Amos v. Home Depot USA, Inc. et al

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HERMAN M. AMOS CIVIL ACTION
VERSUS NO. 24-1297
HOME DEPOT U.S.A., INC., et al. SECTION: “G”(4)
ORDER AND REASONS
This litigation involves a dispute over Home Depot stock owned by Plaintiff Herman M.
Amos (“Plaintiff”). Before the Court is a Motion to Dismiss Plaintiff’s Amended Complaint filed
by Defendants Home Depot, U.S.A., Inc. and Computershare Inc. (“Defendants”).1 Defendants
argue the case should be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack
of subject-matter jurisdiction or pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to
state a claim.2 Plaintiff opposes the motion.3 Having considered the motion, the memoranda in
support and in opposition, the record, and the applicable law, the Court grants the motion in part
and denies it in part.
I. Background
On May 19, 2024, Plaintiff filed a complaint in this Court against Defendants.4 Plaintiff is
a 70-year-old former employee of Defendant Home Depot U.S.A., Inc. (“Home Depot”).5 While
1 Rec. Doc. 46.
2 Id.
3 Rec. Doc. 50.
4 Rec. Doc. 1.
5 Id. at 1.
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employed with Home Depot, Plaintiff alleges he participated in the Employee Stock Purchase Plan
(the “ESPP”).6 Plaintiff alleges that Defendant Computershare, Inc. (“Computershare”) was the
transfer agent or shares management services agent of the ESPP.7 Plaintiff purchased Home Depot
securities through the Plan.8
Plaintiff states that in or about May 2013, he suffered a major medical event and stopped
working for Home Depot.9 Plaintiff alleges the medical event left him unable to recall how to
access the account.10 Plaintiff alleges that he asked Defendants for assistance in accessing his
account, to no avail, and that Defendants intentionally or negligently dismissed his efforts and
dispossessed him of his shares of stock and dividends.11 Plaintiff further contends that Defendants
transferred Plaintiff’s shares to another classification stock without his knowledge or consent.12 In
the original Complaint, Plaintiff asserted claims of negligence, conversion, and breach of fiduciary
duty.13
On September 20, 2024, Plaintiff filed a Motion for Leave to File an Amended Complaint,
seeking to add additional context to some of the factual allegations and to convert his individual
suit into a class action.14 On October 15, 2024, Plaintiff filed a Motion for Leave to File a Second
6 Id. at 1–2.
7 Id. at 2.
8 Id.
9 Id. at 3.
10 Id.
11 Id.
12 Id. at 4.
13 Id. at 5–7.
14 Rec. Doc. 14.
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Amended Complaint, seeking to allege that the ESPP is subject to the Securities Exchange Act.15
Defendants opposed both motions.16 Thereafter, Defendants filed a Motion to Dismiss for Lack of
Jurisdiction, arguing Plaintiff’s claims were moot because Plaintiff regained access to his stocks.17
Plaintiff argued his claims were not moot because of a loss of benefits associated with the now
accessible stock.18 On February 18, 2025, the Magistrate Judge denied both of Plaintiff’s Motions
to Amend the Complaint.19 The Magistrate Judge found, in part, that the proposed class action
claims were futile because Plaintiff’s allegations were conclusory, unclear in the recitation of the
elements of a class action, and failed to provide allegations that justified converting the case to a
class action.20
On February 21, 2025, this Court issued an Order dismissing the Motion to Dismiss as
moot and granting Plaintiff leave to file an Amended Complaint.21 Considering that Plaintiff had
the opportunity to review Defendants’ Motion to Dismiss and the Magistrate Judge’s Order
denying both Motions for Leave to File Amended Complaints, the Court reasoned that Plaintiff
was in a better position to file a sufficient Amended Complaint, if possible.22
15 Rec. Doc. 22.
16 Rec. Docs. 19, 31.
17 See Rec. Doc. 35.
18 See Rec. Doc. 39.
19 Rec. Doc. 41.
20 Id. at 11.
21 Rec. Doc. 44.
22 Id.
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Plaintiff filed the Amended Complaint on February 28, 2025.23 In the Amended Complaint,
Plaintiff reiterates all of the allegations raised in the Original Complaint.24 In addition to the
original individual claims, Plaintiff adds class allegations.25 Plaintiff alleges Defendants reinvested
former employees’ dividends under the ESPP without applying a 15% discount to the market price
for Home Depot stock and moved former employees’ stock from the ESPP without their
knowledge.26 Plaintiff asserts that this conduct supports “a federal securities class action on behalf
of employee investors in the Employee Stock Purchase Plan of Home Depot, Inc. during the
participation period of the Plaintiff (Amos).”27
On March 14, 2025, Defendants filed the instant Motion to Dismiss Plaintiff’s Amended
Complaint.28 On March 24, 2025, Plaintiff filed an opposition to the motion.29 On March 31, 2025,
Defendants filed a reply brief.30 On April 8, 2025, Plaintiff filed a sur-reply brief. 31
II. Parties’ Arguments
A. Defendants’ Arguments in Support of the Motion to Dismiss
Defendants argue that Plaintiff failed to follow the Court’s guidelines for amending the
Complaint.32 Defendants suggest that the Court authorized Plaintiff to file an Amended Complaint
23 Rec. Doc. 45.
24 Id. at 1.
25 Id. at 6–9.
26 Id. at 7–8.
27 Id. at 6.
28 Rec. Doc. 46.
29 Rec. Doc. 50.
30 Rec. Doc. 52.
31 Rec. Doc. 57.
32 Rec. Doc. 46-1 at 1–2.
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to address the mootness of his original claims, as well as to plead any non-futile additional claims.33
Instead, Defendants suggest that Plaintiff restates his entire original Complaint, without adding a
single allegation to it, and purports to reassert the very same class action claims that the Magistrate
Judge rejected.34
Defendants raise four arguments as to why Plaintiff has failed to state a class action claim.35
First, Defendants argue the securities-fraud allegations are insufficient under the heightened
pleading standards of Rule 9(b) and the Private Securities Litigation Reform Act (“PSLRA”).36
Defendants assert the complaint must: (1) specify each alleged misleading or fraudulent statement;
(2) identify the speaker; (3) state when and where the statement was made; (4) plead with
particularity the contents of the false representations; (5) plead with particularity what the person
making the misrepresentation obtained thereby; and (6) explain why the statement is misleading
or fraudulent.37
Second, Defendants argue that Plaintiff’s class action claim fails because the ESPP only
applies to current employees, not former employees like Plaintiff.38 Defendants assert the ESPP
simply does not provide for a 15% discount for the reinvestment of dividends received by a former
or current associate.39 Similarly, Defendants assert the ESPP does not provide for a discount to any
33 Id. at 2.
34 Id.
35 Id. at 9–13.
36 Id. at 9.
37 Id. at 9–10.
38 Id. at 10.
39 Id.
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stock purchases at all by former Home Depot associates like Plaintiff.40 Defendants suggest these
unambiguous terms foreclose any proposed class allegations.41
Third, Defendants also argue the class action claims are time barred because fraud claims
under the Securities Exchange Act “may be brought not later than the earlier of: (1) 2 years after
the discovery of the facts constituting the violation; or (2) 5 years after such violation.”42 Plaintiff
alleges Defendants failed to apply the discount to dividend reinvestments on March 29 and June
19, 2019.43 Defendants assert the statute of repose ran as to those transactions on March 29 and
June 19, 2024, respectively.44
Fourth, Defendants argue the class action allegations do not comply with Rule 23 or Local
Rule 23.1.45 Defendants point out that Plaintiff has not alleged the basis upon which he claims to
be an adequate representative of the class or the grounds for maintenance of a class action.46
Defendants also assert Plaintiff fails to comply with the PSLRA’s certification requirement for
class actions as he does not plead that he: (1) is not acting at the behest of counsel, (2) is familiar
with the subject matter of the complaint, and (3) has authorized initiation of the action.47
40 Id. at 11.
41 Id.
42 Id. at 12 (citing 28 U.S.C. § 1658(b)).
43 Id.
44 Id. at 12–13.
45 Id. at 13.
46 Id.
47 Id. at 14.
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Finally, Defendants contend that Plaintiff’s individual claims should be dismissed as moot
because Plaintiff has obtained full ownership, possession, and control of his Home Deport shares.48
Defendants argue that Plaintiff’s claims are moot and should be dismissed for lack of subject matter
jurisdiction.49
B. Plaintiff’s Arguments in Opposition to Motion to Dismiss
In opposition, Plaintiff argues that the Magistrate Judge’s Order is not the law of the case
as it was overruled by this Court’s Order granting him leave to file an Amended Complaint.50
Plaintiff asserts he has alleged particularized facts as required by Rule 9(b) and the PSLRA.51
Plaintiff contends a flaw in the ESPP denies participants the full benefits outlined in the ESPP.52
Plaintiff argues he was entitled to a 15% discount on purchases made with funds from his payroll
deduction account.53 Plaintiff asserts Defendants have not made dividends reinvestments in
accordance with the 15% discount.54 Plaintiff asserts he has sustained losses due to Defendants’
actions.55 Plaintiff argues the claims are not time barred because Defendants continue to engage in
this dividend reinvestment practice.56
48 Id. at 14–15.
49 Id. at 15.
50 Rec. Doc. 50 at 2.
51 Id. at 3.
52 Id.
53 Id. at 4.
54 Id. at 5.
55 Id.
56 Id. at 8.
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Plaintiff contends the Amended Complaint meets the heightened pleading requirements for
a punitive class action.57 According to Plaintiff, the allegations in the Amended Complaint are
evidence of a pattern and practice by Defendants in the administration, charges, and payments of
shares under the ESPP, which have denied Plaintiff and members of the putative class full benefits
of earnings under the ESPP.58 Plaintiff asserts at least 500 employees are putative class members.59
He contends these employees have sustained an average loss of at least 3 shares per year for 15
years.60 Plaintiff asserts Defendants have arbitrarily moved stock from the ESPP to the
DepotDirect common stock and arbitrarily used stock dividends reinvestments to purchase
DepotDirect common stock without the benefit of the 15% discount applicable under the ESPP.61
Plaintiff asserts his claim that Defendants denied him access to his Home Depot account is
not moot.62 Although he now has access to his account, Plaintiff argues this does not resolve his
claims regarding Defendants’ breach of fiduciary duties.63 Contrary to Defendants’ assertion,
Plaintiff maintains that the Court can provide meaningful relief in the form of a declaratory
judgment and monetary damages.64
Plaintiff submits that the voluntary cessation doctrine also prevents dismissal because
Defendants fail to meet their burden of demonstrating that the challenged conduct––the operation
57 Id. at 9.
58 Id.
59 Id. at 10.
60 Id.
61 Id. at 11.
62 Id. at 12.
63 Id.
64 Id. at 13.
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and management of the plan––cannot reasonably be expected to continue.65 Plaintiff asserts that
several unresolved issues remain regarding Defendants’ unilateral decision or authority to transfer
stock from Home Depot ESPP to Home Depot Common Stock and reinvestment stock purchases
under the ESPP at the higher common stock value.66
Plaintiff asserts that he continues to suffer collateral consequences as a result of
Defendants’ actions.67 This includes the loss of benefits associated with stock purchases that should
have been made under the 15% reduction price in the ESPP, as well as the financial impact of the
dividend reinvestment.68 In response to Defendants’ argument that Plaintiff failed to provide a
sworn certification as required by the PSLRA, Plaintiff attaches a sworn certification to the
opposition brief.69 For these reasons, Plaintiff urges this Court to deny Defendants’ Motion to
Dismiss on ground of mootness.70
C. Defendant’s Arguments in Further Support of Motion to Dismiss
In reply, Defendants assert Plaintiff’s claim that Defendants overcharged him on dividend
reinvestments fails because he had no right to a discount related to dividends.71 Defendants argue
the ESPP does not entitle associates to a 15% discount on stock the individual may buy with
dividends earned on existing holdings.72 Under the ESPP, Defendants suggest current associates
65 Id. at 14–15.
66 Id. at 15.
67 Id.
68 Id.
69 Rec. Doc. 50-3.
70 Rec. Doc. 50 at 16.
71 Rec. Doc. 52 at 2.
72 Id.
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get a 15% discount for stock purchases only when the ESPP buys stock in July or December from
the Payroll Deduction Account of an enrolled associate who made a payroll contribution during
the preceding six months.73 Additionally, Defendants argue only current employees are ESPP
participants.74 Defendants contend Plaintiff’s claim that Defendants “applied . . . funds [from
Participant’s Payroll Deduction Account] as Dividend Reinvestment to purchase additional Home
Depot Common Stock Shares” is illogical.75 Defendants assert nothing in the ESPP provides that
stock dividends qualify as payroll deductions that go into a Payroll Deduction Account.76
Next, Defendants argue the sworn certification attached to the opposition is untimely and
deficient.77 Defendants point out that the Amended Complaint does not define the class period.78
Defendants assert Plaintiff has not published “a notice advising members of the purported class”
in “a widely circulated national business-oriented publication or wire service” within 20 days of
filing the complaint.79 Defendants suggest that these violations show Plaintiff is an inadequate
class representative.80 For these reasons, Defendants argue the proposed class action claims should
be dismissed.81
73 Id. at 2–3.
74 Id. at 3.
75 Id. at 4.
76 Id. at 5.
77 Id. at 6.
78 Id.
79 Id.
80 Id. at 7.
81 Id.
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Finally, Defendants assert Plaintiff’s original claims are moot.82 Defendants point out the
voluntary cessation doctrine only applies to claims for injunctive relief, and Plaintiff does not seek
injunctive relief on the issue of access to his account.83 For these reasons, Defendants argue the
individual claims are moot.84
D. Plaintiff’s Arguments in Further Opposition to the Motion to Dismiss
In the sur-reply brief, Plaintiff argues the ESPP does not contradict the pleadings.85 Plaintiff
asserts Defendants have not followed the ESPP as promulgated.86 Plaintiff contends he published
notice of the filing of the Complaint on Access Wire on March 27, 2025.87 Plaintiff argues the
failure to comply with the early notice requirement should not result in dismissal.88 Plaintiff asserts
courts need not strictly interpret the PSLRA requirements if the necessary information is
comprehensible and readily available.89
III. Legal Standard
A. Legal Standard for Rule 12(b)(6) Motions to Dismiss
Federal Rule of Civil Procedure 12(b)(6) provides that an action may be dismissed for
“failure to state a claim upon which relief can be granted.”90 A motion to dismiss for failure to state
82 Id.
83 Id. at 8.
84 Id.
85 Rec. Doc. 57 at 1.
86 Id.
87 Id. at 2.
88 Id. at 3.
89 Id.
90 Fed. R. Civ. P. 12(b)(6).
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a claim is “viewed with disfavor and is rarely granted.”91 “To survive a motion to dismiss, a
complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’”92 “Factual allegations must be enough to raise a right to relief above the
speculative level.”93 A claim is facially plausible when the plaintiff has pleaded facts that allow
the court to “draw the reasonable inference that the defendant is liable for the misconduct
alleged.”94
On a motion to dismiss, asserted claims are liberally construed in favor of the claimant,
and all facts pleaded are taken as true.95 However, although required to accept all “well-pleaded
facts” as true, a court is not required to accept legal conclusions as true.96 “While legal conclusions
can provide the framework of a complaint, they must be supported by factual allegations.”97
Similarly, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory
statements” will not suffice.98 The complaint need not contain detailed factual allegations, but it
must offer more than mere labels, legal conclusions, or formulaic recitations of the elements of a
cause of action.99 That is, the complaint must offer more than an “unadorned, the-defendant-
91 Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th Cir. 1982).
92 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)).
93 Twombly, 550 U.S. at 555.
94 Iqbal, 556 U.S. at 663 (citing Twombly, 550 U.S. at 556).
95 Leatherman v. Tarrant Cnty. Narcotics Intel. & Coordination Unit, 507 U.S. 163, 164 (1993); see also
Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322–23 (2007).
96 Iqbal, 556 U.S. at 678–79.
97 Id. at 679.
98 Id. at 678.
99 Id.
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unlawfully-harmed-me accusation.”100 From the face of the complaint, there must be enough
factual matter to raise a reasonable expectation that discovery will reveal evidence as to each
element of the asserted claims.101 If factual allegations are insufficient to raise a right to relief
above the speculative level, or if it is apparent from the face of the complaint that there is an
“insuperable” bar to relief, the claim must be dismissed.102
B. Legal Standard for Rule 12(b)(1) Motions to Dismiss
An action should be dismissed as moot pursuant to Federal Rule of Civil Procedure
12(b)(1) “when the issues presented are no longer ‘live’ or the parties lack a cognizable interest in
the outcome.”103 “[A]n actual controversy must exist not only at the time the complaint is filed,
but through all stages of the litigation.”104 “If an intervening circumstance deprives the plaintiff of
a ‘personal stake in the outcome of the lawsuit,’ at any point during litigation, the action can no
longer proceed and must be dismissed as moot.”105 A case becomes moot if the following
conditions are satisfied: “(1) it can be said with assurance that “there is no reasonable expectation
. . . that the alleged violation will recur, and (2) interim relief or events have completely and
irrevocably eradicated the effects of the alleged violation.”106
100 Id.
101 Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 257 (5th Cir. 2009).
102 Carbe v. Lappin, 492 F.3d 325, 328 n.9 (5th Cir. 2007); Moore v. Metro. Hum. Serv. Dist., No. 09-6470,
2010 WL 1462224, at * 2 (E.D. La. Apr. 8, 2010) (Vance, J.) (citing Jones v. Bock, 549 U.S. 199, 215 (2007)).
103 Los Angeles Cnty. v. Davis, 440 U.S. 625, 631 (1979) (quoting Powell v. McCormack, 395 U.S. 486, 498
(1969)).
104 Kingdomware Techs., Inc. v. United States, 579 U.S. 162, 169 (2016) (quoting Already, LLC v. Nike, Inc.,
569 U.S. 85, 90–91 (2013)).
105 Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 160–61 (2016) (quoting Genesis Healthcare Corp. v.
Symczyk, 569 U.S. 66, 72 (2013)).
106 Los Angeles Cnty., 440 U.S. at 631 (internal citations omitted).
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The standard of review applicable to motions to dismiss under Rule 12(b)(1) is similar to
that governing Rule 12(b)(6) motions except that Rule 12(b)(1) allows a court to consider a broader
range of materials.107 In ruling on a Rule 12(b)(1) motion to dismiss, a court may rely on: “(1) the
complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the
complaint supplemented by undisputed facts plus the court’s resolution of disputed facts.”108
IV. Analysis
A. Class Action Claims
Defendants argue that the class allegations do not satisfy the pleading requirements of Rule
9(b), fail to state a claim because they contradict the terms of the ESPP, and fail to meet the
pleading requirements of Rule 23.109 Each argument is addressed in turn.
1. Pleading Requirements of Rule 9(b) and the PSLRA
In the Amended Complaint, Plaintiff asserts “a federal securities class action on behalf of
employee investors in the Employee Stock Purchase Plan of Home Depot, Inc. during the
participation period of the Plaintiff (Amos).”110 The heightened pleading standards of Rule 9(b)
and the PSLRA apply to private litigants’ claims under the Securities Exchange Act of 1934.111
Rule 9(b), which applies where there are allegations of fraud, requires the pleading party to “state
with particularity the circumstances constituting fraud or mistake.”112 The PSLRA requires the
107 Williams v. Wynne, 533 F.3d 360, 365 n. 2 (5th Cir. 2008).
108 Id. (quoting Clark v. Tarrant County, 798 F.2d 736, 741 (5th Cir. 1986)).
109 Rec. Doc. 46-1 at 8–14. The Court does not reach Defendants’ argument regarding timeliness.
110 Rec. Doc. 45 at 6.
111 Police & Fire Ret. Sys. of City of Detroit v. Plains All Am. Pipeline, L.P., 777 F. App’x 726, 729 (5th Cir.
2019).
112 Fed. R. Civ. P. 9(b).
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party to “specify each statement alleged to have been misleading, the reason or reasons why the
statement is misleading, and, if an allegation regarding the statement or omission is made on
information and belief, . . . all facts on which that belief is formed.”113 Additionally, the party must
allege facts “giving rise to a strong inference that the defendant acted with the required state of
mind.”114 If a complaint does not meet these standards, “the court shall, on the motion of any
defendant, dismiss the complaint[.]”115
The Fifth Circuit has “coalesced the pleading requirements in the PSLRA and Rule 9(b)
into a succinct directive for litigants.”116 A plaintiff must: (1) specify each alleged misleading or
fraudulent statement; (2) identify the speaker; (3) state when and where the statement was made;
(4) plead with particularity the contents of the false representations; (5) plead with particularity
what the person making the misrepresentation obtained thereby; and (6) explain why the statement
is misleading or fraudulent.117 The Amended Complaint does not contain any factual allegations
that would support any of these elements. Therefore, Plaintiff has not plead facts with sufficient
detail to meet the Rule 9(b) and PSLRA pleading requirements.
2. Failure to State a Claim
Plaintiff’s proposed class allegations are that Defendants “have denied Plaintiff and
members of the putative class full benefits of earnings” under the ESPP.118 Specifically, Plaintiff
113 15 U.S.C. § 78u-4(b)(1)(B).
114 Id. at § 78u-4(b)(2).
115 Id. at § 78u-4(b)(3)(A).
116 Goldstein v. MCI WorldCom, 340 F.3d 238, 245 (5th Cir. 2003) (citing ABC Arbitrage Plaintiffs Grp. v.
Tchuruk, 291 F.3d 336, 350 (5th Cir. 2002)).
117 Id.
118 Rec. Doc. 45 at 6.
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alleges that Defendants “arbitrarily acted to move stocks belonging to former employees and/or
participants from the [ESPP] without their knowledge or consent, to the DepotDirect common
stock.”119 Plaintiff also alleges that Defendants “arbitrarily acted to use stock Dividends
Reinvestments, belonging to current former employees, without their knowledge or consent, to
purchase DepotDirect common stock; without the benefit of the [15%] discount applicable under”
the ESPP.120
Defendants argue that these allegations contradict the ESPP. The Court can consider the
terms of the ESPP in ruling on the instant motion to dismiss because the Amended Complaint
incorporates the ESPP by reference.121 If an allegation contained in the Complaint is contradicted
by the contents of such an exhibit, “then indeed the exhibit and not the allegation controls.”122 The
unambiguous terms of the ESPP contradict Plaintiff’s argument and foreclose Plaintiff’s class
allegations.
The stated purpose of the ESPP “is to provide Employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock of the Company on a
payroll or other compensation deduction basis.”123 The ESPP defines the term “employee” as “any
person who performs services for, and who is classified as an employee on the payroll records” of
Home Depot or a designated subsidiary.124 It defines “purchase price” to mean “an amount equal
119 Id. at 7.
120 Id. at 7–8.
121 Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498–99 (5th Cir. 2000) (quoting Venture Assocs.
Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993)). (“[D]ocuments that a defendant attaches to a
motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central
to her claim.”).
122 U.S. ex rel. Riley v. St. Luke's Episcopal Hosp., 355 F.3d 370, 377 (5th Cir. 2004).
123 Rec. Doc. 46-5 at 2.
124 Id. at 3.
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to 85% of the Fair Market Value of a Share on the Purchase Date.”125 The ESPP further provides
that any or all employees whose customary employment is not for more than twenty hours per
week or five months per year are excluded from participation, and it imposes an eligibility service
requirement of up to two years of employment.126 To become a participant in the ESPP, the
employee must complete a payroll deduction authorization form and any other required
documents.127 The ESPP provides that if an employee’s employment terminates during the
purchase period due to disability or retirement the balance will either be distributed or held until
the end of the purchase period and applied to purchase shares in accordance with Section 7.128
Section 7 says that the shares could either be whole or fractional and will be held until a share
could be purchased at the purchase price on the purchase date.129 Pursuant to Section 7, as soon as
practicable after the purchase date, the shares are transferred to an account in that associate’s name
held by Computershare.130
Plaintiff does not allege that he was an active employee at the time of the stock purchase.
In fact, Plaintiff alleges that he is a former employee of Home Depot.131 The plain terms of the
ESPP make clear that it does not provide for a 15% discount for the reinvestment of dividends
received by a former employee. The ESPP provides for a 15% discount only when the ESPP buys
stock from the Payroll Deduction Account of an enrolled associate who made a payroll
125 Id.
126 Id.
127 Id.
128 Id. at 5.
129 Id. at 4.
130 Id.
131 Rec. Doc. 1 at 2.
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contribution to the ESPP during the preceding six months. The ESPP does not provide for a
discount for any subsequent stock purchased through a reinvestment of dividends. The ESPP also
provides that as soon as practicable after the purchase date, the shares are transferred to an account
in that associate’s name held by Computershare. Therefore, Plaintiff’s proposed class allegations
that Defendants should have reinvested dividends at a 15% discount and that he had the right to
maintain his shares in the ESPP, rather than in a DepotDirect account, fail as a matter of law based
on the clear terms of the ESPP.
3. Pleading Requirements of Rule 23
Class actions are governed by Rule 23 of the Federal Rules of Civil Procedure.132 A
proposed class must meet the initial requirements established by Federal Rule of Civil Procedure
23(a): (1) numerosity of parties; (2) commonality of legal and factual issues; (3) typicality of the
claims and defenses of the class representatives; and (4) adequacy of the representation by the
class representatives.133 Additionally, “the proposed class must satisfy at least one of the three
requirements listed in Rule 23(b),”134 which sets forth the types of actions that may be maintained
as a class action.
Plaintiff relies on Rule 23(b)(1)(A), which provides for class certification where
“prosecuting separate actions by or against individual class members would create a risk of
inconsistent or varying adjudications with respect to individual class members that would establish
incompatible standards of conduct for the party opposing the class.”135 As the Supreme Court has
recognized, Rule 23(b)(1)(A) “takes in cases where the party is obliged by law to treat the members
132 Fed. R. Civ. P. 23.
133 Fed. R. Civ. P. 23(a); see also Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349 (2011).
134 Dukes, 564 U.S. at 345.
135 Fed. R. Civ. P. 23(b)(1)(A).
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of the class alike (a utility acting toward customers; a government imposing a tax), or where the
party must treat all alike as a matter of practical necessity (a riparian owner using water as against
downriver owners).”136
“At the pleadings stage, a court has two avenues to eliminate class allegations.”137 Under
Rule 23(d)(1)(D), a court may strike class allegations if the pleadings fail to set forth the “minimum
facts necessary to establish the existence of a class satisfying Rule 23’s mandate.”138 Pursuant to
Rule 12(b)(6), if “it is facially apparent from the pleadings that there is no ascertainable class, a
district court may dismiss the class allegation on the pleadings.”139
Local Rule 23.1 also provides that a class action complaint must include “allegations
thought to justify the maintenance of the claim as a class action” such as: (1) “the size and
definition of the alleged class;” (2) “the basis upon which the plaintiff claims to be an adequate
representative of the class;” and (3) “[t]he alleged questions of law or fact claimed to be common
to the class.”140 The Amended Complaint recites these requirements in a conclusory fashion.
However, Plaintiff does not plead any facts to support these conclusions. Additionally, it is facially
apparent from the pleadings that there is no ascertainable class because Plaintiff’s allegations
contradict the clear terms of the ESPP discussed above.
B. Individual Claims
Plaintiff also brings individual claims against Defendants. Plaintiff alleges that Defendants:
(1) were negligent for failing to review Home Depot’s records to locate and communicate with
136 Amchem Products Inc. v. Windsor, 521 U.S. 591, 614 (1997) (internal citations omitted).
137 Gaudet v. Howard L. Nations, APC, No. 19-10356, 2020 WL 6118185, at *15 (E.D. La. Oct. 16, 2020)
(internal citations omitted).
138 Id.
139 John v. Nat'l Sec. Fire & Cas. Co., 501 F.3d 443, 445 (5th Cir. 2007).
140 LR 23.1.
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Plaintiff before taking any action to transfer his shares; (2) exercised unauthorized control over his
shares by transferring them from the Home Depot ESPP to the Home Depot Common Stock; and
(3) breached their fiduciary duty by failing to protect Plaintiff’s shares and by unilaterally
dispossessing Plaintiff of his shares in the ESPP.141
Defendants argue that these claims are moot because Plaintiff now has access to his Home
Depot account. At the pleading stage, this Court must liberally construe Plaintiff’s claims in his
favor and presume all pleaded allegations to be true. Plaintiff alleges that Defendants’ intentional
or negligent actions resulted in the loss of possession and ownership of Plaintiff’s shares and the
associated benefits within the ESPP.142 As Plaintiff correctly asserts, regaining access to the Home
Depot account does not resolve the remaining issue of whether Defendants breached a fiduciary
duty to Plaintiff. Thus, Defendants have not shown that Plaintiff’s individual claims are moot under
Federal Rule of Civil Procedure 12(b)(1).
V. Conclusion
For the reasons discussed above, the class allegations do not satisfy the pleading
requirements of Rule 9(b), fail to state a claim because they contradict the terms of the ESPP, and
fail to meet the pleading requirements of Rule 23. Plaintiff was previously granted leave to file an
Amended Complaint to address these pleading deficiencies, and he failed to do so. Therefore, the
Court finds it would be futile to allow an additional opportunity for amendment and dismisses the
class allegations. However, the Court denies the motion to the extent it seeks dismissal of the
individual claims as Defendants have not shown that the individual claims are moot. Accordingly,
141 Rec. Doc. 1 at 5–7; Rec. Doc. 45 at 1 (incorporating all claims raised in the original Complaint by
reference).
142 Rec. Doc. 1 at 6–7.
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IT IS HEREBY ORDERED that the Motion to Dismiss Plaintiff’s Amended Complaint143
is GRANTED IN PART and DENIED IN PART. The motion is GRANTED to the extent it seeks
dismissal of the proposed class allegations. The motion is DENIED to the extent it seeks dismissal
of the individual claims.
IT IS FURTHER ORDERED that the proposed class allegations raised in the Amended
Complaint are DISMISSED.
NEW ORLEANS, LOUISIANA, this _____ day of November, 2025.
_________________________________
NANNETTE JOLIVETTE BROWN
UNITED STATES DISTRICT JUDGE
143 Rec. Doc. 46.
6th
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