Michaels v. Media Communications Corporation

Background

Scott Michaels, representing himself, brought three cases against Media Communications Corporation, Werner Roth, and the United States Patent and Trademark Office and Kathi Vidal in her official capacity. The cases related to a separate trademark dispute pending before the court and to Michaels’s purported interest in and ownership of the New York Cosmos trademark.

In each case, Michaels applied to proceed without paying filing fees, a status commonly called proceeding in forma pauperis. He declared under penalty of perjury that he could not pay the $402 filing fee without serious financial hardship to himself or his dependents. The court granted all three applications and waived the fees.

Proceedings concerning the fee waivers

Counsel in the separate trademark dispute submitted a declaration referring to a post on Michaels’s personal blog. The post stated, among other things, that Michaels had built and sold a multimillion-dollar e-commerce business and represented more than $100 million in player value as a player agent. The court viewed those statements as inconsistent with Michaels’s claims of financial hardship.

Magistrate Judge Aaron issued an order requiring Michaels to explain why the three cases should not be dismissed under 28 U.S.C. § 1915(e)(2)(A), which requires dismissal when a court determines that an applicant’s allegation of poverty is untrue. Michaels did not respond. Judge Aaron later gave him another opportunity either to respond or to pay the filing fee in each case. Michaels again did not respond or pay the fees.

Court’s analysis and ruling

The court stated that dismissal under § 1915(e)(2)(A) is mandatory when an allegation of poverty is untrue. It explained that the statute does not require absolute destitution or dismissal for minor good-faith inaccuracies, but requires dismissal when a plaintiff conceals or misrepresents financial assets or history in bad faith to obtain fee-free status.

Judge Ronnie Abrams concluded that Michaels’s public statements about his wealth directly contradicted the financial-hardship statements supporting his applications. The court also relied on his failure to respond to the orders or pay the required filing fees, despite his continued participation in other litigation before the court.

The court dismissed the cases captioned 25-CV-6596, 25-CV-6942, and 25-CV-7019 without prejudice under Federal Rule of Civil Procedure 41(b). The Clerk was directed to terminate all pending motions and close the three cases. The court stated that, because the dismissals were without prejudice, Michaels was not prevented from again pursuing the legal relief sought in the cases.