BARNETT v. LVNV FUNDING, LLC et al

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
ROGER F. BARNETT, JR., )
)
Plaintiff, )
)
v. ) No. 1:25-cv-02156-JPH-MG
)
LVNV FUNDING, LLC, )
BLITT & GAINES, P.C., )
)
Defendants. )
ORDER
I.
Granting in forma pauperis status
Mr. Barnett's motion to proceed in forma pauperis is GRANTED. Dkt. [2];
see 28 U.S.C. § 1915(a). While in forma pauperis status allows Mr. Barnett to
proceed without prepaying the filing fee, he remains liable for the full fees.
Rosas v. Roman Catholic Archdiocese of Chicago, 748 F. App'x 64, 65 (7th Cir.
2019) ("Under 28 U.S.C. § 1915(a), a district court may allow a litigant to
proceed 'without prepayment of fees,' . . . but not without ever paying fees.").
No payment is due at this time.
II.
Jurisdiction
Federal courts are courts of limited jurisdiction. In order to hear and
rule on the merits of a case, a federal court must have subject-matter
jurisdiction over the issues. Bender v. Williamsport Area Sch. Dist., 475 U.S.
534, 541 (1986). If the Court determines at any time that it lacks subject-
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matter jurisdiction, it must dismiss the case. Fed. R. Civ. P. 12(h)(3); see
Evergreen Square of Cudahy v. Wis. Hous. & Econ. Dev. Auth., 776 F.3d 463,
465 (7th Cir. 2015) ("[F]ederal courts are obligated to inquire into the existence
of jurisdiction sua sponte.").
Mr. Barnett's amended complaint lists LVNV Funding, LLC, and Blitt &
Gaines, P.C. as defendants. Dkt. 12 at 2. In his ongoing state court
proceedings against his creditor, LVNV, he "invok[ed] binding arbitration under
the . . . agreements," but the cases were not stayed. Id. He alleges that in the
proceedings, his motions were denied because they did not have his signature
on them and entries were improperly docketed, making for an inaccurate
record. Id. at 6. Blitt & Gaines is the law firm representing LVNV in the state
court proceedings. Id. at 2. Mr. Barnett brings claims under the Federal
Arbitration Act ("FAA") and 42 U.S.C. § 1983 for violations of his Fourteenth
Amendment rights and his supremacy clause rights. Id.
Liberally construing Mr. Barnett's complaint, his action is to compel
arbitration under the under § 4 of the FAA, 9 U.S.C § 4. Badgerow v. Walters,
596 U.S. 1, 8 (2022) ("The FAA "authorizes parties to arbitration agreements to
file specified actions in federal court—most prominently, petitions to compel
arbitration (under Section 4)."). However, invoking the FAA does not support
an independent basis for federal jurisdiction. Varden v. Discover Bank, 556
U.S. 49, 59 (2009); Badgerow, 596 U.S. at 8 ("Were it otherwise, every
arbitration in the country, however distant from federal concerns, could wind
up in federal district court."). When determining jurisdiction under § 4, "a
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federal court should determine its jurisdiction by 'looking through' a § 4
petition to the parties' underlying substantive controversy . . . to determine
whether it 'would have jurisdiction under title 28.'" Vaden, 556 U.S. at 62
(quoting 9 U.S.C. § 4).
The Supreme Court has explained the two ways to establish subject-
matter jurisdiction under title 28:
The basic statutory grants of federal-court subject-
matter jurisdiction are contained in 28 U.S.C. §§ 1331
and 1332. Section 1331 provides for federal-question
jurisdiction, § 1332 for diversity of citizenship
jurisdiction. A plaintiff properly invokes § 1331
jurisdiction when she pleads a colorable claim arising
under the Constitution or laws of the United States.
She invokes § 1332 jurisdiction when she presents a
claim between parties of diverse citizenship that
exceeds the required jurisdictional amount, currently
$75,000.
Arbaugh v. Y&H Corp., 546 U.S. 500, 513 (2006) (citations and quotation
omitted).
Here, the three underlying controversies between Mr. Barnett and LVNV
involve LVNV collecting debts from Mr. Barnett.1 Breach of contract suits arise
under state law and do not implicate a federal question. See Valen, 556 U.S. at
66 (finding no federal jurisdiction for § 4 petition because "the parties' actual
controversy, here precipitated by Discover's state-court suit for the balance due
1 The Court takes judicial notice of the filings in Mr. Barnett and LVNV's ongoing state
proceedings, LVNV Funding LLC v. Barnett, 29D02-2502-CC-001337 (Hamilton Cty.
Super. Ct. 2025); LVNV Funding LLC v. Barnett, 29D07-2502-CC-001338 (Hamilton
Cty. Super. Ct. 2025); LVNV Funding LLC v. Barnett, 29D06-2506-CC-006703
(Hamilton Cty. Super. Ct. 2025). Daniel v. Cook Cnty., 883 F.3d 728, 742 (7th Cir.
2016) ("Courts routinely take judicial notice of the actions of other courts or the
contents of filings in other courts.").
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on Vaden's account, is not amendable to federal-court adjudication"). So, the
invocation of the FAA does not confer this Court federal question jurisdiction
because the underlying controversies do not implicate a federal question.
Mr. Barnett also presents a federal question under 42 U.S.C. § 1983,
however, his claims fail to state a claim upon which relief can be granted. He
alleges that when Defendants continued the proceedings in state court after he
invoked arbitration, they violated his Fourteenth Amendment due process and
equal protection rights, and his supremacy clause rights. Dkt. 12 at 14. "In
order to state a claim under [42 U.S.C. § 1983] a plaintiff must allege: (1) that
defendants deprived [him] of a federal constitutional right; and (2) that the
defendants acted under color of state law." Savory v. Lyons, 469 F.3d 667, 670
(7th Cir. 2006); see London v. RBS Citizens, N.A., 600 F.3d 742, 746 (7th Cir.
2010) (private actors may not be sued for "merely private conduct, no matter
how discriminatory or wrongful").
Here, Mr. Barnett names two private actors as Defendants, and alleges
that "Defendants, acting under color of state law through state-court litigation,
deprived Plaintiff of rights protected by the Constitution." Dkt. 12 at 14.
However, participation in state court proceedings is not a state action for §
1983 purposes. See Polk Ctny. v. Dobson, 454 U.S. 312, 318 (1981); Briscoe v.
LaHue, 460 U.S. 325, 329 (1983) ("It is beyond question that, when a private
party gives testimony in open court . . . that act is not performed 'under color
of law.'"). Mr. Barnett does not make any other allegation to suggest that
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Defendants were acting under the color of state law and not as private parties,
therefore his § 1983 claims must be dismissed.
Because Mr. Barnett has not stated a claim arising under federal law, the
case would have to come within the Court's diversity jurisdiction. To invoke
diversity jurisdiction, the amended complaint must allege that Mr. Barnett and
Defendants are citizens of different states and that the amount in controversy
exceeds $75,000. 28 U.S.C. 1332. The amended complaint states that Mr.
Barnett resides in Hamilton County, Indiana, but does not state the domicile
for either Defendants or allege the amount in controversy. See dkt. 12. These
allegations are insufficient to establish diversity jurisdiction.
III.
Conclusion
Mr. Barnett's motion to proceed in forma pauperis is GRANTED. Dkt. [2].
Defendants' pending motion to dismiss Mr. Barnett's original complaint
is DENIED as moot, dkt. [7]. Johnson v. Dossey, 515 F.3d 778, 780 (7th Cir.
2008) ("When an amended complaint is filed, the prior pleading is withdrawn
and the amended pleading is controlling.").
Mr. Barnett's first amended complaint is DISMISSED. He shall have
until January 13, 2026, to file a second amended complaint or otherwise show
cause why the case should not be dismissed for lack of subject-matter
jurisdiction. In doing so, he must clearly show either (1) the federal law giving
rise to his claims, (2) that the parties are of diverse citizenship, or (3) another
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basis for the Court’s jurisdiction. If Mr. Barnett does not respond, the Court
will dismiss this case without prejudice for lack of subject-matter jurisdiction
SO ORDERED.
Distribution:
ROGER F. BARNETT, JR.
10854 Nature Trail Dr.
Apartment 203
Fishers, IN 46037
All Electronically Registered Counsel.
Date: 12/5/2025
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