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Schaffhauser v. Citibank N.A.

November 8, 2007

ANNETTE M. SCHAFFHAUSER AND STEVE E. SCHAFFHAUSER, JR., CONSOLIDATED PLAINTIFFS
v.
CITIBANK (SOUTH DAKOTA) N.A., ET AL., DEFENDANTS



The opinion of the court was delivered by: Judge Sylvia H. Rambo

MEMORANDUM

I. Introduction

Before the court is Defendant Citibank (South Dakota) N.A.'s motion for sanctions pursuant to Federal Rule of Civil Procedure 11 against Plaintiffs Steve E. Schaffhauser, Jr. and Annette M. Schaffhauser, and their attorneys, David Brady and Douglas R. Goldhaber. The motion will be granted.

II. Procedural History

On October 12, 2005, Plaintiff Annette Schaffhauser instituted a civil action against Citibank and others docketed to number 05-CV-2075 (M.D. Pa.). On October 31, 2005, Plaintiff Steve Schaffhauser instituted a civil action against Citibank and others docketed to number 05-CV-2230 (M.D. Pa.). The two cases were consolidated by order dated February 17, 2006 to the earlier case number. Initially the complaints were filed pro se. On December 5, 2005, attorney David Brady entered an appearance for Annette Schaffhauser and, on or about February 17, 2006, entered an appearance for Steve Schaffhauser. David Brady withdrew his appearance on September 9, 2006. Attorney Douglas Goldhaber entered his appearance for Plaintiffs on October 30, 2006.

Plaintiffs allege causes of action against Citibank under the Fair Debt Collections Practices Act, Title 15 U.S.C. § 1692, et seq., the Pennsylvania Fair Credit Extension Uniformity Act, 73 Pa. Cons. Stat. § 2270, et seq., and the Pennsylvania Unfair Trade Practice and Consumer Protection Law, 73 Pa. Cons. Stat. § 201-1, et seq.

Citibank filed a motion to dismiss which was subsequently granted on September 19, 2007. In the interim, Citibank filed a motion for sanctions pursuant to Federal Rule of Civil Procedure 11 on June 2, 2006. Briefing and supplemental authorities followed. On November 29, 2006, an amended complaint was filed. On December 13, 2006, a motion to dismiss the amended complaint was filed by Citibank. On January 7, 2007, a renewed motion for sanctions was filed by Citibank. Attorney David Brady responded to the renewed motion for sanctions.*fn1

On March 27, 2007, Judge Conner, who was originally assigned to this case, recused himself and the case was reassigned to the undersigned judge.

On April 2, 2007, this court issued an order granting Plaintiffs and attorney Goldhaber an opportunity to respond to the renewed motion for sanctions. To date, no response to the renewed motion for sanctions has been filed by those individuals.

III. Discussion

Plaintiffs are credit card debtors who brought this federal action after being sued in a state court collection action. This is one of similar suits brought across the country against Citibank. In these cases, the courts have held that Citibank is not subject to the Fair Debt Collections Practices Act. (See Citibank's Brief in Supp. of Mot. for Sanctions, Exs. A-X; doc. 81-85.)

Citibank filed a motion to dismiss which set forth the defects in Plaintiffs' complaints. Citibank also served on Plaintiffs a Rule 11 motion on May 1, 2006. After the 21 day "safe harbor" period passed, the motion for sanctions was filed on May 1, 2006. While these motions were pending, and before Plaintiffs filed their amended complaint, Annette Schaffhauser filed another complaint which was docketed to number 06-CV-2024. That complaint raised the same Fair Debt Collections Practices Act issue.

Citibank brings its renewed motion for sanctions pursuant to Federal Rule of Civil Procedure 11(b), which states:

(b) Representations to Court. By signing, presenting, or pursuing a pleading, written motion, or other paper filed with or submitted to the court, an attorney or unrepresented party is certifying to the best of the person's knowledge, information, and ...


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