Opinion
1:23-CV-1074-DII
02-01-2024
ANTHONY O. WILSON, Plaintiff, v. ALLEVIATE FINANCIAL, LLC D/B/A TRIPOINT LENDING, Defendant.
ORDER & REPORT AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
MARK LANE UNITED STATES MAGISTRATE JUDGE
TO THE HONORABLE ROBERT PITMAN UNITED STATES DISTRICT JUDGE:
Before the court is Plaintiff Anthony O. Wilson's Motion to Remand (Dkt. 9) and Defendant Alleviate Financial LLC d/b/a TriPoint Lending's (Alleviate) Motion to Strike Plaintiff's Response to Defendant's Motion for Removal (Dkt. 14) and all related briefing. After reviewing the pleadings, the relevant case law, as well as the entire case file, and determining that a hearing is not necessary, the undersigned issues the following Report and Recommendation to the District Court.
United States District Judge Robert Pitman referred the Motion to Remand to the undersigned for Report and Recommendation as to the merits pursuant to 28 U.S.C. § 636(b)(1)(B), Rule 72 of the Federal Rules of Civil Procedure, and Rule 1(d) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas. Text Order, Nov. 16, 2023.
United States District Judge Robert Pitman referred the Motion to Strike to the undersigned for disposition pursuant to 28 U.S.C. § 636(b)(1)(A), Federal Rule of Civil Procedure 72, and Rule 1(c) of Appendix C of the Local Rules of the United States District Court for the Western District of Texas. Text Order, Nov. 16, 2023.
I. Background
Plaintiff Anthony O. Wilson (“Wilson”), proceeding pro se, alleges he was denied a loan by Alleviate and offered debt management and debt settlement services instead. Dkt. 1-4 at 3.
Page numbers correspond to those in the CM/ECF header.
Wilson asserts claims for violation of the Texas Deceptive Trade Practices Act and breach of contract. Id. at 5-6.
Although the factual allegations in Wilson's Original Petition (Dkt. 1-4) comprise less than two pages, examination of the alleged facts is unnecessary to resolve the Motions.
Relevant here is that Alleviate timely removed this action from Texas state court on September 8, 2023 based on federal diversity jurisdiction. Dkt. 1. On October 7, 2023, Wilson filed a Motion to Remand alleging the parties are not diverse under 28 U.S.C. § 1332. Dkt. 9. Wilson's Motion does not dispute that the amount in controversy exceeds $75,000. Id. (“The only issue presented in this removal proceeding context now is: Where the Limited Liability Company (“LLC”) having the citizenship of each of [the] members and where Robert Barsoum[,] who is an individual[,] contending that he is the sole member of the LLC, is the evidence submitted in support legally sufficient to establish that his citizenship is the State of California[?]”
II. Wilson'S Extensive Litigation Experience
Wilson has extensive litigation experience, and in resolving this Motion, the undersigned discovered Wilson is a licensed attorney. The undersigned is familiar with Wilson, and other courts have recognized him as a serial litigant, who asserts frivolous claims. In a previous matter, the undersigned took judicial notice-and does so again here-of the following cases in which Wilson appeared as a plaintiff and was admonished or sanctioned. Wilson v. First Elec. Bank, No. 1:21-CV-968-LY-ML, 2022 U.S. Dist. LEXIS 240211, at *3 (W.D. Tex. 2022), report and recommendation adopted, No. 1:21-CV-968-LY, 2023 U.S. Dist. LEXIS 128577, at *2 (W.D. Tex. 2023):
• Wilson v. First Premier Bank, No. 19-11704, 2020 U.S. Dist. LEXIS 54580, at *5-7 (E.D. Mich. Mar. 30, 2020);
• Wilson v. Stockton, No. 05-CV-74083-DT, 2006 U.S. Dist. LEXIS 94975, at *6-7 (E.D. Mich. Sept. 18, 2006) (noting Wilson “seems to
be a continually irksome and litigious character” and that plaintiff “has filed more than 20 lawsuits in the last decade”);
• Wilson v. Stockton, No. 05-CV-74083-DT, 2006 U.S. Dist. LEXIS 81226, at *4-5 (E.D. Mich. Nov. 6, 2006) (noting Wilson “repeatedly made false statements, repeatedly made financial misrepresentations, and repeatedly filed unsubstantiated complaints”);
• Wilson v. Academic Financial Solutions, No. 05-40361, 2007 U.S. Dist. LEXIS 5956, at *12 (E.D. Mich. Jan. 29, 2007) (“After a full consideration of Plaintiff's history in this cause of action, the Court is left with the firm conviction that Plaintiff brought this suit in bad faith.”);
• Wilson v. Capital One Bank, No. 21-1539, 2022 U.S. App. LEXIS 3789 (6th Cir. Feb. 10, 2022) (affirming dismissal of FCRA claim and sanction of court costs and $2,000 in attorney's fees against Wilson for assertion of frivolous claims).
III. Renewed Admonishment
The undersigned previously “admonishe[d] Mr. Wilson that pro se parties are expected to comply with the rules of procedure. See Houston v. Queen, 606 Fed.Appx. 725, 730 (5th Cir. 2015). Indeed, an experienced litigant such as Mr. Wilson should know compliance with the rules is expected.” Wilson, 2022 U.S. Dist. LEXIS 240211, at *3. Although Wilson is representing himself pro se, he is a licensed attorney, and “counsel is held to a higher standard than a pro se litigant.” Wright v. McCain, 703 Fed.Appx. 281, 284 (5th Cir. 2017) (“‘it would be rather peculiar to treat a trained attorney's error more leniently than' that of a pro se litigant”) (quoting United States v. Riggs, 314 F.3d 796, 799 (5th Cir. 2002)).
IV. Defendant Alleviate'S Motion to Strike
Alleviate argues that the Court should strike Wilson's Response (Dkt. 10) to its Notice of Removal (Dkt. 1). Dkt. 14 at 1. Alleviate's argument is straightforward, Wilson filed a Motion to Remand (Dkt. 9) as well as a Response to Alleviate's Notice of Removal (Dkt. 10). Alleviate also points out that Wilson did not timely file his Response to Alleviate's Notice of Removal. Id. at 2.
Rule 12(f) provides that a district court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” FED. R. CIV. P. 12(F). STRIKING A pleading “is a drastic remedy to be resorted to only when required for the purposes of justice,” and a motion to strike “should be granted only when the pleading to be stricken has no possible relation to the controversy.” Augustus v. Bd. of Pub. Instruction, 306 F.2d 862, 868 (5th Cir. 1962) (quotation omitted); see also Encore Bank, N.A. v. Bank of Am., N.A., 918 F.Supp.2d 633, 642 (S.D. Tex. 2013) (“Motions to strike are usually viewed with disfavor and rarely granted since they seek a drastic remedy and are frequently sought merely to delay.”). The trial court has “ample” discretion when considering a Rule 12(f) motion. In re Beef Indus. Antitrust Litig., 600 F.2d 1148, 1168 (5th Cir. 1979).
As Alleviate points out, the Response and the Motion are nearly identical and make the same argument. Compare Dkt. 9 with Dkt. 10. Alleviate is also correct that Wilson did not timely file his Response, violating Local Rule CV-7(d)(2). Because a pleading that makes the same argument (apparently copy and pasted from a prior pleading) is the paradigmatic definition of redundant and because the undersigned specifically admonished Wilson over a year ago to comply with the Local Rules, the undersigned will grant Alleviate's Motion to Strike (Dkt. 14).
V. Plaintiff'S Motion to Remand
A. Standard of Review
A case may be removed to federal court if the action is one over which the federal court possesses subject matter jurisdiction. 28 U.S.C. § 1441(a). When considering a motion to remand, “[t]he removing party bears the burden of showing that federal jurisdiction exists and that removal was proper.” Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720, 723 (5th Cir. 2002); accord DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006).
“A federal court must affirmatively ascertain subject-matter jurisdiction before adjudicating a suit.” Bank of La. v. FDIC, 919 F.3d 916, 922 (5th Cir. 2019). Generally, a federal court has jurisdiction over a case in two circumstances. The first, known as federal question jurisdiction, exists if a case “arises under the Constitution, treaties or laws of the United States.” 28 U.S.C. § 1331; see Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 808-09 (1988). The second circumstance in which a federal court has jurisdiction is often termed diversity jurisdiction. See generally 28 U.S.C. § 1332 (setting out the elements required for jurisdiction based on “diversity of citizenship”). “Diversity jurisdiction under 28 U.S.C. § 1332 only exists where the parties are citizens of different states and the amount in controversy exceeds $ 75,000.” White v. FCI USA, Inc., 319 F.3d 672, 674-75 (5th Cir. 2003).
Removal is appropriate “only if none of the parties properly joined and served as defendants is a citizen of the state in which the action was brought.” Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (5th Cir. 2007) (citing 28 U.S.C. § 1441(b)(2)). To remove a case based on diversity, the defendant must show that all the prerequisites of diversity jurisdiction contained in § 1332 are satisfied, including the requirement of “complete” diversity of citizenship. Smallwood v. Ill. Cent. R.R. Co., 385 F.3d 568, 572 (5th Cir. 2004), cert. denied, 544 U.S. 992 (2005). The parties' citizenship is based on the facts at the time of removal. Louisiana v. Am. Nat. Prop. Cas. Co., 746 F.3d 633, 636 (5th Cir. 2014).
B. Analysis
Wilson argues that this action should be remanded for lack of subject matter jurisdiction because Wilson and Alleviate are citizens of the same state. Alleviate, an LLC, contends that its sole member is a California citizen, and because an LLC's citizenship is determined based on the citizenship of all its members, complete diversity exists.
This case does not present a federal question. See generally Dkt. 1-4. The Original Petition alleges damages totaling $250,000, which is more than $75,000, id. at 7, and Wilson does not dispute the amount in controversy exceeds the $75,000 amount in controversy requirement. See Dkt. 9 at 1.
For diversity jurisdiction purposes, “a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” Hertz Corp. v. Friend, 559 U.S. 77, 77 (2010) (quoting 28 U.S.C. § 1332(c)(1)) (italics in original; bold emphasis added). The phrase “principal place of business” refers “to the place where a corporation's officers direct, control, and coordinate the corporation's activities,” and is often called “the corporation's nerve center.” Id. at 92-93. A corporation's nerve center, usually its main headquarters, is a single place, and is “not simply an office where the corporation holds its board meetings.” Id. at 93.
Citizenship of an LLC for diversity purposes is determined by the citizenship of all of its members. SXSW v. Fed. Ins. Co., 83 F.4th 405, 407-08 (5th Cir. 2023) (citing Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077 (5th Cir. 2008)). “For individuals, ‘citizenship has the same meaning as domicile,' and ‘the place of residence is prima facie the domicile.'” MidCap Media Fin. v. Pathway Data, 929 F.3d 310, 313 (5th Cir. 2019) (quoting Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954)). “Citizenship requires not only ‘residence in fact' but also ‘the purpose to make the place of residence one's home.'” Id. (quoting Texas v. Florida, 306 U.S. 398, 424 (1939)).
In determining a litigant's domicile, the court must address a variety of factors. No single factor is determinative. The court should look to all evidence shedding light on the litigant's intention to establish domicile. The factors may include the places where the litigant exercises civil and political rights, pays taxes, owns real and personal property, has driver's and other licenses, maintains bank accounts, belongs to clubs and churches, has places of business or employment, and maintains a home for his family.Veranda Assocs. v. Hooper, 496 Fed.Appx. 455, 457 (5th Cir. 2012) (quoting Coury v. Prot, 85 F.3d 244, 251 (5th Cir. 1996)).
Wilson argues, citing no authority, that “[u]nder the nerve center test, the Defendant has failed to establish with evidence admissible pursuant to the Federal rules of evidence [sic] that Defendant's principal place of business is in the State of California ....” Dkt. 9 at 2. Thus, Wilson asserts an irrelevant theory of jurisdiction.
In his combined Response to Defendant's Motion to Strike and Reply to Plaintiff's Response, Wilson shifts to a sufficiency of the evidence argument. Dkt. 16 at 2. Wilson urges the Court to reject Barsoum's affidavit. Id. Wilson urges the Court to require Alleviate to present direct evidence of Barsoum's citizenship, contending that Barsoum's averments under penalty of perjury that he, among other things, pays taxes in California, possesses a California driver's license, and is registered to vote in and votes in California “require[] to [sic] many inferences and presumptions.” Id. The undersigned disagrees.
A sworn affidavit is sufficient to establish citizenship. Ben. E. Keith Co. v. Dining All., Inc., 80 F.4th 695, 698 (5th Cir. 2023) (endorsing a district court's requirement that parties “file [] document[s] establishing its citizenship for diversity purposes, supported by affidavit or declaration”).
Alleviate has carried its burden. It has affirmatively demonstrated the two requirements for this Court to exercise diversity jurisdiction under § 1332. First, the uncontested amount in controversy exceeds $75,000. See 28 U.S.C. § 1332(a). Second, the citizenship of the sole defendant is California while the sole plaintiff's citizenship is Texas, id. at (a)(1); thus, complete diversity exists. Removal was proper. Id. Accordingly, the undersigned will recommend the District Court deny Wilson's Motion to Remand (Dkt. 9).
VI. Order
For the reasons stated, but primarily due to Wilson's extensive litigation experience in this and other federal courts and the fact that he is a licensed attorney, see supra at 2-3, Defendant's Motion to Strike (Dkt. 14) is GRANTED and Plaintiff's Response to Defendant's Notice of Removal (styled “Response to Defendant's Motion for Removal”) (Dkt. 10) is STRICKEN.
VII. Recommendations
For the reasons stated, the undersigned RECOMMENDS that the District Court DENY Plaintiff's Motion to Remand (Dkt. 9).
VIII. Supplemental Recommendation
The undersigned recognizes that many lawyers found their first-year civil procedure classes dull. And the Fifth Circuit notes residency and citizenship are “evergreen issues” in diversity cases. SXSW, 83 F.4th at 407. Thus, the undersigned normally would not take an attorney to task over a citizenship-related mistake. However, Mr. Wilson is not only a licensed attorney but an attorney who has taken to abusing courts in Michigan, see supra at 2-3, and now Texas. Mr. Wilson's actions in this case (and other litigation), in addition to wasting judicial resources, appear to violate his ethical obligations. See TEX. R. PROF CONDUCT 3.01, 3.02, 3.03. Accordingly, the undersigned FURTHER RECOMMENDS that Mr. Wilson (Texas Bar No. 24043453) be prohibited from filing cases as a pro se litigant in the Western District of Texas without the Court's permission.
Mr. Wilson previously applied for admission to the Western District of Texas but did not complete his application. U.S. District Court for the Western District of Texas, https://txwd-ecf.sso.dcn/cgi-bin/addrbook.cgi (last name or bar number search) (last visited February 1, 2024).
In light of this Report and Recommendation, the referral to the magistrate should be ended.
IX. Objections
The parties may file objections to this Report and Recommendation. A party filing objections must specifically identify those findings or recommendations to which objections are being made. The District Court need not consider frivolous, conclusive, or general objections. See Battles v. United States Parole Comm'n, 834 F.2d 419, 421 (5th Cir. 1987).
A party's failure to file written objections to the proposed findings and recommendations contained in this Report within fourteen (14) days after the party is served with a copy of the Report shall bar that party from de novo review by the District Court of the proposed findings and recommendations in the Report and, except upon grounds of plain error, shall bar the party from appellate review of unobjected-to proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. § 636(b)(1)(C); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Services Auto. Ass'n, 79 F.3d 1415 (5th Cir. 1996) (en banc).