The federal appeals court based in Denver has rejected outright a Fort Collins man’s attempt to extract $300 million from the city of Loveland, in a case a lower court judge deemed “fraudulent.”

Eyoel-Dawit Matios claimed Loveland was subject to a “self-executing” agreement to arbitrate his grievances stemming from a traffic stop with a Loveland police officer. Although the city never agreed it would participate in arbitration, Matios engaged Sitcomm Arbitration Association. Sitcomm’s founder, Brett “Eeon” Jones, awarded Matios $300 million after a hearing in which the city did not take part.

Matios subsequently petitioned a federal judge to enforce the award.

Although the U.S. Court of Appeals for the 10th Circuit did not weigh in on the merits of Matios’ petition, it was aware of the multiple other cases throughout the country involving plaintiffs’ attempts to enforce invalid arbitration agreements.

“Federal courts have encountered several petitions to vacate or confirm arbitration awards issued by Sitcomm and/or Mr. Jones, and they have consistently questioned the validity of the underlying contracts and the subsequent arbitration awards,” wrote Judge Carolyn B. McHugh in the July 14 order.

In August 2021, Matios submitted a petition to confirm the $300 million amount he was allegedly owed from arbitration. But U.S. Magistrate Judge N. Reid Neureiter, in a blistering analysis, referred to the arbitration documents as “non-sensical legal mumbo-jumbo” and an “abuse” of the judicial system.

“Mr. Matios’ instant attempt to enforce in federal court this non-existent arbitration ‘contract’ and the accompanying patently ridiculous $300 million arbitration award is fraudulent, an undue imposition on the City, and an extreme waste of judicial resources,” Neureiter wrote in November.

He noted the pattern of unfounded arbitration claims had connections to the antigovernment sovereign citizen movement. The Anti-Defamation League has described the purpose of fraudulent arbitration as intimidating and harassing targets and clogging the courts with unfounded requests.

Sitcomm cases have arisen in federal courts in several other states, with one judge in the Northern District of Texas going so far as to alert the U.S. Attorney’s Office and multiple state attorneys general of Sitcomm’s activities. Another judge in the Middle District of Georgia warned that Sitcomm “appears to make money by selling unwitting consumers fraudulent legal documents and also attempting – so far, unsuccessfully – to dupe a court into confirming one of its awards.”

In February, U.S. District Court Judge William J. Martínez agreed with Neureiter that he could not confirm the arbitration award because there was no valid contract between Matios and Loveland to begin with.

Matios, representing himself, turned to the 10th Circuit and attempted to advance several claims. He argued Neureiter was not permitted to be involved in his case and that there was a “valid private common-law consolidated constitutional contract” between himself and Loveland.

The city countered that Matios was pursuing litigation in bad faith, considering Colorado’s requirement that a valid contract requires the mutual assent of both parties and Loveland’s repeated statements to Matios it had never agreed to the arbitration process. 

“Indeed, Mr. Matios, and individuals like him, who are trying to use an improper, harassing, and ultimately fraudulent process in an effort to get money from a party that has from the beginning denied the claims made and explicitly stated it did not agree to arbitrate need to be stopped,” wrote attorney Ashley Hernandez-Schlagel on behalf of the city.

A three-judge panel for the 10th Circuit quickly determined federal courts did not have jurisdiction over Matios’ case. A U.S. Supreme Court decision from March of this year concluded that federal district courts can only handle arbitration-related petitions in the limited circumstances where Congress has given them authority: disputes between parties of different states and questions of federal law.

Neither of those conditions applied to Matios.

“These contractual disputes are issues of state law, not federal law,” McHugh concluded.

Sitcomm and Matios did not respond to requests for comment.

The case is Matios v. City of Loveland.