Gaudet v. Nations
| Decision Date | 16 October 2020 |
| Docket Number | CIVIL ACTION NO. 19-10356-WBV-JVM SECTION: D (1) |
| Parties | DEBORAH A. GAUDET v. HOWARD L. NATIONS, APC, ET AL. |
| Court | U.S. District Court — Eastern District of Louisiana |
Before the Court is The Nicks Law Firm, LLC's and Shantrell Nicks' Motion to Dismiss and/or to Strike Class Allegations of Second Amended Class Action Complaint.1 The Motion is opposed.2 Defendants, Joseph A. Motta, Attorney at Law, APLC and Joseph A. Motta, have joined in the Motion,3 as have defendants, Howard L. Nations, Cindy L. Nations, Gregory D. Rueb, Howard L. Nations, APC, Rueb & Motta, APLC, and the Rueb Law Firm, APLC.4 After careful consideration of the parties' memoranda and the applicable law, the Motion is DENIED.
This is a class action lawsuit to recover damages for breach of contract and fraud arising from the alleged actions and inactions of certain attorneys and law firms committed while representing the interests of the proposed class members in the Deepwater Horizon Economic and Property Damage Settlement Program (the "BP Settlement Program"), in which members of the Economic and Property DamagesSettlement Class ("BP Class") made claims to be compensated for their subsistence losses caused by the Deepwater Horizon catastrophe that occurred on April 20, 2010 and the resulting oil spill.5 Deborah A. Gaudet and Ray Gaudet ("the Gaudets") claim that they were among the many people who resided along the Gulf Coast who harvested fish and seafood in the coastal area for their regular dietary consumption, but were unable to do so after the oil spill. The Gaudets assert that in June 2015, they were advised that out-of-state lawyers were hosting meetings in various locations to solicit clients to submit claims in the BP Settlement Program. The Gaudets allege that they attended one of those meetings on June 1, 2015, during which they engaged Howard L. Nations, APC, The Nicks Law Firm, LLC, Rueb & Motta, APLC, Joseph A. Motta, Attorney at Law, APLC and The Rueb Law Firm, APLC (collectively, the "Law Firm Defendants"), to file a subsistence claim for damages and signed a fee agreement.6 The Gaudets assert that they subsequently called the Law Firm Defendants several times to determine the status of their claim, and that they were repeatedly told that their claim was still pending.7 Although the Law Firm Defendants advised the Gaudets in May 2019 that their claim had been denied, the Gaudets allege that the Law Firm Defendants never filed a claim for their losses.8
As a result, the Gaudets filed a Class Action Complaint in this Court on May 13, 2019, individually and on behalf of all other similarly situated, asserting two claims - breach of contract and fraud - against the Law Firm Defendants.9 The Gaudets assert that the class action litigation is intended to protect the rights of all clients represented by the Law Firm Defendants who lost the opportunity to participate in the BP Settlement Program due to the Law Firm Defendants' breach of contract, professional malpractice and fraud.10 The Gaudets allege that the Court has jurisdiction pursuant to 28 U.S.C. § 1332(d) of the Class Action Fairness Act of 2005 ("CAFA") because: (1) there are 100 or more class members; (2) the aggregate amount in controversy exceeds $5,000,000.00, exclusive of interest and costs; and (3) at least one plaintiff and one defendant are citizens of different states.11 The Gaudets assert that the Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367.
In response to several motions to dismiss filed by the Law Firm Defendants,12 the Gaudets filed a First Amended Class Action Complaint (the "First Amended Complaint") on September 4, 2019.13 The First Amended Complaint alleges additional facts in support of the breach of contract and fraud claims, removes Ray Gaudet as a plaintiff and names nine additional plaintiffs: Timothy Butler, Dian B. Campbell, Kristine Collins, Regina Falgoust, Abraham Gamberella, Adam J. Hebert,Fred Ledet, Stanwood Moore, Jr. and James Scales, III.14 The First Amended Complaint alleges that the Law Firm Defendants failed to file a subsistence claim for Deborah Gaudet, Timothy Butler, Campbell, Collins, Hebert, Ledet and Scales, and filed incomplete claims for Falgoust, Gamberella and Moore that failed to include specific documents required by the BP Settlement Agreement.15 The Law Firm Defendants again filed motions to dismiss the First Amended Complaint,16 which resulted in a Second Amended Class Action Complaint (the "Second Amended Complaint") being filed on November 20, 2019.17 The Second Amended Complaint incorporates by reference all allegations contained in the First Amended Complaint, and names five attorneys from the Law Firm Defendants as additional defendants -Howard L. Nations, Cindy L. Nations, Shantrell Nicks, Gregory D. Rueb and Joseph A. Motta.18
The Nicks Law Firm LLC and Shantrell Nicks (collectively, the "Nicks Defendants") filed the instant Motion to Dismiss and/or to Strike Class Allegations of Second Amended Class Action Complaint on December 5, 2019, asserting that: (1) the Second Amended Complaint should be dismissed under Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction under CAFA, 28 U.S.C. § 1332(d)(11); (2) the class allegations should be stricken or dismissed pursuant to Fed. R. Civ. P. 23(d)(1)(D) and/or 12(b)(6); and (3) the Second Amended Complaint fails to state a claim againstShantrell Nicks, individually, for breach of contract or fraud and should, therefore, be dismissed pursuant to Fed. R. Civ. P. 12(b)(6).19 The Nicks Defendants assert that the Court lacks subject matter jurisdiction under CAFA because the Second Amended Complaint contains no factual allegations to support Plaintiffs' assertion that, under the "Subsistence Loss Formula," each of the alleged 215 persons that Plaintiffs' counsel purportedly represent sustained approximately $44,600.00 in subsistence damages, for a total of approximately $9,589,000.00.20 The Nicks Defendants argue that the Second Amended Complaint contains no specific factual allegations to show that any named plaintiff, or any putative class member, sustained $44,600.00 in subsistence losses.21
The Nicks Defendants further assert that the Second Amended Complaint does not contain sufficient facts to satisfy the requirements of Fed. R. Civ. P. 23(a), and that all class allegations should be stricken and dismissed under Fed. R. Civ. P. 23(d)(1)(D) and/or 12(b)(6).22 The Nicks Defendants assert that a court may strike class allegations under Fed. R. Civ. P. 23(d)(1)(D) where the complaint fails to plead the minimum facts necessary to establish the existence of a class satisfying the requirements of Fed. R. Civ. P. 23.23 The Nicks Defendants also claim that a district court may dismiss class allegations on a Fed. R. Civ. P. 12(b)(6) motion where it isfacially apparent from the pleadings that there is no ascertainable class.24 The Nicks Defendants contend that a complaint which "does little more than state in conclusory terms that the requirements of Rule 23 have been met" is insufficient to survive dismissal on a motion to strike.25 The Nicks Defendants argue that the Second Amended Complaint contains only conclusory and vague allegations regarding the Rule 23(a) criteria for class actions, which is insufficient as a matter of law to proceed as a class action.26 Even if the Court finds that the Second Amended Complaint sufficiently alleges the Rule 23(a) criteria, the Nicks Defendants assert that Plaintiffs failed to allege sufficient facts to establish that any of the grounds for Rule 23(b) are met, specifically addressing Rule 23(b)(1) and 23(b)(3) with respect to Plaintiffs' legal malpractice claim.27
Finally, the Nicks Defendants assert that the Second Amended Complaint fails to state claims for breach of contract or fraud against Shantrell Nicks, individually, under Fed. R. Civ. P. 12(b)(6).28 The Nicks Defendants point out that Plaintiffs have not alleged that Nicks personally executed any of the attorney-client contracts entered into with Plaintiffs, or that she had any personal involvement in the events at issue.29 The Nicks Defendants argue that Plaintiffs' vague and conclusory allegations regarding Nicks' involvement are insufficient to survive a motion todismiss the breach of contract claim.30 The Nicks Defendants further assert that the Second Amended Complaint also fails to allege fraud with particularity, as required under Fed. R. Civ. P. 9(b).31 The Nicks Defendants claim that the Second Amended Complaint does not contain any factual allegations to show that Nicks personally made any misrepresentations or fraudulently concealed any facts or information from Plaintiffs, as it contains no allegations regarding Nicks' conduct.32
Plaintiffs oppose the Motion, asserting that this Court undeniably has subject matter jurisdiction, that Plaintiffs have satisfied all applicable pleading standards, and that the Motion is premature.33 Plaintiffs assert that it is facially apparent from their First Amended Complaint that they have satisfied their burden of demonstrating each CAFA requirement.34 Plaintiffs claim that CAFA's 100 member requirement is easily satisfied because Plaintiffs' counsel represents approximately 215 individuals who have been harmed by Defendants in the same manner as the Plaintiffs. Plaintiffs further assert that summary reports from the Deepwater Horizon Economic Claims Center ("DHECC"), recently produced by Defendants, indicate that there are at least 2,425 clients for whom Defendants either failed to timely file subsistence claims or failed to properly include all required documents.35 Plaintiffs assert that minimal diversity is also met because each putative class representative is a citizen of Louisiana, and the Defendants are citizens of Texas,Mississippi and California.36 Plaintiffs further assert that the aggregate amount in...
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