Opinion
Civil Action 21-1067
08-11-2022
WOODROW J. HICKS, Pro Se, Plaintiff, v. STACY GARRITY, Pennsylvania State Treasurer; and JOHN DOE, President, First Commonwealth Bank, Defendants.
LISA PUPO LENIHAN, MAGISTRATE JUDGE
REPORT AND RECOMMENDATION
DAVID S. CERCONE, JUDGE
ECF No. 18
I. RECOMMENDATION
For the reasons set forth below, it is respectfully recommended that the Motion to Dismiss the Complaint filed by Defendant John Doe (ECF No. 18) be granted. It is further recommended that Defendant John Doe's Motion, in the alternative, for Summary Judgment and Motion, in the alternative, for a More Definite Statement, also filed at ECF No. 18, be dismissed as moot.
II. REPORT
A. Factual Allegations and Procedural History
Plaintiff Woodrow J. Hicks is currently incarcerated in SCI-Houtzdale. From November 3, 2013 until June 11, 2019, Plaintiff was also incarcerated in a facility within the Pennsylvania Department of Corrections. Compl. ¶ 1, ECF No. 8. Prior to Plaintiff's confinement, he maintained a personal checking account at First Commonwealth Bank (the “Bank”) located in Indiana, Pennsylvania. Id. at ¶ 2. Plaintiff alleges that the Bank is a FDIC insured financial institution. Id.
Plaintiff's last transaction at the Bank occurred on March 16, 2015. Id. at ¶4. Sometime thereafter, Plaintiff alleges that the entire balance of funds in his checking account, $14,913.49, was either transferred by the Bank to the possession of the Pennsylvania State Treasurer, Defendant Stacy Garrity, or seized from the Bank by Defendant Garrity. Id. Plaintiff further alleges that said transfer or seizure was done without his knowledge or consent, or official notice and an opportunity to claim or contest the seizure of his personal property. Id.
Since March 30, 2020, Plaintiff has been confined in a facility within the Pennsylvania Department of Corrections due to the revocation of his special probation/parole. Id. at ¶ 3. On or about February 20, 2021 and March 17, 2021, Plaintiff received notices from Defendant Garrity via First Class mail, advising him that the Pennsylvania Treasury Department possessed his monetary property and that he could claim such property by completing and submitting to the Pennsylvania Treasury Department claim forms included with the notices received by Plaintiff. Id. at ¶ 5; Ex. 1 attached to Compl., ECF No. 8-1.
Plaintiff claims that on February 25, 2021 and March 25, 2021, he submitted completed claim forms, had them notarized, and attached a photocopy of his state-issued DOC ID card to the Pennsylvania Treasury Department. ECF No. 8 at ¶ 6. However, as of the filing of this lawsuit, Plaintiff contends that he has not received either his monetary property or a response from Defendant Garrity. Id. In addition, Plaintiff alleges that he followed up the submission of his claim forms with three typewritten inquiries dated 5/1/2021, 7/1/2021, and 8/1/2021, but received no response as of the date this action was commenced. Id.
Consequently, Plaintiff commenced this civil action on August 12, 2021, against John Doe, President of First Commonwealth Bank and Pennsylvania State Treasurer Stacy Garrity for alleged violations of his rights under the Fourth and Fourteenth Amendments for unreasonably intruding upon his privacy and unlawfully seizing his monetary property without according him due process of law. Id. at pp. 7-8. Plaintiff also claims that Defendant Garrity violated his rights under the First and Fourteenth Amendments for refusing to process his claim forms or respond to his inquiries based on his status as a confined person, in violation of his right to seek redress from the government and to due process and equal protection of the law. Id. at p. 8.
Plaintiff claims that his injuries include the loss of his personal monetary property in the amount of $14,913.49, and the inability to use those funds for necessities such as personal care needs, food, clothing or entertainment and leisure. Id.
For relief, Plaintiff seeks:
1. A declaratory judgment against both Defendants declaring that they violated his rights guaranteed under the Fourth and Fourteenth Amendments for unreasonably intruding upon his privacy and unlawfully seizing his monetary property without due process of law;
2. A declaratory judgment against Defendant Garrity declaring that she discriminated against him as a member of a particularly vulnerable and suspect class of persons, i.e., state prisoners, by failing to respond to his requests for the return of his monetary property with the same measure of diligence as unconfined citizens of this Commonwealth, thereby violating his right to seek redress and to due process and equal protection of the law under the First and Fourteenth Amendments;
3. Injunctive relief against the Defendants ordering them to immediately return his monetary property in the amount of $14,913.49;
4. Compensatory damages to reimburse him for the costs of filing and prosecuting this civil action; and
5. Punitive damages for their unlawful discrimination against him as a member of a particularly vulnerable and suspect class of persons. Id. at pp. 8-9.
On December 17, 2021, Defendant John Doe filed a Motion to Dismiss the Complaint pursuant to Rule 12(b)(6), or in the alternative, a Motion for Summary Judgment and Motion for More Definite Statement. ECF No. 18. On December 20, 2021, the Court entered a text order stating that it would only consider the Motion filed at ECF No. 18 as a Motion to Dismiss and would not consider either the Motion for Summary Judgment or the Concise Statements of Material Fact, and that Plaintiff need not file a response to these two filings. See ECF No. 24. Plaintiff was granted an extension of time to file a response and brief in opposition to the Motion to Dismiss, which he eventually filed on July 26, 2022. ECF Nos. 56 & 57. As such, the motion to dismiss is fully briefed and ripe for review.
Plaintiff claims that he originally deposited his response and brief in opposition to Defendant John Doe's Motion to Dismiss in the prison mailbox on or about February 1, 2022, but apparently it was never delivered to the Court. See ECF No. 57 at 2. He then refiled his response and brief in opposition after receiving the Court's July 8, 2022 order directing him to file a response and opposition brief on or before July 25, 2022. See ECF Nos. 55 - 57.
B. Legal Standard
In deciding a motion to dismiss under Rule 12(b)(6), the courts apply the following standard, as recently reiterated by the court of appeals:
A complaint may be dismissed under Rule 12(b)(6) for “failure to state a claim upon which relief can be granted.” But detailed pleading is not generally required. The Rules demand “only ‘a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.' ” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937 (citation and internal quotation marks omitted). “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.; see also Sheridan v. NGK Metals Corp., 609 F.3d 239, 262 n. 27 (3d Cir.2010). Although the plausibility standard “does not impose a probability requirement,” Twombly, 550 U.S. at 556, 127 S.Ct. 1955, it does require a pleading to show “more than a sheer possibility that a defendant has acted unlawfully,” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.Connelly v. Lane Constr. Corp., 809 F.3d 780, 786-87 (3d Cir. 2016).
Building upon the landmark Supreme Court decisions in Twombly and Iqbal, the court of appeals in Connelly reiterated the three-step process district courts must undertake to determine the sufficiency of a complaint:
First, it must “tak[e] note of the elements [the] plaintiff must plead to state a claim.” Iqbal, 556 U.S. at 675, 129 S.Ct. 1937. Second, it should identify allegations that, “because they are no more than conclusions, are not entitled to the assumption
of truth.” Id. at 679, 129 S.Ct. 1937. See also Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir.2011) (“Mere restatements of the elements of a claim are not entitled to the assumption of truth.” (citation and editorial marks omitted)). Finally, “[w]hen there are well-pleaded factual allegations, [the] court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Iqbal, 556 U.S. at 679, 129 S.Ct. 1937.Id. at 787.
At the motion to dismiss stage, “for purposes of pleading sufficiency, a complaint need not establish a prima facie case in order to survive a motion to dismiss[,]” but need only allege “'enough facts to raise a reasonable expectation that discovery will reveal evidence of the necessary element[s].'” Connelly, 809 F.3d at 78889 (quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (quoting Twombly, 550 U.S. at 556)) (footnote omitted).
Also, when considering pro se pleadings, a court must employ less stringent standards than when judging the work product of an attorney. Haines v. Kerner, 404 U.S. 519, 520 (1972). When presented with a pro se complaint, the court should construe the complaint liberally and draw fair inferences from what is not alleged as well as from what is alleged. Dluhos v. Strasberg, 321 F.3d 365, 369 (3d Cir. 2003). In a § 1983 action, the court must “apply the applicable law, irrespective of whether the pro se litigant has mentioned it by name.” Higgins v. Beyer, 293 F.3d 683, 688 (3d Cir. 2002) (quoting Holley v. Dep't of Veteran Affairs, 165 F.3d 244, 247-48 (3d Cir. 1999)). See also Nami v. Fauver, 82 F.3d 63, 65 (3d Cir. 1996) (“Since this is a § 1983 action, the [pro se] plaintiffs are entitled to relief if their complaint sufficiently alleges deprivation of any right secured by the Constitution.”) (quoting Higgins, 293 F.3d at 688). Notwithstanding this liberality, pro se litigants are not relieved of their obligation to allege sufficient facts to support a cognizable legal claim. See, e.g., Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th Cir. 2002); Riddle v. Mondragon, 83 F.3d 1197, 2102 (10th Cir. 1996).
C. Discussion
In order to “state a claim of liability under §1983, [a plaintiff] must allege that [he] was deprived of a federal constitutional or statutory right by a state actor.” Leshko v. Servis, 423 F.3d 337, 339 (3d Cir. 2005) (citation omitted). Section 1983 provides in relevant part:
Every person who, under color of any statute, ordinance, regulation, custom, or usage of any State . . ., subjects, or causes to be subjected, any citizen of the United States of any other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress....
42 U.S.C. § 1983. Therefore, to state a claim for relief under §1983, a plaintiff must demonstrate both that the defendants were acting under color of state law and that a constitutional violation was directly caused by their conduct. Piecknick v. Pennsylvania, 36 F.3d 1250, 1255-56 (3d Cir. 1994). Section 1983 does not create rights; it simply provides a remedy for violations of those rights created by the United States Constitution or federal law. Kneipp v. Tedder, 95 F.3d 1199, 1204 (3d Cir. 1996) (citing Baker v. McCollan, 443 U.S. 137, 144 n.3 (1979); Mark v. Borough of Hatboro, 51 F.3d 1137, 1141 (3d Cir. 1995)).
In determining whether a private party can be found to have acted under color of state law, the Supreme Court has “insisted that the conduct allegedly causing the deprivation of a federal right be fairly attributable to the State.” Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982). In determining the question of “fair attribution,” the Supreme Court applies a two-step approach:
First, the deprivation 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.... Second, the party charged with the deprivation must be a person who may fairly be said to be a state actor. This may be because he is a state official, because he has acted together with or has obtained significant aid from state officials, or because his conduct is otherwise chargeable to the State. Without a limit such as this, private parties could face constitutional litigation whenever they seek to rely on some state rule governing their interactions with the community surrounding them.Id. With regard to the second step, the Supreme Court has found that “[a]ction by a private party pursuant to [a] statute, without something more, was not sufficient to justify a characterization of that party as a ‘state actor.'” Id. One of the ways that a private party can be found to have acted under color of state law is when a private person has jointly participated with, or invoked the aid of, state officials in the prohibited action. Id. at 941 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 152 (1970) (holding that a private party's joint participation with a state official in a conspiracy to discriminate on the basis of race in violation of the Equal Protection Clause of the Fourteenth Amendment was sufficient to find state action for purposes of Section 1983)).
With these legal precepts in mind, the Court turns to John Doe's Motion to Dismiss.
Defendant John Does advances two main arguments in support of his Motion to Dismiss: First, that the Complaint fails to plead any facts setting forth any actions or personal involvement by John Doe with regard to the transfer of funds; and second, notwithstanding the absence of any factual allegations as to his involvement, John Doe was not acting under color of state law by merely complying with Pennsylvania law when the Bank transferred the balance in Plaintiff's dormant checking account to the Pennsylvania Treasury Department pursuant to state law. Because the Complaint fails to plausibly show that John Doe was a state actor for Section 1983 purposes, and there are no additional facts which could be pled in an amended complaint to plausibly raise a Section 1983 claim against a private employee of a private bank under the circumstances alleged here, Defendant John Doe asks the Court to dismiss the entire Complaint against him with prejudice.
The Court declines to reach Defendant John Doe's first argument as it finds the state actor argument dispositive of the entire Complaint against John Doe.
In response, Plaintiff submits that although he was unable to identify the person responsible for depriving him of his monetary property at the Bank, this pleading deficiency may be cured in an amended complaint after limited discovery. ECF No. 56, ¶ 5. In addition, Plaintiff submits that where a private individual sets in motion a state procedure, acts jointly with a state official, or acts under state compulsion to cause a deprivation of a person's constitutional rights, the private individual may be held liable under Section 1983. Id.
Plaintiff further maintains that his Complaint pleads sufficient factual matter to allow the Court to infer that Defendant John Doe set in motion a state procedure, acted jointly with Defendant Garrity and the Pennsylvania Treasury Department, and acted under compulsion of state law to deprive him of his monetary property in violation of the protections of the Federal Constitution. In support, Plaintiff cites Jordan v. Fox, Rothschild, O'Brien & Frankel, 20 F.3d 1250, 1267 (3d Cir. 1994), for the proposition that “a private individual who enlists the compulsive powers of the state to seize property . . . without pre-deprivation notice or hearing acts under color of law and so may be held liable under section 1983 if his acts cause a state official to use the state's power of legal compulsion to deprive another of property.” ECF No. 57 at 9. Plaintiff argues that Defendant John Doe and the Bank unilaterally closed his account under compulsion of state law and set in motion a state procedure that cause the deprivation of his monetary property for more than three years, thus constituting action taken “under color of state law.” Plaintiff contends that Lugar, 457 U.S. at 934, holding that “[i]f the creditorplaintiff violates the debtor-defendant's due process rights by seizing his property in accordance with statutory procedures, there is little or no reason to deny to the latter a cause of action under the federal statute, § 1983, designed to provide judicial redress for just such constitutional violations”, also supports his position.
The Court finds that neither Jordan nor Lugar supports Plaintiff's position. Those cases involved a seizure of assets and involved collaboration between a private party and state officials to permanently deprive the plaintiff of his property. By contrast here, Plaintiff's monetary funds were not seized as he never lost ownership. See Smolow v. Hafer, 867 A.2d 767, 774 (Pa. Commw. Ct. 2005), aff'd 959 A.2d 298 (Pa. 2008) (“Under the Unclaimed Property Law, property received by the Treasury Department does not permanently escheat to the state. The Commonwealth exercises its right to take ‘custody and control' of abandoned property, as opposed to taking absolute title, and the Unclaimed Property Law provides an entitled claimant the opportunity to recover his property from the Treasurer.”) Moreover, as more fully discussed below, none of the factual allegations in the Complaint suggest any collaboration between Defendant John Doe and the Pennsylvania Treasury Department. Therefore, Jordan and Lugar are factually distinguishable from the present case.
As noted by the district court in Esser v. Evans, “[c]ourts in the Third Circuit have explicitly rejected the notion that private banks are state actors.” Civ. A. No. 11-376, 2011 WL 1539797, *2 (M.D. Pa. Apr. 21, 2011) (citing Awala v. Wachovia Mortgage Corp., 156 Fed.Appx. 527 (3d Cir.2005) (finding that banks are not state actors even though they are a regulated industry and trade in government bonds); Bailey v. Harleysville Nat'l Bank & Trust Co., No. 04-1541,2005 WL 2012024, at *4 (E.D.Pa. Aug. 22,2005)). See also Cutler v. Pelosi, Civ. A. No. 19-834, 2020 WL 529895, *4 (E.D. Pa. Feb. 3, 2020) (the courts have held that “[g]enerally, a private entity such as [a bank] is not a state actor”)(citing Cooper v. Muldoon, Civ. A. No. 05-4780, 2006 WL 1117870, at *2 (E.D.Pa. Apr. 26, 2006)); Murphy v. Yates, No. Civ. A. 05-2552, 2005 WL 2989630, at *2 (E.D.Pa. Aug. 8, 2005) (finding bank's compliance with a valid garnishment order was not state action, thus defeating plaintiff's § 1983 claim). Moreover, a bank's FDIC status does not create a sufficient nexus to render it a state actor-“mere regulation is not enough to turn a private individual into a state actor.” Moore v. Branch Banking & Trust Co., Civ. A. No. 4:09-CV-116, 2010 WL 4962909, at *3 (W.D.Ky. Dec. 1, 2010) (citing Am. Mlfrs. Mut. Ins. Co. v. Sullivan, 526 U.S. 40 (1999) (holding that an insurance company was not a state actor although it was subject to extensive state regulation)).
Although the courts have allowed an exception to this general rule in specific circumstances where a private entity is shown to have jointly participated or collaborated with State officials to violate the plaintiff's constitutional rights, see Cooper, 2006 WL 1117870, at *2 (citing Adickes, 398 U.S. at 152; Dirocco v. Anderson, 655 F.Supp. 594, 596 (E.D.Pa. 1986)), here the facts alleged to not suggest or infer any joint partnership or collaboration between Defendant John Doe and any state officials.
In Love v. New Jersey Department of Corrections, the district court elaborated on the exception to the general rule:
A private entity may only be fairly said to be a state actor where there exists a “close nexus between the State and the challenged action.” Kach, 589 F.3d at 646. A private entity must therefore satisfy one of three tests in order to be treated as a state actor: “(1) whether the private entity has exercised powers that are traditionally the exclusive prerogative of the state; (2) whether the private party has acted with the help of or in concert with state officials; and (3) whether the [s]tate has so far insinuated itself into a position of interdependence with the acting party that it must be recognized as a joint participant in the challenged activity.” Id. (internal quotations omitted).
Civ. A. No. 15-3681, 2015 WL 4430353, *3 (D.N.J. July 20, 2015). The court in Love found that the plaintiff failed to plead any facts to support his claim that the state and bank were interdependent or that the bank was acting in concert with state officials to deprive him of his rights, but had merely alleged that bank employees cashed and deposited a check brought to them by prison officials, which was insufficient to establish a “close nexus” between the bank employees and the state to qualify them as state actors under any of the three tests. Id.
As in Love, the Complaint here fails to allege any facts to suggest a “close nexus” between Defendant John Doe's alleged transfer of Plaintiff's account balance to the Pennsylvania Treasury Department and any state official to support a finding that John Doe was a state actor. A thorough review of the Complaint reveals that it is devoid of any factual allegations which suggest or infer that (1) John Doe or the Bank exercised powers traditionally within the exclusive prerogative of the state, (2) John Doe acted with the help of or in concert with State Treasurer Garrity or any other state officials, and (3) that any Pennsylvania officials so insinuated themselves into a position of interdependence with John Doe such that they must be recognized as joint participants in the challenged activity. With regard to Defendant John Doe, Plaintiff pleads that he maintained a personal checking account at the Bank, his last transaction with the Bank was on March 16, 2015, and sometime thereafter, the Bank transferred his entire account balance to the Pennsylvania State Treasurer. ECF No. 8 at ¶¶ 2, 4. Plaintiff also pleads that in early 2021, he received notices from Defendant Garrity advising him that the Pennsylvania Treasury Department possessed his monetary property. Id. at ¶ 5. It can also be inferred from the Complaint and attached exhibit that the Pennsylvania Treasury Department was and is treating these funds as unclaimed property pursuant to the Pennsylvania Disposition of Abandoned and Unclaimed Property Act (“DAUPA”), 12 P.S. § 1301.1 et seq, suggesting that the Bank transferred the funds to the Pennsylvania Treasury Department pursuant to DAUPA.
Plaintiff's argument that the Complaint pleads sufficient factual matter to allow the Court to infer that Defendant John Doe set in motion a state procedure, and from this the Court should infer that John Doe acted jointly with Defendant Garrity to deprive him of his monetary property, misses the mark. The mere transfer of funds allegedly by Defendant John Doe pursuant to the DAUPA without any factual allegations to suggest collaboration with the Pennsylvania State Treasurer does not suggest conduct that can be fairly attributable to the State and, indeed, the State has assumed all liability for any cause of action that arises from the transfer. As the Supreme Court noted in Lugar, [a]ction by a private party pursuant to [a] statute, without more, [i]s not sufficient to justify a characterization of that party as a ‘state actor.'” Here the Complaint does not suggest or infer that Defendant John Doe took any action other than perhaps the transfer of funds to the custody and control of the Commonwealth after three years of no account activity pursuant to the DAUPA. As such, Plaintiff has failed, as a matter of law, to show or suggest that Defendant John Doe is a state actor.
Section 1301.14 provides:
Upon the payment or delivery of the property to the State Treasurer, the Commonwealth shall assume custody and shall be responsible for the safekeeping thereof. Any person who pays or delivers property to the State Treasurer under this article is relieved of all liability with respect to the safekeeping of such property so paid or delivered for any claim which then exists or which thereafter may arise or be made with respect to such property.12 P.S. § 1301.14. .
As the factual allegations in the Complaint and all reasonable inferences therefrom fail to show or suggest that Defendant John Doe acted under color of state law when he allegedly transferred Plaintiff's account balance to the Pennsylvania State Treasury, Plaintiff fails to state a plausible Section 1983 claim against Defendant John Doe for alleged violations of his rights under the Fourth and Fourteenth Amendments. Moreover, because the Court cannot conceive of any facts which could be pled to show that Defendant John Doe was acting under color of state law, the Court finds it would be futile to allow Plaintiff to amend his Complaint as to the claims against Defendant John Doe.
In civil rights cases brought under § 1983, the Court must allow amendment by the plaintiff before dismissing pursuant to Rule 12(b)(6), irrespective of whether it is requested, unless doing so would be “inequitable or futile.” Fletcher-Harlee Corp. v. Pote Concrete Contractors, Inc., 482 F.3d 247, 251 (3d Cir. 2007); see also Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004) (asserting that where a complaint is vulnerable to dismissal pursuant to 12(b)(6), the district court must offer the opportunity to amend unless it would be inequitable or futile).
Accordingly, the Court recommends that the Motion to Dismiss Plaintiff's Complaint filed by Defendant John Doe (ECF No. 18) be granted with prejudice. In light of this recommendation, the Court further recommends that Defendant John Doe's Motion, in the alternative, for Summary Judgment and Motion, in the alternative, for a More Definite Statement, also filed at ECF No. 18, be dismissed as moot. However, nothing in this Report and Recommendation precludes Plaintiff from seeking any redress he may be entitled to in Pennsylvania Commonwealth Court pursuant to 72 P.S. § 1301.21 for the failure of the State Treasurer to take action on any property claim that he has filed.
III. CONCLUSION
For the reasons stated above, it is respectfully recommended that the Motion to Dismiss the Complaint filed by Defendant John Doe (ECF No. 18) be granted and the Complaint be dismissed with prejudice. It is further recommended that Defendant John Doe's Motion, in the alternative, for Summary Judgment and Motion, in the alternative, for a More Definite Statement, also filed at ECF No. 18, be dismissed as moot.