Slocum v. Zen Realty

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF NORTH CAROLINA

WESTERN DIVISION

NO. 5:23-CV-550-FL

GEORGE SLOCUM, )

)

Plaintiff, )

)

v. ) ORDER

)

ZEN REALTY, )

)

Defendant. )

This matter is before the court on defendant’s motion to dismiss pursuant to Federal Rule

of Civil Procedure 12(b)(1) and 12(b)(6) (DE 16). The motion has been been briefed fully and the

issues raised are ripe for ruling. For the following reasons, the motion is granted.

STATEMENT OF THE CASE

Plaintiff commenced this breach of contract action pro se October 4, 2023, and filed the

operative amended complaint October 20, 2023, claiming defendant did not properly handle or

credit plaintiff’s payments in connection with a residential lease. (Am. Compl. (DE 5) at 2; see

also Compl. Ex. 4 (DE 1-4) at 1). Plaintiff seeks relief as follows: 1) “For all the title, rights and

equity owed to [plaintiff] to be applied to the principals [sic] balance to the principals [sic] account

each and every billing cycle,” and 2) “$1,000,000 per day of the civil penalty or breach (Federal

Reserve Section 29).” (Am. Compl. (DE 5) at 3).

Defendant filed the instant motion to dismiss plaintiff’s action for lack of subject matter

jurisdiction and for failure to state a claim upon which relief can be granted. Plaintiff filed a

response in opposition.

STATEMENT OF FACTS

Where plaintiff's complaint is not a model of clarity, the court reproduces the factual

allegations in the complaint verbatim as follows without alteration from the original:

The acts complained of in this suit concern:

THe fedeml reserve act Section |b 1-2 state +t fedora!

(esewve notes ty he issued at the discretion of the board

of a Overnor ( Slocum (2019 ¢ )_ rhe fodera| fe serve Systein

toy the NYINo.se at making adugace 5 (pec pay men) tp the fedeva

cesewue Danks (GEORGE “SLOWUM) Tous h the federal reserve agent

motes shall be the obhaaton of the Vnited States and he

tecewable by all federal tesere _banke for oublic dues, (wont 1s

a_nublic due.) Lr also sinks ang Federal reserve bank may

hd Ke A400 \iCation negatable nStyment). for Such amount df the

Fedora teverve Notes Orovided ay (equine. Such ap carton (Spall)

be accomdaned with A lender in amount equal in the Sum of the ~~

Potoral resave mie ths a0plied for and issued pursuant 3 such qoplcaton

Collateral Sewuty (Heohable in stoment) dF fered aye ily A \ callteed

Tve_sent my endec to Zeo Realty on thee of(asions fist

titled Great caun, Si doys later 4kd opostomty to cure | five

dais later default tidaement 1 dl fertified Mailed it. 1 also

Certified yrail the \edemal feserve Section b 12 and a power of

iL. AO _——

(Say 2-50 Sh 05 otiable jnstwment) Is

held in A rust Account which Shovld be Sed % lely fpr tent,

Ine bill af acinoge act also stries thitbills are to be

Oata From interest, According to 12 luz}, the powers

and duties of the banks ate to fav invest.

(Am. Compl. (DE 5) at 2-3).

Plaintiff’s original complaint asserted allegations of a similar nature, and additionally

relied upon multiple documents: 1) a certified mail receipts; 2) a copy of a portion of Federal

Reserve Act Section 16; 3) correspondence between plaintiff and defendant signed: “BY: Slocum

George\Agent FOR GEORGE SLOCUM\PRINCIPAL Without Recourse A.R.R.” (DE 1-3; 1-8;

1-12); 4) residential rental contract between plaintiff (as “Tenant”), ChengFeng Niam (as

“Landlord”) and defendant (as “Real Estate Management Firm” and “Agent”), amendment to the

same, and duplicate copies of the same (DE 1-4; 1-5; 1-9; 1-10; 1-13; 1-14); 5) a “durable power

of attorney” (DE 1-6); and 6) electronic mail and text correspondence between plaintiff and

defendant.

COURT’S DISCUSSION

A. Standard of Review

A Rule 12(b)(1) motion challenges the court’s subject matter jurisdiction, and the plaintiff

bears the burden of showing that federal jurisdiction is appropriate when challenged by the

defendant. See McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936); Adams v.

Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). Such a motion may either 1) assert the complaint fails

to state facts upon which subject matter jurisdiction may be based, or 2) attack the existence of

subject matter jurisdiction in fact, apart from the complaint. Bain, 697 F.2d at 1219. Where a

defendant raises a “facial challenge[] to standing that do[es] not dispute the jurisdictional facts

alleged in the complaint,” the court accepts “ the facts of the complaint as true as [the court] would

in context of a Rule 12(b)(6) challenge.” Kenny v. Wilson, 885 F.3d 280, 287 (4th Cir. 2018).1

Under this standard, “[the] court accepts all well-pled facts as true and construes these facts in the

1 Internal citations and quotation marks are omitted from all citations unless otherwise specified.

light most favorable to the plaintiff,” but does not consider “bare assertions devoid of further

factual enhancement[,] . . . unwarranted inferences, unreasonable conclusions, or arguments.”

Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., 591 F.3d 250, 255 (4th Cir. 2009).

B. Analysis

Defendant argues that the court lacks subject matter jurisdiction over plaintiff’s complaint

because the complaint establishes a lack of diversity of citizenship and because a federal question

does not appear on the face of the complaint. Defendant also argues in the alternative that plaintiff

does not allege sufficient facts to state a claim upon which relief can be granted. The court agrees

dismissal is required for lack of subject matter jurisdiction, and thus does not reach defendant’s

alternative argument.

“The Federal courts are courts of limited jurisdiction and are empowered to act only in

those specific instances authorized by Congress.” Bowman v. White, 388 F.2d 756, 760 (4th Cir.

1968). “A court is to presume, therefore, that a case lies outside its limited jurisdiction unless and

until jurisdiction has been shown to be proper.” United States v. Poole, 531 F.3d 263, 274 (4th

Cir. 2008). “[W]hen the inquiry involves the jurisdiction of a federal court,—the presumption in

every stage of a cause being that it is without the jurisdiction of a court of the United States, unless

the contrary appears from the record.” Lehigh Min. & Mfg. Co. v. Kelly, 160 U.S. 327, 337 (1895)

“Furthermore, the complaint must state on its face the grounds for its jurisdiction.”

Bowman, 388 F.2d at 760. “These rules are applicable to diversity as well as to the ‘Federal

question’ jurisdiction of the District Courts.” Id. “The well-pleaded complaint rule requires that

federal question jurisdiction not exist unless a federal question appears on the face of a plaintiff’s

properly pleaded complaint.” Columbia Gas Transmission Corp. v. Drain, 237 F.3d 366, 370 (4th

Cir. 2001).

“Pro se complaints are to be read liberally.” White v. White, 886 F.2d 721, 724 (4th Cir.

1989). “However, liberal construction does not require [the court] to attempt to discern the

unexpressed intent of the plaintiff, but only to determine the actual meaning of the words used in

the complaint.” Williams v. Ozmint, 716 F.3d 801, 805 (4th Cir. 2013). Liberal construction also

“does not undermine the requirement that a pleading contain more than labels and conclusions.”

Giarratano v. Johnson, 521 F.3d 298, 304 n.5 (4th Cir. 2008).

Here, diversity jurisdiction is lacking because the parties are both alleged to be citizens of

North Carolina. (See Am. Compl. p. 1); Bowman, 388 F.2d at 760. Federal question jurisdiction

also is lacking because plaintiff has not asserted a cause of action based upon violation of federal

law. Rather, plaintiff asserts jurisdiction on the basis of breach of contract, and the complaint does

not assert a federal cause of action.

Plaintiff nonetheless suggests that he is seeking relief based upon the “Federal Reserve Act

Section 16 1-2,” and statutes and regulations governing the “federal reserve system for the purpose

of making advances (prepayment) to the federal reserve banks (GEORGE SLOCUM) through the

federal reserve agent[.]” (Am. Comp. p. 2) (internal parentheses and capitalization in original).

Plaintiff also references 12 U.S.C. § 1431, as pertaining to the “powers and duties of the banks” to

pay interest. (Id. p. 3). Plaintiff repeats these references in opposition to defendant’s motion to

dismiss, along with the assertion that 15 U.S.C. § 1615 requires unearned interest “shall be charged

back to the consumer.” (Pl’s Resp. (DE 19) at 1).

None of plaintiff’s references to the statutes and regulations governing the Federal Reserve

and banks, however, create a private cause of action arising under federal law. See, e.g., 12 U.S.C.

§§ 411-412 (governing the issuance and redemption of Federal Reserve notes and the process by

which a Federal Reserve bank may apply for such Federal Reserve notes); 12 U.S.C. § 1431

(defining powers and duties of banks). The mere reference to a federal statute in this manner does

not confer federal question jurisdiction. See Interstate Petroleum Corp. v. Morgan, 249 F.3d 215,

219 (4th Cir. 2001) “Congress has given the lower federal courts jurisdiction to hear only those

cases in which a well-pleaded complaint establishes either that federal law creates the cause of

action or that the plaintiffs right to relief necessarily depends on resolution of a substantial

question of federal law.”); Goldsmith v. Mayor & City Council of Baltimore, 845 F.2d 61, 64 (4th

Cir. 1988) (“The mere existence of a disputed issue of federal law does not confer federal question

Jurisdiction.”). In addition, plaintiffs reference to 15 U.S.C. § 1615 in his response to the instant

motion is inapposite, where plaintiff does not allege in the complaint a “consumer credit

transaction” with defendant. See 15 U.S.C. § 1615(a)(1).

In sum, plaintiff’s complaint must be dismissed for lack of subject matter jurisdiction, and

such dismissal is required to be “without prejudice.” Goldsmith, 845 F.2d at 65.

CONCLUSION

Based on the foregoing, defendant’s motion to dismiss (DE 16) is GRANTED. Plaintiff's

complaint is DISMISSED WITHOUT PREJUDICE for lack of subject matter jurisdiction. The

clerk is DIRECTED to close this case.

SO ORDERED, this the 16th day of February, 2024.

United States District Judge