Stalling v. T3 Trading Group LLC

Background

David Stalling, representing himself, sued T3 Trading Group, LLC under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 1981, the New York State Human Rights Law, and the New York City Human Rights Law. He alleged that T3 Trading Group discriminated against him in hiring because of his race and color.

Stalling alleged that he applied to T3 Trading Group in July or August 2020, completed a phone interview, and received forms and instructions concerning identification, address verification, fingerprinting, and Financial Industry Regulatory Authority examinations. On September 8, 2020, T3 Trading Group told him that his application would not proceed but did not provide a reason. T3 Trading Group told the New York State Division of Human Rights that Stalling was applying to become a trading-group member and proprietary trader, rather than an employee, and that becoming a trader required passing two industry examinations and making a capital contribution. The Equal Employment Opportunity Commission later issued a right-to-sue notice stating that Stalling was not in an employment relationship with T3 Trading Group.

Court’s Analysis

Because Stalling was permitted to proceed without paying filing fees in advance, the court screened his complaint under 28 U.S.C. § 1915(e)(2)(B). The court was required to dismiss claims that were frivolous, malicious, failed to state a claim, or sought relief from an immune defendant. It also had to dismiss claims over which it lacked subject-matter jurisdiction. Although the court read Stalling’s self-represented complaint liberally, it explained that the complaint still had to provide enough factual detail to make his claims plausible.

For the Title VII claim, the court noted a factual dispute about whether T3 Trading Group qualified as an employer, because Title VII covers employees rather than independent contractors. At the pleading stage, however, the court assumed that T3 Trading Group was a potential employer. Even with that assumption, the court held that Stalling had not alleged facts directly showing discrimination or facts supporting a plausible inference that race motivated the decision not to proceed with his application.

The court reached the same conclusion under § 1981. That statute requires facts showing racial discrimination concerning an activity protected by the statute and that the plaintiff would not have suffered the loss of that right but for race. The court held that allegations insufficient to show race as a motivating factor under Title VII were also insufficient to show that the application would have proceeded but for Stalling’s race. The court did not decide the merits of the state or city claims because it gave Stalling an opportunity to amend and stated that it would decline jurisdiction over those claims if he failed to amend and the federal claims were dismissed.

Disposition

The court granted Stalling leave to file an amended complaint within 30 days. The amended complaint had to replace, rather than supplement, the original complaint and had to identify the relevant people, events, dates, locations, injuries, and requested relief. The court stated that failure to comply, absent good cause, would lead to dismissal for failure to state a claim and that the court would decline jurisdiction over the state and city claims. No summons issued at that time. The court also certified that an appeal would not be taken in good faith and denied fee-free status for purposes of an appeal.