Court allows customer of Interactive Brokers to amend complaint in negligence case
Robert Batchelar, a customer of electronic trading major Interactive Brokers, has secured the permission of the Connecticut District Court to amend his complaint against the broker.
On July 5, 2022, Judge Alvin W. Thompson signed an order granting Batchelar’s motion to file his Third Amended Complaint in this lawsuit which evolves around claims about negligent software design.
In this lawsuit, Robert Scott Batchelar accuses Interactive Brokers, LLC of negligent design of its trading software, so that an automatic liquidation of the positions in his account cost him thousands of dollars more than it should have.
Let’s note that Batchelar commenced this lawsuit in December 2015 by filing a complaint asserting claims for breach of contract, negligence, and commercially unreasonable liquidation of pledged collateral. Batchelar states that his current theory of liability is that Interactive Brokers’ Auto-Liquidation Software was negligently designed, coded, maintained and used such that it permitted a liquidation transaction to be executed on terms less favorable to the customer than the terms for that liquidation transaction authorized by the Auto-Liquidation Software.
(The term “Auto-Liquidation Software” means the Source Code that Interactive Brokers have produced in this action).
On September 28, 2016, the Court dismissed Plaintiff’s complaint in its entirety. Ever since, the complaint has been revived and the parties have argued mostly about discovery.
Early this year, the broker and its client clashed over his attempt to amend his complaint. Interactive Brokers was firmly against this attempt by Batchelar to file another complaint.
He said he wanted to add claims that the defendants’ actions go beyond mere negligence and request punitive damages under Connecticut common law. Today, the Court disagreed with the defendant and sided with the plaintiff.
The defendants argued that the proposed amendments are futile. Interactive Brokers asserted that the new “allegations cannot support an award of punitive damages because none of them, even if proven, would demonstrate that defendants had ‘a motivating intent or design’ to harm plaintiff.”
However, the plaintiff proposed to add facts to support a finding of recklessness, and the defendants base their argument on the standard for willful misconduct.
The Court concluded that the plaintiff’s factual allegations are sufficient to state a claim for recklessness.