Cangelosi v. Walmart, Inc.

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
CLAYTON CANGELOSI CIVIL ACTION
VERSUS NO. 25-1820
WALMART INC. SECTION: "G"(1)
REPORT AND RECOMMENDATION
Pro se plaintiff Clayton Cangelosi has filed this civil action against Walmart Inc alleging
unfair trade practices, conversion, and unjust enrichment. Because there is no basis for federal
jurisdiction over his claims, it is RECOMMENDED that this lawsuit be DISMISSED for lack of
subject-matter jurisdiction under 28 U.S.C. § 1915(e)(2)(B).
Background
Mr. Cangelosi filed this lawsuit on September 2, 2025. He alleges that he purchased $171
in food at a Walmart in Marrero, Louisiana. He paid $120 of the purchase price using a
UnitedHealthcare Healthy Benefits card, which he describes as a health-insurance benefit card
designed to provide medically necessary groceries to vulnerable populations. He paid the
remainder using SNAP EBT and personal funds. He alleges that Walmart charged an extra $0.14
labeled as “tax.” He questioned the tax because he claims that Louisiana law exempts food for
home consumption from sales tax. Further, he submits that the local food tax rate of 3.5% would
have yielded a tax of $5.98. Additionally, he contends that 7 C.F.R. § 272.1(b)(1) prohibits
charging sales tax or other fees on purchases paid with SNAP benefits. He asserts causes of action
for violation of federal SNAP regulations, violation of the Louisiana Unfair Trade Practices Act
(“LUTPA”), fraud, conversion, and unjust enrichment. He seeks compensatory and punitive
damages.
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When Mr. Cangelosi filed his Complaint, he also filed a motion for leave to proceed in
forma pauperis. On September 18, 2025, the Court granted him leave to proceed in forma pauperis,
but ordered that summons be withheld and that Mr. Cangelosi show cause by Wednesday, October
22, 2025, why this case should not be summarily dismissed for lack of subject-matter jurisdiction
under 28 U.S.C. § 1915(e)(2)(B). Mr. Cangelosi has not responded to the Court’s order.
Law and Analysis
There exists no absolute right to proceed in forma pauperis in federal civil matters; instead,
it is a privilege extended to those unable to pay filing fees when it is apparent that the claims do
not lack merit on their face. See Startii v. United States, 415 F.2d 1115, 1116 (5th Cir.1969); see
also Adepegba v. Hammons, 103 F.3d 383, 387 (5th Cir. 1996) (noting that the revocation of the
privilege of proceeding in forma pauperis is not new).
28 U.S.C. § 1915(e)(2)(B) provides for summary dismissal sua sponte, should the Court
determine that a case is frivolous. Section 1915(e)(2)(B) provides in pertinent part as follows:
(2) Notwithstanding any filing fee, or any portion thereof, that may have been paid,
the court shall dismiss the case at any time if the court determines that –
* * *
(B) the action or appeal –
(i) is frivolous or malicious;
(ii) fails to state a claim on which relief may be granted; or
(iii) seeks monetary relief against a defendant who is immune from
such relief.
28 U.S.C. § 1915(e)(2)(B)(i)-(iii) (emphasis added). “[A] complaint fails to state a claim upon
which relief may be granted when it does not contain ‘sufficient factual matter, accepted as true,
to state a claim to relief that is plausible on its face.’” Rogers v. Boatright, 709 F.3d 403, 407 (5th
Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). A complaint is frivolous “if it
lacks an arguable basis in law or fact.” Reeves v. Collins, 27 F.3d 174, 176 (5th Cir. 1994).
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Furthermore, federal courts are courts of limited jurisdiction. “Subject matter jurisdiction
may not be waived, and the district court ‘shall dismiss the action’ whenever ‘it appears by
suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter.’” Avitts
v. Amoco Prod. Co., 53 F.3d 690, 693 (5th Cir.1995) (quoting Fed. R. Civ. P. 12(h)(3)).
Here, Mr. Cangelosi invokes this Court’s federal-question jurisdiction under 28 U.S.C. §
1331. This position appears to be based on the alleged violation of the SNAP regulations. The
cited regulations provide: “A State shall not participate in SNAP if State or local sales taxes or
other taxes or fees, including but not limited to excise taxes, are collected within the State on
purchases made with SNAP coupons” and “State and/or local law shall not permit the imposition
of tax on food paid for with coupons.” 7 C.F.R. § 272.1(b). But this rule extends only to the portion
of the sale purchased with SNAP benefits:
Where the total value of groceries being bought by the recipient is larger than the
amount of coupons being presented by the recipient, only the portion of the sale
made in exchange for SNAP benefits must be exempt from taxation in order for a
State to satisfy the requirements of this provision. Although a SNAP recipient may
use a combination of cash and SNAP benefits in making a food purchase, only the
dollar amount represented by the food coupons needs to be exempt from taxation.
Id. Importantly for the jurisdictional question, this regulation does not create a private cause of
action for an individual to challenge the charging of sales tax by a retailer. The Court has not found
any statute or regulation creating such a cause of action. Accordingly, the Court finds no federal
question at issue in this lawsuit and that this Court cannot exercise jurisdiction under § 1331.
Nor does the Court have jurisdiction over Mr. Cangelosi’s state law claims for LUTPA
violation, fraud, conversion, and unjust enrichment. This Court has jurisdiction to consider state
law claims where the complaint satisfies the requirements of 28 U.S.C. § 1332. In order for the
Court to exercise diversity jurisdiction under 28 U.S.C. § 1332, the citizenship of all of the
plaintiffs must be different from the citizenship of all of the defendants and the amount in
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controversy must be in excess of $75,000. 28 U.S.C. § 1332; see Getty Oil Corp., Div. of Texaco,
Inc. v. Ins. Co. of North Am., 841 F.2d 1254, 1258-59 (5th Cir. 1988). While it appears that Mr.
Cangelosi and Walmart are diverse in citizenship, the amount in controversy does not reach the
$75,000 threshold. Even if punitive damages were available, they would not make a claim for
$0.14 in damages rise above $75,000.
The Court finds it lacks subject matter jurisdiction over Mr. Cangelosi’s Complaint.
Accordingly,
IT IS RECOMMENDED that this lawsuit be DISMISSED for lack of subject-matter
jurisdiction, without prejudice to the filing of Mr. Cangelosi’s claims in the appropriate state
forum.
NOTICE OF RIGHT TO OBJECT
Objections must be: (1) specific, (2) in writing, and (3) served within fourteen (14) days
after being served with a copy of this report. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 1(a), 6(b) and
72(b). A party's failure to object bars that party from: (1) entitlement to de novo review by a district
judge; and (2) appellate review of the un-objected-to factual findings and legal conclusions
accepted by the district court, except upon grounds of plain error. Douglass v. United Servs. Auto.
Ass’n, 79 F.3d 1415, 1430 (5th Cir. 1996) (en banc).
New Orleans, Louisiana, this 10th day of November, 2025.
Janis van Meerveld
United States Magistrate Judge
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