Stewart v. Treasure Bay, LLC., et al.

Filing 25

MEMORANDUM OPINION AND ORDER denying 13 Motion to Reinstate Federal Question, Personal Injury; granting 17 Motion to Dismiss Case as Frivolous; denying 19 Motion for Sanctions. Signed by District Judge Halil S. Ozerden on 2/6/17. (JCH)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
EDWARD STEWART

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v.
TREASURE BAY, LLC, et al.

PLAINTIFF
Civil No. 1:16CV261-HSO-JCG
DEFENDANTS

MEMORANDUM OPINION AND ORDER DENYING PLAINTIFF’S
[13] MOTION TO REINSTATE FEDERAL QUESTION, PERSONAL INJURY
PURSUANT TO 28 U.S.C. § 1331; GRANTING DEFENDANTS’ [17] MOTION
TO DISMISS; DENYING DEFENDANTS’ [19] MOTION FOR SANCTIONS;
AND DISMISSING PLAINTIFF’S CLAIMS WITHOUT PREJUDICE
FOR LACK OF SUBJECT MATTER JURISDICTION
BEFORE THE COURT are three Motions: (1) a Motion [13] to Reinstate
Federal Question, Personal Injury Pursuant to 28 U.S.C. § 1331 filed by Plaintiff
Edward Stewart; (2) a Motion [17] to Dismiss filed by Defendants Treasure Bay,
LLC, Western Hospitality, Inc., and Treasure Bay Gaming and Resorts, Inc.; and (3)
a Motion [19] for Sanctions filed by Defendants Treasure Bay, LLC, Western
Hospitality, Inc., and Treasure Bay Gaming and Resorts, Inc. After consideration of
the Motions, related pleadings, the record in this case, and relevant legal authority,
the Court finds that Plaintiff’s Motion [13] to Reinstate Federal Question, Personal
Injury Pursuant to 28 U.S.C. § 1331 should be denied; that Defendants’ Motion [17]
to Dismiss should be granted; and that Defendants’ Motion [19] for Sanctions
should be denied. Plaintiff’s claims should be dismissed without prejudice for lack

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of subject matter jurisdiction.
I. BACKGROUND
Plaintiff Edward Stewart (“Plaintiff” or “Stewart”) was once employed at
Treasure Bay Casino in Biloxi, Mississippi, but was terminated on April 18, 2011.
Am. Compl. [8] at 3. On June 20, 2012, Stewart filed a complaint in this Court, in a
separate civil action, asserting discrimination and retaliation claims under Title VII
of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. (“Title VII”), against

Treasure Bay Casino. Stewart v. Treasure Bay Casino, No. 1:12cv197-LG-JCG,
Compl. [1] (S.D. Miss. June 20, 2012). On January 7, 2015, this Court granted
Treasure Bay Casino summary judgment and dismissed Stewart’s claims with
prejudice. Stewart v. Treasure Bay Casino, No. 15-60087, Order [119] at 18 (S.D.
Miss. Jan. 7, 2015).
Stewart appealed [122]. The United States Court of Appeals for the Fifth
Circuit affirmed this Court’s judgment, and the mandate issued on September 17,
2015. Stewart v. Treasure Bay Casino, No. 15-60087 (5th Cir. Sept. 17, 2015).
On July 8, 2016, Stewart filed the Complaint in the present case against
Defendant Treasure Bay Casino. The Complaint [1] did not state the basis for this
Court’s federal subject matter jurisdiction. Nor was it clear that there was any valid
basis upon which the Court could exercise diversity or federal question jurisdiction.
See 28 U.S.C. §§ 1331, 1332. According to the Complaint, both Plaintiff and
Treasure Bay Casino were citizens of Mississippi. See Compl. [1] at 2. The
Complaint appeared to assert only state-law claims for negligence and wrongful

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termination, although it utilized terms such as “pretext,” “retaliation,” “protected
activities,” and “discrimination,” which alluded to discrimination and retaliation
claims under Title VII. Id. at 5, 8.

On July 12, 2016, the Court entered an Order to Show Cause [3] which
required Plaintiff to set forth in a written Response “the asserted basis for this
Court’s federal subject matter jurisdiction, and . . . show cause why this action
should not be dismissed without prejudice for lack of subject matter jurisdiction . . .
.” Order [3] at 3. Plaintiff filed a Response [6] on July 18, 2016, which appeared to
list several new corporate Defendants and attempted to identify the citizenship of
these entities. Resp. [6] at 1-3. Plaintiff asserted that diversity jurisdiction existed,
id. at 3, and asked the Court to “void any accidental assertions of race
discrimination from the previous case” in his Complaint in the present case, id. at 3.
On July 22, 2016, the Court entered an Order [7] requiring Plaintiff to file an
Amended Complaint “naming all Defendants against whom he seeks recovery in
this case, stating all claims Plaintiff asserts against those Defendants, and
providing all jurisdictional facts demonstrating that this Court has subject matter
jurisdiction over Plaintiff’s claims based upon diversity of citizenship.” Order [7] at
3. The Court determined that “Plaintiff is deemed to have withdrawn any
references to federal claims and has made clear that there is no basis for federal
question jurisdiction in this case.” Id. at 2.
Plaintiff filed an Amended Complaint [8] on July 25, 2016, naming Treasure
Bay LLC, Western Hospitality, Inc., and Treasure Bay Gaming and Resorts, Inc., as
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Defendants. The Amended Complaint [8], which remains the operative pleading,
ostensibly invokes diversity jurisdiction pursuant to 28 U.S.C. § 1332 and appears
to advance state-law claims against Defendants. Am. Compl. [8] at 1-19.
On August 3, 2016, Plaintiff filed a Motion [13] to Reinstate Federal
Question, Personal Injury Pursuant to 28 U.S.C. § 1331. Plaintiff contends that he
marked federal question on the civil cover sheet when he filed his original
Complaint in this case, and posits that this constitutes a sufficient basis for the
Court’s subject matter jurisdiction. Mot. [13] at 1-2. Plaintiff appears to assert that
his failure to set forth a basis for federal question jurisdiction in this Complaint
itself was a mere “technicality,” which should be excused because he is a pro se
litigant Id. at 2.
In referring to his prior Title VII suit against Treasure Bay Casino, Plaintiff
states that neither collateral estoppel nor res judicata is “a factor in this case,”
because “[t]he federal question has nothing to do with the Title VII of the Civil
Rights Act of 1964. This is a claim of personal injury . . . .” Id. at 3. Plaintiff
therefore “request[s] that this case proceed under 28 U.S.C. § 1331 as documented
in exhibits 1 and 2 to protect [his] right to fairness of due process.” Id. Exhibit “1”
to the Motion [13] is the civil cover sheet Plaintiff completed upon filing his original
Complaint, upon which Plaintiff marked “Federal Question” as the basis of
jurisdiction and “Other Personal Injury” as the nature of suit. Exhibit “2” is a copy
of the docket sheet, which reflects that the civil cover sheet initially listed this case
as “28:1331 Fed. Question: Personal Injury.”
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On August 30, 2016, Defendants filed a Motion [17] to Dismiss pursuant to
Federal Rules of Civil Procedure 12(b)(1) and (6), for lack of subject matter
jurisdiction and for failure to state a claim upon which relief may be granted.
Defendants contend that the parties are not of diverse citizenship. Mot. [17] at 2-3.
Defendants also filed a Motion [19] for Sanctions pursuant to Federal Rule of Civil
Procedure 11. Defendants seek “the imposition of sanctions, including but not
limited to sanctions in the form of attorney fees and costs against Plaintiff . . . .”
Mot. [19] at 1.
II. DISCUSSION
A.

Plaintiff’s Motion [13] to Reinstate Federal Question, Personal Injury Pursuant to
28 U.S.C. § 1331 should be denied.
Liberally construing the pleadings, it is clear from Plaintiff’s Complaint [1],

his Response [6] to the Court’s Order [3] to Show Cause, and his Amended
Complaint [8] that Plaintiff has not raised any federal claims in this case. Plaintiff
has asked the Court to “void any accidental assertions of race discrimination from
the previous case,” Resp. [6] at 3, and “Plaintiff [has been] deemed to have
withdrawn any references to federal claims and has made clear that there is no
basis for federal question jurisdiction in this case,” Order [7] at 2.
The mere selection of “Federal Question” jurisdiction on the civil cover sheet
is not controlling. Federal courts are courts of limited jurisdiction, having subject
matter jurisdiction only over those matters specifically designated by the
Constitution or Congress. Epps v. Bexar-Medina-Atascosa Counties Water

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Improvement Dist. No. 1, 665 F.2d 594, 595 (5th Cir. 1982). The Court cannot
“reinstate federal question jurisdiction,” as Plaintiff asks, simply because Plaintiff
checked the box for “Federal Question” jurisdiction on the civil cover sheet,
particularly where, despite being given several opportunities to do so, Plaintiff has
set forth no valid basis for federal question jurisdiction in his various pleadings.

While Plaintiff argues that there is a “federal question” based upon the civil
cover sheet, it is clear from the liberally-construed record as a whole that Plaintiff
does not assert, and does not wish to assert, any federal claims in this case.
Plaintiff’s pleadings set forth no factual or legal basis for his declaration of federal
question jurisdiction. See Mot. [13] at 3 (“The federal question has nothing to do
with the Title VII of the Civil Rights Act of 1964. This is a claim of personal injury .
. .”). There is no allegation of any violation of federal law in Plaintiff’s pleadings, and
there is simply no federal question in this case. Plaintiff’s Motion [13] to Reinstate

Federal Question, Personal Injury Pursuant to 28 U.S.C. § 1331 should be denied.
B.

Defendants’ Motion [17] to Dismiss should be granted, and Plaintiff’s claims
dismissed without prejudice for lack of subject matter jurisdiction.
Defendants ask the Court to dismiss this case on grounds that federal subject

matter jurisdiction is lacking. The Court has already determined that the pleadings
set forth no basis for the exercise of federal question jurisdiction. As for diversity

jurisdiction, the record is clear that Plaintiff and at least one Defendant are citizens
of Mississippi. See 28 U.S.C. § 1332(a)(1); see also, e.g., Am. Compl. [8] at 3
(“Treasure Bay L.L.C. Is [sic] an adult resident citizen of the county of Harrison,

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state of Mississippi and the plaintiff is an adult resident citizen of the county of
Harrison, state of Mississippi”); Mot. [17] at 2-3 (detailing all Defendants’
citizenship as Delaware and Mississippi). Complete diversity of citizenship is
lacking. Because the Court lacks subject matter jurisdiction, Defendants’ Motion to
Dismiss should be granted, and Plaintiff’s claims dismissed without prejudice.
Even if the Court were deemed to have somehow had federal question
jurisdiction over this case when it was initially filed, any such claims have since
been dismissed, and the Court would decline to exercise supplemental jurisdiction
over the remaining state law claims based upon the infancy of this case. See 28
U.S.C. § 1367(c)(3).
C.

Defendants’ Motion [19] for Sanctions should be denied.
Defendants request an award of sanctions pursuant to Federal Rule of Civil

Procedure 11. According to Defendants,
Plaintiff’s present lawsuit is frivolous and Plaintiff should be sanctioned
because: (1) Plaintiff has failed to establish that this Court has subject
matter jurisdiction over his claims; (2) Plaintiff’s claims are barred by the
doctrines of res judicata and collateral estoppel; (3) Plaintiff’s claims,
which are based on Defendants’ negligence, are barred by the Mississippi
Workers’ Compensation Exclusivity Rule; and (4) Plaintiff’s claims are
barred by the applicable statute of limitations.
Mot. [19] at 2. Defendants assert that they have complied with Rule 11(c)(2)
because they “served [their] Motion on Plaintiff by placing it in the mail on July 29,
2016, more than 21 days prior to the filing of the Motion, to allow Plaintiff the
opportunity to withdraw/dismiss his lawsuit,” which Plaintiff has declined to do.
Id. at 8.
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Plaintiff responds that Defendants are “off the mark claiming that [his]
complaint is vexatious litigation.” Resp. [22] at 7. Plaintiff maintains that he has
“sufficient grounds for this complaint,” and that he is “not serving only to cause
annoyance to the defendant [sic].” Id.
A “district court may sanction a party, including a pro se litigant, under Rule
11 if it finds that the litigant filed a pleading for an improper purpose or that the
pleading was frivolous.” Martin v. Bravenec, 627 F. App’x 310, 312 (5th Cir. 2015)
(citing Fed. R. Civ. P. 11(b) and (c); Whittington v. Lynaugh, 842 F.2d 818, 820-21
(5th Cir. 1988)). Federal Rule of Civil Procedure 11 provides, in relevant part, that
(b)

Representations to the Court. By presenting to the court a
pleading, written motion, or other paper—whether by signing,
filing, submitting, or later advocating it—an attorney or
unrepresented party certifies that to the best of the person’s
knowledge, information, and belief, formed after an inquiry
reasonable under the circumstances:
(1)
it is not being presented for any improper purpose, such as
to harass, cause unnecessary delay, or needlessly increase
the cost of litigation;
(2)
the claims, defenses, and other legal contentions are
warranted by existing law or by a nonfrivolous argument for
extending, modifying, or reversing existing law or for
establishing new law;
(3)
the factual contentions have evidentiary support or, if
specifically so identified, will likely have evidentiary
support after a reasonable opportunity for further
investigation or discovery; and
(4)
the denials of factual contentions are warranted on the
evidence or, if specifically so identified, are reasonably
based on belief or a lack of information.

Fed. R. Civ. P. 11(b).
Because Plaintiff’s claims should be dismissed for lack of subject matter

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jurisdiction, the Court is without jurisdiction to reach the merits of Plaintiff’s statelaw claims. Based upon the current record, and given Plaintiff’s pro se status, the
Court cannot find at this time that Plaintiff has necessarily violated any provision
of Rule 11(b) in this case. Moreover, the Motion [19] filed and the version [19-11]
served upon Plaintiff pursuant to Rule 11’s safe-harbor provision are not identical,
such that Defendants arguably did not comply with Rule 11(c)(2). Compare served
Motion [19-11] at 2, with filed Motion [19] at 2 (containing different language in
paragraph 2); see also SortiumUSA, LLC v. Hunger, No. 3:11-CV-1656-M, 2014 WL
1080765, at *3 (N.D. Tex. Mar. 18, 2014) (holding that a defendant’s “failure to
serve [a plaintiff] during the safe-harbor period with the same motion for sanctions
that it later filed with the Court indicates that it has not strictly complied with Fed.
R. Civ. P. Rule 11(c)(2)” and collecting cases).1 The Court will therefore deny
Defendants’ request for sanctions under Rule 11. Plaintiff is however cautioned to
familiarize himself with the requirements Rule 11(b) before filing any future
pleadings.
III. CONCLUSION
To the extent the Court has not addressed any of the parties’ arguments, it
has considered them and determined that they would not alter the result.

The Court has not endeavored to compare the two versions of the 10-page
Motion word for word. However, it is obvious that paragraph 2 is different. While
this might be a distinction without difference, in that it may not alter the overall
substance of Defendants’ Motion, the Court questions whether serving a different
version of a motion upon a party complies with letter or spirit of Rule 11(c)(2).
1

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Plaintiff’s Motion [13] to Reinstate Federal Question, Personal Injury Pursuant to
28 U.S.C. § 1331 and Defendants’ Motion [19] for Sanctions will both be denied.
Because the Court lacks subject matter jurisdiction, Defendants’ Motion [17] to
Dismiss will be granted, and Plaintiff’s claims will be dismissed without prejudice.
IT IS, THEREFORE, ORDERED AND ADJUDGED that, Plaintiff’s
Motion [13] to Reinstate Federal Question, Personal Injury Pursuant to 28 U.S.C. §
1331 is DENIED.
IT IS, FURTHER, ORDERED AND ADJUDGED that, Defendants’
Motion [17] to Dismiss is GRANTED, and Plaintiff’s claims against Defendants are
DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction.
IT IS, FURTHER, ORDERED AND ADJUDGED that, Defendants’
Motion [19] for Sanctions is DENIED.
SO ORDERED AND ADJUDGED, this the 6th day of February, 2017.

s/ Halil Suleyman Ozerden
HALIL SULEYMAN OZERDEN
UNITED STATES DISTRICT JUDGE

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