Smith v. JP Morgan Chase Bank, N.A.

Background

Arthur Edward Smith, who was representing himself, sued J.P. Morgan Chase Bank, N.A., and J.P. Morgan Chase Bank & Co d/b/a Chase Bank (corporately). He proceeded without prepaying filing fees after the court granted his request to do so. Smith alleged that he had deposited a paycheck online at a Chase branch on January 31, 2022, as he had done before. A Chase employee stamped the check with Bad Check; Fraud Alert; Do not Cash I and placed a 10-day hold on it. Smith alleged that this was based mainly on racial discrimination. He also alleged that he could not access the funds for 10 days, which made it difficult to pay bills and worsened his hardship.

Smith asserted a claim under 42 U.S.C. § 1981, which prohibits race, color, and ethnicity discrimination in making and enforcing contracts. He also asserted a state-law claim for intentional infliction of emotional distress under the court’s supplemental jurisdiction, meaning the federal court’s possible authority to hear a related state-law claim. Smith sought money damages. After filing the complaint, he moved to add a copy of the canceled check and a letter stating that the check had been held because it required additional review.

Court’s analysis

Because Smith was proceeding without prepaying fees, the court screened his complaint under 28 U.S.C. § 1915(e)(2)(B). The court explained that it must dismiss claims that are frivolous, malicious, fail to state a claim, or seek money from an immune defendant. It also explained that a complaint must provide enough factual detail to make the claim plausible, rather than merely reciting legal conclusions.

For a § 1981 race-discrimination claim, the court stated that a plaintiff must allege that he belongs to a racial minority, that the defendant intended to discriminate because of race, and that the discrimination concerned an activity covered by the statute. The plaintiff must also allege that the loss would not have occurred but for race. The court found that Smith did not identify his race and did not provide facts suggesting that race was a motivating factor or that the events would not have occurred but for his race. The court therefore held that his allegations were conclusory and failed to state a § 1981 race-discrimination claim.

Leave to amend and disposition

The court did not dismiss the action at this point. Instead, because Smith was representing himself and the court determined that additional facts might allow a valid claim, it granted him 60 days to file an amended complaint. The amended complaint must replace, rather than supplement, the original complaint and must repeat any facts or claims Smith wants the court to consider. The court instructed him to provide facts identifying who violated his rights, what each defendant did, when and where the events occurred, what injuries he suffered, and what relief he seeks. The court said that it would decide later whether to exercise supplemental jurisdiction over the state-law claim.

The court granted Smith’s motion to submit exhibits to the extent stated in the order and directed the Clerk of Court to terminate that motion. No summons would issue at that time. The court warned that if Smith failed to amend within the allowed period and could not show good cause, the complaint would be dismissed for failure to state a claim. The court also certified that an appeal would not be taken in good faith and denied fee-free status for purposes of an appeal from this order. Judge Laura Taylor Swain signed the order.