Allen v. Founders Fed. Credit Union

Robert Craig Allen, Plaintiff, v. Founders Federal Credit Union, Defendant.

C/A 7:17-1964-HMH-BM

UNITED STATES DISTRICT COURT DISTRICT OF SOUTH CAROLINA CHARLESTON DIVISION

January 31, 2018

REPORT AND RECOMMENDATION

This action has been filed by the Plaintiff, an inmate at the Livesay Correctional Institution of the South Carolina Department of Corrections, pro se. Plaintiff asserts claims pursuant to Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971) and/or 42 U.S.C. § 1983¹ for breach of trust, negligence, incompetence, and bad faith by the Defendant for its purported failure to prevent Teresa Morrison (who may have been Plaintiff's girlfriend) from removing $4,440.90 from his account with the Defendant while he was a pretrialdetainee at the Spartanburg County Detention Center. Plaintiff seeks monetary damages against the Defendant for its actions.

The Defendant filed a motion to dismiss pursuant to Rule 12, Fed.R.Civ.P., on November 15, 2017. As the Plaintiff is proceeding pro se, a Roseboro order was entered by the Court on November 16, 2017, advising Plaintiff of the importance of a dispositive motion and of the necessity for him to file an adequate response. Plaintiff was specifically advised that if he failed to respond adequately, the Defendant's motion to dismiss may be granted, thereby ending his case. Plaintiff thereafter filed a memorandum in opposition to the Defendant's motion on January 8, 2018.

This matter is now before the Court for disposition.²

Discussion

When considering a Rule 12 motion to dismiss, the Court is required to accept the allegations in the pleading as true, and draw all reasonable factual inferences in favor of the party opposing the motion. The motion can be granted only if the party opposing the motion has failed to set forth sufficient factual matters to state a plausible claim for relief "on its face". Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). "[O]n a motion to dismiss, the Court does not weigh the strength of the evidence, and simply considers whether the [claim] alleges sufficient facts which, if true, would permit a reasonable fact finder to find [the party seeking dismissal of the claim] liable." Vogt v. Greenmarine Holding, LLC, 318 F.Supp. 2d 136, 144 (S.D.N.Y. 2004).

Further, the Federal Court is also charged with liberally construing a complaint filedby a pro se litigant to allow for the development of a potentially meritorious case. See Cruz v. Beto, 405 U.S. 319 (1972); Haines v. Kerner, 404 U.S. 519 (1972). Even so, the requirement of liberal construction does not mean that the Court can ignore a clear failure in the pleadings to allege facts which set forth a Federal claim, nor can the Court assume the existence of a genuine issue of material fact where none exists. Weller v. Dep't of Social Services, 901 F.2d 387 (4^th Cir. 1990). Here, after careful review and consideration of the pleadings in this case and the arguments of the parties, and in light of the requirements of Rule 12 and the liberal construction given to pro se pleadings, the undersigned finds for the reasons set forth hereinbelow that the Defendant's motion should be granted as to Plaintiff's federal claims. To the extent that Plaintiff intended to allege state law claims, those claims should then be dismissed, without prejudice.

I.(Federal Claims)

Bivens Action. A Bivens action recognizes a private action for damages against federal officers who have violated a citizen's constitutional rights. Corr. Servs. Corp. v. Malesko, 534 U.S. 61, 66 (2001). A Bivens action may only be brought against a federal officer. Shelton & Daniels v. Crookshank, No. 17-108, 2018 WL 527423, at * 2 (N.D.W.Va. Jan. 24, 2018). Here, Plaintiff cannot pursue a Bivens action in this case because there is no allegation in the Complaint to show that the Defendant, a credit union, qualifies as a federal official.³ A federal credit union isa non-profit, cooperative association organized under the Federal Credit Union Act, 12 U.S.C. § 1751 et seq; see United States v. Michigan, 851 F.2d 803, 804 (6^th Cir. 1988); and numerous courts have held that federal credit unions are private actors. See Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1132 (9^th Cir. 1994)["[T]he slight degree of government involvement in the business of federal credit unions does not warrant applying Constitutional requirements to these democratically controlled, non-profit cooperatives."]; Nix v. NASA Fed. Credit Union, 200 F.Supp.3d 578, 587-588 (D.Md. 2016)[dismissing plaintiff's claims against NASA FCU and its employees because NASA FCU was a private, non-governmental actor].

Since there are no allegations in the Complaint that any federal officer or official was responsible for the conduct alleged, Plaintiff cannot maintain this matter as a Bivens action. Therefore, to the extent Plaintiff's claim(s) are asserted under Bivens, they should be dismissed.

42 U.S.C. § 1983. To the extent Plaintiff's claims are being asserted under § 1983, the Defendant moves to dismiss his claim on the ground that Plaintiff has not alleged or shown that the Defendant is a state actor. See generally Complaint. In order to state a cause of action under 42 U.S.C. § 1983, a plaintiff must allege that: (1) the defendant(s) deprived him or her of a federal right, and (2) did so under color of state law. Gomez v. Toledo, 446 U.S. 635, 640 (1980); see Hall v. Quillen, 631 F.2d 1154, 1155-56 & nn. 2-3 (4th Cir.1980). Because the United States Constitution regulates only the government, not private parties, a litigant claiming that his constitutional rights have been violated must first establish that the challenged conduct constitutes "state action." See, e.g., Blum v. Yaretsky, 457 U.S. 991 (1982). To qualify as state action, the conduct in question "must be caused by the exercise of some right or privilege created by the State or by a rule ofconduct imposed by the State or by a person for whom the State is responsible," and "the party charged with the [conduct] must be a person who may fairly be said to be a state actor." Lugar v. Edmondson Oil Co., 457 U.S. at 937; see U.S. v. Int'l Brotherhood of Teamsters, Chauffeurs, Warehousemen Helpers of Am., AFL-CIO, 941 F.2d 1292 (2d Cir.1991).

In other words, purely private conduct, no matter how wrongful, injurious, fraudulent, or discriminatory, is not actionable under 42 U.S.C. § 1983. See Lugar v. Edmondson Oil Co., 457 U.S. 922, 936(1982); Burton v. Wilmington Parking Auth., 365 U.S. 715, 721 (1961). Here, there is no indication in Plaintiff's pleadings that the Defendant is a qualified "state actor" for purposes of § 1983 claim, or that a violation of Plaintiff's federal rights has occurred. Plaintiff did not even respond to Defendant's argument that no state action has been alleged. Therefore, it is not even clear whether Plaintiff is even contesting dismissal of his claim on this basis. Regardless, since there are no allegations in the Complaint to attribute any of the Defendant's actions or inaction to state action, to the extent Plaintiff's claim is asserted under § 1983, it should be dismissed. See James v. Hertiage Valley Federal Credit Union, 197 F.Appx 102, 106 (3d Cir. 2006)[affirming district court's dismissal of plaintiff's § 1983 claim against Heritage Valley Federal Credit Union because "none of the defendants is a state actor"]; Hauschild v. Nielsen, 325 F.Supp.2d 995, 1005-1006 (D.Neb. 2004)[dismissing plaintiff's § 1983 claim because credit union did not act under color of state law]; Brown v. Chicago Municipal Employees Credit Union, No. 13-2597, 2013 WL 1687774, at * 2 (N.D.Ill. Apr. 17, 2013)["Because the Credit Union is not a state actor, Brown would need to allege facts demonstrating the Credit Union 'willfully colluded with the state or its agents to violate her constitutional rights.'"](internal citations omitted).

II.(State Law Claims)

To the extent that Plaintiff has intended to bring any of his claims as state law claims⁴, they should be dismissed, without prejudice. If the Court adopts the recommendation set forth herein with regard to Plaintiff's federal claims, Plaintiff's state law claims will be the only claims remaining in this lawsuit, and when federal claims presented in a case are dismissed, any remaining state law claims should also be dismissed, without prejudice, in order to allow for state court resolution of such claims under the general doctrine developed in United Mine Workers v. Gibbs, 383 U.S. 715 (1966).⁵ See In Re Conklin, 946 F.2d 306, 324 (4th Cir. 1991); Nicol v. Imagematrix, Inc., 767 F.Supp. 744, 746, 749 (E.D.Va. 1991); Mills v. Leath, 709 F.Supp. 671, 675-676 (D.S.C. 1988) [noting that federal courts should generally decline to exercise pendent jurisdiction over remaining state law claim after dismissal of federal claims in a lawsuit]; Carnegie-Mellon v. Cohill, 484 U.S. 343 (1988); Taylor v. Waters, 81 F.3d 429, 437 (4th Cir. 1996).

This doctrine recognizes the state court's role in determining whether dismissal of a state law claim is warranted; Gibbs, 383 U.S. at 726 ["Certainly, if the federal claims are dismissed before trial, . . . the state claims should be dismissed as well"]; Carnegie-Mellon, 484 U.S. at 350, n. 7 ["[I]n the usual case in which all federal-law claims are eliminated before trial, the balance of factors to be considered under the pendent jurisdiction doctrine . . . will point toward declining to exercise jurisdiction over the remaining state law claims."]; and will also allow the Plaintiff to obtain a ruling as to the viability of his state law claims from a more appropriate forum. Further, if these claims were to survive dismissal or summary judgment, it would be much more appropriate for them to be tried in state court. Lee v. Singleton, No. 11-2983, 2012 WL 1896062 at **18-20 (D.S.C. Jan.9, 2012) [dismissing and remanding unrelated state law claims where they were not related to a federal claim], adopted...