Opinion
C. A. 3:22-409-SAL-SVH
03-15-2022
Charles Riley, Petitioner, v. United States Bankruptcy Court, Honorable David R. Duncan; Bruce M. Rose; Joyce S. Goodwin; William Ryan Hovis; Linda K. Barr; Chris Ballinger; John Timothy Stack; Stone Law Firm; David A. Stone; Fabricio Cardoso Santos; Martha Fleming; Fleming & Whitt, P.A.; Pearce W. Fleming; D. Randolph Whitt; Eddye L. Lane, P.A.; Eddye L. Lane; Brian L. Boger Law Firm; Nationwide Mutual Insurance Company; Safeco Assurant Insurance of America; Assurant, Inc.; Toyota Motor Credit; Lender Processing Services, Inc.; LPS Default Solutions; Fidelity National Foreclosure Solutions, Inc.; Fidelity Southern Corporation; T.D. Service Company; Deutsche Bank National Trust Company as Trustee; Mortgage Electronic Registration Systems, Inc.; Carrington Mortgage Services, LLC; Trustee for Carrington Mortgage Loan Trust, Series 2005-NC1, Respondents.
REPORT AND RECOMMENDATION
Shiva V. Hodges United States Magistrate Judge
Charles Riley (“Plaintiff”) filed this action alleging fraud by Defendants related to his bankruptcy case. Pursuant to 28 U.S.C. § 636(b)(1)(B) and Local Civ. Rule 73.02(B)(2)(e) (D.S.C.), the undersigned is authorized to review such complaints for relief and submit findings and recommendations to the district judge. For the following reasons, the undersigned recommends this case be dismissed.
I. Factual and Procedural Background
In his 184-page complaint, Plaintiff alleges numerous claims, including fraud, embezzlement, and conversion, related to his case in the United States Bankruptcy Court for the District of South Carolina., C/A No. 09-4740-DD (“Bankruptcy Case”). He sues the bankruptcy judge, trustees, lawyers, and corporate entities, all of whom were involved in Bankruptcy Case.
The court takes judicial notice of its own records. Anderson v. F.D.I.C., 918 F.2d 1139, 1141 n.1 (4th Cir. 1990) (“[T]he Bankruptcy Court is considered ‘a unit of the district court' under 28 U.S.C. § 151, and we believe a district court should properly take judicial notice of its own records ....”).
II. Discussion
A. Standard of Review
The petition is filed pursuant to 28 U.S.C. § 1915, which permits an indigent litigant to commence an action in federal court without prepaying the administrative costs of proceeding with the lawsuit. To protect against possible abuses of this privilege, the statute allows a district court to dismiss a case upon a finding that the action fails to state a claim on which relief may be granted or is frivolous or malicious. 28 U.S.C. § 1915(e)(2)(B)(i), (ii). A finding of frivolity can be made where the complaint lacks an arguable basis either in law or in fact. Denton v. Hernandez, 504 U.S. 25, 31 (1992). A claim based on a meritless legal theory may be dismissed sua sponte under 28 U.S.C. § 1915(e)(2)(B). See Neitzke v. Williams, 490 U.S. 319, 327 (1989).
A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Pro se complaints are held to a less stringent standard than those drafted by attorneys. Gordon v. Leeke, 574 F.2d 1147, 1151 (4th Cir. 1978). In evaluating a pro se complaint, the plaintiff's allegations are assumed to be true. Fine v. City of N.Y., 529 F.2d 70, 74 (2d Cir. 1975). The mandated liberal construction afforded to pro se pleadings means that if the court can reasonably read the pleadings to state a valid claim on which the plaintiff could prevail, it should do so. A federal court is charged with liberally construing a complaint filed by a pro se litigant to allow the development of a potentially meritorious case. Erickson v. Pardus, 551 U.S. 89, 94 (2007).
The requirement of liberal construction does not mean that the court can ignore a clear failure in the pleading to allege facts that set forth a claim currently cognizable in a federal district court. Weller v. Dep't of Soc. Servs., 901 F.2d 387, 390-91 (4th Cir. 1990). Although the court must liberally construe a pro se complaint, the United States Supreme Court has made it clear a plaintiff must do more than make conclusory statements to state a claim. See Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, the complaint must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face, and the reviewing court need only accept as true the complaint's factual allegations, not its legal conclusions. Iqbal, 556 U.S. at 678-79.
B. Analysis
1. No Subject Matter Jurisdiction
Federal courts are courts of limited jurisdiction, “constrained to exercise only the authority conferred by Article III of the Constitution and affirmatively granted by federal statute.” In re Bulldog Trucking, Inc., 147 F.3d 347, 352 (4th Cir. 1998). Accordingly, a federal court is required, sua sponte, to determine if a valid basis for its jurisdiction exists “and to dismiss the action if no such ground appears.” Id. at 352; see also Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). Although the absence of subject matter jurisdiction may be raised at any time during the case, determining jurisdiction at the outset of the litigation is the most efficient procedure. Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999).
There is no presumption that a federal court has jurisdiction over a case, Pinkley, Inc. v. City of Frederick, MD., 191 F.3d 394, 399 (4th Cir. 1999), and a plaintiff must allege facts essential to show jurisdiction in his pleadings. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936); see also Dracos v. Hellenic Lines, Ltd., 762 F.2d 348, 350 (4th Cir. 1985) (“[P]laintiffs must affirmatively plead the jurisdiction of the federal court.”). To this end, Fed.R.Civ.P. 8(a)(1) requires that the complaint provide “a short and plain statement of the grounds for the court's jurisdiction[.]” When a complaint fails to include “an affirmative pleading of a jurisdictional basis[,] a federal court may find that it has jurisdiction if the facts supporting jurisdiction have been clearly pleaded.” Pinkley, 191 F.3d at 399 (citations omitted). However, if the court, viewing the allegations in the light most favorable to a plaintiff, finds insufficient allegations in the pleadings, the court will lack subject matter jurisdiction. Id.
The two most commonly recognized and utilized bases for federal court jurisdiction are (1) diversity of citizenship pursuant to 28 U.S.C. § 1332; and (2) federal question pursuant to 28 U.S.C. § 1331. The allegations contained in the instant complaint do not fall within the scope of either form of this court's limited jurisdiction.
First, the diversity statute, 28 U.S.C. § 1332(a), requires complete diversity of parties and an amount in controversy in excess of $75,000 Complete diversity of parties in a case means that no party on one side may be a citizen of the same state as any party on the other side. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 373-74 nn. 13-16 (1978). The court does not have diversity jurisdiction over this case, as Plaintiff's complaint fails to demonstrate complete diversity of citizenship satisfying the requirement of § 1332(a). In fact, it appears from the complaint that multiple named defendants, including attorneys and a judge, are citizens of South Carolina, as is Plaintiff.
Second, the essential allegations contained in the complaint are insufficient to show that the case is one “arising under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. Plaintiff has failed to show jurisdiction pursuant to 28 U.S.C. § 1331 for the following reasons.
a. Criminal Statutes
Plaintiff cites to several criminal statutes as a basis for jurisdiction, including, 18 U.S.C. § 134, 18 U.S.C. § 1956, 18 U.S.C. § 155, 18 U.S.C. 666, 18 U.S.C. § 1001, 18 U.S.C. § 1010, 18 U.S.C. § 1014, 18 U.S.C. § 1028, 18 U.S.C. § 1341 et seq. These statutes do not provide any private remedy for citizens to invoke in a civil suit, as they are “bare criminal statute[s], with absolutely no indication that civil enforcement of any kind [i]s available to anyone.” Cort v. Ash, 422 U.S. 66, 80 (1975); see also, e.g., Phillips v. North Carolina, No. 5:19-CV-111-D, 2020 WL 2150526 (E.D. N.C. Mar. 24, 2020) (dismissing case for lack of subject matter jurisdiction despite pro se plaintiff's citation to federal criminal statutes as basis for civil claim); Almond v. Bank of New York Mellon, No. 1:18-cv-3461-MLB-JKL, 2018 WL 4846002, at *2 (N.D.Ga. July 20, 2018) (finding lack of subject matter jurisdiction because “even if the Complaint could fairly be read as attempting to assert claims under 18 U.S.C. §§ 152 and 1001 against Defendant, those Claims cannot give this Court original jurisdiction because there is no private right of action under either statute.”); Ali v. Timmons, No. 04-CV-0164E, 2004 WL 1698445, at *2 (W.D.N.Y. July 26, 2004) (“Initially, plaintiff's claims for criminal theft and embezzlement must be dismissed because there is no private right of action, either express or implied, under the criminal statute raised by plaintiff, 18 U.S.C. § 641.”); House v. Hastings, No. 91 Civ. 3780 (JSM), 1992 WL 44370, at *1 n.1 (S.D.N.Y. Feb. 21, 1992) (“Originally this action was brought under 18 U.S.C. 1001 and 18 U.S.C. 1002, which do not readily provide for a private right of action.”). Accordingly, Plaintiff's citation to various criminal statutes, which do not include private rights of action, does not permit this Court's exercise of federal question jurisdiction.
b. RICO
Plaintiff claims defendants have violated the Racketeer Influenced and Corrupt Organizations Act, 8 U.S.C. §§ 1961-1968 (“RICO”). Pursuant to 18 U.S.C. § 1964(c), RICO provides a private right of action for “[a]ny person injured in his business or property by reason of a violation of section 1962 of this chapter....” Section 1962 states, in relevant part:
(c) It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
(d) It shall be unlawful for any person to conspire to violate any of the provisions of subsection . . . (c) of this section.18 U.S.C. § 1962. To prove a defendant violated § 1962(c), it is necessary for the plaintiff to prove a defendant committed two predicate offenses, or collected an unlawful debt, which the statute defines as an illegal gambling debt or debt unenforceable because of usury laws. 18 U.S.C. § 1961(6).
Plaintiff sprinkles in legalese related to RICO throughout his complaint. [ECF No. 1 at 10, 40-41, 69, 83, 85]. The court will not countenance this so-called “spaghetti approach” to litigation whereby the parties “heave[ ] the entire contents of a pot against the wall in hopes that something [will] stick.” Indep. Towers of Wash. v. Washington, 350 F.3d 925, 929 (9th Cir. 2003). Moreover, the court will not attempt to grapple with every hint of an argument, no matter how poorly developed; as the Fourth Circuit has now repeatedly explained, judges “are not like pigs, hunting for truffles buried in briefs. Similarly, it is not our job to [ ] make arguments for either party.” Hensley v. Price, 876 F.3d 573, 581 (4th Cir. 2017). Plaintiff has failed to show any predicate offense. See Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 616 n.26 (4th Cir. 2009) (“Factual allegations must be enough to raise a right to relief above the speculative level and have enough facts to state a claim to relief that is plausible on its face.”); Superior Bank, F.S.B. v. Tandem Natl Mortg., Inc., 197 F.Supp.2d 298, 313-14 (D. Md. 2000) (explaining allegations of fraud must be pled with particularity); Otworth v. Budnik, 594 Fed.Appx. 859, 862 (6th Cir. 2014) (finding an unlawful threat of foreclosure and mortgage fraud “are not recognized as predicate acts under RICO”). In sum, Plaintiff has failed to sufficiently allege facts that would support the requisite elements for the “extraordinary remedy” RICO provides. See U.S. Airline Pilots Ass'n v. Awappa, LLC, 615 F.3d 312, 317 (4th Cir. 2010) (“RICO . . . ‘does not cover all instances of wrongdoing. Rather, it is a unique cause of action that is concerned with eradicating organized, long-term, habitual criminal activity.'”) (quoting Gamboa v. Velez, 457 F.3d 703, 705 (7th Cir. 2006)).
c. No State Action Pursuant to 42 U.S.C. § 1983
Plaintiff also references 42 U.S.C. § 1983 throughout the complaint. [ECF No. 2, 46]. To state a plausible claim for relief under 42 U.S.C. § 1983, an aggrieved party must sufficiently allege he was injured by “the deprivation of any [of his or her] rights, privileges, or immunities secured by the [United States] Constitution and laws” by a “person” acting “under color of state law.” See 42 U.S.C. § 1983; see generally 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1230 (3d ed. 2014). Plaintiff has not alleged any defendant is a state actor. The court notes Plaintiff has sued a number of attorneys, who do not act under color of state law when performing traditional functions as counsel. See Polk County v. Dodson, 454 U.S. 312, 317-24 nn. 8-9, 12-14 (1981) (finding public defender does not act under color of state law); Hall v. Quillen, 631 F.2d 1154, 1155-56 nn. 2-4 (4th Cir. 1980) (finding court-appointed attorney does not act under color of state law); Deas v. Potts, 547 F.2d 800 (4th Cir. 1976) (finding private attorney does not act under color of state law).
d. Sherman Act are not plausible
In support of his claim of a Sherman Act violation, the complaint states “Beginning as early as 2018 and continuing until at least November 5th, 2018, the exact dates being unknown to the United States, ....” [ECF No. 1 at 29]. Plaintiff then alleges “the defendant and co-conspirators” agreed “on the designated winner and the prices to be bid on contracts for the provision of subcontracting construction services to Deutsche Bank National Trust Company as Trustee for Carrington Mortgage Services....” Id. at 31. It appears many of his allegations are copied from an information filed in a criminal case. See Id. at 39 (“During the period covered by this Information, substantial Quantities Of pipe and other materials used by the defendant and co-conspirators for such utility construction were produced in plants located outside of South Carolina pursuant to purchase orders from Deutsche Bank National Trust Company as Trustee for Carrington Mortgage Services. . . .”). The court finds it implausible that these financial services corporations were involved in price rigging for construction subcontracts.
Plaintiff offers no intelligible, substantive factual allegations that logically connect these federal statutes to Defendants' purported conduct. Plaintiff cannot invoke federal question jurisdiction based on unsupported citations to inapplicable federal authorities. See, e.g., Rivers v. Goodstein, No. 2:18-cv-2032-RMG-MGB, 2018 WL 4658487, at *6 (D.S.C. Sept. 7, 2018), adopted, 2018 WL 4656239 (D.S.C. Sept. 27, 2018) (explaining that the “mere recitation of inapplicable statutes in connection with patently frivolous claims” will not save a pro se complaint from dismissal); Holloway v. Pagan River Dockside Seafood, Inc., 669 F.3d 448, 452-53 (4th Cir. 2012) (noting that a federal court lacks subject matter jurisdiction over a complaint raising claims “so insubstantial, implausible, foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as not to involve a federal controversy”) (internal citations omitted); Hamilton v. United States, No. 2:20-cv-1666-RMG-MHC, 2020 WL 7001153, at *4 (D.S.C. Aug. 26, 2020), adopted, 2020 WL 5939235 (D.S.C. Oct. 7, 2020), affd, 848 Fed.Appx. 564 (4th Cir. 2021) (finding no basis for federal question jurisdiction where complaint failed to allege sufficient facts in support of conclusory references to purported federal violations); Jones v. Cherry, No. 0:20-cv-3489-JFA-PJG, 2020 WL 7055562, at *2 (D.S.C. Dec. 1, 2020), adopted, 2020 WL 7332876 (D.S.C. Dec. 14, 2020) (same).
Because Plaintiff has not shown the court has either diversity or federal question jurisdiction over his claims, the complaint is subject to summary dismissal.
The court also notes that many of the Defendants are immune from suit.
III. Conclusion and Recommendation
For the foregoing reasons, the undersigned recommends the complaint be dismissed with prejudice.
IT IS SO RECOMMENDED.
The parties are directed to note the important information in the attached “Notice of Right to File Objections to Report and Recommendation.”
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed.R.Civ.P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
901 Richland Street
Columbia, South Carolina 29201
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).