Eleventh Circuit Emphasizes Importance of Striking Shotgun Pleadings

In a consolidated appeal of two cases filed against banking institutions, the Eleventh Circuit expressed frustration over being “forced to review a judgment that should never have been entered.”  Estate of Bass v. Regions Bank, Inc., 2020 WL 284094 (11th Cir. Jan. 21, 2020).  Rather than striking the complaints as impermissible shotgun pleadings and allowing the plaintiff an opportunity to amend, the district court had entered judgment and dismissed the case under Rules 12(b)(1) and 12(b)(6).  Ultimately, this resulted in partial vacatur of the district court’s decision.

Plaintiff Bass instructed Fidelity Investments to write a check to his sister-in-law from his Fidelity 401k account.  Upon receipt of the check, the plaintiff’s sister-in-law deposited the money into her Regions Bank general business account.  Rather than setting up an IRA account for the plaintiff as agreed, however, she spent all of the money on personal expenses.  The plaintiff filed separate, multicount complaints against Regions Bank and Fidelity Investments.  Counts I and II in both complaints were “essentially identical.”  Count I alleged common law conversion claims, while Count II alleged both common law tort theories and purported UCC violations.  Count II in both complaints incorporated by reference “each and every allegation contained in the preceding paragraphs of the complaints,” which, as the court noted in a footnote, constituted the condemned “shotgun pleading,” since Count II’s incorporation of Count I arguably alleges a conversion claim against both defendants under the Georgia UCC and banking laws.  Count III alleged breach of contract, and Count IV alleged a breach of fiduciary duty.

Defendants moved to dismiss the plaintiff’s respective complaints pursuant to Rules 12(b)(1) and 12(b)(6).  The district court granted the motions, holding that the plaintiff lacked standing to bring the Georgia UCC claims.  The district court similarly held that the plaintiff’s common law tort claims were preempted by the Georgia UCC.  Finally, the district court dismissed the plaintiff’s claims for breach of contract and breach of fiduciary duty under Rule 12(b)(6).

In an opinion by Senior Judge Tjoflat, who has long targeted shotgun pleadings, the Eleventh Circuit affirmed the lower court’s decision in all respects except as to dismissal of the Georgia UCC counts for lack of standing.  In its review, the court observed that Rule 8(a)(2) requires “a short and plain statement of the claim showing that the pleader is entitled to relief,” which the Supreme Court has held means “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.”  A shotgun pleading “is never plain because it is impossible to comprehend which specific factual allegations the plaintiff intends to support which of his causes of action, or how they do so.”  Accordingly, the district court should have struck the plaintiff’s complaints, affording an opportunity to amend them in compliance with Rule 8(a)(2).

Because the district court did not require the plaintiff to replead his UCC claims, but rather dismissed them for lack of standing, the Eleventh Circuit found that these rulings were incapable of meaningful review.  Although the plaintiff did mention O.C.G.A. § 11-4-103 and Articles 3 and 4 of the Georgia UCC, the plaintiff only generally alleged that the defendants violated unspecified provisions of the UCC and “the banking laws.”  Accordingly, the Eleventh Circuit reasoned that the plaintiff’s claims were not limited to § 11-4-103 and UCC Articles 3 and 4.  The plaintiff, therefore, may have standing to bring “any number of claims under any other provision” of the Georgia UCC or banking laws.  The district court’s ruling that the plaintiff did not have standing under § 11-4-103 was either irrelevant or incomplete, as he might have standing to bring the claim under different UCC provisions.  The Eleventh Circuit vacated and remanded the matter to the district court for further consideration, suggesting that the district court instruct the plaintiff to reallege his Georgia UCC claims in accordance with federal pleading requirements.

Posted by Laura Smithman.

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