FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS April 29, 2008
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
FREDERICK BANKS,
Plaintiff-Appellant,
v. No. 07-1339
(D.C. No. 07-cv-00587-ZLW)
VIO SOFTWARE; THREE MONKEY (D. Colo.)
KARAOKE; and WARREN DO,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before O’BRIEN, EBEL, and GORSUCH, Circuit Judges.
Plaintiff-Appellant Frederick Banks, a federal prisoner, appears pro se and
appeals from a district court decision dismissing, pursuant to 28 U.S.C. §
1915(e)(2)(B), his civil rights claim. Mr. Banks’ complaint challenged the
alleged conversion of two checks, amounting to $110,000, by Defendants-
*
After examining appellant’s brief and the appellate record, this panel has
determined unanimously that oral argument would not materially assist the
determination of this appeal. See Fed. R. App. P. 34(a)(2) and 10th Cir. R.
34.1(G). The case is therefore ordered submitted without oral argument. This
order and judgment is not binding precedent, except under the doctrines of law of
the case, res judicata, and collateral estoppel. It may be cited, however, for its
persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Appellees. He brought his claim under 42 U.S.C. § 1983 and 28 U.S.C. § 1343,
positing that Defendants-Appellees Vio Software and Three Monkey Karaoke had
acted under color of state law because they are businesses incorporated in the
state of Colorado. The district court rejected this theory as legally frivolous and
dismissed Mr. Banks’ complaint sua sponte. Thereafter, the court denied Mr.
Banks’ motion to reconsider and amend his complaint, and, lastly, denied him the
privilege of proceeding on appeal in forma pauperis (“IFP”). We exercise
jurisdiction under 28 U.S.C. § 1291, and dismiss Mr. Banks’ appeal as frivolous.
I. Background
Mr. Banks is incarcerated at the Federal Correctional Institution in Yazoo
City, Mississippi. He alleges that on September 30, 2003, the Defendants-
Appellees sent him two checks in the sum of $110,000 by FEDEX. The checks
were made payable to Hexagon Records and Hexagon LLC and were issued by
Bank One. 1 However, Mr. Banks alleges, the checks were “no good” and
“Defendants never returned the merchandise or reinbursement [sic] of the
$110,000.” Mr. Banks does not specify what “merchandise” the Defendant-
Appellees failed to return, nor does he further illuminate the factual
1
Frederick Banks is the sole officer of Hexagon LLC, a limited liability
company registered in Pennsylvania. See Banks v. 3311 E. Carson Street, No. 04-
1771, Magistrate Report and Recommendation, Dkt. 174 at 3, n.4 (W.D.P.A. May
24, 2007). Hexagon Records is a trade name owned by Hexagon LLC. Id. at 3
n.3.
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circumstances underlying his suit. Cognizant of the “color of law” requirement
for a § 1983 suit, Mr. Banks asserts that Defendants-Appellees Vio Software and
Three Monkey Karaoke “are corporations or LLC’s incorporated in Colorado,”
and therefore “acted under color of state law” when they deprived him of rights
protected by the Due Process and Equal Protection clauses of the Fourteenth
Amendment of the U.S. Constitution.
Having noted its obligation to construe Mr. Banks’ pro se complaint
liberally, the district nonetheless dismissed it as frivolous pursuant to 28 U.S.C. §
1915(e)(2)(B). Citing Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970), the
district court concluded that Mr. Banks failed to allege facts supporting his
assertion that the Defendants acted under color of state law. Without any such
facts, Mr. Banks could not support an arguable claim, see Neitzke v. Williams,
490 U.S. 319, 324-25 (1989), rendering it frivolous. In a motion styled a “Motion
for Reconsideration of Order and Judgment of Dismissal” and “Motion to Amend
Complaint,” Mr. Banks challenged the district court’s decision. Discerning no
reason to reconsider or permit amendment, the court reiterated its earlier decision
that the claim was frivolous. Finally, the court also denied Mr. Banks leave to
proceed IFP on appeal.
II. Discussion
The federal IFP statute, codified as 28 U.S.C. § 1915, opens the federal
courts to indigent litigants. Neitzke, 490 U.S. at 324. By doing so, the statute
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creates the risk that filers, freed from the obligation to prepay fees or costs, will
commence “frivolous, malicious, or repetitive lawsuits.” Id. Accordingly, to
impede such lawsuits, Congress provided for the sua sponte dismissal of
“frivolous or malicious” suits under § 1915(e)(2)(B)(i). See id. Likewise, §
1915(e)(2)(B)(ii) provides for the dismissal “at any time if the court determines
that” the suit “fails to state a claim on which relief may be granted.” A suit “is
frivolous where it lacks an arguable basis either in law or fact” or is “based on an
indisputably meritless legal theory.” Neitzke, 490 U.S. at 325, 327.
“Mindful that pro se actions are held to a less stringent standard of review
and that sua sponte dismissals are generally disfavored by the courts, we
nonetheless allow a complaint to be dismissed under [§ 1915(e)(2)(B)] ‘if the
plaintiff cannot make a rational argument on the law and facts in support of [his]
claim.’” Whitney v. New Mexico, 113 F.3d 1170, 1172 (10th Cir. 1997) (quoting
Yellen v. Cooper, 828 F.2d 1471, 1475 (10th Cir. 1987)). We review a district
court’s determination that a suit is frivolous under § 1915 for an abuse of
discretion. Denton v. Hernandez, 504 U.S. 25, 33 (1992). If the “frivolousness
determination turns on an issue of law,” we review the underlying legal
determination de novo. Fogle v. Pierson, 435 F.3d 1252, 1259 (10th Cir. 2006).
Of course, § 1915(e)(2) commands that this court dismiss – rather than merely
affirm – any appeal that we deem frivolous. 28 U.S.C. § 1915(e)(2) (“[T]he court
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shall dismiss the case at any time if the court determines that . . . (B) the action or
appeal” meets the criteria for sua sponte dismissal.).
Mr. Banks’ theory is simple: because Vio Software and Three Monkey
Karaoke were incorporated in the state of Colorado, they necessarily are state
actors. It is also simply incorrect and frivolous as a matter of law. See, e.g.,
Yanaki v. Iomed, Inc., 415 F.3d 1204, 1207-10 (10th Cir. 2005) (concluding that
company had not acted under color of law without any discussion of fact that it
was incorporated under state law). Cf. San Francisco Arts & Athletics, Inc. v.
U.S.O.C., 483 U.S. 522, 543-44 (1986) (“All corporations act under charters
granted by a government, usually by a State. They do not thereby lose their
essentially private character.”). Even a minimal research effort would have made
this evident. As such, Mr. Banks’ appeal is frivolous and we hereby dismiss it, as
mandated by § 1915(e)(2)(B). We also note that both this dismissal and the
district court’s dismissal count as strikes under 28 U.S.C. § 1915(g). See
Jennings v. Natrona County Det. Ctr. Med. Facility, 175 F.3d 775, 780 (10th Cir.
1999).
Finally, because Mr. Banks has failed to present a “reasoned, nonfrivolous
argument on the law and facts in support of the issues raised on appeal,”
McIntosh v. U.S. Parole Comm’n, 115 F.3d 809, 812 (10th Cir. 1997) (quotation
omitted), we deny his motion to proceed IFP on appeal. In addition, we direct
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him to make full and immediate payment of the outstanding balance of the
appellate filing fees for this appeal.
III. Conclusion
In light of the foregoing, we DENY Mr. Banks’ request to proceed IFP on
appeal and DISMISS his appeal. Accordingly, we assess two strikes against him,
one for filing a frivolous matter in the district court and one for taking a frivolous
appeal.
ENTERED FOR THE COURT
David M. Ebel
Circuit Judge
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