Thoughts About Responses to the Dismissal of the DNC Fraud Lawsuit
After the 2016 Democratic primary election was completed, information contained in emails to and from the DNC and prominent Democrats, that were released purportedly by hackers, revealed that the DNC and Deborah Wasserman Schultz were colluding with the Hillary Clinton campaign to unfairly rig the primary in Clinton’s favor. The case was brought by plaintiffs to redress this wrong and primarily claiming fraud and breach of fiduciary duties by the DNC, Wasserman Schultz, and others by violating the DNC’s own rules for conducting the primaries in an impartial and unbiased manner. The case was brought in the United States District Court in the Southern District of Florida and titled WILDING vs. DNC SERVICES CORP (Case NO. 16-61511-CIV-Zloch), now commonly known as the DNC Fraud Lawsuit.
The Defendants filed a Motion to Dismiss and in the oral arguments on their Motion, the DNC’s attorney asserted that the DNC has the authority to select any candidate they wanted in any way they wanted. The DNC’s attorney told the Court that the delegates could “go into back rooms like they used to and smoke cigars and pick the candidate that way.” Needless to say, this caused further outrage at the audacity of the DNC to deny it has any obligation whatsoever to the people registered and voting as Democrats.
On August 25, 2017, a Final Order of Dismissal (hereafter “the Order”) was issued by U.S. District Judge William J. Zloch that granted the Defendants’ Motion to Dismiss. The Order has been commented on in social media as well as in some news outlets with wildly divergent responses that are equally misleading in opposite ways. Many supporters of the Bernie Sanders campaign were putting great hope on this case to redress their concerns about the fairness of the Democratic Party primaries and are deeply disappointed that the case has now been dismissed.
I’ve seen several negative memes related to the #DNCFraudLawsuit such as:
“Dismissed DNC Fraud Lawsuit is proof that fraudulent elections in the USA are okay!”
“Heart broken again! Just like at the convention! You’d think we’d learn to expect it!”
“This is officially the end of all justice.”
These types of memes proclaiming that “the sky is falling” come from progressives but they are not fact based and only add to the hysteria about our current political processes and create false impressions about the law and the judicial system.
On the other hand, there have been headlines, such as that in the website Observer, stating, “Court Admits DNC and Debbie Wasserman-Schulz Rigged Primaries Against Sanders.” This too is completely erroneous and misinforms people.
As an attorney, I have to say the fantastic conclusions of both extremes seem to be arising from honest emotions and frustrations which are sadly rooted in ignorance about both Judge Zloch’s Order and the law. After reading the Order, I agree with it “98%.” Here's my “down and dirty” analysis.
The Order makes it pretty clear that the attorneys for plaintiffs were not particularly well versed in Federal pleading and practice. Subject matter jurisdiction has technicalities that must be followed to the letter. Importantly, the court's opinion states,
“This Order therefore concerns only technical matters of pleading and subject-matter jurisdiction. To the extent Plaintiffs wish to air their general grievances with the DNC or its candidate selection process, their redress is through the ballot box, the DNC’s internal workings, or their right of free speech—not through the judiciary. To the extent Plaintiffs have asserted specific causes of action grounded in specific factual allegations, it is this Court’s emphatic duty to measure Plaintiffs’ pleadings against existing legal standards. Having done so, and for the reasons that follow, the Court finds that the named Plaintiffs have not presented a case that is cognizable in federal court.” (p. 9)
The essential point there is the distinction in the law between “general grievances” and “specific causes of action.”
State courts are courts of general subject matter jurisdiction. Federal courts are courts of limited subject matter jurisdiction and only have jurisdiction over certain limited issues. The lawsuit does not raise any violation of the Constitution or of Federal Statutes, therefore there is no direct Federal subject matter jurisdiction. The two other possible bridges for indirect Federal subject matter jurisdiction require either complete diversity between plaintiffs and defendants or partial diversity. Diversity means being citizens of different states. Since some of the plaintiff’s live in the same states as some of the defendants there is no complete diversity. (Here, the court seems to chiding the attorneys for using the terms “resident” when they should have used the term “citizen.” This shows that the attorney’s were using State court terminology in Federal court. If that was the only problem it could be easily corrected, but the court makes it clear they do not see that as the only problem or even the most significant problem.)
Since there is no violation of Federal law and no complete diversity of citizenship, the only way into Federal court is with a class action and partial diversity between the parties. The Court held that if there is the assumption of partial diversity (“assumption” because the term used was residence not citizenship), even so, there is no class action subject matter jurisdiction since the representatives of the class have not pled the essential check-off points that are required. For a fraud claim, they must plead that they relied upon the DNC charter and the claims of impartiality before they donated to the DNC.
The Court says the complaint does not include any declarations of reliance upon, or even knowledge of, the claim of DNC impartiality before any one of the representatives donated. The court says that there was a “boilerplate” declaration of reliance, but no sufficient factual content supporting it. Thus the complaint says they detrimentally relied, but does not declare such reliance with factual specificity, for example, and this is my example, such as “I heard on the radio that the DNC chairman said she must be impartial, therefore I donated because I believed she would b e impartial.”
Without establishing the factual basis for detrimental reliance, a fraud case fails by what is called a “lack of standing,” because they have not shown they have suffered a personal loss due to the fraud. In other words, they may have suffered a personal loss, but not one that was due to fraud, because it looks like they donated before any issue or knowledge of the claim of impartiality arose.
For clarification, the opinion says, “The act of donating to an organization does not, of itself, create a legally protected interest in the organization’s operations.” The legal theory is that the DNC is a not-for-profit organization and therefore donations are “gifts,” and a “gift” bestows no inherent legal obligation on the receiver of the “gift.” That is, a gift does not create a contract or binding expectation. Only if the “gift” is given because of fraudulent inducement does any obligation arise, and the court says that such inducement was not sufficiently pled.
The fiduciary duty claims are most interesting to me because of my past experience with such claims for nonprofit public benefit corporations. Here, the question is one related to issues such as membership status. And here the court specifically rejected the DNC’s argument of unlimited procedural options:
“For their part, the DNC and Wasserman Schultz have characterized the DNC charter’s promise of ‘impartiality and evenhandedness’ as a mere political promise—political rhetoric that is not enforceable in federal courts. The Court does not accept this trivialization of the DNC’s governing principles. While it may be true in the abstract that the DNC has the right to have its delegates ‘go into back rooms like they used to and smoke cigars and pick the candidate that way,’ DE 54, at 36:22-24, the DNC, through its charter, has committed itself to a higher principle.”
However, the court adds, “Nevertheless, it is apparent that these Plaintiffs cannot satisfy Lujan’s test, and therefore lack standing to assert Count V of the First Amended Complaint (DE 8).” That means that the grievance of the class of “registered Democrats” is too generalized to meet a very technical but necessary requirement for a class action claim. In other words, there are too many registered Democrats in the USA for the harm that is alleged to be specific to the class. Though the Court’s Order did not frame it in these terms, what it is saying is that “all registered Democrats” are not actually “members” in the usual sense of a membership organization that would create a fiduciary duty to the members.
Like the cases that would not allow claims against the unfair rules of the Commission on Presidential Debates, the court said the “claimed injury was too abstract and generalized to invoke the court’s jurisdiction.” In my view, this is the greyest area of the opinion in which the Court is just saying this is a political football that we don’t want to touch if we don’t have to. The court is reduced to finding that “the harm done to the general public by corruption of the political process is not a sufficiently concrete, personalized injury to establish standing.” This shows where the failure of the law (not the failure of the Judge) resides. Political parties have no generalized public obligation to follow their own rules, and only very specific sets of circumstances must be present for a person to have legal “standing” to hold them accountable based on their duty to uphold their own rules.
The other claims regarding identity theft are minor in the big picture of political fraud, and since they don’t have anything to do with the fairness or impartiality of the DNC, I won’t comment on why the Court found they were not sufficiently pled.
The bottom line is that a dismissal opinion of this kind is not an indictment against the courts, the judges, or our democracy, but shows the Court trying to educate the plaintiffs and their attorneys what is needed to make the lawsuit “have legs.”
A few words about false headlines like “Court Admits DNC Rigged Primaries Against Sanders” are necessary. The case was at the stage of initial review based on the Motion to Dismiss by defendants, and so at this stage the Court only looks at how the causes of action in the complaint are written, not whether their substance is true or false. So the Court says that it "assumes their allegations as true" (p. 2) for purposes of review at this stage. The court did not "admit" anything except in the hypothetical sense for comparing the allegation of "rigging" against the technicalities of pleading those allegations. The court found that even if the allegations of rigging were true, that the complaint was not written with enough specificity or factual basis to take the case to the next stage. In other words, the Court’s Order says to go back to the drawing board and write a better complaint.
The attorneys in this case clearly show they have their hearts in the right place, but from the Order it appears they were not experts in Federal practice. Because of that their complaint had deficiencies, and also the choice of plaintiffs for the potential class may not have been drawn rigorously enough. The bottom line is that a dismissal opinion of this kind is not an indictment against the courts, the judges, or our democracy, but shows the Court trying to educate the plaintiffs and their attorneys what is needed to make the lawsuit “have legs.” A dismissal "without prejudice" is an educational tool telling the attorneys what needs to be fixed in order to go forward.
Whether it can be fixed is another question altogether. There is a slim chance that the complaint can be rewritten to address the points of deficiency enumerated in the Court’s opinion. It may also be possible for additional or other plaintiffs to be found who would be in a more direct position to assert the detrimental reliance required or in a closer relationship with the DNC to assert the fiduciary duty claim.
But rewriting the complaint would most usually require a attorney who is expert in Federal pleading and practice. There is also the issue of “perception of gravitas” that the courts are generally subject to, and it would help to have and attorney on the case who has sufficient reputation in the Federal courts to garner the benefit of the doubt in any “tie” of legal reasoning. Overcoming unconscious bias is the most unpleasant aspect of attempting to get a fair hearing before the courts.
A. Gregory Wonderwheel