Mary Rozzi Church v. Fin. Recovery Servs., Inc., Case # 16-CV-6391-FPG

MARY ROZZI CHURCH, Plaintiff, v. FINANCIAL RECOVERY SERVICES, INC., Defendant.

Case # 16-CV-6391-FPG

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NEW YORK

March 19, 2018

DECISION AND ORDER

INTRODUCTION

Plaintiff Mary Rozzi Church brings this putative class action against Defendant Financial Recovery Services ("FRS") for an alleged violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692-1692p. Specifically, Plaintiff claims that Defendant violated § 1692e(10) of the FDCPA by sending a form collection letter that "use[d] . . . false representation or deceptive means to collect or attempt to collect [a] debt." See 15 U.S.C. § 1692e(10).

Plaintiff filed her Complaint on June 10, 2016, ECF No. 1, and Defendant answered on July 6, 2016, ECF No. 5. On September 28, 2016, Defendant moved to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction. ECF No. 17. In the alternative, Defendant moved for summary judgment under Federal Rule of Civil Procedure 56(a). Id. On May 11, 2017, Plaintiff moved for class certification. ECF No. 35. Plaintiff then moved for summary judgment under Federal Rule of Civil Procedure 56(a) on May 30, 2017. ECF No. 41. In response, on June 26, 2017, Defendant filed a "Renewed Motion/Cross-Motion for Summary Judgment." ECF No. 46. For the reasons that follow, Defendant's Motion to Dismiss (ECF No. 17) is DENIED, Plaintiff's Motion for Summary Judgment (ECF No. 41) is DENIED, Defendant's original Motion for Summary Judgment (ECF No. 17) is GRANTED, Defendant's Renewed Motion/Cross-Motion for Summary Judgment (ECF No. 46) is DENIED AS MOOT, and Plaintiff's Motion for Class Certification (ECF No. 35) is DENIED AS MOOT.

BACKGROUND¹

On or about July 13, 2015, Defendant sent Plaintiff a form collection letter, which she received shortly thereafter. The letter indicated that Plaintiff owed $2,170.50 and that Defendant was authorized to offer Plaintiff various "settlement opportunities." Accordingly, the letter set forth three offers to settle Plaintiff's debt for less than the full amount due. After detailing those offers, it stated:

These settlement offers may have tax consequences. We recommend that you consult independent tax counsel of your own choosing if you desire advice about any tax consequences which may result from this settlement. FRS is not a law firm and will not initiate any legal proceedings or provide you with legal advice. The offers of settlement in this letter are merely offers to resolve your account for less than the balance due.

E.g., ECF No. 41-2, at 1.

LEGAL STANDARD

I. Motion to Dismiss Under Rule 12(b)(1)

A Rule 12(b)(1) motion is the proper channel for dismissal "when the district court lacks the statutory or constitutional power to adjudicate" a matter. Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). "At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice" to establish standing. See Carter v. HealthPort Techs., LLC, 822 F.3d 47, 56 (2d Cir. 2016) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)). Where a defendant brings a facial Rule 12(b)(1) motion, "based solely on the allegations of thecomplaint or the complaint and exhibits attached to it," id., a court must determine whether the complaint and any attached exhibits "allege facts that affirmatively and plausibly suggest that [the plaintiff] has standing to sue," Amidax Trading Grp. v. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011). All facts are drawn "from the complaint and from the exhibits attached thereto" and "assume[d] to be true unless contradicted by more specific allegations or documentary evidence." Id. Issues raised in a Rule 12(b)(1) motion should be resolved first, since a court must confirm that it has subject-matter jurisdiction before proceeding to the merits of a claim. See Rhulen Agency, Inc. v. Ala. Ins. Guar. Ass'n, 896 F.2d 674, 678 (2d Cir. 1990); SEC v. Rorech, 673 F. Supp. 2d 217, 220-21 (S.D.N.Y. 2009).

II. Motion for Summary Judgment

Summary judgment is warranted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The Court must take genuinely disputed facts in the light most favorable to the nonmoving party. See Scott v. Harris, 550 U.S. 372, 380 (2007) (citing Fed. R. Civ. P. 56(c)). If, based on the admissible evidence, a reasonable jury could return a verdict in favor of the nonmoving party, summary judgment is not appropriate. E.g., Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545-46 (2d Cir. 2010) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986)). In deciding whether to grant summary judgment, the Court must resolve "all permissible inferences and credibility questions . . . in favor of the [nonmoving] party." Id. When considering cross-motions for summary judgment, the same analysis applies, and the Court examines each motion on its own merits. See, e.g., Specialty Nat'l Ins. Co. v. English Bros. Funeral Home, 606 F. Supp. 2d 466, 470 (S.D.N.Y. 2009).

DISCUSSION

I. The FDCPA

The FDCPA seeks to, among other things, "eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(e). At its core, "the FDCPA is 'primarily a consumer protection statute.' " Avila v. Riexinger & Assocs., 817 F.3d 72, 75 (2d Cir. 2016) (quoting Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 95 (2d Cir. 2008)). Accordingly, its terms should be construed "in liberal fashion" to effectuate that "underlying [c]ongressional purpose." Id. (quoting Vincent v. The Money Store, 736 F.3d 88, 98 (2d Cir. 2013)).

II. Standing²

Article III of the U.S. Constitution limits the adjudicatory power of federal courts to "[c]ases" and "[c]ontroversies." U.S. Const. Art. III, § 2. Thus, from the outset, federal courts do not have subject-matter jurisdiction over cases in which plaintiffs lack the requisite standing to bring suit. See, e.g., John v. Whole Foods Mkt. Grp., Inc., 858 F.3d 732, 735 (2d Cir. 2017). Constitutional standing requires that a plaintiff "have suffered (1) a concrete, particularized and actual or imminent injury-in-fact (2) that is traceable to [the] defendant's conduct and (3) likely to be redressed by a favorable decision." Woods v. Empire Health Choice, Inc., 574 F.3d 92, 96 (2d Cir. 2009); see also Lujan, 504 U.S. at 560 (describing an "injury in fact" as the "invasion of a legally protected interest"). A plaintiff invoking federal jurisdiction "must demonstrate standing for each claim and form of relief sought." Cacchillo v. Insmed, Inc., 638 F.3d 401, 404 (2d Cir. 2011) (quoting Baur v. Veneman, 352 F.3d 625, 642 n.15 (2d Cir. 2003)).

Defendant relies on Spokeo v. Robins, 136 S. Ct. 1540 (2016), to argue that Plaintiff has not articulated the requisite injury-in-fact. See ECF No. 19, at 8-12. In Spokeo, the Supreme Court explained that a statutory violation alone does not necessarily create standing by the simple virtue of its occurrence. See 136 S. Ct. at 1549. An injury-in-fact requires concreteness—in that vein, the Spokeo Court reiterated that the violation of a procedural right "divorced from any concrete harm" would not satisfy constitutional standing requirements. Id. In disavowing the automatic assumption of Article III standing for bare statutory violations, the Spokeo Court still recognized that, in certain circumstances, "the violation of a procedural right granted by statute can be sufficient" for standing purposes. Id. ("In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified."). To assess that sufficiency post-Spokeo, the Second Circuit looks to whether "Congress conferred the procedural right to protect a plaintiff's concrete interests' as to the harm in question, and . . . [whether] 'the procedural violation presents a risk of real harm to that concrete interest.' " E.g., Katz v. Donna Karan Co., L.L.C., 872 F.3d 114, 119 (2d Cir. 2017) (quoting Strubel v. Comenity Bank, 842 F.3d 181, 190 (2d Cir. 2016)).

By Defendant's account, "Spokeo recognized that a violation of the FDCPA alone does not automatically amount to an injury in fact." ECF No. 19, at 15. This suggestion appears to be rooted in the assumption that any violation of the FDCPA is, by definition, procedural. See id. at 14-15 ("In Spokeo, the Supreme Court emphasized that a plaintiff must show more than a statutory violation. . . . Plaintiff merely alleges that FRS committed a procedural violation, unconnected to any concrete harm."). To the extent that Defendant understands all bare statutory violations to be procedural, that is incorrect—there would be no logical reason to distinguish between "procedural" and "substantive" violations of a statute if "procedural" was simply synonymous for "statutory." Such a view ignores the longstanding recognition that an injury-in-fact "may exist solely by virtueof 'statutes creating legal rights, the invasion of which creates standing.' " See Havens Realty Corp. v. Coleman, 455 U.S. 363, 373-74 (1982) (quoting Warth v. Seldin, 422 U.S. 490, 500 (1975)) (discussing the substantive right "to truthful information concerning the availability of housing" that Congress established in the Fair Housing Act)). Indeed, Spokeo's focus on the violation of procedural rights did not alter its express acknowledgement "that Congress may 'elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate at law.' " See Spokeo, 136 S. Ct. at 1549.

Regardless of whether § 1692e³ creates a substantive or procedural right, Plaintiff has standing to sue for an alleged violation of its terms. See Ceban v. Capital Mgmt. Servs., L.P., No. 17-CV-4554 (ARR) (CLP), 2018 WL 451637, at *4 (E.D.N.Y. Jan. 17, 2018). If § 1692e is understood to create a substantive right—the right to be free from "false,...