United States District Court, W.D. Washington, Tacoma
ORDER TO SUBMIT NEW PROPOSED COMPLAINT, DISMISSING
PROPOSED AMENDED COMPLAINT WITHOUT PREJUDICE, AND RENOTING
PLAINTIFF'S APPLICATION TO PROCEED IN FORMA
Richard Creatura United States Magistrate Judge
who proceeds pro se and is currently incarcerated,
requests to proceed in forma pauperis
(“IFP”) in this civil matter alleging federal
question jurisdiction. Pursuant to Amended General Order
02-19, the District Court has referred plaintiff's
application to the undersigned. The matter is before the
Court on plaintiff's first amended proposed complaint.
brings civil Racketeering Influenced and Corrupt
Organizations Act (“RICO”) claims against various
Charles Schwab entities and employees as well as
plaintiff's wife. Plaintiff's theory of liability is
that these defendants formed a scheme together to deprive
plaintiff of his separate property. However, plaintiff
provides no factual allegations plausibly establishing that
defendants acted with a single, common purpose-as necessary
to make out a cognizable RICO claim. Plaintiff's other
federal claim-brought under 42 U.S.C. § 1985-fails
because plaintiff does not plead any facts to support the
claim that defendants acted on the basis of plaintiff's
membership in a protected class. And the Court will not
exercise supplemental jurisdiction over plaintiff's state
law claims absent a cognizable claim brought under federal
law. Therefore, before the Court will rule on plaintiff's
IFP motion, plaintiff must amend his proposed amended
complaint (Dkt. 6-1) to correct the deficiencies identified
in this Order.
who is incarcerated at the Clallum Bay Corrections Center,
initiated this matter by filing an IFP motion in July 2019.
See Dkt. 1. The undersigned reviewed plaintiff's
IFP application-including his proposed complaint-and,
determining that the proposed complaint failed to state a
claim upon which relief could be granted, dismissed the
proposed complaint without prejudice, and directed plaintiff
to submit a new proposed complaint in support of his IFP
application, if he wished to proceed. See Dkt. 4.
filed an “ex parte motion to amend
complaint.” Dkt. 6. His new proposed complaint (Dkt.
6-1) brings claims against 11 named defendants-first, two
executives (the “executive defendants”): Charles
Schwab, allegedly the founder and Chairman of Charles Schwab
enterprises, and Walter Bettinger II, allegedly the CEO of
Charles Schwab enterprises. Dkt. 6-1, at 2. Second, plaintiff
lists five Charles Schwab entities (the “company
defendants”): Charles Schwab Corporation, Charles
Schwab Holdings, Charles Schwab & Co. Inc., Charles
Schwab Bank, and Charles Schwab Investment Management, Inc.
Dkt. 6-1, at 2-3. Third, plaintiff lists an employee
(“defendant Daniel”) of “Charles Schwab
enterprises, ” who is identified only by his first name
and as an employee of a Lynwood, Washington branch. Dkt. 6-1,
at 3. Fourth, plaintiff lists “Michael Campion, ”
allegedly the “Senior Manager of the Compliance
Department of Charles Schwab enterprises[.]” Dkt. 6-1,
at 3. Fifth, plaintiff lists a “Client Advocacy
Team” (“defendant team”), “an unknown
amount of individuals” apparently working for one of
the company defendants. Dkt. 6-1, at 3. Sixth, plaintiff
lists his wife, defendant Simms. Dkt. 6-1, at 3. Plaintiff
also lists 100 unnamed, Doe defendants who worked for
“Charles Schwab enterprises” at some point.
See Dkt. 6-1, at 3.
summary, the allegations of plaintiff's first amended
proposed complaint are as follows: in August 2014, plaintiff
and defendant Simms entered into a prenuptial agreement that
plaintiff intended “to protect funds earned before
marriage.” Dkt. 6-1, at 5. In early 2017, defendants
Simms proposed opening a “convenience
account”-“a Joint Account that enabled [defendant
Simms] to withdraw the separate funds only at
[p]laintiff's direction or for [p]laintiff's
benefit.” Dkt. 6-1, at 6. Defendant Simms promised that
she would not use plaintiff's funds from this account
without his consent or direction. See Dkt. 6-1, at
defendant Simms, defendant Daniel, and 10 unnamed defendant
employees then opened joint brokerage and bank accounts in
plaintiff's name. See Dkt. 6-1, at 7. Plaintiff
says he had not consented to opening this type of account and
that he did not know that this type of account had been
opened. See Dkt. 6-1, at 7-8. Plaintiff later
deposited approximately $33, 000 into the accounts. Dkt. 6-1,
April 2018, the company defendants and defendant Simms then
“secretly” changed the mailing address for the
accounts, so that plaintiff stopped receiving “Monthly
Transaction Statements, causing [p]laintiff to lose track of
his separate funds.” Dkt. 6-1, at 12. In June or July
2018, plaintiff wrote the company defendants to demand his
account statements and notify them of potential fraud.
See Dkt. 6-1, at 13. He also demanded that defendant
Simms change the address back and send him the missing
account statements. See Dkt. 6-1, at 13. Allegedly,
defendant Simms took over $5, 000 of plaintiff's separate
funds from the accounts. See Dkt. 6-1, at 14.
Moreover, on November 30, 2018, a Doe defendant contacted
defendant Simms to notify her of plaintiff's demand for
account statements and threatened to close the accounts in
2019- an action that allegedly allowed defendant Simms to
drain the accounts, resulting in plaintiff losing “over
fifty-thousand dollars” of separate funds. Dkt. 6-1, at
15-16. Plaintiff alleges that by failing to provide him with
the account statements, the company defendants impeded
plaintiff's attempt to institute state court proceedings
against defendant Simms as well as federal agency
investigations. See Dkt. 6-1, at 15-16.
November 30, 2018, and January 27, 2019, plaintiff alleges
that he again wrote to request documents about his accounts
and notify “Charles Schwab” that there was
unauthorized activity occurring. See Dkt. 6-1, at
17, 20. However, Doe defendants failed to take action in
response to his requests. See Dkt. 6-1, at 21.
Plaintiff also wrote defendant Simms in November 2018 and
January 2019, demanding account statements and that she
change the statement address back. See Dkt. 6-1, at
18, 21. Defendant Simms failed to do so. See Dkt.
6-1, at 21.
January 2019, plaintiff also wrote to the Financial Industry
Regulatory Authority, requesting that they investigate the
matter. See Dkt. 6-1, at 25. The company and
executive defendants assigned defendant Campion, his
compliance department, and ten Doe defendant employees to
plaintiff's complaints. See Dkt. 6-1, at 25.
Plaintiff contends that defendants continued to refuse to
disclose account statements, contracts, and proof of a change
of address notification. See Dkt. 6-1, at 26. In
April 2019, plaintiff informed various agencies of defendant
Campion's actions. See Dkt. 6-1, at 29.
Plaintiff states that defendants then- falsely-informed the
agencies that plaintiff had concealed his
“incarceration/identity.” See Dkt. 6-1,
at 28, 31.
plaintiff contends that he lost $53, 245.96 (see
Dkt. 6-1, at 43), and he brings a variety of federal and
state law claims against defendants. He requests $10 million
in damages, as well as an additional $30 million in treble
damages for his civil RICO claim. See Dkt. 6-1, at
matter is before the Court on plaintiff's “ex
parte motion to amend complaint” (Dkt. 6), which
this Court interprets as plaintiff's first amended
proposed complaint, in response to the Court's order
directing plaintiff to amend his proposed complaint.
See Dkt. 4. Although received shortly after the
deadline that the Court gave plaintiff to amend his proposed
complaint, the Court will accept the proposed amended
complaint as timely filed.