Nicholson v. Chime Banking

Background

David Nicholson, an incarcerated plaintiff representing himself, filed an action against Chime Banking. The court reviewed the complaint under 28 U.S.C. § 1915A, the statute requiring preliminary screening of certain prisoner complaints. Nicholson had separately been granted permission to proceed without paying the filing fee.

Nicholson alleged that he opened an account with Chime Banking in about May or June 2020. He alleged that Chime sent customers an email in December 2020 stating that funds in closed accounts would be forwarded by mail. Nicholson said that, when his account was closed, $3,000 remained in it and that he had not received that money. The complaint stated that he was seeking relief under California law and asserted that the events occurred in San Francisco.

Jurisdiction analysis

The court explained that federal courts have limited subject-matter jurisdiction, meaning they may hear only cases authorized by federal law. It found that Nicholson did not allege a federal question because he identified California law as the basis for his claim.

The court also considered diversity jurisdiction, which generally requires more than $75,000 in controversy and citizenship in different states. It held that diversity jurisdiction was lacking because the alleged amount in controversy was $3,000, far below the $75,000 requirement.

Although the court noted that the Northern District of California might be a proper venue if a substantial part of the events occurred there, it explained that proper venue does not establish federal jurisdiction.

Ruling

Judge Haywood S. Gilliam, Jr. dismissed the action without leave to amend for lack of federal jurisdiction. The court stated that amendment would be futile. It directed the clerk to terminate all pending motions as moot, enter judgment in favor of Chime Banking and against Nicholson, and close the case.