Opinion
C. A. 3:23-5136-MGL-SVH
06-25-2024
Jaquan Hi Keem Bryant, Plaintiff, v. GM Financial, Defendant.
REPORT AND RECOMMENDATION
Shiva V. Hodges United States Magistrate Judge
Jaquan Hi Keem Bryant (“Plaintiff”), proceeding pro se, filed this complaint against GM Financial (“Defendant”). 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 matter be summarily dismissed.
I. Factual and Procedural Background
Plaintiff alleges that on May 6, 2021, he entered into a contract for an auto loan with Defendant. [ECF No. 1 at 1]. Defendant then “initiated a securitization process, which involved the sale of the loan note.” Id. However, Plaintiff alleges Defendant failed “to perfect the security interest correctly” by failing to “include the note, the evidence of debt, in the security agreement and did not file a financing statement.” Id.
Plaintiff argues these alleged actions violated the Truth in Lending Act (“TILA”) and the Uniform Commercial Code (“UCC”) sections 3-301 and 3-604. Id. at 1-2. Plaintiff additionally argues that because of these violations, Defendant has both “forfeited its right to enforce the note . . ., result[ing] in nullifying the Plaintiff's obligation to pay the debt” as well as “voluntarily discharged the Plaintiff's debt . . ., absolving the Plaintiff of any liability under the note.” Id. at 2.
Plaintiff seeks monetary damages, attorneys' fees, and an “[o]rder the Defendant to produce the original note and to demonstrate that it was not securitized.” Id. Plaintiff states he is a “Non-Citizen National of the United States, Executor of Precedent Landed Estate Jaquan Hikeem Bryant.” Id.
Plaintiff's complaint has many of the hallmarks of and appears to be premised on “sovereign citizen” theories. See, e.g., Gaskins v. South Carolina, C/A No. 2:15-2589 DCN, 2015 WL 6464440, at *4 (D.S.C. Oct. 26, 2015) (“sovereign citizens are a loosely affiliated group who believe that the state and federal governments lack constitutional legitimacy and therefore have no authority to regulate their behavior”). However, any such affiliation has no impact on the analysis and recommendation contained herein.
II. Discussion
A. Standard of Review
Plaintiff filed this complaint 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
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 her pleadings. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189-90 (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) federal question pursuant to 28 U.S.C. § 1331; and (2) diversity of citizenship pursuant to 28 U.S.C. § 1332. The allegations contained in the instant complaint do not fall within the scope of either form of this court's limited jurisdiction.
First, the essential allegations contained in Plaintiff's 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 alleges that because Defendant allegedly improperly securitized his auto loan in violation of the TILA,he is no longer obligated to pay on it. Courts have repeatedly rejected this type of argument as frivolous. See, e.g., Bendeck v. U.S. Bank Nat'l Ass'n, C/A No. 17-00180 JMS-RLP, 2017 WL 2726692, at *5 (D. Haw. June 23, 2017) (“Plaintiff's claims are also based, in part, on a securitization theory. Variations of the securitization theory provide that the mere securitization of a note and/or the separation of the note and mortgage renders the note unenforceable. This court and numerous others have rejected similar claims.”) (citations omitted) (collecting cases)); Urquhart v. Vandyk Mortg. Corp., C/A No. 1:22-00823-MHC-JCF, 2022 WL 2389317, at *2 (N.D.Ga. Apr. 14, 2022) (“Plaintiff advances several theories that have been rejected by the courts, including allegations about Defendants' failure to hold and to produce the original ‘blue ink' signed note and demands to produce the note, and improper securitization of the mortgage.”) (collecting cases)), report and recommendation adopted, C/A No. 1:22-823-MHC-JCF, 2022 WL 3336433 (N.D.Ga. May 13, 2022); Tonea v. Bank of Am., N.A., 6 F.Supp.3d 1331, 1344 (N.D.Ga. 2013) (finding that “any claim that Plaintiff may be attempting to assert on the theory that the loan was improperly securitized . . . must fail”); Robinson v. Moynihan, C/A No. 3:21-122, 2021 WL 2346107, at *4 (E.D. Va. June 8, 2021) (“This allegation focuses on the securitization process, in which an original lender assigns an asset to a vehicle like a trust. In fact, securitization does not relieve a borrower's obligation to pay his or her mortgage, nor does it prevent a lender from foreclosing on a property. Moreover, an individual mortgagor has no standing to contest the validity of a securitization assignment, because he or she is not a party to nor a third-party beneficiary of the assignment agreement.”).
Under the TILA, creditors must “provide borrowers with clear and accurate disclosures of terms dealing with things like finance charges, annual percentage rates of interest, and the borrower's rights.” Beach v. Ocwen Fed. Bank, 523 U.S. 410, 412 (1998).
Additionally, Plaintiff, like plaintiffs in other cases asserting similar claims, “fails to cite a single provision of TILA that prohibits Defendant's alleged conduct.” Stokes v. Navient Dep't of Educ. Loan Servicing, C/A No. 2:18-47-MHT-WC, 2019 WL 3183587, at *6 (M.D. Ala. June 18, 2019), report and recommendation adopted, C/A No. 2:18-47-MHT, 2019 WL 3162431 (M.D. Ala. July 15, 2019). Plaintiff “cites no authority, nor can the court find any, that says lenders must disclose that they may securitize” a loan. Robinson, 2021 WL 2346107, at *4; Hegedus v. Nationstar Mortg., LLC, C/A No. 5:16001, 2016 WL 5660239, at *7 (W.D. Va. Sept. 29, 2016) (same). Because Plaintiff has failed to set forth a viable federal claim, the court may not exercise federal question jurisdiction over this matter.
Although Plaintiff argues that “Defendant's non-disclosure of the securitization process is a violation of TILA” is established in Jesinoski v. Countrywide Home Loans, Inc., 574 U.S. 259 (2015) [ECF No. 1 at 2], this case does not support Plaintiff's position. Jesinoski provides that, under the TILA, “rescission is effected when the borrower notifies the creditor of his intention to rescind” and “does not also require him to sue within three years.” 574 U.S. at 262.
Plaintiff's assertions that Defendant violated the UCC cannot confer federal question jurisdiction. See, e.g., Moss v. Stanley, C/A No. 8:20-03194-DCC, 2020 WL 6111002, at *2 (D.S.C. Oct. 16, 2020) (“the UCC is not a federal law or any other binding statutory body whatsoever; it is an aggregated statutory model, whose provisions may be codified by individual states and does not provide a basis for this Court's jurisdiction in this action”) (citations omitted)).
Second, 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). Plaintiff's complaint fails to allege an amount in controversy that satisfies the requirement of § 1332(a) and, indeed, alleges otherwise. [See ECF No. 1-1 at 2 (stating the total purchase cost for the auto in question as $26,624.00)]. Accordingly, the court has no diversity jurisdiction over this case.
Because Plaintiff has not shown that the court has either diversity or federal question jurisdiction over his claims, his complaint is subject to summary dismissal.
III. Conclusion and Recommendation
For the foregoing reasons, the undersigned recommends Plaintiff's action be summarily dismissed without 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).