Lewis v. Full Sail, LLC

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

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DEREK JEROME LEWIS, )

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Plaintiff, )

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v. ) Civil Action No. 16-2150 (EGS)

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FULL SAIL, LLC, et al., )

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Defendants. )

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MEMORANDUM OPINION

This past October, plaintiff Derek Jerome Lewis, proceeding

pro se, filed suit in the Superior Court of the District of

Columbia against Full Sail, LLC, Los Angeles Recording School,

LLC, Los Angeles Film Schools, LLC, TA Associates Management,

LP, Rocky Mountain College of Art & Design (collectively

“Corporate Defendants”), and attorney Robert Gary Stephens.

Compl., ECF No. 5 at 36.1 The suit was subsequently removed to

this Court. See Notice of Removal, ECF No. 1.

The various documents that Mr. Lewis filed along with his

complaint state that he enrolled at Florida-based Full Sail

University to pursue a recording arts degree in early 2015.

Letter to Occupational Safety and Health Administration (“OSHA

Letter”), ECF No. 5 at 37. He used federal loan money to pay his

1 Page-number citations to documents the parties have filed refer

to the page numbers that the Court’s electronic filing system

assigns.

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tuition and other expenses. Id. He contends that near the end of

2015 he stopped taking Full Sail courses on a full-time basis

but that Full Sail continued to charge him for courses that he

was not taking, and he alleges that Full Sail engaged in other

tuition- and fee-related improprieties, like not providing him

refunds and account credits to which he contends that he was

entitled. See id. at 37-38. According to a chart that appears to

have been prepared by Mr. Lewis, Los Angeles Film Schools, Los

Angeles Recording School, and Rocky Mountain College of Art &

Design are offshoots or subsidiaries of Full Sail, which in turn

is controlled by the private equity firm TA Associates

Management. See Chart, ECF No. 5 at 46. Mr. Stephens appears to

be a Texas-based lawyer who has declined to represent Mr. Lewis

in his “case against Full Sail and any other responsible

parties.” Denial of Representation Letter, ECF No. 5 at 47-48.

Mr. Lewis’ complaint refers to a “Conspiracy” and to a

“Ponzi Scheme – Educational” without further elaboration,

Compl., ECF No. 5 at 36, and the various documents he has filed

along with that complaint refer to various related grievances

arising from his relationship with Full Sail. See OSHA Letter,

ECF No. 5 at 38 (referring to “a violation of the Consumer

Financial Protection Act,” 12 U.S.C. § 5567); Document to U.S.

Department of Education, ECF No. 5 at 39 (referring to “fraud”);

Form TCR (Tip, Complaint or Referral) to U.S. Securities and

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Exchange Commission, ECF No. 5 at 41 (referring to “False Claim

Act, Embezzlement, Money Laundering, IRS, Misleading Marketing”

and a “Ponzi Scheme”); Occupational Safety and Health

Administration Whistleblower or Retaliation Complaint, ECF No. 5

at 69 (referring to “False Claim Act, Embezzlement, Medical

Malpractice, IRS Fr[au]d”).

The Corporate Defendants and Mr. Stephens have filed

motions to dismiss. See Corporate Defs.’ Mot. to Dismiss, ECF

No. 3; Def. Robert Gary Stephens’ Mot. to Dismiss, ECF No. 6.

They contend that the Court lacks personal jurisdiction over

them and that Mr. Lewis has failed to state a claim upon which

relief can be granted. Corporate Defs.’ Mem. in Supp. of Mot. to

Dismiss, ECF No. 3-1 at 4-12; Robert Gary Stephens’ Mem. in

Supp. of Mot. to Dismiss, ECF No. 6-2 at 1-2. The Court ordered

Mr. Lewis to respond to the defendants’ motions to dismiss,

advised him that his failure to do so could result in the

dismissal of his claims without prejudice, and, after the Court

received an email from Mr. Lewis in lieu of a properly-filed

response, instructed him to file his response to the defendants’

motions with the Clerk of the Court. See Minute Order of

December 1, 2016; Minute Order of December 27, 2016. Instead of

filing his response with the Clerk, Mr. Lewis mailed to the

Court various documents, which the Court has filed on the docket

in this case. See Documents, ECF No. 7.

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Upon review of the defendants’ motions, Mr. Lewis’

submissions, the relevant law, and the entire record, the Court

agrees with the defendants that it lacks personal jurisdiction

over them and, in the alternative, that Mr. Lewis has failed to

state a claim for which relief can be granted. Accordingly, the

Court GRANTS the defendants’ motions to dismiss.

Under Federal Rule of Civil Procedure 12(b)(2), the

plaintiff bears the burden of establishing a factual basis for

personal jurisdiction. Okolie v. Future Servs. Gen. Trading &

Contracting Co., W.L.L., 102 F. Supp. 3d 172, 175 (D.D.C. 2015)

(citing Crane v. N.Y. Zoological Soc’y, 894 F.2d 454, 456 (D.C.

Cir. 1990)). To meet that burden, the plaintiff “‘must allege

specific acts connecting [the] defendant with the forum.’” Id.

(quoting Second Amendment Found. v. U.S. Conference of Mayors,

274 F.3d 521, 524 (D.C. Cir. 2001)). The Court may exercise one

of two types of personal jurisdiction: (1) “‘general or all-

purpose jurisdiction’” or (2) “‘specific or case-linked

jurisdiction.’” Id. (quoting Goodyear Dunlop Tires Operations,

S.A. v. Brown, 564 U.S. 915, 919 (2011)). Exercise of general

jurisdiction, which permits a court to hear any and all claims

against a defendant, requires that a defendant’s contacts with

the forum be “continuous and systematic” such that the defendant

is “essentially at home” in the forum. See Goodyear, 564 U.S. at

919. “For an individual, the paradigm forum for the exercise of

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general jurisdiction is the individual’s domicile; for a

corporation, it is an equivalent place, one in which the

corporation is fairly regarded as at home.” Id. at 924. Specific

jurisdiction, on the other hand, “is confined to adjudication of

issues deriving from, or connected with, the very controversy

that establishes jurisdiction.” Id. at 919 (internal quotation

marks omitted). That is, “[s]pecific jurisdiction requires only

sufficient minimum contacts with the forum, but requires that

the plaintiff’s claims arise from those contacts.” Brit UW, Ltd.

v. Manhattan Beachwear, LLC, No. 16-523, 2017 WL 375607, at *4

(D.D.C. Jan. 26, 2017) (internal quotation marks and alterations

omitted).

Mr. Lewis has mailed a document to the Court that appears

to assert that Full Sail made a phone call, sent a mesh laptop

case, and sent tuition funds to a student or prospective student

in the District of Columbia. See Documents, ECF No. 7 at 2.

These District of Columbia contacts——the only District of

Columbia contacts to which Mr. Lewis points the Court——do not

permit the Court to exercise general or specific jurisdiction.

As concerns general jurisdiction, Mr. Lewis has not demonstrated

that any of the defendants have contacts with this forum that

are “continuous and systematic” such that those defendants are

“essentially at home” in this forum. See Goodyear, 564 U.S. at

919. And as concerns specific jurisdiction, nothing Mr. Lewis

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has provided to the Court demonstrates that any of his claims

arise from whatever contact the defendants have had with this

forum. See Brit UW, Ltd., 2017 WL 375607, at *4. Accordingly,

the Court lacks personal jurisdiction over the defendants.

In any event, Mr. Lewis has not stated a plausible cause of

action against any of the defendants, so dismissal is warranted

pursuant to Federal Rule of Civil Procedure 12(b)(6). A motion

to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency

of a complaint. Browning v. Clinton, 292 F.3d 235, 242 (D.C.

Cir. 2002). To survive a motion to dismiss, a complaint “must

contain sufficient 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) (internal quotation marks

omitted). A claim is facially plausible when the facts pled in

the complaint allow the court to “draw the reasonable inference

that the defendant is liable for the misconduct alleged.” Id.

The standard does not amount to a “probability requirement,” but

it does require more than a “sheer possibility that a defendant

has acted unlawfully.” Id. “[W]hen ruling on a defendant’s

motion to dismiss [pursuant to Rule 12(b)(6)], a judge must

accept as true all of the factual allegations contained in the

complaint,” Atherton v. D.C. Office of the Mayor, 567 F.3d 672,

681 (D.C. Cir. 2009) (internal quotation marks omitted), and the

court must give the plaintiff the “benefit of all inferences

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that can be derived from the facts alleged.” Kowal v. MCI

Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Even so,

the court need not accept “inferences drawn by plaintiffs if

such inferences are unsupported by the facts set out in the

complaint” or “legal conclusions cast in the form of factual

allegations.” Id. Further, “[t]hreadbare recitals of the

elements of a cause of action, supported by mere conclusory

statements” are not sufficient to state a claim.” Iqbal, 556

U.S. at 678. Additionally, “[i]n determining whether a complaint

states a claim, the court may consider the facts alleged in the

complaint, documents attached thereto or incorporated therein,

and matters of which it may take judicial notice.” Abhe &

Svoboda, Inc. v. Chao, 508 F.3d 1052, 1059 (D.C. Cir. 2007)

(internal quotation marks omitted). And although a pro se

complaint “must be held to less stringent standards than formal

pleadings drafted by lawyers,” Erickson v. Pardus, 551 U.S. 89,

94 (2007) (per curiam) (internal quotation marks omitted), it

too “must plead ‘factual matter’ that permits the court to infer

‘more than the mere possibility of misconduct.’” Atherton, 567

F.3d at 681-82 (quoting Iqbal, 556 U.S. at 679).

Mr. Lewis’ complaint clearly refers to only two claims:

“Conspiracy” and “Ponzi Scheme – Educational.” Compl., ECF No. 5

at 36. To state a claim of conspiracy, a plaintiff “must allege

with some factual support: (1) an agreement between two or more

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persons; (2) to participate in an unlawful act, or in a lawful

act in an unlawful manner; and (3) an injury caused by an

unlawful overt act performed by one of the parties to the

agreement (4) pursuant to, and in furtherance of, the common

scheme.” Mattiaccio v. DHA Grp., Inc., 20 F. Supp. 3d 220, 230

(D.D.C. 2014) (internal quotation marks omitted). Although Mr.

Lewis appears to allege that Full Sail charged him for courses

that he did not take and engaged in other tuition- and fee-

related improprieties, OSHA Letter, ECF No. 5 at 37-38, he has

not alleged that Full Sail or any other defendant was in

agreement with other persons or entities to commit unlawful

acts. See McCreary v. Heath, No. 04-623, 2005 WL 3276257, at *5

(D.D.C. Sept. 26, 2005) (“An essential element of any conspiracy

claim is the existence of some actual conspiracy.”). The chart

that he has submitted that purports to show relationships

between various of the defendants, see Chart, ECF No. 5 at 46,

is “purely conclusory, and devoid of any factual support” for

the notion that certain defendants had agreed to engage in

unlawful acts. See Acosta Orellana v. CropLife Int’l, 711 F.

Supp. 2d 81, 113 (D.D.C. 2010) (finding a failure to plead an

agreement sufficient to state a conspiracy claim where the

plaintiffs merely alleged that certain defendants “acted in

concert” and were “conspiring” to engage in unlawful acts); see

also Busby v. Capital One, N.A., 932 F. Supp. 2d 114, 141

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(D.D.C. 2013) (“[C]onclusory allegations of an agreement do not

suffice; parties must allege facts showing the existence or

establishment of an agreement.”). Accordingly, Mr. Lewis has

failed to state a conspiracy claim.

And construing Mr. Lewis’ “Ponzi Scheme – Educational”

reference as an assertion of some version of a fraud claim, see

Document to U.S. Department of Education, ECF No. 5 at 39

(referring to “fraud”); Form TCR (Tip, Complaint or Referral) to

U.S. Securities and Exchange Commission, ECF No. 5 at 41

(referring to “False Claim Act, Embezzlement, Money Laundering,

IRS, Misleading Marketing” and a “Ponzi Scheme”); Occupational

Safety and Health Administration Whistleblower or Retaliation

Complaint, ECF No. 5 at 69 (referring to “False Claim Act,

Embezzlement, . . . IRS Fr[au]d”), Mr. Lewis also fails to state

a claim of fraud. Federal Rule of Civil Procedure 9(b) requires

that a party alleging fraud “must state with particularity the

circumstances constituting fraud.” Fed. R. Civ. P. 9(b).

Pleading fraud with particularity requires the pleader to “state

the time, place and content of the false misrepresentations, the

fact misrepresented and what was retained or given up as a

consequence of the fraud,” as well as the “identi[ty] [of the]

individuals allegedly involved in the fraud.” United States ex

rel. Williams v. Martin-Baker Aircraft Co., 389 F.3d 1251, 1256

(D.C. Cir. 2004) (internal quotation marks and citations

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omitted). Mr. Lewis has alleged improprieties related to tuition

and fees, and he has alleged that Full Sail charged him for

courses that he did not take, but he has not provided any

specifics concerning misrepresentations made by Full Sail or any

other defendant. In short, Mr. Lewis has not pleaded with

particularity the fraudulent representations of Full Sail or any

other defendant, and thus he has failed to state a claim of

fraud. See Busby, 932 F. Supp. 2d at 136-37 (“Unless a complaint

pleads with particularity a defendant’s alleged fraudulent

representations, the plaintiff will not be permitted to maintain

the claim.”) (internal quotation marks omitted). Accordingly,

Mr. Lewis fails to state a fraud claim.

To the extent that Mr. Lewis seeks to assert a claim in

this Court under 12 U.S.C. § 5567(a), the anti-retaliation

provision of Title X of the Dodd-Frank Wall Street Reform and

Consumer Protection Act, see OSHA Letter, ECF No. 5 at 37-38, he

has failed to state such a claim. That anti-retaliation

provision protects a “covered employee” or such an employee’s

“authorized representative” from retaliation. 12 U.S.C. §

5567(a). A “covered employee” is “any individual performing

tasks related to the offering or provision of a consumer

financial product or service.” Id. § 5567(b). Even assuming that

Mr. Lewis has alleged that Full Sail or any other defendant

discriminated against him for undertaking the various actions

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for which § 5567(a) seeks to provide protection——which he has

not——and assuming further that Mr. Lewis has exhausted his

administrative remedies, see id. § 5567(c), he does not allege

that he was an employee of Full Sail or any other defendant who

“perform[ed] tasks related to the offering or provision of a

consumer financial product or service,” id. § 5567(b), nor does

he allege that he was an “authorized representative” of an

employee who performed such tasks. See id. § 5567(a). Mr. Lewis

thus has failed to state a § 5567(a) claim. See Wimmer v.

Gateway Funding Diversified Mortg. Servs., L.P., No. 15-241,

2015 WL 5453058, at *5 (S.D. Ohio Sept. 17, 2015) (explaining

that even a plaintiff who “alleged only that he ‘was a covered

employee of [a defendant] within the meaning of 12 U.S.C. §

5567’” would fail to state a plausible claim for relief). 2

2 Additionally, to the extent that Mr. Lewis seeks to assert

claims under other anti-retaliation provisions of securities and

workplace safety laws, see Form TCR (Tip, Complaint or Referral)

to U.S. Securities and Exchange Commission, ECF No. 5 at 40-45;

Occupational Safety and Health Administration Whistleblower or

Retaliation Complaint, ECF No. 5 at 66-71, assuming a non-

employee were permitted to make such claims and that private

causes of action were available to him, he fails to state such

claims because his filings fail to allege that Full Sail or any

other defendant discriminated or retaliated against him for

engaging in statutorily protected activity. And to the extent

that he seeks to assert substantive, non-retaliation claims

premised on securities or workplace safety laws, see Form TCR

(Tip, Complaint or Referral) to U.S. Securities and Exchange

Commission, ECF No. 5 at 40-45; Occupational Safety and Health

Administration Whistleblower or Retaliation Complaint, ECF No. 5

at 66-71, the Court is unable to discern from the limited

information provided in the relevant filings what those claims

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Accordingly, for the foregoing reasons, the defendants’

motions to dismiss are GRANTED. An appropriate Order accompanies

this Memorandum Opinion.

SO ORDERED.

Signed: Emmet G. Sullivan

United States District Judge

July 24, 2017

might be and, in any event, is unable to identify factual

allegations that could support any such claims.

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