United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
HONORABLE EDMOND E. CHANG UNITED STATES DISTRICT JUDGE
75th & Cottage Currency Exchange sued the Postal Service
in Illinois state court, alleging that the Postal Service
improperly dishonored a check that it had issued. The
Currency Exchange seeks relief under three Illinois statutes.
As a federal agency, the Postal Service removed the case to
federal court and then moved to dismiss the case. R. 1; R.
12, Mot. Dismiss. That motion is granted: the Currency
Exchange did not properly serve the Postal Service and failed
to exhaust its administrative remedies. (And, in two
instances, the complaint fails to state a claim.) The case is
November 2016, the Postal Service issued a check for $448.66
to Bianca Williams. R. 26, Compl. ¶ 4. Williams sold the
check to the Currency Exchange for cash. Id. ¶
6. The Currency Exchange later tried to present the check for
payment, but it was dishonored with the phrase “Stop
Payment” included as the reason for return.
Id. ¶ 7, Exh. A. The Currency Exchange was
charged a $25 fee for the return of the check. Id.
January 2017, the Currency Exchange sent a letter to a
Chicago post office, seeking to collect on the amount of the
check. R. 18, Pl.'s Resp. Br. Exh. A. The letter
threatened to pursue claims against the Postal Service if it
did not reimburse the Currency Exchange for the value of the
check, the check-return fee, attorneys' fees, and court
costs. Id. There is no indication that the Postal
Service ever responded to that letter. So, in March 2017, the
Currency Exchange sent a similar letter, this time to the
Postal Service's Tort Claims Office in Chicago.
Id. The Postal Service acknowledged receipt of this
second letter and requested further documentation.
Id. Exh. B. But before receiving a final decision
from the Postal Service (known as a final
“disposition” in the pertinent statute, 28 U.S.C.
§ 2675(a)), the Currency Exchange filed suit in May
2017. Compl. at 1. The Postal Service eventually denied the
Currency Exchange's claim. Pl.'s Resp. Br. Exh. C.
now-removed complaint, the Currency Exchange asserts that it
is entitled to relief under three Illinois statutes. Compl.
¶¶ 9-10. The Currency Exchange's attempts to
serve the Postal Service with this complaint and summons were
plagued with difficulties. The Currency Exchange first
attempted to serve the Postal Service at its Chicago Tort
Claims Office, believing that the Postal Service would be
amenable to service at that address based on their past
interactions. Pl.'s Resp. Br. at 2-3. But when the
Currency Exchange's process server attempted service at
the Chicago Tort Claims Office, a Postal Service employee
told the process server that “service of process must
be sent to “E[a]gan, MN.”
Id. The Currency Exchange took the
employee's word for it and directed service to the Postal
Service accounting center in Eagan, Minnesota. See
R. 13, Def.'s Br. at 4; Pl.'s Resp. Br. at 2-3. The
Currency Exchange did not make any other attempts at service.
Postal Service has moved to dismiss under Federal Rules of
Civil Procedure 12(b)(5), 12(b)(1), and 12(b)(6). Rule
12(b)(5) allows “[a] defendant … [to] enforce
the service of process requirements through a pretrial motion
to dismiss.” Cardenas v. City of Chicago, 646
F.3d 1001, 1005 (7th Cir. 2011). The plaintiff bears the
burden of showing that service was proper, id., and
the “court may consider affidavits and other
documentary evidence” outside the pleadings.
Paulsen v. Abbott Labs., 2018 WL 1508532, at *5
(N.D. Ill. Mar. 27, 2018); see also Durukan Amer.,
LLC v. Rain Trading, Inc. 787 F.3d 1161, 1164 (7th
Cir. 2015) (considering affidavits and employment records in
concluding that there was a dispute of fact over service of
process). If service is found to be insufficient, then the
next question is whether to extend the time to serve or,
instead, to dismiss the case for lack of service. That
decision is a highly discretionary one. Cardenas,
646 F.3d at 1005.
Rule of Civil Procedure 12(b)(1) allows a party to move to
dismiss a claim for lack of subject matter
jurisdiction.” Hallinan v. Fraternal Order of
Police of Chicago Lodge No. 7, 570 F.3d 811, 820 (7th
Cir. 2009). In considering a motion to dismiss for lack of
subject matter jurisdiction, the Court “must accept as
true all well-pleaded factual allegations and draw all
reasonable inferences in favor of the plaintiff.”
Long v. Shorebank Dev. Corp., 182 F.3d 548, 554 (7th
Cir. 1999). When a key fact is disputed, the Court can also
look beyond the allegations contained in the pleadings to
determine whether jurisdiction is proper. Id.
motion under Rule 12(b)(6) challenges the sufficiency of the
complaint to state a claim upon which relief may be
granted.” Hallinan, 570 F.3d at 820.
Generally, the complaint only needs “a short and plain
statement of the claim showing that the pleader is entitled
to relief.” Fed.R.Civ.P. 8(a)(2). But claims alleging
fraud must also satisfy the heightened standard of Rule 9(b),
meaning they “state with particularity the
circumstances constituting fraud or mistake.”
Fed.R.Civ.P. 9(b) (emphasis added). On a Rule 12(b)(6)
motion, the Court considers whether the complaint contains
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
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)) (cleaned up).Mere legal conclusions are not entitled to
the presumption of truth. Id. at 678-79. The
complaint's allegations “must … raise a
right to relief above the speculative level.”
Twombly, 550 U.S. at 555.
Service of Process
Postal Service first argues that the Currency Exchange did
not effectuate proper service. Even though the Currency
Exchange initially filed in Illinois court, federal law
governs service of process on the United States Postal
Service. 39 U.S.C. § 409(b). As a result, the Currency
Exchange had to follow Federal Rule of Civil Procedure
4(i)'s requirements for serving the United States
government and its agencies. Rule 4(i) requires that the
plaintiff either “deliver a copy of the summons and of
the complaint to the United States attorney for the district
where the action is brought” or mail the summons and
complaint to the civil-process clerk at the United States
Attorney's Office. Fed.R.Civ.P. 4(i)(1)(A). The plaintiff
must also send a copy of the summons and complaint to the
United States Attorney General. Fed.R.Civ.P.
4(i)(1)(B). But the Currency Exchange followed
neither of these instructions. Instead, it attempted to serve
the Postal Service in Eagan, Minnesota, based solely on the
word of an unidentified Postal Service employee. The Currency
Exchange did not follow Rule 4(i)'s procedural
requirements, meaning it failed to properly serve the Postal
the Currency Exchange is now outside of the 90-day window for
accomplishing service, the Court would have to give an
extension of time if the Currency Exchange showed good cause
for the delay. Fed.R.Civ.P. 4(m); Coleman v. Milwaukee
Bd. of Sch. Directors, 290 F.3d 932, 933-34 (7th Cir.
2002). Good cause generally does not include
“half-hearted” attempts to serve the defendant,
Geiger v. Allen,850 F.2d 330, 333 (7th Cir. 1988),
nor anything less than “reasonable diligence, ”
Schmude v. Sheahan, 214 F.R.D. 487, 490 (N.D. Ill.
2003) (citing Bachenski v. Malnati, 11 F.3d 1371,
1377 (7th Cir. 1993)). Here, the Currency Exchange failed to
follow the simple requirements of Rule 4(i). Attorney
inadvertence is not an acceptable excuse without substantial
extenuating factors, Floyd v. United States, 900
F.2d 1045, 1047 (7th Cir. 1990), and the Currency Exchange
does not present any compelling reason for its mistake. The
mere word of an unknown Postal Service ...