SCHWARTZ

v.

ADP, LLC.

ADP, INC. and AUTOMATIC DATA PROCESSING, INC.,

Defendants. /

OPINION AND ORDER1

Before the Court is Defendants ADP, Inc. and Automatic Data Processing, Inc.’s (together “ADP”) Motion to Dismiss (Doc. 55). Plaintiff David Schwartz responded (Doc. 56). The Court grants the Motion in part.

BACKGROUND

This case arises from Schwartz’s job with ADP. A few years ago, their relationship went awry. Schwartz alleges ADP has illegal business practices. After he blew the whistle on them, ADP retaliated. They locked him out of his work laptop and iPad, then fired him.

Complaint (the “Complaint”) (Doc. 50).

LEGAL STANDARD

A complaint must recite “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “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.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A facially plausible claim allows a “court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Courts must accept all well-pled allegations as true and view them most favorably to plaintiff. Almanza v. United Airlines, Inc., 851 F. 3d 1060, 1066 (11th Cir. 2017).

DISCUSSION

The parties’ dispute proceeds in five parts below.

A. Counts 1 and 7

First, ADP says Schwartz did not state claims under the Computer

Fraud and Abuse Act (“CFAA”). Schwartz responds ADP’s “sole argument” revolves around failing to specify what devices it hacked. (Doc. 56 at 3). That’s wrong. ADP moves to dismiss for several reasons, including the failure to allege proper damages. Even assuming Schwartz clarified the devices, the

Court agrees with ADP on the damages element. The CFAA punishes computer hacking. Fla. Atl. Univ. Bd. of Trs. v. Parsont, 465 F. Supp. 3d 1279, 1290 (S.D. Fla. 2020). Its civil enforcement remedy “has four elements: (1) a defendant intentionally accessed a protected computer; (2) without authorization or exceeding authorized access; and the defendant (3) thereby obtained information; and (4) the plaintiff suffered damage or loss of at least $5,000.”² Hall v. Sargeant, No. 18-80748-CIV- ALTMAN/Reinhart, 2020 WL 1536435, at *28 (S.D. Fla. Mar. 30, 2020); see also Hamilton Grp. Funding, Inc. v. Basel, 311 F. Supp. 3d 1307, 1313 (S.D. Fla. 2018) (parsing dense statute to cobble together this claim). To meet the statutory minimum, damages must satisfy the definition of “loss.” Brown Jordan Int’l, Inc. v. Carmicle, 846 F. 3d 1167, 1173 (11th Cir. 2017); 18 U.S.C. § 1030(c)(4)(A)(i)(I).

18 U.S.C. § 1030(e)(11) (emphasis added). So the CFAA allows recovery of (1) “direct costs of responding to the violation” and (2) “consequential damages resulting from interruption of service.” Carmicle, 846 F. 3d at 1174. At bottom, some combination of those losses must meet the $5,000 minimum. Id. at 1173. ADP is correct the Complaint only makes the conclusory allegation losses reached that amount. While Schwartz alleges ADP hacked attorney-client communications and personal information valued at over $5,000, those are not “losses” under the CFAA. Daughtry v. Atlanta Crane & Automated Handling, Inc., No. 2:10-cv-1371-AKK, 2012 WL 13024455, at *8 (N.D. Ala. Jan. 12, 2012) (“The CFAA’s definition of ‘loss’ does not include lost revenue from the possible misappropriation of ‘stolen’ information.”); Aquent LLC v. Stapleton, 65 F. Supp. 3d 1339, 1345 (M.D. Fla. 2014). Again, losses are the costs associated with remedying a CFAA violation and consequential damages from lost service. Carmicle, 846 F. 3d at 1174; 18 U.S.C. § 1030(e)(11). Yet Schwartz offers no facts from which anyone could infer he suffered $5,000 of those losses. With just conclusory allegations on the damages element, the claim must fail. Oce N. Am., Inc. v. MCS Servs., Inc., 748 F. Supp. 2d 481, 488 (D. Md. 2010); Psychas v. Dist. Dep’t of Transp., No. 18-0081 (ABJ), 2019 WL 4644503, at *8-

11 (D.D.C. Sept. 24, 2019) (surveying cases and explaining limitations on “losses”).³ So the Court dismisses the CFAA claims.

B. Counts 4 and 10

Second, ADP seeks to dismiss both claims under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), which amended the Employee Retirement Income Security Act (“ERISA”). According to Schwartz, ADP did not give him notice of his right to coverage. Without knowing about COBRA benefits, his family lost their insurance. So Schwartz and his wife decided not to have a second child. Like before, the Court concludes he doesn’t have standing.⁴ (Doc. 36) (the “Order”).

Schwartz meets one statutory definition. See 29 U.S.C. § 1002(7)-(8) (demanding plaintiff be someone “who is or may become eligible” or “entitled to” benefits under an ERISA plan). On repleading, Schwartz sprinkled in a few conclusory statements. Yet he again sues for only statutory penalties and (maybe) consequential damages without addressing his expired COBRA benefits. So he still does not pursue COBRA or other ERISA benefits. Most cases Schwartz relies on are easily distinguished. For instance, he says Christopher v. Mobil Oil Corp. helps his cause. 950 F. 2d 1209 (5th Cir. 1992). Not so. In Christopher, plaintiff sued because defendant discharged him for exercising an ERISA right and to prevent benefits from vesting. But for that defendant’s conduct, plaintiff would have standing. This case differs. Schwartz was a participant or beneficiary with standing in the past. But he isn’t anymore. Unlike Christopher, the Complaint does not allege ADP fired Schwartz to deprive him of COBRA or other ERISA benefits (nor could he). And any COBRA rights Schwartz had expired long ago—whether or not ADP provided notice. See 29 U.S.C. § 1162(2)(A); Geissal v. Moore Med. Corp., 524

U.S. 74, 80 (1998). So ADP’s conduct could not be the but-for cause of Schwartz nonentitlement to COBRA at the time of suit. Other cases Schwartz cites are also unavailing. In those situations, plaintiffs were still entitled to ERISA plan benefits. So unlike Schwartz, they had standing.⁵ As much as Schwartz relies on a single, fourteen-year-old case from Illinois, the Court is unpersuaded. Enenstein v. Eagle Ins. Agency, Inc., No. 06 C 627, 2007 WL 2410098 (N.D. Ill. Aug. 23, 2007). There, it was unclear whether plaintiff’s COBRA rights expired presuit. On the other hand, not even

Schwartz alleges he still may have COBRA coverage. Instead, he doubles down on the theory to get damages by stating bare legal conclusions about a “colorable claim” to unidentified benefits. (Doc. 50 at 36, 48). Again, all Schwartz seeks are statutory penalties and (possibly) consequential damages from not having another baby. Neither are benefits. So this is not a circumstance where Schwartz sues for ERISA benefits he lost because of ADP’s failure to give COBRA notice. See Hager v. DBG Partners, Inc., 903 F. 3d 460 (5th Cir. 2018) (finding standing in suit over reimbursed medical expenses when defendant did not notify plaintiff of terminated COBRA benefits). Because he does not identify or pursue a single ERISA benefit to which he is (or could be) entitled, Schwartz does not have statutory

[plaintiff] sue to obtain the statutory penalty for failing to provide plan documents to a participant, since that penalty is not a benefit either.”).⁶ So the Court dismisses the ERISA claims.

C. Counts 6 and 12

Third, ADP wants to dismiss Schwartz’s claims under the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”). FDUTPA is “construed liberally to . . . protect the consuming public and legitimate business enterprises . . . in the conduct of any trade or commerce.”

Fla. Stat. § 501.202(2). Unsurprisingly then, this scheme bars “[u]nfair methods of competition, unconscionable acts or practices, and unfair or

“Trade or commerce” means “the advertising, soliciting, providing, offering, or distributing, whether by sale, rental, or otherwise, of any good or service, or any property . . . or thing of value.” Fla. Stat. § 501.203(8). Like the Order said, this is a “broad” definition. (Doc. 36 at 13). Yet—as before—it is still unclear how the alleged deceptive or unfair conduct fell within trade or commerce. The FDUTPA allegations are limited to ADP’s hacking of Schwartz’s devices and failing to provide employment papers (like COBRA notice). But again, there is no explanation how that has anything to do with trade or commerce. And on its face, hacking a former employee’s devices to gain an advantage in litigation with that employee is not “advertising,

Schwartz mainly relies on cases in which competing businesses sued under FDUTPA. But there is no allegation Schwartz operates a competing business in trade or commerce. Nor is there any other inkling about how ADP’s conduct was commercial. Rather, the FDUTPA claims “focus on the bad end to the parties’ employment relationship and current litigation.” (Doc. 36 at 13). Because the Complaint doesn’t allege ADP’s conduct was in trade or commerce, it fails to state FDUTPA claims. See, e.g., AMG Trade & Distrib., LLC v. Nissan N. Am., Inc., 813 F. App’x 403, 408 (11th Cir. 2020).

So the Court dismisses the FDUTPA claims.

D. Leave to Amend

Fourth, Schwartz (through briefing) impliedly asks to amend any faulty claims. The Court denies the request for several reasons.

To start, the request is procedurally flawed. Parties seeking leave to amend must do so by separate motion. Fed. R. Civ. P. 7(b)(1) (“A request for a

US Inc., No. 20-12258, 2021 WL 5563732, at *4-5 (11th Cir. Nov. 29, 2021). He apparently knew of the new facts to support theories months ago. (Doc. 46 at 2, 8-9, 15). And there is no excuse for why necessary allegations would be withheld. See Tampa Bay Water v. HDR Eng’g, 731 F. 3d 1171, 1186 (11th Cir. 2013) (“A district court may find undue delay when the movant knew of facts supporting the new claim long before the movant requested leave to amend, and amendment would further delay the proceedings. . . . [P]rejudice is especially likely to exist if the amendment involves new theories of recovery or would require additional discovery.”), abrogated on other grounds by CSX

Transp., Inc. v. Gen. Mills, Inc., 846 F. 3d 1333 (11th Cir. 2017). Finally, the case history militates against amendment. In April, when ADP first sought dismissal, Schwartz amended as a matter of course. Then, ADP moved to dismiss again—a motion the Order mostly granted—and

Schwartz amended. Finally, the Court granted ADP’s third motion to dismiss on shotgun pleading grounds, allowing Schwartz to replead. Schwartz had three prior opportunities to amend, and this is ADP’s fourth motion to dismiss.¹⁰ Where relevant, all motions made the same argument. Simply put,

Schwartz had more than enough chances to respond to ADP’s contentions and make any allegations necessary to state his claims. One last point. Schwartz says ADP’s request to dismiss his claims with prejudice (i.e., without leave to amend) is “uninformed legal argument.” (Doc.

56 at 2). According to Schwartz, “there is no limitation on the number of times

E. Fees and Costs

And fifth, ADP moves for a decision on its entitlement to attorney’s fees and costs for the ERISA and FDUTPA claims. A party may move for an entitlement decision “[w]ithin fourteen days after judgment.” Local Rule 7.01(b). This case is still at the pleading stage without judgment entered. So the request is premature. See also Fla. Stat. § 501.2105(1) (permitting fees “after judgment”); Hardt v. Reliance Standard Life Ins., 560 U.S. 242, 255 (2010) (The “fees claimant must show some degree of success on the merits before a court may award attorney’s fees under § 1132(g)(1).” (cleaned up)). What’s more, the request is not made by a separate motion. Nor does it estimate the amount sought. Local Rule 7.01 requires both. So the Court denies the request without prejudice. Accordingly, it is now ORDERED: 1. Defendants’ Motion to Dismiss (Doc. 55) is GRANTED in part. a. Counts¹, 4, 6, 7, 10, and 12 are DISMISSED with prejudice. b. The balance of the Motion is DENIED. 2. Defendants must ANSWER the Third Amended Verified Complaint (Doc. 50) on or before December 17, 2021. DONE and ORDERED in Fort Myers, Florida on December⁸, 2021.

UNITED STATES DISTRICT JUDGE

Copies: All Parties of Record