United States District Court, N.D. Alabama, Western Division
MEMORANDUM OPINION 
H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE.
GastroCare, PC (“GastroCare”) initiated this
action against Defendant TrxServices d/b/a Transaction
Services (“TRX”) alleging state law claims for
breach of contract, unjust enrichment, and fraud arising out
of a business relationship whereby TRX provided GastroCare
with credit/debit card transaction services. (Doc. 1).
Thereafter, TRX filed a motion to dismiss for lack of
subject-matter jurisdiction pursuant Federal Rule of Civil
Procedure 12(b)(1) contending the amount in controversy is
not met and, alternatively, for forum non-conveniens based on
a forum selection clause. (Doc. 10). GastroCare filed a
response in opposition to the motion to dismiss, (doc. 13),
TRX filed a reply brief, (doc. 14), and GastroCare has filed
a sur-reply, (docs. 19 & 20).
a ruling on the motion to dismiss, GastroCare filed a motion
to amend its complaint, requesting to add “individuals
involved in the conduct made the basis of this lawsuit”
as defendants. (Doc. 21). Specifically, GastroCare moves to
add David Jennings and David Leppek as defendants, alleging
“David Leppek is the President of TRX and is
responsible for the actions of David Jennings and others
whose wrongful actions were carried out in the line and scope
of their duties with TRX.” (Doc. 21 at 4-5). There are
no other new allegations in the proposed amended complaint.
(See Id. at 4-9). TRX opposed the motion to amend,
(doc. 25), and GastroCare replied, (doc. 26).
court will “freely grant” a motion to amend
“when justice so requires.” Fed.R.Civ.P.
15(a)(2). The court's discretion in deciding whether to
grant or deny a motion to amend, however, is not unlimited.
Grayson v. K Mart Corp., 79 F.3d 1086, 1110 (11th
Cir. 1996) (citing Espey v. Wainwright, 734 F.2d 748
(11th Cir. 1984); Dussouy v. Gulf Coast Investment
Corp., 660 F.2d 594 (5th Cir. 1981)). A district court
should allow a plaintiff to amend unless there is a
“substantial countervailing reason.” Id.
Such “substantial countervailing reasons”
include: undue delay, bad faith or dilatory motive, repeated
failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party, and the
futility of the amendment. Id. (citing Nolin v.
Douglas Cnty., 903 F.2d 1546, 1550 (11th Cir. 1990)).
futility threshold is akin to that for a motion to dismiss;
thus, if the amended complaint could not survive such
scrutiny, the amendment is futile and leave to amend is
properly denied. B.D. Stephenson Trucking LLC v.
Riverbrooke Capital Partners, LLC, No. 06-0343-WS-M,
2006 WL 2772673, at *6 (S.D. Ala. Sept. 26, 2006) (citing
Burger King Corp. v. Weaver, 169 F.3d 1310, 1320
(11th Cir. 1999)); see also Fla. Power & Light Co. v.
Allis Chalmers Corp., 85 F.3d 1514, 1520 (11th Cir.
1996). As explained below, because allowing the proposed
amended would be futile, the motion to amend, (doc. 21), is
proceeding under the original complaint or the proposed
amended complaint, GastroCare cannot prove the amount in
controversy is met, and the motion to dismiss (doc. 10), is
due to be GRANTED.
Standard of Review
courts are courts of limited jurisdiction, with the power to
hear only cases authorized by the Constitution or by
statute. Kokkonen v. Guardian Life Ins. Co. of Am.,
511 U.S. 375, 377 (1994). Under Federal Rule of Civil
Procedure 12(b)(1), a party may move the court to dismiss a
case if the court lacks jurisdiction over the subject matter
of the case. Even when a party does not assert a
jurisdictional challenge, “a federal court is obligated
to inquire into subject matter jurisdiction sua
sponte whenever it may be lacking.” Bochese v.
Town of Ponce Inlet, 405 F.3d 964, 975 (11th Cir.2005).
Simply put, a federal court is powerless to act beyond its
constitutional or statutory grant of subject-matter
jurisdiction. Smith v. GTE Corp., 236 F.3d 1292,
1299 (11th Cir.2001). Regardless of how the issue came before
the court, a plaintiff, as the party invoking jurisdiction,
bears the burden of establishing the court's
subject-matter jurisdiction. Taylor v. Appleton, 30
F.3d 1365, 1367 (11th Cir.1994).
challenge to a court's subject matter jurisdiction may
come by way of a facial attack or a factual attack:
Facial attacks on the complaint require the court merely to
look and see if the plaintiff has sufficiently alleged a
basis of subject matter jurisdiction, and the allegations in
his complaint are taken as true for the purposes of the
motion. Factual attacks, on the other hand, challenge the
existence of subject matter jurisdiction in fact,
irrespective of the pleadings, and matters outside the
pleadings, such as testimony and affidavits, are considered.
Garcia v. Copenhaver, Bell & Assocs., M.D.s, 104
F.3d 1256, 1261 (11th Cir.1997) (citations omitted).
the TRX relies on documents which are outside of the
pleadings, (see docs. 10-1 & 14-1), its
challenge to the court's subject-matter jurisdiction is a
factual attack. Under such an attack, “no presumptive
truthfulness attaches to plaintiff's allegations, and the
existence of disputed material facts will not preclude the
trial court from evaluating for itself the merits of
jurisdictional claims.” Lawrence v. Dunbar,
919 F.2d 1525, 1529 (11th Cir.1990) (per curiam) (citation
omitted). Indeed, “[i]n the face of a factual challenge
to subject matter jurisdiction, the burden is on the
plaintiff to prove that jurisdiction exists.” OSI,
Inc. v. United States, 285 F.3d 947, 951 (11th
Cir.2002); Motta v. United States, 717 F.3d 840, 844
(11th Cir.2013). However, a court may only find that it lacks
subject matter jurisdiction “if the facts necessary to
sustain jurisdiction do not implicate the merits of
plaintiff's cause of action.” Morrison v. Amway
Corp., 323 F.3d 920, 925 (11th Cir.2003) (citations
omitted). When a jurisdictional challenge implicates the
merits of the plaintiff's claim, the court must
“find that jurisdiction exists and deal with the
objection as a direct attack on the merits of the
plaintiff's case.” Id. (citations
omitted). This ensures “a greater level of protection
for the plaintiff who in truth is facing a challenge to the
validity of his claim: the defendant is forced to proceed
under Rule 12(b)(6) . . . or Rule 56 . . . both of which
place great restrictions on the district court's
discretion.” Id. (citations omitted)
(alterations in original).
to the complaint, in January 2013, David Jennings of TRX
approached someone with GastroCare about providing its
medical practice with credit/debit card transactions
services. (Doc. 1 at ¶5). GastroCare contends TRX
provided it with quotations and applications stating
GastroCare would be charged ten cents ($0.10) per transaction
plus a fee of thirty base points (0.3%), (see doc.
10-1 at 7) and, through its principals, GastroCare agreed for
TRX to provide these services to GastroCare and another
related entity. (Id. at ¶¶6-7). GastroCare
further alleges TRX has provided these services since early
April 2013, and that it has since discovered TRX has been
deducting thirty percent (30%) instead of thirty base points
(0.3%). (Id. at ¶¶8-9). The complaint
states GastroCare requested TRX return all of these funds,
but TRX refused to do so. (Id. at ¶10).
GastroCare requests $72, 902.96, it claims TRX wrongfully
deducted over a period of thirty-eight months (April 2013 to
June 2016), pre-judgment interests ($6, 943.99), and
unspecified punitive damages for fraud. (Id. at
to an affidavit submitted by David Leppek, who has been
employed by TRX since February 2010, and who is the current
president of TRX, GastroCare entered into a Merchant
Application and Agreement with TRX on or about March 18, 2013
(the “Merchant Agreement”) (Doc. 10-1 at ¶2,
6-8, 10-13). The Merchant Application specifically referenced
and incorporated terms and conditions, including a limitation
of liability as follows:
For purposes of this Agreement, Bank and ISO are collectively
referred to hereinafter as the “Bank.” The Bank