stating that federal courts are not required to “assume facts that are not alleged, just because an additional factual allegation would have formed a stronger complaint”
How later courts described this case
- stating that federal courts are not required to “assume facts that are not alleged, just because an additional factual allegation would have formed a stronger complaint”
- stating that court must accept factual allegations in complaint as true but is not required to “accept as true any legal conclusion couched as a factual allegation”
- finding that subject matter jurisdiction is lacking where there is neither diversity of citizenship nor federal question jurisdiction
Written by the judges who cited it.
The opinion
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
DARNELL MURPHY, )
)
Plaintiff, )
)
v. ) Case No. 4:23-CV-1120 HEA
)
CAPITAL ONE, )
)
Defendant. )
OPINION, MEMORANDUM AND ORDER
This matter is before the Court on the motion of self-represented plaintiff Darnell Murphy
for leave to commence this civil action without prepayment of the required filing fee. [ECF No.
2]. Upon consideration of the financial information provided with the motion, the Court finds
plaintiff is financially unable to pay any portion of the filing fee. As a result, plaintiff will be
granted leave to proceed in forma pauperis pursuant to 28 U.S.C. § 1915. Additionally, for the
reasons discussed below, plaintiff will be directed to show cause as to why this case should not be
dismissed for lack of subject matter jurisdiction. See Fed. R. Civ. P. 12(h)(3).
Legal Standard
Under 28 U.S.C. § 1915(e)(2), the Court is required to dismiss a complaint filed in forma
pauperis if it is frivolous, malicious, or fails to state a claim upon which relief can be granted. To
state a claim, a plaintiff must demonstrate a plausible claim for relief, which is more than a “mere
possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). “A claim has facial
plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged.” Id. at 678. Determining whether
a complaint states a plausible claim for relief is a context-specific task that requires the reviewing
court to draw upon judicial experience and common sense. Id. at 679. The court must “accept as
action, supported by mere conclusory statements.” Barton v. Taber, 820 F.3d 958, 964 (8th Cir.
2016). See also Brown v. Green Tree Servicing LLC, 820 F.3d 371, 372-73 (8th Cir. 2016) (stating
that court must accept factual allegations in complaint as true but is not required to “accept as true
any legal conclusion couched as a factual allegation”).
When reviewing a pro se complaint under 28 U.S.C. § 1915(e)(2), the Court must give it
the benefit of a liberal construction. Haines v. Kerner, 404 U.S. 519, 520 (1972). A “liberal
construction” means that if the essence of an allegation is discernible, the district court should
construe the plaintiff's complaint in a way that permits his or her claim to be considered within the
proper legal framework. Solomon v. Petray, 795 F.3d 777, 787 (8th Cir. 2015). However,
even pro se complaints are required to allege facts which, if true, state a claim for relief as a matter
of law. Martin v. Aubuchon, 623 F.2d 1282, 1286 (8th Cir. 1980). See also Stone v. Harry, 364
F.3d 912, 914-15 (8th Cir. 2004) (stating that federal courts are not required to “assume facts that
are not alleged, just because an additional factual allegation would have formed a stronger
complaint”). In addition, affording a pro se complaint the benefit of a liberal construction does not
mean that procedural rules in ordinary civil litigation must be interpreted to excuse mistakes by
those who proceed without counsel. See McNeil v. United States, 508 U.S. 106, 113 (1993).
Plaintiff’s Complaint
Plaintiff Darnell Murphy filed this action on September 7, 2023, by filing a form “Civil
Complaint” naming Capital One, as the sole defendant in this action. In the body of his complaint,
plaintiff claims that the jurisdictional basis for the present action is “the Federal Reserve Act.1”
1On his “Civil Cover Sheet” attached to his Complaint, plaintiff claims that the jurisdictional basis for this
action is “breach of contract.”
identified the state of his own citizenship or that of Capital One Financial Corporation.2 Moreover,
plaintiff failed to fill in the section titled “Amount in Controversy.”
For his “Statement of Claim” plaintiff states the following:
Plaintiff and Defendant are in a credit card agreement. Under the agreement
the Defendant is to make available the statements at the end of each billing
cycle. Plaintiff promise to pay all amounts due on the account.
On August 10, 2023, the Defendant received a tender, and the bill for
payment to the Plaintiff’s account and Defendant did not transfer Principal’s
balance to Principal’s account for set-off.3
As of the date of this claim the Principal account is current in default for
nonpayment.
I Pray court makes judgment is in favor of Plaintiff and require Defendant
to perform its fiduciary duty and apply Principal’s balance to Principal’s
account for set-off every billing-cycle and promptly return all unearn[ed]
interest to the Plaintiff.
For relief in this action plaintiff seeks over three million dollars in civil penalties.
Discussion
“In every federal case the court must be satisfied that it has jurisdiction before it turns to
the merits of other legal arguments.” Carlson v. Arrowhead Concrete Works, Inc., 445 F.3d 1046,
1050 (8th Cir. 2006). The Court has the duty to determine its jurisdiction and raise the issue of
subject matter jurisdiction sua sponte, if necessary. See City of Kansas City, Mo. v. Yarco Co.,
Inc., 625 F.3d 1038, 1040 (8th Cir. 2010). The Court must dismiss any action over which it
determines that it lacks subject matter jurisdiction. Fed. R. Civ. P. 12(h)(3).
2The Court takes judicial notice that in Pierre v. Capital One Corporation, No. 21-CV-30 (PKC) (LB),
2021 WL 11690691, *2 (E.D. N.Y. March 5, 2021), Capital One Corporation pled that it was a Delaware
corporation with its principal place of business in Virginia.
3The Court notes that plaintiff has not indicated whether he had a contract with defendant wherein he
agreed that if he owed fees on the account of any kind (such as monthly, yearly or late fees) that the
tender would need to be paid first on the fees and then on the balance after such fees.
involving the Constitution, laws, or treaties of the United States under 28 U.S.C. § 1331, and cases
where diversity jurisdiction exists under 28 U.S.C. § 1332. If this Court lacks both diversity of
citizenship and federal question jurisdiction, the case is subject to dismissal for lack of jurisdiction.
See Auto-Owners Ins. Co. v. Tribal Ct. of Spirit Lake Indian Rsrv., 495 F.3d 1017, 1020-24 (8th
Cir. 2007) (finding that subject matter jurisdiction is lacking where there is neither diversity of
citizenship nor federal question jurisdiction).
Plaintiff’s complaint fails to establish this Court’s jurisdiction under either basis. The Court
has diversity jurisdiction under 28 U.S.C. § 1332 over cases where the citizenship of each plaintiff
is different from the citizenship of each defendant, and where the amount in controversy is more
than $75,000. Ryan ex rel. Ryan v. Schneider Nat. Carriers, Inc., 263 F.3d 816, 819 (8th Cir. 2001).
Diversity jurisdiction does not appear to exist here. In this case, defendant is Capital One (Financial
Corporation). Plaintiff has failed to indicate his own state of citizenship (not residency), and he
also failed to indicate the state where Capital One is incorporated and where Capital One has its
principal place of business. Assuming without deciding that the parties are diverse in citizenship,
plaintiff has still failed to show that the amount in controversy is over $75,000.
Plaintiff has failed to indicate that the amount in controversy, i.e., the actual amount in
damages in this action, is over $75,000. Plaintiff identifies this action as a breach of contract –
meaning that he attempted to provide payment to his credit card company, but the payment was
not accepted. He does not indicate what the actual cost of his Capital One bill was. He additionally
fails to assert how much he attempted to tender to Capital One, and how much he believes he was
harmed by Capital One in monetary value, not just the value of a civil penalty under the Federal
Reserve Act. As noted below, plaintiff has not stated a proper claim for relief under the Federal
Reserve Act such that this Court has federal question jurisdiction.
jurisdiction over civil actions arising under the Constitution, laws, or treaties of the United States.
Griffioen v. Cedar Rapids & Iowa City Ry. Co., 785 F.3d 1182, 1188 (8th Cir. 2015). Whether a
claim arises under federal law is determined by reference to the “well-pleaded complaint.” Great
Lakes Gas Transmission Ltd. P’ship v. Essar Steel Minn. LLC, 843 F.3d 325, 329 (8th Cir. 2016)
(internal citations omitted). The well-pleaded complaint rule provides that jurisdiction exists only
when a federal question is presented on the face of a plaintiff’s properly pleaded complaint. Id.
Plaintiff’s complaint is drafted on a court-form for filing civil claims. As noted above,
plaintiff indicates that he is asserting a breach of contract action. Although he claims he is also
suing under the “Federal Reserve Act,” plaintiff has failed to articulate a specific cause of action
under the Federal Reserve Act. To the extent that plaintiff seeks to assert a claim under the Federal
Reserve Act, he lacks a cause of action to do so. Plaintiff seems to suggest that Capital One was
violating Section 16 of the Federal Reserve Act, 12 U.S.C. §§ 411-21, which governs the issuance
and redemption of Federal Reserve notes. As a result, plaintiff alleges that Capital One is subject
to penalties under Section 29 of the Federal Reserve Act, 12 U.S.C. § 504, which imposes penalties
on banks for an array of misconduct. But the imposition of civil penalties under Section 29 is
carried out by federal officials, and private individuals do not have a private right of action to
enforce Section 29 of the Federal Reserve Act. Benz-Puente v. Truist Fin., No. 23-cv-2682, 2023
WL 4763998, at *2 (E.D. Pa. July 26, 2023) (Smith, J.) (compiling cases supporting finding that
Section 29 “does not create a private right of action”).
Based on the aforementioned, nothing in plaintiff’s complaint indicates that the Court has
jurisdiction over this matter. The instant action does not arise under the Constitution, laws, or
treaties of the United States, so federal question jurisdiction pursuant to 28 U.S.C. § 1331 is
inapplicable. Diversity jurisdiction under 28 U.S.C. § 1332 does not exist here because plaintiff
has not indicated that his actual damages are over $75,000. As a result, plaintiff will be required
to show cause, within twenty-one (21) days of the date of this Memorandum and Order, why this
action should not be dismissed for lack of subject matter jurisdiction.
Accordingly,
IT IS HEREBY ORDERED that plaintiff's motion to proceed in forma pauperis [ECF
No. 2] is GRANTED.
IT IS FURTHER ORDERED that plaintiff will be required to show cause, within
twenty-one (21) days of the date of this Memorandum and Order, why this action should not
be dismissed for lack of jurisdiction.
IT IS FURTHER ORDERED that if plaintiff fails to comply with the Court’s Order, this
action may be dismissed, without prejudice.
Dated this 12" day of September, 2023.
UNITED STATES DISTRICT JUDGE
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