Opinion
5:23-CV-678-FL-BM
06-18-2024
KEITH L. FERGUSON, et al Plaintiffs, v. WESTGATE CJDR, et al, Defendants.
ORDER AND MEMORANDUM AND RECOMMENDATION
BRIAN S. MOVERS, UNITED STATES MAGISTRATE JUDGE.
This pro se case is before the court on the application [D.E. 4] and amended application [D.E. 5] by plaintiff Keith L. Ferguson (“Mr. Ferguson”) and LaToya Barnes (Ms. Barnes) to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a)(1) and for a frivolity review pursuant to 28 U.S.C. § 1915(e)(2)(B). These matters were referred to the undersigned magistrate judge, pursuant to 28 U.S.C. § 636(b)(1). The court finds that Mr. Ferguson has demonstrated appropriate evidence of inability to pay the required court costs, and the amended application to proceed in forma pauperis [D.E. 5] will be ALLOWED. However, for the reasons set forth below, the undersigned RECOMMENDS that any claims on behalf of Ms. LaToya Barnes be DISMISSED WITHOUT PREJUDICE; that Mr. Ferguson's claims [D.E. 5-1] be DISMISSED WITH PREJUDICE; and that Mr. Ferguson's motion for TRO ([D.E. 5-1] at 6) be DENIED AS MOOT.
Although Ms. Barnes is listed as a co-plaintiff in various filings, Mr. Ferguson appears to have made all of the filings with the exception of the complaint [D.E. 1] and additionally appears to be the narrator in the first person factual account provided in the complaint. As “[a] nonlawyer[, Mr. Ferguson cannot] handle a case on behalf of anyone except himself.” Wojcicki v. SCANA/SCE & G, 1, 245 (4th Cir. 2020) (quotation omitted); see also Myers v. Louden Cty. Pub. Schs., 418 F.3d 395, 400 (4th Cir. 2005) (“The right to litigate for oneself, however, does not create a coordinate right to litigate for others.”) (citing Oxendine v. Williams, 509 F.2d 1405, 1407 (4th Cir. 1975) (per curiam)); Local Civil Rule 5.2(b)(2) (“Except as otherwise permitted by law, no self-represented party may appear on behalf of another self represented party.”); see also 28 U.S.C. § 1654 (“In all courts of the United States the parties may plead and conduct their own cases personally or by counsel.” (emphasis added)). Additionally, because the undersigned finds the claims made in the complaint [D.E. 5-1] to be frivolous and to fail to state a claim upon which relief can be granted, the undersigned finds that requiring Ms. Barnes to make a notice of self-representation and make her own filings in this matter would be futile. However, because Ms. Barnes should not be penalized for Mr. Ferguson's attempt to bring claims on her behalf, the undersigned RECOMMENDS that any claims ostensibly brought on behalf of Ms. Barnes be DISMISSED WITHOUT PREJUDICE.
ORDER ON IN FORMA PAUPERIS MOTION
To qualify for in forma pauperis status, a person must show that he “cannot because of his poverty pay or give security for the costs . . . and still be able to provide himself and dependents with the necessities of life.” See Adkins v. E.I. DuPont de Nemours & Co., 335 U.S. 331, 339 (1948) (internal quotation marks omitted). The court has reviewed Mr. Ferguson's applications and finds that he has adequately demonstrated his inability to prepay the required court costs. His amended application to proceed in forma pauperis [D.E. 5] is therefore ALLOWED.
The undersigned notes that by granting Mr. Ferguson's amended in forma pauperis application [D.E. 5], Mr. Ferguson's original in forma pauperis [D.E. 4] is MOOT.
MEMORANDUM AND RECOMMENDATION ON FRIVOLITY REVIEW
I. ALLEGATIONS AND CLAIMS
Mr. Ferguson's pleadings are less than a model of clarity. Mr. Ferguson's factual allegations in their entirety read as follows:
Upon the day of September 10, 2023 I had been informed by the above named entity(ies) that I could procure a vehicle being in direct violation of 18 USC ss 245. Upon arrival, In the accomodation [sic] of the documentation; the above dealership utilized My Secured Trust as an asset to “loan” Me property under false pretenses of “ownership”, While yet withholding title constituting “commercial FRAUD” by floating a lien. The above mentioned financial institution working in concert with the dealership has been harassing [sic] . . . as per the Fair Debt Collections Practices Act, it is indeed harassment! (emphasis added). To sum it up, I have been wronged as to have requested “full disclosure' [sic] on the matter in all due dilligence [sic] after making good faith attempts to resolve the matter prior to filing a legal claim. We the platintiffs [sic] have suffered harassment personal information gathering and $ 74,524 jointly. By these entities utilizing Our hypothocated [sic] assets. They have been dishonest in business -- practices and We have ample evidence to prove so. Therefore we are entitled to $20,000,000.000. I also request a total reimbursement of $74,524. We would also like a Federal restraining order from a
judge as to protect ourselves our lives and property per our Civil Rights Violations have been evidenced herein evidenced.[D.E. 5-1] at 6.
Construing Mr. Ferguson's allegations in the light most favorable to him, he appears to allege that he was the victim of commercial fraud because, after purchasing a vehicle through an auto loan, he did not receive an unencumbered title to the vehicle while it was subject to the lien associated with the auto loan. Id. As the legal basis for his claims, Mr. Ferguson appears to allege: a violation of 18 U.S.C. §§ 242 and 245; harassment under 15 U.S.C. § 1692; a violation of “USC 1694;” a civil rights claim under 42 U.S.C. § 1983; a violation of 12 C.F.R. § 1026.4; and “commercial FRAUD.” Id. at 3 and 6.
Mr. Ferguson alleges that the court has both diversity jurisdiction and federal question jurisdiction. The relief sought by Mr. Ferguson is “total reimbursement of $74,524,” an additional $20,000,000, and “a Federal restraining order from a judge as to protect ourselves our lives and property.” Id. at 6.
II. APPLICABLE LEGAL STANDARDS FOR FRIVOLITY REVIEW
After allowing a party to proceed in forma pauperis, as here, the court must conduct a frivolity review of the case pursuant to 28 U.S.C. § 1915(e)(2)(B). In such a review, the court must determine whether the action is frivolous or malicious, fails to state a claim upon which relief can be granted, or seeks monetary relief from an immune defendant, and is thereby subject to dismissal. 28 U.S.C. § 1915(e)(2)(B); see also Denton v. Hernandez, 504 U.S. 25, 27 (1992) (allowing a court to dismiss malicious or frivolous actions). A case is frivolous if it lacks an arguable basis in either law or fact. Neitzke v. Williams, 490 U.S. 319, 325 (1989).
In evaluating frivolity specifically, a pro se plaintiff's pleadings are held to “less stringent standards” than those drafted by attorneys. White v. White, 886 F.2d 721, 722 (4th Cir. 1989). Nonetheless, the court is not required to accept a pro se plaintiff's contentions as true. Denton, 504 U.S. at 32. The court is permitted to “pierce the veil of the complaint's factual allegations and dismiss those claims whose factual contentions are clearly baseless.” Neitzke, 490 U.S. at 327. Such baseless claims include those that describe “fantastic or delusional scenarios.” Id. at 328. Provided that a plaintiff's claims are not clearly baseless, the court must weigh the factual allegations in plaintiff's favor in its frivolity analysis. Denton, 504 U.S. at 32. The court must read the complaint carefully to determine if a plaintiff has alleged specific facts sufficient to support the claims asserted. White, 886 F.2d at 724.
Under Rule 8 of the Federal Rules of Criminal Procedure, a pleading that states a claim for relief must contain “a short and plain statement of the grounds for the court's jurisdiction . . . [and] a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(1) and (2). Case law explains that the factual allegations in the complaint must create more than a mere possibility of misconduct. Coleman v. Md. Ct. Appeals, 626 F.3d 187, 190 (4th Cir. 2010) (citing Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). Likewise, a complaint is insufficient if it offers merely “labels and conclusions,” “a formulaic recitation of the elements of a cause of action,” or “naked assertion[s]” devoid of “further factual enhancement.” Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 557 (2007) (internal quotation marks omitted)).
A court may also consider subject matter jurisdiction as part of the frivolity review. See Lovern v. Edwards, 190 F.3d 648, 654 (4th Cir. 1999) (holding that “[d]etermining the question of subject matter jurisdiction at the outset of the litigation is often the most efficient procedure”); Cornelius v. Howell, No. 3:06-3387-MBS-BM, 2007 WL 397449, at *2-4 (D.S.C. Jan. 8, 2007) (discussing the lack of diversity jurisdiction during frivolity review as a basis for dismissal). “Federal courts are courts of limited jurisdiction and are empowered to act only in those specific instances authorized by Congress.” Bowman v. White, 388 F.2d 756, 760 (4th Cir. 1968). The presumption is that a federal court lacks jurisdiction in a particular case unless it is demonstrated that jurisdiction exists. Lehigh Min. & Mfg. Co. v. Kelly, 160 U.S. 327, 337 (1895). The burden of establishing subject matter jurisdiction rests on the party invoking jurisdiction, here the plaintiff. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982) (“The burden of proving subject matter jurisdiction . . . is on the plaintiff, the party asserting jurisdiction.”). The complaint must affirmatively allege the grounds for jurisdiction. Bowman, 388 F.2d at 760. If the court determines that it lacks subject matter jurisdiction, it must dismiss the action. Fed.R.Civ.P. 12(h)(3).
One basis for subject matter jurisdiction, so-called federal question jurisdiction, is that a claim arises under the Constitution, laws, or treaties of the United States. 28 U.S.C. § 1331. Another basis is diversity of citizenship or so-called diversity jurisdiction, which requires that the citizenship of each plaintiff be different from that of each defendant. Id. § 1332; see Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 372-74 (1978) (“That is, diversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff.”).
III. ANALYSIS
Having found that Mr. Ferguson is financially eligible to proceed in forma pauperis, the court must now undertake a frivolity review of this case, pursuant to 28 U.S.C. § 1915(e)(2)(B). For the reasons discussed below, it is RECOMMENDED that Mr. Ferguson's complaint [D.E. 51] be DISMISSED.
A. LACK OF SUBJECT MATTER JURISDICTION
As an initial matter, while Mr. Ferguson alleges diversity jurisdiction, see [D.E. 5-1] at 3 (“Diversity of citizenship” box marked as basis of jurisdiction), his allegations do not support diversity jurisdiction for the reasons discussed below.
Diversity jurisdiction exists in “civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different states ....” 28 U.S.C. § 1332(a). There must be “complete” diversity between parties, which “means that no plaintiff may share a citizenship with any defendant.” Navy Fed. Credit Union v. LTD Fin. Servs., LP, 972 F.3d 344, 352 (4th Cir. 2020) (citing Strawbridge v. Curtiss, 7 U.S. 267 (1806)); see also N.C. Ins. Guar. Ass'n v. Wesco Ins. Co., 518 F.Supp.3d 876, 878 (E.D. N.C. 2021).
Here, Mr. Ferguson alleges that he resides in the state of North Carolina, and one of the defendants, Westgate Chrysler Jeep Dodge Ram (“Westgate CJDR”), is a North Carolina business. [D.E. 5] at 1-2. Accordingly, Mr. Ferguson has failed to allege complete diversity between the parties and has failed to establish diversity jurisdiction.
Even if Mr. Ferguson had effectively alleged diversity jurisdiction, which he does not, his only state law claim, “commercial fraud” fails to state a claim upon which relief can be granted. The undersigned notes that, even if upon Mr. Ferguson's purchase of his vehicle, the title to the vehicle were provided to the lender and lienholder rather than to him, this procedure comports with North Carolina law. See N.C. G.S § 20-51.1 (“Any dealer transferring title to, or an interest in, a new vehicle . . . where a security interest is obtained in the motor vehicle from the transferee in payment of the purchase price or otherwise, the transferor shall deliver the manufacturer's certificate of origin to the lienholder . . .”).
While Mr. Ferguson's complaint also alleges federal question jurisdiction, see [D.E. 5] at 3 (“Federal question” box marked as basis of jurisdiction), these allegations also fail for the reasons discussed below.
B. FAILURE TO STATE A CLAIM UPON WHICH RELIEF MAY BE GRANTED
Mr. Ferguson claims he is entitled to relief based on several statutes: 18 U.S.C. §§ 242 and 245, “USC 1692,” “USC 1694,” 42 U.S.C. § 1983, and “1026.4 CFR.” [D.E. 5-1] at 3. For the reasons discussed below, Mr. Ferguson's complaint should be dismissed for failure to state a claim upon which relief can be granted.
The court construes “USC 1692” to refer to 15 U.S.C. § 1692, also known as the Fair Debt Collections Practices Act.
The court construes “USC 1694” to refer to 18 U.S.C. § 1694. The undersigned notes that no statute is codified as “15 U.S.C. § 1694.”
The court construes “1026.4 CFR” to refer to 12 C.F.R. § 1026.4, which defines what qualifies as a finance charge in consumer lending.
First, Mr. Ferguson appears to allege that the purchase of his vehicle violated 18 U.S.C. § 245. Id. at 6 (“I had been informed by the above named entity(ies) that I could procure a vehicle being in direct violation of 18 USC ss 245.”). The complaint also alleges that defendants violated 18 U.S.C. § 242. Id. at 3. However, 18 U.S.C. §§ 242 and 245 are criminal statutes and do “not provide for any civil cause of action.” Lee v. Lewis, No. 2:10-CV-55-F, 2010 WL 5125327, at *2 (E.D. N.C. Oct. 28, 2010), mem. & recomm. adopted, No. 2:10-CV-55-F, 2010 WL 5125324 (E.D. N.C. Dec. 8, 2010).
Similarly, while the court struggles to discern what law Mr. Ferguson intended to cite by his reference to “USC 1694,” ([D.E. 5] at 3), to the extent that Mr. Ferguson sought to reference 18 U.S.C. § 1694, this statute references criminal penalties for illegal mail conveyance and does not provide a civil cause of action. See Eiland v. United States Postal Service, No. 4:22-cv-00538-PLC, 2022 WL 2817561, at *3-4 (E.D. Mo. July 19, 2022) (finding numerous criminal statutes, including 18 U.S.C. § 1694, do not “by their terms or structure, provide for a private right of action”).
Because the criminal statutes Mr. Ferguson references do not create private rights of action, the undersigned RECOMMENDS that any claims associated with these statutes be DISMISSED as frivolous.
Mr. Ferguson also claims that defendant's actions constituted harassment under 15 U.S.C. § 1692. See [D.E. 5] at 6 (“[A]s per the Fair Debt Collections Practices Act, it is indeed harassment!”). 15 U.S.C. § 1692, the Fair Debt Collection Practices Act (“FDCPA”), was enacted in part “to eliminate abusive debt collection practices by debt collectors” and regulate debt collection practices. 15 U.S.C. § 1692(e). To successfully bring an FDCPA claim, “a plaintiff must show that (1) [he] was the object of collection activity arising from a consumer debt as defined by the FDCPA, (2) the defendant is a debt collector as defined by the FDCPA, and (3) the defendant engaged in an act or omission prohibited by the FDCPA.” Guthrie v. PHH Mortg. Corp., No. 7:20-CV-43-BO, 2022 WL 706923, at *12 (E.D. N.C. Mar. 4, 2022) (citing Johnson v. BAC Home Loans Servicing, 867 F.Supp.2d 766, 776 (E.D. N.C. 2011)), aff'd in part, vacated in part, remanded, 79 F.4th 328 (4th Cir. 2023), cert. denied, No. 23-785, 2024 WL 1839108 (U.S. Apr. 29, 2024).
Here, aside from conclusory accusations of “harassment personal information gathering” related to Mr. Ferguson's loan, he does not allege any facts or circumstances showing any harassment. See Holder v. U.S. Marshals Office, No. 5:16-CV-00145-FL, 2016 WL 3919502, at *1 (E.D. N.C. May 17, 2016) (“[T]he principles requiring generous construction of pro se complaints are not without limits.”), mem. & recomm. adopted, 2016 WL 3920213 (E.D. N.C. July 15, 2016). Further, he does not allege that the defendant engaged in an act or omission prohibited by the FDCPA. See Iqbal, 556 U.S. at 678 (“[N]aked assertion[s] devoid of further factual enhancement” are insufficient to state a claim) (citation omitted) (internal quotation marks omitted). Accordingly, the undersigned finds that Mr. Ferguson has failed to state a claim under 15 U.S.C. § 1692 and RECOMMENDS that any such claims be DISMISSED.
42 U.S.C. § 1983 is a statute that provides a cause of action for alleged constitutional violations. See 42 U.S.C § 1983 (providing cause of action for those deprived of constitutional rights). However, Mr. Ferguson fails to state a § 1983 claim. To establish a claim under § 1983, a plaintiff must prove: “(1) the violation of a right secured by the Constitution and laws of the United States, and (2) that the alleged deprivation was committed by a person acting under the color of state law.” Hill v. Revells, No. 4:20-CV-233-FL, 2021 WL 312621, at *2 (E.D. N.C. Jan. 6, 2021), mem. & recomm. adopted, No. 4:20-CV-233-FL, 2021 WL 308592 (E.D. N.C. Jan. 29, 2021), aff'd, No. 21-2110, 2021 WL 5985559 (4th Cir. Dec. 17, 2021) (quoting Williams v. Studivent, No. 1:09CV414, 2012 WL 1230833, at *4 (M.D. N.C. Apr. 12, 2012)) (internal citations omitted) (internal quotation marks omitted). Mr. Ferguson alleges no facts from which the court could find that either defendant Westgate CJDR or defendant TD Bank is a state actor. As there is no indication in the filings that the defendants were anything but non-state parties engaged in private action, any § 1983 claim against defendants fail. See [D.E. 1] at 2 (filing claim against “banking corporation” and “car dealership”).
Mr. Ferguson claims that defendants violated the Truth in Lending Act (TILA) under 12 C.F.R. § 1026.4. [D.E. 5] at 3. Congress passed the TILA to “assure a meaningful disclosure of credit terms.” 15 U.S.C. § 1601(a). This includes finance charges, which § 1026.4 describes as “the cost of consumer credit as a dollar amount.” 12 C.F.R. § 1026.4. Here, Mr. Ferguson appears to contest the validity of the title lien system in North Carolina in general but provides no details of any finance charges that would seem to violate the conditions set out under 12 C.F.R. § 1026.4. [D.E. 5] at 6. Because there are no facts to support a claim under § 1026.4, any of Mr. Ferguson's claims under § 1026.4 would fail and the undersigned RECOMMENDS that any such claims be DISMISSED for failure to state a claim.
Finally, the only potential claim that remains is a state law claim for “commercial fraud.” See [D.E. 5] at 6 (“[Westgate CJDR] utilized [m]y [s]ecured [t]rust as an asset to ‘loan' Me property under false pretenses of ‘ownership', [w]hile yet withholding title constituting ‘commercial [fraud]' by floating a lien.”) As this claim is based on state law, this court cannot review it due to a lack of diversity jurisdiction or federal claims upon which to base supplemental jurisdiction. Accordingly, the undersigned does not find that this court has subject matter jurisdiction over any state law claims and RECOMMENDS that Mr. Ferguson's state law claim for commercial fraud be DISMISSED.
C. FAILURE TO ALLEGE THE ELEMENTS REQUIRED FOR A TEMPORARY RESTRAINING ORDER
Mr. Ferguson requests “a Federal restraining order from a judge as to protect ourselves our lives and property per our Civil Rights Violations have been evidenced herein evidenced.” [D.E. 5-1] at 6. The undersigned construes this as a request for a temporary restraining order. “A temporary restraining order (‘TRO') . . . is warranted when, the movant demonstrates four factors: (1) that the movant is likely to succeed on the merits, (2) that the movant will likely suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities favors preliminary relief, and (4) that injunctive relief is in the public interest.” Profiles, Inc. v. Bank of Am. Corp., 453 F.Supp.3d 742, 747 (D. Md. 2020), appeal dismissed, No. 20-1438, 2020 WL 6042036 (4th Cir. May 28, 2020) (citing League of Women Voters of Nc. v. North Carolina, 769 F.3d 224, 236 (4th Cir. 2014)). Furthermore, “[a] temporary restraining order . . . affords ‘an extraordinary and drastic remedy' prior to trial.” Id. (quoting Munaf v. Geren, 553 U.S. 674, 68990 (2008)) (internal quotation marks and citation omitted).
Applying these four factors, the undersigned determines that a TRO is not warranted. As discussed above, the undersigned has determined that Mr. Ferguson does not state cognizable claims and he has not plausibly alleged (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm absent injunctive relief, (3) that the balance of equities tips in his favor, or (4) that an injunction is in the public interest. Therefore, the undersigned finds that the motion for TRO is without merit and RECOMMENDS that Mr. Ferguson's motion for TRO ([D.E. 5-1] at 6) be DENIED AS MOOT.
D. FAILURE TO COMPLY WITH A COURT ORDER
Plaintiffs' complaint should also be dismissed for failure to prosecute. On December 18, 2023, United States District Judge Louise W. Flanagan entered an order [D.E. 2] in this case which noted the deficiencies in plaintiff's initial case filing, including failures to provide: (a) a financial disclosure statement; (b) a civil cover sheet; (c) a notice of self-representation; and (d) “proposed summonses for all of the necessary parties for service of this action.” ([D.E. 2] at 1). Plaintiff was warned that “[f]ailure to [correct the deficiencies] may result in the dismissal of this action without prejudice for failure to prosecute.” Id. at 2.
Despite this specific instruction and warning by Judge Flanagan, plaintiffs have failed to cure the above-listed deficiencies to date. Accordingly, it is alternatively RECOMMENDED that this case be DISMISSED for failure to prosecute and failure to comply with the court's order.
IV. CONCLUSION
For the reasons set forth above, it is RECOMMENDED that any claims on behalf of Ms. LaToya Barnes be DISMISSED WITHOUT PREJUDICE; that Mr. Ferguson's claims [D.E. 5-1] be DISMISSED WITH PREJUDICE as frivolous pursuant to 28 U.S.C. § 1915(e)(2)(B)(i) and for failure to state a claim under 28 U.S.C. § 1915(e)(2)(B)(ii); and that Mr. Ferguson's motion for TRO ([D.E. 5-1] at 6) be DENIED AS MOOT.
IT IS DIRECTED that a copy of this Memorandum and Recommendation be served on plaintiffs. Plaintiffs shall have until July 2, 2024, to file written objections to this Memorandum and Recommendation. The presiding district judge must conduct his own review (that is, make a de novo determination) of those portions of the Memorandum and Recommendation to which objection is properly made and may accept, reject, or modify the determinations in the Memorandum and Recommendation; receive further evidence; or return the matter to the magistrate judge with instructions. See, e.g., 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b)(3); Local Civ. R. 1.1 (permitting modification of deadlines specified in local rules), 72.4(b), E.D. N.C.
If a party does not file written objections to the Memorandum and Recommendation by the foregoing deadline, the party will be giving up the right to review of the Memorandum and Recommendation by the presiding district judge as described above, and the presiding district judge may enter an order or judgment based on the Memorandum and Recommendation without such review. In addition, the party's failure to file written objections by the foregoing deadline will bar defendant from appealing to the Court of Appeals from an order or judgment of the presiding district judge based on the Memorandum and Recommendation. See Wright v. Collins , 766 F.2d 841, 846-47 (4th Cir. 1985).