                                                                          FILED
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                      UNITED STATES COURT OF APPEALS                  April 29, 2008
                                  TENTH CIRCUIT                    Elisabeth A. Shumaker
                                                                       Clerk of Court


 FREDERICK BANKS,

          Plaintiff-Appellant,

 v.                                                      No. 07-1339
                                                 (D.C. No. 07-cv-00587-ZLW)
 VIO SOFTWARE; THREE MONKEY                               (D. Colo.)
 KARAOKE; and WARREN DO,

          Defendants-Appellees.




                             ORDER AND JUDGMENT *


Before O’BRIEN, EBEL, and GORSUCH, Circuit Judges.


          Plaintiff-Appellant Frederick Banks, a federal prisoner, appears pro se and

appeals from a district court decision dismissing, pursuant to 28 U.S.C. §

1915(e)(2)(B), his civil rights claim. Mr. Banks’ complaint challenged the

alleged conversion of two checks, amounting to $110,000, by Defendants-



      *
       After examining appellant’s brief and the appellate record, this panel has
determined unanimously that oral argument would not materially assist the
determination of this appeal. See Fed. R. App. P. 34(a)(2) and 10th Cir. R.
34.1(G). The case is therefore ordered submitted without oral argument. This
order and judgment is not binding precedent, except under the doctrines of law of
the case, res judicata, and collateral estoppel. It may be cited, however, for its
persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Appellees. He brought his claim under 42 U.S.C. § 1983 and 28 U.S.C. § 1343,

positing that Defendants-Appellees Vio Software and Three Monkey Karaoke had

acted under color of state law because they are businesses incorporated in the

state of Colorado. The district court rejected this theory as legally frivolous and

dismissed Mr. Banks’ complaint sua sponte. Thereafter, the court denied Mr.

Banks’ motion to reconsider and amend his complaint, and, lastly, denied him the

privilege of proceeding on appeal in forma pauperis (“IFP”). We exercise

jurisdiction under 28 U.S.C. § 1291, and dismiss Mr. Banks’ appeal as frivolous.

I.    Background

      Mr. Banks is incarcerated at the Federal Correctional Institution in Yazoo

City, Mississippi. He alleges that on September 30, 2003, the Defendants-

Appellees sent him two checks in the sum of $110,000 by FEDEX. The checks

were made payable to Hexagon Records and Hexagon LLC and were issued by

Bank One. 1 However, Mr. Banks alleges, the checks were “no good” and

“Defendants never returned the merchandise or reinbursement [sic] of the

$110,000.” Mr. Banks does not specify what “merchandise” the Defendant-

Appellees failed to return, nor does he further illuminate the factual



      1
       Frederick Banks is the sole officer of Hexagon LLC, a limited liability
company registered in Pennsylvania. See Banks v. 3311 E. Carson Street, No. 04-
1771, Magistrate Report and Recommendation, Dkt. 174 at 3, n.4 (W.D.P.A. May
24, 2007). Hexagon Records is a trade name owned by Hexagon LLC. Id. at 3
n.3.

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circumstances underlying his suit. Cognizant of the “color of law” requirement

for a § 1983 suit, Mr. Banks asserts that Defendants-Appellees Vio Software and

Three Monkey Karaoke “are corporations or LLC’s incorporated in Colorado,”

and therefore “acted under color of state law” when they deprived him of rights

protected by the Due Process and Equal Protection clauses of the Fourteenth

Amendment of the U.S. Constitution.

      Having noted its obligation to construe Mr. Banks’ pro se complaint

liberally, the district nonetheless dismissed it as frivolous pursuant to 28 U.S.C. §

1915(e)(2)(B). Citing Adickes v. S.H. Kress & Co., 398 U.S. 144 (1970), the

district court concluded that Mr. Banks failed to allege facts supporting his

assertion that the Defendants acted under color of state law. Without any such

facts, Mr. Banks could not support an arguable claim, see Neitzke v. Williams,

490 U.S. 319, 324-25 (1989), rendering it frivolous. In a motion styled a “Motion

for Reconsideration of Order and Judgment of Dismissal” and “Motion to Amend

Complaint,” Mr. Banks challenged the district court’s decision. Discerning no

reason to reconsider or permit amendment, the court reiterated its earlier decision

that the claim was frivolous. Finally, the court also denied Mr. Banks leave to

proceed IFP on appeal.

II.   Discussion

      The federal IFP statute, codified as 28 U.S.C. § 1915, opens the federal

courts to indigent litigants. Neitzke, 490 U.S. at 324. By doing so, the statute

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creates the risk that filers, freed from the obligation to prepay fees or costs, will

commence “frivolous, malicious, or repetitive lawsuits.” Id. Accordingly, to

impede such lawsuits, Congress provided for the sua sponte dismissal of

“frivolous or malicious” suits under § 1915(e)(2)(B)(i). See id. Likewise, §

1915(e)(2)(B)(ii) provides for the dismissal “at any time if the court determines

that” the suit “fails to state a claim on which relief may be granted.” A suit “is

frivolous where it lacks an arguable basis either in law or fact” or is “based on an

indisputably meritless legal theory.” Neitzke, 490 U.S. at 325, 327.

      “Mindful that pro se actions are held to a less stringent standard of review

and that sua sponte dismissals are generally disfavored by the courts, we

nonetheless allow a complaint to be dismissed under [§ 1915(e)(2)(B)] ‘if the

plaintiff cannot make a rational argument on the law and facts in support of [his]

claim.’” Whitney v. New Mexico, 113 F.3d 1170, 1172 (10th Cir. 1997) (quoting

Yellen v. Cooper, 828 F.2d 1471, 1475 (10th Cir. 1987)). We review a district

court’s determination that a suit is frivolous under § 1915 for an abuse of

discretion. Denton v. Hernandez, 504 U.S. 25, 33 (1992). If the “frivolousness

determination turns on an issue of law,” we review the underlying legal

determination de novo. Fogle v. Pierson, 435 F.3d 1252, 1259 (10th Cir. 2006).

Of course, § 1915(e)(2) commands that this court dismiss – rather than merely

affirm – any appeal that we deem frivolous. 28 U.S.C. § 1915(e)(2) (“[T]he court




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shall dismiss the case at any time if the court determines that . . . (B) the action or

appeal” meets the criteria for sua sponte dismissal.).

         Mr. Banks’ theory is simple: because Vio Software and Three Monkey

Karaoke were incorporated in the state of Colorado, they necessarily are state

actors. It is also simply incorrect and frivolous as a matter of law. See, e.g.,

Yanaki v. Iomed, Inc., 415 F.3d 1204, 1207-10 (10th Cir. 2005) (concluding that

company had not acted under color of law without any discussion of fact that it

was incorporated under state law). Cf. San Francisco Arts & Athletics, Inc. v.

U.S.O.C., 483 U.S. 522, 543-44 (1986) (“All corporations act under charters

granted by a government, usually by a State. They do not thereby lose their

essentially private character.”). Even a minimal research effort would have made

this evident. As such, Mr. Banks’ appeal is frivolous and we hereby dismiss it, as

mandated by § 1915(e)(2)(B). We also note that both this dismissal and the

district court’s dismissal count as strikes under 28 U.S.C. § 1915(g). See

Jennings v. Natrona County Det. Ctr. Med. Facility, 175 F.3d 775, 780 (10th Cir.

1999).

         Finally, because Mr. Banks has failed to present a “reasoned, nonfrivolous

argument on the law and facts in support of the issues raised on appeal,”

McIntosh v. U.S. Parole Comm’n, 115 F.3d 809, 812 (10th Cir. 1997) (quotation

omitted), we deny his motion to proceed IFP on appeal. In addition, we direct




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him to make full and immediate payment of the outstanding balance of the

appellate filing fees for this appeal.

III.   Conclusion

       In light of the foregoing, we DENY Mr. Banks’ request to proceed IFP on

appeal and DISMISS his appeal. Accordingly, we assess two strikes against him,

one for filing a frivolous matter in the district court and one for taking a frivolous

appeal.


                                         ENTERED FOR THE COURT



                                         David M. Ebel
                                         Circuit Judge




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