Aery v. North Star Mutual Insurance

Background

James Paul Aery sued North Star Mutual Insurance, Cory Melbo, and Jodi Mae St. Peter. The complaint appears to concern an insurance-policy dispute. Aery alleged a civil-rights violation under 42 U.S.C. § 1983, breach of an insurance contract, and misrepresentation.

Aery applied to proceed in forma pauperis, meaning he asked to proceed without paying the court’s filing fee upfront. The magistrate judge recommended granting that application, requiring Aery to pay the statutory filing fee through the process required by 28 U.S.C. § 1915(b)(2), and dismissing the complaint without prejudice for failure to state a claim.

Aery objected. He argued that he did not understand why the absence of state-actor allegations justified dismissal, that his requested damages exceeded $15,000 and therefore gave the federal court jurisdiction, and that his claims involved county corruption requiring a jury from outside the area.

Court’s Analysis

The court adopted the magistrate judge’s recommendation regarding Aery’s application to proceed without prepaying fees. It explained that Aery could proceed without paying initially but remained responsible for the filing fee under 28 U.S.C. § 1915(b)(2). The court identified the unpaid balance as $350.

The court dismissed the § 1983 claim because that statute imposes liability on state actors—state officials or people acting under state authority. The court stated that the defendants were private individuals and that Aery’s insurance-policy allegations did not involve state action. Because Aery did not allege that the defendants were state officials or acting with state authority, the court held that he could not sue them under § 1983.

The court also held that it lacked diversity jurisdiction. Diversity jurisdiction can allow a federal court to hear state-law claims when the parties are citizens of different states and more than $75,000 is in controversy. The court said Aery had not shown that the defendants resided in a different state from him, even if his complaint were read as seeking more than $75,000.

The court declined to exercise supplemental jurisdiction over the breach-of-contract claim. Supplemental jurisdiction can allow a federal court to hear related state-law claims when a federal claim is also present. Because the federal § 1983 claim was dismissed, the court declined to decide the remaining state-law claim and dismissed the entire complaint without prejudice. The court stated that Aery could file the state-law claim in state district court and that he might have an opportunity there for a jury to decide the case.

Disposition

Chief Judge John R. Tunheim overruled all of Aery’s objections and adopted the report and recommendation. The court granted Aery’s application to proceed in forma pauperis, directed him to pay the unpaid $350 filing fee as required by § 1915(b)(2), and dismissed the complaint without prejudice.