Funcia v. New York Stock Exchange NYSE Group

Background

Jesus Manuel Funcia, also identified as Manuel J. Funcia, filed the action without a lawyer. The court had previously allowed him to proceed without paying filing fees. His complaint identified federal-question jurisdiction and stated that his rights had been violated through “Agency Failure” and “Constitutional Failure.” An attached document referred to alleged failures by the Securities and Exchange Commission and the New York Stock Exchange NYSE Group concerning an arbitration dated October 28, 2004, as well as alleged misconduct by other defendants.

The opinion states that Funcia had previously filed two related cases in the Southern District of New York involving the defendants’ handling of the arbitration and matters that appeared to involve an employment agreement. The earlier cases were dismissed, and the opinion states that both were adjudicated on the merits. Because those earlier proceedings involved the same defendants and the present allegations arose from the same underlying events, the court considered claim preclusion, also called res judicata. That rule generally prevents a person from bringing claims that were already decided, or that could have been brought, in an earlier case involving the same parties.

Court’s analysis

The court explained that a complaint filed without payment of fees must be dismissed if it is frivolous or malicious, fails to state a legally sufficient claim, seeks money from an immune defendant, or falls outside the court’s subject-matter jurisdiction. The court also explained that pleadings filed by people without lawyers are read liberally, but they still must provide enough factual detail to make a claim plausible.

The court concluded that the elements of claim preclusion were satisfied. It stated that the earlier cases resulted in judgments on the merits, involved the same defendants, and concerned claims that were raised or could have been raised earlier. A new legal theory or requested remedy would not avoid claim preclusion if the claim arose from the same underlying events. The court also stated that it could consider claim preclusion on its own, even though the defendants had not raised it in an answer.

Ruling

The court dismissed the complaint for failure to state a claim under 28 U.S.C. § 1915(e)(2)(B)(ii). The order did not state that the dismissal was with or without prejudice. The clerk was directed to keep the matter open until a civil judgment was entered.

Because of Funcia’s litigation history, Judge Louis L. Stanton also ordered him to show cause—meaning to explain why a proposed restriction should not be imposed—within 30 days. Funcia was required to submit a declaration explaining why he should not be barred from filing future actions without paying filing fees unless he first obtained the court’s permission. The order stated that the restriction would be entered if he failed to submit the declaration on time or failed to show good cause. The court directed the clerk to mail the order to Funcia and record service on the docket.