Robinson v. Tucker
Filing
26
MEMORANDUM AND ORDER granting 10 defendant's Motion to Dismiss. Signed by District Judge J. Thomas Marten on 11/13/2012. (mss)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
LARRY ROBINSON, on behalf of himself
and all others similarly situated,
Plaintiff,
v.
Case No. 12-2200-JTM
SCOTT A. TUCKER,
Defendant.
MEMORANDUM AND ORDER
The following matter comes to the court on defendant Scott Tucker’s Motion to
Dismiss the Complaint and Motion to Take Judicial Notice (Dkt. 10). For the following
reasons, the court grants the Motion.
I. Factual Background
This is a putative class action filed by plaintiff Larry Robinson, individually and
on behalf of others similarly situated, alleging that Tucker engaged in an illegal and
usurious loan scheme that violates state and federal law. Larry Robinson, a resident of
Missouri,
obtained
a
payday
loan
of
$300
through
the
website
www.unitedcashloans.com on or about September 24, 2010. The loan required Robinson
to repay $390 on October 15, 2010, at an annual interest rate of 608.33%.
Robinson alleges that Tucker is responsible for the loan through an alter ego
theory. The website through which Robinson received his loans claims that “United
Cash Loans” is a fictitious name of MNE Services, Inc. (“MNE”), which claims to be
wholly owned by the Miami Tribe of Oklahoma. However, Robinson claims that United
Cash Loans is actually owned, operated, and controlled by defendant Tucker, rather
than MNE or the Miami Tribe of Oklahoma. He claims that Tucker has employed a
“rent-a-tribe” scheme where he pays a small sum of his profits to the Miami Tribe of
Oklahoma, and in return, the Tribe “rents” its sovereign immunity to Tucker.
Robinson has brought the following claims against Tucker: (1) Usury under
Missouri and Kansas state law; (2) Violation of the Missouri Merchandising Practices
Act, § 407.020 RSMo. and/or the Kansas Consumer Protection Act, K.S.A. § 50-634; and
(3) Violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 19
U.S.C. § 1961 et seq.
II. Article III Standing and Subject Matter Jurisdiction
In his Motion to Dismiss, Tucker argues that Robinson lacks Article III standing
for his complaint because he has not pled an injury-in-fact. Tucker asks the court to
dismiss the Complaint under Rule 12(b)(1) for lack of subject matter jurisdiction.
A. Legal Standard
Federal courts have limited jurisdiction and may only exercise jurisdiction when
specifically authorized to do so. Castandeda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994). A
court lacking jurisdiction must dismiss the cause at any stage of the proceeding in
which it becomes apparent that jurisdiction is lacking. Scheideman v. Shawnee Cnty.
Comm’rs, 895 F. Supp. 279, 280 (D. Kan. 1995). The party seeking to invoke a federal
court’s jurisdiction sustains the burden of establishing that such jurisdiction is proper.
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Id. When federal jurisdiction is challenged, the plaintiff bears the burden of showing
why the case should not be dismissed. Jensen v. Johnson Cnty. Youth Baseball League, 838
F. Supp. 1437, 1439–40 (D. Kan. 1993).
This court has federal question jurisdiction over “all civil actions arising under
the Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. “A case arises
under federal law if its ‘well-pleaded 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.’ ” Nicodemus v. Union Pac. Corp., 318
F.3d 1231, 1235 (10th Cir. 2003) (quoting Morris v. City of Hobart, 39 F.3d 1105, 1111 (10th
Cir. 1994)).
A federal district court “shall also have supplemental jurisdiction over all other
claims that are so related to claims in the action within such original jurisdiction that
they form part of the same case or controversy . . . .” 28 U.S.C. § 1367(a) (2012).
However, the district court may decline to exercise supplemental jurisdiction if the
court has dismissed all claims over which it has original jurisdiction. § 1367(c)(3); see also
Pierce v. Gilchrist, 167 Fed. Appx. 37, 39 (10th Cir. 2006) (affirming the district court’s
decision to decline supplemental jurisdiction over state indemnification application
after parties stipulated to dismissal of the § 1983 claims).
The core component of standing is an essential and unchanging part of the caseor-controversy requirement of Article III. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560
(1992). The party invoking federal jurisdiction bears the burden of establishing
standing. Id. at 561. The first requirement of standing is that the plaintiff must have
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suffered an injury-in-fact, which the U.S. Supreme Court has described as “an invasion
of a legally protected interest which is (a) concrete and particularized and (b) actual or
imminent, not conjectural or hypothetical.” Id. at 560.
The RICO Act provides a private right of action for “[a]ny person injured in his
business or property” to recover “threefold the damages he sustains” as a result of the
violation. 18 U.S.C. § 1964(c). However, a plaintiff is not necessarily injured simply
because the defendant violated RICO. See Holmes v. Securities Investor Protection Corp.,
503 U.S. 258, 266 (1992). Standing for private individuals under RICO requires a
plaintiff to have “been injured in his business or property by the conduct constituting
the violation.” Sedima, S.P.R.L. v. Imrex, Co., 473 U.S. 479, 496 (1985). “A plaintiff may
not sue under RICO unless he can show concrete financial loss.” See, e.g., Patterson v.
Mobil Oil Corp., 335 F.3d 476, 492 n.16 (5th Cir. 2003).
A facial challenge to the Complaint questions its sufficiency, and “requires the
court to determine whether the complaint contains sufficient jurisdictional facts to state
a claim which is ‘plausible on its face’ and raises a right to relief ‘above the speculative
level.’ “ Bushnell, Inc. v. Brunton Co., 659 F. Supp. 2d 1150, 1157 (D. Kan. 2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 554 , 555–56 (2007)). This Rule 12(b)(1) facial attack is
subject to the same Twombly/Iqbal plausibility standards. Id.
B. Analysis
Robinson argues this court has federal question jurisdiction pursuant to 28 U.S.C.
§ 1331, because he asserts a claim under the RICO Act, 18 U.S.C. § 1961 et seq. Robinson
asserts that this court has supplemental jurisdiction over his state law claims under 28
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U.S.C. § 1367. Tucker challenges Robinson’s Article III standing, arguing that he has not
pled an injury-in-fact.
In his Complaint, Robinson alleges that he obtained a payday loan of $300 on
September 24, 2010, from Scott Tucker through www.unitedcashloans.com. Robinson
then states that the loan required him to repay $390 on October 15, 2010, at an annual
percentage rate of 608.33%. Tucker argues that the Complaint is devoid of any claim
that Robinson paid back the interest, which would be his injury-in-fact.
In his Complaint, Robinson states that “Plaintiff was aggrieved and suffered
damages” and “Plaintiff was aggrieved and has suffered an ascertainable loss of his
loan amount, interest charges, finance charges, costs of suit, and attorney’s fees.” (Dkt.
1, ¶ 96 & 117). These are general legal conclusions that are insufficient to plead injury.
See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The only factual allegation of damage in the
Complaint is simply that the loan charged him a high interest rate. Robinson never
claims to have paid the loan or the high interest rate back to Tucker. Further, Robinson
never alleges that Tucker harmed his credit score or attempted to collect on the loan. In
short, Robinson has failed to plead that Tucker’s alleged RICO violation resulted in a
concrete and particularized injury to Robinson’s business or property. See Patterson, 335
F.3d at 492 n.16.
In failing to properly plead the requisite injury-in-fact under the RICO Act,
Robinson has no standing. As a result, this court has no original jurisdiction over the
federal claim. Further, this court declines to exercise supplemental jurisdiction over
Robinson’s remaining state law claims. See Pierce, 167 Fed. Appx. at 39.
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III. Conclusion
After finding no original jurisdiction over the RICO claims, the court need not
analyze Tucker’s remaining arguments under 12(b)(6), Rule 19, and Rule 9.
IT IS THEREFORE ORDERED this 13th day of November, 2012, that the
defendant’s Motion to Dismiss (Dkt. 10) is granted, and the case is dismissed without
prejudice.
s/ J. Thomas Marten
J. THOMAS MARTEN, JUDGE
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