Lyndon v. United States

• Decision Date: 19 June 2020
• Docket Number: CIV. NO. 20-00034 JMS-RT
• Parties: TROY LYNDON, Plaintiff, v. UNITED STATES OF AMERICA, et al., Defendants.
• Court: U.S. District Court — District of Hawaii

TROY LYNDON, Plaintiff, v. UNITED STATES OF AMERICA, et al., Defendants.

CIV. NO. 20-00034 JMS-RT

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF HAWAII

June 19, 2020

ORDER (1) GRANTING THIRD AMENDED APPLICATION TO PROCEED IN FORMA PAUPERIS, (2) DISMISSING COMPLAINT WITH LEAVE TO AMEND IN PART, AND (3) HOLDING IN ABEYANCE MOTION FOR IMMEDIATE RELIEF AND OTHER PENDING MOTIONS

I. INTRODUCTION

On January 23, 2020, pro se Plaintiff Troy Lyndon ("Plaintiff" or "Lyndon") filed a Complaint and a Motion for Immediate Relief against Defendants United States of America; Securities & Exchange Commission ("SEC"); and SEC employees Lucee Kirka, Carol Shau, and Karen Matteson¹ (collectively, "Defendants"), asserting claims pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 1346, 2671-2680, and 42 U.S.C. § 1983, based on Defendants'conduct in connection with the litigation of a prior action—SEC v. Lyndon, Civ. No. 13-00486 SOM-KSC (D. Haw. 2014) ("Lyndon"). ECF Nos. 1-2.

On April 15, 2020, Plaintiff filed a Third Amended In Forma Pauperis ("IFP) Application, ECF No. 14.² For the reasons set forth below, the court GRANTS the Third Amended IFP Application, DISMISSES the Complaint with leave to amend in part for failure to state a claim, and HOLDS IN ABEYANCE the Motion for Immediate Relief and other pending motions.

II. IFP APPLICATION

Federal courts can authorize the commencement of any suit without prepayment of fees or security, by a person who submits an affidavit that includes a statement of all assets the person possesses, demonstrating he is unable to pay such costs or give such security. See 28 U.S.C. § 1915(a)(1). "An affidavit in support of an IFP application is sufficient where it alleges that the affiant cannot pay the court costs and still afford the necessities of life." Escobedo v. Applebees, 787 F.3d 1226, 1234 (9th Cir. 2015) (citing Adkins v. E.I. Du Pont de Nemours & Co., Inc., 335 U.S. 331, 339 (1948)); see also United States v. McQuade, 647 F.2d 938, 940 (9th Cir. 1981) (stating that the affidavit must "state the facts as toaffiant's poverty with some particularity, definiteness and certainty" (internal quotation omitted)).

When reviewing a motion filed pursuant to § 1915(a), "[t]he only determination to be made by the court . . . is whether the statements in the affidavit satisfy the requirement of poverty." Martinez v. Kristi Kleaners, Inc., 364 F.3d 1305, 1307 (11th Cir. 2004) (citation omitted). While § 1915(a) does not require a litigant to demonstrate "absolute destitution," Adkins, 335 U.S. at 339, the applicant must nonetheless show that he is "unable to pay such fees or give security therefor." 28 U.S.C. § 1915(a).

As set forth in the Third Amended IFP Application, Plaintiff is self-employed and earned a gross income of $43,310 in 2019. ECF No. 14 at PageID #60. Plaintiff indicates that although he earned a "gross income of $43,310,"and his "net income for 2019 was $1,628." Id. Plaintiff further indicates that "as a result of Covid-19," his "Uber & Lyft driving has been discontinued," and his earnings of "$15/hour from GrubHub, before gas and maintenance, [have] not been consistent enough or predictably sustainable." Id. The Third Amended IFP Application lists Plaintiff's significant assets as including $544.19 in a bank account and a car owned by the bank worth $17,900. Id. at PageID #61. It further indicates that Plaintiff pays monthly expenses in excess of $2,000—$976 for rent, $27 for subscriptions, $400 for food, $85 for electricity, $146 for insurance, $355for car payments, and "$100+" for other miscellaneous expenses. Id. Plaintiff does not have any dependents and has outstanding debt in the form of a $3.8 million judgment. Id.

Plaintiff also submitted a letter in which he provided further detail regarding his financial circumstances. ECF No. 14-1. Plaintiff states that his "work for Uber and Lyft has come to a near standstill due to Covid-19," and that although he now "deliver[s] food for GrubHub . . . , [he has] not been able to book more than 2-4 hours of work per day on average." Id. He further states that paying the $400 filing fee "will prevent [him] from being able to pay [his] rent." Id.

Plaintiff has made the required showing under 28 U.S.C. § 1915(a) to proceed in forma pauperis (i.e., without prepayment of fees); therefore, the court GRANTS Plaintiff's Third Amended IFP Application. ECF No. 14.

III. STANDARDS OF REVIEW

The court must screen the Complaint for each civil action commenced pursuant to 28 U.S.C. § 1915(a), governing IFP proceedings. The court must sua sponte dismiss a complaint or claim that is "frivolous or malicious[,] . . . fails to state a claim on which relief may be granted[,] or . . . seeks monetary relief against a defendant who is immune from such relief." 28 U.S.C. § 1915(e)(2)(B); see Lopez v. Smith, 203 F.3d 1122, 1126-27 (9th Cir. 2000) (en banc) (stating that 28 U.S.C. § 1915(e) "not only permits but requires" the court to sua sponte dismiss anin forma pauperis complaint that fails to state a claim).

To state a claim, a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In considering whether a complaint fails to state a claim, the court must set conclusory factual allegations aside, accept non-conclusory factual allegations as true, and determine whether these allegations state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 677-80 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Weber v. Dep't of Veterans Affairs, 521 F.3d 1061, 1065 (9th Cir. 2008). A complaint that lacks a cognizable legal theory or alleges insufficient facts under a cognizable legal theory fails to state a claim. See UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1014 (9th Cir. 2013) (citing Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990)). That is, Rule 8 requires more than "the-defendant-unlawfully-harmed-me accusation[s]" and "[a] pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do." Iqbal, 556 U.S. at 678 (citations and quotations omitted). "Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement." Id. (quotation signals omitted).

Plaintiff is appearing pro se; consequently, the court liberally construes the Complaint. See Erickson v. Pardus, 551 U.S. 89, 94 (2007);Eldridge v. Block, 832 F.2d 1132, 1137 (9th Cir. 1987) (per curiam). The court also recognizes that "[u]nless it is absolutely clear that no amendment can cure the defect . . . a pro se litigant is entitled to notice of the complaint's deficiencies and an opportunity to amend prior to dismissal of the action." Lucas v. Dep't of Corr., 66 F.3d 245, 248 (9th Cir. 1995); see also Crowley v. Bannister, 734 F.3d 967, 977-78 (9th Cir. 2013).

IV. BACKGROUND

In Lyndon, the SEC filed suit against Lyndon (and another individual) alleging violation of civil securities and exchange laws and regulations—15 U.S.C. §§ 77e(a), 77(e)(c), 77q(a), 78j(b), 78m(a), 78m(b)(5), 17 C.F.R. §§ 240.10b-5, 240.12b-20, 240.13a-1, 240.13a-13, 240.13b2-1, 240.13b2-2; and SEC Rules 12b-20, 13a-1, 13a-12, 13a-14. See Lyndon, Civ. No. 13-00486 SOM-KSC, ECF No. 1 at PageID #3-4. A consent judgment was entered permanently enjoining Lyndon from violating certain securities laws, and requiring him to disgorge ill-gotten gains in an amount to be determined later by the court. See id., ECF Nos. 20 (consent), 22 (consent judgment).³ Thereafter, the SEC moved for summaryjudgment on disgorgement, and Lyndon moved to: (1) stay the consent judgment and for sanctions; (2) compel discovery from the SEC and appeal the magistrate judge's denial of those discovery motions; and (3) set aside the consent judgment. See id., ECF Nos. 28, 36, 41, 43, 48, 68, 76, 81, 101, 112, 118. The district court granted the motion for summary judgment; determined the amount of disgorgement, interest, and penalties to be in excess of $3.6 million; denied Lyndon's appeals of the magistrate judge's denial of Lyndon's discovery motions; and denied Lyndon's motion to set aside the consent judgment. Id., ECF No. 143. Lyndon filed a motion for clarification/reconsideration, the district court construed that motion as a Federal Rule of Civil Procedure 60(b) motion for relief from judgment, and denied the motion. Id., ECF Nos. 144, 145. Final judgment was entered, Lyndon appealed, and the Ninth Circuit affirmed the district court's rulings and final judgment. See id., ECF Nos. 148, 152, 205. And on October 1, 2018, the United States Supreme Court denied Lyndon's petition for writ of certiorari. Id., ECF No. 209.

By the instant action, Plaintiff seeks to "reopen" Lyndon and/or obtain compensation for injury caused by Defendants' alleged wrongdoing during the Lyndon litigation. See ECF No. 1 at PageID #1 ("Ideally, . . . this document could cause the court to reopen the original lawsuit and compel the court to correct its grave mistakes."); ECF No. 2 at PageID #18 (stating that "this case is aboutundoing the irreparable harm perpetrated against me" by the SEC during the course of that prior litigation).⁴ More specifically, Plaintiff alleges that Defendants "misled to give the government advantage" in the Lyndon litigation; "interfer[ed] in [Lyndon's] business activities and financing"; "den[ied Lyndon] access to relevant and exculpatory evidence"; "knowingly present[ed] false evidence to the courts"; "made untrue and defamatory statements"; and "conspired . . . to . . . publish[] and/or caused to be published defamatory information about [Lyndon], defraud [Lyndon] . . . , and maliciously prosecute[] [Lyndon]." ECF No. 1 at PageID #6.

Based on such conduct, Plaintiff's Complaint asserts claims (1) for breach of contract; (2) under the FTCA for malicious prosecution, abuse of process, misrepresentation, tortious...