Swanson v. Style Source, Inc.

Filing 23

ORDER granting 16 Motion to Dismiss for Failure to State a Claim; denying 19 Motion for Summary Judgment. Signed by US District Judge Terrence W. Boyle on 9/22/2018. Copy sent via US Mail to Gary L. Swanson at 915 Dock St., Wilmington, NC 28401. (Stouch, L.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
No. 7:18-CV-63-BO
GARYL. SWANSON,
Plaintiff,
v.

STYLE SOURCE, INC.,
Defendant.

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ORDER

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This matter comes before the Court on defendant's motion to dismiss [DE 16] and
plaintiffs motion for summary judgment [DE 19]. Both motions have been fully briefed and are
ripe for disposition. For the reasons discussed below, defendant's motion to dismiss is
GRANTED and the plaintiffs motion for summary judgment is DENIED.
BACKGROUND
In January 2018, defendant contracted to manufacture custom t-shirts, sweatshirts, and

sweatpants bearing a custom logo for plaintiffs business venture, Cosmic Swami, Inc. [DE 19].
Plaintiff gave defendant a cashier's check for $1,550.00 that same month. Id. Defendant later
notified plaintiff that the t-shirts would be ready for delivery on March 12, 2018. [DE 17].
Plaintiff provided credit card information for the remaining balance of $1,240.33, but his credit
card was declined by his card issuer. Id. Plaintiff did not pay the remaining balance and
defendant did not ship the t-shirts or begin manufacturing any other clothing for plaintiff.
In March 2018, plaintiff sued defendant's co-founder, Geoffrey Krasnov, in the small
claims division of New Hanover County's state court. [DE 17-1]. Plaintiff alleged that Krasnov
was "harassing [him] for full payment" of the outstanding balance. Id. Krasnov counterclaimed

for the money owed. Id. A trial was held on April 9, 2018, where both plaintiffs claims and
Krasnov's counterclaim were dismissed with prejudice. Id.
On April 11, 2018, plaintiff filed a complaint with the Court alleging "negligence of
manufacturing of U.S. made I North Carolina made clothing." [DE 6]. Plaintiff requested
$1,500,000 in relief, in addition to any "blueprints" or "computer files" related to his business,
Cosmic Swami, Inc. Id. Plaintiff included in his complaint a list of federal statutes, including 22
U.S.C. § 7207 and 41 U.S.C. § 8301. Id.
On July 2, 2018, defendant moved to dismiss, citing, among others, Rule 12(b)(l) of the
Federal Rules of Civil Procedure. [DE 16]. In response, plaintiff moved for summary judgment
on July 12, 2018. [DE 19].
DISCUSSION
Defendant has moved to dismiss for lack of subject-matter jurisdiction under Federal
Rule of Civil Procedure 12(b)(1 ). The existence of subject-matter jurisdiction is a threshold
question that a court must address before considering a case's merits. Steel Co. v. Citizens for a

Better Env 't, 523 U.S. 83, 88-89 (1998). "Subject-matter jurisdiction cannot be forfeited or
waived and should be considered when fairly in doubt." Ashcroft v. Iqbal, 556 U.S. 662, 671
(2009) (citation omitted). When subject-matter jurisdiction is challenged, the plaintiff has the
burden of proving jurisdiction to survive the motion. Evans v. B.F. Perkins Co., 166 F.3d 642,
647-50 (4th Cir. 1999). When a facial challenge to subject-matter jurisdiction is raised, the facts
alleged by the plaintiff in the complaint are taken as true, "and the motion must be denied if the
complaint alleges sufficient facts to invoke subject-matter jurisdiction." Kerns v. United States,
585 F.3d 187, 192 (4th Cir. 2009). The Court can consider evidence outside the pleadings
without converting the motion into one for summary judgment. See, e.g., Evans, 166 F.3d at 647.

There are two broad kinds of federal subject-matter jurisdiction: federal question and
diversity. Federal courts have jurisdiction over "all civil actions arising under the Constitution,
laws, or treaties of the United States." 28 U.S.C. § 1331. Federal courts also have jurisdiction in
certain disputes arising under state law where the parties are citizens of different states and there
is a sufficiently large amount of money in controversy. 28 U.S.C. § 1332.
Here, plaintiff has not plausibly alleged the existence of either federal question or
diversity jurisdiction. Plaintiff concedes that both he and defendant are citizens of North
Carolina, so there is incomplete diversity of citizenship. Simply listing federal statutes in the
complaint does not confer federal question jurisdiction, either; plaintiff must plausibly allege that
his complaint arises under federal law and has failed to do so here.
The federal statutes cited in plaintiffs complaint are as follows: 19 U.S.C. Chapter 7, 15
U.S.C. Chapter 15, 15 U.S.C. Chapter 1, 22 U.S.C. § 7207, 22 U.S.C. Subchapter IV, and 41
U.S.C. § 8301. These provisions relate, respectively, to international trade agreements, the
Commodity Credit Corporation and the Department of Agriculture, antitrust claims, public
appropriations, public preference for American-made materials, and trade restrictions on Iran,
Libya, North Korea, and Sudan. The contract dispute between the parties concerning payment for
custom-manufactured clothing does not "arise" under any of these statutes.
For these reasons, the Court finds that it lacks subject-matter jurisdiction over plaintiffs
claims. Because the Court lacks jurisdiction, it declines to consider the remainder of the parties'
arguments.

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CONCLUSION
For the foregoing reasons, defendant's motion to dismiss [DE 16] is GRANTED and
plaintiffs motion for summary judgment [DE 19] is DENIED. The case is DISMISSED for lack
of jurisdiction.

SO ORDERED, this~ day of September, 2018.

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TRRENcE
BOYLE
UNITED STATES DISTRICT JUDGE

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