United States District Court, D. New Mexico
PROPOSED FINDINGS OF FACT AND RECOMMENDED
MATTER came before me on Chief United States District Judge
M. Christina Armijo's Order of Reference referring this
matter to me to conduct hearings, if warranted, including
evidentiary hearings, and to perform any legal analysis
required to recommend to the Court “an ultimate ruling
on this matter in order to determine whether the actions
[filed by Plaintiff] are frivolous or malicious.”
See Doc. 20. The Court has heard the testimony of
Plaintiff and the statements of her counsel, the arguments of
attorneys for some of the Defendants in these actions joined
for this purpose, and has given due consideration to the
exhibits submitted in this earliest-filed case and the
relevant law. The Court will recommend that Chief Judge
Armijo find all of Ms. Carton's Complaints to be
malicious and that she dismiss them with prejudice.
Alyssa Carton suffers from spina bifida and requires the use
of a wheelchair. Her attorney, Sharon Pomeranz, filed 99
cases on her behalf earlier this year. The Complaints allege
that each Defendant owns and/or operates a place of public
accommodation (“PPA”) which violates the
Americans with Disabilities Act (“ADA”), 42
U.S.C. § 12181 et seq., and related
regulations. The Complaints are identical except for the
names of the Defendants, the addresses of Defendants'
PPAs, and the specific alleged ADA violations at each PPA.
Carton asserts claims in two capacities. The first capacity
alleged is as a customer of each Defendant, stating she has
“personally visited each Defendant's PPA, but was
denied full and equal access and full and equal enjoyment of
the facilities, services, goods and amenities.”
Complaint ¶¶ 8-9 at 2-3. The second is as a
“tester.” Complaint ¶ 11 at 3
(“Completely independent of Plaintiff's personal
desire to access the PPA, Plaintiff also acted as a tester
for purposes of discovering, encountering, and engaging
discrimination against persons with disabilities at [each]
is proceeding in forma pauperis (“IFP”)
in all but two of those cases.The statute governing proceedings
in forma pauperis states: “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 . . . the action . . . is frivolous or
malicious.” 28 U.S.C. § 1915(e)(2). Therefore, on
May 1, 2017, this Court held a hearing to determine whether
Plaintiff's cases are frivolous or malicious. Contrary to
the Court's Order setting the hearing, Ms. Carton did not
attend. However, Attorney Pomeranz did answer questions from
the Court and from defense counsel. The Court held a second
hearing on May 11, 2017, at which Ms. Carton and Attorney
Pomeranz both answered questions from the Court and from some
of the defense counsel.
to the statute governing in forma pauperis status,
“the court shall dismiss the case [proceeding IFP] at
any time if the court determines that . . . the action . . .
is frivolous or malicious.” 28 U.S.C. §
1915(e)(2)(B). “A complaint is frivolous if ‘it
lacks an arguable basis either in law or in fact.'”
Fogle v. Infante, 595 F. App'x 807, 809 (10th
Cir. 2014) (quoting Neitzke v. Williams, 490 U.S.
319, 325 (1989)).
Dismissal as malicious is appropriate if the court determines
that the action was filed in “an attempt to vex, injure
or harass the defendant.” Deutsch v. United
States, 67 F.3d 1080, 1086 (3d Cir.1995); see
Lindell v. McCallum, 352 F.3d 1107, 1109 (7th Cir.
2003) (although “‘malicious' . . . is
sometimes treated as a synonym for ‘frivolous, ' .
. . [it] is more usefully construed as intended to
harass”). To make this determination, the court
“must . . . engage in a subjective inquiry into the
litigant's motivations at the time of the filing of the
lawsuit.” Deutsch, 67 F.3d at 1086.
An action may be adjudged malicious if it “is plainly
abusive of the judicial process.” Abdul-Akbar v.
Dep't of Corr., 910 F.Supp. 986, 999 (D. Del. 1995),
aff'd, 111 F.3d 125 (3d Cir. 1997) (unpublished). And
“repetitious litigation of virtually identical causes
of action” supports a finding of malice. McWilliams
v. Colorado, 121 F.3d 573, 574 (10th Cir. 1997)
(internal quotation marks omitted).
Rosiere v. United States, 673 F. App'x 834 (10th
Cir. 2016); see also Black's Law Dictionary 1101
(10th ed. 2014) (“Malicious” means
“substantially certain to cause injury” or
“without just cause or excuse”); Hernandez v.
Earney, 558 F.Supp. 1256 (W.D. Tex. 1983) (complaint
that demonstrated that purpose of action was extortion was
“malicious”); Green v. Jenkins, 80
F.R.D. 686 (W.D. Mo. 1978) (actions initiated in bad faith
for purposes of harassment found malicious); Spencer v.
Rhodes, 656 F.Supp. 458 (E.D. N.C. 1987) (in determining
whether a pro se complaint should be dismissed as
malicious, judge may consider not only printed words, but
“circumstances and history that surround the filing,
the tone of the allegations, and whether probative facts
vital to life of lawsuit have been alleged.”).
An Introduction to Plaintiff, her Attorney and the Litigation
not disclosed in her Complaints or IFP Affidavit, Plaintiff
Alyssa Carton filed these cases with the assistance of not
only her attorney, Sharon Pomeranz, but also a litigation
funding entity. Just how and why these actions were filed was
explored during the two hearings held in 2017 on May 1
(1st Hearing) and May 11 (2nd Hearing).
Ms. Carton's Version of Events
in advocacy, Ms. Carton wanted to find things to do to
benefit her community of people with disabilities, and so in
the fall of 2016, she responded to an ad that had been posted
on Craigslist. Transcript - 2nd Hrg at
12:02-17 (Doc. 35 in 17cv00037). Ms. Carton called
the phone number listed in the ad and spoke to someone who
indicated that “they were there and available to
help” and to “provide litigation support.”
Transcript - 2nd Hrg at 30:05-07. Ms.
Carton referred to this group as “the Litigation
Management Company.” Transcript -
2nd Hrg at 36:06-07. According to Ms. Carton, the
group “basically introduced me to Ms. Pomeranz.”
Transcript - 2nd Hrg at 30:08-16,
36:08-10. Ms. Carton testified that her “assumption is
they all worked together.” Transcript -
2nd Hrg at 37:02.
organization that purportedly placed the ad on Craigslist and
entered into a litigation funding agreement with Ms. Carton
is an entity known as Litigation Management and Financial
Services, LLC (“LMFS”). It appears, however, that
LMFS is somehow affiliated with another organization,
Advocates for Individuals with Disabilities Foundation
(“AID”). Specifically, Ms. Carton received both
the “Litigation Funding Agreement” that she
executed and the IFP application form that she filled out in
an email from Emily@aid.org sent November 1, 2016.
Doc. 34 at 4-14 (“Attached is the paperwork
that I will need filled out for us to begin filing
cases.”). Apparently, the same individual later re-sent
the agreement to Ms. Carton on April 21, 2017, but this time
with a return e-mail address of Emily@litmanco.com.
Doc. 34 at 3 (“Here is that agreement again
for your records:] Craig just got out of his meeting so we
will call you in just a second.”). The Litigation
Funding Agreement between LMFS and Ms. Carton is attached as
Exhibit A to this PF&RD.
Attorney Pomeranz' Version of Events
first hearing, Attorney Pomeranz implied that Ms. Carton was
not referred to her by any outside entity such as a
litigation funding group:
THE COURT: Are you, as an officer of the Court, indicating to
me that Ms. Carton came to you on her own to file these
MS. SHARON POMERANZ: Ms. Carton contacted me, yes.
THE COURT: On her own?
MS. SHARON POMERANZ: She contacted me on her own.
THE COURT: Did she say how she had gotten your name?
MS. SHARON POMERANZ: She said she got my name through Google.
Transcript - 1st Hrg at 38:19-25,
39:01-05 (emphasis added). Attorney Pomeranz declared that it
was after meeting with Ms. Carton that they then
“contacted a group that specializes in this work”
named “Litigation Management Company.”
Transcript - 1st Hrg at 39:06-18
(emphasis added). She flatly denied that this
“non-profit” group in Arizona is the
controversial “AID” organization that filed over
1, 000 ADA cases in Arizona last year. Transcript -
1st Hrg at 39:10-18 (“They are not
AID.”). In fact, the company's name is Litigation
Management and Financial Services, LLC (“LMFS”).
Pomeranz expressly disclaimed a connection with any ADA
advocacy group at the first hearing:
I don't work in the ADA industry. I have never filed ADA
cases before. I was contacted by one client. It seemed like
she had very legitimate cases. I agreed to represent her.
I'm not in the industry. I do family law, Judge. . . .
I have never done ADA work before, and I'm not
affiliated with any groups or trying to do impact
Transcript - 1st Hrg at 47:05-09,
57:10-12 (emphasis added). She further claimed that she
‘had no basis to know if [Ms. Carton] was working with
an outside group or not.” Transcript -
1st Hrg at 54:13-20. Attorney Pomeranz insisted:
I have been completely honest with the Court about my
representation of her. It was an agreement between she
and I (sic) to enforce the ADA, and that's the extent of
it. There's no cottage industry. There's no outside
influence. And, you know, this idea that, you know,
there's some industry springing up all over the country
has nothing to do with me or Ms. Carton. That may or may not
be true, and there may be groups out there planning to
enforce the ADA. But that's outside the scope of this
Transcript - 1st Hrg at 56:04-16
second hearing, however, Attorney Pomeranz did an
“about face” and revealed that as to the ADA
cases brought here, she indeed had a confidential
“litigation funding agreement” with a previously
undisclosed entity - LMFS. Attorney Pomeranz indicated that
she first connected with LMFS during the summer of 2016 when
she “answered an ad for civil rights attorneys on
Indeed.” Transcript - 2nd Hrg at
101:09-16. The Court notes that “Indeed.com” is a
website which touts itself as “the world's #1 job
site.” https://www.indeed.com/about (last
visited July 5, 2017). Attorney Pomeranz said she answered
LMFS's “ad prior to meeting Ms. Carton . . . but
[she] didn't sign [her] agreements with them until after
meeting Ms. Carton.” Transcript -
2nd Hrg at 143:19-22. Attorney Pomeranz stated
that LMFS was responsible for “paying the filing fees,
and they were providing staff, and they paid her the money to
reimburse her for any litigation expenses.”
Transcript - 2nd Hrg at 80:10-20. Among
the resources provided by LMFS was Attorney Pomeranz' new
e-mail address - Sharon@newmexicoada.com - and
website proclaiming, as of the date of the first hearing,
“extensive knowledge” and “experience of
over 1, 000 ADA Title III cases.” Transcript -
1st Hrg at 57:19-22 and 2ndHrg at
70:01-07; http://newmexicoada.com (viewed May 1,
2017). It should be noted that those representations have
since been removed from the website.
The Three Contractual Agreements
“Litigation Funding Agreement” Between Ms. Carton
Litigation Funding Agreement entered into November 1, 2016,
between Ms. Carton and LMFS, provides in relevant part:
This Agreement is limited to providing funding to [Ms.
Carton] and to [Ms. Carton's] attorney for legal
services. . . . the Parties have agreed that [LMFS] shall
bear the costs so that [Ms. Carton] may pursue the Claims.
. . . .
[LMFS] shall pay the costs of pursuing the Claims including
costs of legal advice and representation, court fees . . . .
. . . .
[LMFS] shall pay to [Ms. Carton] $50.00 for each of [Ms.
Carton's claims that result in a filed complaint
initiating a civil action.
. . . .
[Ms. Carton] shall be entitled to all remaining Proceeds [of
any successful claims].
. . . .
[Ms. Carton] affirms that it has had full and lengthy
opportunity to discuss with [LMFS] the options for and
likelihood of settlement of Claims. . . . [Ms. Carton]
therefore gives [LMFS] full and complete
authorization to negotiate and accept any settlements of
[Ms. Carton] agrees to cooperate and consent to any
settlement deemed reasonably [sic] by [LMFS].
Attachment A - Notice and Order, Doc. 37 at Exhibit
1, filed May 17, 2017 (emphasis added).
“Fee Agreement” Between Ms. Carton and Attorney
little over two weeks later, on November 17, 2016, Ms. Carton
also entered into an agreement for attorney representation
with Attorney Pomeranz, which is Attachment B to this
PF&RD. That entitled “FEE AGREEMENT” between
Ms. Carton and her attorney provides in pertinent part as
Attorney [Pomeranz] agrees to abide by Client's [Ms.
Carton] decisions regarding the objectives of the
representation, and shall consult with Client [Ms. Carton] as
to the means by which they are pursued. . . .
The fee of Attorney for representing Client is $100.00 per
case filed on behalf of Client. Client authorizes payment to
Attorney by third-party litigation management support company
("LMSC"). . . .
Costs and expenses incurred by Attorney in its representation
of Client are covered by the attorney unless otherwise agreed
upon with Client. Client agrees that LMSC may cover some or
all of attorney's costs and expenses. Costs and expenses
include, but are not limited to, fees for expert witnesses,
filing fees, fees for service of process, deposition costs,
travel expenses, investigators' fees and expenses,
copying charges, long distance telephone charges, messenger
service fees, and Westlaw/ Lexis Nexis legal research
charges.. . . .
Attorney may retain support staff and support companies
including the Company as a third-party LMSC. The retention of
any LMSC shall not change the fee owed to Attorney by Client
or the duties owed to Client by Attorney.
LMSC is anticipated to provide attorney with litigation
support including, but not limited to, initial drafting of
legal filings, managing correspondence from opposing
counsel/parties, and facilitating settlement discussions as
directed by Attorney and with final authorization by Client.
Attorney will provide LMSC authority to present settlement
offers to opposing counsel/parties.
Additional Compensation and Client Waiver of Monetary
Recovery In the event that Client's case(s) result in a
judicial award or settlement payment ("Monetary
Recovery"), Attorney shall receive an amount equal
to one-hundred percent (100%) of the Monetary Recovery
if effected by settlement before or after service of suit,
with or without trial or if said monetary recovery is an
award of the Court.
Attachment B - Doc. 38, filed May 19, 2017 (emphasis
“Litigation Management Agreement” Between
Pomeranz and LMFS
undated, executed Agreement between Attorney Pomeranz and
Alex Callan, an agent for LMFS, for the provision of
“management services to Attorney only in ADA Actions
filed by Attorney on behalf of Testers” states in part:
[Pomeranz] is retaining [LMFS] to provide
all litigation support services
within the broadest scope of ethical rules governing the
practice of law. The litigation support includes [LMFS]
providing receptionist, telephone, e-mail, paralegal and
consulting services by [LMFS] attorneys knowledgeable and
experienced in ADA enforcement actions. . . . [Pomeranz]
directs [LMFS] to provide services described in this
Agreement. . . . [LMFS] shall assign paralegals, staff and
personnel to work for [Pomeranz]. . . .
[LMFS], under the supervision, authority and consent of
[Pomeranz], shall manage all aspects of ADA civil actions. .
[LMFS] shall . . . Contact [Carton] directly for the purpose
of preparing and submitting Motion to Proceed in Forma
Pauperis pursuant to 28 U.S.C. § 1915 and to complete
the Affidavit . . . . prepare a draft Verified Complaint
[and] file the same with the U.S. District Court; and Pay the
filing fee unless waived.
Attachment C - Notice and Order, Doc. 37 at Exhibit
2, filed May 17, 2017 (emphasis added).
Identification of ADA Violations
appear to be inconsistencies between the allegations in the
Complaints and Ms. Carton's testimony regarding the
identification of alleged ADA violations. Among them, the
filed Complaints allege that Ms. Carton personally visited
Defendants' PPAs and encountered barriers to access at
each PPA. See Complaint ¶ 8 (“Plaintiff
personally visited Defendant's PPA, but was denied full
and equal access”), ¶ 9 (Plaintiff “visited
Defendant's PPA”), ¶ 11 (Plaintiff
“visited the Premises, encountered barriers to
access”), ¶¶ 30-31 (“Plaintiff visited
Defendant's PPA. . . . Plaintiff was prevented from the
full and equal enjoyment” of Defendant's PPA).
Ms. Carton testified that she did not enter all of the PPAs:
“I entered most of them. I think there is several that
we - that were just parking lot situations. . . so most of
them, yes, I would say I was there in the building. But
there's several that we just filed for the parking
lot.” Transcript - 2nd Hrg at
23:01-06. Ms. Carton also testified that for some of the
businesses, she did not go into the building and did not know
whether there were any actual barriers to entering the
building. See Transcript - 2nd Hrg at
126:02-11. In some cases, she testified that there were no
barriers to her entering a PPA. See Transcript -
2nd Hrg at 55:05-08 (nothing ever kept Plaintiff
from entering Buffett's Candies) and 59:11-14 (Plaintiff
doesn't recall experiencing any barriers at Office
Complaints also allege that “Plaintiff in her
individual capacity and as a tester, visited the Premises,
encountered barriers to access at the PPA, engaged and tested
those barriers.” Complaint ¶ 11. “Engaged
and tested” suggests that Ms. Carton encountered and
measured alleged barriers, such as the height of soap and
towel dispensers and aisle width. However, Ms. Carton
testified that generally her driver would visit the PPA, take
the measurements, and then later take Ms. Carton to the PPA
to “observe” violations and sometimes photograph
her at the location to document her physical presence at the
location. See Transcript - 2nd Hrg at
24:02-05 (Ms. Carton “took a few [measurements], but
not a lot”), 50:13-53:10 (Ms. Carton doesn't think
she was at Office Depot when driver took the measurements,
but didn't remember, “there were days where [the
driver would] go and measure things first, and then I'd
go back . . . [to] make sure that the violations were
Preparation of the Complaints
Pomeranz claims that she was the individual who drafted an
ADA complaint that was then used as a “boilerplate for
the rest.” Transcript - 1st Hrg at
34:23-24; Transcript - 2nd Hrg at 70:19-22. Indeed,
she says that she “started drafting the complaint[s]
before [Ms. Carton] had experienced any barriers at
any business[es] in Albuquerque.” Transcript -
2nd Hrg at 76:10-13 (emphasis added). Attorney
We were preparing for litigation for the - well, she had
already told me, when I met her at her house, all
the barriers she faced every day. . . . We just drafted a
general ADA Title III complaint. We didn't have, as you
say, a Carroll Ventures yet because [Ms. Carton] hadn't
visited any - she hadn't experienced barriers at any
Transcript - 2nd Hrg at 76:22-25
(emphasis added). Yet Attorney Pomeranz also maintained that
she “started drafting the complaint[s] in August
, ” which was long before she knew of Ms. Carton
and long before her client experienced any alleged barriers
to services. Transcript - 2nd Hrg at
77:05-09. Ms. Pomeranz also claims that she gave this generic
ADA complaint to LMFS and contends that this explains the
virtually identical complaints filed in the Districts of
Nevada and Colorado by attorneys with similar
“litigation funding agreements” with LMFS.
Transcript - 2nd Hrg at 70:23-25
-71:01-19, and 72:11-14 (“we developed one template,
and we used it for all of the rest, and that that is the same
model they must have been using in their other litigation
Court finds Attorney Pomeranz' claim of composing the
Complaints at issue to be unconvincing for several reasons.
As she acknowledges, she had virtually no experience in this
area of litigation. She further contends that she began
drafting the complaint in August 2016, but says she had no
contractual relationship with LMFS until after she met with
Ms. Carton in late 2016. Moreover, it was the expert in this
area - LMFS - that contractually had undertaken the
obligation to draft any ADA complaints that Attorney Pomeranz
would file. Finally, despite her assertion that she had
drafted the allegations of all the complaints, Attorney
Pomeranz stated that “this allegation that she's a
tester is another reason that I feel uncomfortable continuing
with my representation of her.” Transcript -
1st Hrg at 14:16-28. These observations seem
inconsistent with the attorney's professed involvement in
the drafting of the complaints.
appears that Attorney Pomeranz made little effort to ensure
that the factual contentions in the Complaints had
evidentiary support. When asked at the first hearing what
investigation she made into the merits of the case pursuant
to Rule 11, Attorney Pomeranz responded: “I went with
[Ms. Carton] to visit most of those establishments.
I reviewed all of the ADA regulations and saw that the
factual allegations and the photos we had showed lack of
compliance; some minor, some major. But they all fell within
the regulations for, per se, violations of the ADA.”
Transcript - 1st Hrg at 14:23-15:03
(emphasis added). But when asked if Attorney Pomeranz
accompanied her on the visits, Ms. Carton responded: “I
think there might have been one or two. I don't
really remember. I remember being on the phone with her, as
well, so it might have been that we were on the phone. But,
yeah, that's all I remember about that.”
Transcript - 2nd Hrg at 24:06-12
(emphasis added). Attorney Pomeranz maintained that prior to