IN THE UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

 KEVIN BAILEY, § 

 § 

Plaintiff, § 

§ 

V. § No. 3:22-cv-2007-X-BN 

§ 

TXU, § 

§ 

Defendant. § 

FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE 

UNITED STATES MAGISTRATE JUDGE 

Plaintiff Kevin Bailey filed a pro se complaint alleging that, “[f]or the past five 

years,” he has “been price gouged by the company TXU.” Dkt. No. 3 (further alleging 

that “I have brought this to their attention several times to no avail & also to the 

Texas utilities commission & have not gotten a response mail or e-mail”). 

United States District Judge Brantley Starr referred Bailey’s lawsuit to the 

undersigned United States magistrate judge for screening under 28 U.S.C. § 636(b) 

and a standing order of reference. 

And, after reviewing the complaint, the undersigned questions whether there 

is subject matter jurisdiction and, given the circumstances of this case, enters these 

findings of fact, conclusions of law, and recommendation that the Court should 

dismiss this action for lack of subject matter jurisdiction. 

These findings and conclusions provide Bailey notice as to the jurisdictional 

deficiencies. And the ability to file objections to the undersigned’s recommendation 

that this case be dismissed for lack of jurisdiction (further explained below) offers 

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Bailey an opportunity to establish to the Court (if possible) that it does indeed have 

subject matter jurisdiction. 

 “‘Federal courts are courts of limited jurisdiction,’ possessing ‘only that power 

authorized by Constitution and statute.’” Gunn v. Minton, 568 U.S. 251, 256 (2013) 

(quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); see 

also Bowles v. Russell, 551 U.S. 205, 212 (2007) (“Within constitutional bounds, 

Congress decides what cases the federal courts have jurisdiction to consider.”); 

Stockman v. Fed. Election Comm’n, 138 F.3d 144, 151 (5th Cir. 1998) (“Federal courts 

are courts of limited jurisdiction, and absent jurisdiction conferred by statute, lack 

the power to adjudicate claims.”). 

They must therefore “presume that a suit lies outside this limited jurisdiction, 

and the burden of establishing federal jurisdiction rests on the party seeking the 

federal forum.” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). 

Correspondingly, all federal courts have an independent duty to examine their own 

subject matter jurisdiction. See Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583-

84 (1999) (“Subject-matter limitations ... keep the federal courts within the bounds 

the Constitution and Congress have prescribed. Accordingly, subject-matter 

delineations must be policed by the courts on their own initiative even at the highest 

level.” (citations omitted)). 

Bailey chose to file this lawsuit in federal court and, by doing so, undertook the 

burden to establish federal jurisdiction. See Butler v. Dall. Area Rapid Transit, 762 

F. App’x 193, 194 (5th Cir. 2019) (per curiam) (“[A]ssertions [that] are conclusory [ ] 

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are insufficient to support [an] attempt to establish subject-matter jurisdiction.” 

(citing Evans v. Dillard Univ., 672 F. App’x 505, 505-06 (5th Cir. 2017) (per cuiam); 

Jeanmarie v. United States, 242 F.3d 600, 602 (5th Cir. 2001))). 

If he does not, this lawsuit must be dismissed. See FED. R. CIV. P. 12(h)(3) (“If 

the court determines at any time that it lacks subject-matter jurisdiction, the court 

must dismiss the action.”). 

Because federal jurisdiction is not assumed, “the basis upon which jurisdiction 

depends must be alleged affirmatively and distinctly and cannot be established 

argumentatively or by mere inference.” Getty Oil Corp. v. Ins. Co. of N.A., 841 F.2d 

1254, 1259 (5th Cir. 1988) (citing Ill. Cent. Gulf R. Co. v. Pargas, Inc., 706 F.2d 633, 

636 & n.2 (5th Cir. 1983)); see also MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 

929 F.3d 310, 313 (5th Cir. 2019) (“Because federal courts have limited jurisdiction, 

parties must make ‘clear, distinct, and precise affirmative jurisdictional allegations’ 

in their pleadings.” (quoting Getty Oil, 841 F.2d at 1259)). 

Under their limited jurisdiction, federal courts generally may only hear a case 

if it involves a question of federal law or where diversity of citizenship exists between 

the parties. See 28 U.S.C. §§ 1331, 1332. 

Starting with diversity, in cases invoking jurisdiction under Section 1332, each 

plaintiff’s citizenship must be diverse from each defendant’s citizenship, and the 

amount in controversy must exceed $75,000. See 28 U.S.C. § 1332(a), (b). This amount 

“is determined by the amount of damages or the value of the property that is the 

subject of the action.” Celestine v. TransWood, Inc., 467 F. App’x 317, 319 (5th Cir. 

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2012) (per curiam) (citing Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 

347 (1977)). And, “[f]or diversity purposes, state citizenship is synonymous with 

domicile. A change in domicile requires: ‘(1) physical presence at the new location and 

(2) an intention to remain there indefinitely.’” Dos Santos v. Belmere Ltd. P’ship, 516 

F. App’x 401, 403 (5th Cir. 2013) (per curiam) (citations omitted); see also Preston v. 

Tenet Healthsystem Mem’l Med. Ctr., 485 F.3d 793, 797-98 (5th Cir. 2007) (“In 

determining diversity jurisdiction, the state where someone establishes his domicile 

serves a dual function as his state of citizenship.... Domicile requires the 

demonstration of two factors: residence and the intention to remain.” (citing Stine v. 

Moore, 213 F.2d 446, 448 (5th Cir. 1954))). 

“The basis for diversity jurisdiction must be ‘distinctly and affirmatively 

alleged.’” Dos Santos, 516 F. App’x at 403 (quoting Mullins v. TestAmerica, Inc., 564 

F.3d 386, 397 (5th Cir. 2009)). The United States Court of Appeals for the Fifth 

Circuit has therefore held “that a ‘failure to adequately allege the basis for diversity 

jurisdiction mandates dismissal.’” Id. (quoting Stafford v. Mobil Oil Corp., 945 F.2d 

803, 805 (5th Cir. 1991)). 

Because Bailey alleges neither the citizenships of the parties nor an amount in 

controversy, he has not affirmatively and distinctly alleged diversity jurisdiction. And 

it is more plausible, inferring from his allegations, that there is not complete 

diversity. 

Next, under Section 1331, federal question jurisdiction “exists when ‘a wellpleaded complaint establishes either that federal law creates the cause of action or 

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that the plaintiff’s right to relief necessarily depends on resolution of a substantial 

question of federal law.’” Borden v. Allstate Ins. Co., 589 F.3d 168, 172 (5th Cir. 2009) 

(quoting Franchise Tax Bd. v. Constr. Laborers Vacation Tr., 463 U.S. 1, 27-28 

(1983)); see also In re Hot-Hed Inc., 477 F.3d 320, 323 (5th Cir. 2007) (“A federal 

question exists ‘if there appears on the face of the complaint some substantial, 

disputed question of federal law.’” (quoting Carpenter v. Wichita Falls Indep. Sch. 

Dist., 44 F.3d 362, 366 (5th Cir. 1995))). 

The “‘creation’ test ... accounts for the vast bulk of suits under federal law.” 

Gunn, 568 U.S. at 257 (citation omitted). But 

“a federal court [is also] able to hear claims recognized under state law 

that nonetheless turn on substantial questions of federal law, and thus 

justify resort to the experience, solicitude, and hope of uniformity that a 

federal forum offers on federal issues.” That is to say, “federal 

jurisdiction over a state law claim will lie if a federal issue is: (1) 

necessarily raised, (2) actually disputed, (3) substantial, and (4) capable 

of resolution in federal court without disrupting the federal-state 

balance approved by Congress.” 

Perez v. Se. SNF, L.L.C., No. 21-50399, 2022 WL 987187, at *3 (5th Cir. Mar. 31, 

2022) (per curiam) (quoting Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 

545 U.S. 308, 312 (2005), then Gunn, 568 U.S. at 258). 

Bailey identifies no federal law in his complaint. His factual allegations do not 

implicate a question of federal law. Nor do Bailey’s claims of price gouging by a utility 

company, as alleged here, depend on the resolution of a substantial question of federal 

law. Cf. Budget Prepay, Inc. v. AT&T Corp., 605 F.3d 273, 280 (5th Cir. 2010) (“The 

Supreme Court has ‘sh[ied] away from the expansive view that mere need to apply 

federal law in a state-law claim will suffice to open the “arising under” door.’ Rather, 

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the Court has cautioned that the federal right at issue must be ‘a substantial one, 

indicating a serious federal interest in claiming the advantages thought to be 

inherent in a federal forum.’” (quoting Grable, 545 U.S. at 313)). 

Recommendation

The Court should dismiss this case for lack of subject matter jurisdiction. 

A copy of these findings, conclusions, and recommendation shall be served on 

all parties in the manner provided by law. Any party who objects to any part of these 

findings, conclusions, and recommendation must file specific written objections 

within 14 days after being served with a copy. See 28 U.S.C. § 636(b)(1); FED. R. CIV.

P. 72(b). In order to be specific, an objection must identify the specific finding or 

recommendation to which objection is made, state the basis for the objection, and 

specify the place in the magistrate judge’s findings, conclusions, and recommendation 

where the disputed determination is found. An objection that merely incorporates by 

reference or refers to the briefing before the magistrate judge is not specific. Failure 

to file specific written objections will bar the aggrieved party from appealing the 

factual findings and legal conclusions of the magistrate judge that are accepted or 

adopted by the district court, except upon grounds of plain error. See Douglass v. 

United Servs. Auto. Ass’n, 79 F.3d 1415, 1417 (5th Cir. 1996). 

DATED: September 16, 2022 

 _________________________________________ 

DAVID L. HORAN 

UNITED STATES MAGISTRATE JUDGE 

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