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Oliver v. JND Holdings LLC

United States District Court, D. South Carolina, Greenville Division

October 11, 2019

Anthony Oliver, Plaintiff,
JND Holdings, LLC, Jennifer Keough, Does 1-10, Defendants.



         Anthony Oliver (“Plaintiff”)[1], proceeding pro se and in forma pauperis, files this civil action against the above-captioned Defendants. [Doc. 1.] Pursuant to the provisions of 28 U.S.C. § 636(b) and Local Civil Rule 73.02(B)(2), D.S.C., the undersigned Magistrate Judge is authorized to review the Complaint for relief and submit findings and recommendations to the District Court. Having reviewed the Complaint in accordance with applicable law, the undersigned concludes that this action should be summarily dismissed without issuance and service of process.


         Plaintiff is currently a detainee at the Chatham County Jail in Savannah, Georgia.[2]However, the claims in this action are unrelated to Plaintiff's criminal charges or current incarceration. Plaintiff commenced this action by filing a hand-written, seventeen-page Complaint. [Doc. 1.] Thereafter, in response to this Court's Order dated September 16, 2019 [Doc. 9], Plaintiff filed a Complaint on the standard court form [Doc. 1-1]. The Court considers both of these documents together as the Complaint in this action.

         Plaintiff makes the following allegations. Plaintiff is a citizen of the State of Georgia.[3] [Doc. 1-3 at 3, 4 n.2]. Plaintiff also claims that he is currently a law student. [Doc. 1 at 1.] JND Holdings, LLC (“JND”), is a company located in Seattle, Washington, is incorporated under the laws of the State of Washington, and has its principal place of business in the State of Washington. [Doc. 1-3 at 2, 4.] Defendant Jennifer Keough (“Keough”) is the Chief Executive Officer of JND and is a citizen of the State of Washington. [Id. at 3.] JND and Keough (collectively, “Defendants”) operate a class action administration company that administers class action cases in state and federal courts. [Doc. 1 at 3.]

         According to Plaintiff, “[i]n an effort to promote their class action administration services, ” Defendants have engaged in an “invasive and unlawful form of marketing, ” wherein they seek to be appointed class action administrators, purportedly to send out class action notices to potential class members. [Id. at 2.] However, Defendants do not send out such notices, but instead they “pocket millions of dollars each month and year.” [Id.] Defendants contact class plaintiffs and class members, promising to pay referral fees, but then refuse to pay such referral fees. [Id.]

         Keough contacted Plaintiff and informed him that he was a potential class member in a case filed in federal court. [Id.] Keough agreed to pay Plaintiff $30, 000 for each referral, putting the agreement in writing. [Id.] However, Defendants refused to pay Plaintiff for his referrals, “causing Plaintiff damages, including, but not limited to Plaintiff having his vehicle repossessed.” [Id.]

         More specifically, Plaintiff alleges that, in December 2018, Defendants sent Plaintiff “a notice that [he] was appointed by a Federal Judge to serve as a class Plaintiff representative in the class action case” and provided him with a claim form. [Id. at 4.] Defendants also informed Plaintiff that he was a plaintiff in three other potential class actions. [Id.] Keough informed Plaintiff that she would pay him “the amount of $30, 000 [ ] for each case, and would pay Plaintiff's law school fees and tu[i]tion for one [ ] year.” [Id.] Plaintiff and Defendants agreed in writing that Plaintiff would receive a $30, 000 referral fee for each case. [Id.] Plaintiff met with Keough in Greenville, South Carolina, in February 2019, “to seal the deal.” [Id. at 5.] At that meeting, Keough admitted to Plaintiff that her company is appointed in class action cases to locate potential class members and that she uses the confidential personal information to contact class members to solicit them for her services, promising to pay a referral fee to potential class members who would be involved in other cases. [Id.] Keough also informed Plaintiff that, even though she is required to send letters, postcards, and flyers to potential class members, she does not do so and, instead, pockets the funds and costs for doing so and uses those funds to pay referral fees to people like Plaintiff. [Id.] According to Plaintiff, Keough admitted that, if she were audited, she would not be able to account for “‘millions upon millions of dollars'” that she has pocketed over the past five years. [Id.]

         Then, in March 2019, Keough met with Plaintiff in Savannah, Georgia, reaching an agreement wherein Defendants would hire Plaintiff as an employee to serve as an “‘account executive'” so that Plaintiff could solicit business on behalf of Defendants. [Id. at 6.] The parties then executed a written employment agreement by email and began searching for an office for Plaintiff. [Id.] Several weeks later, Keough contacted Plaintiff regarding whether she was approved to serve as the class administrator for Plaintiff's class action cases. [Id.] Plaintiff informed Keough that she was not approved to serve as the class administrator and that Plaintiff's class counsel had decided to use a different company to serve as the class administrator. [Id.] Thereafter, Keough informed Plaintiff that “he no longer ‘works' for JND and is considered ‘shut down' and has ‘no future' with JND.” [Id.] Defendants refused to pay Plaintiff the $30, 000 in referral fees for the three class action cases, totaling $90, 000. [Id.] Defendants also refused to pay Plaintiff for his work in advertising, hourly wages, and expenses for travel. [Id.]

         Plaintiff contends that he “uncovered evidence that [Defendants] never sent out class notices to potential class members” in Howard v. Southwest Gas Corporation, No. 18-cv-01035-JAD-VCF (D. Nev. June 10, 2019). [Id.] Instead, Defendants “pocketed the class member payments and pocketed funds used for mailing postcards and letters.” [Id.]

         In light of these allegations, Plaintiff contends that Defendants have committed mail fraud in violation of 18 U.S.C. § 1341, and have committed wire fraud in violation of 18 U.S.C. § 1343. [Id. at 7.] Plaintiff asserts that Defendants should be fined and imprisoned. [Id.] Plaintiff asserts that Defendants have generated their wealth by using wrongfully obtained funds and have deceived the United States District Courts, class action plaintiffs, and law firms nationwide. [Id. at 8.] Plaintiff asserts that Defendants have made false statements to courts, law firms, and class members, in an attempt to deceive them. [Id.]

         Defendants promised to pay Plaintiff, as an employee, an average of $7, 000 a month in take-home pay, as well as reimbursements for costs and expenses. [Id. a t 9 . ] H e contends he is entitled to past, future, and compensatory damage s . [ Id.] Plaintiff contends that he has suffered the loss of his income, has experienced depression, has been unable to find any immediate employment, has had to borrow money, and has had to seek extensions of time to pay his household bills. [Id.] Plaintiff contends that Defendants' conduct was intentional, reckless, and caused serious injury to Plaintiff, justifying an award of punitive damages under South Carolina state law. [Id.]

         Plaintiff asserts four causes of action against Defendants. For his first cause of action, Plaintiff asserts that Defendants breached a contract with him. [Id. at 10.] Specifically, Plaintiff contends that he entered a contract with Defendants in which they agreed to pay Plaintiff $30, 000 for each class action referral for a total of $90, 000. [Id.] Plaintiff alleges that Defendants breached that contract by failing and refusing to pay Plaintiff the sum of $90, 000. [Id.] Defendants also breached the employment contract when they terminated him from employment. [Id.] For his second cause of action, Plaintiff asserts that Defendants violated the Sherman Act, 15 U.S.C. § 1. [Id. at 11.] Specifically, Plaintiff contends that “Defendants conspired and agreed to restrain trade and commerce by cheating law firms, corporations, state, county and federal courts” by engaging in a scheme to pocket funds from class action administration fees to pay referral fees. [Id. ] F or his third cause of action, Plaintiff asserts that Defendants violated the Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 18 U.S.C. § 1964. [Id. at 12.] For a fourth cause of action, Plaintiff seeks declaratory and injunctive relief under 28 U.S.C. §§ 2201 and 2202 related to his claims. [Id. at 14.] For his relief, Plaintiff requests compensatory damages in the amount of $2 million, punitive damages, special damages, costs of suit, statutory damages, and an order granting the requested declaratory and inj u nctive relief . [ Id. at 16.]


         Under established local procedure in this judicial district, a careful review has been made of the pro se Complaint. Plaintiff filed this action pursuant to 28 U.S.C. § 1915, the in forma pauperis statute. This statute authorizes the District Court to dismiss a case if it is satisfied that the action “fails to state a claim on which relief may be granted, ” is “frivolous or malicious, ” or “seeks monetary relief against a defendant who is immune from such relief.” 28 U.S.C. § 1915(e)(2)(B).

         Further, even if the Complaint were not subject to the prescreening provisions of 28 U.S.C. § 1915, this Court would possess the inherent authority to review the pro se Complaint to ensure that subject matter jurisdiction exists and that this case is not frivolous. See Mallard v. U.S. Dist. Court, 490 U.S. 296, 307S08 (1989) (“Section 1915(d) . . . authorizes courts to dismiss a ‘frivolous or malicious' action, but there is little doubt they would have power to do so even in the absence of this statutory provision.”); Ross v. Baron, 493 Fed.Appx. 405, 406 (4th Cir. 2012) (“[F]rivolous complaints are subject to dismissal pursuant to the inherent authority of the court, even when the filing fee has been paid . . . [and] because a court lacks subject matter jurisdiction over an obviously frivolous complaint, dismissal prior to service of process is permitted.”) (citations omitted); see also Fitzgerald v. First E. Seventh St. Tenants Corp., 221 F.3d 362, 364 (2d Cir. 2000) (“[D]istrict courts may dismiss a frivolous complaint sua sponte even when the plaintiff has paid the required filing fee[.]”); Ricketts v. Midwest Nat'l Bank, 874 F.2d 1177, 1181 (7th Cir. 1989) (“[A] district court's obligation to review its own jurisdiction is a matter that must be raised sua sponte, and it exists independent of the ‘defenses' a party might either make or waive under the Federal Rules.”); Franklin v. State of Or., State Welfare Div., 662 F.2d 1337, 1342 (9th Cir. 1981) (providing a judge may dismiss an action sua sponte for lack of subject matter jurisdiction without issuing a summons or following other procedural requirements).

         As a pro se litigant, Plaintiff's pleadings are accorded liberal construction and held to a less stringent standard than formal pleadings drafted by attorneys. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (per curiam). However, even under this less stringent standard, the pro se Complaint is subject to summary dismissal. The mandated liberal construction afforded to pro se pleadings means that if the Court can reasonably read the pleadings to state a valid claim on which Plaintiff could prevail, it should do so, but the Court may not rewrite a petition to include claims that were never presented, Barnett v. Hargett, 174 F.3d 1128, 1133 (10th Cir. 1999), or construct Plaintiff's legal arguments for him, Small v. Endicott, 998 F.2d 411, 417-18 (7th Cir. 1993), or “conjure up questions never squarely presented” to the court, Beaudett v. City of Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985). The requirement of liberal construction does not mean that the Court can ignore a clear failure in the pleading to allege facts which set forth a claim cognizable in a federal district court. See Weller v. Dep't of Soc. Servs., 901 F.2d 387, 390 (4th Cir. 1990).

         The Court must accept all well-pled allegations and review a complaint in a light most favorable to plaintiff. Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). Although the Court must liberally construe the pro se Complaint and Plaintiff is not required to plead facts sufficient to prove his case as an evidentiary matter in his pleadings, the Complaint “must 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) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Francis v. Giacomelli, 588 F.3d 186, 193 (4th Cir. 2009) (explaining that a plaintiff may proceed into the litigation process only when his complaint is justified by both law and fact). “A claim has ‘facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'” Owens v. Baltimore City State's Attorneys Office, 767 F.3d 379, 388 (4th Cir. 2014).


         The Complaint is subject to summary dismissal as it is frivolous and fails to allege facts to support a claim for relief that is plausible. As noted, 28 U.S.C. § 1915 permits an indigent litigant to proceed in forma pauperis, which allows the litigant to commence a federal court action without prepaying the administrative costs of proceeding with the lawsuit. See Staley v. Witherspoon, No. 9:07-cv-195-PMD-GCK, 2007 WL 1988272, at *1 (D.S.C. July 3, 2007). However, the statute provides limitations to such actions by permitting the Court to dismiss the case upon a finding that the action “fails to state a claim on which relief may be granted” or is “frivolous or malicious.” Id. (quoting 28 U.S.C. § 1915(e)(2)(B)); see also Denton v. Hernandez, 504 U.S. 25, 32-33 (1992) (explaining a complaint is deemed frivolous when it is “clearly baseless” and includes allegations that are “fanciful, ” “fantastic, ” or “delusional”) (citing Neitzke v. Williams, 490 U.S. 319, 325, 327-28 (1989)).

         A district court's review of a case for factual frivolousness under § 1915 is guided by the Supreme Court's decision in Denton. See Thomas v. Barri, No. 8:10-cv-0431-MBS-BHH, 2010 WL 1993881, at *2-3 (D.S.C. Mar. 3, 2010), Report and Recommendation adopted by 2010 WL 1993860 (D.S.C. May 18, 2010). When a plaintiff proceeds in forma pauperis, § 1915 “gives courts the authority to ‘pierce the veil of the complaint's factual allegations[, ]' mean[ing] that a court is not bound, as it usually is when making a determination based solely on the pleadings, to accept without question the truth of the plaintiff's allegations.” Denton, 504 U.S. at 32. The “initial assessment of the in forma pauperis plaintiff's factual allegations must be weighted in favor of the plaintiff, ” id., and “[a]n in forma pauperis complaint may not be dismissed . . . simply because the court finds the plaintiff's allegations unlikely.” Id. at 33. However, the district court is entrusted with the discretion to dismiss the case for factual frivolousness “when the facts alleged rise to the level of the irrational or the wholly incredible.” Id. “[A] court may dismiss a claim as factually frivolous only if the facts alleged are ‘clearly baseless', a category encompassing allegations that are ‘fanciful,' ‘fantastic,' and ‘delusional.'” Id. at 32-33 (citations omitted) (quoting Neitzke, 490 U.S. at 325, 328).

         Here, each of Plaintiff's claims for relief should be dismissed as they are frivolous and/or fail to state a claim for relief. ...

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