McCready, Kenneth A. v. Ebay Incorporated

CourtCourt of Appeals for the Seventh Circuit
DecidedJuly 10, 2006
Docket05-2450
StatusPublished

This text of McCready, Kenneth A. v. Ebay Incorporated (McCready, Kenneth A. v. Ebay Incorporated) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McCready, Kenneth A. v. Ebay Incorporated, (7th Cir. 2006).

Opinion

In the United States Court of Appeals For the Seventh Circuit ____________

Nos. 05-2450 & 05-3043 KENNETH A. MCCREADY, Plaintiff-Appellant, v.

EBAY, INC., BRUCE KAMMINGA, and DAVID MCDUFFEE, Defendants-Appellees. ____________ Appeals from the United States District Court for the Central District of Illinois. No. 03 C 2117—Michael P. McCuskey, Chief Judge. No. 05 C 2033––Harold A. Baker, Judge. ____________ SUBMITTED JANUARY 19, 2006—DECIDED JULY 10, 2006 ____________

Before EASTERBROOK, MANION, and KANNE, Circuit Judges. KANNE, Circuit Judge. Kenneth McCready has used the federal and state courts to harass eBay, Inc. and eBay’s customers. Acting pro se, McCready has brought suits in many different courts, including: twice in the United States District Court for the Central District of Illinois, the United States District Court for the Eastern District of Michigan, United States Bankruptcy Court for the Northern District of Illinois, and Iroquois County (Illinois) Circuit Court. Although McCready’s choice of fora may differ, his allega- tions (and the respective outcomes) do not. In fact, 2 Nos. 05-2450 & 05-3043

McCready has been wildly unsuccessful in each instance. Here, the two suits filed in the Central District of Illinois were dismissed, and we consolidated McCready’s appeals in order to provide a better understanding of the litany of his repetitive and frivolous legal maneuvers. For the reasons stated below, we affirm. Additionally, we order McCready to show cause why he should not be sanctioned for his abuse of process.

I. HISTORY McCready operated an online business in which he bought and sold various items through several accounts he had registered with eBay, the popular online marketplace. As with all users, eBay required McCready to abide by its user agreement. McCready’s dealings left several eBay users dissatisfied, and they used eBay’s Feedback Forum to voice their displeasure. The buyers complained that McCready failed to deliver the goods he sold or delivered goods of lower quality than he had advertised. eBay notified McCready of the complaints and informed him that his accounts would be suspended if he did not resolve them. After investigating the claims, eBay suspended McCready’s accounts in June or July 2002, and advised him that he would be reinstated if he reimbursed the claimants. Rather than make good on his sales, McCready embarked on retaliatory litigation. The first lawsuit originated in the bankruptcy court for the Northern District of Illinois, where McCready had filed for bankruptcy on April 17, 2002. On August 26, 2002, McCready petitioned for sanctions against eBay, alleging that eBay’s suspension of his account violated the automatic stay provisions of 11 U.S.C. § 362(a). The bankruptcy court denied McCready’s petition. In an order dated March 29, 2004, the district court, on appeal, affirmed, agreeing with the bankruptcy court’s conclusion that eBay was not Nos. 05-2450 & 05-3043 3

collecting debts but merely opting not to do business with McCready. McCready brought his second suit in Iroquois County (Illinois) Circuit Court, where he filed a complaint against eBay and other defendants on November 26, 2002. The circuit court denied all of McCready’s claims and sanctioned him $1000 for litigating in bad faith. The Appellate Court of Illinois affirmed. McCready v. EBay, Inc., No. 3-03-1017 (Ill. App. Ct. May 27, 2005), cert. denied, 844 N.E.2d 39 (Ill. 2005). Seeking to protect itself, eBay sued McCready on March 12, 2003, in California state court requesting declaratory relief allowing eBay to terminate its dealings with McCready. McCready removed the suit to federal court, but eBay successfully caused the case to be remanded to state court where default judgment was entered against McCready. In the third action (the first case on appeal, No. 05-2450), McCready filed an 82-page complaint in the Central District of Illinois on July 9, 2003, against eBay and numerous users of eBay. McCready alleged violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (the “FDCPA”), the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (the “FCRA”), Title 11 of the U.S. Bankruptcy Code, and the Electronic Fund Transfers Act, 15 U.S.C. § 1693, et seq. (the “EFTA”). McCready alleged nine state law claims as well. On December 3, 2004, the district judge dismissed all defendants other than eBay. On February 4, 2005, the court issued an order ruling on eBay’s motion to dismiss. In its order, the district court refused eBay’s request to apply res judicata to the federal claims, explaining that the lawsuits filed in California and Illinois state courts involved only 4 Nos. 05-2450 & 05-3043

state law.1 Rather, the court evaluated McCready’s federal claims under Federal Rule of Civil Procedure 12(b)(6) and dismissed the FDCPA and FCRA claims but left intact McCready’s EFTA claim. The district judge declined to exercise supplemental jurisdiction over McCready’s state law claims, finding they raised novel issues of state law. He referred the case to a magistrate judge for disposition. Before proceedings with the magistrate judge got under way, McCready filed with the district judge a motion to reconsider his ruling dismissing his federal claims and declining to exercise supplemental jurisdiction over his state law claims. The district judge denied this motion. Soon thereafter, McCready filed with the district judge a second motion to reconsider, arguing that the district judge had misunderstood the basis of his claims. The district judge denied this motion as well. Then the par- ties filed with the magistrate judge a stipulation to dis- miss McCready’s only remaining claim (under the EFTA) with prejudice. The magistrate judge obliged on May 12, 2005. The fourth lawsuit, which gives rise to the fifth, was filed by McCready in the Western District of Michigan and involved an eBay transaction. McCready had threatened legal action against Bruce Kamminga because Kamminga sold a snowmobile to another buyer despite McCready having placed the highest bid. After McCready became aware that Kamminga had consulted with David McDuffee, a lawyer, McCready sued both of them, alleging violations of the FDCPA in addition to various state law claims. The defendants moved to dismiss, and the matter was referred to a magistrate judge. The magistrate judge

1 Because eBay prevails on other grounds, we need not consider whether the district court’s decision was correct. Nos. 05-2450 & 05-3043 5

converted the motion to dismiss to a motion for summary judgment and recommended that the district judge grant relief to the defendants. The district judge did so by adopt- ing the magistrate judge’s recommendation. McCready appealed. Affirming in an unpublished order, the Sixth Circuit noted: McCready accomplished the following in his objec- tions to the magistrate judge’s report and recommenda- tion: he repeatedly and inappropriately insulted the magistrate judge; he insisted on the accuracy of his factual and legal assertions; he characterized the defendants as liars; and he threatened the district court with promises to file for a writ of mandamus if his cause of action was dismissed. McCready, however, failed to address the merits of the substantive issues raised in his complaint, challenged in the defendants’ motion to dismiss, and reviewed by the magistrate judge.

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