Appellate Case: 21-1144 Document: 010110676367 Date Filed: 04/27/2022 Page: 1
FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS April 27, 2022
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
BRYAN SEALE, an individual,
Plaintiff - Appellant,
v. No. 21-1144
GARY PEACOCK, an individual; and
JOHN DOE and/or JANE DOE,
individuals whose true name(s) are
unknown,
Defendants - Appellees.
_________________________________
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 1:19-CV-03559-KMT)
_________________________________
Jared R. Ellis, Hall & Evans, LLC (Brian Molzahn with him on the briefs), Denver,
Colorado, for Plaintiff – Appellant.
Andrew E. Swan, Leventhal Lewis Kuhn Taylor Swan PC (Michael D. Kuhn with him on
the brief), Colorado Springs, Colorado, for Defendants – Appellees.
_________________________________
Before TYMKOVICH, Chief Judge, PHILLIPS, and McHUGH, Circuit Judges.
_________________________________
McHUGH, Circuit Judge.
_________________________________
This action involves two incidents targeting Appellant, Bryan Seale. First, in
November and December 2017, someone sent anonymous letters containing personal
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and derogatory information about Mr. Seale to his acquaintances. Second, in
December 2018, Mr. Seale discovered that someone had accessed his real estate
business software account without authorization. Mr. Seale brought this action
asserting claims against (1) his ex-husband and ex-employee, Gary Peacock, for
accessing his real estate business account without authorization and (2) unnamed
defendants for sending the anonymous letters.
The magistrate judge dismissed the claims in two separate orders. First, she
granted with prejudice Mr. Peacock’s motion to dismiss the claims alleged against
him for failure to state a claim. Second, she denied Mr. Seale’s motion to amend the
complaint to substitute Mr. Peacock for the unnamed defendants and dismissed the
remaining claims without prejudice. Mr. Seale appeals both orders. Exercising
jurisdiction under 28 U.S.C. § 1291, we affirm in part and reverse and remand in
part.
I. BACKGROUND
A. Factual History1
Mr. Seale and Mr. Peacock were real estate agents in Colorado. The two
agents were previously married to each other, and Mr. Peacock previously worked for
1
This is an appeal of a Federal Rule of Civil Procedure 12(b)(6) dismissal of
the claims against Mr. Peacock and a denial of a motion to further amend the
complaint as to the claims alleged against the unknown defendants. None of the
defendants have filed an answer to the Amended Complaint. Because of the
procedural posture of the case, we describe the facts as they were alleged in the
Amended Complaint, except where otherwise noted. See Safe Streets All. v.
2
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Mr. Seale. They divorced on May 4, 2017,2 and Mr. Seale terminated Mr. Peacock’s
employment on June 29, 2018.3
Anonymous Letters
In November and December 2017, an unidentified person sent at least fifteen
letters to Mr. Seale’s acquaintances. The letters included statements about
Mr. Seale’s dating and sexual activity, explicit photographs of Mr. Seale, his profile
from a dating website, and references to Mr. Seale’s business. In November 2017,
Mr. Seale received an anonymous letter like those sent to his acquaintances, but his
also included a hostile note, saying, “Do you like breaking up families” and “my
attorney will be getting a subpoena to you to testify in my divorce case.” App. Vol. 1
at 160.
Subsequently, four real estate agents left Mr. Seale’s company, three clients
stopped doing business with Mr. Seale, and two non-profit agencies stopped their
associations with Mr. Seale’s business. Mr. Seale alleged the anonymous letters were
intended to, and did, harm his reputation and business.
Hickenlooper, 859 F.3d 865, 878 (10th Cir. 2017) (accepting all well-pleaded factual
allegations as true when reviewing a dismissal under Rule 12(b)(6)).
2
This is the date stamped on the parties’ divorce decree. As a public record,
this is a fact “subject to judicial notice [that] may be considered in a Rule 12(b)(6)
motion.” Tal v. Hogan, 453 F.3d 1244, 1264 n.24 (10th Cir. 2006).
3
This fact is found in Mr. Seale’s Proposed Second Amended Complaint.
Although the magistrate judge denied as moot the motion for leave to file this
proposed complaint, we include this fact only for context. We need not accept it as
true to resolve the issues in this appeal.
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Mr. Seale reported the letters to the Colorado Springs Police Department and
worked with the United States Postal Inspector to identify the sender. But, as of the
time of filing the Amended Complaint, his efforts had not been successful and the
sender remained unidentified.
Unauthorized Access to Mr. Seale’s CTM Software Account
Mr. Seale used CTM Software (“CTM”), “an interactive real estate contract
platform,” to support his business. Id. at 158. The information on his CTM account
included customers’ names, addresses, phone numbers, email addresses, birthdays,
and social security numbers; emails sent and received by Mr. Seale; the status of his
client relationships; complete contract history for his clients; and other client
documents like bank account information, mortgage account information, lender
relationships, personal settings, account details, and payment histories.
A feature of CTM enabled Mr. Seale to view the login history of the account.
In doing so, he determined that someone other than himself had logged into his CTM
account nineteen times on or about December 13, 2018. Of those, at least one access
went through an IP address that belonged to Liberty Toyota on Woodmen Road in
Colorado Springs, Colorado. The same day as that access, Mr. Peacock was at
Liberty Toyota getting a vehicle serviced. Mr. Seale also discovered that someone
other than himself had accessed his CTM account once on or about December 17,
2018, via an IP address that belonged to Mr. Peacock’s employer at the time.
According to Mr. Seale, Mr. Peacock was “[t]he only individual who had access to
[Mr. Seale]’s CTM logon information.” Id. at 159.
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B. Procedural History
Mr. Seale filed a complaint against Mr. Peacock and unnamed John Doe and/or
Jane Doe defendants in Colorado state court in November 2019. Mr. Peacock
removed the action to the United States District Court for the District of Colorado
based on diversity jurisdiction.4 Mr. Seale and Mr. Peacock consented to have a
magistrate judge conduct all proceedings in the case.
After removal, Mr. Seale filed an Amended Complaint pursuant to Federal
Rule of Civil Procedure 15(a)(1)(B). In the Amended Complaint, Mr. Seale alleged
three claims against Mr. Peacock: statutory civil theft; violation of the Stored
Communications Act, 18 U.S.C. §§ 2701–2713 (“SCA”); and invasion of privacy by
appropriation of name or likeness. Mr. Seale also asserted claims against the
unknown defendants for intentional infliction of emotional distress/outrageous
conduct, invasion of privacy by intrusion into seclusion, invasion of privacy by
public disclosure of private facts, and fifteen counts of libel per se. The magistrate
judge dismissed the claims against the defendants in separate orders, beginning with
the claims against Mr. Peacock.
Claims Against Mr. Peacock
Mr. Peacock moved to dismiss the three claims alleged against him in the
Amended Complaint. He argued Mr. Seale had not alleged that Mr. Peacock intended
4
When Mr. Seale filed the complaint, Mr. Peacock lived in Connecticut and
Mr. Seale remained in Colorado. Mr. Seale also certified that he reasonably believed
the amount in controversy exceeded $100,000. Thus, the district court had removal
jurisdiction under 28 U.S.C. § 1441 and
28 U.S.C. § 1332.
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to permanently deprive Mr. Seale of his property, as required to state a claim for civil
theft. Mr. Peacock also argued that Mr. Seale failed to plausibly allege damages as
required to support the remaining claims. In the Amended Complaint, Mr. Seale
alleged he lost several business relationships after the letters were sent, and he stated,
without explanation, that he suffered mental anguish from the invasion of his privacy.
As to the civil theft claim, the magistrate judge concluded allegations that
Mr. Peacock accessed Mr. Seale’s CTM account without authorization did not
“support an inference that [Mr.] Peacock intended to permanently deprive [Mr. Seale]
of his property.” Id. at 263. As to the other two claims, the magistrate judge
concluded Mr. Seale’s statement that he suffered mental anguish “is a ‘bare
assertion’ and a ‘[t]hreadbare recital[] of an element of the claim, which is
unsupported and does not suffice at the pleading stage.’”
Id. at 264 (quoting Ashcroft
v. Iqbal,
556 U.S. 662, 678 (2009)). The magistrate judge also recognized that “any
damages flowing from [the] letters are irrelevant to the access of the CTM account”
because the letters were sent over a year before the unauthorized person accessed the
CTM account.
Id. at 264–65. For these reasons, the magistrate judge granted the
motion and dismissed all three claims alleged against Mr. Peacock. Without
additional explanation, she dismissed the claims with prejudice.
Mr. Seale moved to amend the dismissals to be without prejudice under
Federal Rule of Civil Procedure 59(e) and moved for leave to further amend the
complaint to remedy the deficiencies in the damage allegations. Before the magistrate
judge could rule on these motions, Mr. Seale submitted another motion to amend the
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complaint to substitute Mr. Peacock in place of the unknown defendants. The
magistrate judge denied the Rule 59(e) motion as premature and denied the first
motion to amend as moot due to the second motion to amend.
Claims Against Unknown Defendants
Throughout the litigation, Mr. Seale tried to identify the person or persons who
sent the disparaging letters. Over the course of a year, he brought four motions for an
extension of time to serve the unknown defendants because his efforts to identify
them had not yet been successful. In the final motion for an extension of time to
serve the unknown defendants, Mr. Seale explained he was pursuing DNA analysis of
the anonymous letters that had been delayed by the COVID-19 pandemic. He
reported that the lab had finally completed the DNA testing and he expected the
results soon. The magistrate judge granted a fourth extension but warned that if
Mr. Seale failed “to serve the unknown defendants” by the new deadline, she would
“dismiss the claims against the unknown defendants without prejudice pursuant to
Fed. R. Civ. P. 4(m).” App. Vol. 2 at 36.
One week before the new deadline, Mr. Seale moved to amend the complaint
because he “recently obtained additional factual information which . . . forms the
basis for naming an individual defendant in place of the unknown defendant(s).” Id.
at 38. In the proposed amended complaint, Mr. Seale alleged he found a photograph
of his computer tablet taken while it was displaying his dating website profile. That
profile contained the explicit photograph included in the anonymous letters.
Mr. Seale alleged the photograph of his tablet had a reflection of the device that took
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the photograph, which he claimed resembled Mr. Peacock’s cell phone. Mr. Seale
also alleged that Mr. Peacock showed Mr. Seale a copy of the explicit photograph
during a therapy session in 2016. Thus, he sought to substitute Mr. Peacock for the
unknown defendants as to the remaining claims.5
In reviewing the motion, the magistrate judge found Mr. Seale had not shown
good cause for the amendment because the identifying information had been in his
possession throughout the litigation and therefore, he had not acted diligently. She
also determined he had not shown excusable neglect. Accordingly, the magistrate
judge denied Mr. Seale’s motion and dismissed the claims against the unknown
defendants without prejudice pursuant to Federal Rule of Civil Procedure 4(m).
Having dismissed all the claims alleged in the Amended Complaint, the
magistrate judge entered final judgment. Thirty days later, Mr. Seale filed a notice of
appeal from the final judgment, which incorporated the magistrate judge’s orders
dismissing Mr. Seale’s claims against Mr. Peacock pursuant to Federal Rule of Civil
Procedure 12(b)(6) and denying Mr. Seale’s motion to amend the complaint with
respect to claims against the unknown defendants.
II. DISCUSSION
On appeal, Mr. Seale challenges the (1) order granting Mr. Peacock’s motion
to dismiss the SCA claim pursuant to Rule 12(b)(6), (2) dismissal of the claims
5
The proposed amended complaint omitted two of the libel per se claims
Mr. Seale originally alleged against the unknown defendants and instead alleged only
thirteen libel per se claims against Mr. Peacock.
8
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against Mr. Peacock with prejudice,6 and (3) order denying Mr. Seale’s motion for
leave to file an amended complaint substituting Mr. Peacock for the unnamed
defendants. We review each of these issues in turn.
A. The Stored Communications Act Claim
Mr. Seale contends the magistrate judge erred when she dismissed his SCA
claim under Rule 12(b)(6) because Mr. Seale can recover statutory damages
regardless of whether he alleges any actual damages. Mr. Peacock disagrees and also
argues Mr. Seale lacks sufficient Article III standing to bring the SCA claim.
Because the standing issue would affect our jurisdiction to consider the other
arguments related to the SCA, we address it first. For the reasons we now explain, we
hold Mr. Seale does have standing. We then consider whether the magistrate judge
erred in dismissing the SCA claim and ultimately conclude Mr. Seale failed to state a
claim under the SCA.
Standing
We consider “the question of standing de novo.” Roe No. 2 v. Ogden, 253 F.3d
1225, 1228 (10th Cir. 2001). Article III of the United States Constitution “limits the
jurisdiction of federal courts to ‘Cases’ and ‘Controversies.’” Susan B. Anthony List
v. Driehaus,
573 U.S. 149, 157 (2014) (quoting U.S. Const., Art. III, § 2). “To
establish Article III standing, a plaintiff must show (1) an ‘injury in fact,’ (2) a
6
Mr. Seale does not challenge the magistrate judge’s decision to dismiss the
statutory civil theft or invasion of privacy claims alleged against Mr. Peacock for
failure to state a claim. However, Mr. Seale does challenge the district court’s
decision to dismiss all three of the claims alleged against Mr. Peacock with prejudice.
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sufficient ‘causal connection between the injury and the conduct complained of,’ and
(3) a ‘likel[ihood]’ that the injury ‘will be redressed by a favorable decision.’” Id. at
157–58 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992)).
Mr. Peacock challenges the injury in fact element, arguing that Mr. Seale has not
shown an injury in fact because he has not suffered actual damages from the alleged
SCA violation.
An injury in fact is “an invasion of a legally protected interest which is
(a) concrete and particularized and (b) ‘actual or imminent, not “conjectural” or
“hypothetical.”’” Lujan, 504 U.S. at 560 (quoting Whitmore v. Arkansas,
495 U.S.
149, 155 (1990)). A federal statute giving a plaintiff a right to sue is not
determinative of an injury in fact. See Spokeo, Inc. v. Robins,
578 U.S. 330, 339
(2016). Rather, a plaintiff must also suffer an injury in fact that is both concrete and
particularized.
Id. However, this does not mean the injury must be tangible.
Id. at
340. “Although tangible injuries are perhaps easier to recognize, . . . intangible
injuries can nevertheless be concrete.”
Id. An intangible harm is concrete if it “has a
close relationship to a harm that has traditionally been regarded as providing a basis
for a lawsuit in English or American courts.”
Id. at 341. Applying this standard, the
Supreme Court has identified “reputational harms, disclosure of private information,
and intrusion upon seclusion” as examples of concrete, intangible harms. TransUnion
LLC v. Ramirez,
141 S. Ct. 2190, 2204 (2021).
To determine whether Mr. Seale has alleged an injury in fact, we must
determine whether the harms protected by the SCA have a close relationship to the
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harms traditionally protected by the courts. The SCA prohibits “intentionally
access[ing] without authorization a facility through which an electronic
communication service is provided” or “intentionally exceed[ing] an authorization to
access that facility” and “thereby obtain[ing], alter[ing], or prevent[ing] authorized
access to a wire or electronic communication while it is in electronic storage in such
system.” 18 U.S.C. § 2701(a).
Mr. Peacock compares the harm protected by the SCA to the common law tort
of trespass to chattels, which traditionally requires actual damages. See Van Alstyne
v. Elec. Scriptorium, Ltd., 560 F.3d 199, 207–08 (4th Cir. 2009) (comparing the SCA
to the common law trespass to chattels). And because Mr. Seale has not alleged
actual damages, Mr. Peacock argues Mr. Seale lacks standing. We are not convinced.
Although the harm protected by the SCA can be viewed as closely related to
the harm associated with trespass against chattels, the SCA is also closely related to
other traditional harms. Significantly, the SCA provides recourse for invasions of
privacy in the realm of electronic communications. See, e.g., In re Facebook, Inc.
Internet Tracking Litig., 956 F.3d 589, 598 (9th Cir. 2020) (“Congress . . . intended
to protect these historical privacy rights when they passed the . . . SCA.”); In re
Nickelodeon Consumer Privacy Litig.,
827 F.3d 262, 276 (3d Cir. 2016) (“[T]he
[SCA] aims to prevent ‘potential intrusions on individual privacy.’” (quoting In re
Google Inc. Cookie Placement Consumer Privacy Litig.,
806 F.3d 125, 145 (3d Cir.
2015))). The protection of these privacy rights does not require a showing of actual
damages. See Alvarado v. KOB-TV, L.L.C.,
493 F.3d 1210, 1217 (10th Cir. 2007)
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(describing the requirements for privacy claims (citing the Restatement (Second) of
Torts § 652B)). Yet, the Supreme Court has recognized these invasions of privacy as
concrete harms for purposes of standing. TransUnion, 141 S. Ct. at 2204.
Mr. Seale alleged he suffered an invasion of privacy because Mr. Peacock,
without authorization, intentionally accessed his CTM account, which contained
electronic communications. Even assuming Mr. Seale has not alleged actual damages
caused by that unauthorized access, the harms stemming from Mr. Seale’s allegations
are closely connected to the harms protected by traditional privacy claims where the
unauthorized intrusion is itself actionable. Thus, Mr. Seale has sufficiently alleged an
injury in fact caused by the unauthorized access that is redressable. Consequently,
Mr. Seale has standing to bring the SCA claim.
That Mr. Seale has standing to bring his SCA claim, however, says nothing
about whether he has sufficiently stated such a claim in the operative complaint. We
undertake that inquiry now.
Rule 12(b)(6) Dismissal
We review an order dismissing claims for failing to state a claim under Rule
12(b)(6) de novo. Strain v. Regalado, 977 F.3d 984, 989 (10th Cir. 2020). Thus, like
the magistrate judge, we consider whether the operative complaint contains
“sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible
on its face.’” Ashcroft,
556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly,
550 U.S.
544, 570 (2007)). “A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
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liable for the misconduct alleged.” Id. “Threadbare recitals of the elements of a cause
of action, supported by mere conclusory statements, do not suffice.”
Id. But we
“accept all the well-pleaded allegations of the complaint as true and [] construe them
in the light most favorable to the plaintiff.” Albers v. Bd. of Cnty. Comm’rs of
Jefferson Cnty.,
771 F.3d 697, 700 (10th Cir. 2014) (quotation marks omitted).
Mr. Seale contends he stated a claim under the SCA because he can recover
statutory damages for a violation regardless of whether he has suffered actual
damages. In the alternative, Mr. Seale claims he plausibly alleged he suffered actual
damages from Mr. Peacock’s unauthorized access of his CTM account. For the
reasons explained below, we hold (1) a plaintiff must show actual damages to be
eligible to recover statutory damages under the SCA and (2) Mr. Seale did not allege
actual damages related to the SCA claim in the Amended Complaint.
a. Actual damages and statutory damages
As an initial matter, we must determine whether plaintiffs can recover
statutory damages under the SCA if they have not suffered actual damages. This is an
issue of first impression in this court. We begin our analysis of this novel question
with the relevant provisions of the SCA. Then, we review the different approaches
courts have used to answer this question. Ultimately, we hold SCA plaintiffs cannot
recover statutory damages without first showing they suffered actual damages caused
by the SCA violation.
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i. The Stored Communications Act
The SCA is a federal criminal statute, 18 U.S.C. § 2701(a), and it provides a
private right of action to any “person aggrieved by any violation of” the Act,
id.
§ 2707(a). Congress provided that private plaintiffs could obtain relief including
“preliminary and other equitable or declaratory relief,” “damages,” and “a reasonable
attorney’s fee and other litigation costs reasonably incurred.” Id. § 2707(b). Congress
further specified what could be included as damages:
The court may assess as damages . . . the sum of the actual damages
suffered by the plaintiff and any profits made by the violator as a result of
the violation, but in no case shall a person entitled to recover receive less
than the sum of $1,000. If the violation is willful or intentional, the court
may assess punitive damages. In the case of a successful action to enforce
liability under the section, the court may assess the costs of the action,
together with reasonable attorney fees determined by the court.
Id. § 2707(c).
ii. Persuasive authority
The first question before us is whether plaintiffs can recover the minimum
statutory damages of $1,000 if they do not allege any actual damages.7 The circuit
courts that have considered this question have determined plaintiffs must have
suffered actual damages as a prerequisite to obtaining statutory damages. Vista Mktg.,
LLC v. Burkett, 812 F.3d 954, 965–75 (11th Cir. 2016); Van Alstyne,
560 F.3d at 205;
7
Mr. Seale did not allege that Mr. Peacock received any profits from the SCA
violation, nor does he argue that he can sustain his claim for statutory damages
because of “any profits made by the violator as a result of the violation.” 18 U.S.C.
§ 2707(c). Thus, we do not address whether profits made by the violator, without
actual damages, could support an award of statutory damages.
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see also Hovanec v. Miller, 831 F. App’x 683, 685 (5th Cir. 2020) (unpublished)
(applying the rule set forth by the Fourth and Eleventh Circuits). But a plethora of
district courts in various circuits have disagreed. Vista Mktg., 812 F.3d at 971–72
(collecting cases). The crux of the disagreement lies in whether the Supreme Court’s
analysis in Doe v. Chao,
540 U.S. 614 (2004), should be applied to the SCA. See
Shefts v. Petrakis,
931 F. Supp. 2d 916, 917 (C.D. Ill. 2013) (describing the
disagreement about whether the statutory interpretation in Doe applies to the SCA).
In Doe, the Supreme Court considered a question similar to the one we face
here: “whether plaintiffs must prove some actual damages to qualify for a minimum
statutory award of $1,000.” 540 U.S. at 616. In Doe, however, the Court considered
this question in context of the Privacy Act of 1974, not the SCA. See
id.
The relevant subsection within the Privacy Act stated,
In any suit brought under the provisions of subsection (g)(1)(C) or (D) of
this section in which the court determines that the agency acted in a manner
which was intentional or willful, the United States shall be liable to the
individual in an amount equal to the sum of—
(A) actual damages sustained by the individual as a result of the refusal or
failure, but in no case shall a person entitled to recovery receive less than
the sum of $1,000; and
(B) the costs of the action together with reasonable attorney fees as
determined by the court.
Id. at 619 (quoting 5 U.S.C. § 552a(g)(4)).
The Supreme Court held plaintiffs must show they sustained actual damages
before they can recover the statutorily guaranteed minimum of $1,000. Id. at 620.
The Court explained, “[w]hen the statute gets to the point of guaranteeing the $1,000
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minimum, it not only has confined any eligibility to victims of adverse effects caused
by intentional or willful actions, but has provided expressly for liability to such
victims for ‘actual damages sustained.’” Id. (quoting 5 U.S.C. § 552a(g)(4)). Then,
the clause guaranteeing $1,000 limits it to a “‘person entitled to recovery.’” Id.
(quoting 5 U.S.C. § 552a(g)(4)). The Court explained, “the simplest reading of that
phrase looks back to the immediately preceding provision for recovering actual
damages.” Id. The Court further reasoned, “the statute does not speak of liability (and
consequent entitlement to recovery) in a freestanding, unqualified way, but in a
limited way, by reference to enumerated damages.” Id. at 621.
In support of a different interpretation, the petitioner in Doe asked the Court to
review the legislative histories of comparable statutes that supposedly authorized
statutory damages without actual damages. Id. at 626. One of these statutes was 18
U.S.C. § 2707(c), which is the SCA statute at issue here.
Id. The Court declined to
consider the meaning of the SCA or its legislative history, however, because the SCA
was “passed well after the Privacy Act,” and “‘subsequent legislative history will
rarely override a reasonable interpretation of a statute that can be gleaned from its
language and legislative history prior to its enactment.’”
Id. at 626–27 (quoting Solid
Waste Agency of N. Cook Cnty. v. Army Corps of Eng’rs,
531 U.S. 159, 169 n.5
(2001)). Thus, the Court did not opine on whether the SCA permitted statutory
damages without actual damages. And the Court ultimately concluded the Privacy
Act “guarantees $1,000 only to plaintiffs who have suffered some actual damages.”
Id. at 627.
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Since Doe, numerous lower courts have answered the question the Court left
open—whether the SCA requires plaintiffs to show actual damages before they are
eligible to recover statutory damages. The circuit courts that have considered the
issue have determined, as with the Privacy Act in Doe, plaintiffs must show actual
damages before being eligible for statutory damages under the SCA. Vista Mktg, 812
F.3d at 965–75; Van Alstyne, 560 F.3d at 205–06. The Fourth Circuit was the first to
consider this question in Van Alstyne, where it explained “the SCA and Privacy Act
contain the substantively identical following phrase: ‘but in no case shall a person
entitled to recover receive less than the sum of $1,000,’ which ‘looks back to the
immediately preceding provision for recovering actual damages.’” Id. at 205 (quoting
Doe, 540 U.S. at 620). “Indeed, the only differences between the damages provisions
in the two statutes is the SCA’s use of the term ‘suffered’ instead of ‘sustained’ and
its use of the phrase ‘and any profits made by the violator.’”
Id. (quoting
18 U.S.C.
§ 2707(c)). Therefore, the Fourth Circuit applied the reasoning in Doe to the SCA
and held, “just as the Privacy Act required proof of ‘actual damages’ as a prerequisite
to recovering statutory damages, so does the SCA.” Id.8
8
In addition to the circuit courts, some district courts have agreed with Van
Alstyne. See Domain Prot., LLC v. Sea Wasp, LLC, No. 4:18-cv-792, 2020 WL
2557043, at *11 (E.D. Tex. May 20, 2020); Thornton v. Thornton,
492 F. Supp. 3d
810, 817 (W.D. Ark. 2020); Pennartz v. Pennartz, No. 4:16-cv-00859-KGB,
2017
WL 4159410, at *9 (E.D. Ark. Sept. 19, 2017); see also Cornerstone Consultants,
Inc. v. Prod. Input Sols., L.L.C., No. C 10-3072-MWB,
2011 WL 13362662, at *1
(N.D. Iowa Apr. 27, 2011) (identifying the elements of a claim under the SCA as a
preliminary matter, including an actual damages element, and requesting
supplemental briefing about whether the elements identified are complete and
accurate).
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On the other hand, numerous district courts have concluded the reasoning in
Doe is not applicable to the language of the SCA.9 These courts emphasized other
ways the SCA differs from the Privacy Act. The major difference they note is that
“the Privacy Act damages provision . . . includes restrictive language that ‘seems to
dictate actual damages as the only remedy in that clause.’” Maremont v. Susan
Fredman Design Grp., Ltd., No. 10 C 7811, 2014 WL 812401, at *7 (N.D. Ill. Mar.
3, 2014) (quoting Shefts,
931 F. Supp. 2d at 918). But Ҥ 2707(c) uses permissive
language—that the [c]ourt ‘may assess as damages’ actual damages and
profits—which” according to these courts, “‘seems to offer the actual damages
formula as one means of calculation’ but not to the exclusion of statutory damages.”
Id. (quoting Shefts,
931 F. Supp. 2d at 918) (emphasis added). In some district courts’
views, this difference, together with the SCA’s legislative history, supports the
conclusion that Doe is not persuasive and plaintiffs “need not prove actual damages
9
See Cline v. Reetz-Laiolo, 329 F. Supp. 3d 1000, 1045–46 (N.D. Cal. 2018);
Aguiar v. MySpace LLC, CV 14-05520 SJO (PJWx),
2017 WL 1856229, at *9–10
(C.D. Cal. May 5, 2017); Chavan v. Cohen, No. C13-01823 RSM,
2015 WL
4077323, at *4 (W.D. Wash. July 6, 2015); Joseph v. Carnes,
108 F. Supp. 3d 613,
618 (N.D. Ill. 2015); Brooks Grp. & Assocs., Inc. v. LeVigne, No. 12-2922,
2014 WL
1490529, at *8–10 (E.D. Pa. Apr. 15, 2014); Maremont v. Susan Fredman Design
Grp., Ltd., No. 10 C 7811,
2014 WL 812401, at *6–7 (N.D. Ill. Mar. 3, 2014); Shefts
v. Petrakis,
931 F. Supp. 2d 916, 919 (C.D. Ill. 2013); Pure Power Boot Camp, Inc.
v. Warrior Fitness Boot Camp, LLC,
759 F. Supp. 2d 417, 428 (S.D.N.Y. 2010);
Hahn v. Rothman, No. CV 09-0249 ODW (FFMx),
2010 WL 11507395, *4–5 (C.D.
Cal. Oct. 8, 2010); Cardinal Health 414, Inc. v. Adams,
582 F. Supp. 2d 967,
975–976 (M.D. Tenn. 2008); Freedman v. Town of Fairfield, No. 3:03CV01048
(PCD),
2006 WL 2684347, at *3 (D. Conn. Sept. 19, 2006); In re Hawaiian Airlines,
Inc.,
355 B.R. 225, 230–31 (Bankr. D. Haw. 2006); Cedar Hill Assocs., Inc. v. Paget,
No. 04 C 0557,
2005 WL 3430562, at *2–3 (N.D. Ill. Dec. 9, 2005).
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in order to be entitled to the minimum statutory damages provided by § 2707(c).” Id.
Not surprisingly, Mr. Seale asks us to adopt the reasoning of these decisions, and
Mr. Peacock advances the position adopted by the federal circuits that have
considered the issue.
iii. Interpreting the SCA
We now resolve de novo whether the SCA requires plaintiffs to show actual
damages to be eligible for statutory damages. See Roe v. Cheyenne Mountain
Conference Resort, Inc., 124 F.3d 1221, 1231 (10th Cir. 1997) (applying de novo
review to a statutory interpretation). Ultimately, we agree with our sibling circuits
and hold plaintiffs must show actual damages from a SCA violation before they are
eligible to recover statutory damages.
When interpreting a statute, “we begin by examining the statute’s plain
language, and if the statutory language is clear, our analysis ordinarily ends.” Coffey
v. Freeport McMoran Copper & Gold, 581 F.3d 1240, 1245 (10th Cir. 2009)
(quotation marks omitted). But where the statutory language is ambiguous, “we look
to the legislative history and the underlying public policy of the statute.” United
States v. Manning,
526 F.3d 611, 614 (10th Cir. 2008) (quotation marks omitted).
Here, the text of the SCA compels the conclusion that actual damages are necessary,
but we would reach the same conclusion even if the SCA were ambiguous.10
10
Although the Supreme Court did not explicitly state the comparable language
in the Privacy Act was ambiguous, it did look to the legislative history of the statute
in its analysis. Doe v. Chao, 540 U.S. 614, 622–23 (2004). We do the same here. Cf.
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Recall that under § 2707(c),
The court may assess as damages in a civil action under this section the
sum of the actual damages suffered by the plaintiff and any profits made by
the violator as a result of the violation, but in no case shall a person entitled
to recover receive less than the sum of $1,000. If the violation is willful or
intentional, the court may assess punitive damages. In the case of a
successful action to enforce liability under this section, the court may assess
the costs of the action, together with reasonable attorney fees determined by
the court.
The Privacy Act, 5 U.S.C. § 522a(g)(4), has similar language, but it is not
identical. The Privacy Act contains mandatory language—“the United States shall be
liable,” 5 U.S.C. § 552a(g)(4) (emphasis added)—while the language of the SCA is
permissive—“[t]he court may assess damages,” 18 U.S.C. § 2707(c) (emphasis
added). Mr. Seale assigns great significance to this difference. He suggests the
permissive language of the SCA, unlike the mandatory Privacy Act counterpart,
provides that actual damages are not the only form of damages permitted under the
statute and that the statutory damages of $1,000 is another permissible form of
damages, irrespective of whether a plaintiff has incurred actual damages. We are not
persuaded.
Subsection (c) has three sentences, and each expressly identifies a different
type of recovery available to a plaintiff: actual damages/profits made by the
violator/statutory damages, punitive damages, and costs and attorney’s fees. And
each of these sentences uses the permissive word “may.” So, while Mr. Seale is on
Shefts, 931 F. Supp. 2d at 919 (criticizing the Van Alstyne court’s decision not to
consider legislative history).
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the right track when he suggests the word “may” tells courts actual damage is not the
only kind of recovery available, he misses the mark in assuming this language speaks
to whether a plaintiff can recover statutory damages without showing actual damages.
The permissive language is consistent with the language and structure of the
statute, which provides flexibility to the court in fashioning an appropriate remedy.
Pursuant to the plain language of the SCA, a court could award actual
damages/profits made by the violator/statutory damages, punitive damages, and/or
costs and attorney’s fees in a successful SCA action. But there is nothing about that
discretion that indicates statutory damages are available in the absence of actual
damages. Instead, the “use of the word ‘may’ . . . conveys only that, where actual
damages or a violator’s profits exist, a court has discretion to decide whether to
award to the plaintiff actual damages or profits of the violator, or both or neither,
when these damages exceed $1,000.” Vista Mktg., 812 F.3d at 972. The permissive
language does not support Mr. Seale’s interpretation of the statute. Instead, it leaves
unanswered the question of whether statutory damages are available for a violation of
the SCA without a showing of actual damages.
In all other respects, the first sentence of subsection (c) is substantially similar
to the comparable provision in the Privacy Act. Van Alstyne, 560 F.3d at 205. Thus,
we look to Doe for guidance. Like the Privacy Act, the SCA “has made specific
provision . . . for what a victim . . . may recover.” Doe,
540 U.S. at 620. The “actual
damages” provision begins by authorizing a court to award actual damages and
profits made by the violator. But the sentence continues: “in no case shall a person
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entitled to recover receive less than the sum of $1,000.” 18 U.S.C. § 2707(c). As a
result, just as in Doe, we must determine what constitutes “a person entitled to
recover.”
Id. Because the statutory damages provision is in the same sentence that
provides for actual damages, “the simplest reading of that phrase looks back to the
immediately preceding provision for recovering actual damages.” Doe, 540 F.3d at
620; see also Van Alstyne,
560 F.3d at 206 (“The reference to a person ‘entitled to
recover’ in § 2707(c) is best read, just as in Doe, to refer back to the beginning of
that sentence, that is, a person who ‘suffered’ actual damages.” (emphasis omitted)).
We agree with the circuits that have considered this issue, that the language of the
SCA requires a plaintiff to show actual damages as a prerequisite for statutory
damages.
Further, contrary to Mr. Seale’s suggestion, the legislative history does not
undermine this interpretation. The relevant legislative history includes Senate Report
No. 99-541 and House Report No. 99-647, Shefts, 931 F. Supp. 2d at 918–19,11 which
describe the then-proposed Electronic Communications Privacy Act (“ECPA”), of
11
Mr. Seale’s argument regarding the legislative history consists of only two
sentences containing general quotations from Maremont, 2014 WL 812401. He does
not cite the legislative history he believes supports his position. Thus, Mr. Seale
likely waived his legislative history argument “by inadequately briefing it.” Burke v.
Regalado,
935 F.3d 960, 1014 (10th Cir. 2019) (“Cursory statements, without
supporting analysis and [citations] are inadequate.” (internal quotation marks
omitted)); see also Fed. R. App. P. 28(a)(8)(A). Nevertheless, we exercise our
discretion to consider the argument because we think it important for a complete
statutory interpretation analysis. See United States v. Moya,
5 F.4th 1168, 1193 (10th
Cir. 2021) (“[W]hether issues should be deemed waived is a matter of discretion.”
(quotation marks omitted)).
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which the SCA is a part. When discussing the damages for a civil action brought for a
violation of the SCA, the Senate Report says “damages . . . includ[e] the sum of
actual damages suffered by the plaintiff and any profits made by the violator as the
result of the violation as provided in (c) with minimum statutory damages of $1,000.”
S. Rep. No. 99-541, at 43. The House Report says, “[d]amages include actual
damages, any lost profits but in no case less than $1,000.” H.R. Rep. 99-647, at 74.
Nothing in these statements is inconsistent with our textual interpretation of
the statute. Both reports could be read as suggesting a plaintiff must have actual
damages, but if those damages are less than $1,000, the statute provides for an award
of $1,000. And while the statements might also be interpreted to the contrary, neither
report expressly speaks to whether actual damages are necessary to be eligible for
statutory damages. See Vista Mktg., 812 F.3d at 974 (explaining why the text of the
Senate and House Reports do not “give a clear indication” that Congress intended to
allow statutory damages without showing actual damages).
Moreover, unlike the final statute, the reports refer to a prior version of the
SCA that was never adopted and did not include punitive damages. This difference is
significant, because the punitive damages provision “allows the statute to serve as a
deterrent to would-be violators even when they think their violations will inflict no
actual damages, and it permits victims to recover in an appropriate case even when
they can prove no actual damages.” Id. at 973 (citing Van Alstyne,
560 F.3d at 209
(holding the SCA permits a plaintiff to recover punitive damages without showing
actual damages)). “Conceivably, the availability of punitive damages under the
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adopted version of the statute could have been a consideration in Congress’s
determination of whether to provide for statutory damages in the absence of actual
damages and a violator’s profits.” Id. at 973–74. For these reasons, the legislative
history, even if relevant to our analysis, does not support a different interpretation of
the statutory text.
In sum, we hold plaintiffs cannot recover statutory damages under the SCA
without first showing they suffered actual damages. Accordingly, we must now
determine whether Mr. Seale alleged actual damages in support of his SCA claim.
b. Damage allegations
We review de novo whether Mr. Seale alleged actual damages related to the
alleged SCA violation such that the claim could survive a motion to dismiss. Strain,
977 F.3d at 989. We hold he did not.
As to damages caused by the SCA violation, Mr. Seale alleged only that
“[s]ubsequent to the mailing of the [letters],” (1) four real estate agents left his
company; (2) three clients stopped communicating with him; and (3) two non-profit
agencies stopped associating with his business. App. Vol. 1 at 160–61. None of these
losses are connected to the alleged unauthorized access of his CTM account because
the anonymous person mailed the letters more than one year before Mr. Peacock
allegedly accessed the CTM account without authorization. The Amended Complaint
is therefore insufficient to support an inference that Mr. Seale suffered actual
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damages caused by the CTM account access. And the magistrate judge correctly
dismissed the SCA claim for failing to allege actual damages.12
B. Dismissal With Prejudice
Mr. Seale next argues the magistrate judge erred by dismissing the claims
against Mr. Peacock with prejudice. “We review the [magistrate] judge’s dismissal
with prejudice for an abuse of discretion.” United States ex rel Stone v. Rockwell Int’l
Corp., 282 F.3d 787, 809 (10th Cir. 2002). We have held “[a] dismissal with
prejudice is appropriate where a complaint fails to state a claim under Rule 12(b)(6)
and granting leave to amend would be futile.” Knight v. Mooring Capital Fund, LLC,
749 F.3d 1180, 1190 (10th Cir. 2014) (quotation marks omitted). Both of these
questions are issues of law that we consider de novo. Cohen v. Longshore,
621 F.3d
1311, 1314–15 (10th Cir. 2010).
We now evaluate de novo whether granting leave to amend on the three claims
alleged against Mr. Peacock—statutory civil theft, violation of the SCA, and invasion
of privacy by appropriation of name or likeness—would be futile. Specifically, we
consider whether an amendment of these claims would be subject to dismissal under
12
Mr. Seale also argues we should reverse the magistrate judge’s decision
because he adequately stated a claim for punitive damages and attorney’s fees. As
Mr. Peacock notes, Mr. Seale failed to raise these arguments before the magistrate
judge, and they are therefore not preserved. Nor does Mr. Seale argue plain error on
appeal. Thus, Mr. Seale waived the arguments, and we do not consider them on
appeal. See United States v. Leffler, 942 F.3d 1192, 1196 (10th Cir. 2019) (“When an
appellant fails to preserve an issue and also fails to make a plain-error argument on
appeal, we ordinarily deem the issue waived (rather than merely forfeited) and
decline to review the issue at all.” (emphasis added)).
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Rule 12(b)(6) for failure to state a claim. Full Life Hospice, LLC v. Sebelius, 709
F.3d 1012, 1018 (10th Cir. 2013). Applying this standard, we conclude the magistrate
judge correctly dismissed the statutory civil theft claim with prejudice, but we
reverse and remand with instructions to dismiss the SCA claim and the invasion of
privacy by appropriation of name or likeness claim without prejudice.
1. Statutory Civil Theft
To state a claim for civil theft under Colorado law, a plaintiff must allege the
defendant “‘knowingly obtains, retains, or exercises control over anything of value of
another without authorization or by threat or deception,’ and acts intentionally or
knowingly in ways that deprive the other person of the property permanently.” Van
Rees v. Unleaded Software, Inc., 2016 CO 51, ¶ 21,
373 P.3d 603, 608 (quoting
Colo.
Rev. Stat. § 18-4-401(1)). The Colorado Supreme Court has clarified that the statute
requires “the specific intent to permanently deprive the owner of the benefit of
property.”
Id. (quoting Itin v. Ungar,
17 P.3d 129, 134 (Colo. 2000)).
Mr. Seale has not alleged that Mr. Peacock intended to permanently deprive him
of property and its benefit. Although Mr. Seale alleges Mr. Peacock accessed sensitive
business information, there is no contention that Mr. Peacock deleted any of that
information so that it was no longer available to Mr. Seale. Accessing and viewing
electronic information that remains accessible to the information’s rightful owner cannot
amount to a permanent deprivation of property. And to the extent Mr. Seale argues he
lost clients and employees, people are not property or things that can be the subject of a
civil theft claim. See Property, BLACK’S LAW DICTIONARY (11th ed. 2019)
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(including land, chattel, and intangible resources in the definition of property). Thus, the
Amended Complaint does not support the necessary elements for statutory civil theft, and
any amendment would be futile. We therefore affirm the dismissal with prejudice of the
statutory civil theft claim.
2. Violation of the Stored Communications Act
As addressed previously, the magistrate judge properly dismissed Mr. Seale’s
SCA claim because Mr. Seale failed to allege actual damages. However, this is a
failure Mr. Seale could remedy. Unlike statutory damages, the text of the SCA does
not connect an award of punitive damages with a showing of actual damages. 18
U.S.C. § 2707(c). Instead, under the statute, punitive damages are contingent on the
“willful or intentional” nature of the SCA violation.
Id. SCA plaintiffs, therefore,
may recover punitive damages regardless of whether they suffered any actual
damages.13 Thus, Mr. Seale could remedy his SCA claim by amending his complaint
to expressly request punitive damages. Therefore, we reverse the dismissal with
prejudice and remand with instructions to dismiss the SCA claim without prejudice.
13
Federal courts agree that an award of punitive damages under the SCA is not
contingent on a showing of actual damages. See Van Alstyne, 560 F.3d at 209
(holding in the context of the SCA that “proof of actual damages is not required
before an award of either punitive damages or attorney’s fees”); Domain Prot.,
2020
WL 2557043, at *14 (“[A]ctual damages are not required for punitive damages under
the SCA.”); Maremont,
2014 WL 812401, at *8 ([A] plaintiff need not prove actual
damages to recover punitive damages, attorney’s fees, or costs for an SCA
violation.”); Chadha v. Chopra, No. 12 C 4204,
2012 WL 6044701, at *4 (N.D. Ill.
Dec. 5, 2012) (“The federal courts are in agreement that a party can recover punitive
damages and attorneys’ fees even without proving actual damages’ under the SCA);
Hahn,
2010 WL 11507395, at *5 (holding “punitive damages are permissible absent
proof of actual damages” from an SCA violation).
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3. Invasion of Privacy by Appropriation of Name or Likeness
To state a claim for invasion of privacy by appropriation of name or likeness
under Colorado law, a plaintiff must allege “(1) the defendant used the plaintiff’s
name or likeness; (2) the use of the plaintiff’s name or likeness was for the
defendant’s own purpose or benefit, commercially or otherwise; (3) the plaintiff
suffered damages; and (4) the defendant caused the damages incurred.” Joe
Dickerson & Assocs., LLC v. Dittmar, 34 P.3d 995, 1002 (Colo. 2001) (en banc). In
the Amended Complaint, Mr. Seale alleged Mr. Peacock appropriated his name or
likeness by using Mr. Seale’s login credentials to access his CTM account.
As with the SCA claim, the magistrate judge dismissed the invasion of privacy
claim because Mr. Seale had not adequately alleged damages. Mr. Seale could
remedy this deficiency through further amendment by including factual support for
the mental anguish he allegedly suffered from the invasion of his privacy. See id.
(expressly allowing plaintiffs to recover personal damages such as mental anguish for
invasions of privacy by appropriation of name or likeness).
However, in reviewing the futility of this claim de novo, we are hindered by
the unsettled status of Colorado law. It is unclear whether Colorado would treat the
unauthorized use of another’s username and password to log into an account as an
appropriation of name or likeness. Specifically, the Colorado Supreme Court has not
addressed whether a username and password combination constitutes a “name” for
purposes of this claim or whether, even if such is a name, a defendant must use it in
public to appropriate it. These arguments were not raised by the parties or considered
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by the magistrate judge, and we cannot determine whether it is “patently obvious”
that these facts could not support a claim for invasion of privacy by appropriation of
name or likeness under Colorado law. See Knight, 749 F.3d at 1190 (stating a court
can sua sponte adjudicate a claim under Rule 12(b)(6) only “when it is patently
obvious that the plaintiff could not prevail on the facts alleged and allowing her an
opportunity to amend her complaint would be futile.” (quotation marks omitted)). For
purposes of this appeal, we assume, without deciding, that amendment would not be
futile. See id.; cf. 6 Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure § 1487 (3d ed. 2021) (“If a proposed amendment is not clearly futile, then
denial of leave to amend is improper.” (emphasis added)). Accordingly, we reverse
and remand the dismissal with prejudice and instruct the magistrate judge to dismiss
this claim without prejudice.
C. Motion to Amend
We turn now to the denial of Mr. Seale’s motion to further amend the
complaint to substitute Mr. Peacock for the unknown defendants, which we review
“for abuse of discretion.” Albers, 771 F.3d at 700–01.
Motions to amend pleadings prior to trial are governed by Federal Rules of
Civil Procedure 15 and 16. Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1247 (10th
Cir. 2015). As relevant here, Rule 15(a)(2) states, “a party may amend its pleading
only with the opposing party’s written consent or the court’s leave. The court should
freely give leave when justice so requires.” After a scheduling order deadline for
amending the pleadings has passed, however, “a party seeking leave to amend must
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demonstrate (1) good cause for seeking modification under Fed. R. Civ. P. 16(b)(4)
and (2) satisfaction of the Rule 15(a) standard.” Birch, 812 F.3d at 1247 (quotation
marks and brackets omitted). The good cause standard “requires the movant to show
the scheduling deadlines cannot be met despite the movant’s diligent efforts.”
Id.
(quotation marks and brackets omitted).
Mr. Seale argues the magistrate judge abused her discretion in denying his
motion because she incorrectly applied the good cause standard. Specifically, he
contends the magistrate judge had previously extended the amendment deadline in
the scheduling order such that only Rule 15(a)(2) applied, which contains no good
cause requirement. But in interpreting the order, the magistrate judge concluded the
deadline for amending the pleadings had not been extended. We give deference to the
magistrate judge’s interpretation of her own order, and we will reverse only if “the
record clearly shows an abuse of discretion.” Auto-Owners Ins. Co. v. Summit Park
Townhome Ass’n, 886 F.3d 863, 872 (10th Cir. 2018) (quoting Chi., Rock Island &
Pac. R.R. v. Diamond Shamrock Ref. & Mktg. Co.,
865 F.2d 807, 811 (7th Cir.
1988)).
The magistrate judge’s order granting Mr. Seale’s fourth motion seeking
additional time to serve the unknown defendants states,
ORDER granting in part [48] Fourth Motion Requesting Additional Time
to Obtain Service of Process Upon Unknown Defendants. This case was
filed one year ago. Plaintiff has not identified or located the unknown
defendants, despite multiple extensions of the deadline to serve the
defendants. Plaintiff is granted an extension to and including November 30,
2020, to identify and serve the unknown defendants. If Plaintiff fails to
serve the unknown defendants by November 30, 2020, the court will
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dismiss the claims against the unknown defendants without prejudice
pursuant to Fed. R. Civ. P. 4(m). No further extensions of this deadline will
be granted.
App. Vol. 2 at 36.
There is no language in the order that extends the time to amend the pleadings.
Nor did Mr. Seale expressly seek an extension of the time to amend the pleadings or
join new parties.14 Nevertheless, Mr. Seale argues the order necessarily extended the
amendment deadline because the only way to serve the unnamed defendants is by
first amending the complaint to identify them. In other words, Mr. Seale argues the
magistrate judge’s interpretation is impossible: it requires him to serve the unknown
defendants without first amending the complaint to join them.
While it is true that substituting a named defendant for an unnamed defendant
requires amending the complaint, see McPhail v. Deere & Co., 529 F.3d 947, 952
14
In his motion, Mr. Seale’s recognized that he would
need to seek leave to amend the Complaint with respect to the claims
against Unknown Defendant(s) in order to name such person(s) in the place
of Unknown Defendant(s). However, [Mr. Seale] will not be in a position
to seek leave to amend the Complaint, or to serve the party or parties to be
substituted for Unknown Defendant(s) by . . . the current deadline for
service authorized by the court.
App. Vol. 2 at 33. But he did not reference or seek to extend the time to amend the
pleadings or join parties. Rather, he labeled the motion as a “Fourth Motion
Requesting Additional Time to Obtain Service of Process upon Unknown
Defendants,” id. at 30, and he argued only that he had “good cause for his failure to
serve Unknown Defendant(s),” id. at 34. The only request he made in that motion
was “that pursuant to Fed. R. Civ. P. 4(m), the Court enter an order extending the
deadline by which Unknown Defendants must be served, and allowing Plaintiff up to
and including December 31, 2020 to effectuate service upon unknown Defendants.”
Id. at 34. Together, these factors show Mr. Seale brought the motion to extend the
service deadline and not the deadline to amend the pleadings or join parties.
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(10th Cir. 2008) (suggesting amendment is the proper way to substitute named
defendants for unnamed defendants), it was not impossible for Mr. Seale to comply
with the magistrate judge’s interpretation of the order. Under the magistrate judge’s
interpretation, the order extended the time to allow Mr. Seale to serve the unknown
defendants, but it did not extend the time to amend the complaint to join them as
parties. In practice, the extension of the time to serve the unknown defendants
assured Mr. Seale that his claims against the unknown defendants would not be
dismissed for failing to serve the complaint before the new deadline. By not also
extending the time to amend the complaint, however, the magistrate judge reserved
the opportunity to review the proposed amended complaint to ensure that the
amendment was supported by good cause. Although the good cause standard is a
more difficult standard, see Bylin v. Billings, 568 F.3d 1224, 1231 (10th Cir. 2009)
(stating Rule 16 is “an arguably more stringent standard than the standards for
amending a pleading under Rule 15”), this is not an impossible task. Indeed, even
after receiving an extension of the time to serve the unknown defendants, Mr. Seale
recognized he needed leave to amend the complaint before he could serve the
unknown defendants. See App. Vol. 2 at 38 (“Because Plaintiff must serve that
individual by November 30, 2020, he is submitting this motion [for leave to file an
amended complaint] on a forthwith basis.”). There is no reason why it would have
been impossible for Mr. Seale to show good cause supporting the motion to amend.
And if he had met that burden, the magistrate judge would have permitted him to
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substitute Mr. Peacock for the unknown defendants, and he would have been able to
serve Mr. Peacock with the amended complaint.
In summary, a party must show good cause to extend a deadline in the
scheduling order. Birch, 812 F.3d at 1247; see also Fed. R. Civ. P. 16(b)(4) (“A
schedule may be modified only for good cause and with the judge’s consent.”
(emphasis added)). But Mr. Seale never attempted to show good cause to extend the
time to amend the pleadings/join parties. Accordingly, the magistrate judge’s
interpretation of the order was not a clear abuse of discretion. Instead, it was
(1) consistent with the language of the order and Mr. Seale’s request for an extension
of the time to serve the unknown defendants, (2) possible to satisfy, and
(3) consistent with our precedent and the requirements of the Federal Rules of Civil
Procedure. Thus, the magistrate judge did not abuse her discretion in concluding that
she had not extended the deadline to amend the pleadings and applying the good
cause standard.
Mr. Seale next argues that even if the magistrate judge did not err by applying
the good cause standard, we should reverse the decision because Mr. Seale satisfied
that standard. But Mr. Seale has not explained why the magistrate judge’s decision
was “arbitrary, capricious, whimsical, or manifestly unreasonable.” Tesone v. Empire
Mktg. Strategies, 942 F.3d 979, 989 (10th Cir. 2019) (quotation marks omitted). To
the contrary, Mr. Seale recognizes there were reasons in the record supporting the
magistrate judge’s decision, including the fact that he “was in possession of
photographs that provided the basis for his Second Motion to Amend the Complaint
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throughout the litigation.” Appellant Br. at 50. He argues simply that the magistrate
judge should have come to a different conclusion because he had shown reasonable
diligence in other ways. But it is not our place to reconsider the circumstances and
determine anew whether Mr. Seale had shown good cause. The record supports the
magistrate judge’s conclusion, and she did not abuse her discretion in denying the
motion. For these reasons, we affirm the magistrate judge’s order denying
Mr. Seale’s motion for leave to file the amended complaint naming the unknown
parties.
III. CONCLUSION
In sum, we AFFIRM IN PART and REVERSE AND REMAND IN PART.
Specifically, we AFFIRM the dismissal of Mr. Seale’s SCA claim under Rule
12(b)(6). We AFFIRM the dismissal with prejudice of the statutory civil theft claim.
We REVERSE AND REMAND the dismissal with prejudice of the SCA claim and
the invasion of privacy by appropriation of name or likeness claim and instruct the
court to dismiss these claims without prejudice.15 We also AFFIRM the order
denying Mr. Seale’s motion to amend.
15
We deny Mr. Peacock’s request for attorney’s fees on appeal. Because the
claims remain dismissed for failure to state a claim under Rule 12(b)(6), we leave in
place the magistrate judge’s order granting Mr. Peacock attorney’s fees under Colo.
Rev. Stat. § 13-17-201.
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