Dames v. JP Morgan Chase & Co.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

MARQUIS DAMES,

Plaintiff, MEMORANDUM & ORDER

. 22-CV-6962 (NGG) (SJB)

~against-

JP MORGAN CHASE & CO., JPMORGAN

CHASE BANK, N.A., and NOEMI GRAHAM,

Defendants.

NICHOLAS G. GARAUFIS, United States District Judge.

Plaintiff Marquis Dames brings this action against Defendants

JPMorgan Chase & Co. (“JPMCC”), JPMorgan Chase Bank, N.A.

(“Chase Bank”), and Noemi Graham (collectively the “Defend-

ants”), (See Am. Compl. (Dkt. 5).) Plaintiff asserts claims for race

discrimination under 42 U.S.C. § 1981 and intentional infliction

of emotional distress (“ITED”) under state law. Before the court

is the Defendants’ motion to dismiss the Amended Complaint.

(Mot. to Dismiss (Dkt. 29).) For the following reasons, the mo-

tion is GRANTED with prejudice.

I, BACKGROUND!

Plaintiff, an African American male, was struck by a vehicle while

riding his e-bicycle on October 29, 2021. (Am. Comp. 4 1.) Una-

\ i ble to work and in need of money, Plaintiff received a $2,000

1 The following facts are taken from the Amended Complaint and, for the

purposes of this motion to dismiss, are assumed to be true. See Ark. Pub.

Emps. Ret. Sys. v. Bristol-Myers Squibb Co., 28 F.4th 343, 349 (2d Cir.

2022}. The court is permitted to consider documents that are incorporated

into the Amended Complaint by reference or that are “integral” to it. Cham-

bers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002). This

includes the exhibits attached to Plaintiffs Amended Complaint. Docu-

ments attached to Plaintiffs opposition brief but not to his Amended

Complaint cannot be considered at the motion to dismiss stage. See Madu,

check, dated September 15, 2022, from Venture Funding Group.

(id.) The next day, Plaintiff deposited the check at a Chase Bank

branch located at 883 Flatbush Avenue, Brooklyn, NY 11226,

where he had banked for approximately ten years. (Id. 918-20.)

The check had stiil not “clear[ed]” as of September 27, 2022, so

Plaintiff visited the Chase Bank branch located at 1509 Foster

Avenue, Brooklyn, NY 11230 to inquire about the delay. (id. {21-

22.) While there, Plaintiff spoke with Defendant Noemi Graham,

who was Vice President Branch Manager. (Ud. ("| 2, 22, 44.) Dur-

ing this conversation, Graham asked Plaintiff questions about the

check’s origin and directed him to Chase’s Fraud Department for

assistance. (id. {| 22-24.) For two weeks, Plaintiff repeatedly

contacted the Fraud Department and was alternatingly told that

the funds would be released shortly and that they were still being

held for “fraud.” Ud. | 27-28.) Joseph Duffy, founder of Venture

Funding Group, also attempted to assist Plaintiff by speaking

with staff at the Foster Avenue branch, “but no one would speak

to him.” dd. { 26.) Plaintiff subsequently visited the Chase Bank

branch at 1599 Flatbush Avenue, Brooklyn NY 11210, where the

manager told him that his account had been restricted and closed

due to “fraud” and that the check still needed to be “verified.”

(id. § 29.)

On November 4, 2022, Plaintiff visited the Chase Bank branch at

42 Broadway, New York, NY 10004, where Chase representatives

recognized that his account had been locked and closed but

agreed to help transfer the restrained $2,000 to a new account.

Ud. {{ 34, 36.) Plaintiff was also told “that the person who signed

the check would have to physically walk into the Brooklyn bank

branch to verify the check.” Ud. § 35.) On November 7, 2022,

Plaintiff learned for the first time that the funds were being with-

held because “the name of the business on the check... did not

Edoszie & Madu, P.C. v. SocketWorks Ltd. Nig., 265 F.R.D. 106, 122-23

(S.D.N.Y. 2010).

match Lexis records[.]” dd. { 37.) Nonetheless, despite this dis-

crepancy, on November 9, 2022~—-54 days after the check was

deposited—the funds were finally released and PlaintifPs original

account was unlocked and reopened. (id. { 38.)

Plaintiff brought suit over this incident on November 15, 2022.

(See Am, Compl. (Dkt. 1).} The Amended Complaint, which was

filed on Novernber 22, 2022, asserts two claims: (1) race discrim-

ination under 42 U.S.C. § 1981; and (2) ITED under state law.

Ud. 14 39-50.) On April 21, 2023, the Defendants moved to dis-

miss the Amended Complaint for failure to state a claim upon

which relief could be granted, pursuant to Federal Rule of Civil

Procedure 12(b) (6).

I, LEGAL STANDARD

To survive a 12(b)(6) motion, a complaint must “contain suffi-

cient factual matter, accepted as true, to ‘state a claim to relief

that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570

(2007)). “The plausibility standard is not akin to a ‘probability

requirement,’ but it asks for more than a sheer possibility that a

defendant has acted unlawfully.” Id. (citing Twombly, 550 U.S. at

556). Although “a court must accept as true all of the allegations

contained in a complaint... [t]hreadbare recitals of the elements

of a cause of action, supported by mere conclusory statements,

do not suffice.” Id. at 678. Lastly, “only a complaint that states a

plausible claim for relief survives a motion to dismiss[,]” and

“[djetermining whether a cormplaint states a plausible claim for

relief will... be a context-specific task that requires the review-

ing court to draw on its judicial experience and common sense.”

fd. at 679,

2 The Amended Complaint notes that Plaintiff was without funds that

were rightfully his for 45 days, (Am. Compl. 15), but September 16, 2022

and November 9, 2022 are 54 days apart.

II. DISCUSSION

Defendants make three arguments in support of dismissal. First,

they assert that Plaintiffs claims against Defendant JPMCC fail

as a matter of law because JPMCC “does not engage in the activ-

ities contemplated by 42 U.S.C. § 1981 nor any activities that

would give rise to breach of any duties necessary to state a claim

for intentional infliction of emotional distress.” (Mot. to Dismiss

at 4-5.) Second, Defendants argue that the Plaintiffs Amended

Complaint fails to state a claim under § 1981 because it does not

sufficiently allege an intent to discriminate on the basis of race.

Ud. at 6.) Finally, they contend that the court, upon dismissal of

the § 1981 claim, should decline to exercise supplemental juris-

diction over Plaintiffs state law IED claim or dismiss this claim

for factual insufficiency. Gd. at 12-13.) The court responds to

each of these arguments in turn.

A. Dismissal of JPMCC as a Party

Parent companies and their subsidiaries are distinct legal entities.

See Hatteras Enters., Inc. v. Forsythe Cosm. Grp., Ltd., No. 15-CV-

5887 (ADS) (ARL), 2019 WL 9443845, at *6 (E.D.N.Y. Jan. 14,

2019) (citing Carte Blanche (Singapore) Pte., Ltd. v. Diners Club

Int'l, Inc., 2 F.3d 24, 26 (2d Cir. 1993)). Courts generally refuse

“to impute the operating activities of an indirectly owned limited

liability company to a parent holding company.” Hershfeld v. JM

Woodworth Risk Retention Grp., Inc., No. 16-CV-6369 (BMC),

2017 WL 1628886, at *4 (E.D.N.Y. May 1, 2017). In this vein,

district courts within this Circuit have dismissed claims against

bank holding companies that are predicated on misconduct by

associated bank subsidiaries. See Zhao v. JPMorgan Chase & Co.,

No. 17-CV-8570 (NRB), 2019 WL 1173010, at *3 (S.D.N.Y. Mar.

13, 2019); Pincover v. J.P. Morgan Chase Bank, N.A., 592 F. Supp.

3d 212, 217 n.3 (S.D.N.Y. Mar. 22, 2022); Russell v. Citigroup,

No. 22-CV-2057 (LDH) WRC), 2023 WL 2969823, at *5

(E.D.N.Y. Feb, 24, 2023) (R&R); see also Akhtar v. JPMorgan

Chase & Co., No. 652274/2018, 2019 WL 4237985 at *2-3 (Sup.

Ct. N.Y. Sept. 6, 2019).

Such is appropriate here. Defendants argue that the inclusion of

JPMCC-——the parent of Chase Bank-—in this case was improper

because JPMCC “does not engage in the business of banking,

does not operate branches, does not employ Chase retail banking

employees and is not involved in the daily operations of Chase

retail banking branches[.]” (Mot. to Dismiss at 5.) Plaintiff re-

sponds that Chase Bank branches receive training on policies and

procedures from JPMCC, which should subject JPMCC to liability

for the actions of its subsidiary and agents. (Opp. to Mot. (Dkt.

29-3) at 4.) These barebones contentions provide the court with

little basis to depart from the general convention of not finding

bank holding companies liable for misconduct of their subsidiar-

ies. JPMCC must therefore be dismissed from this action.

B. Claim One: 42 U.S.C. § 1981

In assessing a § 1981 claim at the pleading stage, “the court does

not apply the familiar McDonnell Douglas burden shifting test

used to analyze the evidentiary support for discrimination claims,

but rather generally assesses the plausibility of the plaintiffs

claim based on the facts alleged.” McDowell v. N. Shore-Long Is-

land Jewish Health Sys., Inc., 788 F. Supp. 2d 78, 81 (E.D.NLY.

2011). A § 1981 plaintiff must plead that but for race, “it would

not have suffered the loss of a legally protected right.” Comcast

Corp. v. Natl Ass’n of Af. Am.-Owned Media, 140 S. Ct. 1009, 1019

(2020). In so pleading, “a plaintifPs naked allegation that the de-

fendant acted based on the plaintiffs race and color is too

conclusory to survive a motion to dismiss.” Bentley, Jr. v. Mobil

3 Plaintiff could have attempted to circumvent this general bar by seeking

to pierce the corporate veil. See Miller vy. Citicorp., No. 95-CV-9728 (LAP),

1997 WL 96569, at *9 (S.D.NLY. Mar. 4, 1997); Gutierrez v. J.P. Morgan

Chase Bank & Co., No, 09-CV-2257 (LAK), 2009 WL 1059636, at *1

(S.D.N.Y. Apr. 13, 2009). He has not, however, raised this argument.

Gas Station, 599 F. App’x 395, 396 (2d Cir. 2015) (Summary Or-

der) (citing Albert v. Carovano, 851 F.2d 561, 572 (2d Cir.

1988)). More specifically, “a plaintiff must allege facts support-

ing the following elements: (1) plaintiff is a member of a racial

minority; (2) defendant's intent to discriminate on the basis of

race; and (3) discrimination concerning one of the statute’s enu-

merated activities.” James v. Am. Airlines, 247 F.Supp.3d 297,

303 (E.D.N.Y. 2017) (citing Brown v. City of Oneonta, 221 F.3d

329, 339 (2d Cir. 2000)).

The second element is the primary focus of debate in this case.

““ssential to an action under Section 1981 are allegations that

the defendants’ acts were purposefully discriminatory and ra-

cially motivated.” Albert v. Carovano, 851 F.2d 561, 571 (2d Cir.

1988). Discriminatory intent may be alleged explicitly via direct

evidence, or implicitly by way of “circumstantial evidence that

supports an inference of discrimination.” Oparaji vy. ABN AMRO

Mortg. Grp., Inc., No, 19-CV-1650 (MKB), 2020 WL 9816011, at

*14 (E.D.N.Y. Sept. 18, 2020) (citing Lizardo v. Denny’s, Inc., 270

F.3d 94, 104 (2d Cir. 2001)). An inference of discrimination may

be drawn through observation of similarly situated individuals

who are not members of the relevant protected class being

treated differently than plaintiffs, Id. (citing Lizardo, 270 F.3d at

101).

For example, the plaintiff in Nwachukwu v. Liberty Bank stated a

§ 1981 claim where he alleged that the bank’s employees had

inquired into his country of origin and made comments—includ-

ing, “[w]e don’t want money from your type”’—that could be

reasonably inferred to communicate racially discriminatory in-

tent. 257 F. Supp. 3d 280, 305 (D. Conn. 2017). Conversely, in

Rojas v. Signature Bank, the court dismissed a § 1981 claim be-

cause the plaintiff “made only bare bones conclusory allegations

in support of his claim” and failed to allege any “facts in support

of his conclusion that defendant had a discriminatory intent for

its actions.” No. 18-CV-6757 (KAM), 2019 WL 1333257 at *2

{E.D.N.Y. Mar. 25, 2019).

Here, Plaintiff fails to provide sufficient facts to properly allege

discriminatory intent. His primary argument is a restatement of

a counterfactual posed in Comcast: “what would have happened

if the plaintiff had been white?” 140 S.Ct. at 1015. Tailoring this

question to the instant facts, Plaintiff asks the court to consider:

“[d]o [w]hite young men get accused of fraud with respect to a

check in the amount of only $2,000.00 and wait forty-five (45)

[sic] days to access said funds, when said check had always been

good and sufficient and get accused of criminal activity where

there was none?” (Opp. to Mot. at 5.) Plaintiff is correct in posing

the question, but asking the hypothetical about similarly situated

“tw hite young men” is only the first step; Comcast also requires

that Plaintiff also allege that his race was the “but-for cause” of

Chase Bank’s behavior by offering factual allegations of explicit

or implicit discrimination. 140 S.Ct. at 1015; see also Oparaji,

2020 WL 9816011, at *14.

In this regard, the Amended Complaint is wholly deficient. Plain-

tiff states that he deposited the check at the Chase Bank branch

at 883 Flatbush Avenue, but does not say if he did this in person

or using an ATM. (Am. Compl. 418-20.) Plaintiff then notes that

after more than ten days without access to the funds, Noemi Gra-

ham told Plaintiff that she would try to “fix the situation,” but

also that she accused Plaintiff of fraud—a seeming contradiction

that is never explained. (id. (§ 22-25.) Nowhere in the Amended

Complaint does the Plaintiff clearly allege that any employee of

Chase Bank mentioned his race—much less communicated ex-

plicit discriminatory intent—or that he observed himself being

treated dissimilarly to Chase’s similarly situated non-black cus-

tomers. (See generally id.) Plaintiff simply alleges that Noemi

Graham acted with malice toward him, “singling him out for dis-

criminatory treatment based upon his racial classification

(because he is Black and wears dreadlocks).” Ud. at § 44.} This

allegation is conclusory and without support. “Plaintiff alleges no

facts in support of his conclusion that defendant had a discrimi-

natory intent for its actions,” and instead provides the court with

only raw speculation. Rojas, 2019 WL 1333257 at *2.

The Amended Complaint also acknowledges an alternative pos-

sible explanation for Chase Bank’s treatment of Plaintiff, which

further undermines a finding of discriminatory intent. See Akyar

y, TD Bank US Holding Co., No. 18-CV-379 (VSB), 2018 WL

4356734, at *3 (S.D.NLY. Sept. 12, 2018) (“[A] complaint that

identifies other possible motives, combined with a lack of specific

factual support of racial animus, contradicts a claim of racial dis-

crimination.”). As Defendants note, (Mot. to Dismiss at 8), the

check at issue was flagged for fraud because of the discrepancy

between the Venture Funding Group address on the check and

its address on Lexis. (Am. Compl. { 37.) Plaintiff argues that De-

fendants should have approved the check simply because the two

addresses are located in the same town and zip code. (Opp. to

Mot. at 6.) But he provides no factual allegations that suggest the

stated justification was pretextual or that in any way contradict □

the Defendants’ narrative. This unrefuted alternative explanation

further undercuts a finding of intent. In sum, the Amended Com-

plaint does not sufficiently allege that racial discrimination was

the but-for cause of the hold placed on Plaintiffs funds.* Plain-

tiffs § 1981 claim must therefore be dismissed.

4 Plaintiffs claim for race discrimination may also fail to establish the third

element under § 1981, discrimination concerning one of the statute’s enu-

merated activities, Plaintiff alleges a delay in access to funds in the course

of Chase Bank’s retail banking operations, (See Am. Compl. 4 5.) Retail

banking invoives the enjoyment of a contractual relationship, and thus falls

into one of the enumerated activities covered by § 1981. See Nwachukwu,

257 F. Supp. 3d at 305; 42 U.S.C. § 1981 (b). But delay in access to banking

services is generally not an injury covered by this statute. See Alexander v.

C. Claim Two: Intentional Infliction of Emotional

Distress

Because it dismisses the § 1981 claim, the court is within its dis-

cretion to also dismiss Plaintiffs supplemental state law ITED

claim. See 28 U.S.C. § 1367(c)(3). When deciding whether to re-

tain jurisdiction after dismissing claims over which it has original

jurisdiction, courts balance the traditional “values of judicial

economy, convenience, fairness, and comity.” Carnegie—Mellon

Univ. v. Cohill, 484 U.S. 343, 350 (1988) (citing United Mine

Workers of Am. v. Gibbs, 383 U.S. 715, 726-27 (1966)); see also

Williams v. City of New York, No. 15-CV-6900 (BMC), 2016 WL

5173254, at *5 (E.D.N.Y. Sept. 21, 2016).

Considering the four values articulated in Cohill, the court de-

clines to exercise supplemental jurisdiction over Plaintiffs ITED

claim. As a matter of comity, the IED claim would be better

suited for state court. See Sheppard v U.S. Tennis Ass’n, No. 17-

CV-5719 (AMD) (SMG), 2018 WL 3941941, at *4 (E.D.N.Y. Aug,

16, 2018). The consideration of fairness also suggests dismissal,

as state courts will ensure the state claim “a surer-footed reading

of applicable law.” Gibbs, 383 U.S. at 726. And because this case

is still in its earliest stages, and still may be refiled in state court,

JPMorgan Chase Bank, N.A., No. 19-CV-10811 (OTW), 2021 WL 1061833,

at *4 (S.D.N-Y. Mar. 18, 2021) (finding that a “twenty-minute delay” in

being able to withdraw funds from a bank account did not implicate the

third § 1981 requirement); Bentley v. United Refin. Co. of Pa. 206

F.Supp.2d 402, 406 (W.D.N-Y. 2002) (“[M]ere delay, even coupled with

discourteous treatment, poor service, or racial animus, is insufficient to

sustain a § 1981 claim.”}. On the other hand, a 54-day delay paired with

the fact that Plaintiff had to visit four separate Chase Bank branches before

he could access his funds may distinguish the instant case. Regardless, the

court need not answer this question because Plaintiff fails to satisfy §

1981’s second element and therefore fails to state a claim,

dismissal is also in the interest of convenience and judicial effi-

ciency. See Klein & Co. Futures. Inc. v. Bd, of Trade, 464 F.3d 255,

262 (2d Cir. 2006) (“[Wlhere, as here, the federal claims are

eliminated in the early stages of litigation, courts should gener-

ally decline to exercise pendent jurisdiction over remaining state

law claims.”). Accordingly, the court follows others in this district

and declines to exercise supplemental jurisdiction over Plaintiffs

remaining state law claim. See, e.g., Cha v. Hooters of Am., LLC,

No. 12-CV-4523 (DLD (JMA), 2013 WL 5532745, at *6 (E.D.N.Y.

Sept. 30, 2013); Aigbojie v. Fed’n Emp. and Guidance Serv., No.

95-CV-4977 (NG), 1997 WL 702977 at *1 (E.D.N.Y. Nov. 7,

1997).

IV. CONCLUSION

For the foregoing reasons, Plaintiff has failed to state a claim.

Plaintiffs briefing in opposition does not seek leave to amend

upon a finding of dismissal. Moreover, “[a]n opportunity to

amend is not required where the plaintiff already has amended

the complaint.” Thorsen v. Sons of Norway, 996 F. Supp. 2d 143,

166 (E.D.N.Y. 2014). Accordingly, the Defendants’ motions to

dismiss is GRANTED with prejudice.

SO ORDERED.

Dated: Brooklyn, New York

August 7 , 2023

s/Nicholas G. Garaufis

NICHOLAS G. GARAUFIS |,

United States District Judge

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