Educational Financial Counselors v. City of Capitola / Capitola Police…
Educational Financial Counselors, et al. v. City of Capitola / Capitola Police Department, et al.
- Virginia Demarchi
- 5:25-cv-09421
- U.S. District Court · Northern District of California
- 2
In Educational Financial Counselors v. City of Capitola, Judge Demarchi ordered plaintiffs to explain by December 23 why the case should not be dismissed for failing to prosecute.
The plaintiffs—Kevin Smith and Educational Financial Counselors—must respond by December 23, 2025, and address the unpaid filing fee, Smith’s incomplete fee-waiver application, and EFC’s lack of counsel.
What happened
Educational Financial Counselors, a trust, and Kevin Smith sued the City of Capitola, its police department, police personnel, a towing company, and two company owners. The complaint was filed on October 31, 2025.
The court had denied Smith’s request to proceed without paying the filing fee because the application lacked necessary financial information. The court also said the trust could not proceed without a lawyer. The deadline to submit a new application, pay the fee, and obtain a lawyer for the trust passed without any docket entry showing that these steps had occurred.
Judge Virginia K. DeMarchi ordered the plaintiffs to respond by December 23, 2025, and explain why the case should not be dismissed for failing to prosecute or follow court orders. The court did not dismiss the case in this order; it warned that a later order could recommend dismissal if the plaintiffs do not respond.
The detailed version
- Educational Financial Counselors v. City of Capitola / Capitola Police… · No. 5:25-cv-09421
- Virginia Demarchi
- Dec. 2, 2025
Background
On October 31, 2025, Kevin Smith and Educational Financial Counselors (EFC), identified as a trust, filed a complaint against the City of Capitola, the Capitola Police Department, several police officers and records technicians, KJRB Inc., a towing company, and two KJRB Inc. owners.
Earlier court order
On November 5, 2025, the court denied Smith’s application to proceed without paying the filing fee, but did so without prejudice. The court gave two reasons: the application did not provide enough information about Smith’s assets, including assets held by a trust he controls, income, and expenses; and EFC could not qualify for this status because it was a trust rather than a natural person. The court stated that the filing fee therefore had to be paid even if Smith separately qualified to proceed without paying it.
The court also stated that EFC could not proceed without a licensed lawyer. It gave Smith until November 26, 2025, to file an amended application. Alternatively, the plaintiffs could pay the filing fee by that date. The court also directed EFC to obtain licensed counsel by November 26 if it wished to remain a plaintiff.
Order to show cause
The November 26 deadline passed. The court stated that the docket did not show that Smith had filed an amended application, that the plaintiffs had paid the filing fee, or that EFC had obtained counsel, although EFC remained named as a plaintiff.
The court cited its inherent power—the court’s authority to manage its cases and move them toward resolution—to issue an order requiring the plaintiffs to explain their failure to take the required steps. By December 23, 2025, the plaintiffs must file a written response showing why the action should not be dismissed for failure to prosecute. If they do not respond by that deadline, the court stated that it will issue an order reassigning the action to a district judge with a recommendation that the complaint be dismissed for failure to prosecute and/or failure to comply with court orders.
Disposition
This order orders the plaintiffs to show cause; it does not dismiss the action. Judge Virginia K. DeMarchi warned of a possible later recommendation for dismissal if the plaintiffs fail to respond.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.