Bray v. Bank of Am.
| Decision Date | 06 November 2014 |
| Docket Number | Case No. 4:14-CV-01336-CEJ |
| Parties | PATRICK RYAN BRAY, Plaintiff, v. BANK OF AMERICA, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on defendant's motion to dismiss plaintiff's complaint for lack of standing as to Count I (tying of assets in violation of 12 U.S.C. § 1972(1)) and failure to state a claim as to Counts II (libel) and III (slander). The issues are fully briefed. Also before the Court are the plaintiff's motion to amend the complaint by including exhibits in support of his claims1 and motion to amend the complaint "to address appropriate parties."2
Plaintiff Patrick Bray was an independent financial advisor in St. Petersburg, Florida. Beginning in 2004, one of Bray's clients was InteliSpend Prepaid Solutions, for whom he managed a portfolio of initially $45 million and eventually up to $70million. The InteliSpend account represented a significant portion of Bray's book of business.
In March 2010, InteliSpend decided to partner with Bank of America, N.A. (BoA) to manage its assets. InteliSpend arranged for Bray to continue managing its assets by securing him a position with BoA. From March 2010 until October 2011, Bray worked for BoA and its corporate cousin, Merrill Lynch, as a financial advisor. BoA was the lead lender for InteliSpend's parent company, Maritz, LLC, and acted as Maritz's administrative agent for a six-bank lending syndicate line of credit. When he began his employment with Merrill Lynch, the company provided Bray with a loan secured by a promissory note in the amount of $395,805.
Bray's relationship with BoA and Merrill Lynch deteriorated over time, culminating in his decision to resign in October 2011. After Bray left BoA he hoped that Maritz would move its assets from Merrill Lynch and allow him to continue to manage those funds. However, Maritz chose to keep its assets with BoA and Merrill Lynch instead. In Count I of the complaint, Bray alleges that Maritz chose not to move its assets because BoA threatened to put its loans in default if Maritz withdrew those funds. Bray was never employed by Maritz, nor was he ever an owner, shareholder, or otherwise connected to Maritz, except through his management of some of Maritz's assets via his relationship with InteliSpend. In addition, Bray was never a direct competitor with BoA, nor was he ever a customer of BoA.
In Count II of the complaint, Bray alleges that a BoA employee sent an e-mail to one of BoA's affiliates, Blackrock, that falsely suggested that Bray was engaging in unethical behavior. After that, Bray ran into many obstacles wheneverhe attempted to work with Blackrock on behalf of Maritz. Bray also alleges that "there were numerous other cases of written defamation" by BoA's employees, but he provides no details about those incidents. In Count III, Bray alleges that BoA slandered him when it told Maritz that Bray had threatened BoA's employees. According to the complaint, this statement was made after BoA's security investigation revealed that Bray had not threatened anyone.
On January 6, 2012, after Bray failed to pay back $335,491.88 of the remaining balance on his loan, Merrill Lynch initiated an arbitration proceeding before the Financial Industry Regulatory Authority (FINRA). BoA was not a party to the arbitration. Bray raised several counterclaims in the arbitration, including that Merrill Lynch violated the Bank Holding Company Act's prohibition on "tying of assets." 12 U.S.C. § 1972(1). A hearing was held on Merrill Lynch's claim and Bray's counterclaims from November 4 to 13, 2013. Thereafter, the FINRA panel issued a directed verdict against Bray on Merrill Lynch's claim and on each of Bray's counterclaims. Bray alleges that during the arbitration BoA made a written accusation against him to the panel of FINRA arbitrators, accusing Bray of threatening the lives of BoA's employees, which Bray says was also libelous.3
On February 2, 2014, Bray initiated this action against BoA in the United States District Court for the Middle District of Florida. The case was transferred to this Court on July 29, 2014. BoA moves to dismiss the complaint, arguing that Bray lacks standing to bring a claim under 12 U.S.C. § 1972(1) and that the complaint fails to state a claim for libel or slander under Fed. R. Civ. P. 12(b)(6).
Dismissal under Rule 12(b)(1) of the Federal Rules of Civil Procedure is appropriate if the plaintiff has failed to satisfy a threshold jurisdictional requirement. See Trimble v. Asarco, Inc., 232 F.3d 946, 955 n.9 (8th Cir. 2000). Standing is a threshold jurisdictional issue. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). A dismissal for lack of subject matter jurisdiction requires that the complaint be successfully challenged on its face or on the factual truthfulness of its averments. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). In a facial attack, the court restricts itself to the face of the pleadings, and all of the factual allegations concerning jurisdiction are presumed to be true. Id. However, in a factual challenge, the court considers matters outside of the pleadings, and no presumptive truthfulness attaches to the plaintiff's allegations. Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990). Furthermore, the existence of disputed material facts does not preclude the trial court from evaluating for itself the merits of jurisdictional claims. Id. at 729. "Because at issue in a factual 12(b)(1) motion is the trial court's jurisdiction—its very power to hear the case— there is substantial authority that the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Id. The burden of proving that jurisdiction exists rests with the plaintiff. Great Rivers Habitat Alliance v. Fed. Emergency Mgmt. Agency, 615 F.3d 985, 988 (8th Cir. 2010).
The purpose of a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure is to test the legal sufficiency of the complaint. The factualallegations of a complaint are assumed true and construed in favor of the plaintiff, "even if it strikes a savvy judge that actual proof of those facts is improbable." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1 (2002)); Neitzke v. Williams, 490 U.S. 319, 327 (1989) (); Scheuer v. Rhodes, 416 U.S. 232, 236 (1974) (). The issue is not whether the plaintiff will ultimately prevail, but whether the plaintiff is entitled to present evidence in support of his claim. Id. A viable complaint must include "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Corp., 550 U.S. at 570; see also id. at 563 () "Factual allegations must be enough to raise a right to relief above the speculative level." Id. at 555.
The Bank Holding Company Act, 12 U.S.C. §§ 1971-78, prohibits banks from engaging in certain practices that "require bank customers to accept or provide some service or product or refrain from dealing with other parties in order to obtain the bank product or service they desire." Swerdloff v. Miami Nat'l Bank, 584 F.2d 54, 58 (5th Cir. 1978). A private plaintiff, as opposed to a government regulator, can bring a suit to recover treble damages for the so-called anti-tying violations, provided he qualifies as a "person who is injured in his business or property by reason of anything forbidden in [§] 1972 . . . ." 12 U.S.C. § 1975.
Bray brought his suit under § 1972(1), which prohibits a bank from engaging in certain anti-competitive tying practices—i.e., conditioning a customer's access to some of the bank's desirable products on the acceptance of certain other, unwanted products. 12 U.S.C. § 1972(1).4 To maintain a cause of action for a violation of § 1972(1), a plaintiff must set forth facts plausibly demonstrating the following four elements: "(1) that the bank imposed a tie, (2) that the practice was unusual in the banking industry, (3) that it resulted in an anticompetitive arrangement, and (4) that it benefitted the bank." Mamot Feed Lot & Trucking v. Hobson, 539 F.3d 898, 903-04 (8th Cir. 2008) (quoting Doe v. Northwest Bank Minnesota, N.A., 107 F.3d 1297, 1304 (8th Cir. 1997), overruled on other grounds by Humana Inc. v. Forsyth, 525 U.S. 299 (1999)) (numbering added). At issue here is whether Bray—a non-customer, non-competitor, former employee—has standing to sue BoA under § 1972.
"[T]he question of standing is whether the litigant is entitled to have the [federal] court decide the merits of the dispute or of particular issues." Warth v.Seldin, 422 U.S. 490, 498 (1975). "When a plaintiff alleges injury to rights conferred by statute, two separate standing-related inquiries are implicated: whether the plaintiff has Article III standing (constitutional standing) and whether the statute gives that plaintiff authority to sue (statutory standing)." Miller v. Redwood Toxicology Lab., Inc., 688 F.3d 928, 934 (8th Cir. 2012).
First, constitutional standing addresses the fact that federal courts have limited jurisdiction because "Article III, § 2, of the Constitution extends the 'judicial Power' of the United States only to 'Cases' and 'Controversies.'" Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 102 (1998). To satisfy the requirement of ...
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