Opinion
No. 2:19-CV-00044-FL
04-17-2020
Christopher Lee Neal, Plaintiff, v. State Employees Credit Union, Defendant.
Memorandum & Recommendation
Plaintiff Christopher Lee Neal claims that Defendant State Employees Credit Union violated his constitutional rights when it provided his financial records to state authorities in response to a subpoena. Compl. passim. He argues that turning over the records violated his constitutional rights because the North Carolina Financial Privacy Act entitles him to notice and an opportunity to be heard when a government agency seeks his records through a subpoena. Id.
Ultimately, the district court should dismiss Neal's Complaint. The statute he is suing under, 42 U.S.C. § 1983, only applies to actions by governmental actors and SECU is a private entity. Even if SECU were a state actor, Neal's claim would still fail because § 1983 does not protect rights provided by state law. And what's more, Neal has no protectable Fourth Amendment interest in the records maintained by his credit union. Thus, he has failed to state a claim under § 1983.
I. Screening Under 28 U.S.C. § 1915
Because the court has granted Neal IFP status (D.E. 14), it must analyze the viability of the claims in the Complaint. 28 U.S.C. § 1915(e). The court reviews a complaint to eliminate those claims that unnecessarily impede judicial efficiency and the administration of justice. The court must dismiss any portion of the complaint it determines is frivolous, malicious, fails to state a claim upon which relief may be granted, or seeks monetary relief from a defendant who is immune from such relief. Id. § 1915(e)(2)(B).
A complaint fails to state a claim upon which relief may be granted if it does not "contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The Supreme Court has explained that "[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Neal's pro se status relaxes, but does not eliminate, the requirement that his complaint contain facially plausible claims. The court must liberally construe a pro se plaintiff's allegations, but it "cannot ignore a clear failure to allege facts" that set forth a cognizable claim. Johnson v. BAC Home Loans Servicing, LP, 867 F. Supp. 2d 766, 776 (E.D.N.C. 2011).
Neal's claim arises out of 42 U.S.C. §1983, which creates civil liability for any person acting under the color of state law who deprives a plaintiff of "any rights, privileges, or immunities secured by the Constitution and laws" of the United States. Thus, to state a claim under § 1983, "a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law." West v. Atkins, 487 U.S. 42, 48 (1988); Philips v. Pitt Cnty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009).
In this case Neal claims that SECU violated his rights under the Fourth and Fourteenth Amendments. The Fourth Amendment provides that "[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated[.]" U.S. Const. amend. IV. The Fourteenth Amendment makes the Fourth Amendment's protections applicable to state actors as well as federal ones. Mapp v. Ohio, 367 U.S. 643, 655 (1961). But, as discussed below, Neal cannot establish that a state actor violated his constitutional rights.
Although not part of his Complaint, a declaration Neal filed reveals that his claims relate to evidence used against him in a successful criminal prosecution. D.E. 10 ¶ 18. Neal has not shown that his conviction has been reversed, vacated, or questioned by a federal court conducting a habeas corpus proceeding. To the contrary, he appears to be currently incarcerated as a result of his conviction. Thus, his claim would also be barred by Heck v. Humphrey, 512 U.S. 477 (1994). That case holds that a plaintiff may not bring a § 1983 action if the success of the action would imply the invalidity of the his conviction, unless the plaintiff can show "that the conviction or sentence has been reversed on direct appeal, expunged by executive order, declared invalid by a state tribunal authorized to make such determination, or called into question by a federal court's issuance of a writ of habeas corpus[.]" Id. at 486-87.
A. SECU is not a State Actor
To state a claim under § 1983, "a plaintiff . . . must show that the alleged deprivation was committed by a person acting under color of state law." West, 487 U.S. at 48; Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009). SECU is a private entity, not a governmental one. Compl. ¶ 4. And its response to a validly issued subpoena does not change its status. See Monsegue v. Moore, 4:18-CV-00239, 2019 WL 1085188, at *2 (S.D. Ga. Mar. 7, 2019) ("Nor does 'underwriting' by the 'FDIC' or timely responses to federal subpoenas make private banks state actors."); Gold v. City of Sandusky, No. 3:15-CV-02001, 2019 WL 1468992, at *8 (N.D. Ohio Mar. 26, 2018) ("Responding to the subpoena did not transform the medical provider Defendants into state actors."). Thus, SECU is not a state actor and Neal cannot sue it under § 1983. The district court should dismiss Neal's constitutional claim for failure to state a claim upon which relief may be granted.
B. Section 1983 does not Apply to Alleged Violations of State Law
Neal's complaint stems from an allegation that SECU violated the requirements of North Carolina law by not notifying him before responding to a subpoena for his financial records. But to state a claim under § 1983, a defendant must show that they were deprived of a "right secured by the Constitution and laws of the United States[.]" West, 487 U.S. at 48. Thus a violation of state law cannot support a claim under § 1983 and Neal's Complaint should be dismissed.
C. Turning Over Neal's Financial Records in Response to a Subpoena did not Violate Neal's Constitutional Rights
Even if Neal could overcome these shortcomings, he has still failed to state a claim because he has not alleged a violation of his Fourth Amendment rights. A violation of state law does not, on its own, create a violation of the Fourth Amendment. What's more, the Supreme Court has held that a person does not have a protectable Fourth Amendment interest in the records maintained by financial institutions. Thus, the district court should dismiss Neal's complaint.
Neal's Complaint mentions both the Fourth and Fourteenth Amendments. The undersigned interprets the reference to the Fourteenth Amendment as an indication that the Fourth Amendment has been incorporated against the states. If Neal would claim that he has some sort of free-standing due process claim in connection with the subpoena of his bank records, that argument also fails to state a claim for relief and should be dismissed. --------
1. A Violation of North Carolina Law does not Establish a Violation of the Fourth Amendment
North Carolina law provides certain privacy protections that apply when a government authority seeks a person's financial records. See N.C. Gen. Stat. § 53B-1, et seq. But "a violation of state law is not the same as a violation of the Fourth Amendment." United States v. Warren, No. 7:17-CR-00121, 2018 WL 6588508, at *5 (E.D.N.C. Aug. 23, 2018). Thus, a violation of state law cannot, by itself, support a claim that Neal has suffered a violation of his constitutional rights. Neal needs to show that a government actor violated his rights under the Fourth Amendment itself.
2. The Fourth Amendment Does Not Protect Neal's Financial Records
The Supreme Court addressed the applicability of the Fourth Amendment to financial records in United States v. Miller. In that case, the United States served subpoenas on two banks to obtain Miller's financial records. 425 U.S. 435, 436. During a later criminal proceeding, Neal argued that the United States' actions violated his Fourth Amendment rights. Id. at 438-39. The Supreme Court rejected Neal's argument and held that he did not have a Fourth Amendment interest in the records because they were the bank's records, not his. Id. at 440-41. The Court explained that "[t]he depositor takes the risk, in revealing his affairs to another, that the information will be conveyed by that person to the Government." Id. at 443. Thus, based on Miller, the Fourth Amendment provided no protection for Neal's financial records and the use of a subpoena to obtain them did not violate his constitutional rights.
II. Conclusion
For these reasons, the undersigned recommends that the district court dismiss his Complaint.
The Clerk of Court must serve a copy of this Memorandum and Recommendation ("M&R") on each party who has appeared in this action. Any party may file a written objection to the M&R within 14 days from the date the Clerk serves it on them. The objection must specifically note the portion of the M&R that the party objects to and the reasons for their objection. Any other party may respond to the objection within 14 days from the date the objecting party serves it on them. The district judge will review the objection and make their own determination about the matter that is the subject of the objection. If a party does not file a timely written objection, the party will have forfeited their ability to have the M&R (or a later decision based on the M&R) reviewed by the Court of Appeals. Dated: April 17, 2020.
/s/_________
ROBERT T. NUMBERS, II
UNITED STATES MAGISTRATE JUDGE