Carter v. Wells Fargo & Company ( 2024 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DARRYL CHADWICH CARTER, Case No. 24-cv-07406-DMR 8 Plaintiff, ORDER GRANTING IFP 9 v. APPLICATION AND SCREENING COMPLAINT PURSUANT TO 28 U.S.C. 10 WELLS FARGO & COMPANY, et al., § 1915(E) 11 Defendants. 12 On October 23, 2024, self-represented Plaintiff Darryl Chadwich Carter filed a complaint, 13 an application for leave to proceed in forma pauperis (“IFP”), and a motion for service of process. 14 [Docket Nos. 1 (Compl.), 2 (IFP), 4 (Mot. Service).] On November 3, 2024, Plaintiff filed a motion to amend the complaint with his first amended complaint (“FAC”) attached as an exhibit. 15 [Docket Nos. 9 (Mot. Amend), 9-2 (FAC).] A party may amend its pleading once as a matter of 16 course no later than 21 days after serving it. Fed. R. Civ. P. 15(a). The court grants Plaintiff’s 17 motion to amend the complaint and treats the FAC as the operative complaint. The hearing on the 18 motion to amend set for December 12, 2024 is vacated. 19 Having considered Plaintiff’s papers, the court grants the IFP application and finds that the 20 FAC fails to state a claim on which relief may be granted pursuant to 28 U.S.C. § 1915(e). 21 Plaintiff must file a second amended complaint that addresses the deficiencies identified in this 22 screening order by December 10, 2024. Plaintiff’s motion for service of process is denied as 23 moot.1 24 I. DISCUSSION 25 A court may allow a plaintiff to prosecute an action in federal court without prepayment of 26 27 1 A motion for service of process is unnecessary. The Clerk will issue summons when the court 1 fees or security if the plaintiff submits an affidavit showing that he or she is unable to pay such 2 fees or provide such security. See 28 U.S.C. § 1915(a). Having evaluated Plaintiff’s financial 3 affidavit, the court finds that Plaintiff has satisfied the economic eligibility requirement of 28 4 U.S.C. § 1915(a) and grants the application to proceed IFP. 5 The court’s grant of Plaintiff’s application to proceed IFP, however, does not mean that 6 they may continue to prosecute the complaint. A court is under a continuing duty to dismiss a 7 case filed without the payment of the filing fee whenever it determines that the action “(i) is 8 frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks 9 monetary relief against a defendant who is immune from such relief.” 28 U.S.C. § 10 1915(e)(2)(B)(i)-(iii). If the court dismisses a case pursuant to Section 1915(e)(2)(B), the plaintiff 11 may still file the same complaint by paying the filing fee. This is because the court’s section 12 1915(e)(2)(B) dismissal is not on the merits, but rather an exercise of the court’s discretion under 13 the IFP statute. Denton v. Hernandez, 504 U.S. 25, 32 (1992). 14 To make the determination under 28 U.S.C. § 1915(e)(2)(B), courts assess whether there is 15 an arguable factual and legal basis for the asserted wrong, “however inartfully pleaded.” Franklin 16 v. Murphy, 745 F.2d 1221, 1227-28 (9th Cir. 1984). Courts have the authority to dismiss 17 complaints founded on “wholly fanciful” factual allegations for lack of subject matter jurisdiction. 18 Id. at 1228. A court can also dismiss a complaint where it is based solely on conclusory 19 statements, naked assertions without any factual basis, or allegations that are not plausible on their 20 face. Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009); see also Erickson v. Pardus, 551 U.S. 89 21 (2007) (per curiam). 22 Although pro se pleadings are liberally construed and held to a less stringent standard than 23 those drafted by lawyers, see Haines v. Kerner, 404 U.S. 519, 520-21 (1972), a complaint, or 24 portion thereof, should be dismissed for failure to state a claim if it fails to set forth “enough facts 25 to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 26 554 (2007); see also Fed. R. Civ. P. 12(b)(6). “[A] district court should not dismiss a pro se 27 complaint without leave to amend unless it is absolutely clear that the deficiencies of the 1 2012) (quotations omitted). 2 Plaintiff alleges that he submitted two online consumer disputes on September 15, 2024 3 with his personal bank, Wells Fargo Bank, N.A. (“WFB”), regarding an $8.71 transaction from 4 merchant X.com and a $45 transaction from merchant Visible. FAC ¶¶ 5-6. Plaintiff described 5 the reason for the disputes as: “Goods or service not as described.” Id. Plaintiff later clarified that 6 he had “a very serious ongoing problem with Visible including: A.) Network Integrity; and b.) 7 Network quality of service.” Id. at ¶ 11. WFB allegedly failed to investigate the consumer 8 disputes and closed Plaintiff’s claim, stating: “We have determined the transactions were 9 authorized or that a processing error did not occur.” Id. at ¶ 7. Plaintiff then reported WFB to the 10 Consumer Financial Protection Bureau (CFPB), but WFB made the same representations to the 11 CFPB, and the CFPB closed the complaint. Id. at ¶¶ 8-12. 12 Plaintiff brings claims against Defendants WFB and its parent company Wells Fargo & 13 Company (“WFC”) for intentional misrepresentation and intentional infliction of emotional 14 distress.2 Plaintiff seeks a total of $3 million in compensatory damages for “losses, pain-suffering, 15 mental duress, emotional stress, etc.” and “consistent and persistent stress, worry, sleepless nights, 16 mental pain, anguish, and suffering flowing from defendants’ actions or lack thereof,” as well as 17 punitive damages and declaratory and injunctive relief. FAC ¶¶ 20-21, 26. 18 A. Subject Matter Jurisdiction 19 Federal courts are courts of limited jurisdiction, and a “federal court is presumed to lack 20 jurisdiction in a particular case unless the contrary affirmatively appears.” Stock W., Inc. v. 21 Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989) (citations omitted). A federal court 22 may exercise either federal question jurisdiction or diversity jurisdiction. Federal question 23 jurisdiction under 28 U.S.C. § 1331 requires a civil action to arise under the constitution, laws, or 24 treaties of the United States. A district court has diversity jurisdiction where the parties are 25 diverse and “the matter in controversy exceeds the sum or value of $75,000, exclusive of interests 26 2 Plaintiff also brings claims against 25 unknown Doe Defendants who are employed by Wells 27 Fargo. FAC ¶ 3. The court does not consider the Doe Defendants for purposes of diversity 1 and costs.” 28 U.S.C. § 1332. Parties are diverse only when the parties are “citizens of different 2 states.” Id. A natural person’s state citizenship is determined by his or her state of domicile. 3 Kanter v. Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001). “A person’s domicile is her 4 permanent home, where she resides with the intention to remain or to which she intends to return. 5 A person residing in a given state is not necessarily domiciled there, and thus is not necessarily a 6 citizen of that state.” Id. (internal citation omitted). 7 Plaintiff does not claim any federal law violations that would confer federal question 8 jurisdiction. Plaintiff asserts diversity jurisdiction under 28 U.S.C. § 1332. FAC ¶ 4. Plaintiff 9 alleges that Defendant WFC is a Delaware corporation with its principal place of business in 10 California, making it a citizen of Delaware and California for purposes of diversity. See FAC ¶¶ 11 1-2. Under 28 U.S.C. § 1348, a national bank is a citizen only of the state in which its main office 12 is located, not its principal place of business. See Rouse v. Wachovia Mortg., FSB, 747 F.3d 707, 13 709 (9th Cir. 2014). The court takes judicial notice that the main office of WFB is located in 14 South Dakota, making it a citizen of South Dakota for purposes of diversity. See id. at 715. 15 Although the FAC pleads that Plaintiff’s “current address” is in New York, the FAC does not 16 plead that New York is Plaintiff’s permanent home or domicile. See Kanter, 265 F.3d at 857. 17 Because Plaintiff’s state citizenship is not clearly pleaded, the FAC does not adequately 18 demonstrate complete diversity among the parties. 19 Plaintiff also has not alleged any factual basis for his claim of $3 million in damages. 20 “Where the plaintiff originally files in federal court, the amount in controversy is determined from 21 the face of the pleadings.” Geographic Expeditions, Inc. v. Est. of Lhotka ex rel. Lhotka, 599 F.3d 22 1102, 1106 (9th Cir. 2010). The amount in controversy alleged by the proponent of federal 23 jurisdiction—typically the plaintiff in the substantive dispute—controls so long as the claim is 24 made in good faith. Id. Courts “use the ‘legal certainty’ test to determine whether the complaint 25 meets § 1332(a)’s amount in controversy requirement.” Naffe v. Frey, 789 F.3d 1030, 1039 (9th 26 Cir. 2015). Under that standard, “the sum claimed by the plaintiff controls if the claim is 27 apparently made in good faith. It must appear to a legal certainty that the claim is really for less 1 Red Cab Co., 303 U.S. 283, 288-89 (1938)). The complaint may be dismissed if it is “virtually 2 impossible for a plaintiff to meet the amount-in-controversy requirement.” Pachinger v. MGM 3 Grand Hotel-Las Vegas, Inc., 802 F.2d 362, 364 (9th Cir. 1986). 4 Plaintiff’s disputed transactions amount to a total of $53.71. FAC ¶¶ 5-6. Therefore, 5 almost the entirety of Plaintiff’s sought-after $3 million consists of emotional distress damages. 6 Plaintiff argues that Defendants’ misrepresentations regarding his consumer disputes “created a 7 climate for plaintiff whereas plaintiff does not know who to trust in the consumer banking 8 business,” and caused Plaintiff to open and close one or more bank accounts, negatively impacting 9 his credit score. FAC ¶ 19. Plaintiff also argues that he “does not know which way to turn” 10 because the CFPB failed to take action against Defendants. Id. at ¶ 25. Even liberally construing 11 the FAC, it is not facially plausible for the emotional damages stemming from Plaintiff’s 12 allegations to amount to $3 million. Plaintiff’s calculation of damages is “wholly fanciful.” See 13 Franklin, 745 F.2d at 1228. Plaintiff does not meet the $75,000 amount-in-controversy 14 requirement for diversity jurisdiction. 15 The court finds that Plaintiff has not pleaded subject matter jurisdiction. 16 B. Failure to State a Claim 17 Even if the court could exercise jurisdiction over the case, Plaintiff has not met the 18 elements of a claim for intentional misrepresentation or intentional infliction of emotional distress. 19 Under California law,3 the elements of intentional misrepresentation are: “(1) defendant 20 misrepresents material facts; (2) with knowledge of the falsity of the representations or the duty of 21 disclosure; (3) with intent to defraud or induce reliance; (4) which induces justifiable reliance by 22 the plaintiff; (5) to his or her detriment.” 625 3rd St. Assocs., L.P. v. Alliant Credit Union, 633 F. 23 Supp. 2d 1040, 1051 (N.D. Cal. 2009). Further, because this claim sounds in fraud, Federal Rule 24 of Civil Procedure 9(b) applies and the circumstances constituting fraud or mistake must be 25 “stated with particularity.” Id. at 1049 (citing Fed. R. Civ. P. 9(b)). 26 Plaintiff has not stated with particularity that Defendants misrepresented a material fact. 27 1 Plaintiff appears to take issue with WFB allegedly characterizing the nature of his complaint as a 2 dispute about an unauthorized transaction or processing error. A fair reading of the FAC is that 3 Plaintiff disputed the quality and integrity of the goods or services he purchased from third-party 4 vendors (X.com and Visible), having paid for those services through WFB. FAC ¶ 15. Plaintiff 5 alleges that WFB “lied about the basis of plaintiff’s disputes.” Id. This allegation is not plausible 6 on its face, because it is clear from the FAC that WFB never made any statements about the basis 7 of Plaintiff’s disputes. WFB simply stated that it had “determined the transactions were 8 authorized or that a processing error did not occur.” FAC ¶ 7. WFB never said what Plaintiff’s 9 dispute with the vendors was about. Plaintiff does not allege that the transactions he made through 10 WFB were unauthorized or that a processing error had occurred. Plaintiff does not explain why 11 WFB would have a legal duty to investigate the quality and integrity of goods and services 12 purchased from third parties. Plaintiff has not alleged a misrepresentation. 13 “Under California law, the elements of intentional infliction of emotional distress are: (1) 14 extreme and outrageous conduct by the defendant with the intention of causing, or reckless 15 disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or 16 extreme emotional distress; and (3) actual and proximate causation of the emotional distress by 17 defendant’s outrageous conduct.” Sabow v. United States, 93 F.3d 1445, 1454 (9th Cir. 1996) 18 (citing Christensen v. Superior Court, 54 Cal. 3d 868, 903 (1991)). “Extreme and outrageous 19 conduct is conduct that is so extreme as to exceed all bounds of that usually tolerated in a civilized 20 community.” Myung Chang v. Lederman, 172 Cal. App. 4th 67, 86 (2009). Again, Plaintiff has 21 not explained why WFB had a legal duty to do anything about his personal problems with the 22 quality of third-party goods and services. Plaintiff has not alleged the elements of intentional 23 infliction of emotional distress. 24 Plaintiff has not stated a claim. 25 II. CONCLUSION 26 For the reasons above, the court grants Plaintiff’s IFP Application and finds that the 27 complaint fails to demonstrate subject matter jurisdiction and also fails to state a claim pursuant to 1 identified in this order by December 10, 2024. If Plaintiff does not file a timely first amended 2 complaint, the court will recommend that this action be dismissed. The Case Management 3 Conference set for January 29, 2025 is vacated and will be re-set by the court at a later date if 4 appropriate. 5 The court refers Plaintiff to the section “Representing Yourself” on the Court’s website, 6 located at https://cand.uscourts.gov/pro-se-litigants/, as well as the Court’s Legal Help Centers for 7 unrepresented parties. Parties may schedule an appointment by calling 415-782-8982 or emailing 8 fedpro@sfbar.org. 9 10 IT IS SO ORDERED. 11 Dated: November 18, 2024 12 ______________________________________ Donna M. Ryu 13 Chief Magistrate Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 27