Treanor v. Paypal, Inc.
1:24-cv-09698
S.D.N.Y.Mar 13, 2025Background
- Plaintiff Michael R. Treanor, Jr., a New York attorney appearing pro se, sued PayPal, Inc. in federal court, alleging state law fraud and related claims over a failed cryptocurrency transaction on Venmo (a PayPal subsidiary).
- Treanor deposited $4,000 in Venmo's crypto system on December 14, 2024, intending to make certain payments.
- He could not access or transfer the funds as intended and later liquidated his crypto position, expecting the funds to return to his cash balance.
- The funds were held as the transaction was reviewed, causing a delay of up to a week before the money was returned to his bank account.
- Treanor alleged damages exceeding $75,000 (including punitive damages) due to his inability to use the funds for an essential transaction.
- The court granted Treanor leave to proceed in forma pauperis but ultimately found the complaint lacking in factual support for the necessary amount in controversy for diversity jurisdiction, dismissing the complaint with leave to amend within 30 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Diversity jurisdiction: amount in controversy | Claimed damages (actual + punitive) exceed $75,000 | Alleged facts support only $4,000 in dispute | Complaint fails to plead sufficient amount-in-controversy; dismissed. |
| Sufficiency of fraud and related claims | Defendant fraudulently induced deposit via deceptive advertising | No evidence of fraudulent or egregious conduct | No facts supporting gross or morally reprehensible conduct; punitive claims speculative. |
| Class Action Eligibility | Plaintiff can represent a class as pro se attorney | Pro se litigant cannot bring class action | Pro se attorney cannot serve as both class rep and counsel; class allegations not allowed. |
| Leave to Amend | Plaintiff seeks to amend if necessary | — | Leave granted for 30 days to replead with plausible facts. |
Key Cases Cited
- Wis. Dep’t of Corr. v. Schacht, 524 U.S. 381 (addresses diversity jurisdiction requirements)
- St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283 (amount in controversy controls if made in good faith)
- Hertz Corp. v. Friend, 559 U.S. 77 (corporate citizenship for diversity jurisdiction purposes)
- Palazzo ex rel. Delmage v. Corio, 232 F.3d 38 (domicile defined for individuals in diversity cases)
- Triestman v. Fed. Bureau of Prisons, 470 F.3d 471 (duty to construe pro se pleadings liberally, but exception for attorney litigants)
- Cuoco v. Moritsugu, 222 F.3d 99 (leave to amend generally required for pro se litigants)