“Appellants’ challenge to the Controller’s post-escheat procedure 6 is not ripe because the Appellants failed to challenge the Controller’s action—or inaction—in 7 superior court as required by Section 1541 . . . .”
How later courts described this case
- “Appellants’ challenge to the Controller’s post-escheat procedure 6 is not ripe because the Appellants failed to challenge the Controller’s action—or inaction—in 7 superior court as required by Section 1541 . . . .”
Written by the judges who cited it.
The opinion
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8 UNITED STATES DISTRICT COURT
9 FOR THE EASTERN DISTRICT OF CALIFORNIA
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11 BURK N. ASHFORD, No. 2:19-cv-2358-KJM-EFB PS
12 Plaintiff,
13 v. ORDER
14 BETTY T. YEE, State Controller for State
of California; COMERICA
15 INCORPORATED; COMERICA BANK
& TRUST, NATIONAL ASSOCIATION;
16 and COMERICA SECURITIES, INC., and
DOES 1-20,
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Defendants.
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20 Plaintiff originally commenced this action in the United States District Court for the
21 Northern District of Texas.1 ECF No. 3. That court granted plaintiff’s motion to proceed in
22 forma pauperis, deferred screening the complaint pursuant to 28 U.S.C. § 1915(e)(2), and
23 transferred the case to this district pursuant to 28 U.S.C. § 1404(a). ECF Nos. 4 & 6; see 28
24 U.S.C. § 1404(a) (“For the convenience of parties and witnesses, in the interest of justice, a
25 district court may transfer any civil action to any other district or division where it might have
26 been brought.”).
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1 This case, in which plaintiff is proceeding in propria persona, was referred to the
28 undersigned under Local Rule 302(c)(21). See 28 U.S.C. § 636(b)(1).
1 The court now screens plaintiff’s complaint. Pursuant to § 1915(e)(2), the court must
2 dismiss the case at any time if it determines the allegation of poverty is untrue, or if the action is
3 frivolous or malicious, fails to state a claim on which relief may be granted, or seeks monetary
4 relief against an immune defendant. As discussed below, plaintiff’s complaint must be dismissed
5 for failure to state a claim.
6 Although pro se pleadings are liberally construed, see Haines v. Kerner, 404 U.S. 519,
7 520-21 (1972), a complaint, or portion thereof, should be dismissed for failure to state a claim if it
8 fails to set forth “enough facts to state a claim to relief that is plausible on its face.” Bell Atl.
9 Corp. v. Twombly, 550 U.S. 544, 554, 562-563 (2007) (citing Conley v. Gibson, 355 U.S. 41
10 (1957)); see also Fed. R. Civ. P. 12(b)(6). “[A] plaintiff’s obligation to provide the ‘grounds’ of
11 his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of
12 a cause of action’s elements will not do. Factual allegations must be enough to raise a right to
13 relief above the speculative level on the assumption that all of the complaint’s allegations are
14 true.” Id. (citations omitted). Dismissal is appropriate based either on the lack of cognizable
15 legal theories or the lack of pleading sufficient facts to support cognizable legal theories.
16 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990).
17 Under this standard, the court must accept as true the allegations of the complaint in
18 question, Hospital Bldg. Co. v. Rex Hosp. Trustees, 425 U.S. 738, 740 (1976), construe the
19 pleading in the light most favorable to the plaintiff, and resolve all doubts in the plaintiff’s favor,
20 Jenkins v. McKeithen, 395 U.S. 411, 421 (1969). A pro se plaintiff must satisfy the pleading
21 requirements of Rule 8(a) of the Federal Rules of Civil Procedure. Rule 8(a)(2) requires a
22 complaint to include “a short and plain statement of the claim showing that the pleader is entitled
23 to relief, in order to give the defendant fair notice of what the claim is and the grounds upon
24 which it rests.” Twombly, 550 U.S. at 555 (citing Conley v. Gibson, 355 U.S. 41 (1957)).
25 The complaint alleges that from April to June 2011, the United States Department of
26 Treasury deposited plaintiff’s social security benefits into his Direct Express debit card account
27 /////
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1 he held with defendant “Comerica.”2 ECF No. 3 ¶ 9. Plaintiff alleges, without elaboration, that
2 he was unable to access his account to withdraw his funds until 2017. Id. ¶ 10. When he
3 attempted to do so, he discovered that his account balance was zero. Id. Over the next two years,
4 plaintiff made numerous unsuccessful inquiries regarding the absence of his funds.
5 In August 2019, plaintiff filed a complaint with the Federal Reserve Bank of Dallas. Id.
6 ¶ 11. Only after filing that complaint was plaintiff notified that his funds had been transferred to
7 the California State Controller’s Office pursuant to California’s Unclaimed Property Law
8 (“UPL”). Id.; see Cal. Civ. Proc. Code § 1513(a) (property held by a banking organization
9 escheats to the state if there is no increase or decrease to an account’s deposit amount over a
10 three-year period). Plaintiff called the Controller’s Office and informed an employee that he
11 wanted to file a claim. Id. ¶ 12. Although it is not clear whether he actually filed a claim,
12 plaintiff alleges that “[t]he final result was that the California Controller has obfuscated the
13 money and posted a request for intercepts.” Id. The complaint purports to allege one claim
14 against Betty Yee, the Controller for the State of California (“Controller”), and Comerica, which
15 is styled as “Confiscation of Social Security Entitlements.” Plaintiff also alleges that this case
16 arises under 42 U.S.C. § 4017(a) and “U.S. Code § 407(a)(b).” Id. ¶ 6.
17 Plaintiff’s allegations are insufficient to state a claim for relief. As an initial matter,
18 “Confiscation of Social Security Entitlements” is not a cause of action, and it is not entirely clear
19 from the complaint’s allegations what specific claim plaintiff is attempting to assert. Plaintiff
20 also cannot state a claim under 42 U.S.C. § 4017(a). That statute, which directed the
21 Administrator of the Federal Emergency Management Agency to establish the National Flood
22 Insurance Fund, has no relevance to the complaint’s allegations.
23 Plaintiff also cites to “U.S. Code § 407(a)(b),” but he fails to indicate which title of the
24 United States Code he is referencing. Presumably, he intends to state a claim for violation of 42
25 U.S.C. § 407. That statute provides that an individual’s right to future payments of social security
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2 The complaint names as defendants Betty Yee, the State Controller for the State of
27 California, and two Comerica entities as defendants, Comerica Incorporated and Comerica Bank
& Trust, N.A. Plaintiff’s complaint, however, does not attempt to differentiate between the two
28 Comerica entities. Instead, it advances allegations against “Comerica.”
1 benefits “will not be transferable or assignable, at law or in equity, and none of the moneys paid
2 or payable or rights existing under this subchapter shall be subject to execution, levy, attachment,
3 garnishment, or other legal process or to the operation of any bankruptcy or insolvency law.” 42
4 U.S.C. § 407. The purpose of the statute is “to protect social security beneficiaries and their
5 dependents from the claims of creditors.” Crawford v. Gould, 56 F.3d 1162, 1166 (9th Cir. 1995)
6 (quoting Fetterusso v. New York, 898 F.2d 322, 327 (2nd Cir. 1990).
7 Plaintiff’s allegations do not demonstrate that his right to future payments was transferred
8 or assigned to California or one of its agencies. Nor do they establish that his funds in plaintiff’s
9 account were subject to “execution, levy, attachment, garnishment, or other legal process.” See
10 42 U.S.C. § 407. Significantly, plaintiff fails to show that defendants have precluded him from
11 recovering his funds under the procedures established by California’s Unclaimed Property Law
12 (“UPL”).
13 California’s UPL “establishes the conditions under which certain unclaimed personal
14 property escheats to the state. The UPL is not a permanent or ‘true’ escheat statute. Instead, it
15 gives the state custody and use of unclaimed property until such time as the owner claims it.”
16 Azure Limited v. I-Flow Corp., 46 Cal. 4th 1323, 1328 (2009). Accounts with a banking
17 organization, such as plaintiff’s Direct Express account, “are deemed to be abandoned property,
18 escheatable to the State, after the account has been dormant (i.e., inactive) for a period of three
19 years.” Resolution Trust Corp. v. State of Cal., 851 F. Supp. 1453, 1456 (C.D. Cal. 1994) (citing
20 Cal. Civ. Proc. Code § 1513(a)). Banks are required to report and deliver to the Controller funds
21 from accounts deemed abandoned, and failure to do so may result in the imposition of penalties.
22 State of Cal. ex rel. McCann v. Bank of America, N.A., 191 Cal. App. 4th 897, 905 (2011).
23 A person claiming interest in property escheated to the state may file a claim to the
24 property, Cal. Civ. Proc. Code § 1540(a), and the Controller then has 180 days to make a decision
25 on the claim, Cal. Civ. Proc. Code § 1541. If the claimant is dissatisfied with the Controller’s
26 decision, or if no decision is issued within 180 days, he may commence an action in state court to
27 establish his claim to the property. Id.
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1 Here, although plaintiff alleges he called the Controller’s Office and stated he wanted to
2 file a claim, he does not specifically allege that he filed a claim. Nor does he allege that he filed
3 an action in state court challenging an adverse decision on a claim. Accordingly, the complaint
4 fails to state a claim based on plaintiff’s funds escheating to California. Cf. Taylor v. Yee, 780
5 F.3d 928, 939 (9th Cir. 2015) (“Appellants’ challenge to the Controller’s post-escheat procedure
6 is not ripe because the Appellants failed to challenge the Controller’s action—or inaction—in
7 superior court as required by Section 1541 . . . .”).
8 Accordingly, plaintiff’s complaint must be dismissed for failure to state a claim. Plaintiff
9 is granted leave to file an amended complaint. Any amended complaint must allege a cognizable
10 legal theory against a proper defendant and sufficient facts in support of that cognizable legal
11 theory. Should plaintiff choose to file an amended complaint, the amended complaint shall
12 clearly set forth the allegations against each defendant and shall specify a basis for this court’s
13 subject matter jurisdiction. Any amended complaint shall plead plaintiff’s claims in “numbered
14 paragraphs, each limited as far as practicable to a single set of circumstances,” as required by
15 Federal Rule of Civil Procedure 10(b), and shall be in double-spaced text on paper that bears line
16 numbers in the left margin, as required by Eastern District of California Local Rules 130(b) and
17 130(c). Any amended complaint shall also use clear headings to delineate each claim alleged and
18 against which defendant or defendants the claim is alleged, as required by Rule 10(b), and must
19 plead clear facts that support each claim under each header.
20 Additionally, plaintiff is informed that the court cannot refer to prior pleadings in order to
21 make an amended complaint complete. Local Rule 220 requires that an amended complaint be
22 complete in itself. This is because, as a general rule, an amended complaint supersedes the
23 original complaint. See Loux v. Rhay, 375 F.2d 55, 57 (9th Cir. 1967). Accordingly, once
24 plaintiff files an amended complaint, the original no longer serves any function in the case.
25 Therefore, “a plaintiff waives all causes of action alleged in the original complaint which are not
26 alleged in the amended complaint,” London v. Coopers & Lybrand, 644 F.2d 811, 814 (9th Cir.
27 1981), and defendants not named in an amended complaint are no longer defendants. Ferdik v.
28 Bonzelet, 963 F.2d 1258, 1262 (9th Cir. 1992). Finally, the court cautions plaintiff that failure to
wOASe 2 LUV VMEVYOUING VIE MVOC to PR Ve PAY VI
1 || comply with the Federal Rules of Civil Procedure, this court’s Local Rules, or any court order
2 || may result in a recommendation that this action be dismissed. See E.D. Cal. L.R. 110.
3 Accordingly, it is hereby ORDERED that:
4 1. Plaintiff’s complaint is dismissed with leave to amend, as provided herein.
5 2. Plaintiff is granted thirty days from the date of service of this order to file an amended
6 || complaint. The amended complaint must bear the docket number assigned to this case and must
7 || be labeled “First Amended Complaint.” Failure to timely file an amended complaint in
8 || accordance with this order will result in a recommendation this action be dismissed.
9 | DATED: May 13, 2020.
10 tid, PDEA
ll EDMUND F. BRENNAN
UNITED STATES MAGISTRATE JUDGE
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