Seidle v. National Ass'n of Securities Dealers

• Decision Date: 31 October 2002
• Docket Number: No. 8:02-CV-1067-T-24TBM.,8:02-CV-1067-T-24TBM.
• Citation: 248 F.Supp.2d 1140
• Parties: Edward A.H. SIEDLE and the Siedle Directory of Securities Dealers, Inc. Plaintiffs, v. NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., Defendant.
• Court: U.S. District Court — Middle District of Florida

248 F.Supp.2d 1140

Edward A.H. SIEDLE and the Siedle Directory of Securities Dealers, Inc. Plaintiffs, v. NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC., Defendant.

No. 8:02-CV-1067-T-24TBM.

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

October 31, 2002.

Order Denying Reconsideration January 8, 2003.

Craig P. Clendinen, John Calhoun Bales, Bales Weinstein, P.A., Tampa, FL, Richard M. Gelb, Daniel C. Hohler, Gelb & Gelb, LLP, Boston, MA, for Edward A.H. Siedle, Siedle Directory of Securities Dealers, Inc.

Mark A. Brown, Marty J. Solomon, Carlton Fields, P.A., Tampa, FL, Carla B. Oakley, Brobeck, Phleger & Harrison, San Francisco, CA, for National Association of Securities Dealers, Inc.

ORDER

BUCKLEW, District Judge.

This cause comes before the Court for consideration of Defendant's Motion to Dismiss (Doc. No. 9, filed July 15, 2002 Plaintiffs filed an Opposition thereto (Doc. No. 10, filed July 25, 2002). This Court also considers Plaintiffs' Motion for Leave to Amend the Amended Complaint (Doc. No. 25, filed October 3, 2002). Defendant filed an Opposition thereto (Doc. No. 27, filed October 15, 2002). This Court held oral argument on the motions on October 22, 2002.

I. Background

This case was brought by Plaintiff Edward A. Siedle, a former Securities and Exchange Commission attorney and a former associate counsel and director of compliance for a "major money management company." Plaintiff Siedle further states that he is president of Benchmark Financial Services, Inc., which is a broker-dealer registered with the National Association of Securities Dealers, Inc., and that he published The Siedle Directory Securities Dealers ("The Siedle Directory") up until May 30, 2002.

In the Amended Complaint, Plaintiff Siedle added his company, The Siedle Directory of Securities Dealers, Inc. ("Siedle Company") as a plaintiff. Plaintiffs allege that Plaintiff Siedle assigned his copyright to the Siedle Company and that the Siedle Company now publishes The Siedle Directory.

The Siedle Directory contains material copied from the Central Registration Depository ("CRD"). Plaintiffs allege that the NASD and/or its affiliates maintain and include the CRD as part of the NASD's Public Disclosure Program ("PDP"), which is made available through a web site operated by NASD and/or its affiliates (the "PDP web site"). Plaintiffs further allege that NASD and others administer the CRD under the oversight of the United States Securities and Exchange Commission and that the PDP was created pursuant to the statutory mandate of 15 U.S.C. § 78o-3(i).

Plaintiffs plead that the PDP web site includes a "click agreement" to which users must agree in order to request and obtain CRD information. Plaintiffs attach a copy of the "original click agreement" as Exhibit B to the Amended Complaint (the "First Click Agreement"). The First Click Agreement addresses restrictions on the commercial use of the contents of the PDP web site.

In December 2001, Plaintiff Siedle hired a computer programmer to create a program so that he could download the content found on the PDP web site in its entirety, and, in February 2002, the programmer copied content from the PDP web site for the purpose of Plaintiffs' reproduction and commercialization of that content in The Siedle Directory. Plaintiffs sell hard copies of The Siedle Directory for approximately $850 per copy.

Plaintiffs allege that NASD revised its click agreement on or about March 12, 2002 and a copy of this agreement (the "Second Click Agreement") is attached to the Amended Complaint as Exhibit C. The Second Click Agreement also addresses restrictions on the commercial use of the contents of the PDP web site.

Plaintiffs seek a declaration that they are entitled under the First Click Agreement to publish and sell The Siedle Directory, which admittedly contains content copied from the PDP web site without interference from NASD. Count I, Amended Complaint. Plaintiffs likewise seek a declaration that they are entitled to copy and republish the PDP web site content for commercial resale under the Second Click Agreement. Count II, Amended Complaint. In Counts III and IV, Plaintiffs seek orders from this Court temporarily and permanently enjoining NASD from interfering with their continued copying of PDP web site content, their reproduction of that content is The Siedle Directory, and their commercial sale of The Siedle Directory.

Defendant now moves to dismiss the Amended Complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P., arguing that each of Plaintiffs' claims fails as a matter of law because Plaintiffs have agreed and must agree to comply with the First and Second Click Agreements, which prohibit the copying and republication of the PDP web site content for commercial sale. Plaintiffs contend that click agreements should be held unenforceable and, if held enforceable, the First Click Agreement on its face does not limit the Plaintiffs' access and use of the PDP information. Plaintiffs also argue that even if the First Click Agreement and the Second Click Agreement could be construed as valid, they are unenforceable because they are against public policy and violate the NASD's federal mandate.

The Plaintiffs move this Court for leave to amend the Amended Complaint to add a count based upon a written request for information from NASD using a form downloaded from the web site, which information the NASD declined to provide. Defendant opposes the motion arguing that the amendment would be futile as the new claim is fatally defective.

II. Motion to Dismiss

In deciding a motion to dismiss, the district court is required to view the complaint in the light most favorable to the plaintiff. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). A complaint should not be dismissed for failure to state a cause of action "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Bank v. Pitt, 928 F.2d 1108, 1111-12 (11th Cir. 1991) (citing Conley v. Gibson, 355 U.S. 41 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). The Federal Rules of Civil Procedure "do not require a claimant to set out in detail the facts upon which he bases his claim." Conley, 355 U.S. at 47, 78 S.Ct. 99. All that is required is "a short and plain statement of the claim." Fed.R.Civ.P. 8(a)(2). The standard on a 12(b)(6) motion is not whether the plaintiff will ultimately prevail in his or her theories, but whether the allegations are sufficient to allow the plaintiff to conduct discovery in an attempt to prove the allegations. Jackam v. Hospital Corp. of Am. Mideast, Ltd., 800 F.2d 1577, 1579 (11th Cir. 1986). The Federal Rules of Civil Procedure have adopted this "simplified pleading" approach because of "the liberal opportunity for discovery and other pretrial procedures ... to disclose more precisely the basis of both claim and defense Conley, 355 U.S. at 48, 78 S.Ct. 99. The purpose of notice pleading is to reach a decision on the merits and to avoid turning pleading into "a game of skill in which one misstep by counsel may be decisive to the outcome." Id.

It is well established that, where a cause of action stems from a contract that is attached to the complaint as an exhibit, the contract is considered part of the record for a Rule 12(b)(6) motion to dismiss. If the contract demonstrates unambiguously that the plaintiffs relief is not merited, the claims should be dismissed. Jacksonville Newspaper Printing Pressmen & Assistants' Union No. 57 v. Florida Pub'g Co., 340 F.Supp. 993, 995 (M.D.Fla.(granting defendant's motion to dismiss "where plaintiffs cause of action arises out of a contract which is attached to his complaint as an exhibit, and where such contract shows unambiguously on its face that the relief prayed for is not merited"), aff d, 468 F.2d 824 (5th Cir.1972), cert. denied, 411 U.S. 906, 93 S.Ct. 1531, 36 L.Ed.2d 196 (1973); Breckenridge Creste Apartments, Ltd. v. Citicorp Mortg., Inc., 826 F.Supp. 460, 464 (N.D.Ga.1993)(granting defendant's motion to dismiss "when the contract is attached to the complaint as an exhibit, dismissal is appropriate if the court finds that no possible relief can be granted under any construction of the contract sued upon"), affd, 21 F.3d 1126 (11th Cir.1994).

This Court must first address the Plaintiffs' argument that the validity of click agreements is a matter of first impression in Florida and that they should not be enforced in this case. This Court is unpersuaded by Plaintiffs' argument against the validity of click agreements. There are any number of cases from other state and federal courts expressly and implicitly approving the validity of click agreements. See, e.g., Moore v. Microsoft Corp., 293 A.D.2d 587, 741 N.Y.S.2d 91 (2002); Caspi v. Microsoft Network, L.L.C., 323 N.J.Super. 118, 732 A.2d 528 (App.Div.), cert. denied, 162 N.J. 199, 743 A.2d 851 (1999); Hotmail Corp. v. Van$ Money Pie Inc., 47 U.S.P.Q.2d 1020, 1025, 1998 WL 388389 (N.D.Cal.1998); I.Lan Sys., Inc. v. Netscout Serv. Level Corp., 183 F.Supp.2d 328, 338 (D.Mass. 2002); Register.com, Inc. v. Verio, Inc., 126 F.Supp.2d 238, 245-48 (S.D.N.Y.2000); Management Computer Controls, Inc. v. Charles Perry Constr., Inc., 743 So.2d 627 (Fla. 1st DCA 1999). In addition, although there may be no Florida case law directly on point, the Plaintiffs were unable to cite the Court to any case law, Florida or otherwise, holding a click agreement unenforceable or invalid. Accordingly, this Court finds no reason to hold that the click agreements in this case are unenforceable or invalid.

Having found the click agreements enforceable, this Court next addresses Defendant's argument that Count I fails to state a claim because the First Click Agreement expressly prohibits commercial exploitation of content downloaded from the PDP web site. Plaintiffs, on the other hand, argue that the language of the First Click...