# Morris, Sr. v. Small Business Administration

> District Court, S.D. Ohio · October 18, 2024

URL: https://www.frixlaw.com/law-library/cases/10665566

## Case

- **Court:** District Court, S.D. Ohio
- **Decided:** October 18, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION AT DAYTON

LEON A. MORRIS, SR., : Case No. 3:22-cv-00221
:
Plaintiff, : District Judge Thomas M. Rose
: Magistrate Judge Caroline H. Gentry
vs. :
:
SMALL BUSINESS :
ADMINISTRATION, et al., :
:
Defendants. :

SUPPLEMENTAL REPORT AND RECOMMENDATION

This matter is before the undersigned United States Magistrate Judge to consider
Plaintiff Leon Morris’ Second Amended Complaint on recommittal. The case concerns
Morris’ claim that the United States Small Business Administration should have loaned
money to his business, Neighborhood Fish and More, LLC, during the COVID-19
pandemic. (Doc. 30). For the following reasons, the undersigned RECOMMENDS that
the Court DISMISS all the claims in the Second Amended Complaint.
I. Procedural History
Morris submitted his original pro se Complaint and related documents in 2022.
(Doc. 1). He asked to amend his Complaint, which the Court allowed. (Doc. 14; Doc. 18
at PageID 69). In February 2023, the undersigned recommended that the Court dismiss
Morris’ Complaint (as amended) but allow him to file a Second Amended Complaint to
name proper defendant(s) and attempt to fix some of the problems with his previous
complaints. (Doc. 18 at PageID 69, 76-77). The Court agreed and allowed Morris to do
so. (Doc. 23).

Morris then filed several documents that the undersigned construed together as his
Second Amended Complaint. (See Doc. 24-1, 25, 27, 28, 29). The Second Amended
Complaint (filed together as Doc. 30) generally raises the same issue as Morris’ earlier
complaints—his argument that the Small Business Administration should have granted
Neighborhood Fish and More, LLC (“Neighborhood Fish”) a loan during the pandemic.
It appears (but is not clear) that Neighborhood Fish sought an EIDL or Economic Injury

Disaster Loan under Section 7(b)(2) of the Small Business Act, as impacted by the
Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), Pub. L. No.
116-36, 134 Stat. 281 (2020). (See generally Doc. 43-1 at PageID 213, 218).
After liberally construing the Second Amended Complaint, the undersigned
initially concluded that Morris should be allowed to proceed with two claims, but that the

rest of his claims, including so-called “Bivens” claims alleging violations of his
constitutional rights, should be dismissed. (Doc. 31). Morris objected to these
recommendations, asserting that the Second Amended Complaint “was liberally
construed wrong.” (Doc. 34 at PageID 157).
The Court then recommitted (or returned) the matter to the undersigned to

consider part of Morris’ objections. (Doc. 37). The District Judge stated:
Morris’ objections make statements that (arguably) change the basis for the
Report and Recommendations’ recommendations upon its initial screening
of the Second Amended Complaint. Therefore, the Court recommits the
matter to Magistrate Judge Gentry, instructing her to (a) conduct an initial
screening of the Second Amended Complaint (Doc. No. 30) while taking
into consideration statements made by Morris in his Objections (Doc. No.
34) and (b) then issue a supplemental report and recommendation concerning
the result of that initial screening of the Second Amended Complaint. . . . The
[Court] recognizes that it is entirely possible that the anticipated
Supplemental Report and Recommendations could make the same
recommendations made in the [earlier] Report and Recommendations (Doc.
No. 31) or could recommend that more of Plaintiff’s Second Amended
Complaint be dismissed than in the [earlier] Report and Recommendations.
(Doc. 37 at PageID 184-85). The Recommittal Order also pointed out that Morris, who is
not an attorney, is not permitted to raise claims on behalf of Neighborhood Fish. (Id. at
PageID 185, fn.1).
The undersigned Magistrate Judge now provides the requested Supplemental
Report and Recommendation. The undersigned has considered Morris’ Second Amended
Complaint (Doc. 30), his objections to the undersigned’s previous review (including his
assertions that he did not raise “Bivens” claims (Doc. 34)), and the Recommittal Order,
including Morris’ inability to represent (or raise claims on behalf of) Neighborhood Fish,
which is a limited liability company.1 (Doc. 37; see also Doc. 18 at PageID 72-73; Doc.
23). 28 U.S.C. § 1654. The undersigned concludes that the Second Amended Complaint
does not state a claim on which relief may be granted and recommends dismissal.
II. Allegations in the Second Amended Complaint
Although the Second Amended Complaint is unclear, Morris appears to be suing
the United States Small Business Administrator, Isabella Casillas Guzman (the
“Administrator”) and the United States Small Business Administration (“SBA”).

1 See Ohio Secretary of State’s Business Details page for Neighborhood Fish & More LLC, available at
https://businesssearch.ohiosos.gov?=businessDetails/4246403 (last visited Oct. 8, 2024).
(Second Amended Complaint, Doc. 30 at PageID 123; Objections, Doc. 34 at PageID
157 ). He may also be suing the United States of America. (Doc. 30 at PageID 131).

Morris alleges that in April 2020, he filed two separate pandemic disaster loan
applications for his two small businesses: Real Change Program and Neighborhood Fish.
(Doc. 30 at PageID 125). In July 2020, both applications were approved. (Id.; but see
PageID 126 (alleging one loan was denied)). Although $45,000 was deposited into Real
Change Program’s bank account, no money was disbursed to Neighborhood Fish. (Doc.
30 at PageID 125). When Morris contacted the SBA, staffers explained that the

applications were “duplicates,” which Morris disputes. (Id.). He alleges that he emailed
the Administrator, who “promised to correct this problem neglect negligence but never
responded back.” (Id. (as in original)).2
Morris refers to the CARES Act that allegedly authorized the EIDLs but does not
raise a claim under that Act. (Doc. 30 at PageID 131 (“Plaintiff makes no claim under the

CARES Act”)). He also refers to a 2019 Standard Operating Procedure document and
asserts that the Administrator and/or the SBA exceeded their statutory authority and
“failed to follow rules, regulations, and laws of Congress” by denying the loan to
Neighborhood Fish. (Doc. 30 at PageID 126, 132). This denial, Morris says, “forced

2 Morris also asserts that the Administrator “was supposed to investigate and respond to Plaintiff A.S.A.P.”
(See Doc. 43 at PageID 209). Morris has provided what may be his emails to the SBA about Neighborhood
Fish. (See Doc. 43-1 at PageID 215-16). None of these documents support Morris’ allegation that Guzman
personally promised to fix the SBA’s “negligence.” The record does contain the SBA’s form response letter
acknowledging receipt of Morris’ email about his other business, for which the SBA apparently also denied
a loan. (Doc. 43-1 at PageID 213). It also contains the SBA’s letter about Neighborhood Fish’s loan
application, which was denied due to “Unsatisfactory credit history.” (Doc. 43-1 at PageID 225).
Plaintiff’s business to suffer financial hardship until he was forced to permanently close
his doors.” (Doc. 30 at PageID 126).

The undersigned liberally construes the allegations as attempting to assert claims
under the Federal Tort Claims Act (“FTCA”), 28 U.S.C. §§ 2671-2680; civil rights
claims under 42 U.S.C. §§ 1983 and 1985; and a claim for judicial review of the SBA’s
denial of Neighborhood Fish’s loan application under the Administrative Procedure Act
(“APA”), 5 U.S.C. §§ 701-706. For relief, Morris seeks to have past-due bills paid, credit
restored, business debts paid, a line of credit, and damages. (Doc. 30 at PageID 127, 136).

III. Screening Standard
The standard set forth in the two previous Reports and Recommendations is
incorporated herein by reference. (Doc. 18, 31). Screening is required even though
Morris is no longer incarcerated. (See Doc. 33). See Smith v. Dollar Gen. Store, No.
1:18-cv-179, 2019 WL 148657, at *1 (E.D. Tenn. Jan. 9, 2019) (citing McGore v.

Wrigglesworth, 114 F.3d 601, 608 (6th Cir. 1997)) (“district courts must [still] screen
complaints filed by former prisoners who are proceeding in forma pauperis”).
IV. Discussion
The undersigned concludes that all of Morris’ claims should be dismissed. As
explained below, he has not pled viable claims under Section 1983 or 1985. Further,

Morris cannot raise FTCA and ACA claims based on Neighborhood Fish’s denied loan
application without the assistance of counsel, and he has not adequately pled any claims
of his own. In short, Morris has not pled a claim on which the Court may grant him relief.
A. Section 1983 and 1985 Claims
The undersigned previously construed Morris’ Second Amended Complaint to
include “Bivens” claims that assert federal actors violated a plaintiff’s constitutional

rights. (Doc. 31 at PageID 144-46 (citing Bivens v. Six Unknown Named Agents of the
Federal Bureau of Narcotics, 403 U.S. 388 (1971)). The undersigned previously
determined that Morris’ Bivens claims should be dismissed. (Doc. 31 at PageID 146).
Morris objected, asserting that he did not raise a Bivens claim. (Doc. 34 at PageID
159). On recommittal, the undersigned accepts his statement and instead evaluates
Morris’ constitutional claims under 42 U.S.C. §§ 1983 and 1985. (See Doc. 30 at PageID

124, 131 (citing 42 U.S.C. §§ 1983 and 1985)).3
To plead and prove a Section 1983 claim, Plaintiff must establish that a person
acting under color of state law deprived him of a right secured by the Constitution or the
laws of the United States. Searcy v. City of Dayton, 38 F.3d 282, 286 (6th Cir. 1994).
Morris has not sued any state official in his Second Amended Complaint. (Doc. 30). He

does not describe any action by a state official. (Id.). He does not allege that any
Defendant acted under color of state law, and there is no basis to infer that they did. His
claim instead is that a federal official (the Administrator) acted under color of federal law
(i.e., the CARES Act, the Small Business Act, or a related law) and did so in a way that

3 A claim under Section 1983, which is titled “Civil action for deprivation of rights,” is similar to a Bivens
action. The key difference is that Section 1983 lawsuits are filed against state officials, whereas Bivens
lawsuits are filed against federal officials. See Beasley v. Poole, No. 1:11-cv-63, 2011 WL 2689347, at *7
(E.D. Tenn. July 11, 2011) (“the Court observes that an action under Bivens is almost identical to a 42
U.S.C. § 1983 action, except the Bivens action is maintained against federal officials while a § 1983 is
brought against state officials”); Williams v. Taylor, No. 1:22-cv-769, 2024 WL 1770727, at *5 (S.D. Ohio
Apr. 24, 2024) (“a prisoner who is challenging violations of his civil rights may file a lawsuit based upon 42
U.S.C. § 1983 or a so-called Bivens action, depending on whether the defendant is a state or federal
official”). Because Morris sued federal defendants, the undersigned previously construed his Second
Amended Complaint as asserting Bivens claims.
allegedly violated his constitutional rights. This allegation fails to include the necessary
element of state action and does not present a viable Section 1983 claim.

Moreover, a Section 1983 claim cannot be raised against the federal government,
its agencies or officials. See Conner v. Greef, 99 F. App’x 577, 580 (6th Cir. 2004) (“The
federal government and its officials are not subject to suit under 42 U.S.C. § 1983.”);
Teller v. United States Dep’t of Just., No. 1:18-cv-1359, 2018 WL 4031061, at *2 (N.D.
Ohio Aug. 23, 2018) (“It is well-settled that agencies of the United States Government,
such as the United States Department of Justice may not be subjected to suit under §

1983”) (cleaned up). Morris’ Section 1983 claim fails for this reason as well.
Finally, even if Morris could sue Defendants under Section 1983, he has not
included sufficient factual information to plead claims on which relief may be granted.
Although he labels the claims as violations of his Due Process and Equal Protection
rights, for example, he provides no facts that show how or why Defendants’ alleged

actions did so. (See Doc. 30 at PageID 131). Conclusory allegations of misconduct (also
referred to as “unadorned, the defendant-unlawfully-harmed-me accusation[s]”) are
insufficient to state a claim for relief under Ashcroft v. Iqbal, 556 U.S. 662 (2009) and
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). See Keita v. U.S. Small Bus.
Admin., No. 07-cv-4958, 2010 WL 395980, at *5 (E.D.N.Y. Feb. 3, 2010) (“Without

some specification of factual detail, the complaint completely fails to state any plausible
claim against individual defendants . . . under the Iqbal test.”).
In sum, because Morris does not allege that any Defendant acted under color of
state law, because the named federal Defendants may not be sued under Section 1983,
and because Morris has not asserted facts that support a plausible claim for violation of
his constitutional rights, his Section 1983 claims should be dismissed.

Section 1985 is titled “Conspiracy to interfere with civil rights.” To state such a
claim:
a plaintiff must allege: (1) a conspiracy; (2) for the purpose of depriving a
person or a class of persons, directly or indirectly, of equal protection of the
laws; (3) through an act in furtherance of the conspiracy; (4) which causes
injury to plaintiff or plaintiff’s property or deprives him of any right or
privilege of a citizen of the United States. Vakilian v. Shaw, 335 F.3d 509,
518 (6th Cir.2003). The acts that allegedly deprived a plaintiff of equal
protection of the law “must be the result of class-based discrimination.” Id.
(citing Newell v. Brown, 981 F.2d 880, 886 (6th Cir.1992)). A plaintiff must
allege sufficient facts to link two or more defendants in the conspiracy and to
establish the requisite “meeting of the minds” essential to the existence of the
conspiracy. Coker v. Summit County Sheriff’s Dep’t, 90 F. App’x 782, 789
(6th Cir.2003) (quoting McDowell v. Jones, 990 F.2d 433, 434 (8th
Cir.1993)).
Mason v. LaPointe, No. 3:12-cv-1881, 2012 WL 5939283, at *3 (N.D. Ohio Nov. 26,
2012), aff’d, No. 12-4533 (6th Cir. Aug. 21, 2013) (unreported).
Morris’ Second Amended Complaint does not attempt to meet this standard and
does not describe such a conspiracy. Its few paragraphs simply allege that the SBA
denied Neighborhood Fish’s loan application under the CARES Act but should have
granted the loan, as it was Congress’ intent to keep small businesses open. (Doc. 30).
Rather than describing a conspiracy claim, the allegations resemble a strict liability
claim. While Morris alleges that the Administrator violated the “Rules, Regulations, and
law of Congress,” in denying the loan, which forced Neighborhood Fish to suffer
financial hardship and close (Doc. 30 at PageID 126), these allegations do not describe
the elements of a Section 1985 conspiracy. Morris fails to state a claim on which relief
may be granted under Section 1985 as well.

The undersigned therefore RECOMMENDS that the Court DISMISS all of
Morris’ constitutional claims, whether raised under Bivens, Section 1983, or Section
1985.
B. Neighborhood Fish and More, LLC’s claims
The Small Business Act “authorizes the SBA to issue EIDLs to ‘any small
business concern, private nonprofit organization, or small agricultural cooperative,’ not

to individual business owners.” Huang v. Small Bus. Admin., No. 22-cv-3363, 2022 WL
3111809, at *1 (N.D. Cal. Aug. 4, 2022) (quoting 15 U.S.C. § 636(b)(2)). Claims arising
from the denial of such loan, therefore, belong only to the business, as it is the business
(not the owner) that applies for the EIDL and potentially suffers an injury-in-fact when
the SBA denies the business’ application. Id.

Accordingly, claims that challenge the SBA’s denial of an EIDL to Neighborhood
Fish belong to and must be litigated by Neighborhood Fish, not Morris. Morris cannot
raise those claims on behalf of Neighborhood Fish because he is not an attorney licensed
to practice law. (Doc. 18 at PageID 72-73 (noting that Morris cannot bring claims on
behalf of Neighborhood Fish); Doc. 23, PageID 95 (adopting that conclusion)). All

claims based on alleged injuries to Neighborhood Fish must therefore be dismissed.
If Morris is attempting to challenge the SBA’s action on his own behalf, he lacks
standing to do so. Courts have “found that the individual owner of a business lacked
standing to bring a similar action against the SBA for denying the COVID-19 EIDL
application for his business.” Jackson v. Small Bus. Admin., No. 3:22-cv-986, 2022 WL
18456351, *9 fn. 5 (N.D. Tex. Dec. 16, 2022), report and recommendation adopted,

2023 WL 375351 (N.D. Tex. Jan. 24, 2023). Here, Morris does not present facts in his
Second Amended Complaint that describe an independent injury separate and apart from
Neighborhood Fish’s injury. (Doc. 30). Because Morris has not pled sufficient facts to
establish his standing, “he has failed to state a claim upon which relief can be granted,
and his complaint is subject to dismissal.” Huang, 2022 WL 3111809, at *1.
The undersigned therefore RECOMMENDS that the Court DISMISS all claims

belonging to Neighborhood Fish based on the SBA’s denial of its EIDL application and
Morris’ attempted claims based on that alleged injury. As he does not plead other discrete
injuries to himself, any attempted claim based on injury to himself caused by the SBA’s
denial of Neighborhood Fish’s EIDL application should also be DISMISSED.
V. Conclusion

Having considered the Second Amended Complaint (Doc. 30) on recommittal
(Doc. 37), the undersigned Magistrate Judge RECOMMENDS that the Court DISMISS
it in its entirety. 28 U.S.C. § 1915(e)(2)(B); 28 U.S.C. § 1915A(b).
The undersigned further RECOMMENDS that the Court CERTIFY that an
appeal from the dismissal of this case would not the taken in good faith and therefore

DENY Morris leave to appeal in forma pauperis.
Morris may file one single document containing all objections to this Supplemental
Report and Recommendation in the manner described at the end of this opinion. He is
reminded that he must keep this Court informed of his address while the case is pending.
IT IS SO RECOMMENDED.
/s/ Caroline H. Gentry
CAROLINE H. GENTRY
United States Magistrate Judge

Notice Regarding Objections to this Report and Recommendations

If any party objects to this Report and Recommendations (“R&R”), the party may
serve and file specific, written objections to it within fourteen days after being served
with a copy thereof. Fed. R. Civ. P. 72(b). All objections shall specify the portion(s) of the
R&R objected to and shall be accompanied by a memorandum of law in support of the
objections. The Court may extend the fourteen-day objections period if a timely motion for
an extension of time is filed.
A District Judge of this Court will make a de novo determination of those portions
of the R&R to which objection is made. Upon proper objection, a District Judge of this
Court may accept, reject, or modify, in whole or in part, the findings or recommendations
made herein, may receive further evidence or may recommit this matter to the Magistrate
Judge with instructions. 28 U.S.C. § 636(b)(1).
The parties are specifically advised that failure to object to the R&R will result in a
waiver of the right to have the District Judge review the R&R de novo, and will also
operate as a waiver of the right to appeal the decision of the District Court adopting the

R&R. See Thomas v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th
Cir. 1981).

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10665566. Public record. Not legal advice.