Watkins v. The Victor

Opinion

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

MICHEL WATKINS, § § Plaintiff, § § V. § No. 3:24-cv-2353-N-BN § THE VICTOR, ET AL., § § Defendants. § FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE Plaintiff Michael Watkins filed a pro se complaint against an entity and two individuals that appears to assert claims related to a breach of contract and/or apartment lease, citing Texas law, and includes citations to the Federal Reserve Act, a federal statute. See Dkt. No. 3. Chief United States District Judge David C. Godbey referred Watkins’s complaint to the undersigned United States magistrate judge for pretrial management under 28 U.S.C. § 636(b) and a standing order of reference. After reviewing the complaint, the undersigned questions whether there is subject matter jurisdiction and, given the circumstances of this case, enters these findings of fact, conclusions of law, and recommendation that the Court should dismiss this action for lack of subject matter jurisdiction. These findings and conclusions provide Watkins notice as to the jurisdictional deficiencies. And the ability to file objections to the undersigned’s recommendation that this case be dismissed for lack of jurisdiction (as further explained below) offers Watkins an opportunity to establish (if possible) that the Court does have subject matter jurisdiction. Legal Standards

“Jurisdiction is the power to say what the law is.” United States v. Willis, 76 F.4th 467, 479 (5th Cir. 2023). So consideration of “[j]urisdiction is always first.” Louisiana v. U.S. Dep’t of Energy, 90 F.4th 461, 466 (5th Cir. 2024) (citation omitted). And, because “‘[f]ederal courts are courts of limited jurisdiction,’ possessing ‘only that power authorized by Constitution and statute,’” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)), “subject-matter delineations must be policed by the courts on their own

initiative even at the highest level,” Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583-84 (1999) (citations omitted). Watkins chose to file this lawsuit in federal court and, by doing so, undertook the burden to establish federal jurisdiction. See St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (“The burden of establishing subject matter jurisdiction in federal court rests on the party seeking to invoke it.” (cleaned

up)); Butler v. Dall. Area Rapid Transit, 762 F. App’x 193, 194 (5th Cir. 2019) (per curiam) (“Assertions that are conclusory are insufficient to support an attempt to establish subject-matter jurisdiction.” (cleaned up)). And, if the party invoking federal jurisdiction fails to establish it, the lawsuit must be dismissed. See FED. R. CIV. P. 12(h)(3) (“If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.”). Because federal jurisdiction is not assumed, “the basis upon which jurisdiction depends must be alleged affirmatively and distinctly and cannot be established argumentatively or by mere inference.” Getty Oil Corp. v. Ins. Co. of N.A., 841 F.2d

1254, 1259 (5th Cir. 1988) (citing Ill. Cent. Gulf R. Co. v. Pargas, Inc., 706 F.2d 633, 636 & n.2 (5th Cir. 1983)); see also MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310, 313 (5th Cir. 2019) (“Because federal courts have limited jurisdiction, parties must make ‘clear, distinct, and precise affirmative jurisdictional allegations’ in their pleadings.” (quoting Getty Oil, 841 F.2d at 1259)). Under their limited jurisdiction, federal courts generally may only hear a case if it involves a question of federal law or where diversity of citizenship exists between

the parties. See 28 U.S.C. §§ 1331, 1332. Federal question jurisdiction under Section 1331 “exists when ‘a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a substantial question of federal law.’” Borden v. Allstate Ins. Co., 589 F.3d 168, 172 (5th Cir. 2009) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1, 27-28 (1983)); see also

In re Hot-Hed Inc., 477 F.3d 320, 323 (5th Cir. 2007) (“A federal question exists ‘if there appears on the face of the complaint some substantial, disputed question of federal law.’” (quoting Carpenter v. Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th Cir. 1995))). The “‘creation’ test … accounts for the vast bulk of suits under federal law.” Gunn, 568 U.S. at 257 (citation omitted). But “a federal court [is also] able to hear claims recognized under state law that nonetheless turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues.” That is to say, “federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” Perez v. Se. SNF, L.L.C., No. 21-50399, 2022 WL 987187, at *3 (5th Cir. Mar. 31, 2022) (per curiam) (quoting Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 312 (2005), then Gunn, 568 U.S. at 258). And, in cases invoking jurisdiction under Section 1332, each plaintiff’s citizenship must be diverse from each defendant’s citizenship, and the amount in controversy must exceed $75,000. See 28 U.S.C. § 1332(a), (b). This amount “is determined by the amount of damages or the value of the property that is the subject of the action.” Celestine v. TransWood, Inc., 467 F. App’x 317, 319 (5th Cir. 2012) (per curiam) (citation omitted). “The required demonstration concerns what the plaintiff is claiming (and thus the amount in controversy between the parties), not whether the plaintiff is likely to win or be awarded everything he seeks.” Robertson v. Exxon Mobil Corp., 814 F.3d 236, 240 (5th Cir. 2015) (cleaned up). That is, “[t]he amount in controversy is not proof of the amount the plaintiff will recover but an estimate of the amount that will be put at issue in the course of the litigation. The amount is measured by the value of the object of the litigation.” Durbois v. Deutsche Bank Nat’l Tr. Co. as Tr. of Holders of AAMES Mortg. Inv. Tr. 20054 Mortg. Backed Notes, 37 F.4th 1053, 1057 (5th Cir. 2022) (cleaned up). “When a plaintiff invokes federal-court jurisdiction, the plaintiff’s amount-in- controversy allegation is accepted if made in good faith.” Dart Cherokee Basin Operating Co., LLC v. Owens, 574 U.S. 81, 87 (2014). More specifically, “unless the law gives a different rule, the sum claimed by the plaintiff controls if the claim is

apparently made in good faith.” Greenberg, 134 F.3d at 1253 (cleaned up). And, “[f]or diversity purposes, state citizenship is synonymous with domicile. A change in domicile requires: ‘(1) physical presence at the new location and (2) an intention to remain there indefinitely.’” Dos Santos v. Belmere Ltd. P’ship, 516 F. App’x 401, 403 (5th Cir. 2013) (per curiam) (citations omitted); see also Preston v. Tenet Healthsystem Mem’l Med. Ctr., 485 F.3d 793, 797-98 (5th Cir. 2007) (“In determining diversity jurisdiction, the state where someone establishes his domicile

serves a dual function as his state of citizenship.... Domicile requires the demonstration of two factors: residence and the intention to remain.” (citing Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954))); SXSW v. Fed. Ins. Co., 83 F.4th 405, 407 (5th Cir. 2023) (“‘The difference between citizenship and residency is a frequent source of confusion.’ For natural persons, § 1332 citizenship is determined by domicile, which requires residency plus an intent to make the place of residency one’s permanent

home. An allegation of residency alone ‘does not satisfy the requirement of an allegation of citizenship.’” (emphasis in original; citations omitted)). “The basis for diversity jurisdiction must be ‘distinctly and affirmatively alleged.’” Dos Santos, 516 F. App’x at 403 (quoting Mullins v. TestAmerica, Inc., 564 F.3d 386, 397 (5th Cir. 2009)). For example, “an allegation of residency alone does not satisfy the requirement of an allegation of citizenship.” J.A. Maters Invs. v. Beltramini, ___ F.4th ____, No. 23-20292, 2024 WL 4115280 (5th Cir. Sept. 9, 2024) (per curiam) (citation omitted). And “a ‘failure to adequately allege the basis for diversity jurisdiction mandates dismissal.’” Dos Santos, 516 F. App’x at 403 (quoting

Stafford v. Mobil Oil Corp., 945 F.2d 803, 805 (5th Cir. 1991)). Analysis While Wakins cites a federal statute, the Federal Reserve Act, merely citing a federal statute does not establish jurisdiction under Section 1331 where no facts alleged in the complaint could demonstrate a violation of the statute cited. And the Federal Reserve Act fails to provide a private cause of action, such that it could support jurisdiction under Section 1331. See Patterson v. Long Beach

Mortg. Co., No. 3:07-cv-1602-O-BH, 2009 WL 4884151, at *3 (N.D. Tex. Dec. 15, 2009) (“When a private citizen relies on a federal statute as a basis for federal question jurisdiction, that statute must expressly or implicitly provide a private cause of action or else a federal court will not have subject matter jurisdiction to hear the dispute.” (citing Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 817 (1986))); Hicks v. Capital Bank, No. 3:24-cv-517-G, 2024 WL 1287626, at *1 (N.D. Tex. Mar. 26, 2024)

(observing “that the Federal Reserve Act does not provide individuals with a private cause of action” and that reliance on the so-called Bills of Exchange Act, which is not a federal statute, is “similarly frivolous” (citations omitted)); see also Singh v. Duane Morris LLP, 538 F.3d 334, 338 (5th Cir. 2008) (“[T]he mere presence of a federal issue in a state cause of action does not automatically confer federal-question jurisdiction.” (quoting Merrell Dow, 478 U.S. at 813)). And, even if the Court accepts Watkins’s amount-in-controversy allegation, Watkins still has not established diversity jurisdiction where he fails to include any allegations concerning the citizenships of the parties. Recommendation The Court should dismiss this lawsuit for lack of subject matter jurisdiction. A copy of these findings, conclusions, and recommendation shall be served on all parties in the manner provided by law. Any party who objects to any part of these findings, conclusions, and recommendation must file specific written objections within 14 days after being served with a copy. See 28 U.S.C. § 636(b)(1); FED. R. □□□□ P. 72(b). In order to be specific, an objection must identify the specific finding or recommendation to which objection is made, state the basis for the objection, and specify the place in the magistrate judge’s findings, conclusions, and recommendation where the disputed determination is found. An objection that merely incorporates by reference or refers to the briefing before the magistrate judge is not specific. Failure to file specific written objections will bar the aggrieved party from appealing the factual findings and legal conclusions of the magistrate judge that are accepted or adopted by the district court, except upon grounds of plain error. See Douglass v. United Servs. Auto. Assn, 79 F.3d 1415, 1417 (5th Cir. 1996). DATED: October 16, 2024

UNITED STATES MAGISTRATE JUDGE

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