Fernandez v. Home Depot U.S.A., Inc.

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
GENE FERNANDEZ,
Plaintiff,
v.
THE HOME DEPOT, INC.,
Defendant.
______________________________/
Hon. Paul L. Maloney
Case No. 1:26-cv-215
REPORT AND RECOMMENDATION
Plaintiff Gene Fernandez filed his complaint in this action against Defendant The Home
Depot, Inc., on January 20, 2026, alleging a federal-law claim pursuant to 42 U.S.C. § 1983.
Fernandez also invokes the Court’s supplemental jurisdiction pursuant to 28 U.S.C. § 1367 over
his state-law claims. (ECF No. 1 at PageID.2.)
On January 22, 2026, I granted Fernandez’s motion to proceed in forma pauperis. (ECF
No. 4.) Accordingly, I have conducted an initial review of the complaint pursuant to 28 U.S.C.
§ 1915(e)(2) to determine whether it is frivolous or malicious, fails to state a claim upon which
relief can be granted, or seeks monetary relief against a defendant who is immune from such relief.
Based on this review, I recommend that the Court dismiss the Section 1983 claim for failure to
state a claim upon which relief can be granted and dismiss the state-law claims without prejudice
pursuant to 28 U.S.C. § 1367(c)(3).
I. Background
Fernandez alleges that he holds Michigan cannabis license AU-SP-000-118, is a registered
government contractor, and has been a longtime Home Depot customer. He operates a cannabis
dispensary called Freddy’s Dispensary which is highly regulated under Michigan law. (ECF No.
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1 at PageID.2–4.) To obtain his cannabis license, Fernandez was required to undergo background
checks, including inquiry into his criminal history. (Id. at PageID.3.)
Fernandez alleges that on an unidentified date, sometime before February 19, 2023, Home
Depot employees reported to law enforcement that Fernandez committed theft when he failed to
return a rental vehicle. He further alleges that the report was made without verification of readily
available rental records. As a result, Fernandez was arrested and detained for some period of time.
(Id.) On February 19, 2023, Fernandez was charged in the Muskegon County Circuit with one
count of failure to return rented property -- $1,000.00 or more but less than $20,000.00. (ECF No.
1-1 at PageID.9.) Specifically, the warrant alleged that Fernandez failed to return a rented Ford
cargo van to a Home Depot store in Roosevelt, Michigan, on its return date of July 4, 2022. (ECF
No. 1-1 at PageID.9.)
Fernandez alleges that following his arrest, Penske Truck Leasing, which apparently
handles Home Depot vehicle rentals, confirmed that Fernandez never rented or possessed the
vehicle. He claims that Home Depot’s failure to verify this information before reporting the alleged
criminal activity “constituted reckless disregard for the truth.” (Id.) Fernandez says that, due to the
false criminal charges, which were apparently dismissed, he was required to file a mandatory
regulatory complaint and disclosure with the State of Michigan to defend his cannabis license
during renewal review. He also claims that the “arrest and regulatory fallout delayed the opening
and “stabilization” of Freddy’s Dispensary by approximately 90 days, causing substantial lost
revenue. (Id. at PageID.4.) Fernandez seeks damages flowing from the false criminal charges.
II. Failure to State a Claim
Pursuant to Federal Rule of Civil Procedure 12(b)(6), a claim must be dismissed for failure
to state a claim on which relief may be granted unless the “[f]actual allegations [are] enough to
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raise a right to relief above the speculative level on the assumption that all of the complaint’s
allegations are true.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007) (internal citations
and footnote omitted).
As the Supreme Court has held, to satisfy this rule, a complaint must contain “sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). This plausibility standard “is
not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant
has acted unlawfully.” Id. If the complaint simply “pleads facts that are merely consistent with a
defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to
relief.” Id. (internal quotation marks omitted). As the Court further observed:
Two working principles underlie our decision in Twombly. First, the tenet that a
court must accept as true all of the allegations contained in a complaint is
inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not suffice. Rule 8 marks a
notable and generous departure from the hypertechnical, code-pleading regime of
a prior era, but it does not unlock the doors of discovery for a plaintiff armed with
nothing more than conclusions. Second, only a complaint that states a plausible
claim for relief survives a motion to dismiss. 	Determining whether a complaint
states a plausible claim for relief will, as the Court of Appeals observed, be a
context-specific task that requires the reviewing court to draw on its judicial
experience and common sense. But where the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct, the complaint has
alleged— but it has not “show[n]”—“that the pleader is entitled to relief.”
Id. at 678–79 (internal citations omitted).
III. Discussion
A. 	Section 1983 Claim
To state a claim under 42 U.S.C. § 1983, a plaintiff must allege the violation of a right
secured by the federal Constitution or laws and must show that the deprivation was committed by
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a person acting under color of state law. West v. Atkins, 487 U.S. 42, 48 (1988); Dominguez v.
Corr. Med. Servs., 555 F.3d 543, 549 (6th Cir. 2009).
Fernandez’s Section 1983 claim fails for the simple reason that Home Depot is a private
company and not a state actor. See Jones v. Home Depot Corp., No. 24-11832, 2024 WL 4253097,
at *2 (E.D. Mich. Aug. 20, 2024), report and recommendation adopted, 2024 WL 4666285 (E.D.
Mich. Nov. 4, 2024) (“Because Home Depot is not a state actor, Jones’s complaint against it should
be dismissed sua sponte.”). Fernandez alleges that Home Depot can be held liable under Section
1983 because its “employees were knowing participants in joint activity with law enforcement by
providing false information that directly caused [his] arrest.” (Id.) This allegation lacks merit
because it is contrary to well established law that a private citizen does not become a state actor
merely by reporting suspected criminal activity to law enforcement. See Powell v. City of Radcliff,
No. 3:19-CV-386, 2020 WL 6704581, at *3 (W.D. Ky. Nov. 13, 2020) (“As both the Sixth Circuit
and other courts in this district have concluded when applying the state compulsion test, reporting
a crime and providing information to law enforcement is insufficient to establish a state actor under
Section 1983.” (collecting cases)); Oliver v. Murphy, No. 19-1286, 2019 WL 7195323, at *2 (W.D.
Tenn. Dec. 26, 2019) (“Reporting a crime, even falsely, does not transform a private citizen into a
state actor.” (citing Lansing v. City of Memphis, 202 F.3d 821, 831 (6th Cir. 2000)); Easley v.
Dietrich, No. 1:11-cv-299, 2011 WL 1811065, at *2 (W.D. Mich. May 12, 2011) (“Individuals
who report crimes and testify as witnesses are not state actors for the purpose of § 1983 claims.”)
(citing Moldowan v. City of Warren, 578 F.3d 351, 399 (6th Cir. 2009)); Wade v. Bradley Cnty.
Sheriffs Office, No. 1:10-cv-191, 2010 WL 5439774, at *4 (E.D. Tenn. Dec. 27, 2010) (“Because
Mr. Ownby was not acting under color of law when reporting Plaintiff’s alleged crime and because,
in general, private individuals do not act under color of state law, are not state actors, and are not
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amenable to a § 1983 suit . . . Plaintiff has stated no cause of action under 42 U.S.C. § 1983 against
Mr. Ownby.”); see also Benavidez v. Gunnell, 722 F.2d 615, 618 (10th Cir. 1983) (“We know of
no case in which the report of a state crime is action under color of state law under § 1983. The
mere furnishing of information to police officers does not constitute joint action under color of
state law which renders a private citizen liable under §§ 1983 or 1985.”).
Because Fernandez alleges nothing more than Home Depot’s report of erroneous
information of a crime to law enforcement, his Section 19983 claim is subject to dismissal.
B. 	State-Law Claims
I further recommend that the Court decline to exercise supplemental jurisdiction over
Fernandez’s state-law claims. Ordinarily, where a district court has exercised jurisdiction over a
state-law claim solely by virtue of supplemental jurisdiction, and the federal claims are dismissed
prior to trial, the court will dismiss the remaining state-law claims. See Experimental Holdings,
Inc. v. Farris, 503 F.3d 514, 521 (6th Cir. 2007) (“Generally, once a federal court has dismissed a
plaintiff’s federal law claim, it should not reach state law claims.” (citing United Mine Workers of
Am. v. Gibbs, 383 U.S. 715, 726 (1966))); Landefeld v. Marion Gen. Hosp., Inc., 994 F.2d 1178,
1182 (6th Cir. 1993). In determining whether to retain supplemental jurisdiction, “[a] district court
should consider the interests of judicial economy and the avoidance of multiplicity of litigation
and balance those interests against needlessly deciding state law issues.” Id. at 1182; see also Moon
v. Harrison Piping Supply, 465 F.3d 719, 728 (6th Cir. 2006) (“Residual jurisdiction should be
exercised only in cases where the interests of judicial economy and the avoidance of multiplicity
of litigation outweigh our concern over needlessly deciding state law issues.” (internal quotations
omitted)). Dismissal, however, remains “purely discretionary.” Carlsbad Tech., Inc. v. HIF Bio,
Inc., 556 U.S. 635, 639 (2009) (citing 28 U.S.C. § 1367(c)).
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Here, because the case is in its infancy and the balance of the relevant considerations
weighs against the continued exercise of supplemental jurisdiction, I recommend that Fernandez’s
state-law claims be dismissed without prejudice.
IV. Conclusion
For the foregoing reasons, I recommend that the Court dismiss Fernandez’s Section 1983
claim for failure to state a claim upon which relief can be granted. I further recommend that the
Court decline to exercise supplemental jurisdiction over the state-law claims and dismiss them
without prejudice pursuant to 28 U.S.C. § 1367(c)(3).
The Court must also decide whether an appeal of this action would be in good faith within
the meaning of 28 U.S.C. § 1915(a)(3). See McGore v. Wrigglesworth, 114 F.3d 601, 611 (6th Cir.
1997). Good faith is judged objectively, Coppedge v. United States, 369 U.S. 438, 445 (1962), and
an appeal is not taken in good faith if the issue presented is frivolous, defined as lacking an
arguable basis either in fact or law. See Dellis v. Corr. Corp. of Am., 257 F.3d 508, 511 (6th Cir.
2001). For the same reasons that I recommend dismissal of the action, I discern no good faith basis
for an appeal and recommend that, should Fernandez appeal this decision, the Court assess the
$605.00 appellate filing fee pursuant to Section 1915(b)(1), see McGore, 114 F.3d at 610-11.
Date: January 26, 2026 	/s/ Sally J. Berens
SALLY J. BERENS
U.S. Magistrate Judge
NOTICE
OBJECTIONS to this Report and Recommendation must be filed with the Clerk of Court
within 14 days of the date of service of this notice. 28 U.S.C. § 636(b)(1)(C). Failure to file
objections within the specified time waives the right to appeal the District Court’s order. See
Thomas v. Arn, 474 U.S. 140 (1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).
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