Opinion
C/A 7:17-1964-HMH-BM
01-31-2018
Robert Craig Allen, Plaintiff, v. Founders Federal Credit Union, Defendant.
REPORT AND RECOMMENDATION
This action has been filed by the Plaintiff, an inmate at the Livesay Correctional Institution of the South Carolina Department of Corrections, pro se. Plaintiff asserts claims pursuant to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971) and/or 42 U.S.C. § 1983 for breach of trust, negligence, incompetence, and bad faith by the Defendant for its purported failure to prevent Teresa Morrison (who may have been Plaintiff's girlfriend) from removing $4,440.90 from his account with the Defendant while he was a pretrial detainee at the Spartanburg County Detention Center. Plaintiff seeks monetary damages against the Defendant for its actions.
In Bivens, the Supreme Court established a direct cause of action under the Constitution of the United States against federal officials for the violation of federal constitutional rights. A Bivens claim is analogous to a claim under 42 U.S.C. § 1983. However, federal officials cannot be sued under 42 U.S.C. § 1983 because they do not act under color of state law. See Harlow v. Fitzgerald, 457 U.S. 800, 814-820 (1982). Harlow and progeny indicate that case law involving § 1983 claims is applicable in Bivens actions and vice versa. Farmer v. Brennan, 511 U.S. 825 (1994). See also Mitchell v. Forsyth, 472 U.S. 511, 530 (1985); Turner v. Dammon, 848 F.2d 440, 443-444 (4th Cir. 1988); Osabutey v. Welch, 857 F.2d 220, 221-223 (4th Cir. 1988); and Tarantino v. Baker, 825 F.2d 772, 773-775 (4th Cir. 1987), cert. denied, North Carolina v. Tarantino, 489 U.S. 1010 (1989).
The Defendant filed a motion to dismiss pursuant to Rule 12, Fed.R.Civ.P., on November 15, 2017. As the Plaintiff is proceeding pro se, a Roseboro order was entered by the Court on November 16, 2017, advising Plaintiff of the importance of a dispositive motion and of the necessity for him to file an adequate response. Plaintiff was specifically advised that if he failed to respond adequately, the Defendant's motion to dismiss may be granted, thereby ending his case. Plaintiff thereafter filed a memorandum in opposition to the Defendant's motion on January 8, 2018.
This matter is now before the Court for disposition.
This case was automatically referred to the undersigned United States Magistrate Judge for all pretrial proceedings pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Rule 73.02(B)(2)(g), D.S.C. The Defendant has filed a motion to dismiss. As this is a dispositive motion, this Report and Recommendation is entered for review by the Court.
Discussion
When considering a Rule 12 motion to dismiss, the Court is required to accept the allegations in the pleading as true, and draw all reasonable factual inferences in favor of the party opposing the motion. The motion can be granted only if the party opposing the motion has failed to set forth sufficient factual matters to state a plausible claim for relief "on its face". Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "[O]n a motion to dismiss, the Court does not weigh the strength of the evidence, and simply considers whether the [claim] alleges sufficient facts which, if true, would permit a reasonable fact finder to find [the party seeking dismissal of the claim] liable." Vogt v. Greenmarine Holding, LLC, 318 F.Supp. 2d 136, 144 (S.D.N.Y. 2004).
Further, the Federal Court is also charged with liberally construing a complaint filed by a pro se litigant to allow for the development of a potentially meritorious case. See Cruz v. Beto, 405 U.S. 319 (1972); Haines v. Kerner, 404 U.S. 519 (1972). Even so, the requirement of liberal construction does not mean that the Court can ignore a clear failure in the pleadings to allege facts which set forth a Federal claim, nor can the Court assume the existence of a genuine issue of material fact where none exists. Weller v. Dep't of Social Services, 901 F.2d 387 (4th Cir. 1990). Here, after careful review and consideration of the pleadings in this case and the arguments of the parties, and in light of the requirements of Rule 12 and the liberal construction given to pro se pleadings, the undersigned finds for the reasons set forth hereinbelow that the Defendant's motion should be granted as to Plaintiff's federal claims. To the extent that Plaintiff intended to allege state law claims, those claims should then be dismissed, without prejudice.
I.
(Federal Claims)
Bivens Action. A Bivens action recognizes a private action for damages against federal officers who have violated a citizen's constitutional rights. Corr. Servs. Corp. v. Malesko, 534 U.S. 61, 66 (2001). A Bivens action may only be brought against a federal officer. Shelton & Daniels v. Crookshank, No. 17-108, 2018 WL 527423, at * 2 (N.D.W.Va. Jan. 24, 2018). Here, Plaintiff cannot pursue a Bivens action in this case because there is no allegation in the Complaint to show that the Defendant, a credit union, qualifies as a federal official. A federal credit union is a non-profit, cooperative association organized under the Federal Credit Union Act, 12 U.S.C. § 1751 et seq; see United States v. Michigan, 851 F.2d 803, 804 (6th Cir. 1988); and numerous courts have held that federal credit unions are private actors. See Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1132 (9th Cir. 1994)["[T]he slight degree of government involvement in the business of federal credit unions does not warrant applying Constitutional requirements to these democratically controlled, non-profit cooperatives."]; Nix v. NASA Fed. Credit Union, 200 F.Supp.3d 578, 587-588 (D.Md. 2016)[dismissing plaintiff's claims against NASA FCU and its employees because NASA FCU was a private, non-governmental actor].
This would be so even if the Defendant were a federal government agency. In order to maintain a Bivens damages action, Plaintiff would need to name the responsible individual(s) as the party defendant(s). See FDIC v. Meyer, 510 U.S. 471, 484-86 (1994)[holding that a Bivens action is unavailable against agencies]; Randall v. United States, 95 F.3d 339, 345 (4th Cir. 1996)["Any remedy under Bivens is against federal officials individually, not the federal government."].
Since there are no allegations in the Complaint that any federal officer or official was responsible for the conduct alleged, Plaintiff cannot maintain this matter as a Bivens action. Therefore, to the extent Plaintiff's claim(s) are asserted under Bivens, they should be dismissed.
42 U.S.C. § 1983. To the extent Plaintiff's claims are being asserted under § 1983, the Defendant moves to dismiss his claim on the ground that Plaintiff has not alleged or shown that the Defendant is a state actor. See generally Complaint. In order to state a cause of action under 42 U.S.C. § 1983, a plaintiff must allege that: (1) the defendant(s) deprived him or her of a federal right, and (2) did so under color of state law. Gomez v. Toledo, 446 U.S. 635, 640 (1980); see Hall v. Quillen, 631 F.2d 1154, 1155-56 & nn. 2-3 (4th Cir.1980). Because the United States Constitution regulates only the government, not private parties, a litigant claiming that his constitutional rights have been violated must first establish that the challenged conduct constitutes "state action." See, e.g., Blum v. Yaretsky, 457 U.S. 991 (1982). To qualify as state action, the conduct in question "must be caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible," and "the party charged with the [conduct] must be a person who may fairly be said to be a state actor." Lugar v. Edmondson Oil Co., 457 U.S. at 937; see U.S. v. Int'l Brotherhood of Teamsters, Chauffeurs, Warehousemen Helpers of Am., AFL-CIO, 941 F.2d 1292 (2d Cir.1991).
In other words, purely private conduct, no matter how wrongful, injurious, fraudulent, or discriminatory, is not actionable under 42 U.S.C. § 1983. See Lugar v. Edmondson Oil Co., 457 U.S. 922, 936(1982); Burton v. Wilmington Parking Auth., 365 U.S. 715, 721 (1961). Here, there is no indication in Plaintiff's pleadings that the Defendant is a qualified "state actor" for purposes of § 1983 claim, or that a violation of Plaintiff's federal rights has occurred. Plaintiff did not even respond to Defendant's argument that no state action has been alleged. Therefore, it is not even clear whether Plaintiff is even contesting dismissal of his claim on this basis. Regardless, since there are no allegations in the Complaint to attribute any of the Defendant's actions or inaction to state action, to the extent Plaintiff's claim is asserted under § 1983, it should be dismissed. See James v. Hertiage Valley Federal Credit Union, 197 F.Appx 102, 106 (3d Cir. 2006)[affirming district court's dismissal of plaintiff's § 1983 claim against Heritage Valley Federal Credit Union because "none of the defendants is a state actor"]; Hauschild v. Nielsen, 325 F.Supp.2d 995, 1005-1006 (D.Neb. 2004)[dismissing plaintiff's § 1983 claim because credit union did not act under color of state law]; Brown v. Chicago Municipal Employees Credit Union, No. 13-2597, 2013 WL 1687774, at * 2 (N.D.Ill. Apr. 17, 2013)["Because the Credit Union is not a state actor, Brown would need to allege facts demonstrating the Credit Union 'willfully colluded with the state or its agents to violate her constitutional rights.'"](internal citations omitted).
II.
(State Law Claims)
To the extent that Plaintiff has intended to bring any of his claims as state law claims, they should be dismissed, without prejudice. If the Court adopts the recommendation set forth herein with regard to Plaintiff's federal claims, Plaintiff's state law claims will be the only claims remaining in this lawsuit, and when federal claims presented in a case are dismissed, any remaining state law claims should also be dismissed, without prejudice, in order to allow for state court resolution of such claims under the general doctrine developed in United Mine Workers v. Gibbs, 383 U.S. 715 (1966). See In Re Conklin, 946 F.2d 306, 324 (4th Cir. 1991); Nicol v. Imagematrix, Inc., 767 F.Supp. 744, 746, 749 (E.D.Va. 1991); Mills v. Leath, 709 F.Supp. 671, 675-676 (D.S.C. 1988) [noting that federal courts should generally decline to exercise pendent jurisdiction over remaining state law claim after dismissal of federal claims in a lawsuit]; Carnegie-Mellon v. Cohill, 484 U.S. 343 (1988); Taylor v. Waters, 81 F.3d 429, 437 (4th Cir. 1996).
Plaintiff references allegations of breach of trust, negligence, incompetence, and bad faith in his Complaint, which would all appear to be claims assertable under state law. See Complaint, p. 4. However, it is not clear based on the allegations in his Complaint whether he has intended to pursue these claims as state law claims or not. For purposes of this section only, and giving Plaintiff's pleadings the liberal construction to which he is entitled as a pro se litigant, the undersigned has assumed that Plaintiff may have intended to assert state law claims.
The Complaint is devoid of any allegations that would establish diversity jurisdiction. Plaintiff is an inmate in a South Carolina prison, while the Defendant has been determined in a previous federal suit to be a citizen of South Carolina, and there are no allegations in the Complaint that the Defendant is not a citizen of South Carolina for purposes of a diversity analysis. See Mungo v. Minnesota Life Ins. Co., No. 11-464, 2011 WL 2516934, at 4 (D.S.C. June 23, 2011); cf Moore v. Founders Federal Credit Union, Civil Action No. 0:11-cv-358-JFA-JM (Court Docket No. 1, pp. 1-2 & Court Docket No. 29)[Defendant representing that it was citizen of South Carolina for purposes of diversity analysis].
This doctrine recognizes the state court's role in determining whether dismissal of a state law claim is warranted; Gibbs, 383 U.S. at 726 ["Certainly, if the federal claims are dismissed before trial, . . . the state claims should be dismissed as well"]; Carnegie-Mellon, 484 U.S. at 350, n. 7 ["[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendent jurisdiction doctrine . . . will point toward declining to exercise jurisdiction over the remaining state law claims."]; and will also allow the Plaintiff to obtain a ruling as to the viability of his state law claims from a more appropriate forum. Further, if these claims were to survive dismissal or summary judgment, it would be much more appropriate for them to be tried in state court. Lee v. Singleton, No. 11-2983, 2012 WL 1896062 at **18-20 (D.S.C. Jan.9, 2012) [dismissing and remanding unrelated state law claims where they were not related to a federal claim], adopted by, 2012 WL 1895998 (D.S.C. May 24, 2012); see also Singh v. New York State Dep't of Taxation & Finance, No. 06-299, 2011 WL 3273465 at ** 20-21 (W.D.N.Y. July 28, 2011), adopted by, 865 F.Supp.2d 344 (W.D.N.Y. Oct.25, 2011).
Dismissal of Plaintiff's state law claims would also not prejudice the Plaintiff, as the parties could seek a fast track for resolution of these claims at the state level; See Rule 40(c), S.C.R.Civ.P.; and there are no additional statute of limitations problems presented by a dismissal here, because federal law provides for tolling of statutes of limitation for state claims during the period they were pending in federal court and for thirty days afterwards. See 28 U.S.C.A. § 1367(d); see also Artis v. District of Columbia, No. 16-460, ___ S.C. ___, 2018 WL 491524 (Jan. 22, 2018); Jinks v. Richland County, 538 U.S. 456 (2003); Hedges v. Musco, et al., 204 F.3d 109, 123-124 (3rd Cir.2000); Beck v. Prupis, 162 F.3d 1090, 1099-1100 (11th Cir.1998) ["a dismissal under section 1367 tolls the statute of limitations on the dismissed claims for 30 days"]; cf. National Federation of Independent Business v. Sebelius, 567 U.S. 519, 559-560 (2012).
The Defendant has raised a statute of limitations ground for dismissal, which Defendant may pursue in state court. Plaintiff is cautioned that this dismissal will not restart the running of his statute of limitations on any state law claims, and the undersigned makes no finding as to whether Plaintiff's state law claims may already be time barred.
Conclusion
Based on the foregoing, it is recommended that the Defendant's motion to dismiss be granted to the extent Plaintiff has asserted his claims under Bivens and/or § 1983, and that those claims be dismissed, with prejudice. Plaintiff's remaining state law causes of action, to the extent that he has intended to assert any such claims, should then be dismissed, without prejudice, in order to allow Plaintiff to pursue these claims in state court, if he desires to do so.
The parties are referred to the Notice Page attached hereto.
/s/_________
Bristow Marchant
United States Magistrate Judge January 31, 2018
Charleston, South Carolina
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
Post Office Box 835
Charleston, South Carolina 29402
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).