Opinion
C. A. 6:23-cv-06366-TMC-KFM
02-13-2024
James A. Griffin, Plaintiff, v. Santander Consumer USA, Defendant.
REPORT OF MAGISTRATE JUDGE
Kevin F. McDonald United States Magistrate Judge
This is a civil action filed by a non-prisoner. Pursuant to the provisions of 28 U.S.C. § 636(b) and Local Civil Rule 73.02(B)(2) (D.S.C.), this magistrate judge is authorized to review all pretrial matters in this case and submit findings and recommendations to the district court.
PROCEDURAL HISTORY
The plaintiff's complaint/petition to vacate arbitration award was entered on the docket on December 8, 2023 (doc. 1). By order dated December 28, 2023, the plaintiff was given an opportunity to provide the necessary information to bring the case into proper form for evaluation and possible service of process (doc. 10). The plaintiff submitted documents in response to the order, bringing his case into proper form. On January 4, 2024, the defendant filed a response to the plaintiff's complaint/petition asserting that the plaintiff's request to vacate the arbitration award should be denied (doc. 15). On January 17, 2024, the plaintiff filed a motion to amend his petition (doc. 16), to which the defendant responded in opposition on January 25, 2024 (doc. 17). On February 13, 2024, the undersigned granted the plaintiff's motion to amend (doc. 19). As such, the plaintiff's amended complaint/petition (doc. 20) is ready for review.
ALLEGATIONS
The plaintiff filed this action challenging an arbitration award pursuant to the Federal Arbitration Act (“FAA”) involving a loan for a vehicle he purchased from Toyota of Greenville in January 2023 (doc. 20 at 1-2). The plaintiff contends that the arbitration award should be vacated because the arbitrator erred by finding that the defendant was entitled to possession of the vehicle in question; failing to nullify the contract based on a forged signature on the insurance coverage acknowledgment form with the wrong insurance policy number that was dated prior to the purchase of the vehicle; failing to find a violation of the Truth in Lending Act (“TILA”), the Unfair and Deceptive Practice Act, or the Consumer Fraud Act based on misleading statements about financing; failing to find a violation of the Fair Credit Reporting Act (“FCRA”), failing to find relevant that the defendant did not obtain a security interest in the vehicle; failing to find relevant portions of a Comptroller's handbook; failing to find relevant misstatements made by the defendant to the Consumer Financial Protection Bureau and the South Carolina Department of Consumer Affairs; failing to find relevant that damage was done to the plaintiff's driveway during repossession of the vehicle in question or that the repossession was a breach of peace; and failing to find null and void a settlement agreement signed by the plaintiff because it was signed under duress (id. at 2-3).
The plaintiff also alleges that the arbitration award was not supported by substantial evidence based on insufficient evidence and clearly erroneous findings by the arbitrator (id. at 3-4). The plaintiff also alleges that the arbitrator committed errors of law by utilizing the incorrect legal standard and making rulings contrary to established law (id. at 4). He further contends that the arbitrator's impartiality was questionable because he had a relationship with the firm representing the defendant and allowed agents for the defendant to engage in the unauthorized practice of law (id. at 4-5). The plaintiff contends that agents of the defendant engaged in the unauthorized practice of law by representing the defendant at the arbitration proceedings (id.). For relief, the plaintiff seeks exclusive possession of the vehicle in question; an order preventing the defendant from ever repossessing the vehicle in question, an order requiring agents for the defendants to provide proof they are licensed to practice law in the state of South Carolina (or find that the agents engaged in the unauthorized practice of law and enjoin them from further participation in this matter); to have the arbitration award vacated; an order finding the purchase contract null and void and refunding any money paid by the plaintiff; an order subpoenaing documents from the defendant; and money damages (id. at 5-7).
STANDARD OF REVIEW
The plaintiff filed this action pursuant to 28 U.S.C. § 1915, the in forma pauperis statute. This statute authorizes the District Court to dismiss a case if it is satisfied that the action “fails to state a claim on which relief may be granted,” is “frivolous or malicious,” or “seeks monetary relief against a defendant who is immune from such relief.” 28 U.S.C. § 1915(e)(2)(B). As a pro se litigant, the plaintiff's pleadings are accorded liberal construction and held to a less stringent standard than formal pleadings drafted by attorneys. See Erickson v. Pardus, 551 U.S. 89 (2007) (per curiam). The requirement of liberal construction does not mean that the Court can ignore a clear failure in the pleading to allege facts which set forth a claim cognizable in a federal district court. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 391 (4th Cir. 1990).
DISCUSSION
As noted above, the plaintiff filed this action seeking to vacate an arbitration award pursuant to the Federal Arbitration Act. The instant matter is frivolous and subject to summary dismissal. As an initial matter, although the plaintiff purports to bring this action as a challenge to an arbitration award, he also appears to assert independent claims apart from the arbitration award. As such, out of an abundance of caution for the pro se litigant, the undersigned will address the plaintiff's assertions regarding the arbitration award and the potential independent claims in turn.
Federal Arbitration Act
The FAA provides that a court may only vacate an arbitration award on one of four grounds: (1) the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrator; (3) where the arbitrator was guilty of misconduct in refusing to postpone the hearing (upon sufficient cause shown), refused to hear evidence pertinent and material to the controversy, or any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrator exceeded its power so that a mutual, final, and definite award upon the subject matter submitted was not made. Three S Del., Inc. v. Data Quick Info. Sys., Inc., 492 F.3d 520, 527 (4th Cir. 2007). Judicial review of an arbitration award in federal court “is among the narrowest known at law” and “a district or appellate court is limited to determine whether the arbitrators did the job they were told to do - not whether they did it well, or correctly, or reasonably, but simply whether they did it.” Id. (internal quotation marks and citations omitted). Here, a plethora of the arguments asserted by the plaintiff in seeking to have the arbitration award vacated, as outlined above, are not grounds under which the FAA allows review. Liberally construed, the only assertions by the plaintiff that could be construed as falling within the FAA are that the arbitrator was partial and that the arbitrator refused to hear evidence pertinent to and material to the controversy (see doc. 20). Nevertheless, as set forth below, the undersigned finds the plaintiff's assertions of error unavailing.
First, the plaintiff appears to assert that the arbitration award should be vacated based on ground 3 because the arbitrator found irrelevant evidence that he presented (see doc. 20). However, a federal court can only vacate an arbitration award if the “arbitrator's refusal to hear pertinent and material evidence deprives a party to the proceeding of a fundamentally fair hearing.” Three S. Del., 492 F.3d at 530-31 (internal citations omitted). Here however, the plaintiff has not asserted that he was denied the right to “present” evidence during the hearing; instead, he argues that the arbitrator erred because he found irrelevant many documents/matters raised by the plaintiff - and ultimately ruled against him (see doc. 20 at 2-3). The United States Supreme Court has instructed that courts “are not authorized to review the arbitrator's decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties' agreement.” Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001). Indeed, “the arbitrator's ‘improvident, even silly, factfinding' does not provide a basis for a reviewing court to” find enforcement of the award impermissible. Id. (quoting United Paperworkers Int'l Union, AFL-CIO v. Miscio, Inc., 484 U.S. 29, 39 (1987)). As such, based on the foregoing, the plaintiff's assertion that the arbitrator found irrelevant evidence he submitted does not provide a basis for vacating the arbitration award.
The plaintiff also argues that the arbitration award should be vacated based on ground 2 because the arbitrator was partial to the defendant (see doc. 20). To establish partiality, however, the plaintiff was required to “demonstrate that a reasonable person would have to conclude that an arbitrator was partial to the other party to the arbitration.” ANR Coal Co. v. Cogentrix of N.C., Inc., 173 F.3d 493, 500 (4th Cir. 1999) (internal quotation marks and citations omitted). In evaluating claims of partiality, the court addresses four factors: (1) the extent and character of the personal interest the arbitrator has in the proceedings, (2) the directness of the relationship between the arbitrator and the party the arbitrator is alleged to favor, (3) the connection of the relationship to the arbitration, and (4) the proximity in time between the relationship and the arbitration proceeding. Id. “When considering each factor, the court should determine whether the asserted bias is direct, definite and capable of demonstration rather than remote, uncertain or speculative” as well as “whether the facts are sufficient to indicate improper motives on the part of the arbitrator.” Id. (internal quotation marks and citation omitted). Here, the plaintiff's entire argument of partiality rests on his vague and conclusory assertion that the party representatives for the defendant had appeared before the arbitrator before (doc. 20 at 4). Such an assertion falls short of the partiality standard. Indeed, the plaintiff's assertions of partiality are nothing more than dissatisfaction with the arbitrator's ruling, which is not a basis for partiality in and of itself as asserted by the plaintiff. As such, the alleged impartiality of the arbitrator does not provide a basis for vacating the arbitration award. Based on the foregoing, the plaintiff's request to vacate the arbitration award should be denied.
Fair Credit Reporting Act
Liberally construed, the plaintiff's amended complaint may be seeking relief under the FCRA, seeking money damages from the defendant for alleged incorrect entries on his credit reports (doc. 20 at 3). The FCRA governs consumer credit reporting practices. 15 U.S.C. § 1601, et seq.. The FCRA delineates requirements for three types of actors, including “(1) consumer reporting agencies, (2) users of consumer reports, and (3) the furnishers of information to consumer reporting agencies.” See Martin v. Sallie Mae, Inc., et al., C/A No. 5:07-cv-00123, 2007 WL 4305607, at *9 (S.D. W.Va. Dec. 7, 2007) (citing Gibbs v. SLM Corp., 336 F.Supp.2d 1, 11 (D. Mass. 2004)). These requirements are either enforced by appropriate government officials or private entities. See 15 U.S.C. § 1681s-2. For example, § 1681s-2(a), which requires that furnishers of credit information provide consumer reporting agencies with accurate information, may only be enforced by government officials. See 15 U.S.C. § 1681s-2(d) (emphasis added). The plaintiff's claim in this action is that the defendant furnished false information to the credit bureaus; thus, his claim falls within this category (see doc. 20). However, because only the government can enforce FCRA claims under 15 U.S.C. § 1681s-2(d), the plaintiff's FCRA claim is subject to dismissal. See 15 U.S.C. § 1681s-2(d).
Frivolousness
Additionally, the undersigned notes that the plaintiff's amended complaint, which appears to seek money damages in addition to having the arbitration award vacated (see doc. 20), is also subject to summary dismissal as frivolous. See Feurtado v. McNair, C/A No. 3:05-cv-1933-SB, 2006 WL 1663792, at *2 (D.S.C. Jun. 15, 2006) (noting that frivolousness encompasses inarguable legal conclusions and fanciful factual allegations), aff'd, 227 Fed.Appx. 303 (4th Cir. 2007), petition for cert. dismissed, 553 U.S. 1029 (2008). For example, the plaintiff's allegations involving alleged fraud during the arbitration proceedings appear to be based on the notion that he has special status in the United States as a “National of the United States of America, non-citizen, Native Carolinian” - as he has identified himself in other actions brought in this court. See Griffin v. First Progress, C/A No. 6:23-cv-04454-TMC, at doc. 1 p. 1 (D.S.C.). Although the plaintiff does not identify himself as a sovereign citizen, his complaint bears all of the hallmarks of the “sovereign citizen” theory. See Leaks v. N.C. , C/A No. 3:22-cv-00108-MR, 2023 WL 2291241, at *1-2 (W.D. N.C. Feb. 28, 2023) (recognizing as a sovereign citizen a plaintiff identified as a national of the United States of America). Adherents to the “sovereign citizen” theory “believe that the state and federal governments lack constitutional legitimacy and therefore have no authority to regulate their behavior.” United States v. Ulloa, 511 Fed.Appx. 105, 106 n.1 (2d Cir. 2013); see also Presley v. Prodan, C/A No. 3:12-3511-CMC-JDA, 2013 WL 1342465, at *2 (D.S.C. Mar. 11, 2013) (collecting cases describing the “sovereign citizen” movement and its common features), Report and Recommendation adopted by 2013 WL 1342539 (D.S.C. Apr. 2, 2013). These theories have repeatedly been rejected as baseless. See, e.g., United States v. Benabe, 654 F.3d 753, 767 (7th Cir. 2011) (“Regardless of an individual's claimed status . . . as a ‘sovereign citizen' . . . that person is not beyond the jurisdiction of the courts. These theories should be rejected summarily, however they are presented.”); United States v. Jagim, 978 F.2d 1032, 1036 (8th Cir. 1992) (explaining claim by party that he was “outside” the jurisdiction of the United States to be “completely without merit” and “patently frivolous” and rejecting it “without expending any more of this Court's resources on their discussion”); Glover v. South Carolina, C/A No. 5:16-cv-00969-JMC, 2017 WL 1836982, at *1 n.1 (D.S.C. May 8, 2017), appeal dismissed sub nom., 700 Fed.Appx. 306 (4th Cir. 2017). Moreover, his request that this court find two representatives from the arbitration proceedings engaged in the unauthorized practice of law is also frivolous in nature. As such, to the extent the plaintiff's amended complaint can be construed as asserting claims in addition to his request that the arbitration award be vacated, such claims would also be subject to summary dismissal as frivolous.
CONCLUSION AND RECOMMENDATION
Now, therefore, based upon the foregoing, IT IS HEREBY RECOMMENDED that the district court dismiss this action with prejudice, without leave to amend, and deny the plaintiff's request to vacate the arbitration award. See Britt v. DeJoy, 49 F.4th 790 (4th Cir. 2022). It is further recommended that the United States District Judge assigned to this case warn the plaintiff regarding the entry of sanctions (including prefiling restrictions) in the future should the plaintiff continue to file such cases in this court. The attention of the parties is directed to the important notice on the next page.
Although the defendant requests that the award be confirmed and the plaintiff be ordered to turn over the vehicle in question, the defendant has not filed a motion seeking such relief, it has just raised it as part of its response to filings by the plaintiff. Additionally, it appears that the vehicle in question has already been repossessed (see doc. 20 at 3). As such, the undersigned has only recommended that the plaintiff's motion to vacate be denied and this matter be dismissed.
IT IS SO RECOMMENDED.
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
250 East North Street, Room 2300
Greenville, South Carolina 29601
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).