Smith v. Comenity Bank

Filing 10

MEMORANDUM OPINION remanding the case to the General Sessions Court of Shelby County, Tennessee. Signed by Judge Richard G. Andrews on 4/5/2017. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
COMENITY BANK,
Plaintiff,

v.
CHARMANE SMITH,

Civ. Action No. 16-1229-RGA
General Sessions Court of
Shelby County, Tennessee
Case ID 1831787

Defendant.

Charmane Smith, Memphis, Tennessee. Pro Se Defendant/Counterclaimant.

MEMORANDUM OPINION

April~17
Wilmington, Delaware

On December 16, 2016, Defendant/Counterclaimant Charmane Smith filed a
notice of removal that references proceedings in the General Sessions Court of Shelby
County, Tennessee. 1 (D.I. 2). Smith appears prose and has been granted leave to
proceed in forma pauperis. For the reasons discussed below, the Court will summarily
remand the case to the General Sessions Court of Shelby County, Tennessee.
FACTUAL AND PROCEDURAL BACKGROUND

On November 8, 2016, a civil warrant issued in Portfolio Recovery Assoc. v.
Smith, Case ID 1831787, in the Shelby County General Sessions Court. See Portfolio
Recovery Assoc. v. Smith, Case ID 1831787 (Nov. 8, 2016). According to the court

docket, Smith was served on November 19, 2016, and an "initial setting" is scheduled
for May 2, 2017. (Id.) The nature of the case is unknown. 2

1

Smith is a frequent prose and in forma pauperis litigator in other United States
District Courts. See Smith v. MasterCard Int'/, 2017 WL 103966, at *1 (E.D. Mo. Jan.
10, 2017). She has been barred from filing actions in at least five other districts. See
Smith v. United States, Civ. No. 00-2302 (D.D.C. Sept. 27, 2000) (enjoining Plaintiff
from filing actions in forma pauperis in the absence of an allegation of imminent danger
of serious physical injury); Smith v. United States, Civ. No. 01-450 (N.D. Tex. May 30,
2001) (enjoining Plaintiff from filing cases without prior judicial permission); Smith v.
Dell, Inc., 2007 WL 221530 (W.D. Tenn. Jan. 24, 2007) (enjoining Plaintiff from filing
actions in forma pauperis and applying the order to any action that is filed in another
district and transferred to the Western District of Tennessee); Smith v. Spitzer, 531 F.
Supp. 2d 360 (N.D.N.Y. 2008) (barring Plaintiff from filing actions without obtaining
counsel or prior court approval); Smith v. Chase Bank, Civ. No. 11-2270-LAP (S.D.N.Y.
Dec. 2, 2016) (barring Plaintiff from filing actions in forma pauperis without first
obtaining leave of court to file).
2

Portfolio Recovery Associates is one of the nation's largest debt collectors. See
https://www.portfoliorecovery.com/ (last visited Mar. 31, 2017).

2

On December 16, 2016, Smith filed an application for removal pursuant to 28
U.S.C. § 1446(c)(2) based upon diversity of citizenship. (D.I. 2). The notice is
captioned Charmane Smith, Counterclaimant v. Comenity Bank, Plaintiff, and attached
to it is a Counterclaim authored by Smith. On January 3, 2017, Smith filed an
addendum to an amended civil complaint even though neither a complaint nor an
amended complaint has been filed with the Court. (D.I. 8).
LEGAL STANDARD

The exercise of removal jurisdiction is governed by 28 U.S.C. § 1441(a) which
states that, in order to remove a civil action from state court to federal court, a district
court must have original jurisdiction by either a federal question or diversity of
citizenship. 28 U.S.C. §§ 1331, 1332, 1441 (a). Section 1441 (a) also provides that the
action may be removed by the defendant to the district court of the United States for the
district and division embracing the place where such action is pending. 3 Id. at

§ 1441(a). The statute is strictly construed, requiring remand to State court if any doubt
exists over whether removal was proper. Shamrock Oil & Gas Corp. v. Sheets, 313
U.S. 100, 104 (1941).
A court will remand a removed case "if at any time before final judgment it
appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447(c).
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Under § 1441 (a), Smith was required to remove this action to the United States
District Court for the Western District of Tennessee. As previously noted, Smith has
been enjoined from filing actions in forma pauperis in that District Court. While the
Court is aware that "[d]istrict courts generally should not dismiss in forma pauperis
complaints sua sponte for improper venue," it is concerning that Smith appears to be
forum shopping. Greene v. Horry Cnty., 650 F. App'x 98, 99 (3d Cir. 2016) (citing
Sinwell v. Shapp, 536 F.2d 15, 19 (3d Cir. 1976) (stressing that "28 U.S.C. § 1915
contains no express authorization for a dismissal for lack of venue.").

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The party seeking removal bears the burden to establish federal jurisdiction. Steel

Valley Auth. v. Union Switch & Signal Div. Am. Standard, Inc., 809 F.2d 1006, 1010 (3d
Cir. 1987); Zaren v. Genesis Energy, L.P., 195 F. Supp. 2d 598, 602 (D. Del. 2002). In
determining whether remand based on improper removal is appropriate, the court "must
focus on the plaintiff's complaint at the time the petition for removal was filed," and
assume all factual allegations therein are true. Steel Valley Auth., 809 F.2d at 1010.
Upon a determination that a federal court lacks subject matter jurisdiction, the District
Court is obligated to remand, sua sponte, to the State court from which it was removed.

See Scott v. New York Admin. for Children's Services, 2017 WL 775825, at *1 (3d Cir.
Feb. 28, 2017).

DISCUSSION
Requisites for Removal. Initially the court notes that Smith failed to comply
with the requisites for removal. She did not provide for the court's review any copies of
process, pleadings, or orders from the state civil proceeding. See 28 U.S.C. § 1446(a).
The Court takes judicial notice that the Plaintiff named in this removal action (Comenity
Bank) is not the Plaintiff named in Case ID 1831787 (Portfolio Recovery Associates,
LLC), the case that Smith has removed.

Removal. Smith indicates that she has removed this matter under §1446(c),
based upon diversity of citizenship. District Courts have original jurisdiction of all civil
actions where the matter in controversy exceeds the sum or value of $75,000 and is
between citizens of different states. See 28 U.S.C. § 1332(a). According to the Court
Docket for Case ID 1831787, the parties are not diverse with both parties listing as

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having addresses in the State of Tennessee. See Portfolio Recovery Assoc. v. Smith,
Case ID 1831787, court docket. It seems that Smith has filed the Counterclaim (D.I. 2)
that names Comenity Bank as a Plaintiff, with an address in Delaware, in an effort to
vest this Court with jurisdiction based upon diversity of citizenship. As previously noted,
Comenity Bank is not a named Plaintiff in Case ID 1831787. In addition, because
Smith failed to provide the Court with any copies of any documents filed in Case ID
1831787 from the General Sessions Court of Shelby County, the amount in controversy
is unknown. The parties in Case ID 1831787 are not diverse and, therefore, the Court
lacks jurisdiction. Accordingly, the Court will remand the matter to the General
Sessions Court of Shelby County, Tennessee.
Counterclaim/Complaint. To the extent that Plaintiff intended to file a new

case (although that is far from clear), the instant Counterclaim/Complaint is very similar
to a complaint Plaintiff filed in the United States District Court for the Southern District
of Ohio in Smith v. World Fin. Network Bank, Civ. No. 17-002-JLG-EPD (S.D. Ohio Jan.
3, 2017) at D.I. 3. The most notable differences are that Plaintiff has named different
opposing parties, and the complaint in the Ohio District Court case is typed while the
Counterclaim/Complaint in the instant case is handwritten. Other than that, the
allegations are, for the most part, the same. The Ohio District Court complaint was
screened pursuant to 28 U.S.C. § 1915(e)(2) and dismissed for failure to assert any
claim over which the court had subject matter jurisdiction. See Smith v. World Fin.
Network Bank, 2017 WL 480415, at *3 (S.D. Ohio Feb. 6, 2017).

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Even were this Court to consider the Counterclaim/Complaint in the instant case
as a Complaint with Smith as Plaintiff and Comenity Bank as Defendant, the reasoning
of the Court in Smith v. World Fin. Network Bank, 2017 WL 480415 (S.D. Ohio Feb. 6,
2017), provides a sound basis for dismissal. A federal court may properly dismiss an
action sua sponte under the screening provisions of 28 U.S.C. § 1915(e)(2)(B) if "the
action is frivolous or 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." Ball v.
Famiglio, 726 F.3d 448, 452 (3d Cir. 2013); see also 28 U.S.C. § 1915(e)(2) (in forma
pauperis actions). The Court must accept all factual allegations in a complaint as true
and take them in the light most favorable to a pro se plaintiff. Phillips v. County of
Allegheny, 515 F.3d 224, 229 (3d Cir. 2008); Erickson v. Pardus, 551 U.S. 89, 93
(2007). Because Plaintiff proceeds pro se, her pleading is liberally construed and her
complaint, "however inartfully pleaded, must be held to less stringent standards than
formal pleadings drafted by lawyers." Erickson v. Pardus, 551 U.S. at 94 (citations
omitted).
An action is frivolous if it "lacks an arguable basis either in law or in fact."
Neitzke v. Williams, 490 U.S. 319, 325 (1989). Under 28 U.S.C. § 1915(e)(2)(B)(i), a
court may dismiss a complaint as frivolous if it is "based on an indisputably meritless
legal theory" or a "clearly baseless" or "fantastic or delusional" factual scenario.
Neitzke, 490 U.S. at 327-28; Wilson v. Rackmill, 878 F.2d 772, 774 (3d Cir. 1989).
The legal standard for dismissing a complaint for failure to state a claim pursuant
to§ 1915(e)(2)(B)(ii) is identical to the legal standard used when ruling on Rule 12(b)(6)

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motions. Tourscher v. McCullough, 184 F.3d 236, 240 (3d Cir. 1999). However,
before dismissing a complaint or claims for failure to state a claim upon which relief
may be granted pursuant to the screening provisions of 28 U.S.C. § 1915, the Court
must grant Plaintiff leave to amend her complaint unless amendment would be
inequitable or futile. See Grayson v. Mayview State Hosp., 293 F.3d 103, 114 (3d Cir.
2002).
Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting the
well-pleaded allegations in the complaint as true and viewing them in the light most
favorable to the plaintiff, a court concludes that those allegations "could not raise a
claim of entitlement to relief." Bell At/. Corp. v. Twombly, 550 U.S. 544, 558 (2007).
"Though 'detailed factual allegations' are not required, a complaint must do more than
simply provide 'labels and conclusions' or 'a formulaic recitation of the elements of a
cause of action."' Davis v. Abington Mem'I Hosp., 765 F.3d 236, 241 (3d Cir. 2014)
(quoting Twombly, 550 U.S. at 555). In addition, a plaintiff must plead facts sufficient to
show that a claim has substantive plausibility. See Johnson v. City of Shelby,
_U.S._, 135 S.Ct. 346, 347 (2014). A complaint may not dismissed, however, for
imperfect statements of the legal theory supporting the claim asserted. See id. at 346.
When reviewing the sufficiency of a complaint, a court should follow a three-step
process: (1) consider the elements necessary to state a claim; (2) identify allegations
that are merely conclusions and therefore are not well-pleaded factual allegations; and
(3) accept any well-pleaded factual allegations as true and determine whether they
plausibly state a claim. See Connelly v. Lane Constr. Corp., 809 F.3d 780, 787 (3d Cir.

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2016); Williams v. BASFCatalystsLLC, 765 F.3d 306, 315 (3d Cir. 2014). Deciding
whether a claim is plausible will be a "context-specific task that requires the reviewing
court to draw on its judicial experience and common sense." Ashcroff v. Iqbal, 556 U.S.
662, 679 (2009).
As discussed by the Ohio District Court:
Plaintiff has used conclusory labels to describe her claims sounding in
products liability, including personal injury, breach of warranty, and strict
liability. Liberally construing the complaint, plaintiff basically asserts that
defendant was negligent in designing its credit card products, resulting in
hackers being able to interfere with her accounts and her use of
defendant's credit cards. Plaintiff demands compensatory and economic
damages in the amount of ten billion dollars.
Smith v. World Fin. Network Bank, 2017 WL 480415, at *1 (S.D. Ohio Feb. 6, 2017).
In the instant Counterclaim/Complaint, the only specific damages Smith alleges
is that she is owed $120 for overpayments on her credit card statements. Compare D.I.
2 at 1f 3 to Smith v. World Fin. Network Bank, 2017 WL 480415, at *2. Nor is Smith's
allegation that she sustained damages in the amount of one, not ten as in the Ohio
case, billion dollars made in good faith. Compare D.I. 8 at p.2 to Smith v. World Fin.
Network Bank, 2017 WL 480415, at *2; see also Smith v. Phoenix Technologies Ltd.,
2011 WL 5444700 at **2-3 (N.D. Cal. Nov. 9, 2011) (dismissing action filed by Smith
pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter jurisdiction where Smith's
request for $2.8 billion in damages was not made in good faith). The Ohio District
Court also observed that two actions filed by Smith in Florida, wherein she made
threadbare and conclusory allegations claiming damages in the sum of ten billion
dollars, were dismissed for failure to satisfy the jurisdictional amount. See Smith v.

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American Express, Civ. No. 17-60023-BB, at D.I. 6 at pp. 2-3 (S.D. Fla. Jan. 6, 2017);
Smith v. American Express, Civ. No. 16-62805-WPD, at D.I. 8 at pp.2-3 (S.D. Fla. Dec.
14, 2016).
In addition, in this case and in the Ohio District Court case, Smith alleges that the
injuries resulting from product security flaws began on or before September 9, 2012.
Under Ohio law, the claims were time-barred. Smith v. World Fin. Network Bank, 2017
WL 480415, at *2. Similarly, the claims are time-barred under Delaware law since
Delaware's two-year statute of limitations, 10 Del. C. § 8119, applies to products liability
claims. See Brown v. E.I. duPont de Nemours & Co., 820 A.2d 362 (Del. 2003). Smith
filed the Counterclaim/Complaint on December 16, 2016 and, therefore, it appears from
the face of the Counterclaim/Complaint that her claims are time-barred.
Having reviewed the Counterclaim/Complaint, the Court concludes that the
allegations are insufficient to allege subject matter jurisdiction and the claims are timebarred. Therefore, the matter will be dismissed as frivolous pursuant to 28 U.S.C.

§ 1915(e)(2)(B)(i). The Court finds amendment futile.
CONCLUSION
For the above reasons the court will: ( 1) summarily remand the case to the
Chancery Court of the State of Delaware; (2) in the alternative, dismiss the
Counterclaim/Complaint pursuant to 28 U.S.C. § 1915(e)(2)(B)(i) as frivolous; and
(3) dismiss as moot Plaintiff's request for counsel (D.I. 4).
An appropriate order will be entered.

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