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treating a motion to dismiss the original complaint as a motion to dismiss the amended complaint because the same arguments applied and “[t]his approach serves the interests of judicial efficiency”
Summary of this case from Dirden v. GentryOpinion
1:22-CV-00201-SPB
01-08-2023
KERRY LEE SWITZER JR., Plaintiff v. FRANKLIN INVESTMENT CORP; and CORTECH, Defendants
REPORT AND RECOMMENDATION ON MOTIONS TO DISMISS IN RE: ECF NOS. 24, 26
RICHARD A. LANZILLO CHIEF UNITED STATES MAGISTRATE JUDGE
It is respectfully recommended that the motions to dismiss filed on behalf of Defendants Cortech (ECF No. 24) and Franklin Investment Corp. (ECF No. 26) be GRANTED.
I. Procedural History and Factual Allegations
Plaintiff Kerry Lee Switzer Jr. (“Switzer”), proceeding pro se, commenced this action against Defendants Franklin Investment Corp. (“Franklin”) and Cortech. His original Complaint alleged that “Franklin Industries in cooperation with Cortech violated Switzerland owned email owned by plaintiff in tax and pandemic fraud schemes and violation of restraining order (your so called Russian Ransomware).” ECF No. 9. The Complaint asserted that this conduct constituted “Intentional Cybor (sic) Fraud, International and domestic violating Plaintiffs (sic) right to life and right to property, income, and violating the standards of already filed lawsuit in Venango County case no 2020-01127.” Id. As the statutory basis for federal court jurisdiction, the Complaint listed the Computer Fraud and Abuse Act, 18 U.S.C. §1030(a)(4), the federal wire fraud statute,18 U.S.C. §1343, and “PA 18 §§ 7611 and 7612 PA Code 7601.” Id. As relief, he demanded damages in the amount of $1.5 million. Id. Franklin and Cortech separately moved pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the Complaint for failure to state a claim. See ECF No. 24 (Cortech); ECF No. 26 (Franklin). In response to the Defendants' motions, Switzer filed an Amended Complaint. ECF No. 35.
Given the filing of this amended pleading, Switzer's motion for an extension of time to do so was denied as moot. See ECF 37.
The Amended Complaint cites the same federal statutes and provisions of Pennsylvania state law. Factually, it alleges:
1. The plaintiff has screen shots of a Cortech employee, known to be in association with Den Graham, and Franklin Industries, Ex General Manager Greg Stokes, teaching individuals how to break into protected emails, contractracted (sic) and protected by the sovereignty of Switzerland, including its encrypted signal, violations of which include at an international standard two separate fines, and two yrs mandatory minimum only pardonable through the acting President of the United states (sic) and defense secretary.. .unless the victim is in said country. The service is provided worldwide under the corporate entity Proton mail.
2. The violations of these emails other than being in violation of the above federal and state statutes are also prosecutable as an attempt of identity theft, especially if the attempt is more than once, which is prosecutable as aggravated identity theft, in an attempt to gain personal information such as social security numbers, and financial information.
3. The defendants reside within Pennsylvania.
4. The seek for relief can be sought, as punitive, comprehensive, and cumulative damages, prosecuted domestically holding other than the
international mandatory minimum of two years and fines, domestically three to five years, along with those damage, and restitution paid.
5. The recipient of these fines costs and mandatory minimum of two years, receives electronic notice, graphed to the cyber terrorists software, the fine, numbers, and instructions, to remedy the violation, known as ransomeware (sic), or international insurable electronic warrants.
6. The plaintiff was framed on national Television as a terrorist held in Russian Prison as a terrorist, when the recipient of the ransomware was the cyber terrorist, until the story was reeled back.ECF No. 35, ¶¶ 1-6.
Because the arguments for dismissal raised by Franklin and Cortech in their respective motions to dismiss Switzer's original Complaint apply with equal force to the Amended Complaint and the Amended Complaint plainly fails to allege facts to support a cause of action against either Defendant, it is respectfully recommended that the Court rule on the sufficiency of the Amended Complaint based on the pending motions to dismiss. This approach serves the interests of judicial efficiency and preservation of judicial resources.
II. Standard of Review
A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) tests the legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). In deciding a motion to dismiss, the court is not opining on whether the plaintiff is likely to prevail on the merits; rather, the plaintiff must only present factual allegations sufficient “to raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007) (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235-236 (3d ed. 2004)). See also Ashcroft v. Iqbal, 556 U.S. 662, (2009). A complaint should only be dismissed pursuant to Rule 12 (b)(6) if it fails to allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570 (rejecting the traditional Rule 12 (b)(6) standard established in Conley v. Gibson, 355 U.S. 41 (1957)). In making this determination, the court must accept as true all well-pled factual allegations in the complaint and view them in a light most favorable to the plaintiff. U.S. Express Lines Ltd. v. Higgins, 281 F.3d 383, 388 (3d Cir. 2002). While a complaint does not need to include detailed factual allegations to survive a motion to dismiss, a complaint must provide more than labels and conclusions. Twombly, 550 U.S. at 555. A “formulaic recitation of the elements of a cause of action will not do.” Id. (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Moreover, a court need not accept inferences drawn by a plaintiff if they are unsupported by the facts as set forth in the complaint. See California Pub. Employee Ret. Sys. v. The Chubb Corp., 394 F.3d 126, 143 (3d Cir. 2004) (citing Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997)). Nor must the court accept legal conclusions disguised as factual allegations. Twombly, 550 U.S. at 555. See also McTernan v. City of York, Pennsylvania, 577 F.3d 521, 531 (3d Cir. 2009) (“The tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.”). Because Switzer is proceeding pro se, the allegations of his Amended Complaint are held to “less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U.S. 519, 520-521 (1972). If the court can reasonably read a pro se litigant's pleadings to state a valid claim upon which relief could be granted, it should do so despite the litigant's failure to cite proper legal authority, confusion of legal theories, poor syntax and sentence construction, or unfamiliarity with pleading requirements. See Boag v. MacDougall, 454 U.S. 364 (1982); United States ex rel. Montgomery v. Bierley, 141 F.2d 552, 555 (3d Cir. 1969) (petition prepared by a prisoner may be inartfully drawn and should be read “with a measure of tolerance”).
III. Analysis
A. The Amended Complaint fails to state a claim under the Computer Fraud and Abuse Act.
Switzer claims both Franklin and Cortech violated the Computer Fraud and Abuse Act, (“CFAA”), 18 U.S.C. § 1030. The CFAA prohibits fraudulent and unauthorized access of computer systems and creates a private right of action for those who suffer damages resulting from prohibited conduct. 18 U.S.C. § 1030(g). The Amended Complaint alleges broadly that Franklin and Cortech violated § 1030(a)(4) of the CFAA. A person violates § 1030(a)(4) if he (1) access a protected computer; (2) without authorization or exceeding authorized access; (3) knowingly and with intent to defraud; and (4) further the intended fraud and obtain anything of value. See, e.g., P.C. Yonkers, Inc. v. Celebrations the Party and Seasonal Superstore, LLC, 428 F.3d 504, 508 (3d Cir. 2005). “Protected computer” within the meaning of the CFAA are United States computers, financial institution computers, and computers used in interstate or foreign commerce. 18 U.S.C. § 1030(e)(2). “Beyond the substantive elements of a CFAA violation, the statute's private right of action is further limited to situations where the defendant's conduct satisfies one of the factors set forth in § 1030(c)(4)(A)(i)(I)-(V).” Elias Indus., Inc. v. Kissler & Co. Inc., 2021 WL 2141509, at *3 (W.D. Pa. May 26, 2021). The only one of these factors conceivably implicated by Switzer's allegations is subclause (I) “loss to [one] or more persons during any [one]-year period ... aggregating at least $5,000 in value.” 18 U.S.C. § 1030(c)(4)(A)(i)(I).
Even the most generous reading of Switzer's Amended Complaint yields no support for any of the essential elements a CFAA claim against either Franklin or Cortech. Switzer has not identified any protected computer within the meaning of the statute. Although he refers to the “sovereignty of Switzerland” and an individual allegedly training others how to break into protected emails (ECF No. 35, ¶ 1), he alleges no facts to support the use of a protected computer for such purposes or explain how these somewhat bizarre allegations relate to him. Likewise, no facts are alleged to support that Franklin or Cortech accessed any computer without authorization or exceeded authorized access, knowingly and with intent to defraud, and further the intended fraud and obtain something of value.
The Amended Complaint also fails to allege any facts to support that Switzer sustained a “loss” within the meaning of the CFAA. “Loss” in this context means “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense, and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service[.]” 18 U.S.C. § 1030(e)(11). “Courts in the Third Circuit read the term ‘loss' narrowly, requiring it to be related to impairment of or damage to a computer.” Elias Indus., Inc., 2021 WL 2141509, at *3 (citing Advanced Fluid Sys. v. Huber, 28 F.Supp.3d 306, 330 (M.D. Pa. 2014); Sealord Holdings, Inc. v. Radler, 2012 WL 707075 at (E.D. Pa. Mar. 6, 2012) (“the investigating or remedying damage must be related to the damage to the computer”)). “Losses include the ‘cost of remedial measures taken to investigate or repair the damage to the computer[.]'” Id. See also Integrated Waste Sols., Inc. v. Goverdhanam, 2010 WL 4910176 *16 (E.D. Pa. Nov. 30, 2010) (denying motion to dismiss CFAA claim where plaintiff alleged costs for retaining security services to investigate sources of cyberattacks)). By contrast, “damage” means “any impairment to the integrity or availability of data, a program, a system, or information[.]” 18 U.S.C. § 1030(e)(8). To the extent the Amended Complaint can be read to allege any loss or damages sustained by Switzer, they do not fall within this scope of those terms as used in the CFAA.
B. The Complaint fails to state a claim under the federal wire fraud statute.
The Amended Complaint also alleges broadly that the Defendants violated 18 U.S.C. §1343, the federal wire fraud statute. “[T]here is no private cause of action for a violation of the federal mail and wire fraud statutes.” Addlespurger v. Corbett, 461 Fed.Appx. 82, 87 (3d Cir. 2012). Thus, this claim also should be dismissed.
C. To the extent Switzer's Amended Complaint asserts claims under state law, the Court should decline to exercise supplemental jurisdiction.
“A district court may decline to exercise supplemental jurisdiction over state law claims if it has dismissed all claims over which it has original jurisdiction unless considerations of judicial economy, convenience, or fairness to the parties provide an affirmative justification for exercising supplemental jurisdiction.” Patel v. Meridian Health Sys., 666 Fed.Appx. 133 (3d Cir. 2016) (internal citations and quotations omitted). See also 28 U.S.C. § 1367(c)(3) (“The district courts may decline to exercise supplemental jurisdiction ... [if] the district court has dismissed all claims over which it has original jurisdiction.”); Byrd v. Shannon, 715 F.3d 117, 128 (3d Cir. 2014) (affirming dismissal of state law claims where district court dismissed all of the plaintiff's federal claims).
No discernable considerations provide justification for exercising supplemental jurisdiction over state law claims in this case. This case is in its early stages. A case management order has not been issued and no discovery has taken place. Further, to the extent Switzer raises state law claims, Switzer may assert and have them efficiently resolved in state court. Thus, considerations of judicial economy do not favor the exercise of supplemental jurisdiction. Because all parties are in Western Pennsylvania and a substantial part of the alleged events or omissions giving rise to the claims occurred in Western Pennsylvania, concerns of convenience and fairness to the parties do not weigh in favor of exercising supplemental jurisdiction. See, e.g., Taylor v. Sw. Pennsylvania Hum. Servs., Inc., 2022 WL 17976325, at *2 (W.D. Pa. Dec. 28, 2022). For these reasons, the Court should decline to exercise supplemental jurisdiction over any remaining state law claims.
D. Switzer's Amended Complaint should be dismissed with prejudice and without opportunity for further amendment.
Finally, it is recommended that Switzer's federal claims to be dismissed with prejudice. Switzer has already filed an amended complaint in response to Defendants' motions to dismiss. His amended complaint failed to cure any of the deficiencies of his claims and demonstrates that any further amendment would be futile. See Ivers v. Brentwood Borough Sch. Dist., 2021 WL 2116367, at *5 (W.D. Pa. May 25, 2021) (citing In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1434 (3d Cir. 1997) (a court may decide to deny leave to amend for reasons such as undue delay, bad faith, dilatory motive, prejudice, and futility)). Despite two opportunities to state a claim, Switzer has alleged no facts to support any element of his CFAA claim and because the federal wire fraud statute does not provide a private right of action no amendment can cure the legal deficiency of that claim. Accordingly, no further amendment should be permitted and this claim should be dismissed with prejudice. See id.
IV. Notice Regarding Objections
In accordance with the Federal Magistrate Judge's Act, 28 U.S.C. § 636(b)(1)(B) and (C), and Rule 72.D.2 of the Local Rules of Court, the parties are allowed fourteen (14) days from the date of service of this Report and Recommendation to file written objections thereto. Any party opposing such objections shall have fourteen (14) days from the date of service of objections to respond thereto. Failure to file timely objections will constitute a waiver of any appellate rights.