Brown v. 7-Eleven Incorp et al

Filing 7

ORDER and REPORT-RECOMMENDATION: Ordered that Pltf's #6 Amended IFP application is granted; Pltf's #2 IFP application is denied as moot; Pltf's #3 Motion for appt of counsel is denied. Recommended that the Court dismiss with leave to replead Pltf's complaint.( Objections to R&R due by 7/2/2020, Case Review Deadline 7/6/2020). Signed by Magistrate Judge Miroslav Lovric on 6/17/20. (Attachments: #1 Case Law)(Copy served via regular mail)(sfp, )

Download PDF
Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 2018 WL 4185705 Only the Westlaw citation is currently available. For Online Publication Only United States District Court, E.D. New York. Nicholas TALLEY, Donna Evans Talley, Plaintiffs, v. LOANCARE SERVICING, DIV. OF FNF, Selene Finance, Defendants. 15-CV-5017 (JMA) (AKT) | Signed 08/31/2018 Attorneys and Law Firms Donna Evans Talley, Nicholas Talley, pro se. Stuart L. Kossar, Esq., Knuckles, Komosinski & Manfro, LLP, 565 Taxter Road, Suite 590, Elmsford, New York 10523, Attorney for Defendant Selene Finance, LP. Edward Rugino, Rosicki, Rosicki and Associates, P.C., 51 East Bethpage Road, Plainview, New York 11803, Attorney for Defendant LoanCare Servicing. MEMORANDUM AND ORDER Joan M. Azrack, United States District Judge *1 On August 18, 2015, Donna Evans Talley and Nicholas Talley (together “plaintiffs” or the “Talleys”) filed a pro se complaint in this Court against Selene Financing (“Selene”) and LoanCare Servicing, Division of FNF (“LoanCare”) (together “defendants”). On January 21, 2016, the Court granted plaintiffs' applications to proceed in forma pauperis, but dismissed the complaint sua sponte pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii). Plaintiffs were given an opportunity to file an amended complaint. On February 16, 2016, plaintiffs filed an amended complaint, which seeks, among other things, injunctive relief to “[s]top illegal and fraudulent foreclosure.” (Am. Compl. at 4.) Simultaneous with the filing of the amended complaint, plaintiffs filed an Order to Show Cause for a Preliminary Injunction and Temporary Restraining Order seeking to enjoin LoanCare from pursuing a foreclosure sale scheduled for March 3, 2016. In an Order dated February 24, 2016, this Court, sua sponte dismissed, pursuant to 28 U.S.C. § 1915(e)(2)(B)(ii), the prayer for injunctive relief in plaintiffs' amended complaint and denied plaintiffs' request for a preliminary injunction and temporary restraining order. Before the Court are defendants' motions to dismiss the amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). For the reasons stated below, the Court grants defendants' motions and dismisses plaintiffs' amended complaint in its entirety. I. BACKGROUND The following facts are taken from plaintiffs' amended complaint, the record before the Court and fillings from the foreclosure action. In deciding a motion to dismiss under Rule 12(b)(6), the Court may take judicial notice of public records, including state court filings. Blue Tree Hotels Inv. (Canada), Ltd. v. Starwood Hotels & Resorts Worldwide, Inc., 369 F.3d 212, 217 (2d Cir. 2004). The Court can also consider exhibits—such as copies of the mortgage and mortgage assignments—which are attached or integral to the amended complaint. (2d Cir. 2004). Sira v. Morton, 380 F.3d 57, 67 A. The Bay Shore Mortgage On March 7, 2009, Nicholas Talley and Donna Evans Talley executed a mortgage in favor of non-party Lend America (the lender) in the principal sum of $311,558 concerning a property located at 22 Lakeland Street, Bay Shore, New York (“the Bay Shore property”). (Am. Compl., ECF No. 7 at 15-16.) Plaintiffs claim that there was no recording of the original title or delivery of the mortgage or deed to plaintiffs. (Id. at 5.) Plaintiffs further allege that Lend America became defunct in December of 2009 and that no assignments of the mortgage occurred prior to 2012. (Id.) By way of an endorsement to the note and two assignments of the mortgage, the loan instruments were transferred to defendant LoanCare on February 27, 2012. (Id. at 5, 8-12.) The assignment to LoanCare was recorded on April 10, 2012 in the Suffolk County Clerk’s Office. (Id. at 5.) On March 31, 2015, LoanCare assigned the mortgage to defendant Selene. (Id. at 24-25.) B. The Foreclosure Proceeding *2 Plaintiffs defaulted on the note and mortgage by failing to make their monthly payment due in January 2011 and each month thereafter. (Kossar Decl. Ex. J, ECF No. 42-11 at 3.) As a result, LoanCare commenced an action against © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 plaintiffs in New York State Supreme Court, Suffolk County on March 19, 2012. (Id.) In the Talleys' verified joint answer, they admitted their default in payments but requested a judicially mandated loan modification. (Id. at 8.) The state court denied the Talleys' request, noting that after numerous prior attempts the parties had not been able to reach an agreement to modify the loan or settle the action. (Id.) The Talleys also asserted fifteen affirmative defenses, alleging, among other things: lack of personal jurisdiction; lack of standing and legal capacity; fraud in connection with the origination and the servicing of the loan; lack of good faith with respect to a loan modification; and LoanCare’s failure to state a cause of action, mitigate damages and comply with the provisions of Real Property Actions and Proceedings Law and Banking Law. (Id. at 3.) LoanCare moved for summary judgment against the Talleys seeking to strike their answer and dismiss their affirmative defenses amongst other relief. (Id.) The Talleys opposed the motion and cross moved for summary judgment seeking dismissal of the complaint on the grounds that LoanCare lacked standing. (Id. at 4.) In an Order dated April 11, 2014, the state court denied the Talleys' cross motion for summary judgment in its entirety. (Id.) In response to the Talleys' lack of standing defense, the court found that, “as holder of the endorsed note and as the assignee of the mortgage, [LoanCare] ha[d] standing to commence [the foreclosure] action. (Id. at 5.) The court noted that LoanCare demonstrated that it had been in “continuous possession of the note and mortgage since February 27, 2012,” concluding that LoanCare “is the transferee and holder of the original note as well as the assignee of the mortgage by virtue of the written assignments.” (Id. at 6.) In sum, the court held that LoanCare satisfied its prima facie burden as to the merits of the foreclosure action as it produced the endorsed note, the mortgage and assignments as well as evidence of plaintiffs' nonpayment. (Id. at 5.) Further, the court noted that LoanCare submitted proof of its compliance with the notice requirements of the RPAPL § 1303 and § 1304. (Id.) Thus, the court found that LoanCare established its entitlement to summary judgement and dismissed the Talleys' remaining affirmative defenses finding that plaintiff submitted sufficient proof to establish, prima facie, that such defenses were unmeritorious. (Id. at 5, 7-9) (noting that circumstances of fraud must be “stated in detail” and that a defense based upon the “doctrine of unclean hands” lacks merit where a defendant fails to come forward with admissible evidence of immoral or unconscionable behavior). The court also noted that the Talleys “failed to demonstrate that they made a reasonable attempt to discover the facts which would give rise to a triable issue of fact or that further discovery might lead to relevant evidence.” (Id. at 8.) The court further rejected the Talleys' contention that they were entitled to a judicially mandated loan modification and ordered the appointment of a referee to compute amounts due under the subject note and mortgage. (Id. at 8, 9.) On September 29, 2014, the state court entered final judgment for foreclosure and sale of the Bay Shore property. (Kossar Decl. Ex. K, ECF No. 42-12 at 3-8.) The state court further ordered that LoanCare was entitled to judgment establishing the validity of the mortgage and to recover $390,013.50 with interest to date of the closing of time of the referee’s sale of the subject property. (Id.) C. The Instant Action Plaintiffs' amended complaint alleges fraud against defendants LoanCare and Selene along with other claims under: (1) the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2605, § 2608; (2) federal regulation 24 C.F.R. § 203.350 1 associated with the National Housing Act, 12 U.S.C. § 1701; (3) various provisions of the Uniform Commercial Code (“UCC”); (4) the Pooling and Servicing Agreement (“PSA”) that governs plaintiffs' mortgage; and (5) fraud. 2 (Amend. Compl.) Though stated somewhat differently, plaintiffs' amended complaint appears to reiterate their contentions from the prior state court foreclosure action, specifically alleging that LoanCare did not have standing to foreclose on the Bay Shore property and that the mortgage and its assignment to LoanCare, and subsequently to Selene, were invalid and therefore unenforceable. 3 (See Am. Compl.) *3 Specifically, plaintiffs allege that the original deed has never been delivered since the inception of the mortgage. (Id. at 3.) Plaintiffs claim that although the original lender, Lend America ceased to exist as of December 2009, the mortgage was never assigned in the years 2009 through 2012. (Id.) Plaintiffs allege that Lend America “acquired the loan without providing principal/issuer resulting in no securitization of an FHA security instrument from 2009-2012.” (Id.) Plaintiffs appear to allege that “no delivery of deed and title” concerning plaintiffs' mortgage “proves deceptive practices and fraud was the intention from the origination of the mortgage.” (Id.) Plaintiffs further allege that defendants have no standing under Article III of the Constitution because the original title was not recorded or delivered to plaintiffs. (Id. at 5-6.) Finally, © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 plaintiffs allege that “even if this was a legal foreclosure, we were not given our due process because we were not notified by LoanCare or the Court of our Right to Appeal thereby denying us ‘due process’.” 4 (Id. at 6.) Specifically, plaintiffs allege that they did not receive the Notice of Entry of Final Judgment for Foreclosure and Sale from LoanCare until February 6, 2015 and that the September 29, 2014 judgment is in violation of the PSA, RESPA and the UCC because the mortgage and note were transferred to Selene on August 1, 2014. 5 (Id.) Plaintiffs seek the following relief: “[d]efendants produce orig[inal] deed of mortgage, title with covenants”; “[r]eimburse[ment] [of] $4,336 for services not rendered (deed/title)”; “[p]rove securitization of mortgage from 2009 to present”; “[p]roduce chain of assignment”; “[e]xplain no recordation of closing documents”; “[r]eveal identity of principal/issuer”; “LoanCare cease and desist from harassing us and placing us under duress since the mortgage has been sold to Selene”; “[s]top illegal and fraudulent foreclosure by prior servicer, LoanCare without assignment.” (Id. at 4.) Defendants filed separate motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), claiming that plaintiffs' claims should be dismissed because (a) they are barred by the Rooker-Feldman doctrine; (b) are barred by the doctrines of res judicata and collateral estoppel; and (c) fail to state a claim upon which relief can be granted. 6 dismissed for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) “when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000); see Fed. R. Civ. P. 12(b)(1). In reviewing a motion to dismiss under this Rule, the Court accepts all factual allegations in the complaint as true. Shipping Fin. Servs. Corp. v. Drakos, 140 F.3d 129, 131 (2d Cir. 1998). However, the Court should not draw inferences favorable to the party asserting jurisdiction. Id. In resolving a jurisdictional issue, the Court may consider affidavits and other materials beyond the pleadings, but may not rely on mere conclusions or hearsay statements contained therein. J.S. ex rel. N.S. v. Attica Cent. Sch., 386 F.3d 107, 110 (2d Cir. 2004); see also All. For Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 89, n. 8 (2d Cir. 2006) (“The presentation of affidavits on a motion under Rule 12(b) (1) ... does not convert the motion into a motion for summary judgment under Rule 56.”). 2. Fed. R. Civ. P. 12(b)(6) *4 To survive a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), a plaintiff must allege sufficient facts “to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible only “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” II. DISCUSSION (2009) (citing Ashcroft v. Iqbal, 556 U.S. 662, 678 Twombly, 550 U.S. at 556). Mere labels A. Standard of review The court is mindful that when considering a motion to dismiss a pro se complaint, the court must construe the complaint liberally and interpret the complaint “to raise and legal conclusions will not suffice. Twombly, 550 U.S. at 555. In reviewing a motion to dismiss, the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the plaintiff. the strongest arguments they suggest.” Triestman v. Federal Bureau of Prisons, 470 F.3d 471, 474 (2d Cir. 2006). “However, mere conclusions of law or unwarranted Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006). Motions to dismiss invoking res judicata and collateral estoppel are properly brought under Rule 12(b)(6). See Hirsch v. Desmond, No. 08–CV–2660, 2010 WL 3937303, at *2 (E.D.N.Y. Sept. 30, 2010) (collateral estoppel); Wiercinski v. Mangia 57, Inc., No. 09–CV–4413, 2010 WL 2681168, at *1 (E.D.N.Y. July 2, 2010) (res judicata ). deductions need not be accepted.” Bobrowsky, 777 F. Supp. 2d at 703 (internal quotation marks and citations omitted). 1. Fed. R. Civ. P. 12(b)(1) Federal Rule of Civil Procedure 12(b)(1) requires the dismissal of a claim when there is a “lack of subject-matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). A case is properly B. Rooker-Feldman Doctrine Defendants' initial argument is that this Court lacks jurisdiction to hear this case under the Rooker-Feldman © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 doctrine. See Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) (holding that only the Supreme Court can entertain a direct appeal from a state court judgment); District of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 483, n.3 (1983) (finding that federal courts do not have jurisdiction over claims which are “inextricably intertwined” with prior state court determinations). The Rooker-Feldman doctrine “recognizes that ‘federal district courts lack jurisdiction over suits that are, in substance, appeals from state-court judgments.’ ” Alston v. Sebelius, CV 13-4537, 2014 U.S. Dist. LEXIS 123613, at *23-24 (E.D.N.Y. July 31, 2014) (report and recommendation), adopted by, 2014 U.S. Dist. LEXIS 122970, 2014 WL 4374644 (E.D.N.Y. Sept. 2, 2014) (quoting Hoblock v. Albany Cnty. Bd. of Elections, 422 F.3d 77, 84 (2d Cir. 2005) ). “The doctrine applies when a litigant seeks to reverse or modify a state court judgment or asserts claims that are ‘inextricably intertwined’ with state court determinations.” Park v. City of N.Y., No. 99–Civ–2981, 2003 WL 133232, at *7 (S.D.N.Y. Jan. 16, 2003) (citations omitted). The doctrine precludes a district court from hearing “cases brought by state-court losers complaining of injuries caused by statecourt judgments rendered before the federal district court proceedings commenced and inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). The Second Circuit has established four requirements that must be satisfied for the Rooker–Feldman doctrine to apply: (1) “the federal-court plaintiff must have lost in state court;” (2) “the plaintiff must complain of injuries caused by a state court judgment;” (3) “the plaintiff must invite district court review and rejection of the judgment;” and (4) “the state-court judgment must have been rendered before the district court proceedings commenced.” Hoblock, 422 F.3d at 85 (internal quotation marks and citations omitted). The first and fourth requirements are procedural and the second and third are substantive. Id. Specifically, with respect to foreclosure proceedings, “courts in this Circuit have consistently held that any attack on a judgment of foreclosure is clearly barred by the Rooker– Feldman doctrine.” Ashby v. Polinsky, No. 06–CV–6778, 2007 WL 608268, at *1 (E.D.N.Y. Feb. 22, 2007) (internal quotation marks and citation omitted), aff'd, 328 F. App'x 20 (2d Cir. 2009); see also Done v. Wells Fargo Bank, N.A., No. 08–CV–3040, 2009 WL 2959619, at *3 (E.D.N.Y. Sept. 14, 2009); Ward v. Bankers Trust Co. of California, N.A., No. 09– CV–1943, 2011 WL 1322205, at *5 (E.D.N.Y. Mar. 29, 2011). This even includes challenges to a judgment of foreclosure that was allegedly procured by fraud, as plaintiffs have alleged herein. See, e.g., Swiatkowski v. Citibank, 745 F. Supp. 2d 150, 164–65 (E.D.N.Y. 2010) aff'd, 446 F. App'x 360, 361 (2d Cir. 2011) (finding Rooker–Feldman doctrine applied to allegations that defendants engaged in a pattern of submitting fraudulent and perjurious documents related to the judgment of foreclosure and sale in other courts and that the allegations and relief sought were “inextricably intertwined with the state court judgment and would require overturning the state court judgment”); Parra v. Greenpoint Mortgage Co., No. Civ.A. 01–CV–02010, 2002 WL 32442231, at *2 (E.D.N.Y. Mar. 26, 2002) (“The fact that [a] plaintiff alleges that a state court judgment was procured by fraud does not remove [the] claims from the ambit of Rooker–Feldman”); Dockery v. Cullen & Dykman, 90 F. Supp. 2d 233, 236 (E.D.N.Y. 2000) (same). *5 In the instant case, Rooker-Feldman bars plaintiffs' claims. The procedural requirements of Rooker–Feldman are satisfied. First, plaintiffs lost in state court. (Kossar Decl. Exs. J, K.) Second, the state court granted LoanCare summary judgment and denied plaintiffs' cross-motion for summary judgment by Order dated April 9, 2014, and issued a foreclosure judgment on September 29, 2014. (See id.) Since those judgments predate the August 18, 2015 filing of the initial complaint in the instant action, (see Compl., ECF 1), all pertinent state-court decisions were issued before the proceedings in this Court commenced. The substantive requirements of Rooker–Feldman are also satisfied because plaintiffs' amended complaint seeks review and rejection of those state court decisions. Plaintiffs' claims complain of injuries, including, “deceptive practices and fraud” at the origination of the mortgage due to no delivery or recording of closing documents and seeks to “[s]top illegal and fraudulent foreclosure,” in contravention of the state court judgment of foreclosure and the state court’s acceptance of the validity of the mortgage documents that formed the basis for that judgement. (Am. Compl. at 4-6.) See Trakansook v. Astoria Fed. Sav. & Loan Ass'n, No. 06–Civ–1640, 2007 WL 1160433, at *5 (E.D.N.Y. Apr. 18, 2007), aff'd, No. 07–2224–CV, 2008 WL 4962990 (2d Cir. Nov. 21, 2008) (holding that because plaintiff’s complaint asked the court “to vacate the judgment of foreclosure and sale and award her title to the property, it [was] plain that she [was] inviting © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 [the] court to ‘reject’ the [state court] order.”); Done v. Option One Mortgage, No. 09–civ–4770, 2011 WL 1260820, at *6 (E.D.N.Y. Mar. 30, 2011) (concluding substantive requirements of Rooker-Feldman met where “[a]lthough plaintiff ha[d] made a cursory reference to seeking monetary damages, it [was] abundantly clear that the whole purpose of th[e] action [was] to undo the foreclosure judgment”). In their amended complaint, plaintiffs contend that LoanCare had no standing to bring the state court foreclosure action. (See Am. Compl.) However, as plaintiffs admit, the state court rejected this exact contention in its final judgment. (Pls.' Supplemental Opp. to defendant LoanCare’s Mot. to Dismiss, ECF No. 43 at 4; Kossar Decl. Ex. J at 7 (“The assertions by the defendant mortgagors as to the plaintiff’s alleged lack of standing, which rest, inter alia, upon alleged defects in the assignments, rife with speculation, are rejected as unmeritorious ...”).) In opposition to defendants' motion to dismiss, plaintiffs specifically state that they are seeking “[r]escission of [f]inal [s]ummary [j]udgment”, that this Court “[r]ender the lien unenforceable due to fraudulent concealment”, and seek “[d]ismissal of the [f]oreclosure due to lack of [s]tanding.” (Pls.' Opp. to defendant LoanCare’s Mot. to Dismiss, ECF No. 39-12.) Plaintiffs are requesting this Court to do exactly what Rooker-Feldman forbids— to overturn the New York Supreme Court judgment of foreclosure. See Trakansook, 2007 WL 1160433, at *5 (“Because [plaintiff’s] complaint asks this court to vacate the judgment of foreclosure and sale and award her title to the property, it is plain that she is inviting this court to ‘reject’ the [state court order].”). A ruling in plaintiffs' favor “would effectively declare the state court judgment [of foreclosure] fraudulently procured and thus void, ... which is precisely the result that the Rooker–Feldman doctrine seeks to avoid.” Kropelnicki v. Siegel, 290 F.3d 118, 129 (2d Cir. 2002). Moreover, plaintiffs' attempt to thwart application of RookerFeldman by labeling their claims as “fraud in the inducement” and “fraudulent concealment” rather than the “fraud” they alleged in the state action fails. Plaintiffs' claim of “newly discovered facts of fraud in the inducement” based on the actions of third parties at the time of the loan origination fails to preclude application of Rooker-Feldman. 7 (Pls.' Opp. to defendant Selene’s Mot. to Dismiss, ECF No. 42-26 at 1.) Plaintiffs' claims relate not to defendants' conduct in the course of the state court foreclosure action, but, rather, to the validity of the underlying mortgage documents and defendants' standing to commence the foreclosure proceeding. Thus, “the injury complained of is the judgment permitting the foreclosure, which implicitly held that the mortgage[ ] w[as] valid.” Webster v. Wells Fargo Bank, N.A., No. 08–civ–10145, 2009 WL 5178654, at *8 (S.D.N.Y. Dec. 23, 2009), aff'd sub nom. as amended (Jan. 24, 2012) Webster v. Penzetta, 458 F. App'x 23 (2d Cir. 2012) (finding the Court “plainly lack[ed] subject matter jurisdiction” over plaintiff’s claims “attacking the validity of the foreclosure proceedings and the validity of the underlying mortgage loan documents” pursuant to Rooker-Feldman because “the injury complained of is the judgment permitting foreclosure, which implicitly held that the mortgages were valid.”); see also Feliciano v. U.S. Bank Nat. Ass'n, No. 13–CV–5555, 2014 WL 2945798, at *2–4 & n. 7 (S.D.N.Y. June 27, 2014) (finding that plaintiffs' claims that “[defendant] wrongfully foreclosed upon their home because it lacked the legal capacity to accept the assignment of the underlying mortgage, and therefore lacked standing in the Foreclosure Action” failed under Rooker-Feldman and the fraud exception did not apply because “the complaint alleges fraudulent conduct (generally) by defendant prior to the institution of the Foreclosure Action rather than on the state court itself.” (internal citations and quotations omitted) ). Therefore, plaintiffs attempt to invoke a fraudulent procurement exception to the Rooker–Feldman doctrine fails. *6 Accordingly, the Court lacks subject matter jurisdiction over plaintiffs' claims and the amended complaint should be dismissed in its entirety. C. Res judicata Alternatively, to the extent the Rooker-Feldman doctrine does not deprive the Court of subject matter jurisdiction, all of plaintiffs' claims are barred by the doctrine of res judicata. Under the doctrine of res judicata, “a final judgment on the merits of an action precludes the parties or their privies from re-litigating issues that were or could have been raised in that action.” Flaherty v. Lang, 199 F.3d 607, 612 (2d Cir. 1999) (quotation omitted). “In applying the doctrine of res judicata, [a court] must keep in mind that a state court judgment has the same preclusive effect in federal court as the judgment would have had in state court.” Burka v. New York City Transit Auth., 32 F.3d 654, 657 (2d Cir. 1994). Further, federal courts must apply the doctrine of res judicata according to the rules of the state from which the judgment is taken. See Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 373 (1996); Giardina v. Nassau Cnty., No. 08–CV–2007, 2010 WL 1850793, at *3 (E.D.N.Y. May 7, 2010). New York State © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 courts apply a transactional analysis, “barring a later claim arising out of the same factual grouping as an earlier litigated claim even if the later claim is based on different legal theories or seeks dissimilar or additional relief.” Burka, 32 F.3d at 657 (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir. 1994) ); see Done, 2009 WL 2959619, at *3 (same). Res judicata applies when there was: (1) a previous action that resulted in a final adjudication on the merits, (2) the party against whom res judicata is to be invoked was party to the previous action or in privity with a party to that action, and (3) the claims involved in the current case were, or could have been, raised in the previous action. Swiatkowski, 745 F. Supp. 2d at 171 (quoting Whelton v. Educ. Credit Mgmt. Corp., 432 F.3d 150, 155 (2d Cir. 2005) ). Res judicata applies to defenses that could have been raised in the prior action as well. Waldman v. Vill. of Kiryas Joel, 39 F. Supp. 2d 370, 377 (S.D.N.Y. 1999) (res judicata “prevents a party from litigating any issue or defense that could have been raised or decided in a previous suit, even if the issue or defense was not actually raised or decided”) (quoting Woods v. Dunlop Tire Corp., 972 F.2d 36, 38 (2d Cir. 1992) ); Robbins v. Growney, 229 A.D.2d 356, 645 N.Y.S.2d 791, 792 (N.Y. App. Div. [1st] Dep't 1996) (“The doctrine of res judicata is applicable ... to defenses raised in the prior action or which, though not raised, could have been.”) (internal citation omitted). “All litigants, including pro se plaintiffs, are bound by the principles of res judicata. Done, 2009 WL 2959619, at *3. Here, plaintiffs' claims are barred from further adjudication by res judicata. First, the judgment of foreclosure entered against plaintiffs is an adjudication on the merits, which prevents reconsideration of any claim that is based on the same facts as the foreclosure judgment and which would disturb LoanCare’s (or Selene’s) ability to enforce rights provided pursuant to the mortgage and the note securing the Bay Shore property. See id. at *4. Second, the facts pled by plaintiffs in their amended complaint—that LoanCare brought the foreclosure suit in the Suffolk County Supreme Court and was not the holder of a valid mortgage note at the time of assignment, (see Am. Compl.)—would have been central to deciding any entitlement to a judgment of foreclosure, and thus demonstrates that their claims in the current suit arise from the same transaction as LoanCare’s claim in the previous foreclosure action. Done, 2009 WL 2959619, at *4. Plaintiffs' claims arising from the origination of the mortgage and attacking the ability of defendants to enforce it in the foreclosure proceedings, (see Am. Compl.), not only could have been raised as a defense to foreclosure in the state court, but were actually raised, (see Kossar Decl. Exs. I, J) and therefore cannot be relitigated in this Court. See, e.g., Hinds v. Option One Mortg. Corp., No. 11–CV–6149, 2012 WL 6827477, at *5 (E.D.N.Y. Dec. 6, 2012) (report & recommendation), adopted by 2013 WL 132719 (E.D.N.Y. Jan. 10, 2013) (“Inasmuch as Plaintiff’s fraud claim is premised on his allegations that Defendants obtained the underlying mortgage through predatory lending tactics and fraud, res judicata operates to preclude federal review of such a claim ... [since the plaintiff’s claims] arise from the same factual grouping—namely the validity of Plaintiff’s mortgage, and the right of Defendants to enforce that agreement in a state court foreclosure proceeding”): Solomon v. Ocwen Loan Servicing, LLC, No. 12CV-2856, 2013 WL 1715878, at *5 (E.D.N.Y. Apr. 12, 2013) (“The state-law claims asserted by plaintiff arise from the origination of the [m]ortgage and attack the ability of defendants to enforce it in the foreclosure proceedings. These claims could have been raised as a defense to foreclosure in state court, and therefore cannot be relitigated in a subsequent suit in federal court.”); Swiatkowski, 745 F. Supp. 2d at 171 (“Many of the factual allegations plaintiff raises in opposition to the instant motion to dismiss involve issues that could have been raised as claims or defenses in the state court [foreclosure] proceedings.”); Gray v. Americredit Fin. Servs., Inc., No. 07 Civ. 4039, 2009 WL 1787710, at *6 n. 2 (S.D.N.Y. June 23, 2009) (“Plaintiff’s allegations of fraud regarding the underlying loan transaction do not appear to be of the type recognized by certain courts as immune from res judicata.”); Yeiser v. GMAC Mortg. Corp., 535 F.Supp.2d 413, 421 (S.D.N.Y. 2008) (“According to New York law, ... res judicata ... applies to defenses that could have been litigated, including defenses to a foreclosure.”). *7 Whether cast as violations of RESPA, or regulations governing the National Housing Act, plaintiffs effectively allege that defendants improperly obtained the foreclosure judgment due to lack of standing based on fraud or “fraud in the inducement”. (See Am. Compl.) However, plaintiffs asserted these claims, albeit in different form, in the state foreclosure action as affirmative defenses in their verified answer, in their opposition to LoanCare’s summary judgment motion, and in support of their own cross motion for summary judgment. (Kossar Decl. Exs. I, J.) Specifically, in the state action, plaintiffs alleged that LoanCare had no standing to bring a foreclosure action, had © 2020 Thomson Reuters. No claim to original U.S. Government Works. 6 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 “unclean hands,” and misled, overcharged and defrauded plaintiffs in the mortgage application, closing and servicing process. (Id., Ex. I at ¶ ¶ 3, 8, 14, 18) The state court considered and ultimately dismissed plaintiffs' affirmative defenses and denied plaintiffs' summary judgment; instead, granting summary judgment in LoanCare’s favor. (Kossar Decl. Ex. J.) “If plaintiffs were unhappy with the result of that proceeding, the proper recourse was a state court appeal. Because plaintiffs could have presented the same claims they now assert, including the RESPA claim, as defenses or counterclaims in the action for foreclosure, the doctrine of res judicata bars this litigation.” Yeiser, 535 F. Supp. 2d at 422 (citing 12 U.S.C. § 2614, which authorizes an action, pursuant to the provisions of RESPA, to be brought in the federal district court or in any other court of competent jurisdiction in which the property involved is located, or where the violation is alleged to have occurred); Mercado v. Playa Realty Corp., No. CV 03-3427, 2005 WL 1594306, at *7 (E.D.N.Y. July 7, 2005) (determining that because plaintiff could have asserted the new claims she was raising in her federal action during the foreclosure action as counterclaims and the relief sought by plaintiff was inconsistent with the ruling in the foreclosure action, the new claims were barred by the doctrine of res action concerning the mortgage for purposes of res judicata. Yeiser, 535 F. Supp. 2d at 423. The facts alleged in the amended complaint establish privity between Selene and LoanCare, as LoanCare assigned the mortgage to Selene on March 31, 2015—after final judgment in the state foreclosure action. See Yeiser, 535 F. Supp. 2d at 423 (“[s]ince the loan was transferred to GRP in May 2005,” almost one year after the state foreclosure action, “GRP is a successor to that interest and is also in privity with [the original note holder],” which was the plaintiff in the foreclosure litigation); Hinds, 2012 WL 6827477, at *4 n.8 (finding the privity requirement satisfied where Wells Fargo was not a party in the state court proceeding, but bought the subject property at a foreclosure sale, rendering it a successor in interest). Thus, the requirements of res judicata are satisfied here. Therefore, to the extent Rooker-Feldman does not deprive this Court of subject matter jurisdiction over plaintiffs' claims, the claims are barred by the doctrine of res judicata and must be dismissed. judicata). 8 Lastly, the present action satisfies the privity requirement for claim preclusion since LoanCare commenced the foreclosure proceeding and is a named party to the current action. Further, Selene, a non-party to the earlier state court action may still invoke claim preclusion if it can demonstrate that it was in privity with a party to the earlier action. See Houdet v. U.S. Tennis Ass'n, No. 13-CV-5131, 2014 WL 6804109, at *4 (E.D.N.Y. Dec. 3, 2014) (finding res judicata to apply “not just to the parties in a prior litigation but also to those in privity with them” where the “new defendants have a sufficiently close relationship to justify [its] application” (internal quotation marks omitted) ). “A relationship of privity ‘includes those who are successors to a property interest, those who control an action although not formal parties to it, [and] those whose interests are represented by a party to the action.’ ” Modular Devices, Inc. v. Alcatel Alenia Space Espana, No. 08-CV-1441, 2010 WL 3236779, at *4 (E.D.N.Y. Aug. 12, 2010) (quoting Ferris v. Cuevas, 118 F.3d 122, 126 (2d Cir. 1997) ). Under New York law, both the party servicing the mortgage and the party that later acquires it (becoming a successor in interest) are considered to be in privity with the party to the original D. Collateral Estoppel Plaintiffs' claims are also precluded under the narrower doctrine of collateral estoppel. “Collateral estoppel, or issue preclusion, ‘precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party ... whether or not the tribunals or causes of action are the same.’ ” Sullivan v. Gagnier, 225 F.3d 161, 166 (2d Cir. 2000). Whether relitigation of an issue is precluded is determined by the rules of the court that rendered the prior judgment. Id. “Under New York law, the doctrine of collateral estoppel requires that ‘the issue in the second action [be] identical to an issue which was raised, necessarily decided and material in the first action.’ ” Hines v. HSBC Bank USA, No. 15CV-3082, 2016 WL 5716749, at *9 (E.D.N.Y. Sept. 30, 2016) (quoting Parker v. Blauvelt Volunteer Fire Co., 93 N.Y.2d 343, 349 (1999) ). Thus, “[b]efore collateral estoppel can be invoked, the court must find that an identical issue was necessarily decided in the prior action and is decisive of the present action, and that there was a full and fair opportunity to contest the decision now said to be controlling.” 535 F. Supp. 2d at 424 (internal citation omitted). © 2020 Thomson Reuters. No claim to original U.S. Government Works. Yeiser, 7 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 *8 “To determine whether the issue in the first litigation was necessarily decided, the focus is on the rights, questions or facts that underlie a judicial decision, not the legal theories underlying the complaint.” Id. at 424-25 (citing Coveal v. Consumer Home Mortgage, Inc., 2005 WL 2708388, at *5 (E.D.N.Y. Oct. 21, 2005) ) “New York requires only that the issue have been properly raised by the pleadings or otherwise placed in issue and actually determined in the prior proceeding.” Id. (finding collateral estoppel to be applicable where all the facts giving rise to the amended complaint were presented in the foreclosure proceeding even though plaintiffs did not allege all of the same causes of action). Here, plaintiffs had a full and fair opportunity to litigate the factual issues raised in the amended complaint in the state foreclosure action. And, those issues were decided in LoanCare’s favor. As discussed supra, plaintiffs already challenged the validity of the assignment of the mortgage to LoanCare and its standing to foreclose on the Bay Shore property in state court, and the state court necessarily rejected those arguments when it found LoanCare had a valid claim to the Bay Shore property and entered judgment of foreclosure on that property. No appeal was filed in that action. Accordingly, plaintiffs cannot relitigate these issues against defendant LoanCare in federal court. See Graham v. Select Portfolio Servicing, Inc., 156 F. Supp. 3d 491, 505– 06 (S.D.N.Y. 2016). Plaintiffs are also precluded from litigating these same issues against Selene, despite the fact that Selene was not a party to the initial suit in state court. See Jasper v. Sony Music Entm't, Inc., 378 F. Supp. 2d 334, 343 (S.D.N.Y. 2005) (“By binding the plaintiff to earlier judicial decisions in which he was a party, defensive collateral estoppel precludes a plaintiff from getting a second bite at the apple merely by choosing a new adversary.”); see also Fequiere v. Tribeca Lending, No. 14-CV-812, 2016 WL 1057000, at *9–10 (E.D.N.Y. Mar. 11, 2016) (applying defensive non-mutual collateral estoppel to FDCPA claim). Accordingly, the Court grants defendants' motions to dismiss plaintiffs' claims because they are precluded pursuant to the doctrine of collateral estoppel. 9 E. Sanctions Pursuant to Rule 11 of the Federal Rules of Civil Procedure (“Rule 11”), defendant LoanCare seeks to impose sanctions on plaintiffs in the form of attorneys' fees incurred in defendant’s defense of the instant action. (Def. LoanCare’s Mot. to Dismiss, ECF No. 39-7 at 19-20.) For the reasons discussed below, defendant’s motion is denied. As an initial matter, the Court notes that LoanCare has not satisfied the procedural requirements for filing a sanctions motion. Rule 11 requires that a motion for sanctions “be made separately from any other motion and ... describe the specific conduct that allegedly violates Rule 11(b).” Fed. R. Civ. P. 11(c)(2). In any event, the Court denies LoanCare’s motion for sanctions. Plaintiffs' claims against defendants are plainly without merit. Nevertheless, this alone does not warrant sanctions, particularly as plaintiff is proceeding pro se. Although Rule 11 does apply to pro se litigants, the court may take into account the “special circumstances of litigants who are untutored in the law,” Maduakolam v. Columbia Univ., 866 F.2d 53, 56 (2d Cir. 1989), as well as whether such a litigant has been warned of the possible imposition of sanctions. See Kuntz v. Pardo, 160 B.R. 35, 40 (S.D.N.Y. 1993); see also Fed. R. Civ. P. 11 advisory committee’s note to the 1993 amendments (stating that the court should consider, inter alia, whether the motion was made in bad faith). There are no facts indicating that plaintiff instituted or maintained this lawsuit in bad faith or that they were warned of the imposition of sanctions. For all of the above reasons, LoanCare’s request for sanctions is denied. F. Leave to Amend *9 Pro se plaintiffs are ordinarily given the opportunity “to amend at least once when a liberal reading of the complaint gives any indication that a valid claim might be stated.” Shomo v. City of New York, 579 F.3d 176, 183 (2d Cir. 2009) (internal quotation omitted). Nevertheless, “a district court may deny a pro se plaintiff leave to amend when amendment would be futile.” Boddie v. N.Y. State Div. of Parole, No. 08-CV-911, 2009 WL 1033786, at *5 (E.D.N.Y. Apr. 17, 2009). Here, the Court has carefully considered whether plaintiffs should be granted leave to amend the complaint. Having decided plaintiffs' claims are barred by Rooker-Feldman, res judicata and collateral estoppel, the Court finds that any amendment of these claims would be futile. For these reasons, the Court declines to grant plaintiffs leave to amend. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 8 Talley v. LoanCare Servicing, Div. of FNF, Not Reported in Fed. Supp. (2018) 2018 WL 4185705 III. CONCLUSION For the reasons stated above, the Court grants defendants' motions and dismisses plaintiffs' amended complaint in its entirety. The Clerk of Court is directed to close this case and send a copy of this Order to pro se plaintiffs. SO ORDERED. All Citations Not Reported in Fed. Supp., 2018 WL 4185705 Footnotes 1 2 3 4 5 6 7 8 9 Plaintiffs also allege a violation of 24 C.F.R. § 203.35 in their amended complaint, (Am. Compl. at 5), but note in their opposition to defendant LoanCare’s motion to dismiss that this was an error. (Pls.' Opp. to LoanCare’s Mot. to Dismiss, ECF No. 39-12 at 3.) Though the amended complaint seeks relief from “LoanCare harassing us and placing us under duress” (Am. Compl. at 5-6), the only allegation of such harassment appears in plaintiffs' opposition to defendant LoanCare’s motion to dismiss. (See Pls.' Opp. to LoanCare’s Mot. to Dismiss, ECF No. 39-12 at 5-6.) A plaintiff “cannot amend [his] complaint by asserting new facts or theories for the first time in opposition to [d]efendants' motion to dismiss”, K.D. ex rel. Duncan v. White Plains Sch. Dist., 921 F. Supp. 2d 197, 209 (S.D.N.Y. 2013). In any event, plaintiff’s conclusory assertions of harassment are insufficient to state any plausible claims. The Court notes that plaintiffs appear to use the terms “fraud”, “fraudulent concealment” and “fraud in the inducement” interchangeably. To the extent that plaintiffs attempt to allege a due process violation under 42 U.S.C. § 1983, such claim is unwarranted as the defendants are private parties, not state actors. According to the loan transfer documents attached to plaintiffs' amended complaint, the mortgage and note were transferred to Selene on March 31, 2015. (See Am. Compl. at 23-24.) However, Selene first became involved with plaintiffs' loan when it became a servicer of the loan on August 1, 2014. (Pls.' Opp. to Def. LoanCare’s Mot. to Dismiss, ECF No. 35-1, Ex. H at 17.) Plaintiffs filed for Chapter 13 bankruptcy on June 5, 2017. (Pls.' Opp. to Mot. to Dismiss, Ex. J, ECF No. 35 at 37.) Plaintiffs appear to allege newly discovered facts in relation to the alleged fraudulent closing of the mortgage in 2009. (Pls.' Opp to defendant Selene’s Mot. to Dismiss, ECF No. 42-26 at 1.) Specifically, plaintiffs now argue, in conclusory fashion, that at the time of the closing of their mortgage in 2009, the Title Company was a “shell company” and the attorney at the closing table was fraudulent. (Id.) “Although New York’s permissive counterclaim rule means that res judicata generally will not necessarily bar claims that could have been counterclaims in a prior action, this exception for counterclaims does not permit an attack on a judgment” previously issued by the state court. Beckford v. Citibank N.A., No. 00 Civ. 205, 2000 WL 1585684, at *3 (S.D.N.Y. Oct. 24, 2000) (internal quotation omitted). Because plaintiffs' claims fail under Rooker-Feldman, res judicata and collateral estoppel, the Court need not reach the defendants' alternative arguments in support of dismissal. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 9 Aguilar v. U.S., Not Reported in F.Supp.2d (1999) 1999 WL 1067841 KeyCite Yellow Flag - Negative Treatment Distinguished by U.S. v. $6,787.00 in U.S. Currency, N.D.Ga., February 13, 2007 1999 WL 1067841 Only the Westlaw citation is currently available. United States District Court, D. Connecticut. Francisco AGUILAR, Plaintiff, v. UNITED STATES OF AMERICA, Defendant. Nos. 3:99–MC–304 (EBB), 3:99–MC–408 (EBB). | Nov. 8, 1999. cases. This court denied without prejudice Aguilar's initial complaint, which was erroneously captioned “United States v. One Parcel Of Property Located At 414 Kings Hwy.,” one of the cases already docketed and then pending. See Order of June 15, 1999. Upon refiling an amended complaint (the “Amended Complaint”) with the appropriate caption, Aguilar also filed a second complaint (the “Second Complaint”), seeking the same relief and asserting essentially the same claims against the government for bringing the other three forfeiture cases. The clerk returned these pleadings because Aguilar failed to complete the IFP forms. See Order of August 25, 1999. After Aguilar cured these pleading deficiencies, miscellaneous docket numbers were assigned to the complaints. *1 Francisco Aguilar, pro se, seeks leave to proceed in forma pauperis (“IFP”) to press two meritless complaints against the government, which is prosecuting related civil forfeiture actions against his properties. Although Aguilar is otherwise financially eligible, the court dismisses these complaints sua In Aguilar's Amended Complaint—the one originally filed against his own property at 414 Kings Highway—Aguilar seeks return of the property, compensatory damages and $100,000,000 in punitive damages “to deter the United States of America from committing a similar Abuse of Power.” Aguilar pleads his case in four “Articles,” asserting sundry state and federal “constitutional” claims, including conversion, false pretenses, mail fraud, and breach of fiduciary duty. The Amended Complaint also suggests an allegation that the government falsified and deliberately omitted known material facts from its probable cause affidavit sponte pursuant to 28 U.S.C. § 1915(e)(2)(B) because the purported claims are frivolous, baseless and irremediable. in “disregard” of 19 U.S.C. § 1615, the statute outlining the burden of proof in administrative forfeiture proceedings. Dismissal of Plaintiff's Complaints BURNS, Senior J. Background Would-be plaintiff Aguilar is no stranger to this court. He is currently serving a forty-year sentence for drug trafficking at the federal penitentiary in Leavenworth, Kansas. See United States v. Tracy, 12 F.3d 1186, 1189 (2d Cir.1993) (affirming conviction and sentence). In connection with his conviction for narcotics offenses, the government filed civil forfeiture actions pursuant to 21 U.S.C. § 881(a) in 1990 and 1991 against four of Aguilar's Connecticut properties, which have since been sold. With the help of CJA-appointed counsel, Aguilar has vigorously defended each of these four actions, three of which remain pending before this court, and are scheduled for trial in January 2000. 1 Now Aguilar seeks to take the offensive by filing these purported claims against the government, and serving the current property owners as well as the Assistant United States Attorney who is prosecuting the related forfeiture The Second Complaint—the one related to the government's seizure of the other three properties—seeks similar equitable and monetary relief, including return of the properties, compensation for “suffering,” “usurpation,” denial of his use and enjoyment of the properties and lost rents, and one billion dollars in punitive damages. Liberally construed, the Second Complaint simply repeats the claims of the Amended Complaint except for one additional allegation: that Aguilar was entitled to, and did not receive, a hearing prior to the seizure and sale of his properties. Discussion A. § 1915(e)(2)(B) Standards *2 The Prisoner Litigation Reform Act (“PLRA”) mandates dismissal of an IFP action if it: “(i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief.” 28 U.S.C. § 1915(e)(2)(B) (as amended © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 Aguilar v. U.S., Not Reported in F.Supp.2d (1999) 1999 WL 1067841 in 1996). Prior to the adoption of the PLRA, district courts had discretion to dismiss frivolous actions; now they are required to do so. See Pub.L. 104–134, 110 Stat. 1321 (1996) (making dismissal of frivolous actions mandatory, and also requiring dismissal for failing to state a claim or seeking damages from an immune defendant). Because Aguilar's claims qualify for dismissal under all three of these prongs, the standards for each are set out in turn. 1. Frivolous or Malicious A complaint is frivolous if “it lacks an arguable basis either in law or in fact.” Neitzke v. Williams, 490 U.S. 319, 325, 109 S.Ct. 1827, 1831–32, 104 L.Ed.2d 338 (1989) (interpreting no relief could be granted under any set of facts that could be proved consistent with the allegations.” Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d. 59 (1984). *3 Pro se complaints, such as these, however, must be read broadly, see Haines v. Kerner, 404 U.S. 519, 520–21, 92 S.Ct. 594, 595–96, 30 L.Ed.2d 652 (1972) (per curiam), and may not be dismissed “simply because the court finds the plaintiff's allegations unlikely.” Denton v. Hernandez, 504 U.S. 25, 33, 112 S.Ct. 1728, 1733, 118 L.Ed.2d 340 (1982) (construing pre-PLRA complaint as frivolous). Therefore, § 1915(d), later redesignated as § 1915(e)(2)(B)(i), to preclude “not only the inarguable legal conclusion, but also the fanciful factual allegation”). Factual frivolity occurs where “the ‘factual contentions are clearly baseless,’ such as when allegations are the product of delusion or fantasy.” a pro se plaintiff who is proceeding in forma pauperis should be afforded the same opportunity as a pro se feepaid plaintiff to amend his complaint prior to its dismissal for failure to state Livingston v. Adirondack Beverage Co., 141 F.3d 434, 437 (2d Cir.1998) (quoting Neitzke, 490 U.S. at 327, 109 S.Ct. at 1833). Legal frivolity, by contrast, occurs where “the claim is based on an indisputably meritless legal theory [such as] when either the claim lacks an arguable basis in law, or a dispositive defense clearly exists on the face of the complaint.” Livingston, 141 F.3d at 327 (internal quotes and citation omitted); see also Tapia–Ortiz v. Winter, 185 F.3d 8, 11 (2d Cir.1999) (upholding dismissal as frivolous where “[t]he complaint's conclusory, vague, and general allegations ... d[id] not [ ] suffice to establish” plaintiff's claims). In addition to frivolous claims, the court must also dismiss any malicious claims, i.e., where “[t]he manifest purpose of appellant's complaint [i]s not to rectify any cognizable harm, but only to harass and disparage.” Tapia–Ortiz, 185 F.3d at 11. 2. Failure To State A Claim An IFP action must also be dismissed sua sponte if it fails to state a claim on which relief may be granted. See 28 U.S.C. § 1915(e)(2)(B)(ii); see also Star v. Burlington Police Dep't, 189 F.3d 462, 1999 WL 710235 (2d Cir.1999) (summarily affirming dismissal made pursuant to § 1915(e)(2)(B)(ii) of purported due process challenge that failed to state a claim). As in a motion to dismiss under Fed.R.Civ.P. 12(b)(6), a § 1915(e)(2)(B)(ii) dismissal is warranted only if “it is clear that a claim [under § 1915(e)(2)(B)(ii) ], unless the court can rule out any possibility, however unlikely it might be, that an amended complaint would succeed in stating a claim. Gomez v. USAA Federal Sav. Bank, 171 F.3d 794, 796 (2d Cir.1999) (per curiam) (vacating § 1915(e)(2)(B) (ii) dismissal where “the district court did not give th[e] pro se litigant an opportunity to amend his complaint, and because [the court] cannot rule out the possibility that such an amendment will result in a claim being successfully pleaded”). 3. Relief Against An Immune Defendant Dismissal of an IFP case is also required where plaintiff seeks monetary damages against a defendant who is immune from such relief. See also, 28 U.S.C. § 1915(e)(2)(B)(iii); see Spencer v. Doe, 139 F.3d 107, 111 (2d Cir.1998) (affirming dismissal pursuant to § 1915(e)(2)(B)(iii) of official-capacity claims in § 1983 civil rights action because “the Eleventh Amendment immunizes state officials sued for damages in their official capacity”). Here, even if Aguilar's claims had any merit, the complaints must be dismissed © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 Aguilar v. U.S., Not Reported in F.Supp.2d (1999) 1999 WL 1067841 nevertheless because each seeks monetary damages from the United States, which is immune from such relief. See Presidential Gardens Assocs. v. United States, 175 F.3d 132, 139 (2d Cir.1999) (noting “[t]he sovereign immunity of the United States may only be waived by federal statute”). B. Dismissal Standards Applied Aguilar's complaints are devoid of any arguable basis in law or fact. Most of his factual allegations—to the extent they are even comprehensible—are conclusory, vague and baseless. For example, he purports to allege: “The United States of America has misused its power against the Francisco Aguilar's Intangible Rights.” (Amended Complaint at 2); and “The United States of America overpassed its bound of its authority and make a tyrannic use of its powers.” (Second Complaint at 4). Even the Second Circuit has recognized Aguilar's prior handiwork to be “so indisputably lacking in merit as to be frivolous within the meaning of 28 U.S.C. § 1915(e).” See United States v. One Parcel Of Property Located At 414 Kings Hwy., No. 97–6004 (2d Cir. April 23, 1997) (mandate [Doc. No. 167] dismissing appeal of Aguilar's motion to enjoin state default proceedings). Only two allegations asserted by Aguilar are even arguably actionable: the lack-of-probable-cause argument in the Amended Complaint and the due process claim in the Second Complaint. Both of these, however, must be dismissed because each fails to state a claim for which relief may be granted. 1. Probable Cause *4 The one potentially cogent legal claim that can be derived from a liberal reading of the Amended Complaint has already been conclusively decided by the court and is therefore barred from relitigation. See United States v. One Parcel Of Property Located At 414 Kings Hwy., No. 5:91–cv–158 (denying lackof-probable-cause argument in motion to dismiss [Doc. No. 64] in 1993, and in motions for summary judgment [Doc. Nos. 55, 96] in 1996). Here again, Aguilar reiterates his allegation that the government's affidavit in support of probable cause was tainted because it failed to disclose that the 414 Kings Highway property was subject to a mortgage held by People's Bank, and therefore could not have been purchased with funds traceable to drug sales. After the government voluntarily dismissed that forfeiture action, this court initially ordered the sale proceeds of the property disbursed to Aguilar. See id., Order of Oct. 25, 1996 [Doc. No. 151]. The bank appealed the order and, during the pendency of the appeal, secured a default judgment in state court against Aguilar. See People's Bank v. Aguilar, No. CV– 96–0337761–S (Conn.Super.Ct.1997). On the Bank's appeal from this court's disbursal of proceeds to Aguilar, the Second Circuit reversed and remanded. See United States v. One Parcel Of Property Located At 414 Kings Hwy., 128 F.3d 125, 128 (2d Cir.1997). On remand, in accordance with the Second Circuit mandate, this court disbursed the proceeds from the sale of 414 Kings Highway to the bank in partial satisfaction of Aguilar's debt owed on the defaulted mortgage. See United States v. One Parcel Of Property Located At 414 Kings Hwy., No. 5:91–cv–158, 1999 WL 301704 (D.Conn. May 11, 1999). Because the lack-of-probable-cause claim, perfunctorily adverted to in Aguilar's otherwise meritless Amended Complaint, has already been addressed in the 414 Kings Highway forfeiture case, the court will not consider it again. As such, it must be dismissed because it fails to state a claim for which this court could grant further relief. 2. Due Process In addition to his now-stale probable cause allegation about 414 Kings Highway, Aguilar claims in the Second Complaint that he was wrongfully denied a hearing prior to the seizure and sale of the other three properties. However, the constitutional right to a preseizure hearing in civil forfeiture proceedings was not recognized until 1993, two years after the seizure in this case. See United States v. James Daniel Good Real Property, 510 U.S. 43, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993) (holding that Fifth Amendment Due Process protections apply to civil forfeiture proceedings against real property). Even if such due process protections applied retroactively, Aguilar's challenge to the sale of the properties would lack merit because exigent circumstances required their interlocutory sale. In civil forfeiture proceedings “[u]nless exigent circumstances are present, the Due Process Clause requires the Government to afford notice and a meaningful opportunity to be heard before seizing real property subject to civil forfeiture.” Id. at 62, 114 S.Ct. at 505; see also United States v. One Parcel Of Property Located At 194 Quaker Farms Rd., 85 F.3d 985, 988 (2d Cir.1996) (“[a]bsent exigent circumstances, a hearing, with notice to record owners, is held before seizure.”). “To establish exigent circumstances, © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 Aguilar v. U.S., Not Reported in F.Supp.2d (1999) 1999 WL 1067841 the Government must show that less restrictive measures— i.e., a lis pendens, restraining order, or bond—would not suffice to protect the Government's interest in preventing the sale, destruction, or continued unlawful use of the property.” Id. at 62, 114 S.Ct. at 505. real *5 Aguilar's properties addressed in the Second Complaint were seized because there was probable cause that each had been used to facilitate the offenses for which he was convicted. See 21 U.S.C. § 881(a)(7) (1999). This civil forfeiture statute authorizes interlocutory sale of seized properties by two methods, which are incorporated by reference into the statute. See 21 U.S.C. § 881(b) (authorizing seizure of property subject to civil forfeiture upon process issued pursuant to the Supplemental Rules for Certain Admiralty and Maritime Claims; 21 U.S.C. § 881(d) (authorizing seizure and summary sale governed by the customs laws codified in the Tariff Act of 1930, 19 U.S.C. §§ 1602–1619). Though the source of authority differs, the standards for sale under each are virtually indistinguishable. Rule E(9)(b) of the Maritime Rules permits the interlocutory sale of seized property if such property is perishable, or liable to deterioration, decay, or injury by being detained in custody pending the action, or if the expenses of keeping the property is [sic] excessive or disproportionate, or if there is unreasonable delay in securing the release of property.... Supplemental Rule for Certain Admiralty and Maritime Claims E(9)(b). Section 1612(a) of the customs laws, by contrast, provides for seizure and summary sale whenever it appears that such property is liable to perish or to waste or to be greatly reduced in value by keeping, or that the expense of keeping the same is disproportionate to the value thereof.... 19 U.S.C. § 1612(a) (1999). Here, the Chief Deputy United States Marshal certified that the properties located at both 2030–32 Main St., Bridgeport (No. 5:90–cv–544), and 8 Drumlin Rd., Westport (No. 5:90– cv–545), were abandoned and therefore subject to vandalism, deterioration and depreciation. See 2/20/91 Declaration in Support of Motion for Interlocutory Sale [Doc. Nos. 28 (5:90– cv–544), 31 (5:90–cv–545) ] at ¶¶ 4, 5. The marshal also certified that the mortgage obligations exceeded by over $ 1,000 per month the rental income of the 2034–38 Main St., Bridgeport (No. 5:90–cv–546), property, which was several months in arrears and had little or no equity. See 2/21/90 Declaration in Support of Motion for Interlocutory Sale [Doc. No. 27 (5:90–cv–546) ] at ¶ 4. This court found these reasons sufficiently exigent to order the interlocutory sales. See 8/1/90 Order for an Interlocutory Sale [Doc. Nos. 34 (5:90–cv–544), 50 (5:90–cv–545), 31 (5:90–cv–546) ]. Interlocutory sale was thus warranted under both Rule E(9)(b) and § 1612(a) because the two abandoned properties were liable to deteriorate or lose value and the mortgage liabilities of the rented property were disproportionate in comparison to its value. Cf. United States v. Esposito, 970 F.2d 1156, 1161 (2d Cir.1992) (vacating order of interlocutory sale of forfeited home where “there was no finding that t[he amount expended for maintenance and repairs] was excessive or disproportionate”). *6 Aguilar's claim that he was wrongfully denied an opportunity to be heard prior to the sale of his properties is therefore not a cognizable due process challenge because the exigency of the properties' abandonment and disproportionate cost of upkeep required their interlocutory sale. Thus, sua sponte dismissal is warranted because Aguilar's due process claim fails to state a remediable cause of action. 3. Other Claims The remainder of Aguilar's claims are frivolous and can be disposed of readily. To the extent Aguilar's claim invoking 19 U.S.C. § 1615 can be construed as challenging the constitutionality of shifting the burden to the claimant upon the government's showing of probable cause, the Second Circuit has “h[e]ld that it does not violate due process to place the burden of proving an innocent owner affirmative defense on the claimant.” 194 Quaker Farms Rd., 85 F.3d at 987. In addition, the tort claims for false pretenses and conversion are not actionable as these are intentional torts to which the limited waiver of sovereign immunity of the Federal Tort Claims Act (“FTCA”) is inapplicable. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 Aguilar v. U.S., Not Reported in F.Supp.2d (1999) 1999 WL 1067841 See 28 U.S.C. § 2680(h); see also Bernard v. United States, 25 F.3d 98, 104 (2d Cir.1994) (“the FTCA does not authorize suits for intentional torts based on the actions of Government prosecutors”). Furthermore, because the United States government is not a fiduciary and owes no associated duties to Aguilar, his breach of fiduciary duty allegation against the government fails to state a claim. Finally, Aguilar also fails to state a valid mail fraud claim as that criminal code For the foregoing reasons, Aguilar's complaints [Nos. 3:99– mc–304 and 3:99–mc–408] are dismissed pursuant to 28 U.S.C. § 1915(e)(2)(B) because they present frivolous allegations, none of which state a cognizable claim, and seek monetary relief from an immune defendant. Because the court cannot definitively rule out the possibility that amendment to the pleadings might result in an actionable claim, see provision, 18 U.S.C. § 1341, may only be prosecuted by the government, not against it. Gomez, 171 F.3d at 796, these dismissals are made without prejudice and may be replead after the conclusion of the related forfeiture proceedings. Conclusion All Citations Not Reported in F.Supp.2d, 1999 WL 1067841 Footnotes 1 See United States v. One Parcel Of Property Located At 2030–32 Main St., No. 5:90–cv–544(EBB) (pending); United States v. One Parcel Of Property Located At 8 Drumlin Rd., No. 5:90–cv–545 (EBB) (pending); United States v. One Parcel Of Property Located At 2034–38 Main St., No. 5:90–cv–546(EBB) (pending); see also United States v. One Parcel Of Property Located At 414 Kings Hwy., No. 5:91–cv–158(EBB) (closed). End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 2013 WL 840706 Only the Westlaw citation is currently available. United States District Court, S.D. New York. ACCD GLOBAL AGRICULTURE INC. and Curt Meltzer, Plaintiffs, v. Alan P. PERRY and Farm Technologies Network LLC, Defendants. courts, and the courts must adjudicate those cases validly brought pursuant to diversity jurisdiction. That does not mean, however, that federal courts should accept allegations of diversity without investigation-indeed, federal courts are mandated to sua sponte examine their own jurisdiction at every stage in the litigation: Subject-matter jurisdiction can never be waived or forfeited ... [and] if courts become concerned about their own jurisdiction to hear cases, they have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties either overlook or elect not to press. No. 12 Civ. 6286(KBF). | March 1, 2013. MEMORANDUM DECISION & ORDER KATHERINE B. FORREST, District Judge. *1 “The district courts of the United States, as [the Supreme Court has] said many times, are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). In most cases, federal jurisdiction lies either in the cause of action arising under federal law, or in the parties' citizenship being diverse-that is, from different states. While it is clear why federal courts should adjudicate cases implicating federal law, the rationale for so-called “diversity jurisdiction” is more historical. The drafters of the Judiciary Act were concerned that state court judges might employ improper local biases in adjudicating large-dollar cases brought by or against people from foreign States. See id. (“In order to provide a neutral forum for what have come to be known as diversity cases, Congress also has granted district courts original jurisdiction in civil actions between citizens of different States .... To ensure that diversity jurisdiction does not flood the federal courts with minor disputes, § 1332(a) requires that the matter in controversy in a diversity case exceed a specified amount, currently $75,000.”) One wonders whether the fear of such local biases continues to justify the ability to access the federal courts, especially in light of the expertise one assumes state courts have over the issues of state law raised in diversity cases—and also in light of the overwhelming number of cases that make it into federal court on diversity grounds. Currently, however, diversity remains an open avenue to the federal Dumann Realty, LLC v. Faust, 09 Civ. 7651, 2013 WL 30672, at *1 (S.D.N.Y. Jan.3, 2013) (quotation marks omitted) (citing Gonzalez v. Thaler, –––U.S. ––––, ––––, 132 S.Ct. 641, 648, 181 L.Ed.2d 619 (2012); Henderson ex rel. Henderson v. Shinseki, ––– U.S. ––––, ––––, 131 S.Ct. 1197, 1202, 179 L.Ed.2d 159 (2011)) (emphasis supplied). This means investigating all aspects of the diversity requirements —not only whether all plaintiffs are completely diverse from all defendants, but also whether the amount in controversy reaches the statutory level. Here, after having done just that, the Court determines that the requirements for diversity jurisdiction are not met. Plaintiffs ACCD Global Agriculture (“ACCD”) and Curt Meltzer sue defendants Alan P. Perry and Farm Technologies Network LLC (“FTN”) on claims arising from a soured business collaboration. But almost the entirety of plaintiffs' theory of damages is based on the projected profits lost from the collapse of that collaboration-a collaboration on an unproven business based on sophisticated new science, in an untested foreign market. Such damages require, however, more than the mere assurance from the entity itself that the profits were realizable and realistic—more than the mere ipsidixit of “I say I can make that money, therefore I can”—and instead require plaintiffs to eventually establish both the existence and amount of the profits allegedly lost to a reasonable certainty. See Schonfeld v. Hilliard, 218 F.3d 164, 172–75 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 (2d Cir.2000); Ho Myung Moolsan, Co. Ltd. v. Manitou Mineral Water, Inc., 07 Civ. 7483, 2010 WL 4892646, at *8 (Dec. 2, 2010); Pot Luck LLC v. Freeman, 06 Civ. 10195, 2010 WL 908475, at *3 (S.D.N.Y. Mar.8, 2010). *2 But plaintiffs' complaint here simply asserts that plaintiffs “would [have made] over $1 million per year in profits”—and makes no other proffer whatsoever concerning that allegation. This is insufficient to support a claim for lost profits, even at the motion to dismiss stage. And without those damages, the complaint does not allege an injury in excess of $75,000. Because plaintiffs have alleged absolutely no facts suggesting that their actual recoverable damages are any more than $12,157.08—far below the $75,000 required for diversity jurisdiction to lie—the Court lacks jurisdiction over this action and must dismiss it. Accordingly, the Court dismisses this action sua sponte without prejudice, and denies defendants' motion to dismiss as moot. BACKGROUND The following facts are drawn from the First Amended Complaint (the “FAC”), the documents attached thereto, and the documents incorporated therein, and are construed in the light most favorable to plaintiffs. Policemen's Annuity & Benefit Fund of City of Chicago v. Bank of Am., NA, ––– F.Supp.2d ––––, 2012 WL 6062544, at *1 (Dec. 7, 2012). The Parties and the Dispute Plaintiff ACCD is an agricultural technologies company targeting international farming markets, and specifically China. (FAC ¶ 9.) Plaintiff Meltzer is the president, CEO, and a director of ACCD. ( Id. ¶ 2.) Collectively as shareholders, Meltzer formed ACCD with defendant Perry, and two other individuals not involved in this lawsuit. (Id. ¶¶ 11, 16, 17.) Perry had worked in “crop production ... farming, agronomy, and soil sciences” for four decades, and served as vice president, treasurer, and a director of ACCD. (Id. ¶¶ 10, 11, 16, 18.) Perry was and is also the sole member and owner of defendant FTN—another soil sciences company. (Id. ¶¶ 12, 13.) Meltzer had initially sought to pursue a business enterprise with Perry because of Perry's representations concerning his soil sciences expertise. (See id. ¶¶ 10, 13–15.) Specifically, Perry told Meltzer that his and FTN's soil science technology allowed for significant production improvements over regular farming techniques. (Id. ¶¶ 13–15.) 1 But Perry “failed to provide supporting data to ACCD” to back up his representations, and—allege plaintiffs—those representations “were not accurate.” (Id. ¶ 13; see also id. ¶¶ 14, 15.) Despite Perry's failure to provide ACCD with data, ACCD still “projected that one farm of 5,000 acres ... with Perry's alleged expertise ... would generate over $1 million per year in profits.” (Id. ¶ 38.) The FAC contains no factual support or data whatsoever concerning the more-than$1 million per-year-per-farm profits projected by ACCD. In May 2011, Meltzer and Perry, and others, formed ACCD through execution of a “Shareholders Agreement.” (Id. ¶ 11; see also id. Ex. 1 (the “Shareholders Agreement”).) That agreement contained provisions, inter alia: *3 • Requiring that Perry-and the other shareholders —devote “commercially reasonable” time to ACCD (Shareholder Agreement ¶ 7); • Requiring that Perry license the FTN technology to ACCD for $1.00 per year—until such time as ACCD “accept[s] its initial funding,” at which point requiring that Perry sell the technology to ACCD for $1.00, which would then license the technology to FTN for $1.00, provided that FTN use the technology only domestically (id. ¶ 8); and • Requiring that a departing shareholder not compete with ACCD for two years, but permitting Perry to run FTN domestically provided he had no contact with ACCD's customers (id. ¶ 20). By late 2011, however, the relationship between Meltzer and Perry had broken down. Perry allegedly interfered in various ways in ACCD's operations, (see FAC ¶¶ 23–27), and eventually resigned in December 2011. (Id. ¶ 28.) Due to that resignation, ACCD was denied “Perry's alleged expertise and his involvement and active participation.” (Id. ¶ 38.) Accordingly, ACCD was alleged denied the projected morethan-$1 million per-year-per-farm profits the Meltzer/Perry collaboration would have generated. Facts Relating to Diversity Jurisdiction and Damages Diversity jurisdiction in cases with domestic parties requires that “the matter in controversy exceeds the sum or value of © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 $75,000, exclusive of interest and costs, and is between ... citizens of different states.” 28 U.S.C. § 1332(a)(1). The parties on one side of the litigation must be completely diverse from the parties on the litigation's other side—that is, “no plaintiff can be a citizen of the same state as a defendant.” Aurora Loan Servs. LLC v. Sadek, 809 F.Supp.2d 235, 239 (S.D.N.Y.2011). There is no dispute in this case that all plaintiffs are fully diverse from all defendants—plaintiffs are citizens of New York, and defendants are citizens of Maine. (FAC ¶¶ 1–4.) There is also no present dispute amongst the parties as to the amount in controversy—defendants do not raise the issue in their pending motion to dismiss. But, the court's “independent obligation to ... raise and decide jurisdictional questions that the parties either overlook or elect not to press,” Henderson, 131 S.Ct. at 1202, requires that the Court examine the FAC's damages allegations on its own. Plaintiffs' allegations concerning injury, harm, or otherwise suggesting damages, are—in toto—the following: • Perry interfered with ACCD's operations in late 2011 by (1) impeding ACCD's “testing efforts”; (2) failing to pursue business opportunities in Mexico; (3) failing to pursue “citrus greening trials”; (4) “pull[ing]” an employee off an ACCD project; (5) “hav[ing] private conversations with” another employee 2 ; and (6) “fail[ing] to set up private meetings for Meltzer with ... industry leaders.” (FAC ¶¶ 23–26.) There is not a single allegation as to how these alleged harms affected ACCD, either in terms of dollar amounts or in terms of practical consequences. *4 • Perry told Meltzer that Meltzer should restructure ACCD, however “Perry was not committed to the” restructuring, and “the restructuring was never completed.” (Id. ¶¶ 34–35.) What affect this had on ACCD or Meltzer, in terms of dollars, is not alleged. • Perry and FTN have been competing with ACCD in violation of the Shareholders Agreement. (Id. ¶¶ 36–37.) What affect this has had on ACCD or Meltzer, in terms of dollars or in terms of practical consequences, is not alleged. • Meltzer “advanced” certain sums to Perry totaling $12,157.08 for certain business and personal expenses. Perry never paid Meltzer back. (Id. ¶¶ 31–33.) • Due to Perry's alleged wrongful refusal to continue working with Meltzer and ACCD, ACCD has been unable to achieve its business plans. Specifically, “ACCD [had] projected that one farm of 5,000 acres under its management ... which [was] denied to ACCD by Perry's misconduct ... would generate over $1 million per year in profits to ACCD. Thus, ACCD's damages for its lost profits due to Perry's and FTN's misconduct are well in excess of $1 million.” (Id. ¶ 38.) Procedural History ACCD and Meltzer initially sued Perry and FTN on August 16, 2012. (ECF No. 1.) Defendants moved to dismiss, but before the Court ruled on that motion, plaintiffs filed the current FAC on October 12, 2012. (ECF No. 11.) Defendants then filed the current motion on October 26. That motion seeks dismissal of five of the FAC's seven counts—all on Rule 12(b)(6) grounds. (See ECF No. 13.) Shortly thereafter, on December 12, 2012, this action was transferred from Judge Barbara S. Jones to the undersigned. (ECF No. 17.) DISCUSSION Legal Standards “A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2000); see Williams v. Skyline Auto. Inc., 11 Civ. 8318, 2012 WL 1965334, at *2 (S.D.N.Y. May 24, 2012). To survive a Rule 12(b)(1) challenge to the Court's subject matter jurisdiction, the plaintiff must “allege facts that affirmatively and plausibly” suggest that jurisdiction exists. Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir.2011); see GMA Accessories, Inc. v. Dorfman–Pacific Co., Inc., 11 Civ. 3731, 2012 WL 899385, at *3 (March 16, 2012) (dismissal is proper “when the complaint fails to allege sufficient allegations to support subject matter jurisdiction”). The Court draws all well-pleaded facts from the complaint— and the documents attached thereto and incorporated therein © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 —assumes such facts to be true, and construes reasonable inferences in the plaintiffs' favor. Amidax, 671 F.3d at 145. The constitutional and statutory basis for jurisdiction in a diversity case such as this one is found in 28 U.S.C. § 1332. That section requires that “the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different states.” § 1332(a)(1). 28 U.S.C. Lost Profits Damages *5 The only injury or damages alleged by the FAC, other than ACCD's lost profits, consists of the $12,157.08 Meltzer allegedly loaned or advanced Perry that Perry never paid back. Otherwise, the only damages articulated by plaintiffs are the “in excess of $1 million” of lost profits based on ACCD's alleged “project[ion] that one farm of 5,000 acres ... would generate over $1 milion per year in profits.” (See FAC ¶¶ 31–33, 38.) A plaintiff may recover lost profits “only if he can establish both the existence and amount of such damages with reasonable certainty. The damages may not be merely speculative, possible or imaginary ... and must be capable of measurement based upon known reliable factors without undue speculation.” Schonfeld, 218 F.3d at 172 (quotation marks and citations omitted). Thus, a party claiming lost profits must eventually prove that it would have been able to pursue its business venture on the price, cost, and quantity terms it contemplates. See Ho Myung Moolsan, 2010 WL 4892646, at *8. “A court should be hesitant ... to rely on stated assumptions as to the” operating success of a proposed business venture. Id.; see Dupont Flooring Sys., Inc. v. Discovery Zone, Inc., 98 Civ. 5101, 2004 WL 1594629, at *7 (S.D.N.Y. July 14, 2004) (“Courts repeatedly have rejected claims for lost profits that rest on a series of assumptions and projections.”) (quotation marks omitted; collecting cases); Coastal Aviation. Inc. v. Commander Aircraft Co., 937 F.Supp. 1051, 1070 (S.D.N.Y.1996) (“To award plaintiff lost profits based on the unproven assumption that it would have [succeeded in its business ventures] would unjustly reward plaintiff rather than make it whole.”) Moreover, “evidence of lost profits from a new business venture receives greater scrutiny because there is no track record upon which to base an estimate.” Schonfeld, 218 F.3d at 172. Thus, “[p]rojections of future profits based upon a multitude of assumptions that require speculation and conjecture and few known factors do not provide the requisite certainty.” Id.; see Robin Bay Assocs., LLC v. Merrill Lynch & Co., 07 Civ. 376, 2008 WL 2275902, at *7 (S.D.N.Y. June 3, 2008) (“the obvious reason [is] that there does not exist a reasonable basis of experience upon which to estimate lost profits”). Indeed, for 100 years, the New York Court of Appeals has been “reluctant” to award lost profits in cases involving new business ventures. See Cramer v. Grand Rapids Show Case Co., 223 N.Y. 63, 119 N.E. 227, 228–29 (N.Y.1918). 3 Finally, if sought on breach of contract claims, 4 plaintiff must additionally eventually prove that “lost profit damages,” specifically, “were within the contemplation of the parties when the contract was made.” Schonfeld, 218 F.3d at 172; Robin Bay, 2008 WL 2275902, at *7 (“To recover lost profits the plaintiff must show both that the alleged loss is capable of proof with reasonable certainty and that the damages were fairly within the contemplation of the parties.”). *6 “Though courts often address the issue of lost profits at the summary judgment stage, New York courts have dismissed claims for lost profits where the pleadings suggest that an award of lost profits would require an unreasonable level of speculation.” Robin Bay, 2008 WL 2275902, at *7 (on motion to dismiss, dismissing claims for lost profits arising from proposed construction of a casino in St Croix because “court would have to assume” that plaintiff would obtain funding to purchase land, secure proper licenses, complete construction, and operate the business profitably, when the industry was “in its infancy”); 5 see also Pot Luck, 2010 WL 908475, at *3 (on motion to dismiss, dismissing claims for lost profits arising from proposed distribution of film in certain regions because such claims would require the court to assume the existence of markets in those regions, the terms of any distributorship agreements in those regions, the efforts of retained distributors, and the effectiveness of those efforts); Calip Dairies, Inc. v. Penn Station News Corp., 262 A.D.2d 193, 194, 695 N.Y.S.2d 70 (1st Dep't 1999) (“The cause of action for lost profits was also properly dismissed [on motion to dismiss under N.Y. C.P.L.R.] because the profits alleged to have been lost could not be determined with a reasonable degree of certainty.”); Lama Holding Co. v. Smith Barney Inc., 215 A.D.2d 314, 315, 627 N.Y.S.2d 33 (1st Dep't 1995; 676 R.S.D. Inc. v. Scandia Realty, 195 A.D.2d 387, 387, 600 N.Y.S.2d 678 (1st Dep't 1993). © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 There is not a single allegation in the FAC in the case at bar suggesting that ACCD would ever have been profitable in China or the other international farming markets the FAC alleges were its targets. (See FAC ¶ 9.) As a preliminary matter, the Court notes that such allegations-well-pleaded, and with support—should not have been or be difficult for plaintiffs to produce. Indeed, it is plaintiffs' business whose profits are alleged to have been destroyed. It is there plaintiffs who should have the records and models and projections— without any need for discovery, or any other process—to support any allegations that ACCD would have made the many millions in lost profits that plaintiffs claim. But there is no allegation that ACCD could acquire land in China on which to operate any farms; nor that ACCD could acquire any Chinese legal rights or licenses to operate the farms; nor that technologically-advanced farming in China is even possible, practically or legally; nor that ACCD could build the farms; nor that ACCD could find laborers with the necessary experience with technologically-advanced farming; nor that ACCD could find laborers at all; nor that the FTN farming techniques would be effective. Nor is there any well-pleaded allegation even that ACCD could operate the farms profitably. Indeed, there is no allegation that ACCD or Meltzer had ever been successful in any venture similar to ACCD. And while the FAC alleges that Perry told Meltzer that Perry had had success in prior similar ventures, the FAC specifically alleges that Perry was lying when he made those representations. (See FAC ¶¶ 13–15.) It seems odd to accuse an individual of lying about his credentials and, in the very next breath, claim damages based—essentially—solely on the withheld expertise of that individual. Likewise, the Court cannot— and will not—assume the effectiveness and profitability of unproven farming techniques that plaintiffs themselves allege were not as effective as they were represented to be. *7 In the absence of well-pleaded allegations supporting any of the facts listed above, “there is simply no basis for the court to determine lost profits at this point or any other stage of the litigation because such a calculation would require a high degree of speculation.” Robin Bay, 2008 WL 2275902, at *8. Indeed, “a high degree of speculation” puts it lightly. Plaintiffs' damages claims based on ACCD's alleged lost profits are therefore dismissed. The FAC is thus left with a claim for $12,157.08 in money Meltzer advanced Perry, which Perry never repaid. But this is below the $75,000 threshold required by 28 U.S.C. § 1332(a). Accordingly, the Court lacks subject matter jurisdiction and must dismiss this action. CONCLUSION For the reasons stated above, plaintiffs' FAC is dismissed. This dismissal is without prejudice, and plaintiffs are hereby granted leave to file a second amended complaint not later than March 11, 2013. Defendants' motion to dismiss is denied as moot. The Clerk of the Court is directed to terminate the motion at ECF No. 12. SO ORDERED. All Citations Not Reported in F.Supp.2d, 2013 WL 840706 Footnotes 1 2 3 Perry allegedly told Meltzer that his and FTN's technology provided (1) “at least a 30% increase in production for nearly every crop ... for 15 years”; (2) “crop yields of 20% to 100% over the traditional N, P, K fertilizer program; and (3) “high end yield increases (of up to over 120%) for 11 different crops.” (FAC ¶¶ 13–15.) The content of those conversations is not alleged. “I have pointed out the limited business experience of plaintiffs, the fact that the enterprise was an adventure in a locality where neither one of them had before been engaged in business. No doubt the plaintiffs entertained hope that the business venture upon which they were about to embark would prove successful. Such © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 expectation was evidently based upon a consideration of the resident population of the city of Amsterdam, the business activity of the residents of that city, and the number and character of competitors in the same general line of business. Plaintiffs, however, had no assurance that the venture would not prove to be a failure. At the time the contract was made they had the lease of a vacant unfinished store. They had not as yet purchased goods, placed goods on sale, or secured one customer. They had before them the labor of building up a new business. Nevertheless, the courts below have held that plaintiffs may recover for the breach of the contract such an amount of profits as they would have made had they not been prevented from starting in business, such damages not to be based upon a business theretofore carried on, but measured by profits during a period of time corresponding to the period of interruption one year later. Therein material error was committed. ... A distinction exists between the interruption of an established business and a new venture. The owner of an established business may have it in his power to establish with reasonable certainty the amount of capital invested, the monthly and yearly expenses of operating his business, and the daily, monthly, or yearly income he derived from it for a long time prior thereto and for the time during which the interruption of which he complains continued, thereby furnishing a reasonably correct estimate of the nature of the legal injury and the amount of damages which resulted therefrom. While evidence of such facts may be admissible they must not be uncertain or problematical. The requirement imposed upon one whose business has been established and interrupted cannot be enforced as to him and made less stringent to one embarking in a new business who cannot furnish data of past business from which the fact that anticipated profits would have been realized 4 5 can be legally deduced.” 119 N.E. at 228–29 (internal citations omitted). Plaintiffs' FAC lists seven counts—some of which are plead “in the alternative” from each other—including one for breach of contract. Because no count includes a statement of the damages arising from that count, it is impossible for the Court to determine what damages claims are linked to which legal counts. Indeed, the Robin Bay case is particularly instructive because there—like in the case at bar—the party against whom lost profits were claimed acted in the venture as an adviser without whom the venture could not proceed for lack of the venturers' expertise. Moreover, like this case, the claims in that case arose under contract, negligence, and fiduciary duty theories. See 2008 WL 2275902, at ––––1–2, 7–8. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 6 Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013) 2013 WL 30672 2013 WL 30672 Only the Westlaw citation is currently available. United States District Court, S.D. New York. DUMANN REALTY, LLC, Profitechnic Limited, LLC, Lawrence Luk and Mac Luk, Plaintiffs, v. Frederick FAUST, Defendant/ Counterclaim Plaintiff, v. Dumann Realty, LLC, Richard Du and Mac Luk, Counterclaim Defendants. No. 09 Civ. 7651(JPO). | Jan. 3, 2013. MEMORANDUM AND ORDER J. PAUL OETKEN, District Judge. *1 Dumann Realty, LLC (“Dumann” or “the LLC”), Profitechnic Capital Limited (“Profitechnic”), Lawrence Mac (“Mac”), and Mac Luk (together, “Plaintiffs”) brought this action against Dumann member Frederick Faust (“Faust” or “Defendant”) asserting nine claims under New York State Law, including breach of Dumann's Operating Agreement and breach of the common law duty of good faith and fair dealing. Faust has filed several counterclaims against Plaintiffs, also under New York law. Defendant has filed a motion for summary judgment, which is now fully briefed. However, this Court has determined that it lacks subject matter jurisdiction over this matter, and thus must dismiss this case sua sponte, without reaching the merits of Defendant's motion. I. Subject Matter Jurisdiction “The district courts of the United States ... are ‘courts of limited jurisdiction. They possess only that power authorized 1673, 128 L.Ed.2d 391 (1994)). “Plaintiffs bear the burden of showing by a preponderance of the evidence that subject matter jurisdiction exists. [J]urisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it.” APWU v. Potter, 343 F.3d 619, 623 (2d Cir.2003) (internal quotation marks and citations omitted; alteration in original). “Subject-matter jurisdiction can never be waived or forfeited. The objections may be resurrected at any point in the litigation, and a valid objection may lead a court midway through briefing to dismiss a complaint in its entirety.” Gonzalez v. Thaler, ––– U.S. ––––, ––––, 132 S.Ct. 641, 648, 181 L.Ed.2d 619 (2012). Moreover, if courts become concerned about their jurisdiction to hear cases, they have “an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties either overlook or elect not to press.” Hernandez ex rel. Hernandez v. Shinseki, ––– U.S. ––––, ––––, 131 S.Ct. 1197, 1202, 179 L.Ed.2d 159 (2011) (citation omitted); see also Alliance of American Insurers v. Cuomo, 854 F.2d 591, 605 (2d Cir.1988) (stating that “a challenge to subject matter jurisdiction cannot be waived and may be raised sua sponte by the district court” (citation omitted)). To be sure, if it is determined late in the life of a case that no subject matter jurisdiction exists, “many months of work on the part of the attorneys and the court may be wasted.” Henderson, 131 S.Ct. at 1202. This, however, is a modest price to pay for the continued preservation of federalism. Accord Mansfield, C. & L.M. Ry. Co. v. Swan, 111 U.S. 379, 382, 4 S.Ct. 510, 28 L.Ed. 462 (1884) (explaining that the rules governing subject matter jurisdiction “spring[ ] from the nature and limits of the judicial power of the United States” and are therefore “inflexible and without exception”). II. Diversity Jurisdiction in Cases Involving Limited Liability Companies *2 In their Second Amended Complaint, Plaintiffs allege that “[t]his Court has original jurisdiction over the subject by Constitution and statute.’ “ Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, matter of this action pursuant to 28 U.S.C. § 1332 based upon the diversity of citizenship of each of the parties and the amount in controversy.” (Second Amended Complaint at 162 L.Ed.2d 502 (2005) (quoting Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375, 377, 114 S.Ct. ¶ 11.) Under 28 U.S.C. § 1332(a) (1), federal diversity jurisdiction exists where the matter is between “citizens of © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013) 2013 WL 30672 different States.” Since Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435 (1806), it has been settled law that there must be complete diversity between all plaintiffs and all defendants. A Limited Liability Company (“LLC”) is completely diverse from opposing parties only if all of the members of the LLC are citizens of different states than all opposing parties. See Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213 F.3d 48, 51 (2d Cir.2000) (“defendants Bedford Partnership and Bedford LLC are, for diversity purposes, citizens of Florida because both entities have Florida members”); Receivables Exch., LLC v. Hotton, No. 11 Civ. 0292(JS)(WDW), 2011 WL 239865, at *1 (E.D.N.Y. Jan. 21, 2011) (explaining that, “for diversity purposes, an LLC is a citizen of every state that its members are citizens of” (citations omitted)); Castillo Grand LLC v. Sheraton Operating Corp., No. 09 Civ. 7197(RPP), 2009 WL 4667104, at *1 (S.D.N.Y. Dec.9, 2009) (“For purposes of assessing diversity jurisdiction, an unincorporated entity such as a partnership or a limited liability company is deemed to be a citizen of all states of which its partners or members are citizens.” (citation omitted)); cf. Carden v. Arkoma Assocs., 494 U.S. 185, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990) (holding that, in the context of limited partnerships, citizenship of limited partners had to be taken into account to determine diversity of citizenship among the parties). In his recent submission to this Court, Richard Du avers that that, as of the filing of the initial Complaint on September 2, 2009, two of the original three members, Du and Luk, were both citizens of New York, while Faust, who is both an original member of Dumann and the defendant in this action, was a domiciliary of Pennsylvania. (Dkt. No. 96 (“the Du Affidavit”) at ¶¶ 3, 5–6.) 1 Du states, however, that Faust “resigned as a member” of the LLC on March 18, 2009, over five months before the initial Complaint was filed. (Du 2 Affidavit at ¶ 2.) This begs the question whether Faust must be considered a member of Dumann for the purpose of determining whether the parties are completely diverse. III. State Law and LLC Membership The question of whose citizenship constitutes part of the LLC's citizenship is ultimately governed by the law of the state of incorporation. This is illuminated in CR Holding Company, LLP v. Campbell, No. 11 Civ.2051(JWL), 2011 WL 2357649, at *3 (D.Kan. June 3, 2011), a case whose facts are remarkably similar to this case. Campbell concerned a dispute between several limited partnerships and their former partner, the defendant Campbell. The sole remaining partner, Renkemeyer, was a citizen of Kansas, while Campbell was a citizen of Missouri. In his motion to dismiss for lack of subject matter jurisdiction, Campbell argued *3 that diversity is not complete because [Campbell] remains a partner of each of the plaintiff entities such that the plaintiff entities are citizens of both Kansas and Missouri, thereby destroying complete diversity ... Plaintiffs, however, contend that Mr. Renkemeyer is the sole partner of each entity because Mr. Campbell has either withdrawn from the partnerships or, under the circumstances, should be deemed dissociated .... Id. at *1. In determining whether subject matter jurisdiction existed, Judge Lungstrum looked to the Kansas state law on partner withdrawal from limited partnerships, which provided that withdrawal was impermissible unless it was provided for by the partnership agreement. Id. at *2. “[B]ecause defendant is not permitted to withdraw as a limited partner of Renkemeyer Campbell LP under the agreement itself and, thus, by statute ...,” Judge Lungstrum held, “defendant remains a limited partner .... That entity, then, is a citizen of both Kansas and Missouri, thereby destroying complete diversity.” Id. at *3. In other words, despite Campbell's attempted withdrawal, the LLC remained a citizen of Campbell's place of citizenship. Though less squarely on point, Tri–County Metropolitan Transportation District of Oregon v. Butler Block, LLC, No. 08 Civ. 259(AA), 2008 WL 2037306 (D.Or. May 7, 2008), is also informative. In Butler Block, Judge Aiken wrestled with the question whether an Oregon plaintiff was completely diverse from the defendant, a parent LLC composed of a California citizen and a child LLC with one member, an Oregon citizen. The defendant LLC argued that its Oregon LLC member did not destroy complete diversity, because the child LLC had been administratively dissolved under Oregon law for failure to pay its fees. Id. at *2. However, Judge Aiken held that neither Delaware state law 3 nor the parent © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013) 2013 WL 30672 LLC agreement permitted withdrawal of a member due to administrative dissolution. Further, “under Delaware law,” as under New York law, “unless an LLC agreement provides otherwise, a member may not resign from a limited liability company prior to the dissolution and winding up of the limited liability company.” Id. at *2 (internal quotation marks and citation omitted). Thus, even if Oregon no longer recognized the existence of the child LLC, the child LLC continued to exist under Delaware law, and the citizenship of its member destroyed diversity. Butler Block, then, underscores the principle laid out in Campbell: the law of the state of incorporation plays a central role in the determination of whether complete diversity can exist between an LLC and an opposing party. Armed with Campbell and Butler Block, this Court can now turn to the case at hand. It is undisputed that Dumann, the LLC, was formed in New York and is governed by New York Limited Liability Company Law (“NYLLCL”). (See Dkt. No. 85, Ex. A (“Operating Agreement”) at III § 1 (“Unless specifically set forth otherwise in the Articles of Organization or by amendment thereto, management of this Company shall be vested in the members, who shall be subject to all of the rights, duties, privileges and liabilities of the Managers, as set forth in the New York Limited Liability Company Law .”) NYLLCL § 606(a) provides in relevant part: *4 A member may withdraw as a member of a limited liability company only at the time or upon the happening of events specified in the operating agreement and in accordance with the operating agreement. Notwithstanding anything to the contrary under applicable law, unless an operating agreement provides otherwise, a member may not withdraw from a limited liability company prior to the dissolution and winding up of the limited liability company. See also Klein v. 599 Eleventh Ave. Co., 14 Misc.3d 1211(A), at *3 (N.Y.Sup.2006) (explaining that “a member may withdraw from a limited liability company only as provided in its operating agreement. If the operating agreement is silent, a member may not withdraw prior to the dissolution of the company.” (citations omitted)). The Operating Agreement contains the following rules about withdrawal: A member may withdraw as a member of this Company with the vote or written consent of at least two-thirds in interest of the members, other than the member who proposes to withdraw as a member. If such consent is not given, a member may withdraw upon not less than six months prior written notice to this Company, provided such withdrawal does not breach this Operating Agreement, and the New York Limited Liability Company Law or any other contractual obligation between such proposed withdrawing member and this company or its other members. Should such breach occur, then the withdrawing member may be liable for damages as a result thereof. (Operating Agreement at III, § 10.) 4 Read together, the NYLLCL and the Operating Agreement do not permit member withdrawal, unless (1) two-thirds consent is given or (2) the withdrawal occurs after six months' notice. Here, Faust did not obtain two-thirds consent to withdraw. Nor did he provide six months' notice before withdrawal; indeed, this is the very basis of Dumann's contention that Faust breached the membership agreement. (See Second Amended Complaint at ¶¶ 17–18.) 5 Because Faust has not withdrawn under one of the two methods enumerated in the Operating Agreement, his “resignation” from Dumann was, in short, ineffective. 6 Thus, when Plaintiffs brought this suit, Dumann's citizenship for diversity jurisdiction purposes was both New York and Pennsylvania. Pennsylvania, in other words, finds itself “on both sides of the ‘v.’ sign” in this matter, Saavedra v. Boeing Co., 464 F.Supp.2d 770, 771 (N.D.Ill.2006), meaning that diversity of citizenship is incomplete. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 Dumann Realty, LLC v. Faust, Not Reported in F.Supp.2d (2013) 2013 WL 30672 The infirmity in this Court's subject matter jurisdiction over this case is a subtle one, which may explain why it has gone unnoticed throughout much of the litigation. Nevertheless, that infirmity divests this Court of the power to adjudicate this case as a matter of federal law. the Court is directed to terminate the case and all pending motions. *5 SO ORDERED. All Citations IV. Conclusion For the foregoing reasons, this case is DISMISSED sua sponte for lack of subject matter jurisdiction. The Clerk of Not Reported in F.Supp.2d, 2013 WL 30672 Footnotes 1 2 3 4 5 6 While the Second Amended Complaint alleges that Dumann has its “principal place of business” in New York State, that fact (as to an LLC) is entirely irrelevant to diversity jurisdiction. The Second Amended Complaint does not enumerate the citizenship of the members of Dumann at the time the suit was filed. On December 6, 2012, this Court issued an issued an Order to Show Cause why Plaintiff's Second Amended Complaint should not be dismissed for lack of subject matter jurisdiction (“the Order”). The Order directed Plaintiffs to both “enumerate every Member of the LLC as of the original date of this action's filing, and ... specify the citizenship of each Member.” Dumann Realty LLC v. Faust, No. 09 Civ. 7651(JPO), 2012 WL 6135020, at *1 (S.D.N.Y. Dec.6, 2012). On December 19, 2012, Plaintiffs filed an affidavit by Richard Du. On December 28, 2012, Defendant filed an affidavit by Anthony R. Molé in reply. (Dkt. No. 97 (“Molé Affidavit”).) As Defendant rightly notes (see Molé Affidavit at ¶¶ 4–7), the Du Affidavit's contention that Faust “resigned as a member” is problematic on its own terms. Du relies on paragraph 23 of Faust's Answer to the Second Amended Complaint for the proposition that Faust resigned from Dumann; however, that paragraph states not that Faust resigned, but that “on or about March 18, 2009, by letter, Faust indicated his desire to resign from Dumann and requested that Dumann's remaining members, Du and Luk, consent to his resignation.” (Du's Affidavit, Ex. A at ¶ 23 (emphasis added).) The defendant LLC was a Delaware LLC governed by Delaware law. Id. at *1. Moreover, the Operating Agreement “has (no) specified date of dissolution ... unless sooner dissolved pursuant to this Agreement or pursuant to the provisions of the [NYLLCL].” (Id. at § II, 7.) As Defendant's counsel notes, this puts Plaintiff “in a situation where any argument made in an attempt to support diversity subject matter jurisdiction would be counterproductive to their claim.” (Molé Affidavit at ¶ 9.) Moreover, Dumann sued Faust within six month of his resignation, meaning that the period during which the Operating Agreement anticipated Faust to be liable for consequential damages of the breach was still in effect. This underscores that, at the time this Complaint was filed, Faust was a member of the LLC for purposes of diversity jurisdiction. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 2013 WL 840706 Only the Westlaw citation is currently available. United States District Court, S.D. New York. ACCD GLOBAL AGRICULTURE INC. and Curt Meltzer, Plaintiffs, v. Alan P. PERRY and Farm Technologies Network LLC, Defendants. courts, and the courts must adjudicate those cases validly brought pursuant to diversity jurisdiction. That does not mean, however, that federal courts should accept allegations of diversity without investigation-indeed, federal courts are mandated to sua sponte examine their own jurisdiction at every stage in the litigation: Subject-matter jurisdiction can never be waived or forfeited ... [and] if courts become concerned about their own jurisdiction to hear cases, they have an independent obligation to ensure that they do not exceed the scope of their jurisdiction, and therefore they must raise and decide jurisdictional questions that the parties either overlook or elect not to press. No. 12 Civ. 6286(KBF). | March 1, 2013. MEMORANDUM DECISION & ORDER KATHERINE B. FORREST, District Judge. *1 “The district courts of the United States, as [the Supreme Court has] said many times, are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute.” Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005). In most cases, federal jurisdiction lies either in the cause of action arising under federal law, or in the parties' citizenship being diverse-that is, from different states. While it is clear why federal courts should adjudicate cases implicating federal law, the rationale for so-called “diversity jurisdiction” is more historical. The drafters of the Judiciary Act were concerned that state court judges might employ improper local biases in adjudicating large-dollar cases brought by or against people from foreign States. See id. (“In order to provide a neutral forum for what have come to be known as diversity cases, Congress also has granted district courts original jurisdiction in civil actions between citizens of different States .... To ensure that diversity jurisdiction does not flood the federal courts with minor disputes, § 1332(a) requires that the matter in controversy in a diversity case exceed a specified amount, currently $75,000.”) One wonders whether the fear of such local biases continues to justify the ability to access the federal courts, especially in light of the expertise one assumes state courts have over the issues of state law raised in diversity cases—and also in light of the overwhelming number of cases that make it into federal court on diversity grounds. Currently, however, diversity remains an open avenue to the federal Dumann Realty, LLC v. Faust, 09 Civ. 7651, 2013 WL 30672, at *1 (S.D.N.Y. Jan.3, 2013) (quotation marks omitted) (citing Gonzalez v. Thaler, –––U.S. ––––, ––––, 132 S.Ct. 641, 648, 181 L.Ed.2d 619 (2012); Henderson ex rel. Henderson v. Shinseki, ––– U.S. ––––, ––––, 131 S.Ct. 1197, 1202, 179 L.Ed.2d 159 (2011)) (emphasis supplied). This means investigating all aspects of the diversity requirements —not only whether all plaintiffs are completely diverse from all defendants, but also whether the amount in controversy reaches the statutory level. Here, after having done just that, the Court determines that the requirements for diversity jurisdiction are not met. Plaintiffs ACCD Global Agriculture (“ACCD”) and Curt Meltzer sue defendants Alan P. Perry and Farm Technologies Network LLC (“FTN”) on claims arising from a soured business collaboration. But almost the entirety of plaintiffs' theory of damages is based on the projected profits lost from the collapse of that collaboration-a collaboration on an unproven business based on sophisticated new science, in an untested foreign market. Such damages require, however, more than the mere assurance from the entity itself that the profits were realizable and realistic—more than the mere ipsidixit of “I say I can make that money, therefore I can”—and instead require plaintiffs to eventually establish both the existence and amount of the profits allegedly lost to a reasonable certainty. See Schonfeld v. Hilliard, 218 F.3d 164, 172–75 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 (2d Cir.2000); Ho Myung Moolsan, Co. Ltd. v. Manitou Mineral Water, Inc., 07 Civ. 7483, 2010 WL 4892646, at *8 (Dec. 2, 2010); Pot Luck LLC v. Freeman, 06 Civ. 10195, 2010 WL 908475, at *3 (S.D.N.Y. Mar.8, 2010). *2 But plaintiffs' complaint here simply asserts that plaintiffs “would [have made] over $1 million per year in profits”—and makes no other proffer whatsoever concerning that allegation. This is insufficient to support a claim for lost profits, even at the motion to dismiss stage. And without those damages, the complaint does not allege an injury in excess of $75,000. Because plaintiffs have alleged absolutely no facts suggesting that their actual recoverable damages are any more than $12,157.08—far below the $75,000 required for diversity jurisdiction to lie—the Court lacks jurisdiction over this action and must dismiss it. Accordingly, the Court dismisses this action sua sponte without prejudice, and denies defendants' motion to dismiss as moot. BACKGROUND The following facts are drawn from the First Amended Complaint (the “FAC”), the documents attached thereto, and the documents incorporated therein, and are construed in the light most favorable to plaintiffs. Policemen's Annuity & Benefit Fund of City of Chicago v. Bank of Am., NA, ––– F.Supp.2d ––––, 2012 WL 6062544, at *1 (Dec. 7, 2012). The Parties and the Dispute Plaintiff ACCD is an agricultural technologies company targeting international farming markets, and specifically China. (FAC ¶ 9.) Plaintiff Meltzer is the president, CEO, and a director of ACCD. ( Id. ¶ 2.) Collectively as shareholders, Meltzer formed ACCD with defendant Perry, and two other individuals not involved in this lawsuit. (Id. ¶¶ 11, 16, 17.) Perry had worked in “crop production ... farming, agronomy, and soil sciences” for four decades, and served as vice president, treasurer, and a director of ACCD. (Id. ¶¶ 10, 11, 16, 18.) Perry was and is also the sole member and owner of defendant FTN—another soil sciences company. (Id. ¶¶ 12, 13.) Meltzer had initially sought to pursue a business enterprise with Perry because of Perry's representations concerning his soil sciences expertise. (See id. ¶¶ 10, 13–15.) Specifically, Perry told Meltzer that his and FTN's soil science technology allowed for significant production improvements over regular farming techniques. (Id. ¶¶ 13–15.) 1 But Perry “failed to provide supporting data to ACCD” to back up his representations, and—allege plaintiffs—those representations “were not accurate.” (Id. ¶ 13; see also id. ¶¶ 14, 15.) Despite Perry's failure to provide ACCD with data, ACCD still “projected that one farm of 5,000 acres ... with Perry's alleged expertise ... would generate over $1 million per year in profits.” (Id. ¶ 38.) The FAC contains no factual support or data whatsoever concerning the more-than$1 million per-year-per-farm profits projected by ACCD. In May 2011, Meltzer and Perry, and others, formed ACCD through execution of a “Shareholders Agreement.” (Id. ¶ 11; see also id. Ex. 1 (the “Shareholders Agreement”).) That agreement contained provisions, inter alia: *3 • Requiring that Perry-and the other shareholders —devote “commercially reasonable” time to ACCD (Shareholder Agreement ¶ 7); • Requiring that Perry license the FTN technology to ACCD for $1.00 per year—until such time as ACCD “accept[s] its initial funding,” at which point requiring that Perry sell the technology to ACCD for $1.00, which would then license the technology to FTN for $1.00, provided that FTN use the technology only domestically (id. ¶ 8); and • Requiring that a departing shareholder not compete with ACCD for two years, but permitting Perry to run FTN domestically provided he had no contact with ACCD's customers (id. ¶ 20). By late 2011, however, the relationship between Meltzer and Perry had broken down. Perry allegedly interfered in various ways in ACCD's operations, (see FAC ¶¶ 23–27), and eventually resigned in December 2011. (Id. ¶ 28.) Due to that resignation, ACCD was denied “Perry's alleged expertise and his involvement and active participation.” (Id. ¶ 38.) Accordingly, ACCD was alleged denied the projected morethan-$1 million per-year-per-farm profits the Meltzer/Perry collaboration would have generated. Facts Relating to Diversity Jurisdiction and Damages Diversity jurisdiction in cases with domestic parties requires that “the matter in controversy exceeds the sum or value of © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 $75,000, exclusive of interest and costs, and is between ... citizens of different states.” 28 U.S.C. § 1332(a)(1). The parties on one side of the litigation must be completely diverse from the parties on the litigation's other side—that is, “no plaintiff can be a citizen of the same state as a defendant.” Aurora Loan Servs. LLC v. Sadek, 809 F.Supp.2d 235, 239 (S.D.N.Y.2011). There is no dispute in this case that all plaintiffs are fully diverse from all defendants—plaintiffs are citizens of New York, and defendants are citizens of Maine. (FAC ¶¶ 1–4.) There is also no present dispute amongst the parties as to the amount in controversy—defendants do not raise the issue in their pending motion to dismiss. But, the court's “independent obligation to ... raise and decide jurisdictional questions that the parties either overlook or elect not to press,” Henderson, 131 S.Ct. at 1202, requires that the Court examine the FAC's damages allegations on its own. Plaintiffs' allegations concerning injury, harm, or otherwise suggesting damages, are—in toto—the following: • Perry interfered with ACCD's operations in late 2011 by (1) impeding ACCD's “testing efforts”; (2) failing to pursue business opportunities in Mexico; (3) failing to pursue “citrus greening trials”; (4) “pull[ing]” an employee off an ACCD project; (5) “hav[ing] private conversations with” another employee 2 ; and (6) “fail[ing] to set up private meetings for Meltzer with ... industry leaders.” (FAC ¶¶ 23–26.) There is not a single allegation as to how these alleged harms affected ACCD, either in terms of dollar amounts or in terms of practical consequences. *4 • Perry told Meltzer that Meltzer should restructure ACCD, however “Perry was not committed to the” restructuring, and “the restructuring was never completed.” (Id. ¶¶ 34–35.) What affect this had on ACCD or Meltzer, in terms of dollars, is not alleged. • Perry and FTN have been competing with ACCD in violation of the Shareholders Agreement. (Id. ¶¶ 36–37.) What affect this has had on ACCD or Meltzer, in terms of dollars or in terms of practical consequences, is not alleged. • Meltzer “advanced” certain sums to Perry totaling $12,157.08 for certain business and personal expenses. Perry never paid Meltzer back. (Id. ¶¶ 31–33.) • Due to Perry's alleged wrongful refusal to continue working with Meltzer and ACCD, ACCD has been unable to achieve its business plans. Specifically, “ACCD [had] projected that one farm of 5,000 acres under its management ... which [was] denied to ACCD by Perry's misconduct ... would generate over $1 million per year in profits to ACCD. Thus, ACCD's damages for its lost profits due to Perry's and FTN's misconduct are well in excess of $1 million.” (Id. ¶ 38.) Procedural History ACCD and Meltzer initially sued Perry and FTN on August 16, 2012. (ECF No. 1.) Defendants moved to dismiss, but before the Court ruled on that motion, plaintiffs filed the current FAC on October 12, 2012. (ECF No. 11.) Defendants then filed the current motion on October 26. That motion seeks dismissal of five of the FAC's seven counts—all on Rule 12(b)(6) grounds. (See ECF No. 13.) Shortly thereafter, on December 12, 2012, this action was transferred from Judge Barbara S. Jones to the undersigned. (ECF No. 17.) DISCUSSION Legal Standards “A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it.” Makarova v. United States, 201 F.3d 110, 113 (2000); see Williams v. Skyline Auto. Inc., 11 Civ. 8318, 2012 WL 1965334, at *2 (S.D.N.Y. May 24, 2012). To survive a Rule 12(b)(1) challenge to the Court's subject matter jurisdiction, the plaintiff must “allege facts that affirmatively and plausibly” suggest that jurisdiction exists. Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir.2011); see GMA Accessories, Inc. v. Dorfman–Pacific Co., Inc., 11 Civ. 3731, 2012 WL 899385, at *3 (March 16, 2012) (dismissal is proper “when the complaint fails to allege sufficient allegations to support subject matter jurisdiction”). The Court draws all well-pleaded facts from the complaint— and the documents attached thereto and incorporated therein © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 —assumes such facts to be true, and construes reasonable inferences in the plaintiffs' favor. Amidax, 671 F.3d at 145. The constitutional and statutory basis for jurisdiction in a diversity case such as this one is found in 28 U.S.C. § 1332. That section requires that “the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different states.” § 1332(a)(1). 28 U.S.C. Lost Profits Damages *5 The only injury or damages alleged by the FAC, other than ACCD's lost profits, consists of the $12,157.08 Meltzer allegedly loaned or advanced Perry that Perry never paid back. Otherwise, the only damages articulated by plaintiffs are the “in excess of $1 million” of lost profits based on ACCD's alleged “project[ion] that one farm of 5,000 acres ... would generate over $1 milion per year in profits.” (See FAC ¶¶ 31–33, 38.) A plaintiff may recover lost profits “only if he can establish both the existence and amount of such damages with reasonable certainty. The damages may not be merely speculative, possible or imaginary ... and must be capable of measurement based upon known reliable factors without undue speculation.” Schonfeld, 218 F.3d at 172 (quotation marks and citations omitted). Thus, a party claiming lost profits must eventually prove that it would have been able to pursue its business venture on the price, cost, and quantity terms it contemplates. See Ho Myung Moolsan, 2010 WL 4892646, at *8. “A court should be hesitant ... to rely on stated assumptions as to the” operating success of a proposed business venture. Id.; see Dupont Flooring Sys., Inc. v. Discovery Zone, Inc., 98 Civ. 5101, 2004 WL 1594629, at *7 (S.D.N.Y. July 14, 2004) (“Courts repeatedly have rejected claims for lost profits that rest on a series of assumptions and projections.”) (quotation marks omitted; collecting cases); Coastal Aviation. Inc. v. Commander Aircraft Co., 937 F.Supp. 1051, 1070 (S.D.N.Y.1996) (“To award plaintiff lost profits based on the unproven assumption that it would have [succeeded in its business ventures] would unjustly reward plaintiff rather than make it whole.”) Moreover, “evidence of lost profits from a new business venture receives greater scrutiny because there is no track record upon which to base an estimate.” Schonfeld, 218 F.3d at 172. Thus, “[p]rojections of future profits based upon a multitude of assumptions that require speculation and conjecture and few known factors do not provide the requisite certainty.” Id.; see Robin Bay Assocs., LLC v. Merrill Lynch & Co., 07 Civ. 376, 2008 WL 2275902, at *7 (S.D.N.Y. June 3, 2008) (“the obvious reason [is] that there does not exist a reasonable basis of experience upon which to estimate lost profits”). Indeed, for 100 years, the New York Court of Appeals has been “reluctant” to award lost profits in cases involving new business ventures. See Cramer v. Grand Rapids Show Case Co., 223 N.Y. 63, 119 N.E. 227, 228–29 (N.Y.1918). 3 Finally, if sought on breach of contract claims, 4 plaintiff must additionally eventually prove that “lost profit damages,” specifically, “were within the contemplation of the parties when the contract was made.” Schonfeld, 218 F.3d at 172; Robin Bay, 2008 WL 2275902, at *7 (“To recover lost profits the plaintiff must show both that the alleged loss is capable of proof with reasonable certainty and that the damages were fairly within the contemplation of the parties.”). *6 “Though courts often address the issue of lost profits at the summary judgment stage, New York courts have dismissed claims for lost profits where the pleadings suggest that an award of lost profits would require an unreasonable level of speculation.” Robin Bay, 2008 WL 2275902, at *7 (on motion to dismiss, dismissing claims for lost profits arising from proposed construction of a casino in St Croix because “court would have to assume” that plaintiff would obtain funding to purchase land, secure proper licenses, complete construction, and operate the business profitably, when the industry was “in its infancy”); 5 see also Pot Luck, 2010 WL 908475, at *3 (on motion to dismiss, dismissing claims for lost profits arising from proposed distribution of film in certain regions because such claims would require the court to assume the existence of markets in those regions, the terms of any distributorship agreements in those regions, the efforts of retained distributors, and the effectiveness of those efforts); Calip Dairies, Inc. v. Penn Station News Corp., 262 A.D.2d 193, 194, 695 N.Y.S.2d 70 (1st Dep't 1999) (“The cause of action for lost profits was also properly dismissed [on motion to dismiss under N.Y. C.P.L.R.] because the profits alleged to have been lost could not be determined with a reasonable degree of certainty.”); Lama Holding Co. v. Smith Barney Inc., 215 A.D.2d 314, 315, 627 N.Y.S.2d 33 (1st Dep't 1995; 676 R.S.D. Inc. v. Scandia Realty, 195 A.D.2d 387, 387, 600 N.Y.S.2d 678 (1st Dep't 1993). © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 There is not a single allegation in the FAC in the case at bar suggesting that ACCD would ever have been profitable in China or the other international farming markets the FAC alleges were its targets. (See FAC ¶ 9.) As a preliminary matter, the Court notes that such allegations-well-pleaded, and with support—should not have been or be difficult for plaintiffs to produce. Indeed, it is plaintiffs' business whose profits are alleged to have been destroyed. It is there plaintiffs who should have the records and models and projections— without any need for discovery, or any other process—to support any allegations that ACCD would have made the many millions in lost profits that plaintiffs claim. But there is no allegation that ACCD could acquire land in China on which to operate any farms; nor that ACCD could acquire any Chinese legal rights or licenses to operate the farms; nor that technologically-advanced farming in China is even possible, practically or legally; nor that ACCD could build the farms; nor that ACCD could find laborers with the necessary experience with technologically-advanced farming; nor that ACCD could find laborers at all; nor that the FTN farming techniques would be effective. Nor is there any well-pleaded allegation even that ACCD could operate the farms profitably. Indeed, there is no allegation that ACCD or Meltzer had ever been successful in any venture similar to ACCD. And while the FAC alleges that Perry told Meltzer that Perry had had success in prior similar ventures, the FAC specifically alleges that Perry was lying when he made those representations. (See FAC ¶¶ 13–15.) It seems odd to accuse an individual of lying about his credentials and, in the very next breath, claim damages based—essentially—solely on the withheld expertise of that individual. Likewise, the Court cannot— and will not—assume the effectiveness and profitability of unproven farming techniques that plaintiffs themselves allege were not as effective as they were represented to be. *7 In the absence of well-pleaded allegations supporting any of the facts listed above, “there is simply no basis for the court to determine lost profits at this point or any other stage of the litigation because such a calculation would require a high degree of speculation.” Robin Bay, 2008 WL 2275902, at *8. Indeed, “a high degree of speculation” puts it lightly. Plaintiffs' damages claims based on ACCD's alleged lost profits are therefore dismissed. The FAC is thus left with a claim for $12,157.08 in money Meltzer advanced Perry, which Perry never repaid. But this is below the $75,000 threshold required by 28 U.S.C. § 1332(a). Accordingly, the Court lacks subject matter jurisdiction and must dismiss this action. CONCLUSION For the reasons stated above, plaintiffs' FAC is dismissed. This dismissal is without prejudice, and plaintiffs are hereby granted leave to file a second amended complaint not later than March 11, 2013. Defendants' motion to dismiss is denied as moot. The Clerk of the Court is directed to terminate the motion at ECF No. 12. SO ORDERED. All Citations Not Reported in F.Supp.2d, 2013 WL 840706 Footnotes 1 2 3 Perry allegedly told Meltzer that his and FTN's technology provided (1) “at least a 30% increase in production for nearly every crop ... for 15 years”; (2) “crop yields of 20% to 100% over the traditional N, P, K fertilizer program; and (3) “high end yield increases (of up to over 120%) for 11 different crops.” (FAC ¶¶ 13–15.) The content of those conversations is not alleged. “I have pointed out the limited business experience of plaintiffs, the fact that the enterprise was an adventure in a locality where neither one of them had before been engaged in business. No doubt the plaintiffs entertained hope that the business venture upon which they were about to embark would prove successful. Such © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 ACCD Global Agriculture Inc. v. Perry, Not Reported in F.Supp.2d (2013) 2013 WL 840706 expectation was evidently based upon a consideration of the resident population of the city of Amsterdam, the business activity of the residents of that city, and the number and character of competitors in the same general line of business. Plaintiffs, however, had no assurance that the venture would not prove to be a failure. At the time the contract was made they had the lease of a vacant unfinished store. They had not as yet purchased goods, placed goods on sale, or secured one customer. They had before them the labor of building up a new business. Nevertheless, the courts below have held that plaintiffs may recover for the breach of the contract such an amount of profits as they would have made had they not been prevented from starting in business, such damages not to be based upon a business theretofore carried on, but measured by profits during a period of time corresponding to the period of interruption one year later. Therein material error was committed. ... A distinction exists between the interruption of an established business and a new venture. The owner of an established business may have it in his power to establish with reasonable certainty the amount of capital invested, the monthly and yearly expenses of operating his business, and the daily, monthly, or yearly income he derived from it for a long time prior thereto and for the time during which the interruption of which he complains continued, thereby furnishing a reasonably correct estimate of the nature of the legal injury and the amount of damages which resulted therefrom. While evidence of such facts may be admissible they must not be uncertain or problematical. The requirement imposed upon one whose business has been established and interrupted cannot be enforced as to him and made less stringent to one embarking in a new business who cannot furnish data of past business from which the fact that anticipated profits would have been realized 4 5 can be legally deduced.” 119 N.E. at 228–29 (internal citations omitted). Plaintiffs' FAC lists seven counts—some of which are plead “in the alternative” from each other—including one for breach of contract. Because no count includes a statement of the damages arising from that count, it is impossible for the Court to determine what damages claims are linked to which legal counts. Indeed, the Robin Bay case is particularly instructive because there—like in the case at bar—the party against whom lost profits were claimed acted in the venture as an adviser without whom the venture could not proceed for lack of the venturers' expertise. Moreover, like this case, the claims in that case arose under contract, negligence, and fiduciary duty theories. See 2008 WL 2275902, at ––––1–2, 7–8. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 6 Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015) 2015 WL 2124365 Home Loan Serv., 3:14–CV–53 (CSH), ––– F.Supp.3d ––––, 2015 WL 2124365 Only the Westlaw citation is currently available. United States District Court, D. Connecticut. Luis GONZALEZ and Sonia Gonzalez, Plaintiffs, v. OCWEN HOME LOAN SERVICING, Sand Canyon Corporation, Dale M. Sugimoto, Fabiola N. Camperi, Matthew A. Engel, William S. Smith, Leopold & Associates, Option One Mortgage Corporation, American Home Mortgage Service, Inc., Deutsche Bank National Trust Company, Soundview Home Loan Trust 2005–OPT3, Hunt Leibert Jacobson PC, Benjamin T. Staskiewicz, S. Bruce Fair, Esq., Jon Doe, Jan Doe, Hinshaw & Culbertson, LLP, Valerie Nicole Doble, Defendants. Civil Action No. 3:14–CV–53 (CSH). | Signed May 6, 2015. Attorneys and Law Firms Sonia Gonzalez, East Windsor, CT, pro se. Valerie N. Doble, Hinshaw & Culbertson, LLP, Boston, MA, for Defendants. RULING ON PLAINTIFFS' MOTION TO REARGUE AND REQUEST FOR JUDGE TO RECONSIDER/ARTICULATE [Doc. 15] HAIGHT, Senior District Judge: I. INTRODUCTION *1 Pro se Plaintiffs Luis Gonzalez and Sonia Gonzalez brought this action against various defendant mortgage companies, banks, and individuals (counsel to and executives for said mortgage companies and banks), alleging violations of the United States Constitution and the United Nations Declaration on the Rights of Indigenous Peoples, “banking fraud,” and conspiracy with respect to the foreclosed mortgage of 54 Abbe Road, East Windsor, Connecticut (the “East Windsor Property”). 1 On February 25, 2015, the Court entered an “Order of Dismissal” [Doc. 13], dismissing Plaintiffs' action with prejudice. See Gonzalez v. Ocwen 2015 WL 778432 (D.Conn. Feb. 25, 2015). 2 In particular, the Court dismissed the action in its entirety because the Court determined that it lacked subject matter jurisdiction and the complaint failed to set forth any claims upon which relief may be granted in that it contained only frivolous or legally impossible claims. 3 2015 WL 778432, at *4– 11. Furthermore, the Court found that Plaintiffs failed to serve Defendants with process (the summons and complaint), Fed.R.Civ.P. 4(c)(1), 4(m), and failed to prosecute the action for more than six months, Fed.R.Civ.P. 41(b), both constituting alternative grounds for dismissal. 4 Id., at *11– 14. II. DISCUSSION Pending before the Court is Plaintiffs' “Motion to Reargue and Request for Judge to Reconsider/Articulate” [Doc. 15]. The Court construes this pro se motion as one for reconsideration and/or oral argument with respect to the Court's “Order of Dismissal” of Plaintiffs' Amended Complaint [Doc. 13]. The standard for granting a motion for reconsideration “is strict, and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.” Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir.1995); accord Mir v. Shah, 569 F. App'x 48, 50 (2d Cir.2014) (same). See also Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir.1992), cert. denied, 506 U.S. 820 (1992) (“The major grounds justifying reconsideration are ‘an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice.’ ”) (quoting 18 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 4478 at 790); Kolel Beth Yechiel Mechil of Tartikov, Inv. v. YLL Irrevocable Trust, 729 F.3d 99, 104 (2d Cir.2013) (same) (citing Virgin Atl. Airways, 956 F.2d at 1255). “It is well-settled that a motion for reconsideration is ‘not a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing on the merits, or otherwise taking a ‘second bite at the apple.’ “ Driessen v. Royal Bank Int'l, No. 3:14–CV–01300, 2015 WL 881205, *1 (D.Conn. Mar. 2, 2015) (quoting Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir.2012)). Put © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015) 2015 WL 2124365 simply, a “motion to reconsider should not be granted where the moving party seeks solely to relitigate an issue already decided.” Weiming Chen v. Ying–Jeou Ma, 595 F. App'x 79, 80 (2d Cir.2015) (citing Shrader, 70 F.3d at 257). *2 The Court has carefully reviewed Plaintiffs' submitted list of assertions in support of their motion for reconsideration. Pursuant to the Second Circuit's strict standard for reconsideration, the Court finds no adequate grounds— no controlling authority or factual information that the Court overlooked—to warrant reconsideration of its Order of Dismissal. Rather, Plaintiffs have once again set forth allegations in an attempt to challenge the validity of the state court foreclosure of the East Windsor Property, upon which Deutsche Bank, as Trustee, foreclosed the mortgage and took title to the property. The requested reconsideration and/or “reargument” (oral argument before the Court) would thus not reasonably be expected to alter the Court's ruling. The only potentially “new” evidence or data Plaintiffs presented on their motion for reconsideration included: (1) two letters from Howard F. Pitkin (“Pitkin letters”), the Banking Commissioner for the State of Connecticut, regarding a “National Ocwen Settlement” (herein “Settlement”) entered between the Consumer Financial Bureau and Ocwen Home Loan Servicing (“Ocwen”) with respect to various loans serviced by Homeward Residential Holdings, LLC (previously known as American Home Mortgage Servicing, Inc. or AHMSI); and (2) a photocopy of a check from “Ocwen Borrower Payment Account QSF” payable to Luis Gonzalez for $1,168.44 (dated 12/6/2014). Doc. 15, at 4–7. The Pitkin letters indicate that they relate to a mortgage loan with respect to “54 Abbe Road, E. Windsor, CT” and inform the “Borrowers” (recipients) that they “may be eligible to receive a payment of at least $700.00 as a part of the National Ocwen Settlement” because they “had a loan serviced by Homeward Residential Holdings LLC ... and lost [their] primary residence to foreclosure between January 1, 2009 and December 31, 2012.” 5 In presenting the Pitkin letters and/or the National Settlement payment to Luis Gonzalez, Plaintiffs once again seek to challenge the state court's final judgment of foreclosure. As stated in the Order of Dismissal, pursuant to the Rooker–Feldman doctrine, this Court remains barred from reconsidering that foreclosure judgment. See, e.g., Swiatkowski v. Bank of America, NT & SA, 103 F. App'x 431, 432 (2d Cir.2004) (affirming district court's “holding that under the Rooker–Feldman doctrine, the [district] court lacked subject matter jurisdiction: even reading the complaint liberally, ... [plaintiffs'] lawsuit was effectively seeking to re-litigate a judgment of foreclosure entered against them by the state court”); Ford v. U.S. Dep't of Treasury Internal Revenue Serv., 50 F. App'x 490, 491 (2d Cir.2002) (affirming district court's dismissal of plaintiff's complaint for lack of subject matter jurisdiction under the Rooker–Feldman doctrine where plaintiff's claims asserted alleged fraud and the statute of limitations with respect to the state court foreclosure judgment; Second Circuit held such claims were “inextricably intertwined with the state court's underlying foreclosure judgment,” so that, in “seek[ing] a declaration that the foreclosure judgment [was] void,” plaintiff was effectively seeking a “reversal of the state court foreclosure judgment”); Billie v. Aurigremma, No. 3:13–cv–1432 (JBA), 2013 WL 6331358, at *2 (D.Conn. Dec. 5, 2013) (“any claims contesting the validity of the state court foreclosure judgment are precluded by the Rooker–Feldman doctrine”); Andrews v. Citimortgage, Inc., No. 14–CV–1534(JS)(AKT), 2015 WL 1509511, at *5 (E.D.N.Y. Mar. 31, 2015) (“in the Second Circuit, any attack on a judgment of foreclosure is ... barred by the Rooker–Feldman doctrine”) (citation omitted) (collecting cases). In addition, the Rooker–Feldman doctrine also bars challenges to the state court foreclosure judgment as “obtained fraudulently.” Vossbrinck v. Accredited Home Lenders, Inc., 773 F.3d 423, 427 (2d Cir.2014) (per curiam ). *3 In the case at bar, Plaintiffs lost in state court regarding foreclosure of their property, complain of injuries caused by that state court judgment, invite federal district court review and rejection of the state court foreclosure, and commenced this federal suit after the state court judgment was rendered. See, e.g., McKithen v. Brown, 481 F.3d 89, 97 (2d Cir.2007) (setting forth “four requirements for the application of Rooker–Feldman” doctrine). This Court therefore lacks subject matter jurisdiction over the present action pursuant to the Rooker–Feldman doctrine. 6 No evidence presented by Plaintiffs for reconsideration contradicts the Court's threshold finding that it lacks subject matter jurisdiction. Absent such jurisdiction, the Court is barred from proceeding in this matter and must dismiss. See Fed.R.Civ.P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action .”). See also Manway Constr. Co. v. Housing Auth. of Hartford, 711 F.2d 501, 503 (2d Cir.1983) (“It is common ground that in our federal system of limited jurisdiction any © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015) 2015 WL 2124365 party or the court sua sponte, at any stage of the proceedings, may raise the question of whether the court has subject matter jurisdiction; and, if it does not, dismissal is mandatory.”) (emphasis added). Court [Doc. 13], which directed dismissal of the action with prejudice. The Court therefore DENIES Plaintiffs' motion for reconsideration [Doc. 15]. It is SO ORDERED. All Citations III. CONCLUSION In sum, Plaintiffs have presented no legal authority or new evidence which would reasonably alter the prior Order of this Not Reported in F.Supp.3d, 2015 WL 2124365 Footnotes 1 2 3 Plaintiffs also included two defendants with the generic names of “Jon Doe” and “Jan Doe.” It is unclear whom Plaintiffs sought to represent with these designations. The full facts and circumstances of the case are set forth in the February 25 Order, familiarity with which is assumed. See also Gonzalez v. Option One Mortg. Corp., No. 3:12–CV–1470 (CSH), 2014 WL 2475893, at *1 (D.Conn. June 3, 2014) (dismissing prior federal case in which Plaintiffs also challenged foreclosure on East Windsor Property); Gonzalez v. United States, No. 3:13–CV–650 (CSH), 2014 WL 3738179, at *1 (D.Conn. July 29, 2014) (same). With respect to lack of subject matter jurisdiction, Plaintiffs' claims presented no grounds for “federal question” jurisdiction, 28 U.S.C. § 1331; and there was also no complete “diversity of citizenship” in that Plaintiffs and multiple defendants were all citizens of Connecticut at the commencement of the action. See 28 U.S.C. ¶ 1332(a) (“[t]he district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between ... citizens of different States ”) (emphasis added). Plaintiffs' claims were also barred by the “Rooker–Feldman” doctrine in that Plaintiffs sought to challenge final state court judgments, which foreclosed on the East Windsor property and passed title to Deutsche Bank. See Rooker v. Fid. Trust Co., 263 U.S. 413 (1923); D.C. Court of Appeals v. Feldman, 460 U.S. 462 (1983). For the Rooker—Feldman doctrine to apply, (1) a plaintiff must have lost in state court; (2) his injury must have been caused by a state court judgment; (3) he must have invited federal review of that state court judgment; 4 5 and (4) the state court judgment must have been entered before his federal suit commenced. McKithen v. Brown, 481 F.3d 89, 97 (2d Cir.2007). This Court therefore lacked jurisdiction to consider Plaintiffs' claims. The Court clarified that it “would ordinarily grant Plaintiffs a brief additional period within which to effect proper service before dismissing the complaint without prejudice,” but “granting Plaintiffs additional time for service would be futile because their Complaint is fatally defective in that it sets forth ‘frivolous' claims which cannot be remedied by amendment.” 2015 WL 778432, at *12. Similarly, the Court found “no point” in providing Plaintiffs with additional days to serve the summons and complaint because the Amended Complaint “sets forth exclusively frivolous and/or legally impossible claims.” Id., at *13. Pursuant to Federal Rule 401 of Evidence, the Court takes judicial notice of the “Consent Judgment” which gave rise to the National Ocwen Settlement payments. See Consumer Fin. Protection Bureau v. Ocwen Fin., Corp., No. 1:13–cv–2025 (RMC) (D.D.C. Feb. 26, 2014), Doc. 12. Pursuant to Exhibit B of that judgment, “[t]he purposes of the payments ... are remedial and relate to the reduction in the proceeds deemed realized by borrowers for tax purposes from the foreclosure sale of residential properties owned by the borrowers allegedly resulting from the allegedly unlawful conduct of Ocwen.” Id., Doc. 12–2, at ¶ 7. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 Gonzalez v. Ocwen Home Loan Servicing, Not Reported in F.Supp.3d (2015) 2015 WL 2124365 6 See also https:// nationalocwensettlement.com (website for National Settlement, declaring that the Consent Judgment addresses Ocwen's alleged “misconduct during the mortgage servicing process.”) (visited May 4, 2015). It thus follows that the letters presented by Plaintiffs do not indicate that foreclosure on the East Windsor Property was wrongful or invalid. Rather, they address possible errors in mortgage servicing by Ocwen or its subsidiaries. Either reading of the letters, however, does not alter the Court's finding that any such challenge to the state court foreclosure judgment is barred by the Rooker–Feldman doctrine. The Court also notes that Plaintiffs have presented no data that the Court overlooked in finding that neither “federal question” nor “diversity of citizenship” subject matter jurisdiction exists in this action. See 28 U.S.C. §§ 1331, End of Document 1332(a), respectively. © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 McDermott v. Cicconi, Not Reported in F.Supp.2d (2011) 2011 WL 4834257 the sufficiency of the allegations set forth in the complaint in KeyCite Red Flag - Severe Negative Treatment Report and Recommendation Rejected by McDermott v. Cicconi, N.D.N.Y., October 12, 2011 2011 WL 4834257 Only the Westlaw citation is currently available. United States District Court, N.D. New York. Brian E. McDERMOTT, Plaintiff, v. Zebra CICCONI and David A. Stallone, Supt., Defendants. No. 6:11–CV–1059 (MAD/ATB). | Sept. 20, 2011. Attorneys and Law Firms Brian E. McDermott, pro se. ORDER and REPORT–RECOMMENDATION ANDREW T. BAXTER, United States Magistrate Judge. *1 The Clerk has sent to the court a civil rights complaint, together with an application to proceed in forma pauperis (IFP), filed by pro se plaintiff, Brian E. McDermott. (Dkt.Nos.1, 2). I. In Forma Pauperis (IFP) Application A review of plaintiff's IFP application shows that he declares he is unable to pay the filing fee. (Dkt. No. 2). In his application, plaintiff states that he is not employed and has no money or assets from any sources. (Dkt. No. 2). Plaintiff states that his last employment date was August 23, 2011, and that he was working for AdvantageRN, an Ohio company. (Dkt. No. 2 at ¶ 2(b)). Plaintiff states that he received $ 726.00 for the pay period ending August 27, 2011, but that he has no checking or savings accounts. (Id.) Plaintiff's only dependent is his wife. (Id. ¶ 6). After reviewing plaintiff's application, this court finds that he meets the financial criteria for proceeding without the payment of fees for purposes of this recommendation. In addition to determining whether plaintiff meets the financial criteria to proceed IFP, the court must also consider light of 28 U.S.C. § 1915, which provides that the court shall dismiss the case at any time if the court determines that the action is (i) frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief. U.S.C. § 1915(e)(2)(B) (i)-(iii). 28 In determining whether an action is frivolous, the court must consider whether the complaint lacks an arguable basis in law or in fact. Neitzke v. Williams, 490 U.S. 319, 325, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). Dismissal of frivolous actions is appropriate to prevent abuses of court process as well as to discourage the waste of judicial resources. Neitzke, 490 U.S. at 327; Harkins v. Eldridge, 505 F.2d 802, 804 (8th Cir.1974). Although the court has a duty to show liberality toward pro se litigants, and must use extreme caution in ordering sua sponte dismissal of a pro se complaint before the adverse party has been served and has had an opportunity to respond, the court still has a responsibility to determine that a claim is not frivolous before permitting a plaintiff to proceed. Fitzgerald v. First East Seventh St. Tenants Corp., 221 F.3d 362, 363 (2d Cir.2000) (finding that a district court may dismiss a frivolous complaint sua sponte even when plaintiff has paid the filing fee). To survive dismissal for failure to state a claim, the complaint must contain sufficient factual matter, accepted as true, to state a claim that is “plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Bell Atl. Corp., 550 U.S. at 555). The court will now turn to a consideration of the plaintiff's complaint under the above standards. II. Complaint *2 In his complaint, plaintiff alleges that he worked as a nurse at Cayuga Correctional Facility (CCF), a facility within the New York State Department of Corrections and Community Supervision (“DCCS”) . 1 On April 11, 2011, plaintiff states that he submitted a “Work Place [sic] Harassment Complaint” to defendant Ciccioni. (Compl. ¶ © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 McDermott v. Cicconi, Not Reported in F.Supp.2d (2011) 2011 WL 4834257 4; Dkt. No. 1 & Pl.'s Ex. I). Plaintiff states that on April 12, defendant Cicconi made plaintiff sign two probationary employee evaluations, at the same time, allegedly contrary to DCCS personnel policy. Plaintiff states that one evaluation was a “6 week” evaluation, and the other was a “10 week” evaluation. (Id. & Pl.'s Exs. II—III). Plaintiff claims that both of these evaluations were late, and the second evaluation was full of allegations of undocumented and unsubstantiated misconduct against plaintiff. (Id. & Pl.'s Ex. II). Plaintiff states that defendant Cicconi's purpose in issuing these poor performance evaluations was to retaliate against plaintiff for his April 11, 2011 harassment complaint. (Id.) As a result, plaintiff resigned from his employment at Cayuga Correctional Facility on May 4, 2011. (Compl. Ex. V; Pl.'s Ltr. of Resignation). Plaintiff also alleges that, on May 12, 2011, after plaintiff's resignation, defendant Stallone took the unprecedented step of posting a picture of plaintiff in the lobby of the facility, warning that plaintiff was not allowed past the lobby. (Id. & Pl .'s Ex. IV; Memorandum to Lobby Officer)). The complaint contains two “Causes of Action.” (Compl.¶ 5). The “First Cause of Action” states that defendant Ciccone violated the “NYS DOCS Employee Service Manual” when she made plaintiff sign two evaluations on the same date, subsequent to his filing a complaint of workplace harassment. Plaintiff's “Second Cause of Action” states that defendant Stallone violated plaintiff's rights when he posted plaintiff's picture on the wall, banning plaintiff from the facility, for everyone to see, also in retaliation for plaintiff's harassment complaint. 2 Plaintiff seeks substantial monetary relief “for ten years of employment had Plaintiff not been harassed and forced to resign after Retaliation to a Whistleblower.” (Compl.¶ 6). III. Whistleblower Protection Act Plaintiff cites as his basis for jurisdiction, the federal Whistleblower Protection Act, 5 U.S.C. § 2302(b)(8). Congress passed the Whistleblower Protection Act in order to provide “federal employees with the right to seek corrective action from the [Merit Systems Protection Board] whenever a personnel action has been taken in retaliation for certain whistleblowing activities.” Mulero Abreu v. Oquendo–Rivera, 729 F.Supp.2d 498, 523–24 (D.P.R.2010) (quoting Fields v. DOJ, 452 F.3d 1297, 1302 (Fed.Cir.2006)) (emphasis added). Plaintiff in this case is not a federal employee, and therefore, this whistleblower legislation does not apply to him. Federal jurisdiction for this action may not be based upon the federal statute he cites in the complaint. IV. Alternative Bases for Jurisdiction *3 The court notes that plaintiff raises only the federal Whistleblower Protection Act as his basis for federal jurisdiction, and the case could be dismissed for that reason alone. The court must keep in mind, however, that when a plaintiff proceeds pro se, particularly when he or she claims violations of civil rights, the pleadings must be construed with great liberality. Sealed Plaintiff v. Sealed Defendants, 537 F.3d 185, 191 (2d Cir.2008) (citation omitted). The court must interpret the pleadings to raise the strongest arguments they suggest. McPherson v. Coombe, 174 F.3d 276, 279 (2d Cir.1999) (quoting Burgos v. Hopkins, 14 F.3d 787, 790 (2d Cir.1994). Thus, the court will examine other possible bases for plaintiff's complaint. A. Other Federal Whistleblower Statutes There are several federal statutes prohibiting retaliation against whistleblowers, each of which is applicable to a specific type of individual or misconduct. See, e.g., 5 U.S.C. § 1221 (protecting federal employees from certain types of retaliation); 12 U.S.C. § 1441a(q) (protecting those reporting misconduct by the FDIC or the Thrift Depositor Protection Oversight Board); 18 U.S.C. § 1513(e) (Sarbanes Oxley provision for those who report corporate fraud); 31 U.S.C. § 3730(h) (False Claims Act whistleblower provision); 33 U.S.C. § 1367 (protecting employees who report violations of Clean Water Act). Clearly, none of these statutes apply in plaintiff's stated factual situation. B. Federal Employment Statutes There are other federal employment statutes that prevent retaliation for making complaints. See e.g. 42 U.S.C. § 2000e–3(a) (Title VII). Title VII prohibits discrimination based upon membership in a “protected class.” 42 U.S.C. § 2000e–2(a). Title VII also forbids an employer from discriminating against an employee because he or she has made a charge, testified, assisted, or participated in any manner in a Title VII investigation, proceeding or hearing. Id. In order to state a claim under Title VII, the plaintiff © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 McDermott v. Cicconi, Not Reported in F.Supp.2d (2011) 2011 WL 4834257 must show, among other factors, that he participated in a protected activity, defendant knew about that activity, and that there is a causal connection between the protected activity and an adverse employment action. See Jute v. Hamilton Sustrand Corp., 420 F.3d 166, 173 (2d Cir.2005). Participation in a protected activity includes expressing opposition to employment practices that are “unlawful under Title VII.” Swift v. Countrywide Home Loans, Inc., 770 F.Supp.2d 483, 489 (E.D.N.Y.2011). In this case, although plaintiff labeled his internal employment complaint “Harassment/Hostile Work Environment,” which sounds like a claim for employment discrimination under Title VII, plaintiff was not complaining about discrimination based upon race, color, religion, sex, or national origin. A review of plaintiff's complaint shows that he alleged he was harassed for being too slow, taking too long with a patient, and improperly handling paperwork. (Compl. Pl.'s Ex. I). He does not claim that he is a member of a protected group. He does not claim that his resignation was in any way related to complaints about violations of Title VII. Rather, he complained about his work environment in general, apparently related to the rudeness of his supervisors. plaintiff does not state a claim under Title VII. 3 Thus, C. First Amendment *4 The federal constitution also prohibits retaliation against adverse employment actions based upon protected speech. See e.g. Singh v. City of New York, 524 F.3d 361, 372 (2d Cir.2008). Such a claim would be brought under 42 U.S.C. § 1983. Id. However, in order to state a First Amendment claim, the plaintiff would first have to show that his speech addressed a matter of “public concern.” Id. A matter is of public concern when it relates to matters of political, social, or other community concerns. Id. (citing Connick v. Myers, 461 U.S. 138, 146, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983)). Matters of public concern involve an employee speaking as a citizen, and not as an employee, who is only complaining about a personnel decision. Id. Personal grievances are not protected under the First Amendment. Id. In this case, plaintiff's internal complaint was clearly a personal grievance, complaining about how he was being treated at work. There was no matter of “public concern” involved in his “harassment” complaint. Thus, he may not bring an action, claiming First Amendment violations under section 1983. D. New York Statutes New York State has a whistleblower statute that is specifically applicable to public employees. 4 See N.Y. Civ. Serv. Law § 75–b. However, this section does not apply to plaintiff's situation. Section 75–b provides that 2(a) A public employer shall not dismiss or take other disciplinary or other adverse personnel action against a public employee regarding the employee's employment because the employee discloses to a governmental body information: (i) regarding a violation of a law, rule or regulation which violation creates and presents a substantial and specific danger to public health or safety; or (ii) which the employee reasonably believes to be true and reasonably believes constitutes an improper governmental action N.Y. Civ. Serv. Law § 75–b(2)(a). Section 75–b only applies as a defense to disciplinary charges and does not permit the plaintiff to bring a separate claim for damages such as plaintiff is attempting to do in this case. See Dibiase v. Barber, No. CV 06–5355, 2008 WL 4455601, at *9 (E.D.N.Y. Sept. 30, 2008) (citing Perfetto v. Erie County Water Auth., No. 03–CV–439, 2006 WL 1888556, at *5 (W.D.N.Y. July 7, 2006)). Thus, plaintiff cannot base any action on the above state law sections. Even assuming that plaintiff could state a claim under some New York State statute, there would be no jurisdiction in federal court for such an action. There is clearly no diversity of citizenship, sufficient to assert jurisdiction under 28 U.S.C. § 1332. The other basis for jurisdiction is “federal question” under 28 U.S.C. § 1331. A well-pleaded complaint may allege federal question jurisdiction by either asserting a federal cause of action or presenting state claims that “ ‘necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.’ “ Broder v. Cablevision Sys. Corp., 418 F.3d 187, 194 (2d Cir.2005) (quoting Grable & Sons Metal Products, Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005)). © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 McDermott v. Cicconi, Not Reported in F.Supp.2d (2011) 2011 WL 4834257 *5 In this case, plaintiff's complaint is anything but wellpleaded, and the court is only speculating regarding the types of claims that plaintiff could be attempting to bring because of the liberality with which pro se plaintiffs are treated. After a review of the complaint and the potentially applicable law, this court finds that plaintiff's complaint does not state a claim, nor can a federal claim be stated based upon plaintiff's disagreement with the personnel action taken against him, regardless of the fact that his supervisor made him sign two performance evaluations in one day, and even if that action was in violation of the DCCS policy manual. Thus, although plaintiff may meet the financial criteria for IFP status, his complaint may be dismissed under (ii) for failure to state a claim. section 1915(e)(2)(B) V. Opportunity to Amend Generally, when the court dismisses a pro se complaint sua sponte, the court should afford the plaintiff the opportunity to amend at least once, however, leave to re-plead may be denied where any amendment would be futile. Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir.1993). In this case, the court finds that any attempt of the plaintiff to amend this complaint would be futile, and she would still be unable to state a federal claim. WHEREFORE, based on the findings above, it is RECOMMENDED, that plaintiff's complaint be DISMISSED SUA SPONTE WITH PREJUDICE pursuant to 29 U.S.C. § 1915(e)(2)(B) (ii) for failure to state a claim, and it is RECOMMENDED, that if the District Court adopts this recommendation, the court further certify that any appeal from this matter would not be taken in good faith pursuant to 28 U.S.C. § 1915(a)(3), and it is ORDERED, that the Clerk of the Court serve a copy of this Order on plaintiff in accordance with the Local Rules. Pursuant to 28 U.S.C. § 636(b)(1), the parties have fourteen (14) days within which to file written objections to the foregoing report. Such objections shall be filed with the Clerk of the Court. FAILURE TO OBJECT TO THIS REPORT WITHIN FOURTEEN (14) DAYS WILL PRECLUDE APPELLATE REVIEW. Roldan v. Racette, 984 F.2d 85, 89 (2d Cir.1993) (citing Small v. Sec'y of Health and Human Servs. ., 892 F.2d 15 (2d Cir.1989)); see also 6(e). 28 U.S.C. § 636(b) (1); FED. R. CIV. P. 72, 6(a), & All Citations ORDERED, that plaintiff's motion to proceed IFP (Dkt. No. 2) is GRANTED for purposes of filing only, and it is Not Reported in F.Supp.2d, 2011 WL 4834257 Footnotes 1 2 3 4 Although plaintiff refers to the Department as DOCS, on April 1, 2011, the New York State Department of Correctional Services (“DOCS”) and the New York State Division of Parole were merged into one agency, named the New York State Department of Corrections and Community Supervision. The court will refer to the department with its new acronym. The plaintiff's allegation that they posted his picture in the lobby is related to his retaliation claim and does not appear to be a separate action challenging the use of his photograph. The court would also point out that before bringing an action under Title VII, plaintiff would be required to exhaust his administrative remedies and obtain a “right to sue” letter. See McPherson v. New York City Dep't of Educ., 457 F.3d 211, 214 (2d Cir.2006) (requirements of a Title VII action in federal court). The other whistleblower statute does not apply to public employeer, and thus, plaintiff could not make use of that law as a basis for his claims. See Dibiase v. Barber, No. CV 06–5355, 2008 WL 4455601, at *5 (E.D.N.Y. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 McDermott v. Cicconi, Not Reported in F.Supp.2d (2011) 2011 WL 4834257 Sept. 30, 2008) (citing N.Y. Labor Law § 740); Balduzzi v. City of Syracuse, No. 96 Civ. 824, 1997 WL 52434, at *3–4 (N.D.N.Y. Feb.4, 1997) ( End of Document section 740 applies only to employees in the private sector). © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 Brown v. Peters, Not Reported in F.Supp. (1997) 1997 WL 599355 1997 WL 599355 Only the Westlaw citation is currently available. United States District Court, N.D. New York. Kenneth BROWN, Plaintiff, v. Andrew PETERS, Warden, Watertown Correctional Facility; Joseph Williams, Warden, Lincoln Work– Release Center; Francis J. Herman, Senior Parole Officer Interstate Bureau; T. Stanford, Senior Parole Officer; Deborah Stewart, Parole Officer; John Doe # 1, Parole Agent, Watertown Correctional Facility; John Doe # 2, Parole Agent, Lincoln Work Release Center; Susan Bishop, Director of Interstate Compact, South Carolina; Cecil Magee, Parole Officer, South Carolina; Frank Barton, Parole Officer, South Carolina; John McMahan, Parole Officer, South Carolina, Defendants. No. Civ.A. 95CV1641RSPDS. | Sept. 22, 1997. Attorneys and Law Firms Kenneth Brown, State Court Institute–Greene, Waynesburg, PA, plaintiff, pro se. Dennis C. Vacco, New York State Attorney General, The Capitol Albany, NY, for defendants Peters, Herman Stewart, Doe # 1, Doe # 2, and Williams, Jeffrey M. Dvorin, Assistant Attorney General, Carl N. Lundberg, Chief Legal Counsel, South Carolina Department of Probation, Columbia, SC, for defendants Bishop, Magee, Barton, McMahan, and Stanford, Carl N. Lundberg, of Counsel. DECISION AND ORDER POOLER, J. *1 The above matter comes to me following a Report– Recommendation by Magistrate Judge Daniel Scanlon, Jr., duly filed on April 17, 1997. Following ten days from the service thereof, the Clerk has sent me the entire file, including any and all objections filed by the parties herein. Plaintiff Kenneth Brown commenced this Section 1983 civil rights action on November 17, 1995. On February 12, 1996, Magistrate Judge Scanlon ordered Brown to submit an amended complaint alleging the specific acts committed by the individuals named as defendants which Brown claimed violated his constitutional rights. Brown filed an amended complaint on March 21, 1996. In his amended complaint, Brown alleged that defendants violated his rights under the Eighth and Fourteenth Amendments by failing to process properly his interstate compact paperwork, resulting in Brown being imprisoned pursuant to a parole hold when in fact he had never violated the conditions of his parole. For a more complete statement of Brown's claims, see his amended complaint. Dkt. No. 5. On August 5, 1996, defendants Peters and Williams made a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Dkt. No. 13; Dkt. No. 14, at 2. On August 19, 1996, defendants Bishop, Magee, Barton, and McMahan made a motion to dismiss the complaint against them or, in the alternative, for summary judgment. Dkt. No. 20. On October 17, 1996, defendants Herman, Stewart, and Stanford made a motion to dismiss for failure to state a claim. Dkt. No 34. On April 17, 1996, Magistrate Judge Scanlon recommended that all defendants' motions to dismiss be granted and that the complaint be dismissed. Dkt. No. 50. On June 9, 1997, Brown filed objections to the magistrate judge's report-recommendation, having been granted additional time in which to do so. Dkt. No. 52. In addition, Brown filed on June 9, 1997, a motion for leave to file a second amended complaint and a copy of his proposed amended complaint. Dkt. No. 53. I turn first to the last motion filed, Brown's motion for leave to amend his complaint a second time. Brown seeks to file a second amended complaint “setting forth in detail the personal involvement of each defendant and how their acts of commission and omission served to deprive plaintiff of Constitutionally secured rights.” Dkt. No. 53. The district court has discretion whether to grant leave to amend. Ruffolo v. Oppenheimer & Co., 987 F.2d 129, 131 (2d Cir.1993). In exercising that discretion, the court should freely grant leave to amend when justice so requires. Fed.R.Civ.P. 15(a). However, the court need not grant leave to amend where it appears that amendment would prove to be unproductive or futile. Ruffolo, 987 F.2d at 131. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 1 Brown v. Peters, Not Reported in F.Supp. (1997) 1997 WL 599355 Here, Brown moved to amend his complaint to add additional allegations against the named defendants. However, the additional allegations fail to cure the deficiency which forms the basis of defendants' motion to dismiss— the absence of defendants' personal involvement in a constitutional deprivation. Section 1983 imposes liability upon an individual only when personal involvement of that individual subjects a person to deprivation of a federal right. See Monell v. Dep't of Soc. Servs., 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). A complaint is fatally defective if it fails to allege personal involvement sufficient to establish that a supervisor was “directly and personally responsible for the purported unlawful conduct.” Alfaro Motors, Inc. v. Ward, 814 F.2d 883, 886 (2d Cir.1987). *2 Brown's proposed amended complaint alleges in conclusory fashion that defendants acted “in a grossly negligent and concerted manner which breached their duties owed to Plaintiff and is the proximate cause of [the violation of plaintiff's constitutional rights].” Proposed Am. Compl., at 3. Brown continues in the same vein, stating that defendants owed duties to plaintiff to carry out their jobs in a professional manner and they failed to carry out those duties appropriately. The complaint states that defendants held specific responsibilities, such as checking for outstanding warrants, which if performed properly should have alerted them to a problem. However, nowhere does the complaint set forth allegations that these defendants either participated directly in any constitutional infraction or that they were even aware of such an infraction. The proposed amended complaint merely alleges that these defendants failed in performing their supervisory and ministerial functions. “These bare assertions do not state a claim under 42 U.S.C. § 1983.” Davis, 1988 WL 78306, *2 (S.D.N.Y.). Smiley v. This plaintiff previously has had the opportunity to amend his complaint for the same reason asserted here, to allege personal involvement on the part of defendants. Brown's first amended complaint failed to accomplish that task, and it appears that even if allowed to amend again Brown would be unable to make the requisite allegations with sufficient specificity to sustain his complaint. Consequently, I find that amendment would be futile, and I deny Brown's motion for leave to amend his complaint. I turn now to the magistrate judge's report-recommendation and defendants' motions. The magistrate judge recommends that I grant defendants' motions and dismiss the complaint as to all defendants. The report-recommendation clearly describes the grounds on which the magistrate judge recommends dismissal as to each defendant. Fed.R.Civ.P. 72(b) requires the district judge to make a de novo determination on “any portion of the magistrate's disposition to which specific, written objection has been made.” Brown's objections fail to address directly any of the analysis. Brown's objections state (1) that he has been deprived of his constitutional rights; (2) that he has stated a cause of action; (3) that the court wrongly refused to appoint an attorney for him and wrongly stayed discovery pending the outcome of these motions; (4) that he seeks to file an amended complaint; (5) the standard of review for a Fed.R.Civ.P. 12(b) (6) motion; (6) that he disagrees with the magistrate judge's recommendation to grant defendants' motions because the allegations in his complaint, which he repeats, show that his rights were violated; and (7) the text of the Fourteenth and Eighth Amendments. Even affording the objections the liberal reading required for pro se pleadings, I find that these objections fail to state any basis whatsoever, much less a specific one, for the court not to adopt the magistrate judge's rulings. They simply re-state the relief sought and the facts on which Brown grounds his complaint and conclude that the magistrate judge's conclusions are wrong. When the parties make only frivolous, conclusive, or general objections, the court reviews the report-recommendation for clear error. See Camardo v. General Motors Hourly–Rate Employees Pension Plan, 806 F.Supp. 380, 382 (W.D.N.Y.1992) (court need not consider objections which are frivolous, conclusive, or general and constitute a rehashing of the same arguments and positions taken in original pleadings); Chambrier v. Leonardo, 1991 WL 44838, *1 (S.D.N.Y.) (restatement of allegations already before the court and assertion that valid constitutional claim exists insufficient to form specific objections); Schoolfield v. Dep't of Correction, 1994 WL 119740, *2 (S.D.N.Y.) (objections stating that magistrate judge's decisions are wrong and unjust, and restating relief sought and facts upon which complaint grounded, are conclusory and do not form specific basis for not adopting report-recommendation); Vargas v. Keane, 1994 WL 693885, *1 (S.D.N.Y.) (general objection that report does not address violation of petitioner's constitutional rights is a general plea that report not be adopted and cannot be treated as objection within the meaning of 28 U.S.C. § 636), aff'd, 86 F.3d 1273 (2d Cir.), cert. denied, 519 U.S. 895, 117 S.Ct. 240, 136 L.Ed.2d 169 (U.S.1996). See also Scipio v. Keane, 1997 WL 375601, *1 © 2020 Thomson Reuters. No claim to original U.S. Government Works. 2 Brown v. Peters, Not Reported in F.Supp. (1997) 1997 WL 599355 (1997) (when objections fail to address analysis directly, court reviews report-recommendation for clear error); Fed.R.Civ.P. 72(b), Advisory Comm. Note (when no specific, written objections filed, “court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation”). *3 Because Brown fails to make specific objections or provide any basis for his general objections, I review the report-recommendation for clear error. After careful review, I conclude that the magistrate judge's report-recommendation is well-reasoned and is not clearly erroneous. 1 The magistrate judge employed the proper standard, accurately recited the facts, and reasonably applied the law to those facts. Consequently, I adopt the report-recommendation. CONCLUSION Because plaintiff's proposed amendment demonstrates that amendment would be futile, I deny plaintiff's motion for leave to amend his complaint. I approve the magistrate judge's recommendation and grant defendants' motions to dismiss. Plaintiff's complaint is dismissed in its entirety. IT IS SO ORDERED. ORDER and REPORT–RECOMMENDATION This matter was referred to the undersigned for report and recommendation by the Hon. Rosemary S. Pooler, United States District Judge, by Standing Order dated November 12, 1986. Currently before this Court are a number of motions. Defendants Peters and Williams have filed a motion to dismiss (dkt.13); defendants Bishop, Magee, Barton and McMahan have filed a motion for summary judgment, or in the alternative to dismiss (dkt.20); and defendants Herman, Stewart and Stanford also have filed a motion to dismiss (dkt.34). Plaintiff opposes these three motions (dkts.27, 29, 33, 38). Defendants Bishop, Magee and McMahan have filed a motion to stay discovery (dkt.41) and plaintiff has filed a motion to extend time (dkt.44) in which to file opposition to the latter motion for a stay of discovery. The Court addresses these issues seriatim. BACKGROUND Plaintiff's amended complaint, which he has brought pursuant to 42 U.S.C. § 1983, alleges the following facts. In October, 1991, plaintiff was incarcerated in the Watertown Correctional Facility in Watertown, New York. He applied for an interstate compact because he wanted to return to South Carolina to live with his common law wife, Pamela Reid. During the application process, he was interviewed by the facility's parole officer, identified only as defendant John Doe # 1. After signing the necessary papers, his application was forwarded to defendant Andrew Peters, the facility's superintendent, who reviewed, signed and forwarded the papers to the Interstate Bureau. Amend. Compl. at ¶¶ 1–2; Exs. A, B. On or about January 15, 1992, while his compact was waiting for review at the Interstate Bureau, plaintiff was approved for work release and sent to the Lincoln Work Release Center in New York City. While at the center, plaintiff spoke to a parole officer, defendant John Doe # 2, and told him that he was seeking a compact that would return him to South Carolina upon his conditional release. Plaintiff claims the parole officer told him that he would handle the necessary paperwork, although the officer had had no experience with an interstate compact. Amend. Compl. at ¶¶ 3, 4. *4 Plaintiff, meanwhile, asked Reid whether any officials had contacted her in South Carolina regarding his prospective residence in that state. Upon discovering no one had contacted her, plaintiff asked a lawyer he knew, Navron Ponds, to inquire as to his compact status. In March, 1992, the lawyer spoke with defendant Susan Bishop, who is the director of the interstate compact program in South Carolina. Bishop allegedly told Ponds that plaintiff “was disapproved because there was a discrepancy about approving plaintiff['s] compact.” The “discrepancy” was the fact that plaintiff owed the state of South Carolina eighty-six days of confinement from a previous sentence. Plaintiff claims Bishop told Ponds to contact defendants Cecil Magee and Frank Barton, who worked for the South Carolina Parole Department. Sometime in March, 1992, Ponds made some calls to Barton and Magee. A verbal agreement was reached, and plaintiff, upon speaking with Barton and Magee was told that his compact had been approved. He also was told that he should report to the South Carolina Department of Parole upon being released. Amend. Compl. at ¶¶ 5–7. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 3 Brown v. Peters, Not Reported in F.Supp. (1997) 1997 WL 599355 Prior to leaving the Lincoln Work Release Center, plaintiff processed paperwork related to his interstate compact. His paperwork was sent by Doe # 2 to defendant Joseph Williams, the superintendent of the center. Williams reviewed, signed and returned the paperwork to plaintiff. On May 1, 1992, upon his release from the center, plaintiff traveled to South Carolina. Three days later, he entered a South Carolina parole office and promptly was arrested because of the eightysix days of confinement that he owed the state. Plaintiff's paperwork was given to defendant John McMahan, a parole officer. Plaintiff claims that McMahan never returned this paperwork to him. On May 20, 1992, the state of South Carolina revoked plaintiff's parole and plaintiff was returned to prison to serve the eighty-six days that he owed. When he asked McMahan what would happen to his one year of parole from New York, the officer allegedly told him that his New York parole would run concurrently with his South Carolina parole, and that when he finished his South Carolina parole, he would not owe any parole whatsoever. Plaintiff served the eighty-six days he owed and was released on July 31, 1992. Amend. Compl. at ¶¶ 8–10. In February, 1993, plaintiff was arrested on robbery charges in South Carolina. The charges ultimately were dropped, but he apparently encountered some difficulties regarding this arrest as a result of a parole hold that New York state had placed upon him. Bishop's office told him that it had nothing to do with his parole hold and that any problem that he had was between him and the state of New York. He talked to authorities in Albany, New York regarding the parole hold, but was not successful in his efforts to have the hold removed. On September 30, 1993, after had been extradited to New York as a fugitive from justice, plaintiff was given a preliminary hearing at Riker's Island, New York. The hearing officer found no probable cause that plaintiff had violated any condition of parole. He was released. Amend. Compl. at ¶¶ 11–14; Exs. C–J. *5 Plaintiff claims that he would not have suffered hardships if his interstate compact had been handled correctly. He alleges that defendant Deborah Stewart failed to follow up and see whether plaintiff had arrived in South Carolina. If she had, he argues, she would have discovered that he had been arrested upon his arrival. He alleges that defendant Francis Herman, a parole officer at the Interstate Bureau failed to do his job by not investigating plaintiff's violation reports. Amend. Compl. at ¶¶ 15–17; Exs. F–I. Plaintiff asserts that the foregoing amounts violations of his Eighth and Fourteenth Amendment rights, wherefore he both compensatory and declaratory relief. DISCUSSION A. Motion to Dismiss by Williams and Peters. Williams and Peters have filed a motion to dismiss plaintiff's complaint pursuant to FED.R.CIV.P. 12(b)(6) on the grounds that it fails to state a claim upon which relief may be granted. In a Rule 12(b)(6) motion, all factual allegations in the complaint must be taken and construed in plaintiff's favor. See LaBounty v. Adler, 933 F.2d 121, 122 (2d Cir.1991) (citing Ortiz v. Cornette, 867 F.2d 146, 149 (1989)). The Court's role is not to assess whether plaintiffs have raised questions of fact or demonstrated an entitlement to a judgment as a matter of law, as in a motion made pursuant to FED.R.CIV.P. 56 for summary judgment, but rather to determine whether plaintiff's complaint sufficiently alleges all of the necessary legal elements to state a claim under the law. See Christopher v. Laidlaw Transit, Inc. 899 F.Supp. 1224, 1226 (S.D.N.Y.1995), (citing Ricciuti v. New York City Transit Authority, 941 F.2d 119, 124 (2d Cir.1991)). Factual allegations in brief or memoranda may not be considered. Fonte v. Board of Managers of Continental Towers Condominium, 848 F.2d 24, 25 (2d Cir.1988). The Court now turns to the issues presented. Personal involvement of defendants in alleged constitutional deprivations is a prerequisite to an award of damages under § 1983. Wright v. Smith, 21 F.3d 496, 501 (2d Cir.1994). As superintendents at New York State Correctional facilities, Williams and Peter may be found personally involved in the alleged deprivation of plaintiff's constitutionally protected rights by a showing that they: (1) directly participated in the infraction; (2) knew of the infraction, but failed to remedy the wrong; (3) created or continued a policy or custom under which unconstitutional practices occurred; or (4) were grossly negligent in managing subordinates who caused unlawful conditions or events. Id., (quoting Williams v. Smith, 781 F.2d 319, 323–24 (2d Cir.1986)). Supervisory liability also may be imposed against Williams or Peters with a showing of gross negligence or deliberate indifference to plaintiff's constitutional rights. Id. Absent some personal involvement by Williams or Peters in the allegedly constitutionally infirm conduct of their subordinates, neither can be held liable © 2020 Thomson Reuters. No claim to original U.S. Government Works. 4 Brown v. Peters, Not Reported in F.Supp. (1997) 1997 WL 599355 under § 1983. Cir.1987). Gill v. Mooney, 824 F.2d 192, 196 (2d *6 Plaintiff has not provided any evidence linking either Williams or Peters to his alleged constitutional deprivations. All that plaintiff has alleged is that Williams and Peters, as superintendents, have reviewed and signed paperwork relating to plaintiff's compact. Though it has long been held that pro se complaints are held to “less stringent standards than formal pleadings drafted by lawyers” for the purpose of a motion to dismiss under Rule 12(b)(6), Haines v. Kerner, 404 U.S. 519, 520, 92 S.Ct. 594, 595–96, 30 L.Ed.2d 652 (1972), plaintiff has not explained how the ministerial conduct of these two defendants was violative of the Constitution. Their motion to dimiss should be granted. B. Motion for Summary Judgment or to Dismiss by Bishop, Magee, Barton and McMahan. Bishop, Magee, Barton and McMahan have filed a motion for summary judgment, or in the alternative a motion to dismiss. The Court will treat their motion as a motion to dismiss. “[C]omplaints relying on the civil rights statutes are insufficient unless they contain some specific allegations of fact indicating a deprivation of rights, instead of a litany of general conclusions that shock but have no meaning.” Barr v. Adams, 810 F.2d 358, 363 (2d Cir.1987). Plaintiff has not alleged specifically how the conduct of these four defendants infringed upon his constitutional rights. In his amended complaint, he contends that defendants violated the Constitution by “continuously breaching [[[their] duty” to him. This language underscores the defect with the complaint: if it alleges anything at all, it alleges that defendants were negligent in handling plaintiff's interstate compact and parole. To state a cognizable § 1983 claim, the prisoner must allege actions or omissions sufficient to demonstrate deliberate indifference; mere negligence will not suffice. Hayes v. New York City Dept. of Corrections, 84 F.3d 614, 620 (2d Cir.1996); Morales v. New York State Dep't of Corrections, 842 F.2d 27, 30 (2d Cir.1988) ( section 1983 does not encompass a cause of action sounding in negligence). The Court finds that the claims against Bishop, Magee, Barton and McMahan should be dismissed. C. Motion to Dismiss by Herman, Stewart and Stanford. Plaintiff's claim against Stewart is that she failed to follow up and see whether plaintiff had arrived in South Carolina. Herman, he likewise asserts, failed to do his job because he did not investigate plaintiff's violation reports. Plaintiff has not alleged how these actions run afoul of the Constitution; and again, these claims seem to be grounded in negligence, which is not actionable under at 620. § 1983. Hayes, 84 F.3d Plaintiff's claim against Stanford must fail because his complaint literally fails to state a claim against that defendant. Aside from naming Stanford as a defendant, and alleging that he was the appointed Senior Parole Officer at plaintiff's September 30, 1993 revocation hearing at Riker's Island, plaintiff does not detail how Stanford violated his constitutional rights. Absent some personal involvement by Stanford in the allegedly constitutionally infirm conduct of his subordinates, he cannot be held liable under § 1983. Gill, 824 F.2d at 196. *7 Accordingly, the Court finds that Stanford, Stewart and Herman's motion to dismiss should be granted. D. Plaintiff's “John Doe” Claims. In so far as neither John Doe # 1 nor John Doe # 2 have been identified and served in this matter, the Court does not have jurisdiction over these parties and does not reach the merits of plaintiff's claims against them. E. Discovery Motions. Defendants Bishop, Magee and McMahan have filed a motion to stay discovery until the Court has made a ruling on their motion to dismiss. Plaintiff has filed a motion to extend the time in which he may file opposition to defendants' motion. Plaintiff, however, has filed his opposing response (dkt.47), therefore his instant discovery motion is denied as moot. In that the Court recommends granting defendants' motion to dismiss, discovery in this matter would be fruitless. Accordingly, defendants' motion for a stay of discovery pending the resolution of their motion to dismiss is granted. CONCLUSION WHEREFORE, based upon the foregoing analysis, it is hereby © 2020 Thomson Reuters. No claim to original U.S. Government Works. 5 Brown v. Peters, Not Reported in F.Supp. (1997) 1997 WL 599355 ORDERED, that plaintiff's motion to extend the time to file an opposing reply (dkt.44) is denied as moot; and it is further ORDERED, that defendants Bishop, Magee and McMahan's motion to stay discovery until their motion to dismiss is decided (dkt.41) is granted; and it is further RECOMMENDED, that defendants Peters and Williams' motion to dismiss (dkt.13) be granted; and it is further RECOMMENDED, that defendants Bishop, Magee, Barton and McMahan's motion to dismiss (dkt.20) be granted; and it is further RECOMMENDED, that defendants Herman, Stewart and Stanford's motion to dismiss (dkt.34) be granted. Pursuant to 28 U.S.C. § 636(b)(1) and Local Rule 72.1(c), the parties have ten (10) days within which to file written objections to the foregoing report. Such objections shall be filed with the Clerk of the Court. FAILURE TO OBJECT TO THIS REPORT WITHIN TEN (10) DAYS WILL PRECLUDE APPELLATE REVIEW. Roldan v. Racette, 984 F.2d 85, 89 (2d Cir.1993) (citing Small v. Secretary of Health and Human Services, 892 F.2d 15 (2d Cir.1989)); 28 U.S.C. § 636(b)(1); FED.R.CIV.P. 6(a), 6(e) and 72. All Citations Not Reported in F.Supp., 1997 WL 599355 Footnotes 1 I note, however, that the report-recommendation would survive even de novo review. End of Document © 2020 Thomson Reuters. No claim to original U.S. Government Works. © 2020 Thomson Reuters. No claim to original U.S. Government Works. 6

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?