Amendment. To wit, Defendants want this Court to construe the First Amendment so

broadly as to immunize a political party and its leadership from any legal liability

arising from the making of false representations in connection with the receipt of

money – or what the common law regards as fraud. Indeed, the brief’s “Summary of

Argument” alone contains no fewer than three separate references to the “First

Amendment rights” of political parties: (1) imploring the Court not to “inject[] itself

into factional disputes within a political party”; (2) invoking “central and critical First

Amendment rights” nullifying any legal claim that the DNC was biased against Bernie

Sanders in the 2016 presidential primary; and (3) characterizing the continued

maintenance of this lawsuit, brought by donors to the Sanders campaign based on the

DNC’s false statements and omissions leading the public to believe that it was

conducting the primary in a neutral manner, as “threaten[ing] serious injury to the

DNC’s – and to all political parties’ – well-established First Amendment rights.”

DNC Br. at 10-12.


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Perhaps it is not surprising that Defendants expect that the First Amendment

trumps common-law fraud when it comes to political parties. After all, the nation’s

two major parties – despite the fact that political parties are mentioned nowhere in the

Constitution – have managed to amass a singular position of power within the present-

day U.S. system of government. Their supremacy has been both recognized and

facilitated by the nation’s courts, encapsulated in Supreme Court decisions such as

Timmons v. Twin Cities Area New Party, 520 U.S. 351 (1997), which characterized

the two-party system as an indelible feature of American democracy even though

parties – much less a system based on only two of them – are alien to the

constitutional framework.1 The two major parties are also the principal beneficiaries

of the Supreme Court’s line of election cases crescendoing in Citizens United v.

Federal Election Commission,2 the legal framework which authorizes unlimited

donations and spending in U.S. elections on First Amendment grounds.

As scrupulous designers of a republican system of government based on

separate, coordinate branches tasked with preventing amalgamation of power in any

1 See generally Lisa Jane Disch, Tyranny of the Two-Party System 4 (Columbia University Press, 2002).

2 558 U.S. 310 (2010). At the beginning of this line of precedent stands Buckley v. Valeo, 424 U.S. 1 (1976).


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one situs, it is difficult to imagine the Founding Fathers would not be taken aback by

the extent to which political power has become concentrated in the two private

organizations that manage the major political parties, i.e., the Democratic National

Committee and the Republican National Committee.3

But the Founding Fathers were not just political architects. They were also men

steeped in legal learning. Out of 55 framers of the Constitution, 32 were lawyers.4

Indeed, as practitioners of the common law prevailing in England’s colonies, they

ensured the primacy of our common-law rights by making them also a matter of

constitutional right – for example, in the Seventh Amendment’s preservation of the

right of trial by jury for “Suits at common law,” as well as the Ninth Amendment’s

dictate that, “The enumeration in the Constitution, of certain rights, shall not be

construed to deny or disparage others retained by the people.”5 Surely, these bearers

3 Formally speaking, the DNC is a not-for-profit corporation, DNC Services Corporation, organized under the laws of the District of Columbia, where it is also headquartered. The RNC is an unincorporated association also headquartered in D.C.

4 How Many of the Founding Fathers Were Lawyers?, State Bar of Michigan Blog (July 4, 2011), available at http://sbmblog.typepad.com/sbm-blog/2011/07/how-many-of-the-founding-fathers-were-lawyers.html

5 See generally Jeffrey Jackson, Blackstone’s Ninth Amendment: A Historical Common Law Baseline for the Interpretation of Unenumerated Rights, 62 Okla. L. Rev. 167 (Winter 2010), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1694665, for an exhaustive


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and protectors of the common-law tradition would be shocked at Defendants’ present

claim before this Court that the First Amendment should be read to immunize the

DNC and its leader from liability for fraudulent conduct. The right to bring suit

sounding in fraud or deceit is an ancient common-law right;6 yet Defendants posit the

First Amendment as a barrier to this right. There is simply no precedent for such an

entitlement against the right to sue for fraud; to the contrary, the Supreme Court has

declared that, “Untruthful speech, commercial or otherwise, has never been protected

for its own sake.” Va. State Board of Pharmacy v. Va. Citizens Consumer Council,

Inc., 425 U.S. 748, 771 (1976).

Once the volume is turned down on their outlandish First Amendment claims,

Defendants’ brief is reduced not just to nitpicking, but baldly misrepresenting, what is

explicitly set forth in the operative complaint, as well as citing improper filings and

arguments that in no way should be part of the Court’s analysis in this appeal. The

premise of this case is straightforward. Plaintiffs and the proposed Class members

collectively paid millions of dollars in campaign donations based on a false belief that

examination of the manifold ways in which the Constitution incorporated rights then existing at common law.

6 “The action for deceit is of very ancient origin with one form of the action known to exist as early as 1201.” NFA Mutual Ins. Co v. Kelly, 274 Ark. 281, 283 (Ark. 1981) (citing Prosser, Law of Torts, p. 685 (4th ed. 1971)).


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was perpetuated by the DNC and its former chairwoman through a series of false

statements and omissions: namely, that the DNC was running (as it was obligated to

do under its own Charter) a presidential primary process that was fair and evenhanded

between the candidates and had not determined that one of the candidates, Hillary

Clinton, would be the nominee even before the race started. Absent the prominent

political actors involved, this would be readily characterized as a large-scale “Ponzi

scheme,” and there would be no serious doubt regarding Plaintiffs’ Article III standing

to pursue their claims. The fact, however, that the actors are drawn from the political

rather than business sector does not alter the analysis in any respect. Despite all of

their pleas for the Court to cloak their actions in a blanket of First Amendment

immunity, Defendants fail to identify one shred of precedent that could be read to

shield a political party from liability for defrauding people of money.

As discussed in further detail below, Defendants’ arguments on appeal should

be rejected, and this Court should reverse the district court’s Final Order of Dismissal.

II. ARGUMENT

A. As In Any Fraud Case, Loss Of Money Means There Is A Redressable Injury-In-Fact

In this case, the injury-in-fact prong of Article III standing is in the tangible

form of millions of dollars donated to the Sanders campaign by donors who believed

he was competing in a fair primary, and did not have the benefit of documents


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ultimately released into the public domain by Guccifer 2.0 and WikiLeaks (and,

eventually, public confessions and admissions by DNC officers) showing that the

DNC actively supported Hillary Clinton from the beginning. That the loss of money –

even what the Supreme Court has termed an “identifiable trifle” – constitutes an injury

sufficient to confer Article III standing is a bedrock principle of federal civil litigation.

See U.S. v. Students Challenging Regulatory Agency Procedures (SCRAP), 412 U.S.

669, 689 n.4 (1973); Natural Resources Defense Council, Inc. v. FDA, 710 F.3d 71,

85 (2d Cir. 2013) (“Even a small financial loss is an injury for purposes of Article III

standing.”). So too is the principle that an injury reducible to money damages presents

a redressable injury sufficient to confer standing under Article III. See Wernsing v.

Thompson, 423 F.3d 732, 745 (7th Cir. 2005) (“injuries compensable in monetary

damages can always be redressed by a court judgment”); Cardenas v. Smith, 733 F.2d

909, 914 (D.C. Cir. 1984) (“A damages claim, by definition, presents a means to

redress an injury.”). The idea that millions of dollars in donations paid to the

campaign of a candidate running in a rigged election cannot comprise a redressable

injury sufficient for those defrauded to bring suit is a canard fabricated on the basis of

two mythological readings of the First Amendment conjured by the DNC and its

former chairwoman.

The first myth is the notion that “voluntary contributions to an organization” –

especially, political organizations – are somehow excluded from the category of


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monetary loss qualifying as injury-in-fact, by virtue of the First Amendment or some

other unspecified immunity attaching to the organization. See DNC Br. at 15, 17.

The Supreme Court already settled most of this issue, against Defendants’ position, in

Illinois ex rel. Madigan v. Telemarketing Associates, Inc., 538 U.S. 600 (2003) – a

case their brief conspicuously fails to even mention, let alone address. Madigan

rejected a group of telemarketers’ First Amendment defense to claims they made false

representations in connection with the solicitation of charitable contributions for a

non-profit corporation providing aid to Vietnam veterans. On behalf of a unanimous

Court, Justice Ginsburg wrote, “Just as government may seek to inform the public and

prevent fraud through . . . disclosure requirements, so it may ‘vigorously enforce. .

.antifraud laws to prohibit professional fundraisers from obtaining money on false

pretenses or by making false statements.’” Id. at 623-24 (quoting Riley v. Nat’l Fed.

Of Blind of N.C., Inc., 487 U.S. 781, 800 (1988)). First Amendment considerations,

Justice Ginsburg went on to write, “do not disarm States from assuring that their

residents are positioned to make informed choices about their charitable giving.

Consistent with our precedent and the First Amendment, States may maintain fraud

actions when fundraisers make false or misleading representations designed to deceive

donors about how their donations will be used.” Madigan, 538 U.S. at 624.


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If the general issue of whether donors or “voluntary contributors” 7 may sue for

fraud is definitively settled by Madigan (a case mentioned neither in the Final Order

of Dismissal, nor in Defendants’ briefing), then what do Defendants really mean when

they state, “[T]he contributions upon which Plaintiffs rely to assert their claims were

entirely voluntary. And to hold that such voluntary contributions to an organization

could give rise to a cognizable injury-in-fact would open the door to practically

limitless litigation. . .,” (DNC Br. at 17)? If Defendants are suggesting that political

organizations be afforded a broad immunity from suits in connection with the

acceptance of campaign contributions, then this would be an extraordinary grant of

immunity, one without any support in precedent and, indeed, directly contrary to what

the Supreme Court has repeatedly stated about the scope of the First Amendment. See

Va. State Board of Pharm. v. Va. Citizens Consumer Council, Inc., 425 U.S. 748, 771

7 Defendants’ characterization of the Plaintiffs’ campaign donations as “voluntary contributions” – seeking shelter in the language of charitable contributions, at issue in Madigan – is itself unwarranted. Through its jurisprudence, the Supreme Court has recognized that contributing financially to campaigns is a quintessential form of political activity, entitled to at least as much protection – if not more so – than voting itself. Compare Citizens United v. Federal Election Commission, 558 U.S. 310 (2010) with Shelby Cty. v. Holder, 570 U.S. 2 (2013). Viewed in this light, Defendants’ First Amendment chest-thumping is all the more ironic because it is Plaintiffs who have attempted to exercise their First Amendment rights through campaign contributions, as recognized and elevated in Citizens United, but it is Defendants who have unconscionably interfered with the exercise of those rights via their rigging of the Democratic primary for their candidate of choice.


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(1976) (“Untruthful speech, commercial or otherwise, has never been protected for its

own sake”); Gertz v. Robert Welch, Inc., 418 U.S. 323, 340 (1974) (“[T]here is no

constitutional value in false statements of fact. Neither the intentional lie nor the

careless error materially advances society’s interest in ‘uninhibited, robust, and wide-

open’ debate on public issues.”); accord U.S. v. Smith, 985 F. Supp. 2d 547, 605-606

(S.D.N.Y. 2014) (“Just because this alleged quid pro quo arrangement involved

political-party officials, they are not entitled to immunity for their actions under the

guise of protected speech.”); U.S. v. Rybicki, 354 F.3d 124, 150 (2d Cir. 2003) (“The

conduct at issue—fraud—enjoys no constitutional protection, whether the deceitful

scheme is aimed at a victim’s property or at his intangible right to honest services.”).

No case remotely stands for the proposition that political parties or entities otherwise

engaged in political activity enjoy sweeping immunity from fraud claims owing to the

First Amendment, and Defendants have not even pretended to cite such a case.8

8 In the court below, Defendants characterized Plaintiffs’ claims as attempting to enforce a non-actionable “political promise,” while citing cases in which such claims were deemed non-justiciable. See Defendants’ Motion To Dismiss Plaintiffs’ First Amended Complaint And Memorandum Of Law In Support (App. 44 at 14); Hearing Tr. (Ap. 25, 2017) (App. 54 at 35-36). Subsequent to the district court’s refusal to “accept this trivialization of the DNC’s governing principles” (App. 62 at 16), i.e., its charter obligation to conduct the presidential nominating process in an impartial and evenhanded manner, Defendants have receded from this position on appeal, although they mistakenly still believe that cases involving the promises of political candidates bear any relevance. See DNC Br. at 15 n.8.


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The second myth relied upon by Defendants is the proposition that trying to

hold the DNC and its leadership legally accountable for fraud violates the DNC’s First

Amendment rights by dragging matters of “internal party policy” into court. See DNC

Br. at 18-19, 24-25. The notion that an organization’s First Amendment associational

rights could trump the rights of fraud victims to obtain redress for their injuries is

absurd, and again seems to depend upon some special status that political parties

believe themselves to be due under the American legal system. So too is the concept

that this action concerns strictly a matter of “internal Democratic Party policy,”

especially given that the 2016 primaries have long been concluded, leaving monetary

relief as the only feasible relief. To the extent Defendants are complaining that a

money judgment would disrupt their ability to continue conducting business as usual –

that is, in the manner which gave rise to the fraud on Plaintiffs – this is one of the very

points of such judgments, that is, to deter future fraudulent conduct. The assertion that

subjecting Defendants to the very possibility of a money judgment would be

unacceptable from a First Amendment perspective is nothing more than a declaration

that political parties and their leaders should exist above and apart from the legal

norms which apply to every other type of private organization in the United States.


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The special legal status aspired to by Defendants appears even more rarefied in

light of their assertion that a class consisting of registered Democrats cannot bring a

claim for breach of fiduciary duty against the DNC and its former chairwoman. While

Defendants repeatedly invoke their “associational” rights under the First Amendment

as a barrier to any manner of liability for fraud, in the next breath they assert that the

leadership of this association bears absolutely no responsibility to its members. See

DNC Br. at 31. If Defendants are right about this, then the Democratic Party and the

Republican Party are paradoxical “associations” indeed – organizations in which there

are zero bonds of loyalty or responsibility running from the leadership to the rank and

file. If Defendants are right, and the case law recognizing fiduciary duties owed by a

political party’s leadership to its membership are antiquated “outliers” (DNC Br. at

32) – vestiges of a time when the American political party was a site of genuine

democratic engagement rather than the nexus between corporate campaign financing

and the nation’s elite political class, then Defendants have put the lie to another

portion of the Democratic Party’s own Charter – the very first paragraph of the

Charter’s Preamble:

We, the Democrats of the United States of America, united in common purpose, hereby rededicate ourselves to the principles which have historically sustained our Party. Recognizing that the vitality of the Nation’s political institutions has been the foundation of its enduring strength, we acknowledge that a political party which wishes to lead must listen to those it would lead, a party which asks for the people’s trust must prove that it trusts the people and a party which hopes to call


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forth the best the Nation can achieve must embody the best of the Nation’s heritage and traditions.9 B. Plaintiffs’ Injuries Are “Fairly Traceable” To Defendants’

Conduct

Defendants’ claim that Plaintiffs cannot satisfy the causation prong of Article

III standing depends on a disingenuous reading of the operative complaint as well as

the legal standard governing the analysis. This Circuit has made it clear that “. . . for

purposes of satisfying Article III's causation requirement, ‘we are concerned with

something less than the concept of ‘proximate cause.’’” Barbour v. Haley, 471 F.3d

1222,1226 (11th Cir. 2006) (quoting Focus on the Family v. Pinellas Suncoast Transit

Auth., 344 F.3d 1263, 1273 (11th Cir. 2003)) (“[E]ven harms that flow indirectly from

the action in question can be said to be ‘fairly traceable’ to that action for standing

purposes.”). Indeed, “‘at [the pleading] stage of the litigation,’ the plaintiffs’ ‘burden

... of alleging that their injury is ‘fairly traceable’ to’ the challenged act ‘is relatively

modest.’” Rothstein v. UBS AG, 708 F.3d 82, 92 (2d Cir. 2013) (quoting Bennett v.

Spear, 520 U.S. 154, 171 (1997)).

Here, the operative complaint provides considerable detail regarding affirmative

misrepresentations as well as omissions by Defendants regarding their conduct of the

9 https://s3.amazonaws.com/uploads.democrats.org/DNC_Charter_Bylaws_3.12.18.pdf


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2016 primaries and, critically, whether Defendants were fulfilling their charter

obligation to maintain a posture of “impartiality and evenhandedness” with respect to

the slate of candidates for the nomination. The one action by the donor Plaintiffs

alleged to have been taken in conjunction with their claims is the donation of money –

either to the Sanders campaign or the DNC itself – and then, with respect to each of

the fraud-related claims, the complaint alleges that the donor Plaintiffs “relied on

Defendants’ misrepresentations and omissions to their injury” or the same resulted in

injury to the Plaintiffs. SAC10 (App. 70-2, ¶¶ 188, 195, 204 & 210).11 Any honest,

fair, and reasonable reading of the Complaint shows an injury-in-fact to Plaintiffs –

payment and loss of money – that is “fairly traceable” to conduct by Defendants, i.e.,

false representations and omissions about the primary process that induced the

Plaintiffs to pay the money.

It is also important to recognize that Plaintiffs’ claims were pled on the basis of

a small segment of internal DNC documents showing the DNC’s bias and concealed

from Plaintiffs’ view until released into the public domain by Guccifer 2.0 beginning

June 15, 2016. See (App. 70-2, ¶ 165). At the time of pleading their claims, Plaintiffs

10 “SAC” refers to the Second Amended Complaint.

11 “App.” refers to Appellants/Plaintiffs’ Appendix.


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did not have the benefit of the much larger WikiLeaks release of internal DNC

documents showing how Defendants rigged the primary process for Hillary Clinton.

See, e.g., Jim Newell, “Hacked Email Appears to Show That Donna Brazile Fed

Clinton Campaign a Town Hall Question,” Slate (Oct. 11, 2016) (available at

http://www.slate.com/blogs/the_slatest/2016/10/11/donna_brazile_may_have_fed_clin

ton_campaign_town_hall_question.html ); Eric Wemple, “WikiLeaks emails: Pro-

Clinton CNN commentator pre-checked op-ed with DNC,” Washington Post (July 24,

2016) (available at https://www.washingtonpost.com/blogs/erik-

wemple/wp/2016/07/24/wikileaks-emails-pro-clinton-cnn-political-commentator-pre-

checked-op-ed-with-dnc/?utm_term=.e560a39cb2cb). Nor, for that matter, did

Plaintiffs have the benefit of public admissions by DNC officials, including an

extensive published account by former interim chair Donna Brazile – who succeeded

Defendant Wasserman Schultz when the latter resigned shortly after this lawsuit was

filed – expounding on how the process was secretly rigged for Hillary Clinton. See

Donna Brazile, “Inside Hillary Clinton’s Secret Takeover of the DNC,” Politico (Nov.

2, 2017) (available at https://www.politico.com/magazine/story/2017/11/02/clinton-

brazile-hacks-2016-215774); see also Sophie Tatum, “Asked if DNC system was

rigged in Clinton’s favor, Warren says ‘yes,’” CNN (Nov. 3, 2017) (available at

https://www.cnn.com/2017/11/02/politics/elizabeth-warren-dnc-rigged/index.html).


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The very small quantity of available information on which Plaintiffs could

predicate their claims in contrast to what has become public record since the time of

pleading underscores the district court’s error in entering a Final Order of Dismissal

without affording the Plaintiffs even one opportunity to amend the allegations in

response to its desire for more factual content on the nature of the

misrepresentations/omissions and how Plaintiffs relied upon them. See Final Order of

Dismissal (App. 62, at 14).

Defendants defend this error by misconstruing the district court’s order and the

applicable case law. See DNC Br. at 34-37. First of all, the language “without

prejudice” at the end of the order refers not to the ability or opportunity for Plaintiffs

to amend, but to the fact that dismissal was granted on subject-matter jurisdiction

grounds (i.e., Article III standing) rather than on the merits. See Grayson v. K-Mart

Corp., 79 F3d 1086, 1094 n.7 (11th Cir. 1996) (“A dismissal ‘without prejudice’

refers to the fact that the dismissal is not on the merits, not whether the dismissal is

final and appealable.”); Stalley ex rel. U.S. v. Orlando Regional Healthcare Sys., Inc.,

524 F.3d 1229, 1232 (11th Cir. 2008) (“A dismissal for lack of subject matter

jurisdiction is not a judgment on the merits and is entered without prejudice.”). What

is instead relevant to the analysis is the fact that the order was styled a “Final Order of

Dismissal,” which precluded Plaintiffs from amending their complaint. See


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Dependable Component Supply, Inc. v. Carrefour Informatique Tremblant, Inc., 572

Fed. Appx. 796, 800 & n.3 (11th Cir. July 18, 2014).

Thus, DiMaio v. Democratic National Committee, 520 F.3d 1299 (11th Cir.

2008) is inapposite because in that case, the plaintiff was still free to amend his

complaint, as a matter of right, under Federal Rule of Civil Procedure 15(a)(1) at the

time the district court dismissed the complaint. See id. at 1303. Here, by contrast, the

Plaintiffs had already amended under Rule 15(a)(1) on non-substantive grounds at the

time the district entered its Final Order of Dismissal. And by styling its order as a

Final Order of Dismissal, the district court made it clear that dismissal of the

complaint constituted dismissal of the action, meaning that any further motions

seeking leave to amend would be inappropriate. See Stargel v. Suntrust Banks, Inc.,

2014 WL 12538887, *4 (N.D. Ga. June 7, 2014) (discussing Czeremcha v. Int’l Ass’n

of Machinists & Aerospace Workers, 724 F.2d 1552, 1556 & n.6 (11th Cir. 1984)).12

12 To the extent Defendants suggest, based on the alleged social media posts of two class members as well as “the political climate during the relevant time period” that it would have been futile to allow Plaintiffs an opportunity to amend (see DNC Br. at 22 & n.10), they misconstrue the nature of the district court’s analysis, which explicitly construed Defendants’ request for dismissal as a “facial attack,” and thus properly confined its analysis to the four corners of the complaint. See Stalley, 524 F.3d at 1232-33 (cited in Final Order of Dismissal (App. 62 at 8-9)).


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C. All Of Defendants’ Arguments Under Federal Rule Of Civil Procedure 12(b)(6) Are Barred Under Rule 12(g)(2), Because They Failed To Make Such Arguments In Their Initial Motion To Dismiss

Federal Rule of Civil Procedure 12(g)(2) provides: “Except as provided in Rule

12(h)(2) or (3), a party that makes a motion under this rule must not make another

motion under this rule raising a defense or objection that was available to the party but

omitted from its earlier motion.” Here, Defendants originally moved under Rule

12(b)(5) to dismiss the case based on insufficient service of process. Defendants’

Motion to Dismiss for Insufficient Service of Process (App. 9). That original motion

failed to raise any defenses or objections under Rule 12(b)(6), which Defendants then

attempted to include within their second motion to dismiss alongside their arguments

for dismissal on lack of subject-matter jurisdiction/standing grounds under Rule

12(b)(1). While the Rule 12(b)(1) grounds were properly considered by the district

court given the Rule 12(h)(3)13 exception in Rule 12(g)(2), the Rule 12(b)(6)

arguments were appropriately not reached given the bar under Rule 12(g)(2). See

GCL, LLC v. Schwab, No. 11–04593, 2012 WL 4321972, at *3-*4 (E.D. Pa. Sept. 21,

2012) (declining to consider arguments in the defendant’s second motion to dismiss

13 Rule 12(h)(3) does not apply to motions asserting a lack of subject-matter jurisdiction.


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that were available but not asserted in its first motion to dismiss); In re Micron

Technology, 875 F.3d 1091, 1097 (Fed. Cir. 2017) (purpose of Rule 12(g)(2) bar on

successive motion to dismiss raising grounds previously available to defendant is “to

consolidate defenses and to promote early resolution of such issues”).

Accordingly, this Court is barred from considering Defendants’ Rule 12(b)(6)

arguments, which were never properly presented to the lower court in compliance

with Rule 12(g)(2).

D. Alternatively, Plaintiffs State Viable Causes Of Action And This Court Should Deny Defendants’ Rule 12(b)(6) Motion

Even if this Court were to examine Defendants’ procedurally barred Rule

12(b)(6) arguments, this Court should reject them as completely lacking in merit.

Because it is premature to determine which state law(s) will apply until a later stage of

the proceedings, see, e.g., Speedmark Transp., Inc. v. Mui, 778 F. Supp. 2d 439, 444

(S.D.N.Y. 2011); Klay v. Humana, Inc., 382 F.3d 1241, 1262 (11th Cir. 2004),14

Plaintiffs will assume that either Florida or District of Columbia law applies.

14 Abrogated in part on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008).


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1. Plaintiffs State A Cause Of Action For Fraud

The elements of Plaintiffs’ fraud claims are (1) a false statement concerning a

material fact; (2) the representor’s knowledge that the representation is false; (3) an

intention that the representation induce another to act on it; and (4) consequent injury

by the party acting in reliance on the representation. Butler v. Yusem, 44 So. 3d 102,

105 (Fla. 2010). “Fraud also includes the intentional omission of a material fact.”

Ward v. Atl. Sec. Bank, 777 So. 2d 1144, 1146 (Fla. 3d DCA 2001). Plaintiffs

properly allege such fraud.

Plaintiffs allege that Defendants made specific statements, besides the

representations in the DNC charter, that they were ensuring an evenhanded and

impartial Democratic Party presidential nominating process. (App. 70-2, ¶¶ 156-161).

Plaintiffs allege these statements with exacting particularity, quoting from public

statements Defendants themselves made. (Id.).

Plaintiffs allege that these representations were false since Defendants were

secretly conspiring against Senator Sanders’ presidential campaign, through various

means. (App. 70-2, ¶¶ 162-171). Plaintiffs also allege that Defendants omitted these

material facts from Plaintiffs, showing that Defendants were conspiring against Bernie

Sanders’ campaign. (App. 70-2, ¶¶ 162-171). Moreover, Plaintiffs allege that they

were materially harmed by the fraudulent statements and omissions by donating


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money to the DNC and donating money to Bernie Sanders’ campaign. (App. 70-2, ¶¶

2-171, 185-190).

2. Plaintiffs State A Cause of Action For Negligent Misrepresentation

The elements of Plaintiffs’ negligent misrepresentation claims are:

(1) misrepresentation of a material fact; (2) the representor must either know of the misrepresentation, must make the representation without knowledge as to its truth or falsity, or must make the representation under circumstances in which he ought to have known of its falsity; (3) the representor must intend that the representation induce another to act on it; (4) injury must result to the party acting in justifiable reliance on the misrepresentation.

Wallerstein v. Hospital Corp. of America, 573 So. 2d 9, 10 (Fla. 4th DCA 1990).

Plaintiffs allege that that Defendants made specific false statements and

omissions, besides the representations in the DNC charter, that they were ensuring a

fair and equitable Democratic Party presidential nominating process. (App. 70-2, ¶¶

156-161). Plaintiffs allege that Defendants knew and ought to have known the

statements/omissions were false since they were secretly conspiring against Senator

Sanders’ presidential campaign, through various means. (App. 70-2, ¶¶ 162-171).

Plaintiffs allege that Defendants intended that the Plaintiffs would rely on these

misrepresentations, which caused Plaintiffs harm. (App. 70-2, ¶¶ 2-171, 191-197).


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3. Plaintiffs Properly Allege A Violation Of The District Of Columbia Consumer Protection Procedures Act

The purpose of the D.C. Consumer Protection Procedures Act (“CPPA”) is “to

protect consumers from a broad spectrum of unscrupulous practices by merchants,

therefore the statute should be read broadly to assure that the purposes are carried

out.” Modern Mgmt. Co. v. Wilson, 997 A.2d 37, 52 (D.C. 2010). In order to achieve

its aims, the statute “eliminate[s] the requirement of proving certain elements such as

intent to deceive and scienter.” Saucier, 64 A.3d at 442 (quoting Fort Lincoln Civic

Ass’n, Inc. v. Fort Lincoln New Town Corp., 944 A.2d 1055, 1073 n.20 (D.C. 2008))

see also Beck v. Test Masters Educ. Servs., Inc., 994 F. Supp. 2d 90, 96 (D.D.C. 2013)

(“[T]he thrust of the D.C. CPPA is much more liberal than common law fraud

claims—no proof of intent is required by the alleging party. Plaintiff must only

establish that defendant made a misrepresentation—affirmative or implied—to

prevail.”).

Section 28-3904 of the D.C. Code defines various acts as violations of the

CPPA, stating that “It shall be a violation of this chapter, whether or not any

consumer is in fact misled, deceived or damaged thereby, for any person to [. . .] (e)

misrepresent as to a material fact which has a tendency to mislead; . . . (f) fail to state

a material fact if such failure tends to mislead.” § 28-3904, DC Stat. (2016) (emphasis

added). Here, Plaintiffs in the Sanders Donor Class and DNC Donor Class have pled


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violations of these CPPA provisions, by virtue of Defendants’ false representations

that they were neutral with respect to the Democratic candidates, as well as their

failure to disclose the fact they were conspiring behind the scenes in pursuit of

Secretary Clinton’s nomination over Senator Sanders. (App. 70-2, ¶¶ 156-184 ,198-

205).

The CPPA also specifies that a “consumer” may file suit to obtain relief,

including damages and injunctive relieve. § 28-3905(k), DC Stat. (2016). Under the

statute, a “consumer” is defined to include any person who “would purchase . . . or

receive consumer goods or services,” while “goods and services” is defined to mean

“any and all parts of the economic output of society, at any stage or related or

necessary point in the economic process, and includes consumer credit, franchises,

business opportunities, real estate transactions, and consumer services of all types.”

§§ 28-3901(a)(2), 28-3901(a)(7). Here, all Plaintiffs who made their donation

payments through ActBlue (which likely comprises the vast majority of Sanders

Donor Class and DNC Donor Class members) qualify as “consumers” entitled to bring

suit under the CPPA because ActBlue charges a 3.95% fee for “processing” services

on each donation. (App. 70-2, ¶¶ 155).

Moreover, and contrary to Defendants’ suggestion, the CPPA does not require a

defendant to be in privity with the plaintiff to be liable under the statute; in other

words, the defendant need not be the direct seller of the goods or services to be sued.


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Rather, and consistent with its consumer protection purpose, CPPA liability extends to

any “person connected with the supply side of a consumer transaction.” Calvetti v.

Antcliff, 346 F. Supp. 2d 92, 104 (D.D.C. 2004) (citation and quotation omitted).

Here, as the persons responsible for overseeing the Democratic primary process,

Defendants were “connected with” the supply side of those consumer transactions

resulting in donations to the DNC itself as well as to the various Democratic primary

candidates in each race, including Senator Sanders. Cf. Williams v. Purdue Pharma

Co., 297 F. Supp. 2d 171, 174-75 (D.D.C. 2003) (ruling that plaintiffs could sue drug

manufacturers under the CPPA even though they purchased the drugs through

intermediary pharmacies).

4. Plaintiffs Properly Allege Unjust Enrichment

“In Florida, the essential elements of a claim for unjust enrichment are: (1) a

benefit conferred upon Defendant by Plaintiff, (2) Defendant’s appreciation of the

benefit, and (3) Defendant’s acceptance and retention of the benefit under

circumstances that make it inequitable for him to retain it without paying the value

thereof.” Silver v. Digges, Case No. 6:06-CV-290-Orl-19DAB, 2006 WL 2024935, at

*2 (M.D. Fla. July 17, 2006).

That is exactly what Plaintiffs allege here: Plaintiffs conferred a benefit on

Defendants, including through monetary donations to the DNC; that Defendants


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retained these benefits; and that it would inequitable for Defendants to retain the

benefits. (App. 70-2 ¶¶ 207-11).

5. Plaintiffs Properly Allege Breach of Fiduciary Duty

“District of Columbia law has deliberately left the definition of ‘fiduciary

relationship’ flexible, so that the relationship may change to fit new circumstances in

which a special relationship of trust may properly be implied.” Kemp v. Eiland, 139

F. Supp. 3d 329, 343 (D.D.C. 2015). “Whether a fiduciary relationship exists is a

fact-intensive question, and the fact-finder must consider ‘the nature of the

relationship, the promises made, the type of services or advice given and the

legitimate expectations of the parties.’” Millennium Square Residential Ass’n v. 2200

M Street LLC, 952 F. Supp. 2d 234, 248-49 (D.D.C. 2013) (quoting Firestone v.

Firestone, 76 F.3d 1205, 1211 (D.C. Cir. 1996)). Indeed, at least one court in the

District of Columbia has commented on the “broad[]” construction of what constitutes

a fiduciary relationship under District of Columbia law:

[A] fiduciary relationship is one founded upon trust or confidence reposed by one person in the integrity and fidelity of another. It is said that the relationship exists in all cases in which influence has been acquired and betrayed. The rule embraces both technical fiduciary relations and those informal relations which exist whenever one man trusts in, and relies upon, another . . . .

Teltschik v. Williams & Jensen, PLLC, 683 F. Supp. 2d 33, 46 (D.D.C. 2010).


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Furthermore, under District of Columbia law, “[o]fficers and directors of a

corporation owe a fiduciary duty to the corporation and to its shareholders, which

requires them to act in good faith in managing the affairs of the corporation.” Wis.

Ave. Associates, Inc. v. 2720 Wis. Ave. Co-op Ass’n, Inc. 441, A.2d 956, 962 (D.C.

1982). “The directors’ fiduciary obligation to a corporation means that they must

manage the corporation solely in its best interest, not as a vehicle for promoting their

personal beliefs or causes.” Friends of Tilden Park, Inc. v. District of Columbia, 802

A.2d 1201, 1210 (D.C. 2002).

Other courts have recognized the existence of a fiduciary duty running from an

executive officer of a political party to the party and its members. See U.S. v.

Halloran, 821 F.3d 321, 339-40 (2d Cir. 2016); see also U.S. v. Margiotta, 688 F.2d

108, 124 (2d Cir. 1982) (“(t)he county committee (of the Republican Party) and its

chairman are . . . trustees of party interests for the registered voters of the party in that

county.” (quoting In re Application of Roosevelt, 160 N.Y.S.2d 747, 749-50 (N.Y.

Sup. Ct. 1957) (internal quotation marks omitted)).

Under District of Columbia law, “A breach of fiduciary duty claim requires a

plaintiff to allege that the defendant: 1) owed plaintiff a fiduciary duty; 2) the

defendant breached that duty; and 3) the breach proximately caused injury to the

plaintiff.” Lee v. Bos, 874 F. Supp. 2d 3, 7 (D.D.C. 2012) (citation and internal

quotation marks omitted). “Such a claim ‘is not actionable unless injury accrues to


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the beneficiary or the fiduciary profits thereby.’” Id. (quoting Randolph v. ING Life

Ins. & Annuity Co., 973 A.2d 702, 709 (D.C. 2009)).

Plaintiffs in the Democratic Party Class have properly alleged the existence of

such a fiduciary relationship between themselves and Defendants, and Defendants’

breach of those duties.

Plaintiffs allege that they have donated money directly to Defendants, donated

money to Bernie Sanders’ campaign, and retained registration in the Democratic

Party. (App. 70-2, ¶¶ 2-152). Plaintiffs allege that, by virtue of giving Defendants

their money and trust in this manner, Defendants owed Plaintiffs a duty to ensure a

fair and equitable Democratic party presidential nominee process and to not secretly

conspire against Senator Sanders’ presidential campaign. These facts, along with the

resulting injuries to Plaintiffs and corresponding illicit benefits accruing to

Defendants, are sufficient to allege the existence of a fiduciary relationship. Cf e.g.,

S.E.C. v. DiBella, 587 F.3d 553, 564-565 (2d Cir. 2009) (“It would be a strange result

indeed to conclude that a publicly elected official who controls billions of dollars of

public moneys set aside for the benefit of thousands of public employees in

Connecticut is not a fiduciary of those funds and has no fiduciary duties as to those

funds.”); Town of Poughkeepsie v. Espie, 402 F. Supp. 2d 443, 453-454 (S.D.N.Y.

2005) (“Neither the existence of a dominant political party nor widespread corruption,

if such there were, relieves a Town Board member of his or her fiduciary duty to


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exercise due diligence in authorizing and conducting municipal business.”); U.S. v.

Smith, 985 F. Supp. 2d 547, 602 (S.D.N.Y. 2014) (“It is certainly conceivable that

once Tabone became the Vice Chairman of the Queens County Republican Party,

regardless of whether he took an oath of office or signed a contractual agreement, he

had a duty, based on the nature of the relationship itself, to act for the benefit of those

entities and individuals within the scope of the relation.”); Harding v. Harrington, 484

N.Y.S.2d 571, 573 (N.Y. Sup. Ct. 1984) (“Members of a political party have a right to

nominate presidential electors irrespective of their leaders’ view or the success of their

leaders’ political negotiations; and party officials who have the power to call such a

meeting necessary to such purpose have a fiduciary obligation to party members to do

so.”).

6. Plaintiffs Properly Allege Negligence

“The elements of a negligence cause of action are duty, breach, causation, and

damages. Paterson v. Deeb, 472 So. 2d 1210, 1214 (Fla. 1st DCA 1985), review

denied, 484 So.2d 8 (Fla. 1986).

Plaintiffs in the DNC Donor Class plausibly allege negligence as a result of

Defendants’ data leaks. Plaintiffs allege that Defendants had a duty to safeguard

Plaintiffs’ personal information, breached that duty by not creating adequate

safeguard, and Plaintiffs were harmed by the leaking of their private and confidential

information. (App. 70-2, ¶¶ 218-228). The merits of Plaintiffs’ claims are self-


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evident. See, e.g., Remijas v. Neiman Marcus Group, LLC, 794 F.3d 688, 697-698 (2d

Cir. 2015) (“It is enough at this stage of the litigation that Neiman Marcus admitted

that 350,000 cards might have been exposed and that it contacted members of the

class to tell them they were at risk. Those admissions and actions by the store

adequately raise the plaintiffs’ right to relief above the speculative level.”).

III. CONCLUSION

For the foregoing reasons and the reasons stated in Plaintiffs’ opening brief,

Plaintiffs respectfully ask this Court to reverse and vacate the District Court’s final

judgment.

~signature page follows~


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ANTONINO G. HERNANDEZ, P.A. ANTONINO G. HERNANDEZ Florida Bar No. 164828 4 SE 1st St., 2nd Floor Miami, Florida 33131 Telephone: (305) 282-3698 Facsimile: (786) 513-7748 [email protected] Counsel for Plaintiffs/Appellants


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SERVICE LIST Carol Wilding et al. v. DNC Services Corporation et al.

11th Circuit Court of Appeals Case No. 17-14194

Bruce Spiva, Esq. Marc Erik Elias, Esq. Graham M. Wilson, Esq. Ruthzee Louijeune, Esq. Perkins Coie LLP 700 13th St., NW, Suite 600 Washington DC, 20005 Ph: (202) 654-6203 Fax: (202) 654-6211 [email protected] [email protected] [email protected] [email protected] Counsel for Appellees/Defendants DNC Services Corporation d/b/a DNC or Democratic National Committee and Deborah Wasserman Schultz


no. 17-14194 for the eleventh circuit carol wilding, et...

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