Court Opinion

ID: 9400917
Source: CourtListenerOpinion
Date Created: 2023-06-09 19:01:30.884444+00
Date Added: 2024-06-11T17:19:48.884096
License: Public Domain

USCA11 Case: 22-11789     Document: 41-1     Date Filed: 06/09/2023   Page: 1 of 7

                                                   [DO NOT PUBLISH]
                                    In the
                United States Court of Appeals
                         For the Eleventh Circuit

                           ____________________

                                 No. 22-11789
                           ____________________

       SEAN SHEFFLER,
       on behalf of himself and all others
       similarly situated,
       TY BAUGH,
       BELINDA GOSS,
       TRAVIS ROGERS,
                                                    Plaintiﬀs-Appellants,
       versus
       AMERICOLD REALTY TRUST,
       a Maryland corporation,

                                                    Defendant-Appellee.

                           ____________________
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       2                        Opinion of the Court                    22-11789

                  Appeal from the United States District Court
                     for the Northern District of Georgia
                     D.C. Docket No. 1:21-cv-01075-TCB
                           ____________________

       Before WILSON and JILL PRYOR, Circuit Judges, and COVINGTON,*
       District Judge.
       COVINGTON, District Judge:
               The plaintiffs appeal from the district court’s order granting
       Americold Realty Trust’s Rule 12(b)(6) motion to dismiss and the
       court’s order denying the plaintiffs’ post-dismissal Rule 59(e) mo-
       tion seeking leave to file a second amended complaint. The plain-
       tiffs’ sensitive personally identifiable information (PII) was alleg-
       edly exposed in a data breach incident, and the plaintiffs brought
       claims for negligence and breach of implied contract. We recently
       reversed the dismissal of a similar negligence claim in a data breach
       class action, Ramirez v. The Paradies Shops, LLC, __ F.4th __, No.
       22-12853 (11th Cir. June 5, 2023), but we do not reach that issue in
       this case. Instead, with the benefit of oral argument, we reverse the
       denial of leave to amend and remand so the plaintiffs can proceed
       on their second amended complaint.

       *Honorable Virginia M. Covington, United States District Judge for the Mid-
       dle District of Florida, sitting by designation.

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       22-11789                  Opinion of the Court                                3

                                  I.      BACKGROUND
             Sean Sheffler sued Americold on behalf of himself and a class
       of other current or former Americold employees who allegedly
       had their PII improperly accessed during a ransomware attack on
       Americold’s systems. Shortly after Americold’s first motion to dis-
       miss, Sheffler amended his complaint as of right, adding three
       named plaintiffs.
              Americold then renewed its Rule 12(b) motion to dismiss,
       arguing that no relevant state had recognized a common law neg-
       ligence duty to safeguard PII, the plaintiffs had not suffered a cog-
       nizable injury, and the economic loss bar precluded recovery. It
       also argued the plaintiffs failed to allege a meeting of the minds to
       establish an implied contract.1
              The plaintiffs later requested leave to file a sur-reply to the
       motion to dismiss to address Purvis v. Aveanna Healthcare, LLC,
       563 F. Supp. 3d 1360 (N.D. Ga. 2021), in which another district
       court had recently discussed negligence and the duty to safeguard
       PII under Georgia law. In opposing leave, Americold mentioned in
       a footnote that the plaintiffs had not included similar foreseeability
       allegations to those in Purvis.
             The district court permitted the plaintiffs to file the sur-re-
       ply, but it granted Americold’s motion to dismiss. The court

       1 The plaintiffs also asserted claims for invasion of privacy and breach of con-
       fidence but withdrew those claims in response to Americold’s motion to dis-
       miss.

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       4                      Opinion of the Court                 22-11789

       concluded the plaintiffs’ negligence claim failed because their fore-
       seeability allegations were less specific than those in Purvis. The
       court also agreed with Americold on the breach of implied contract
       claim.
               The plaintiffs timely moved “pursuant to Fed. R. Civ. P.
       59(e) and 60(b)” for an order vacating the dismissal and allowing
       them leave to file a second amended complaint. They argued that
       leave to amend should be granted liberally even after dismissal.
       The proposed second amended complaint, which was attached,
       would have added more specific allegations about the foreseeabil-
       ity of a data breach.
              The district court noted there is some ambiguity regarding
       the standard for a post-judgment motion for leave to amend, but it
       ultimately agreed with Americold that the plaintiffs needed to meet
       the stringent standards of Rules 59 and 60, not the more lenient
       standard of Rule 15. Because the plaintiffs failed to meet this strin-
       gent standard, the court denied leave to amend.
                                II.    DISCUSSION
              On appeal, the plaintiffs contend, among other things, that
       the district court erred by using the stringent Rule 59(e) standard,
       rather than the lenient Rule 15 standard.
              We review the denial of a post-dismissal motion for leave to
       file an amended complaint for abuse of discretion. See Spanish
       Broad. Sys. of Fla. v. Clear Channel Commc’ns, 376 F.3d 1065, 1077
       (11th Cir. 2004). That said, the abuse of discretion standard in this
       context is not entirely clear. Compare Thomas v. Davie, 847 F.2d 771,

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       22-11789                   Opinion of the Court                                5

       773 (11th Cir. 1988) (discussing the limits on a district court’s dis-
       cretion in denying leave to amend), with Cason v. Seckinger, 231 F.3d
       777, 786–87 (11th Cir. 2000) (explaining that the question before
       this Court on review is whether the district court’s decision was a
       clear error of judgment, not whether we would grant leave to
       amend). In any event, a court abuses its discretion if the judge fails
       to apply the proper legal standard. E.g., United States v. Shaygan, 652
       F.3d 1297, 1310 (11th Cir. 2011).
               Although Federal Rule of Civil Procedure 15(a) provides
       that leave to amend shall be freely given when justice so requires,
       the right to amend under Rule 15 terminates once a complaint is
       finally dismissed. See Czeremcha v. Int’l Ass’n of Machinists & Aero-
       space Workers, 724 F.2d 1552, 1554–56 (11th Cir. 1984); see also Jacobs
       v. Tempur-Pedic Int’l, Inc., 626 F.3d 1327, 1344 (11th Cir. 2010) (stat-
       ing that Rule 15(a) has no application after judgment is entered).
              Instead, a plaintiff may move for relief under Rule 59(e) by
       asking the district court to vacate its judgment based on proposed
       amendments. Spanish Broad. Sys. of Fla., 376 F.3d at 1077; Czerem-
       cha, 724 F.2d at 1556. As the plaintiffs argue, our earliest binding
       precedent provides that the “same” liberal amendment standard
       also applies to a Rule 59(e) motion seeking leave to file an amended
       complaint.2 Spanish Broad. Sys. of Fla., 376 F.3d at 1077 (explaining

       2 The district court relied on an unpublished panel decision—OJ Commerce, LLC

       v. Ashley Furniture Industries, Inc., 817 F. App’x 686, 693 (11th Cir. 2020)—when
       it applied the more stringent Rule 59(e) standard. But we do not find OJ Com-
       merce persuasive because it did not discuss the Czeremcha line of cases and,

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       6                        Opinion of the Court                     22-11789

       that “leave to amend must be granted absent a specific, significant
       reason for denial,” such as futility of amendment or undue delay,
       and the same standards apply to motions seeking amendment
       through Rule 59(e)); Thomas, 847 F.2d at 773 (“[A] district court’s
       discretion to dismiss a complaint without leave to amend is ‘se-
       verely restrict[ed]’ by Fed.R.Civ.P.15(a), which directs that leave to
       amend ‘shall be freely given when justice so requires.’ [U]nless
       there is a substantial reason to deny leave to amend, the discretion
       of the district court is not broad enough to permit denial. The same
       standards apply when a plaintiff seeks to amend after a judgment
       of dismissal has been entered by asking the district court to vacate
       its order of dismissal pursuant to Fed.R.Civ.P.59(e).”) (citations and
       internal quotation marks omitted). Accord Dussouy v. Gulf Coast Inv.
       Corp., 660 F.2d 594, 597–98, n.1 (5th Cir. Nov. 5, 1981).
              Americold argues that policy considerations of finality and
       judicial efficiency nevertheless weigh against allowing the plaintiffs
       to take a “wait and see” approach, that is, making a tactical decision
       to wait to add factual allegations until after the court ruled on the
       Rule 12(b)(6) motion. When we asked the plaintiffs about this at
       oral argument, they pointed out that the district court created a
       new legal standard for data breach negligence claims that Amer-
       icold had not presented in its motion to dismiss. Indeed, the plain-
       tiffs would have been hard-pressed to predict that they might need
       to amend their complaint to add more specific foreseeability

       instead, cited the stringent Rule 59(e) standard from cases in which leave to
       amend was not at issue.

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       22-11789                   Opinion of the Court                                  7

       allegations in response to Americold’s renewed motion to dismiss.
       Moreover, in denying leave to amend, the district court did not find
       that the proposed amendment would be futile, that there was un-
       due delay, or that Americold would be prejudiced by the amend-
       ment. 3 See Thomas, 847 F.2d at 773 (discussing reasons to deny leave
       to amend). And our recent opinion in Ramirez has undermined the
       dismissal of the plaintiffs’ negligence claim.
              In light of the more liberal amendment standard, the unu-
       sual procedural history of this case, and our intervening Ramirez
       decision, we VACATE the district court’s dismissal of the action
       and REMAND with instructions to grant the plaintiffs’ motion for
       leave to amend.

       3 The district court alternatively denied the motion to amend because it found
       the motion was untimely and the plaintiffs had not shown good cause for an
       extension. Even assuming the scheduling order actually adopted the 30-day
       window for amendments set forth in the parties’ Joint Preliminary Report and
       Discovery Plan—and that is debatable—the unique procedural history of this
       case also constituted good cause to extend the time to file an amendment. See
       Fed. R. Civ. P. 16(b); Sosa v. Airprint Sys., 133 F.3d 1417, 1418 (11th Cir. 1998).

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