Clark v. Capital One Auto Financing

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
On December 4, 2025, Plaintiff Granson Clark (“Plaintiff”), proceeding pro se, filed a
complaint against Capital One Auto Financing. (Doc. 1). Plaintiff also filed an application to
proceed in forma pauperis, which was granted on January 5, 2026. (Docs. 4 & 5). Plaintiff’s
complaint is now before the Court for screening. Upon review, the Court concludes that the
complaint fails to state a cognizable claim.
Plaintiff has the following options as to how to proceed. Plaintiff may file an amended
complaint, which the Court will screen in due course. Alternatively, Plaintiff may file a
statement with the Court stating that he wants to stand on this complaint and have it reviewed
by the assigned district judge, in which case the Court will issue findings and recommendations
GRANSON CLARK,
Plaintiff,
v.
CAPITAL ONE AUTO FINANCING,
Defendant.
Case No. 1:25-cv-01734-KES-SKO
FIRST SCREENING ORDER; ORDER
FOR PLAINTIFF TO:
(1) FILE A FIRST AMENDED
COMPLAINT;
(2) NOTIFY THE COURT THAT HE
WISHES TO STAND ON HIS
COMPLAINT; OR
(3) FILE A NOTICE OF VOLUNTARY
DISMISSAL
(Doc. 1)
FOURTEEN-DAY DEADLINE
Case 1:25-cv-01734-KES-EGC Document 6 Filed 01/06/26 Page 1 of 6

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to the district judge consistent with this order. Lastly, Plaintiff may file a notice of voluntary
dismissal. If Plaintiff does not file anything, the Court will recommend that the case be
dismissed.
I. SCREENING REQUIREMENT AND STANDARD
In cases where the plaintiff is proceeding in forma pauperis, the Court is required to
screen each case and shall dismiss the case at any time if the Court determines that the allegation
of poverty is untrue, or that the action or appeal is frivolous or malicious, fails to state a claim
upon which relief may be granted, or seeks monetary relief against a defendant who is immune
from such relief. 28 U.S.C. § 1915(e)(2). See also Calhoun v. Stahl, 254 F.3d 845 (9th Cir.
2001) (dismissal required of in forma pauperis proceedings which seek monetary relief from
immune defendants); Cato v. United States, 70 F.3d 1103, 1106 (9th Cir. 1995) (district court
has discretion to dismiss in forma pauperis complaint under 28 U.S.C. § 1915(e)); Barren v.
Harrington, 152 F.3d 1193 (9th Cir. 1998) (affirming sua sponte dismissal for failure to state a
claim). If the Court determines that a complaint fails to state a claim, leave to amend may be
granted to the extent that the deficiencies of the complaint can be cured by amendment. Lopez
v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) (en banc).
In determining whether a complaint fails to state a claim, the Court uses the same
pleading standard used under Federal Rule of Civil Procedure 8(a). A complaint must contain
“a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R.
Civ. P. 8(a)(2). Detailed factual allegations are not required, but “[t]hreadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do not suffice.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007)). A complaint may be dismissed as a matter of law for failure to state a claim
for two reasons: (1) lack of a cognizable legal theory; or (2) insufficient facts under a cognizable
legal theory. See Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). Plaintiff
must allege a minimum factual and legal basis for each claim that is sufficient to give each
defendant fair notice of what the plaintiff’s claims are and the grounds upon which they rest.
See, e.g., Brazil v. U.S. Dep’t of the Navy, 66 F.3d 193, 199 (9th Cir. 1995); McKeever v. Block,
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932 F.2d 795, 798 (9th Cir. 1991).
In reviewing the pro se complaint, the Court is to liberally construe the pleadings and
accept as true all factual allegations contained in the complaint. Erickson v. Pardus, 551 U.S.
89, 94 (2007). Although a court must accept as true all factual allegations contained in a
complaint, a court need not accept a plaintiff’s legal conclusions as true. Iqbal, 556 U.S. at 678.
“[A] complaint [that] pleads facts that are ‘merely consistent with’ a defendant’s liability . . .
‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id. (quoting
Twombly, 550 U.S. at 557).
II. SUMMARY OF PLAINTIFF’S COMPLAINT
Plaintiff drafted his complaint using the general complaint form provided by this Court.
The complaint names “Capital One Auto Financing” as the defendant. (Doc. 1 (“Compl.”) at 1,
see id. at 2). Plaintiff states that subject matter jurisdiction is based on federal question, (id. at
3), specifically invoking “Article 1 Section 10: Right to Contract,” (id. at 3).
The statement of claim section of the complaint states: “Threat to take property and / or
continue to report on credit. (Id. at 4). Regarding the relief sought, Plaintiff states “Not being
able to pay off Trust Lien to get around to other obligations contracted with.” (Id.) Plaintiff
contends that the amount in controversy is “$1,000,000 Amount Owed for Violation of Trust
Lien.” (Id.)
III. DISCUSSION
A. Rule 8
Rule 8 states that a complaint must contain “a short and plain statement of the claim
showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Plaintiff’s complaint
violates Rule 8 because it does not contain a short and plain statement of the claim demonstrating
that he is entitled to relief. Although the Federal Rules use a flexible pleading policy, Plaintiff
is required to give fair notice to Defendant of the basis of the claim and must allege facts that
support the elements of the claim plainly and succinctly. A complaint must contain sufficient
factual allegations to give the defendant fair notice of the claim and the grounds upon which it
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rests. Twombly, 550 U.S. at 555.
Here, there are insufficient allegations in the complaint to identify the basis of the claim.
Plaintiff alleges Defendant “threat[ened] to take property and / or continue to report on credit.”
(Compl. at 4). Plaintiff does not explain how these actions were wrongful or otherwise amounted
to a violation of his constitutional rights, and fails to give Defendant “fair notice” of the claims
against which they must defend and the facts and legal theories that give rise to the claims.
See Fed. R. Civ. P. 8(a)(2); Brazil, 66 F.3d at 199; McKeever, 932 F.2d at 798.
B. Contract Clause Claim
The Contracts Clause of the United States Constitution states that no state shall pass any
“law impairing the obligation of contracts.” U.S. Const. art. I, § 10, cl. 1. To state a claim under
the Contracts Clause, a plaintiff must not only allege that a state impaired his contract, but that
it did so by legislative act. See New Orleans Waterworks Co. v. Louisiana Super–Refining Co.,
125 U.S. 18, 30 (1888) (noting that to state a claim under the Contracts Clause, “not only must
the obligation of a contract have been impaired, but it must have been impaired by a law of the
state”); Cycle Barn, Inc. v. Arctic Cat Sales Inc., 701 F. Supp. 2d 1197, 1202 (W.D. Wash. 2010)
(stating that an element of a Contracts Clause claim is whether a change in the law has impaired
a contractual relationship). The elements of a Contracts Clause claim are (1) the existence of a
valid contract, (2) a state law or regulation that substantially impairs that contractual relationship,
and (3) that the impairment is not reasonable or necessary to serve an important public purpose.
See Energy Reserves Grp. v. Kan. Power & Light Co., 459 U.S. 400, 411 (1983). The threshold
inquiry is “whether the state law has, in fact, operated as a substantial impairment of a contractual
relationship.” Id. However, the Contracts Clause only limits the government’s power to modify
contracts that already exist. As stated, “[t]he Constitution protects freedom of contract only by
limiting the states’ power to modify or affect contracts already formed.” S.F. Apartment Ass’n
v. City & Cty. of San Francisco, 881 F.3d 1169, 1180 n.8 (9th Cir. 2018) (quoting McCarthy v.
Mayo, 827 F.2d 1310, 1315 (9th Cir. 1987)).
Here, Plaintiff does not allege the existence of any a “state law or regulation that
substantially impairs the contractual relationship,” Energy Reserves Grp., 459 U.S. at 411, much
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less facts showing that Defendant—a private company—substantially impaired the obligations
of that contract by a legislative act. The Court therefore finds that Plaintiff’s claim necessarily
fails as a matter of law.
C. Leave to Amend
The Court has screened Plaintiff’s complaint and finds that it fails to state any cognizable
claims. Rule 15(a)(2) of the Federal Rules of Civil Procedure instructs that a court should “freely
give leave [to amend] when justice so requires,” unless “amendment would be futile.” Ebner v.
Fresh, Inc., 838 F.3d 958, 968 (9th Cir. 2016).
Because Plaintiff’s Contract Clause claim fails as a matter of law, it cannot be cured, and
any amendment would likely be futile. In such a case, there is no need for the Court to prolong
this litigation by providing plaintiff an additional opportunity to amend that could only prove
futile. See, e.g., Chaset v. Fleer/Skybox Int’l, 300 F.3d 1083, 1088 (9th Cir. 2002) (no need to
prolong the litigation by permitting further amendment where the “basic flaw” in the underlying
facts as alleged cannot be cured by amendment); Lipton v. PathoGenesis Corp., 284 F.3d 1027,
1039 (9th Cir. 2002) (“Because any amendment would be futile, there was no need to prolong
the litigation by permitting further amendment.”); Klamath–Lake Pharmaceutical Ass’n v.
Klamath Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983) (“futile amendments should
not be permitted”). However, out of an abundance of caution and consistent with the liberality
of Rule 15(a)(2), the Court will grant Plaintiff one opportunity to amend his complaint to correct
the deficiencies identified and to recast his allegations as seeking relief based on a different cause
of action.
The Court makes clear that if Plaintiff chooses to seek relief based on a different cause
of action, that new cause of action must be reasonably related to the allegations contained in the
original complaint. Plaintiff is also instructed to (1) be mindful of the rules governing a federal
court’s limited jurisdiction1 and (2) ensure that any amended complaint complies with Rule 8—
1 Federal courts are courts of limited jurisdiction and lack inherent or general subject matter jurisdiction. Federal courts
can adjudicate only those cases which the United States Constitution and Congress authorize them to adjudicate.
Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375 (1994). To proceed in federal court, a plaintiff’s pleading must
establish the existence of subject matter jurisdiction. Generally, there are two potential bases for federal subject matter
jurisdiction: (1) federal question jurisdiction, or (2) diversity jurisdiction.
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which, again, requires Plaintiff to plead sufficient facts to give Defendants fair notice of the
allegations against them and how those allegations relate to any theory of liability and requested
remedy.
IV. ORDER
Based on the foregoing, IT IS ORDERED that:
1. Within fourteen (14) days from the date of service of this order, Plaintiff shall either:
a. File a First Amended Complaint;
b. Notify the Court in writing that he wants to stand on the current complaint;
or
c. File a notice of voluntary dismissal.
2. If Plaintiff chooses to file an amended complaint, Plaintiff shall caption the amended
complaint “First Amended Complaint” and refer to case number 1:25-cv-01734-
KES-SKO.
3. Failure to comply with this order may result in the dismissal of this action.
IT IS SO ORDERED.
Dated: January 6, 2026 /s/ Sheila K. Oberto .
UNITED STATES MAGISTRATE JUDGE
“[A] case ‘arises under’ federal law either where federal law creates the cause of action or ‘where the
vindication of a right under state law necessarily turn[s] on some construction of federal law.’” Republican Party of
Guam v. Gutierrez, 277 F.3d 1086, 1088–89 (9th Cir. 2002), quoting Franchise Tax Bd. v. Construction Laborers
Vacation Trust, 463 U.S. 1, 8–9 (1983). The presence or absence of federal question jurisdiction is governed by the
“well-pleaded complaint rule.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987). Under the well-pleaded
complaint rule, “federal jurisdiction exists only when a federal question is presented on the face of the plaintiff’s
properly pleaded complaint.” Id.
Alternatively, under 28 U.S.C. § 1332, federal district courts have original jurisdiction over civil actions in
diversity cases “where the matter in controversy exceeds the sum or value of $75,000” and where the matter is between
“citizens of different states.” 28 U.S.C. § 1332. “Subject matter jurisdiction based upon diversity of citizenship requires
that no defendant have the same citizenship as any plaintiff.” Tosco Corp. v. Communities for a Better Env’t, 236 F.3d
495, 499 (9th Cir.2001) (per curiam), abrogated on other grounds by Hertz Corp. v. Friend, 559 U.S. 77 (2010), citing
28 U.S.C. § 1332(a).
“A plaintiff suing in federal court must show in his pleading, affirmatively and distinctly, the existence of
whatever is essential to federal jurisdiction, and, if he does not do so, the court . . . on discovering the [defect], must
dismiss the case, unless the defect be corrected by amendment.” Id. (quoting Smith v. McCullough, 270 U.S. 456
(1926)).
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