Opinion
23-CV-7643 (LTS)
01-02-2024
WILLIAM SCALES, Plaintiff, v. LOWER EASTSIDE PEOPLE'S FEDERAL CREDIT UNION, Defendant.
ORDER OF DISMISSAL
LAURA TAYLOR SWAIN, Chief United States District Judge:
Plaintiff, who is appearing pro se, brings this action invoking the Court's federal question and diversity jurisdiction, 28 U.S.C. §§ 1331, 1332, asserting state law breach of contract and negligence claims. By order dated November 14, 2023, the Court granted Plaintiff's request to proceed in forma pauperis (“IFP”), that is, without prepayment of fees. For the reasons set forth in this order, the Court dismisses the action for lack of subject matter jurisdiction.
STANDARD OF REVIEW
The Court must dismiss an in forma pauperis complaint, or portion thereof, that is frivolous or malicious, fails to state a claim on which relief may be granted, or seeks monetary relief from a defendant who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B); see Livingston v. Adirondack Beverage Co., 141 F.3d 434, 437 (2d Cir. 1998). The Court must also dismiss a complaint when the Court lacks subject matter jurisdiction. See Fed.R.Civ.P. 12(h)(3). While the law mandates dismissal on any of these grounds, the Court is obliged to construe pro se pleadings liberally, Harris v. Mills, 572 F.3d 66, 72 (2d Cir. 2009), and interpret them to raise the “strongest [claims] that they suggest,” Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 474-75 (2d Cir. 2006) (internal quotation marks and citations omitted) (emphasis in original).
BACKGROUND
This action arises from Plaintiff's application for a business loan for his corporation, which Defendant Lower Eastside People's Federal Credit Union (“Credit Union”) denied. Plaintiff asserts breach of contract and negligence claims and alleges that these claims arose from February to October 2022, from interactions during phone calls and on email. The following facts are drawn from the complaint.
“The defendant stated my corporation was approved a business loan and only required proof of my employment.” (ECF 1, at 5.) After providing proof of employment, “I requested to delay receiving the business loan[.]” (Id.) A few weeks later, “I decided to retrieve the business loan and loan officer stated I would have to wait for the web developer to complete the website and mobile application.” (Id.) The Credit Union then informed Plaintiff that “my corporation would no longer be able to receive the business loan . . . [and that] I was never approved a business loan though the loan officer previously stated specifically my corporation was approved a business loan with or without [Small Business Administration] approval[.]” (Id.)
Plaintiff asserts that Defendant's conduct “led to a disruption of business.” (Id. at 6.) He seeks money damages in the amount of $1,000,000.00.
DISCUSSION
A. Claims on behalf of other entities
The complaint is unclear as to whether Plaintiff is asserting claims on behalf of himself or on behalf of his business, which he refers to as a corporation. (Id. at 5.) If Plaintiff does seek to assert claims on behalf of his corporation, or any other artificial entity, the Court must dismiss those claims.
The statute governing appearances in federal court, 28 U.S.C. § 1654, “allow[s] two types of representation: ‘that by an attorney admitted to the practice of law by a governmental regulatory body, and that by a person representing himself.'” Lattanzio v. COMTA, 481 F.3d 137, 139 (2d Cir. 2007) (quoting Eagle Assocs. v. Bank of Montreal, 926 F.2d 1305, 1308 (2d Cir. 1991)). A nonlawyer cannot bring suit on behalf of another entity. See United States ex rel. Mergent Servs. v. Flaherty, 540 F.3d 89, 92 (2d Cir. 2008); Iannaccone v. Law, 142 F.3d 553, 558 (2d Cir. 1998). While “some courts allow sole proprietorships to proceed pro se [because] a sole proprietorship has no legal existence apart from its owner,” Lattanzio, 481 F.3d at 140 (citation omitted), courts generally do not allow corporations, partnerships, associations, and other artificial entities to appear in court without an attorney, Rowland v. Cal. Men's Colony, Unit II Men's Advisory Council, 506 U.S. 194, 202-03 (1993).
Plaintiff does not allege that he is an attorney, and he does not state that his business is a sole proprietorship. Thus, to the extent that Plaintiff asserts claims on behalf of entities (other any that are his sole proprietorships), the Court dismisses those claims without prejudice.
B. Subject matter jurisdiction
To the extent Plaintiff seeks to assert claims on his own behalf, the complaint does not suggest that the Court can exercise subject matter jurisdiction of such claims.
The subject matter jurisdiction of the federal district courts is limited and is set forth generally in 28 U.S.C. §§ 1331 and 1332. Under these statutes, federal jurisdiction is available only when a “federal question” is presented or when plaintiff and defendant are citizens of different states and the amount in controversy exceeds the sum or value of $75,000 (“diversity jurisdiction”). “‘[I]t is common ground that in our federal system of limited jurisdiction any party or the court sua sponte, at any stage of the proceedings, may raise the question of whether the court has subject matter jurisdiction.'” United Food & Com. Workers Union, Loc. 919, AFL-CIO v. CenterMark Prop. Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994) (quoting Manway Constr. Co., Inc. v. Hous. Auth. of the City of Hartford, 711 F.2d 501, 503 (2d Cir. 1983)); see Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subjectmatter jurisdiction, the court must dismiss the action.”); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999) (“[S]ubject-matter delineations must be policed by the courts on their own initiative ....”).
To invoke federal question jurisdiction, a plaintiff's claims must arise “under the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A case arises under federal law if the complaint “establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law.” Bay Shore Union Free Sch. Dist. v. Kain, 485 F.3d 730, 734-35 (2d Cir. 2007) (quoting Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 690 (2006)). Mere invocation of federal jurisdiction, without any facts demonstrating a federal law claim, does not create federal subject matter jurisdiction. See Nowak v. Ironworkers Loc. 6 Pension Fund, 81 F.3d 1182, 118889 (2d Cir. 1996).
Plaintiff has not alleged facts showing that this Court can consider his claims under its federal question jurisdiction. He states that he is asserting claims of breach of contract and negligence, which are usually brought under state law, not federal law, and his allegations do not suggest any federal claim. Rather, he asserts that the Credit Union initially suggested that it would approve his loan application but later denied it. Because these allegations do not support a federal claim, the Court cannot exercise federal question jurisdiction of Plaintiff's state law claims.
Plaintiff also does not allege facts demonstrating that the Court has diversity jurisdiction of this action. To establish jurisdiction under 28 U.S.C. § 1332, a plaintiff must first allege that the plaintiff and the defendant are citizens of different states. Wis. Dep't of Corr. v. Schacht, 524 U.S. 381, 388 (1998) (“A case falls within the federal district court's ‘original' diversity ‘jurisdiction' only if diversity of citizenship among the parties is complete, i.e., only if there is no plaintiff and no defendant who are citizens of the same State.”).
For diversity purposes, an individual is a citizen of the State where he or she is domiciled, which is defined as the place where the individual “has his true fixed home . . . and to which, whenever he [or she] is absent, he has the intention of returning.” Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 42 (2d Cir. 2000) (internal quotation marks and citation omitted). In addition, for diversity purposes, a corporation is a citizen “of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.” § 1332(c)(1); see also The Hertz Corp. v. Friend, 559 U.S. 77, 92-93 (2010) (a corporation's principal place of business is its “nerve center,” usually its main headquarters).
Moreover, for diversity of citizenship jurisdiction, the plaintiff must also allege to a “reasonable probability” that his claims are in excess of the sum or value of $75,000, the statutory jurisdictional amount. See § 1332(a); Colavito v. N.Y. Organ Donor Network, Inc., 438 F.3d 214, 221 (2d Cir. 2006) (citation and internal quotation marks omitted).
Plaintiff states in the complaint that both he and Defendant reside in New York. Because the parties are not of diverse citizenship, the Court cannot exercise diversity jurisdiction of Plaintiff's state law claims.
LEAVE TO AMEND DENIED
Plaintiff proceeds in this matter without the benefit of an attorney. District courts generally should grant a self-represented plaintiff an opportunity to amend a complaint to cure its defects unless amendment would be futile. See Hill v. Curcione, 657 F.3d 116, 123-24 (2d Cir. 2011); Salahuddin v. Cuomo, 861 F.2d 40, 42 (2d Cir. 1988). Indeed, the Second Circuit has cautioned that district courts “should not dismiss [a pro se complaint] without granting leave to amend at least once when a liberal reading of the complaint gives any indication that a valid claim might be stated.” Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000) (quoting Gomez v. USAA Fed. Sav. Bank, 171 F.3d 794, 795 (2d Cir. 1999)).
Because Plaintiff brings state law claims against the Credit Union, and both he and the Credit Union reside in New York, the Court cannot exercise jurisdiction of Plaintiff's claims. The Court therefore declines to grant Plaintiff leave to amend the complaint because amendment would be futile.
CONCLUSION
Plaintiff's complaint, filed in forma pauperis under 28 U.S.C. § 1915(a)(1), is dismissed for lack of subject matter jurisdiction. See Fed.R.Civ.P. 12(h)(3). The Court dismisses any claims Plaintiff seeks to assert on behalf of his corporation without prejudice.
The Court certifies under 28 U.S.C. § 1915(a)(3) that any appeal from this order would not be taken in good faith, and therefore in forma pauperis status is denied for the purpose of an appeal. See Coppedge v. United States, 369 U.S. 438, 444-45 (1962).
The Court directs the Clerk of Court to enter judgment in this action.
SO ORDERED.