Miles-Baker v. Charles Schwab & Co., Inc.

Background

Eric T. Miles-Baker, appearing without a lawyer, sued Charles Schwab & Co., Inc. He invoked diversity jurisdiction and sought money damages based on alleged poor customer service at a Schwab branch. Miles-Baker alleged that a financial specialist, Joseph Gilt, ignored him, would not review his verifying credentials, and rejected his request to speak with a manager. He also alleged that a client relationship manager, Monica Stevens, did not adequately respond to his request to review and reconcile transactions involving his closed account.

Miles-Baker had been granted permission to proceed without paying filing fees in advance. The court explained that it had to dismiss a fee-waived complaint that was frivolous, failed to state a claim, sought relief from an immune defendant, or fell outside the court’s subject-matter jurisdiction.

Jurisdiction

The court concluded that Miles-Baker had not pleaded enough facts to establish diversity jurisdiction. Diversity jurisdiction requires complete diversity of citizenship and an amount in controversy exceeding $75,000. The court treated Miles-Baker as a New York citizen. It said Schwab appeared to be a California corporation with its principal place of business in California, and therefore assumed for purposes of the order that the parties were diverse.

The court nevertheless found that Miles-Baker alleged no facts suggesting that his claims satisfied the more-than-$75,000 amount-in-controversy requirement. The court also stated that it was unclear whether the alleged poor customer service was enough to state a claim under state law. Because the complaint did not establish the required amount in controversy, the court held that it lacked diversity jurisdiction and dismissed the complaint under Federal Rule of Civil Procedure 12(h)(3). The court separately stated that the complaint did not establish federal-question jurisdiction because it did not assert a federal claim or facts showing that relief depended on a substantial question of federal law.

Leave to Amend and Disposition

Because Miles-Baker was self-represented and the court could not say that amendment would be futile, it granted him 30 days to file an amended complaint. The amended complaint had to provide facts supporting diversity jurisdiction and identify the state-law claims he was bringing. The court explained that the amended complaint would replace, rather than supplement, the original complaint, so Miles-Baker had to repeat any facts or claims he wanted the court to consider.

The court’s conclusion dismissed the action for lack of subject-matter jurisdiction and granted 30 days’ leave to file an amended complaint. It stated that, if Miles-Baker did not timely amend and could not show good cause, the court would enter judgment dismissing the action for the reasons in the order. The court also certified that an appeal would not be taken in good faith and denied permission to appeal without prepaying fees. Judge Laura Taylor Swain signed the order.