Legal Challenge by Frustrated Supporters of 2016 Bernie Sanders Campaign Rejected

As the country approaches the next presidential election in 2020, the Eleventh Circuit closed the book on a putative class action filed by supporters of Bernie Sanders during his last bid for the Democratic Party’s nomination in 2016. Wilding v. DNC Services Corp., 2019 WL 5539021 (11th Cir. Oct. 28, 2019), “pit[ted] a political party against some of its supporters,” who alleged that “during the 2016 Democratic presidential primaries,” the Democratic National Committee and its former chair, Deborah Wasserman Schultz, “improperly tipped the scales in favor of former Secretary of State Hillary Clinton, who was challenging Senator Sanders for the Democratic presidential nomination.”

In an opinion by Judge Adalberto Jordan, the court affirmed the lawsuit’s dismissal on all counts. The plaintiffs had asserted claims for fraud, unjust enrichment, and breach of fiduciary duty (among other common-law and statutory claims) on behalf of three proposed classes: (1) DNC donors, (2) Sanders donors, and (3) registered Democratic voters. The plaintiffs sought damages, costs and attorney’s fees, and declaratory and injunctive relief.

The Eleventh Circuit ultimately rejected some of the claims for lack of standing and the rest on the merits.

With respect to the proposed class of DNC donors, the court explained that the plaintiffs who claimed to have relied on allegedly false statements about the DNC’s impartiality before donating could satisfy the injury-in-fact, causation, and redressability requirements for Article III standing. But those plaintiffs had not satisfied the heightened pleading requirements for a fraud claim under Federal Rule of Civil Procedure 9(b), nor had they asserted a plausible claim for unjust enrichment under Rule 8. Those claims thus failed on the merits under Rule 12(b)(6).

With respect to the Sanders donors, the court held that the plaintiffs lacked standing because they had not sufficiently alleged that any false statements caused them to suffer a financial injury: “Although they too alleged that they relied on the false statements to their detriment, not a single named plaintiff who contributed money to the Sanders campaign set out the dates (exact or approximate) of his or her donations.”

With respect to the broader class of Democratic voters, the court held that the named plaintiffs lacked standing to assert a claim for breach of fiduciary duty because they had not alleged a “concrete injury.” And “[a]lthough chapter and verse are not required, a blank page by definition will usually not provide enough for a court to plausibly infer a fiduciary relationship in this political party setting.”

Finally, the court rejected the plaintiffs’ argument that they should have been given leave to amend their allegations regarding standing. The plaintiffs had already amended their complaint once as a matter of right, and they had not sought leave to amend their complaint a second time. After noting that district courts are not required to grant counseled plaintiffs leave to amend sua sponte, the Eleventh Circuit concluded that “federal courts can only adjudicate cognizable claims, and the complaint here fails on a number of jurisdictional and substantive grounds.”

The Wilding decision might attract the most attention from the political sphere, but it also illustrates the Eleventh Circuit’s approach to standing as a jurisdictional prerequisite for the maintenance of state-law claims in federal court. Despite what Judge Jordan’s opinion acknowledged as “some support” in other jurisdictions “for the notion that the mere violation of a state-law right satisfies Article III even in the absence of an identifiable injury,” the Eleventh Circuit “require[s] plaintiffs asserting violations of state-created rights to demonstrate a concrete injury; the defendant’s violation of those rights is not enough.”

Posted by Lee Peifer.

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