Vardon v. TD Ameritrade
MEMORANDUM AND ORDER - Plaintiff shall have until April 30, 2012, to file sufficient evidence with the court showing that the amount in controversy is greater than $75,000.00, the jurisdictional amount. (Pro Se Case Management Deadline set for 4/30/2012: deadline for Plaintiff to show jurisdictional amount by preponderance of evidence.) Ordered by Judge Joseph F. Bataillon. (Copy mailed to pro se party) (TEL)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
JAMES M. VARDON,
Plaintiff filed his Complaint in this matter on February 13, 2012. (Filing No. 1.)
Plaintiff has previously been given leave to proceed in forma pauperis. (Filing No. 6.) The
court now conducts an initial review of Plaintiff’s claims to determine whether summary
dismissal is appropriate under 28 U.S.C. § 1915(e)(2).
SUMMARY OF COMPLAINT
Plaintiff filed his Complaint on February 13, 2012, against one Defendant, TD
Ameritrade. (Filing No. 1 at CM/ECF p. 1.) Condensed and summarized, Plaintiff alleges
that his “deceased brother” bought “5 $10,000 auction rate securities” from Defendant in
2005. (Id. at CM/ECF p. 2.) After his brother died, Plaintiff inherited the securities but
“couldn’t cash them in because they were now considered ‘toxic assets.’” (Id.) Years later,
Plaintiff cashed them in, but only received the face value of $50,000 and Plaintiff therefore
received “no profit.” (Id.) Plaintiff states that his loss is “around $100,000,” which he
calculated himself. (Id.) Plaintiff therefore seeks damages in the amount of $100,000. (Id.
at CM/ECF p. 4.)
APPLICABLE LEGAL STANDARDS ON INITIAL REVIEW
The court is required to review in forma pauperis complaints to determine whether
summary dismissal is appropriate. See 28 U.S.C. § 1915(e)(2). The court must dismiss a
complaint or any portion thereof that states a frivolous or malicious claim, that fails to state
a claim upon which relief may be granted, or that seeks monetary relief from a defendant
who is immune from such relief. 28 U.S.C. § 1915(e)(2)(B).
A pro se plaintiff must set forth enough factual allegations to “nudge their claims
across the line from conceivable to plausible,” or “their complaint must be dismissed” for
failing to state a claim upon which relief can be granted. Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 569-70 (2007); see also Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009) (“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.”).
Regardless of whether a plaintiff is represented or is appearing pro se, the plaintiff’s
complaint must allege specific facts sufficient to state a claim. See Martin v. Sargent, 780
F.2d 1334, 1337 (8th Cir. 1985). However, a pro se plaintiff’s allegations must be construed
liberally. Burke v. North Dakota Dep’t of Corr. & Rehab., 294 F.3d 1043, 1043-44 (8th Cir.
2002) (citations omitted).
DISCUSSION OF CLAIMS
“If the court determines at any time that it lacks subject-matter jurisdiction, the court
must dismiss the action.” Fed. R. Civ. P. 12(h)(3). Subject matter jurisdiction is proper
pursuant to 28 U.S.C. § 1332, commonly referred to as “diversity of citizenship”
jurisdiction.1 For purposes of 28 U.S.C. § 1332, “diversity of citizenship” means that “the
citizenship of each plaintiff is different from the citizenship of each defendant.” Ryan v.
Schneider Natl. Carriers, Inc., 263 F.3d 816, 819 (8th Cir. 2001). In addition, the amount
in controversy must be greater than $75,000.00 for diversity of citizenship jurisdiction. 28
U.S.C. § 1332(a). Where a complaint “alleges a sufficient amount in controversy to establish
diversity jurisdiction, but the opposing party or the court questions whether the amount
alleged is legitimate, the party invoking federal jurisdiction must prove the requisite amount
by a preponderance of the evidence.” Trimble v. Asarco, Inc., 232 F.3d 946, 959-60 (8th Cir.
2000) (quotation omitted) (abrogated on other grounds by Exxon Mobil Corp. v. Allapattah
Servs., Inc., 545 U.S. 546 (2005)). In addition, “[n]o presumptive truthfulness attaches to
the plaintiff’s allegations, and the existence of disputed material facts will not preclude the
trial court from evaluating for itself the merits of the jurisdictional claims.” Id. (quotation
Subject matter jurisdiction is also proper where a plaintiff asserts a “non-frivolous claim of a right
or remedy under a federal statute,” commonly referred to as “federal question” jurisdiction. Northwest South
Dakota Prod. Credit Ass’n v. Smith, 784 F.2d 323, 325 (8th Cir. 1986). Even liberally construed, Plaintiff
does not bring his claims pursuant to federal question jurisdiction.
Here, Plaintiff alleges that Defendant already paid him $50,000 when he cashed out
his brother’s stock. (Filing No. 1 at CM/ECF p. 1.) Plaintiff personally calculated the
additional lost profit on these “toxic assets” to be “around $100,000” but he does not assert
what this amount is based on aside from his own unsupported guess. (Id.) In light of these
allegations, the court has serious doubts regarding “whether the amount alleged is
legitimate.” In accordance with Trimble, the court will require Plaintiff to show by a
preponderance of the evidence that the amount claimed is legitimate, and that this court has
subject matter jurisdiction. This matter cannot proceed further until Plaintiff does so.
IT IS THEREFORE ORDERED that:
Plaintiff shall have until April 30, 2012, to file sufficient evidence with the
court showing that the amount in controversy is greater than $75,000.00, the jurisdictional
The Clerk of the court is directed to set a pro se case management deadline in
this matter with the following text: April 30, 2012:
deadline for Plaintiff to show
jurisdictional amount by preponderance of evidence.
DATED this 4 th day of March, 2012.
BY THE COURT:
s/ Joseph F. Bataillon
United States District Judge
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