Jensen v. Navy Federal Credit Union

• Court: District Court, D. Arizona
• Decided: September 18, 2025
• Docket: 4:25-cv-00460
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Jason Adam Jensen, No. CV-25-00460-TUC-JGZ

10 Plaintiff, ORDER

11 v.

12 Navy Federal Credit Union,

13 Defendant. 14 15 On August 12, 2025, pro se Plaintiff Jason Adam Jensen filed a Complaint alleging 16 violations of 42 U.S.C. § 407 and the Americans with Disabilities Act, 42 U.S.C. § 12101 17 et seq. (“ADA”), and asserting claims of willful negligence, harassment, and intentional 18 infliction of emotional distress. (Doc. 1.) Plaintiff has also filed an Application for Leave 19 to Proceed In Forma Pauperis and Motion for Emergency Injunctive Relief (Temporary 20 Restraining Order and Preliminary Injunction). (Docs. 2, 3.) For the following reasons, the 21 Court will dismiss Plaintiff’s Complaint with leave to amend, grant Plaintiff’s Application 22 for Leave to Proceed in Forma Pauperis, and deny Plaintiff’s Motion for Emergency 23 Injunctive Relief. 24 I. Application to Proceed In Forma Pauperis 25 The Court may allow a plaintiff to proceed without prepayment of fees when it is 26 shown by affidavit that he “is unable to pay such fees[.]” 28 U.S.C. § 1915(a)(1); LRCiv 27 3.3. Review of Plaintiff’s Application demonstrates that his modest living expenses exceed 28 his limited income. (Doc. 2.) Therefore, the Court will grant the Application. 1 II. Statutory Screening of IFP Complaint 2 District courts must dismiss an action filed in forma pauperis if the court determines 3 the action is frivolous or malicious, fails to state a claim on which relief may be granted, 4 or seeks monetary relief against a defendant who is immune from such relief. 28 U.S.C. § 5 1915(e)(2)(B). 6 District Court screening orders apply the same standard as applied to a Rule 12(b)(6) 7 motion to dismiss for failure to state a claim. Watison v. Carter, 668 F.3d 1108, 1112 (9th 8 Cir. 2012). In order to survive dismissal for failure to state a claim, a plaintiff must allege 9 enough facts to state a claim to relief that is plausible on its face. See Bell Atlantic Corp. v. 10 Twombly, 550 U.S. 544, 547 (2007). While a complaint need not plead “detailed factual 11 allegations,” the factual allegations it does include “must be enough to raise a right to relief 12 above the speculative level.” Id. at 555. Indeed, Fed. R. Civ. P. 8(a)(2) requires a showing 13 that a plaintiff is entitled to relief “rather than a blanket assertion, of entitlement to relief.” 14 Id. at 555 n.3. The complaint “must contain something more . . . than . . . a statement of 15 facts that merely creates a suspicion [of] a legally cognizable right to action.” Id. at 555 16 (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235–236 (3d 17 ed.2004); see also Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (interpreting Rule 8(a) and 18 explaining that there must be specific, non-conclusory factual allegations sufficient to 19 support a finding by the court that the claims are plausible). 20 When assessing the sufficiency of the complaint, all well-pleaded factual allegations 21 are taken as true and construed in the light most favorable to the plaintiff, Keates v. Koile, 22 883 F.3d 1228, 1234 (9th Cir. 2018), and all reasonable inferences are drawn in the 23 plaintiff’s favor. Caltex Plastics, Inc. v. Lockheed Martin Corp., 824 F.3d 1156, 1159 (9th 24 Cir. 2016). Pro se filings must be construed liberally. Hebbe v. Pliler, 627 F.3d 338, 342 25 (9th Cir. 2010) (A complaint filed by a pro se litigant “must be held to less stringent 26 standards than formal pleadings drafted by lawyers.”) (quoting Erickson v. Pardus, 551 27 U.S. 89, 94 (2007) (per curiam)). Nonetheless, the court will not accept as true conclusory 28 legal allegations cast in the form of factual allegations. Iqbal, 556 U.S. at 678. 1 Finally, if the court determines that dismissal is appropriate, the plaintiff must be 2 given at least one chance to amend a complaint when a more carefully drafted complaint 3 might state a claim. Cook, Perkiss & Liehe, Inc. v. N. California Collection Serv. Inc., 911 4 F.2d 242, 247 (9th Cir. 1990) (“[A] district court should grant leave to amend even if no 5 request to amend the pleading was made, unless it determines that the pleading could not 6 possibly be cured by the allegation of other facts.”). When dismissing with leave to amend, 7 the court is to provide reasons for the dismissal so a plaintiff can make an intelligent 8 decision whether to file an amended complaint. See Bonanno v. Thomas, 309 F.2d 320, 9 322 (9th Cir. 1962). 10 A. Complaint 11 Plaintiff is a resident of Tucson, Arizona and a Social Security benefits recipient 12 who maintains a savings account and checking account with Defendant Navy Federal 13 Credit Union (“NFCU”). (Doc. 1 ¶¶ 2, 8.) Plaintiff alleges that his Social Security benefits 14 are directly deposited into his NFCU savings account. (Id. ¶¶ 6, 8.) 15 According to the Complaint, Plaintiff entered into a credit card agreement with 16 NFCU that provides for “[a] security interest in all of [his] individual and joint share 17 accounts at Navy Federal” as a condition of credit card use. (Id. ¶ 9.) Plaintiff asserts that 18 NFCU relied on this security-interest clause to make unauthorized withdrawals from his 19 accounts. (Id. ¶ 11.) Plaintiff further alleges that he repeatedly contacted NFCU to request 20 reversal of these withdrawals. (Id. ¶ 13.) Although NFCU ultimately reversed the 21 deductions, Plaintiff states that NFCU informed him it could not prevent future automatic 22 withdrawals and that he would need to make alternative arrangements to pay his credit card 23 account to avoid further deductions. (Id. ¶¶ 13, 17.) Plaintiff states that NFCU’s refusal to 24 stop the automatic withdrawals caused him to experience multiple emotional outbursts and 25 distress, and NFCU agents refused to provide any accommodations under the ADA or to 26 escalate the issue to a level where a human could override the automated process. (Id. ¶¶ 27 18, 19.) Plaintiff contends that NFCU’s “blanket security interest” clause is “unlawful and 28 unenforceable under 42 U.S.C. § 407.” (Id. ¶¶ 10, 20.) He claims that the clause permits 1 NFCU to automatically withdraw funds from his accounts and that such withdrawals 2 constitute an unlawful “legal process” or “assignment” of Social Security benefits. (Id. ¶ 3 12.) 4 Plaintiff brings five claims for relief: (1) Violation of 42 U.S.C. § 407; (2) 5 “Discrimination Against Social Security Recipients”; (3) Willful Negligence; (4) 6 Harassment; and (5) Intentional Infliction of Emotional Distress. (Doc. 1 at 6–9.) 7 B. Discussion 8 1. Claim 1 Fails to State a Claim Upon Which Relief Can Be Granted 9 Section 407 “imposes a broad bar against the use of any legal process to reach all 10 social security benefits.” Washington State Dep't of Soc. & Health Servs. v. Guardianship 11 Est. of Keffeler, 537 U.S. 371, 382 (2003). Plaintiff alleges NFCU violated 42 U.S.C. § 12 407's anti-attachment provision by enforcing a security interest clause that permitted 13 automatic withdrawals from Plaintiff’s account containing Social Security benefits. (Doc. 14 1 ¶¶ 22–23.) 15 Section 407, however, does not create a private right of action. Private rights of 16 action must be created by Congress, either expressly or by clear implication. Alexander v. 17 Sandoval, 532 U.S. 275, 286–87 (2001) (private rights of action must be created by 18 Congress); Pearson v. Bank of Am., N.A., No. CV-16-03402-PHX-JJT, 2016 WL 5871490, 19 at *1 (D. Ariz. Oct. 7, 2016) (holding that § 407(a) “does not confer a private right of action 20 on a plaintiff”); In re Digimarc Corp. Derivative Litig., 549 F.3d 1223, 1229–30 (9th Cir. 21 2008) (“The fact that a federal statute has been violated and some person harmed does not 22 automatically give rise to a private cause of action in favor of that person. Instead, the 23 statute must either explicitly create a right of action or implicitly contain one.” (internal 24 quotations and citations omitted)). Accordingly, even if NFCU’s conduct was inconsistent 25 with the statute’s protective purpose, Plaintiff lacks statutory authority to compel 26 compliance. 27 In addition, NFCU’s alleged wrongful acts do not fall within the scope of § 407. 28 Section 407 bars the use of “execution, levy, attachment, garnishment, or other legal 1 process” to seize Social Security benefits. Washington State Dept. of Social and Health 2 Services, 537 U.S. at 382; 42 U.S.C. § 407(a). Plaintiff does not allege that NFCU used 3 any of these judicial processes to withdraw funds from his account. Instead, he contends 4 that NFCU’s automatic withdrawals pursuant to a credit-card security agreement amount 5 to an “assignment” or “other legal process.” (Doc. 1 ¶ 4.) The Supreme Court has rejected 6 such an expansive interpretation, holding that “other legal process” refers to procedures 7 “much like the processes of execution, levy, attachment, and garnishment” in which a 8 judicial or quasi-judicial mechanism compels the transfer of property to satisfy a liability. 9 Washington State Dept. of Social and Health Services, 537 U.S. at 385. This interpretation 10 reflects Congress’s intent to protect beneficiaries from involuntary seizures imposed 11 through state-backed processes, not to invalidate private contractual arrangements. See, 12 e.g., Lopez v. Washington Mut. Bank, FA, 302 F.3d 900, 904–05 (9th Cir.), opinion 13 amended on denial of reh'g sub nom. Lopez v. Washington Mut. Bank, F.A., 311 F.3d 928 14 (9th Cir. 2002). The voluntarily-accepted account terms at issue here do not violate § 407. 15 In Lopez, the Ninth Circuit held that a bank’s deduction of overdraft charges from an 16 account into which Social Security benefits were deposited did not violate § 407. Id. at 17 905–06. The court emphasized that the plaintiffs had “remained free at all times to close 18 their account or change their direct deposit instructions,” and that their continued use of 19 the account reflected a voluntary arrangement, not an assignment or compelled transfer. Id. 20 at 904–05. Other courts have reached the same conclusion with respect to overdraft fees, 21 setoff rights, and similar account terms. See Sanford v. Standard Fed. Bank, No. 10-12052, 22 2011 WL 721314 (E.D. Mich. Feb. 23, 2011) (stating setoff of overdraft charges does not 23 involve “legal process”); Wilson v. Harris N.A., No. 06 C 5840, 2007 WL 2608521 (N.D. 24 Ill. Sept. 4, 2007) (finding bank's offset of overdraft charges did not violate § 407); Frazier 25 v. Marine Midland Bank, N.A., 702 F. Supp. 1000 (W.D.N.Y. 1988) (concluding exercise 26 of contractual setoff right in loan agreement is not violative of § 407(a)). Under Keffeler 27 and Lopez, Plaintiff’s challenge to the enforcement of a consensual contractual provision 28 in his credit agreement falls outside the scope of § 407. 1 Section 407(a) does provide that the “right of any person to any future payment 2 under this subchapter shall not be transferable or assignable.” 42 U.S.C. § 407(a). This 3 language prohibits agreements or legal devices that divert Social Security benefits before 4 the beneficiary receives them, such as when a creditor requires a beneficiary to direct the 5 Social Security Administration to send checks directly to the creditor. See Philpott v. Essex 6 Cnty. Welfare Bd., 409 U.S. 413, 416 (1973) (holding that state could not compel 7 repayment by intercepting Social Security benefits); Tidwell v. Schweiker, 677 F.2d 560, 8 566 (7th Cir. 1982) (invalidating agreement requiring claimant to assign Social Security 9 payments to a state agency). In those situations, the beneficiary’s entitlement to future 10 payments is diverted to another party. By contrast, once Social Security benefits are 11 deposited into a beneficiary’s account, the funds belong to the beneficiary, who remains 12 free to spend, save, or pledge them like any other asset. Townsel v. DISH Network L.L.C., 13 668 F.3d 967, 973–74 (7th Cir. 2012) (prearranged debits to pay a private debt are not 14 assignments because the beneficiary remains in control of the funds). Plaintiff’s allegations 15 fall into the latter category. He challenges how deposited funds were applied under a 16 consensual security-interest clause, not a diversion of his entitlement to future benefits. 17 In short, Plaintiff’s allegations describe the enforcement of a private credit 18 agreement, not the invocation of a judicial or quasi-judicial process. Because § 407 neither 19 provides a private cause of action nor applies to the conduct alleged, Plaintiff has failed to 20 state a claim under 42 U.S.C. § 407. 21 2. Claim 2 Fails to State a Claim Upon Which Relief Can Be Granted 22 Liberally construing the Complaint, it appears that Plaintiff is alleging NFCU 23 violated Title III of the ADA by discriminating against Social Security recipients through 24 its general security-interest clause and by failing to provide adequate accommodations for 25 a disability. (Doc. 1 ¶ 28.) Title III prohibits discrimination on the basis of disability in 26 places of public accommodation. 42 U.S.C. § 12182(a). A bank is a place of public 27 accommodation within the meaning of the ADA. See 42 U.S.C. § 12182(7)(F). 28 To state a claim under Title III, a plaintiff must allege facts showing that: (1) he is 1 disabled within the meaning of the ADA; (2) defendant is a private entity that owns, leases, 2 or operates a place of public accommodation; and (3) plaintiff was denied public 3 accommodations by the defendant because of his disability. Molski v. M.J. Cable, Inc., 481 4 F.3d 724, 730 (9th Cir. 2007); 42 U.S.C. § 12182(a)-(b). While Plaintiff’s disability status 5 and NFCU’s status as a public accommodation are not disputed, the Complaint does not 6 plausibly allege a causal link between Plaintiff’s disability and NFCU’s general security- 7 interest clause. 8 A facially neutral policy violates the ADA only if it burdens a plaintiff “in a manner 9 different and greater than it burdens others.” Crowder v. Kitagawa, 81 F.3d 1480, 1484 10 (9th Cir. 1996). Here, the Complaint does not allege that NFCU’s clause disproportionately 11 affected Plaintiff because of his disability. Nor does it identify any requested 12 accommodation that NFCU refused to provide. The Complaint acknowledges that after 13 each disputed withdrawal, NFCU reversed the transaction. (Doc. 1 ¶¶ 13, 17–19, 28.) 14 Absent factual allegations tying NFCU’s conduct to Plaintiff’s alleged disability, the ADA 15 claim fails to state a claim under Title III of the ADA. 16 3. Claims 3, 4, and 5 17 Claims 3, 4, and 5 arise under state law. (Doc. 1 at 7–9.) Federal jurisdiction in this 18 case rests solely on the presence of a federal claim. (Id. ¶ 4); see Kokkonen v. Guardian 19 Life Ins. Co. of Am., 511 U.S. 375 (1994) (federal courts are courts of limited jurisdiction 20 and may adjudicate only those cases authorized by the Constitution and federal statute); 21 see also 28 U.S.C. § 1331. 22 Because the Court has determined that Plaintiff fails to state a federal claim, no 23 independent basis for subject-matter jurisdiction presently exists. A district court may 24 exercise supplemental jurisdiction over state-law claims under 28 U.S.C. § 1367(a), but it 25 may also decline to do so where “the district court has dismissed all claims over which it 26 has original jurisdiction.” 28 U.S.C. § 1367(c)(3); see Gorstein v. World Sav. Bank, 110 F. 27 App’x 9, 10–11 (9th Cir. 2004) (recognizing district court’s discretion to decline 28 supplemental jurisdiction once federal claims are eliminated). Unless and until a viable 1 federal claim is stated, the Court declines to exercise supplemental jurisdiction over 2 Plaintiff’s state law claims. 3 Accordingly, the Court will not screen Claims 3, 4, and 5 unless subject-matter 4 jurisdiction can be established. 5 III. Temporary Restraining Order 6 Plaintiff filed a Motion for Emergency Injunctive Relief (Temporary Restraining 7 Order and Preliminary Injunction). (Doc. 3.) In the Motion, Plaintiff asks the Court to 8 enjoin NFCU from exercising its “security interest” to “levy, garnish, or otherwise execute 9 upon Plaintiff’s Social Security funds.” (Doc. 3 at 1.) 10 “A preliminary injunction is ‘an extraordinary and drastic remedy, one that should 11 not be granted unless the movant, by a clear showing, carries the burden of persuasion.’” 12 Lopez v. Brewer, 680 F.3d 1068, 1072 (9th Cir. 2012) (quoting Mazurek v. Armstrong, 520 13 U.S. 968, 972 (1997) (per curiam)). Whether to grant or deny a motion for a temporary 14 restraining order or preliminary injunction is within the Court’s discretion. See Miss 15 Universe, Inc. v. Flesher, 605 F.2d 1130, 1132–33 (9th Cir. 1979). A party seeking 16 injunctive relief under Fed. R. Civ. P. 65 must show that: (1) he is likely to succeed on the 17 merits; (2) he is likely to suffer irreparable harm in the absence of injunctive relief; (3) the 18 balance of equities tips in his favor; and (4) an injunction is in the public interest. Pom 19 Wonderful LLC v. Hubbard, 775 F.3d 1118, 1124 (9th Cir. 2014) (citing Winter v. Nat. 20 Res. Def. Council, Inc., 555 U.S. 7, 20 (2008)); see Stuhlbarg Int'l Sales Co. v. John D. 21 Brush & Co., 240 F.3d 832, 839 n.7 (9th Cir. 2001) (noting that the standard for issuing a 22 preliminary injunction is substantially identical to the standard for issuing a temporary 23 restraining order (“TRO”)). 24 A. Ex Parte Requirements Not Met 25 Plaintiff seeks a TRO without providing notice to NFCU. A TRO may be entered 26 without notice to the adverse party only if: 27 (A) specific facts in an affidavit or a verified complaint clearly show that immediate and irreparable injury, loss, 28 or damage will result to the movant before the adverse party can be heard in opposition; and 1 (B) the movant’s attorney certifies in writing any efforts made to give notice and the reasons why it should not 2 be required. 3 Fed. R. Civ. P. 65(b)(1); see also LRCiv 65.1 (“Ex parte restraining orders shall only issue 4 in accordance with Rule 65, Federal Rules of Civil Procedure.”). 5 Plaintiff has not shown that he will suffer irreparable injury before NFCU can be 6 heard in opposition and has not certified the “efforts made to give notice and the reasons 7 why it should not be required.” Fed. R. Civ. P. 65(b)(1)(B). Because the request for a 8 temporary restraining order fails to comply with Rule 65(b)(1)(B), the Court, in its 9 discretion, will deny without prejudice Plaintiff’s request for a TRO.1 See LRCiv 65.1; see 10 also Am. Can Co. v. Mansukhani, 742 F.2d 314, 321 (7th Cir. 1984) (holding district court 11 abused its discretion in granting ex parte temporary restraining order “when there was no 12 valid reason for proceeding ex parte and by disregarding the strict procedural requirements 13 of Fed. R. Civ. P. 65(b) for the issuance of such ex parte orders”); Adobe Sys., Inc. v. S. 14 Sun Prods., Inc., 187 F.R.D. 636, 643 (S.D. Cal. 1999). 15 IV. Leave to Amend 16 The Court will dismiss the Complaint with leave to amend.2 See Noll v. Carlson, 17 809 F.2d 1446, 1448 (9th Cir. 1987) (leave to amend is liberally granted unless absolutely 18 clear deficiencies cannot be cured by amendment). The Court has provided the reasons for 19 the dismissal to permit Plaintiff to make an intelligent decision whether to file a First 20 Amended Complaint. See Bonanno v. Thomas, 309 F.2d 320, 322 (9th Cir. 1962). 21 Furthermore, Plaintiff is advised that all causes of action alleged in the original Complaint 22 which are not alleged in the First Amended Complaint will be waived. Hal Roach Studios, 23 1 Additionally, for the same reasons the Court found Plaintiff failed to state a claim upon 24 which relief may be granted, the Court also concludes that Plaintiff is unlikely to succeed on the merits. 25 2 Plaintiff is advised that the Court’s informational Handbook for Self-Represented Litigants, is available at https://www.azd.uscourts.gov/proceeding-without-attorney-0, and 26 may be consulted prior to submitting an amended complaint. Plaintiff is also advised that the non-profit Step Up to Justice provides free, advice-only consultation to federal self- 27 represented litigants. More information is available at https://www.azd.uscourts.gov/federal-court-advice-only-clinic-tucson (last visited Sept. 28 29, 2024). Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1546 (9th Cir. 1989) (explaining that “an || amended pleading supersedes the original”). 3 Any amended complaint filed by Plaintiff must be retyped or rewritten in its entirety 4|| and may not incorporate any part of the original Complaint by reference. An amended 5 || complaint must be clearly designated as the First Amended Complaint on the face of the 6 || document and formatted in compliance with LRCiv 7.1. Plaintiff is advised that if an || amended complaint fails to state a claim upon which relief can be granted, the Court will 8 || likely dismiss this action. Additionally, Plaintiff is advised that if he fails to timely comply □□ with every provision of this Order, this action will be dismissed pursuant to Fed. R. Civ. P. 41(b). See Ferdik v. Bonzelet, 963 F.2d 1258, 1260 (9th Cir. 1992), as amended (May 22, 11 || 1992) (district court may dismiss action for failure to comply with any order of the Court). 12 Accordingly, 13 IT IS ORDERED: 14 1. Plaintiff's Complaint (Doc. 1) is dismissed for failure to state a claim. 15 || Plaintiff has 30 days from the date this Order is filed to file a First Amended Complaint in 16 || compliance with this Order. 17 2. Plaintiff's Application to Proceed in Forma Pauperis (Doc. 2) is granted. 18 || Plaintiff is not required to pay the filing fee. 19 3. If Plaintiff fails to file a First Amended Complaint within 30 days, the Clerk || of Court must, without further notice, enter a judgment of dismissal of this action without prejudice and deny any pending unrelated motions as moot. 22 4. Plaintiff's Motion for Temporary Restraining Order (Doc. 3) is denied 23 || without prejudice. 24 Dated this 18th day of September, 2025. 25 26 [An Gps 27 p/ Jennifer G. 7 ps 28 Chiet United States District Judge

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