Craig Clifford, et al. v. Richard Federman, et al.

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 20-12294
Non-Argument Calendar
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D.C. Docket No. 1:18-cv-01953-JPB
JOHN CLIFFORD,
Plaintiff,
CRAIG CLIFFORD,
SCOTT CLIFFORD,
PAUL CLIFFORD,
STEPHEN DAZZO,
JERSEY CORD CUTTERS, LLC,
KASOLAS FAMILY & FRIENDS VG INVESTMENT, LLC,
CHRISTINE C. CLIFFORD,
as administrator of the estate of John Clifford,
Plaintiffs - Appellants,
versus
RICHARD FEDERMAN,
WINSTON JOHNSON,
GOTHAM MEDIA CORPORATION,
GOTHAM MEDIA SERVICES, INC.,
WINSONIC DIGITAL MEDIA GROUP, LTD.,
WINSONIC DIGITAL CABLE SYSTEMS NETWORK, LTD.,
JUSTIN SU,
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LORI POOLE,
ROBERT KOSTENSKY,
TODD GUTHRIE, TECH CXO, LLC,
PATRICK SHAW,
RICKSHAW PRODUCTIONS, LLC,
DARYL ARTHUR,
MEGATONE MUSIC, LLC,
KRISTY THURMAN,
KT COMMUNICATIONS CONSULTING, INC.,
2251 LAKE PARK INVESTMENT GROUP LLC,
DOC MAANDI MOVIES LLC,
DMM-EXPENDABLES 3 LLC,
MAANDI MEDIA PRODUCTIONS DIGITAL LLC,
MAANDI ENTERTAINMENT LLC,
MAANDI MEDIA PRODUCTIONS LLC,
MAANDI PARK MS LLC,
MAANDI MEDIA HOLDINGS INTERNATIONAL LLC,
KIMBERLYTE PRODUCTIONS SERVICES, INC.,
2496 DIGITAL DISTRIBUTION LLC,
1094 DIGITAL DISTRIBUTION LLC,
SST SWISS STERLING, INC.,
HEATHER CLIPPARD,
ROBERT HALF INTERNATIONAL INC.,
d.b.a. The Creative Group,
d.b.a. Robert Half Technology, et al.,
WINSONIC DIGITAL MEDIA CABLE SYSTEMS HOLDINGS, INC., et al.,
CASCADE NORTHWEST, INC.,
Defendants - Appellees.
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Appeal from the United States District Court
for the Northern District of Georgia
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(May 5, 2021)
Before WILSON, ROSENBAUM, and BLACK, Circuit Judges.
PER CURIAM:
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Craig Clifford, Scott Clifford, Paul Clifford, Stephen Dazzo, Jersey Cord
Cutters, LLC, Kasolas Family & Friends VG Investment, LLC, and Christine C.
Clifford, as administrator of the estate of John Clifford (collectively, Appellants)
appeal the district court’s striking and dismissal of their Original and First
Amended Complaints on shotgun pleading grounds and the district court’s denial
of their motion for reconsideration. After review,1 we affirm the district court.
I. BACKGROUND
On May 3, 2018, Appellants filed their 195-page, 50-count2 Original
Complaint against 42 defendants. The Original Complaint alleged generally that
the Appellees committed fraud when they solicited investments for a “fictitious
and non-existent” internet television service trademarked as “VIDGO” and later
used those investments to fund personal projects unrelated to the purported
business venture. Many of the Appellees moved to strike or dismiss the Original
Complaint on shotgun pleading grounds. On March 22, 2019, after “engag[ing] in
the painstaking task of wading through and deciphering [Appellants’] tangled mess
of allegations to determine the merits of the [Appellees’] pending motions,” Judge
1 We review a district court’s dismissal of a complaint on shotgun pleading grounds for
an abuse of discretion. Vibe Micro, Inc. v. Shabanets, 878 F.3d 1291, 1294 (11th Cir. 2018).
We also review a district court’s denial of a motion for reconsideration for an abuse of
discretion. Corley v. Long-Lewis, Inc., 965 F.3d 1222, 1234 (11th Cir. 2020).
2 The Original Complaint purports to contain 51 counts, but it does not contain a count
45.
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Amy Totenberg granted the Appellees’ motions to strike the Appellants’ Original
Complaint based on shotgun pleading grounds and directed the Appellants to
replead their complaint with certain parameters:
(1) [Appellants] may not incorporate all 312 factual paragraphs into
each count. [Appellants] instead must indicate which of the factual
paragraphs are alleged to support each individual count alleged.
(2) Each individual count may only be based on a single legal claim or
legal basis for recovery (i.e. [Appellants] may not assert “Legal Fraud,
Fraud in the Inducement, and Alter-Ego Liability” together in the
same count).
(3) [Appellants] are permitted to assert a single count against multiple
defendants; however, [Appellants] must identify what precise conduct
is attributable to each individual defendant separately in each count.
(4) As to Count 24 (Securities Fraud): [Appellants] must satisfy the
heightened pleading requirements of Federal Rule of Civil Procedure
9(b) and the Private Securities Litigation Reform Act of 1995
(PSLRA).
(5) As to Counts 28 through 46 (Fraud) and Count 51 (Intentional
Misrepresentation): [Appellants] must satisfy the heightened pleading
requirements of Federal Rule of Civil Procedure 9(b).
Appellants filed their First Amended Complaint on April 23, 2019. The
First Amended Complaint contained 258 pages and 52 counts against 36
defendants. As with the Original Complaint, many Appellees moved to dismiss
the First Amended Complaint on shotgun pleading grounds. The case was
reassigned to Judge J.P. Boulee in June of 2019. On January 7, 2020, Judge
Boulee found that the First Amended Complaint was a “quintessential shotgun
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pleading of the kind the Eleventh Circuit has condemned repeatedly.” Judge
Boulee stated it was “virtually impossible to know which allegations of fact are
intended to support which claims of relief since each cause of action incorporates
more than 200 paragraphs.” He found that Appellants failed to correct the
pleading deficiencies identified by Judge Totenberg—specifically identifying
which facts support each individual count alleged and adequately identifying the
precise conduct attributable to each defendant. He concluded that Appellants’
method of pleading was no clearer than it was in the Original Complaint and
remained an impermissible shotgun pleading.
Judge Boulee also stated that Judge Totenberg had “thoroughly explained to
[Appellants] why the Original Complaint violated the shotgun pleading rule,” and
provided notice of the defects. However, because the Appellants “did not
meaningfully amend their Original Complaint,” Judge Boulee determined they
should not be afforded another opportunity to amend. Thus, the court granted the
motions to dismiss based on shotgun pleading grounds and dismissed the case with
prejudice.
Appellants filed a motion for reconsideration pursuant to Federal Rule of
Civil Procedure 60. On June 15, 2020, the district court rejected Appellants’
arguments and denied the motion for reconsideration.
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II. DISCUSSION
A. Shotgun Pleading
Appellants assert that both district judges abused their discretion in striking
Appellants’ Original Complaint and dismissing Appellants’ First Amended
Complaint on shotgun pleading grounds. Shotgun pleadings violate Federal Rule
of Civil Procedure 8(a)(2)’s “short and plain statement” requirement by “failing
. . . to give the defendants adequate notice of the claims against them and the
grounds upon which each claim rests.” Vibe Micro, Inc. v. Shabanets, 878 F.3d
1291, 1294-95 (11th Cir. 2018) (quotations and alteration omitted). Shotgun
pleadings are characterized by: (1) multiple counts that each adopt the allegations
of all preceding counts; (2) conclusory, vague, and immaterial facts that do not
clearly connect to a particular cause of action; (3) failing to separate each cause of
action or claim for relief into distinct counts; or (4) combining multiple claims
against multiple defendants without specifying which defendant is responsible for
which act. Weiland v. Palm Beach Cty. Sheriff’s Ofc., 792 F.3d 1313, 1321-23
(11th Cir. 2015). Dismissal of a complaint as a shotgun pleading is warranted
where “it is virtually impossible to know which allegations of fact are intended to
support which claim(s) for relief,” where the failure to “more precisely parcel out
and identify the facts relevant to each claim materially increase[s] the burden of
understanding the factual allegations underlying each count,” or where the
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complaint indiscriminately lumps together multiple defendants without specifying
how each is responsible for acts or omissions that give rise to a claim for relief. Id.
at 1323-25 (quotations and emphasis omitted).
In dismissing a shotgun complaint, a district court must give the plaintiffs
one chance to remedy its deficiencies. Jackson v. Bank of Am., N.A., 898 F.3d
1348, 1358 (11th Cir. 2018). “What matters is function, not form: the key is
whether the plaintiff had fair notice of the defects and a meaningful chance to fix
them. If that chance is afforded and the plaintiff fails to remedy the defects, the
district court does not abuse its discretion in dismissing the case with prejudice on
shotgun pleading grounds.” Id.
This Court, like the two district judges before us, has now “engaged in the
painstaking task of wading through and deciphering [Appellants’] tangled mess of
allegations.” After that review, we conclude the district court did not abuse its
discretion in striking Appellants’ Original Complaint or dismissing Appellants’
First Amended Complaint as shotgun pleadings. As to the Original Complaint, the
district judge did not abuse her discretion in striking their complaint as (1) the
Appellants incorporated by reference 312 paragraphs of factual allegations into
each of their 50 enumerated causes of action, (2) each cause of action incorporated
by reference each and every prior cause of action, (3) many of the enumerated
causes of action were actually comprised of multiple sub-causes of action, (4) each
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enumerated cause of action was asserted against multiple defendants, and
(5) Appellants essentially accused all defendants of being responsible for all acts
and omissions, so that no individual defendant could identify exactly what he or
she did wrong. These deficiencies in the Original Complaint are the definition of a
shotgun pleading, and the district court did not abuse its discretion in striking the
complaint and giving the Appellants a chance to remedy the deficiencies. See
Jackson, 898 F.3d at 1358.
The district court also did not abuse its discretion in dismissing Appellants’
First Amended Complaint as a shotgun pleading. Even after Judge Totenberg gave
Appellants explicit instructions on how to remedy the deficiencies in the
complaint, Appellants did not do so. While Appellants did not incorporate all 312
introductory paragraphs into each count, the majority of the 52 counts incorporated
almost the entirety of the fact section of the complaint, consisting of 249
paragraphs and 104 pages. The complaint is cumbersome, requiring the reader to
identify and sift through hundreds of paragraphs incorporated into each count, and
then parse through numerous allegations to identify which of those hundreds of
paragraphs have some relevance to a particular defendant or cause of action. It is
virtually impossible to know which allegations of fact are intended to support
which claims for relief when each cause of action incorporates more than 200
paragraphs. As Judge Boulee observed, “this method of pleading is in no manner
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any clearer than it was in the Original Complaint nor does it specifically identify
the precise conduct attributable to each individual defendant.” As Appellants had
notice of the defects and a meaningful chance to fix them, it was not an abuse of
discretion to dismiss the First Amended Complaint as a shotgun pleading. See id.
B. Motion for Reconsideration
Appellants contend the district court abused its discretion in denying their
motion for reconsideration. Appellants bring several points of error, which we
address in turn.
1. Dismissal of State Law Claims with Prejudice
Appellants contend the district court’s dismissal of their state law claims
with prejudice rather than without prejudice required reconsideration. They rely
on our decision in Vibe Micro, where we remanded for the limited purpose of
dismissing without prejudice as to refiling in state court any state law claims. Vibe
Micro, 878 F.3d at 1296-97. “Although it is possible for the district court to
continue to exercise supplemental jurisdiction over these pendant claims . . . if the
district court instead chooses to dismiss the state law claims, it usually should do
so without prejudice as to refiling in state court.” Id. at 1296 (citations omitted).
Vibe Micro is distinguishable from this case, however. This case is in
federal court both on the basis of original federal question jurisdiction and
diversity jurisdiction. Thus, any state law claims would be in federal court on the
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basis of diversity jurisdiction with or without federal questions. The reasoning for
remanding in Vibe Micro was because the state law claims there were in federal
court on the basis of supplemental jurisdiction, rather than diversity jurisdiction.
Id. Thus, the district court did not abuse its discretion in denying reconsideration
on this basis.
2. Grounds for Dismissal with Prejudice
Appellants contend that no grounds exist for the extreme sanction of
dismissal with prejudice. They rely on our decision in Betty K., Ltd. v. M/V
Monada, et al., 432 F.3d 1333, 1337-38 (11th Cir. 2005), providing that a
dismissal with prejudice should be imposed only if a party engages in a clear
pattern of delay or willful contempt and the district court specifically finds lesser
sanctions would not suffice.
The district court did not abuse its discretion in dismissing Appellants’ First
Amended Complaint with prejudice. Specific to the shotgun pleading issue, we
have held “[w]hen a litigant files a shotgun pleading, is represented by counsel,
and fails to request leave to amend, a district court must sua sponte give him one
chance to replead before dismissing his case with prejudice on non-merits shotgun
pleading grounds.” Vibe Micro, 878 F.3d at 1296. Here, the district court
followed the holding in Vibe Micro. When the Original Complaint was stricken,
Appellants were given another chance to replead and remedy their shotgun
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pleading issues, but Appellants filed an equally unclear First Amended Complaint.
The district court was not required to give Appellants any additional chances to
remedy the pleading violations. See id. Therefore, the district court did not abuse
its discretion in denying reconsideration on this basis.
3. Rule 8 and Rule 9(b)
Appellants also contend the district court abused its discretion by applying
Rule 8 to the portion of the Amended Complaint asserting fraud-based claims,
since Rule 9(b) governs fraud-based claims. While Rule 8 requires a “short and
plain statement of the claim,” Rule 9(b) requires “the circumstances constituting
fraud or mistake shall be stated with particularity.” Am. United Life Ins. Co. v.
Martinez, 480 F.3d 1043, 1066-67 (11th Cir. 2007) (citing Fed. R. Civ P. 8 and
9(b)).
Although Appellants assert the district court should have evaluated their
fraud claims solely under Rule 9(b), the requirement to plead with particularity
does not allow them to evade Rule 8’s requirements. See Ashcroft v. Iqbal, 556
U.S. 662, 686-87 (2009). The district court did not abuse its discretion in denying
reconsideration on this basis.3
3 We reject Appellants’ arguments that certain defendants could not oppose
reconsideration on shotgun pleading grounds because they did not file motions to dismiss based
on shotgun pleading arguments.
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III. CONCLUSION
We affirm the district court’s dismissal of Appellants’ case and denial of
Appellants’ motion for reconsideration.
AFFIRMED.
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