United States District Court, D. Delaware
JEFFREY COHEN, et al. Plaintiffs,
KATHLEEN BIRRANE, et al., Defendants.
Jeffrey Cohen, FCI Hazelton, Bruceton Mills, West Virginia.
Pro Se Plaintiff.
ANDREWS, U.S. District Judge
Jeffrey Cohen, an inmate at FCI Hazelton in Bruceton Mills,
West Virginia, filed this action personally and as sole
shareholder of IDG Companies, LLC, raising claims under 42
U.S.C. § 1983 and supplemental claims under Delaware law
pursuant to 28 U.S.C. § 1367. (D.I. 1, 3). He appears
pro se and has been granted leave to proceed in
forma pauperis. (D.I. 8, 11). Cohen also moves for
injunctive relief and requests counsel. (D.I. 4, 9). The
Court now proceeds to review and screen the Complaint
pursuant to 28 U.S.C. § 1915(e)(2)(B) and §
brings this lawsuit for claims relating to a Delaware
receivership action currently pending in the Court of
Chancery of the State of Delaware, In the Matter of the
Liquidation of Indemnity Insurance Corporation, RRG,
C.A. No. 8601-CB. Indemnity Insurance Corporation, RRG
("IIC") is a risk retention group founded by Cohen
and domiciled in Delaware. Cohen v. Stewart, 2014 WL
2574550, at *1. IDG Companies, LLC ("IDG") is an
affiliated company owned by Cohen. Id. After a
routine investigation by the Delaware Department of Insurance
uncovered concerns about IIC's solvency, the Insurance
Commissioner of the State of Delaware, then Karen Weldin
Stewart, sought a seizure order from the Delaware Court of
Chancery. Id. On May 30, 2013, the Court of Chancery
entered a confidential seizure and injunction order that
vested Commissioner Stewart with the title to all IIC
property. Id. On June 17, 2013, the seizure order
was enrolled in the Circuit Court for Baltimore County in the
State of Maryland, State of Delaware v. Indemnity
Insurance Corp., RRG, No. 03-C-13006820 (Cir. Ct.
Baltimore County, Md). Id.
September 13, 2013, three IIC employees became aware of, and
concerned about, unauthorized activity in their
deferred-compensation accounts. Cohen was the only person
with access to the accounts. Id. The employees
contacted the Delaware Department of Insurance, and
Commissioner Stewart froze the three accounts before they
could be emptied. Id. On September 25, 2013, the
Court of Chancery issued an order imposing sanctions against
Cohen due to actions taken by him during the Court of
Chancery proceedings. Cohen v. State ex. rel.
Stewart, 89 A.3d at 80. On October 7, 2013, Cohen filed
an expedited motion to modify or, alternatively, for relief
from the order imposing sanctions. Id. The Court of
Chancery denied the motion without prejudice. Id. at
81. The Court of Chancery entered an additional sanctions
order against Cohen on November 1, 2013, following his
continued contumacious behavior. Id. at 81-83.
November 6, 2013, Commissioner Stewart filed a petition for
the entry of a rehabilitation and injunction order with
consent of IIC's board. Cohen v. Stewart, 2014
WL 2574550, at *1. On November 7, 2013, the Court of Chancery
entered the order, placed IIC into receivership, and
appointed Commissioner Stewart as the receiver.Id.
then appealed to the Delaware Supreme Court challenging
multiple orders. Cohen v. State ex. rel Stewart, 89
A.3d at 68. "Central to [the] appeal [was] whether the
delinquency proceedings [for IIC] violated the constitutional
due process rights [of] Jeffrey B. Cohen." Id.
On April 9, 2014, the Delaware Supreme Court affirmed the
Court of Chancery's rulings and concluded there were no
violations of Cohen's right to due process. Id.
at 68-69. The next day, on April 10, 2014, the Court of
Chancery entered a liquidation order. Cohen v.
Stewart, 2014 WL 2574550, at *1. In the meantime, on
December 31, 2013, Cohen had filed a motion for emergency
relief in the Court of Chancery. In the Matter of the
Liquidation of Indemnity Insurance Corporation, RRG,
C.A. No. 8601-CB at BL-549.
was indicted and charged in Maryland with fifteen counts of
wire fraud, five counts of aggravated identity theft, two
counts of money laundering, five counts of making false
statements to an insurance regulator, and four counts of
obstructing justice. United States v. Cohen, 2015 WL
4641072 (D. Md. Aug, 3, 2015). On June 5, 2015, he pled
guilty to wire fraud, aggravated identity theft, making false
statements to an insurance regulator, and obstructing
justice. Id. He was sentenced on December 10, 2015,
to a term of 240 months imprisonment. See United States
v. Cohen, Crim. No. 14-310-GLR (D. Md.) (D.I. 590). An
appeal is pending. (4th Cir., No. 15-4780).
October 3, 2016, this Court received Plaintiff's
Complaint for declaratory and injunctive relief and
for damages naming as Defendants Kathleen Birrane, Michael
Teichman, Michael Johnson, Greg Bealuk, and
possibly Commissioner Stewart. (D.I. 1). The
Complaint asserts jurisdiction pursuant to 28 U.S.C. §
1331 (federal question), 28 U.S.C. § 1343 (civil rights
and elective franchise), and 28 U.S.C. § 1367
(supplemental jurisdiction). (D.I. 1 at p.3).
has previously sued Teichman, Johnson, Bealuk, and Stewart
for racketeering in the United States District Court for the
District of Maryland. See Cohen v. Ins Consultants,
No. 14-768 (D.I. 44, ¶ 52 & Count VII) (D. Md.)
(filed March 13, 2014). Teichman is a Delaware attorney whose
hiring was authorized by Cohen. (D.I. 3 at 9). Bealuk and
Johnson are insurance professionals who were hired by the
Commissioner to operate IDG while it was in the delinquency
proceedings. (Id. at 10). Birrane, a Maryland
attorney, represented Bealuk and Johnson in the INS
instant Complaint refers to acts allegedly taken by
Defendants from 2010 through April 2014. Plaintiff raises
claims under 42 U.S.C. § 1983 for violations of his
right to procedural due process under the Fourth, Fifth, and
Fourteenth Amendments of the United States Constitution, as
well as supplemental state law claims under Delaware law for
negligence, gross negligence, conversion, breach of fiduciary
duty, fraud, and conspiracy. (D.I. 3 at pp.21-32).
federal court may properly dismiss an action sua
sponte under the screening provisions of 28 U.S.C.
§ 1915(e)(2)(B) and § 1915A(b) if "the action
is frivolous or malicious, fails to state a claim upon which
relief may be granted, or seeks monetary relief from a
defendant who is immune from such relief." Ball v.
Famiglio,726 F.3d 448, 452 (3d Cir. 2013); see
also 28 U.S.C. § 1915(e)(2) (in forma
pauperis actions); 28 U.S.C. § 1915A (actions in
which prisoner seeks redress from a governmental defendant).
The Court must accept all factual allegations in a complaint
as true and take them in the light most favorable to a
pro se plaintiff. Phillips v. County of
Allegheny,515 F.3d 224, 229 (3d Cir. 2008);
Erickson v. Pardus,551 U.S. 89, 93 (2007). Because
Plaintiff proceeds pro se, his pleading is liberally