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Emrit v. Reverbnation, Inc.

United States District Court, M.D. North Carolina

December 16, 2014

RONALD SATISH EMRIT, Plaintiff,
v.
REVERBNATION, INC., Defendant.

MEMORANDUM OPINION, ORDER, AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

L. PATRICK AULD, Magistrate Judge.

This case comes before the Court on Plaintiff's Application to Proceed In Forma Pauperis (Docket Entry 1) in conjunction with his Pro Se Complaint (Docket Entry 2).[1] The Court will grant Plaintiff's Application to Proceed In Forma Pauperis for the limited purpose of recommending dismissal for frivolousness and failure to state a claim.

LEGAL BACKGROUND

"The federal in forma pauperis statute, first enacted in 1892 [and now codified at 28 U.S.C. § 1915], is intended to guarantee that no citizen shall be denied access to the courts solely because his poverty makes it impossible for him to pay or secure the costs." Nasim v. Warden, Md. House of Corr., 64 F.3d 951, 953 (4th Cir. 1995) (en banc) (internal quotation marks omitted). "Dispensing with filing fees, however, [is] not without its problems.... In particular, litigants suing in forma pauperis d[o] not need to balance the prospects of successfully obtaining relief against the administrative costs of bringing suit." Nagy v. FMC Butner, 376 F.3d 252, 255 (4th Cir. 2004). To address this concern, the in forma pauperis statute provides that "the court shall dismiss the case at any time if the court determines... (B) the action... (i) is frivolous or malicious; (ii) fails to state a claim on which relief may be granted; or (iii) seeks monetary relief against a defendant who is immune from such relief." 28 U.S.C. § 1915(e)(2).

As to the first of these grounds, the United States Supreme Court has explained that "a complaint, containing as it does both factual allegations and legal conclusions, is frivolous where it lacks an arguable basis either in law or in fact." Neitzke v. Williams, 490 U.S. 319, 325 (1989). In assessing such matters, this Court may "apply common sense." Nasim, 64 F.3d at 954; see also Nagy, 376 F.3d at 256 ("The word frivolous is inherently elastic and not susceptible to categorical definition." (internal quotation marks omitted)).

As to the second ground, a plaintiff "fails to state a claim upon which relief may be granted, " 28 U.S.C. § 1915(e)(2)(B)(ii), when the complaint does not "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "Where a complaint pleads facts that are merely consistent with' a defendant's liability, it stops short of the line between possibility and plausibility of entitlement to relief.'" Id . (quoting Twombly, 550 U.S. at 557). This standard "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id . In other words, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Id.[2]

FACTUAL BACKGROUND

Plaintiff's Complaint stems from his dealings with Defendant in the placement of banner ads on the internet advertising Plaintiff's song and music video, "Lady Brazil." (Docket Entry 2.) Plaintiff alleges that he paid Defendant to place banner ads, featuring a picture of him with Mariah Carey, on various webpages. (Id. at 5-6.) Plaintiff states that, if individuals clicked on the ad, it would then direct them to a webpage, hosted by Defendant, showing Plaintiff's music video for "Lady Brazil." (Id.) Plaintiff avers that the banner ads automatically renewed each week, unbeknownst to him, and Defendant charged him at a rate between $20 to $40 weekly. (Id.)

ANALYSIS

Plaintiff alleges nine state-law claims in his Complaint. (Docket Entry 2 at 7-17.) Plaintiff premises jurisdiction on diversity of citizenship. (Id. at 3-5.) However, Plaintiff frivolously invokes this Court's subject matter jurisdiction and fails to establish that this Court possesses subject matter jurisdiction over this case. Alternatively, Plaintiff fails to state a claim for any of his state-law claims. Therefore, the Court should dismiss Plaintiff's case.

A. Subject Matter Jurisdiction

"Federal courts are courts of limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The burden of establishing jurisdiction rests on the party asserting it. Id . Federal courts have jurisdiction to hear civil actions where complete diversity exists between the parties and the amount in controversy exceeds $75, 000. 28 U.S.C. § 1332.[3] "In most cases, the sum claimed by the plaintiff controls' the amount in controversy determination." JTH Tax, Inc. v. Frashier, 624 F.3d 635, 638 (4th Cir. 2010) (quoting St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288 (1938)). When computing the amount in controversy, the Court may also include punitive damages. See Gordon v. National Bus. Consultants, Inc., No. 87-2676, 856 F.2d 186 (table), 1988 WL 86618, at *1 (4th Cir. 1998) (unpublished); Perez v. Choice Endeavors, Inc., No. 1:05CV526, 2006 WL 995128, at *2 (M.D. N.C. April 12, 2006) (unpublished). However, if the plaintiff cannot, to a legal certainty, recover the jurisdictional amount, then the Court lacks jurisdiction. St. Paul Mercury, 303 U.S. at 289.

In this case, Plaintiff alleges that he lost somewhere between $100 to $200 dollars in his dealings with Defendant.[4] Despite the low amount of compensatory damages, Plaintiff requests $250, 000 in punitive damages in order to meet the amount in controversy. (Docket Entry 2 at 17.) North Carolina General Statute § 1D-15 prohibits courts from awarding punitive damages for breach of contract, but courts may award punitive damages when the actions in a breach of contract also give rise to a tort, see Newton v. Standard Fire Ins. Co., 291 N.C. 105, 111, 229 S.E.2d 297, 301 (1976).

Plaintiff, though, does not present a viable claim for any of his alleged torts - as discussed in the next section. Thus, Plaintiff does not have a basis with which to claim punitive damages, and the Court can only look to Plaintiff's compensatory damages to determine the amount in controversy. Furthermore, even if Plaintiff could recover punitive damages on a tort, he could not, consistent with the Due Process Clause of the Fourteenth Amendment, recover the amount in controversy. As explained to Plaintiff in a previous case, see Emrit v. American Commc'ns Network, Inc., No. 1:13-cv-0076, 2014 WL 5389910, at *2 (M.D. N.C. April 2, 2014) (unpublished), aff'd, 583 Fed.Appx. 46 (4th Cir. 2014), the United States Constitution imposes limits on punitive damage awards, State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 416 (2003). In State Farm, the United States Supreme Court invalidated a ...


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