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Cartmell v. Credit Control, LLC

United States District Court, E.D. Pennsylvania

January 10, 2020



          Joseph F. Leeson, Jr. United States District Judge


         This is an action brought under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”), in which Plaintiff William Cartmell contends that Defendant Credit Control, LLC's attempt to collect a debt violated several provisions of that statute. As with many FDCPA cases, this case rests on the content of Credit Control's collection letter (“the Letter”), which offered Cartmell three “payment options” for repayment of the debt. Significantly, the Letter failed to notify Cartmell that repayment of any part of the debt-which at the time the Letter was sent was beyond the statute of limitations and therefore not judicially recoverable-could revive the debt and subject him to liability. Cartmell contends this omission constituted a violation of the FDCPA's prohibition on unfair and deceptive debt-collection practices.

         There are currently four motions pending before the Court, each with opposition: Credit Control's motion to dismiss the Amended Complaint for lack of subject matter jurisdiction based on Cartmell's failure to establish standing, Cartmell's motion for class certification, and both parties' cross-motions for summary judgment. Because “[t]he requirement that jurisdiction be established [is] a threshold matter” that “‘spring[s] from the nature and limits of the judicial power of the United States' and is ‘inflexible and without exception, '” Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 94-95 (1998) (quoting Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382 (1884)), Credit Control's motion to dismiss for lack of jurisdiction must be resolved before the motions for either class certification or summary judgment can be addressed.[1]

         Having reviewed both parties' arguments, the Court concludes that Cartmell has established standing sufficient to invoke the Court's subject matter jurisdiction. Consequently, for the reasons set forth below, Credit Control's motion to dismiss is denied.


         A. Facts alleged in the Amended Complaint

         The following are the relevant facts asserted in the Amended Complaint. Significantly, these facts-namely, the existence, date, and content of the Letter, as well as the nature and timeliness of the debt-are not in dispute.

         Prior to April 23, 2018, Cartmell incurred a credit card debt to Credit One Bank, which was subsequently sold or transferred to LVNV Funding, LLC. Amended Complaint (“Am. Compl.”), ECF No. 14, ¶¶ 14-15, 17. On or about April 23, 2018, Credit Control, LLC, a debt collector, caused to be delivered to Cartmell a collection letter in an attempt to collect on the debt. Id. ¶ 20. As of April 23, 2018, more than six years had elapsed since the last payment or activity on the LVNH Funding debt. Id. ¶ 24. The Letter offered Cartmell three “options” to pay the time-barred debt, while also stating, “[t]he law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it.” Id. ¶¶ 23, 25. However-and at the heart of the dispute in this case-the Letter failed to inform Cartmell that should he choose one of the payment options and make a payment, such action might revive the statute of limitations for debt-collection purposes, which could expose him to future liability on the debt. Id. ¶ 26. Based on this omission, Cartmell asserts causes of action for violations of (1) 15 U.S.C. § 1692e, which prohibits the use of false, deceptive, or misleading representations or means in connection with the collection of any debt, [2] as well as (2) 15 U.S.C. §1692f, which prohibits the use of any unfair or unconscionable means to collect any debt. See Id. ¶¶ 35-45.

         B. Procedural history

         The initial Complaint in this action was filed on or about April 15, 2019. See ECF No. 1. Counsel appeared before the Court for a Rule 16 initial conference on August 6, 2019, at which time a discovery schedule was put in place. See ECF Nos. 7, 9. On August 13, 2019, the parties filed a stipulation allowing Cartmell to file an Amended Complaint, see ECF Nos. 13-14, which was accepted for filing and remains the operative pleading in the case.[3]

         In October 2019, the Court received correspondence from counsel indicating the existence of a potential discovery dispute. After receipt of this correspondence, on October 31, 2019, the Court extended the expert discovery deadline and scheduled a telephone conference, which was held on November 4, 2019. See ECF No. 18. At the conference, the Court issued several directives intended to resolve the dispute.[4] See ECF No. 21.

         On December 4, 2019, the previously-set deadline for the filing of dispositive motions, the parties filed cross-motions for summary judgment, see ECF Nos. 27, 30, in addition to a motion for class certification filed by Cartmell, see ECF No. 29, and the instant motion to dismiss for lack of subject matter jurisdiction by Credit Control, see ECF No. 28.


         A. Legal Standard and Applicable Law

         1. Federal Rule of Civil Procedure 12(b)(1)

         Under Federal Rule of Civil Procedure 12(b)(1), “a court must grant a motion to dismiss if it lacks subject-matter jurisdiction to hear a claim.” In re Schering Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 243 (3d Cir. 2012); Lenell v. Advanced Min. Tech., Inc., No. 14-CV-01924, 2014 WL 7008609, at *1 (E.D. Pa. Dec. 11, 2014) (“At issue in a Rule 12(b)(1) motion is the court's ‘very power to hear the case.'” (quoting Petruska v. Gannon Univ., 462 F.3d 294, 302 (3d Cir. 2006))). “A challenge to subject matter jurisdiction under Rule 12(b)(1) may be either a facial or a factual attack. The former challenges subject matter jurisdiction without disputing the facts alleged in the complaint, and it requires the court to ‘consider the allegations of the complaint as true.'” Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016) (quoting Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006)). “The latter, a factual challenge, attacks the factual allegations underlying the complaint's assertion of jurisdiction, either through the filing of an answer or ‘otherwise present[ing] competing facts.'” Davis, 824 F.3d at 346 (quoting Constitution Party of Pa. v. Aichele, 757 F.3d 347, 358 (3d Cir. 2014)). When a movant presents a factual challenge to jurisdiction, the burden is on the plaintiff to show the presence of jurisdiction, and the trial court “may independently evaluate the evidence regarding disputes over jurisdictional facts, rather than assuming that the plaintiff's allegations are true.” Lenell, 2014 WL 7008609, at *2 (quoting CNA v. United States, 535 F.3d 132, 140 (3d Cir. 2008), as amended (Sept. 29, 2008)).

         The initial question, then, is whether Credit Control's challenge to jurisdiction is facial or factual, the answer to which will in turn dictate the scope of what the Court may consider in resolving the challenge-the allegations alone if the challenge is facial, or evidence beyond the pleadings if the challenge is factual. See In re Schering Plough Corp., 678 F.3d at 243. Credit Control contends that evidence outside the pleadings negates subject matter jurisdiction. According to Credit Control, Cartmell's deposition testimony establishes that he “understood that the debt was too old for him to be sued on it and he never intended to make a payment in response to Credit Control's letter. Therefore, Cartmell suffered no injury and was not at risk of suffering any harm.”[5] Credit Control's Moving Memorandum (“Credit Control Mem.”), ECF No. 28, at 5. Cartmell responds by arguing, in essence, that because Credit Control violated a substantive right conveyed by the FDCPA-the right to be free from false, deceptive, or misleading representations in debt collection-as opposed to a mere procedural right, the violation in and of itself is sufficient to satisfy the injury-in-fact requirement of Article III. See, e.g., Cartmell's Opposition Memorandum (“Cartmell Opp'n.”), ECF No. 34, at 6-9.

         Although the key facts alleged in the operative pleading are not contested-Credit Control does not dispute the nature of the debt or the content of the Letter, or that the Letter was sent to Cartmell by Credit Control in an attempt to collect on the debt-because Credit Control asserts facts beyond the pleadings are dispositive as to jurisdiction, Credit Control's motion is properly considered a factual attack on subject matter jurisdiction. As a result, the Court is free to weigh evidence beyond the pleadings in its analysis.[6] See CNA, 535 F.3d at 140, 145.

         With an understanding of the nature and contours of Credit Control's challenge to jurisdiction, the Court briefly reviews principles of Article III standing generally before turning to a review of standing principles in the context of the FDCPA specifically.

         2. Article III standing generally

         Article III, Section 2 of the United States Constitution limits the jurisdiction of federal courts to actual “Cases” and “Controversies.” U.S. Const. art. III, § 2. As the Supreme Court has stated, “the core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992) (citing Allen v. Wright, 468 U.S. 737, 751 (1984)); Davis, 824 F.3d at 346 (“Standing is a jurisdictional matter. ‘Absent Article III standing, a federal court does not have subject matter jurisdiction to address a plaintiff's claims, and they must be dismissed.'” (quoting Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006))). Over the years, federal jurisprudence has

established that the irreducible constitutional minimum of standing contains three elements. First, the plaintiff must have suffered an “injury in fact”-an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Second, there must be a causal connection between the injury and the conduct complained of-the injury has to be fairly . . . trace[able] to the challenged action of the defendant, and not . . . th[e] result [of] the independent action of some third party not before the court. Third, it must be “likely, ” as opposed to merely “speculative, ” that the injury will be redressed by a favorable decision.

Lujan, 504 U.S. at 560-61 (internal quotations and citations omitted). Since these elements are not mere pleading requirements but rather jurisdictional prerequisites, “each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.” Id. at 561.

         The Supreme Court's 2016 decision in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), asrevised (May 24, 2016), a case brought under the Fair Credit Reporting Act, bears heavily on the instant analysis for what the Court said regarding the ability to claim an intangible injury as the basis for standing-the very issue at the heart of Credit Control's motion. As the Third Circuit recently observed, the Supreme Court in Spokeo “highlighted that there are two elements that must be established to prove an injury in fact-concreteness and particularization, ” however, the Court “rejected the argument that an injury must be ‘tangible' in order to be ‘concrete.'” In reHorizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 637 (3d Cir. 2017) (citing Spokeo, 136 S.Ct. at 1545, 1549). The Court in Spokeo “explained that ‘both history and the judgment of Congress play important roles' in determining whether ‘an intangible injury constitutes injury in fact.'” In re Horizon, 846 F.3d at 637 (quoting Spokeo, 136 S.Ct. at 1549). Thus, Spokeo indicates that an intangible harm can satisfy the injury-in-fact requirement of Article III if (1) “‘an alleged intangible harm' is closely related ‘to a harm that has traditionally been regarded ...

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