Nos. 05-2450 & 05-3043
United States Court of Appeals For the Seventh Circuit
SUBMITTED JANUARY 19, 2006—DECIDED JULY 10, 2006
Appeals from the United States District Court for the Central District of Illinois. No. 03 C 2117—Michael P. McCuskey, Chief Judge. No. 05 C 2033—Harold A. Baker, Judge.
Before EASTERBROOK, MANION, and KANNE, Circuit Judges.
KANNE, Circuit Judge. Kenneth McCready has used the federal and state courts to harass eBay, Inc. and eBay‘s customers. Acting
Here, the two suits filed in the Central District of Illinois were dismissed, and we consolidated McCready‘s appeals in order to provide a better understanding of the litany of his repetitive and frivolous legal maneuvers. For the reasons stated below, we affirm. Additionally, we order McCready to show cause why
I. HISTORY
McCready operated an online business in which he bought and sold various items through several accounts he had registered with eBay, the popular online marketplace. As with all users, eBay required McCready to abide by its user agreement. McCready‘s dealings left several eBay users dissatisfied, and they used eBay‘s Feedback Forum to voice their displeasure. The buyers complained that McCready failed to deliver the goods he sold or delivered goods of lower quality than he had advertised. eBay notified McCready of the complaints and informed him that his accounts would be suspended if he did not resolve them. After investigating the claims, eBay suspended McCready‘s accounts in June or July 2002, and advised him that he would be reinstated
The first lawsuit originated in the bankruptcy court for the Northern District of Illinois, where McCready had filed for bankruptcy on April 17, 2002. On August 26, 2002, McCready petitioned for sanctions against eBay, alleging that eBay‘s suspension of his account violated the automatic stay provisions of
McCready brought his second suit in Iroquois County (Illinois) Circuit Court, where he filed a complaint against eBay and other defendants on November 26, 2002. The circuit court denied all of McCready‘s claims and sanctioned him $1000 for litigating in bad faith. The Appellate Court of Illinois affirmed. McCready v. EBay, Inc., No. 3-03-1017 (Ill. App. Ct. May 27, 2005), cert. denied, 844 N.E.2d 39 (Ill. 2005).
Seeking to protect itself, eBay sued McCready on March 12, 2003, in California state court requesting declaratory relief allowing eBay to terminate its dealings with McCready. McCready removed the suit to federal court, but eBay successfully caused the case to be remanded to state court where default judgment was entered against McCready.
In the third action (the first case on appeal, No. 05-2450), McCready filed an 82-page complaint in the Central District of Illinois on July 9, 2003, against eBay and numerous users of eBay. McCready alleged violations of the Fair Debt Collection Practices Act,
On December 3, 2004, the district judge dismissed all defendants other than eBay. On February 4, 2005, the court issued an order ruling on eBay‘s motion to dismiss. In its order, the district court refused eBay‘s request to apply res judicata to the federal claims, explaining that the lawsuits filed in California and Illinois state courts involved only state law.1 Rather, the court evaluated McCready‘s federal claims under
Before proceedings with the magistrate judge got under way, McCready filed with the district judge a motion to reconsider his ruling dismissing his federal claims and declining to exercise supplemental jurisdiction over his state law claims. The district judge denied this motion. Soon thereafter, McCready filed with the district judge a second motion to reconsider, arguing that the district judge had misunderstood the basis of his claims. The district judge denied this motion as well. Then the parties filed with the magistrate judge a stipulation to dismiss McCready‘s only remaining claim (under the EFTA) with
The fourth lawsuit, which gives rise to the fifth, was filed by McCready in the Western District of Michigan and involved an eBay transaction. McCready had threatened legal action against Bruce Kamminga because Kamminga sold a snowmobile to another buyer despite McCready having placed the highest bid. After McCready became aware that Kamminga had consulted with David McDuffee, a lawyer, McCready sued both of them, alleging violations of the FDCPA in addition to various state law claims.
The defendants moved to dismiss, and the matter was referred to a magistrate judge. The magistrate judge converted the motion to dismiss to a motion for summary judgment and recommended that the district judge grant relief to the defendants. The district judge did so by adopting the magistrate judge‘s recommendation. McCready appealed. Affirming in an unpublished order, the Sixth Circuit noted:
McCready accomplished the following in his objections to the magistrate judge‘s report and recommendation: he repeatedly and inappropriately insulted the magistrate judge; he insisted on the accuracy of his factual and legal assertions; he characterized the defendants as liars; and he threatened the district court with promises to file for a writ of mandamus if his cause of action was dismissed. McCready, however, failed to address the merits of the substantive issues raised in his complaint, challenged in the defendants’ motion to dismiss, and reviewed by the magistrate judge. Rather, McCready filed a rambling, 143-page objection to the magistrate judge‘s report and recommendation that contained numerous fundamental flaws in reasoning and analysis. McCready offered bold conclusions regarding facts and the law with little, if any support.
McCready v. Kamminga, 113 F. App‘x 47, 49 (6th Cir. 2004). What McCready failed to accomplish with his objections, the Sixth Circuit held, was to preserve any issues for appeal. Id. Notably, appended to the defendants’ appellate brief was a subpoena, issued by the court below, directing eBay to produce documentation relating to McCready.
In the fifth lawsuit (the second case on appeal, No. 05-3043), McCready filed a two-count complaint again in the Central District of Illinois, naming Kamminga, McDuffee, and eBay as defendants. McCready alleged eBay‘s production of documents in compliance with the subpoena in the Michigan case violated Title I of the Electronic Communications Privacy Act,
[T]his court warned the parties that it would not allow this case to become trapped in a thicket of motions meant to harass adverse parties, increase the costs of the litigation, and cause vexatious delay. Nonetheless, between May 5 and May 18, 2005, McCready filed five motions. First, McCready filed a motion for default judgment and motion for entry of default against Kamminga [who was proceeding pro se] for filing an inartful answer to the complaint. Then on May 10, 2005, he filed a motion to strike McDuffee‘s answer to the complaint and find McDuffee in contempt. Also on May 10, 2005, McCready filed a motion to advance the filing date of a motion for sanctions against Kamminga, since Kamminga had filed an answer to
McCready‘s proposed motion for sanctions. On May 12, 2005, McCready filed a motion to strike McDuffee‘s motion to dismiss, and on May 18, 2005, he filed the motion for sanctions against Kamminga, which rendered moot [his motion to advance the filing date].
McCready appeals the dismissal of both cases filed in the Central District of Illinois (No. 05-2450 and No. 05-3043).
II. ANALYSIS
We review de novo a district court‘s granting of a motion to dismiss under
The defendants’ argument incorrectly centers around substantive elements McCready “failed to aver.” All McCready was required to do in his complaint was to provide a short and plain statement showing that he was entitled to relief, so as to put the defendants on notice of his claims and their basis. Thompson v. Ill. Dep‘t of Prof‘l Regulation, 300 F.3d 750, 753 (7th Cir. 2002).
But “if the plaintiff chooses to provide additional facts, beyond the short and plain statement requirement, the plaintiff cannot prevent the defense from suggesting that those same facts demonstrate the plaintiff is not entitled to relief.” Id. (citations omitted). In other words, if a plaintiff pleads facts which show he has no claim, then he has pled himself out of court. Jefferson v. Ambroz, 90 F.3d 1291, 1296 (7th Cir. 1996). And so the proper inquiry is not what McCready did not allege, but what he did allege. See Kolupa v. Roselle Park Dist., 438 F.3d 713, 714 (2006) (Any defendant “tempted to write ‘this complaint is deficient because it does not contain . . .’ should stop and think: What rule of law requires a complaint to contain that allegation?” (quoting Doe v. Smith, 429 F.3d 706, 708 (7th Cir. 2005) (emphasis in original)).
A. No. 05-2450: McCready v. eBay, Inc.
1. McCready‘s Fair Debt Collection Practices Act (“FDCPA“) Claim
The FDCPA prevents debt collectors from using “any false, deceptive, or misleading representation or means in connection with the collection of any debt.”
McCready admits that eBay‘s principal purpose is not to collect debts; rather McCready claims eBay falls under the “second prong” of the FDCPA‘s definition of “debt collector” because eBay “regularly attempts” to collect debts. What matters is not which prong of the FDCPA applies, but McCready‘s allegation that
2. McCready‘s Fair Credit Reporting Act (“FCRA“) Claim
McCready complains that eBay‘s “feedback profile” contains false and misleading comments made by other users of eBay, in violation of the FCRA. To come under the ambit of the FCRA, eBay must be a “consumer reporting agency,” which is defined by the FCRA to be:
any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.
any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer‘s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer‘s eligibility for—(A) credit or insurance to be used primarily for personal, family, or household purposes; (B) employment purposes; or (C) any other purpose authorized under [this title].
Suffice it to say, given the broad statutory purpose of preserving individuals’ privacy, a “consumer” under
eBay‘s Feedback Forum sorts information according to eBay users’ self-anointed “usernames,” which leaves intact their anonymity outside the eBay universe to the extent they desire to retain it. And it is clear that the Feedback Forum is used to inform eBay users’ decision to buy from, or sell to, a particular user, an inherently commercial activity. Because the Feedback Forum cannot be considered a “consumer report,” by extension eBay cannot be considered a “consumer reporting agency” within the FCRA. Nor does eBay exert any control over what is said in the Forum, which contains mere opinions of people not in eBay‘s employ.
3. McCready‘s Bankruptcy Claims
McCready argues he alleged a rescission claim under §§ 521 and 524 of the Bankruptcy Code and, because eBay did
554. When plaintiff filed for bankruptcy court protection in April, 2002, eBay also immediately upon learning of that bankruptcy filing, closed his accounts.
555. When plaintiff agreed to pay eBay the fees he owed it then for commissions and listing fees (approximately $1300), eBay agreed to reinstate him to its good graces.
556. This payment and subsequent agreement with eBay constituted a non-conforming reaffirmation agreement which, according to the Bankruptcy Code, was required to have been reduced to a writing, signed by both parties and authorized by the [B]ankruptcy Court.
However, these paragraphs give no indication of any injury McCready suffered or remedy he sought. It is unclear whether he seeks to enforce or avoid the agreement, or to obtain reinstatement of his account or recovery of his $1300.
Although we construe complaints by pro se litigants liberally, Haines v. Kerner, 404 U.S. 519, 520 (1972), we must do so while keeping in mind the purpose of the federal pleading system is to provide notice of all claims, see
4. McCready‘s State Law Claims
McCready‘s Illinois state law claims included the Illinois Consumer Fraud and Deceptive Business Practices Act; tortious interference with prospective economic advantage; breach of contract; invasion of privacy; bad faith insurance claim denial; conversion; fraud; and civil conspiracy. After dismissing all but one of McCready‘s federal claims, the district court, citing
In his motion to reconsider, McCready claimed to have alleged in his complaint diversity jurisdiction over his state law claims. The district court disagreed and noted that the time had passed for McCready to amend his complaint. On appeal, McCready argues diversity jurisdiction exists and that he should be permitted to amend his complaint to cure any defect. He also contends he never sought supplemental jurisdiction over his state law claims.
Rule 8(a)(1) only requires “a short and plain statement” of the jurisdictional basis, which, however “must be alleged affirmatively and distinctly and cannot be established ‘argumentatively or by mere inference.’ ” 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1206 (3d ed. 2004) (quoting Thomas v. Bd. of Trs. of Ohio State Univ., 195 U.S. 207, 218 (1904)). “For a case to be within the diversity jurisdiction of the federal courts, diversity must be ‘complete,’ meaning that no plaintiff may be a citizen of the same state as any defendant.” Fidelity & Deposit Co. of Md. v. City of Sheboygan Falls, 713 F.2d 1261, 1264 (7th Cir. 1983) (citing Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806)). McCready‘s complaint does not mention eBay‘s principal place of business; therefore he did not allege complete diversity. See
When diversity jurisdiction is not properly alleged, typically we would allow a plaintiff to amend his complaint to cure the deficiency or to supplement his brief to provide clarification. See
B. No. 05-3043: McCready v. eBay, Inc., Kamminga, and McDuffee
In the second case, No. 05-3043, McCready alleged that McDuffee, acting as Kamminga‘s lawyer, served eBay with a “phony” subpoena. eBay complied with the subpoena and gave McDuffee printouts of electronic communications involving McCready. McCready claims he did not become aware of the subpoena until his appeal to the Sixth Circuit and that these events violated the ECPA and SCA.
At the 12(b)(6) stage, we typically would be confined to McCready‘s complaint, which did not contain the subpoena. Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 661 (7th Cir. 2002). But Rule 10(c) provides that “[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes.” From this rule, we have concluded ” ‘documents attached to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff‘s complaint and are central to his claim.’ ” 188 LLC v. Trinity Indus., Inc., 300 F.3d 730, 735 (7th Cir. 2002) (quoting Wright v. Assoc. Ins. Cos., 29 F.3d 1244, 1248 (7th Cir. 1994)); see Cont‘l Cas. Co. v. Am. Nat‘l Ins. Co., 417 F.3d 727, 731 n.3 (7th Cir. 2005) (” ‘[T]his rule includes a limited class of attachments to Rule 12(b)(6) motions’ that are ‘central to the plaintiff‘s claim.’ “) (quoting Rosenblum, 299 F.3d at 661). We are ” ‘not bound to accept [McCready‘s] allegations as to the effect of the [subpoena], but can independently examine the document and form [our] own conclusions as to the proper construction and meaning to be given the material.’ ” Rosenblum, 299 F.3d at 661 (quoting 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1327 at 766 (2d ed. 1990)). The heart of McCready‘s lawsuit is based upon the subpoena, to which he made repeated reference in his complaint. The subpoena was included by the defense in its motion to dismiss, and there is no factual dispute as to its contents. Thus, we may look at the subpoena without converting the motion to
Good faith reliance on a subpoena is a complete defense to actions brought under the ECPA and SCA.
C. McCready‘s Abuse of Process
McCready has abused the judicial process with frivolous litigation. The result has been the harassment of opposing parties, insult to judicial officers, and waste of limited and valuable judicial resources. Not only have McCready‘s actions on eBay resulted in the filing of five frivolous lawsuits, but our review of the dockets of the district courts in this circuit reveal McCready has engaged in a pattern of similar behavior against other innocent defendants.
In exercising our inherent power, we do so in a way that is tailored to the abuse. Chambers v. NASCO, Inc., 501 U.S. 32, 44-45 (1991); Support Sys., Int‘l. v. Mack, 45 F.3d 185, 186 (7th Cir. 1995) (per curiam) (citations omitted). When dealing with a frivolous litigator who, despite due warning or the imposition of sanctions, continues to waste judicial resources, we impose a filing bar preventing the litigant from filing in this court or any federal court in this circuit. See Mack, 45 F.3d at 186. Usually such an order is tied to a monetary incentive—such as the payment of outstanding filing fees, the imposition of a fine, or both. See, e.g., Montgomery v. Davis, 362 F.3d 956 (7th Cir. 2004). But the satisfaction of an outstanding monetary obligation to this court will not necessarily cause the bar to be lifted when a minimum time period is imposed. See Mack, 45 F.3d at 186 (allowing petition for reinstatement to be filed after two years from entry of order).
McCready is hereby ordered to show cause within 30 days why he should not be required to pay $2,500 to this court‘s clerk. Should McCready fail to respond or merely attempt to reargue his case, then the $2,500 sanction will be imposed and McCready will be barred from filing, with appropriate exceptions, any paper in all
III. CONCLUSION
For the foregoing reasons, the district courts were correct to grant the defendants’ motions to dismiss, and their judgments are AFFIRMED. Moreover, we order McCready to show cause within 30 days why he should not be sanctioned for his abuse of process.
A true Copy:
Teste:
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Clerk of the United States Court of Appeals for the Seventh Circuit
USCA-02-C-0072—7-10-06