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Hartzman v. Wells Fargo & Co.

United States District Court, M.D. North Carolina

March 19, 2015



L. PATRICK AULD, Magistrate Judge.

This case comes before the Court on Plaintiff's Motion to Seal Document (Docket Entry 22), Plaintiff's Motion for Leave to File an Amended Complaint (Docket Entry 24), and Plaintiff's Motions to Compel (Docket Entries 31, 32). For the reasons that follow, the Court will deny as moot Plaintiff's Motion to Seal, will grant in part and deny in part Plaintiff's Motion to Amend, [1] and will deny Plaintiff's Motions to Compel.


Plaintiff commenced this action by filing a four-page Complaint alleging that Defendant, his former employer, retaliated against him for reporting Defendant's allegedly fraudulent practices in violation of a whistleblower provision within the Sarbanes-Oxley Act, codified at 18 U.S.C. § 1514A(b). (See Docket Entry 1 at 1.) Plaintiff subsequently filed a Supplement to that Complaint, which includes approximately 50 pages of attachments containing additional factual allegations, charts, and correspondence concerning his related Department of Labor administrative proceeding. (See Docket Entry 8 and its various attachments.) Defendant then moved to dismiss the Amended Complaint (Docket Entry 19), contending that "there are no facts alleged in the Complaint that, under any interpretation, satisfy the pleading requirements of Twombly and Iqbal. The Complaint is completely devoid of any allegation that would reasonably inform [Defendant], or any other reader, of the factual basis for any claim that [Plaintiff] may be trying to assert" (Docket Entry 20 at 8).

Plaintiff, in an apparent effort to provide such factual matter, sought leave to amend his pleading a second time. (Docket Entry 24.) Accordingly, Plaintiff's proposed Second Amended Complaint consists of over 140 pages which reflect a jumble of factual allegations, charts, correspondence, and website links to news articles. (See Docket Entry 24-1 at 1-143.) Defendant responded in opposition to amendment, on grounds of futility (Docket Entry 29), and Plaintiff replied (Docket Entry 30).

In connection with Plaintiff's instant Motion to Amend, Plaintiff also sought to file under seal a document as an attachment to the Second Amended Complaint, in keeping with Defendant's contention that said document should remain confidential. (Docket Entry 22 at 1-2.) In response, the Court entered a Text Order directing Plaintiff to supplement his Motion to Seal according to the requirements of Local Rule 5.4. (Text Order dated Dec. 1, 2014.) Plaintiff filed a Supplement (Docket Entry 23), to which Defendant responded (Docket Entry 25), and Plaintiff replied (Docket Entry 28).

In addition, Plaintiff submitted two documents entitled Motions to Compel. (Docket Entries 31, 32.) Those Motions seek the recusal of various individuals - including SEC Chair Mary Jo White and Attorney General Eric Holder - who have no apparent involvement in this case. (See Docket Entry 31 at 1; Docket Entry 32 at 1.) Defendant then responded in opposition (Docket Entry 33) and Plaintiff replied (Docket Entry 34).


A. Plaintiff's Motion to Amend

Plaintiff requests leave to amend "to add Defendants and refine claims of harms suffered from [D]efendants' behavior described in the [C]omplaint." (Docket Entry 24 at 1.) Specifically, Plaintiff's First Amended Complaint names only "Wells Fargo" as a Defendant (Docket Entry 8 at 1), whereas his proposed Second Amended Complaint seeks to proceed against "Wells Fargo & Company or one or more of its direct or indirect subsidiaries" (Docket Entry 24-1 at 1), as well John Gerard Stumpf (current Chairman and CEO of Defendant Wells Fargo) and Robert King Steel (former CEO of Wachovia prior to its sale to Defendant Wells Fargo) (id. at 8-9). Plaintiff's Second Amended Complaint further identifies 21 additional purported claims (not including his Sarbanes-Oxley whistleblower claim) against Defendant, ranging from criminal offenses (such as, bank fraud and perjury), to a provision concerning fiduciary responsibilities under ERISA (the Employee Retirement Income Security Act), to an action for deprivation of rights under 42 U.S.C. § 1983. (See Docket Entry 24-1 at 140-42.) Defendant opposes amendment on grounds of futility, because, according to Defendant, the Second Amended Complaint fails to state a claim. (Docket Entry 29 at 1-7.)[2]

Given Defendant's refusal of consent, Plaintiff "may amend its pleading only with... the [C]ourt's leave. The [C]ourt should freely give leave when justice so requires." Fed.R.Civ.P. 15(a)(2). Under this standard, the Court has discretion, "but outright refusal to grant the leave without any justifying reason appearing for the denial is not an exercise of discretion." Foman v. Davis, 371 U.S. 178, 182 (1962). Accordingly, "the federal rules strongly favor granting leave to amend." Medigan of Ky., Inc. v. Pub. Serv. Comm'n, 985 F.2d 164, 167-68 (4th Cir. 1993). Furthermore, as the Fourth Circuit has noted, "[t]he law is well settled that leave to amend a pleading should be denied only when the amendment would be prejudicial to the opposing party, there has been bad faith on the part of the moving party, or the amendment would be futile.'" Edwards v. City of Goldsboro, 178 F.3d 231, 242 (4th Cir. 1999) (quoting Johnson v. Oroweat Foods Co., 785 F.2d 503, 509 (4th Cir. 1986)) (emphasis in original).

"An amendment would be futile if the amended claim would fail to survive a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6)." Syngenta Crop Prod., Inc. v. EPA, 222 F.R.D. 271, 278 (M.D. N.C. 2004) (Tilley, C.J.). A plaintiff fails to state a claim when the complaint does not "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id . (quoting Twombly, 550 U.S. at 557).

This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id . In other words, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id . "Leave to amend, however, should only be denied on the ground of futility when the proposed amendment is clearly insufficient or frivolous on its face." Johnson, 785 F.2d at 510 (citing Davis v. Piper Aircraft Corp., 615 F.2d 606, 613 (4th Cir. 1980)).

As an initial matter, Plaintiff's proposed Second Amended Complaint appears to test the limits of the Federal Rules of Civil Procedure's requirements that a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief, " Fed.R.Civ.P. 8(a)(2), and that "[e]ach allegation must be simple, concise, and direct, " Fed.R.Civ.P. 8(d)(1). "While the Court must bear in mind that Rule 8 does not require technical forms of pleading or motions and that the pleadings submitted by parties proceeding pro se are to be viewed especially liberally, the Court is also mindful that [] [D]efendant must be provided notice of the claims against [it] so that [it] may prepare a defense." Jenkins v. ...

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