Unreported / Non-Citable
Background
On October 23, 2025, Sean T. Doherty, proceeding pro se, filed a complaint against Navy Federal Credit Union asserting claims for breach of contract, breach of the implied covenant of good faith and fair dealing, conversion, civil theft, violation of California Business and Professions Code § 17200, and negligence. Doherty simultaneously filed an Application to Proceed In Forma Pauperis (IFP) using form AO 239. The complaint invoked diversity jurisdiction under 28 U.S.C. § 1332(a), alleging the parties were citizens of different states and the amount in controversy exceeded $75,000, but did not specify the defendant's citizenship or principal place of business.
The court reviewed the IFP application and the complaint sua sponte under 28 U.S.C. § 1915(e)(2)(B). Regarding the IFP application, the court noted that 28 U.S.C. § 1915(a) requires a plaintiff to submit an affidavit including a statement of all assets showing inability to pay fees, with "particularity, definiteness and certainty" per Ninth Circuit precedent. The court also examined whether the complaint established subject matter jurisdiction, recognizing that the party asserting diversity jurisdiction bears the burden of proof and must affirmatively and distinctly allege facts essential to federal jurisdiction.
The Court’s Holding
The court denied Doherty's IFP application without prejudice. Although he used the correct form, he failed to sign the affidavit under penalty of perjury as required, rendering the application incomplete under Gonzalez v. U.S. Customs & Border Prot., 2021 U.S. Dist. LEXIS 174552. Additionally, Doherty claimed $4,050 in monthly expenses against only $250 in monthly income without explaining how he affords his expenses, failing to allege poverty with the requisite particularity. The court granted Doherty 45 days to either pay the $405 filing fee or submit a renewed, fully completed IFP application.
The court dismissed the complaint without prejudice for lack of subject matter jurisdiction. Doherty alleged Navy Federal Credit Union is a "federally chartered credit union doing business nationwide" but did not state its principal place of business. Federal courts treat Navy Federal as a corporation under 28 U.S.C. § 1332(c), making its citizenship the state of incorporation and principal place of business. Because the complaint failed to establish complete diversity, Doherty did not meet his burden under Kanter v. Warner-Lambert Co., 265 F.3d 853. The court granted 45 days to file an amended complaint curing the jurisdictional deficiency and complying with Rules 8(a) and 12(b)(6), warning that failure to do so would result in dismissal without further order.
Key Takeaways
- A pro se plaintiff's IFP application must include a signed affidavit under penalty of perjury and a complete, particularized statement of assets and expenses; unsigned forms and unexplained discrepancies between income and expenses warrant denial.
- To invoke diversity jurisdiction against a federally chartered credit union, a plaintiff must allege the defendant's principal place of business, as such entities are treated as corporations with dual citizenship under 28 U.S.C. § 1332(c).
- The court may dismiss a complaint sua sponte for lack of subject matter jurisdiction at any time, without issuing a summons or following standard procedural requirements for failure-to-state-a-claim dismissals.
- When dismissing without prejudice for jurisdictional defects, the court may grant leave to amend with a firm deadline and warn that un-realleged claims will be deemed waived.
- A plaintiff denied IFP status must either pay the full filing fee or cure the IFP application deficiencies before an amended complaint will be accepted.
Why It Matters
This order illustrates the strict procedural gatekeeping applied to pro se litigants seeking IFP status and invoking diversity jurisdiction in federal court. The court enforced Ninth Circuit requirements that IFP affidavits be signed and financially detailed, and that diversity allegations against corporate defendants include principal place of business. The ruling reinforces that jurisdictional defects are threshold issues subject to sua sponte dismissal, and that leave to amend is conditioned on curing both jurisdictional and procedural deficiencies within a set timeframe. Practitioners and pro se filers must ensure complete jurisdictional allegations and fully executed IFP forms to avoid early dismissal.