Palmer v. Idalia Llorens Collection Agency, Inc.

434 F.Supp.3d 462

Samantha PALMER, Plaintiff,

v.IDALIA LLORENS COLLECTION AGENCY, INC., Universidad del Sagrado Corazon, Defendants.

CIVIL ACTION NO. 1:19-CV-00341-MJT

United States District Court, E.D. Texas, Beaumont Division.

Signed January 21, 2020

Shawn Jaffer, Shawn Jaffer Law Firm PLLC, Frisco, TX, Andrew Paul Gertz, Gertz Adair Law Firm, Beaumont, TX, for Plaintiff.

Anthony W. Hernandez, Anthony W. Hernandez, Attorney at Law, Kevin Michael Acevedo-Carlson, The Gonzalez Law Group PLLC, Houston, TX, for Defendants.

OPINION AND ORDER OF TRANSFER

Michael J. Truncale, United States District Judge

Before the Court is Defendant Universidad del Sagrado Corazon ("the University")'s motion to dismiss the plaintiff's complaint for lack of personal jurisdiction and failure to state a claim for relief or alternatively to transfer venue to Puerto Rico. [Dkt. 22]. The Court has considered the motion, all other relevant filings, and the applicable law. For the reasons stated below, the Court finds that the case should be transferred in its entirety¹ to the United States District Court for the District of Puerto Rico.

I. BACKGROUND

A. Procedural Background

Ms. Palmer filed her complaint with this Court on August 6, 2019, against the University and Idalia Llorens Collection Agency, Inc. ("Idalia"), asserting claims for wrongful debt collection under the Fair Debt Collection Practices Act ("FDCPA") and the Texas Debt Collection Act ("TDCA"). [Dkt. 1]. On September 11, 2019, Idalia filed an answer. [Dkt. 9]. Two weeks later, the University filed its answer on September 26, 2019. [Dkt. 11]. On November 5, 2019, the University filed a motion to dismiss for lack of personal jurisdiction and failure to state a claim for relief or alternatively to transfer venue. [Dkt. 22]. Ms. Palmer responded to the University's motion to dismiss on December 2, 2019. [Dkt. 26]. Subsequently, the University filed its reply on December 9, 2019. [Dkt. 28]. Additionally, pending before the Court are the University's motion for a protective order [Dkt. 21], Ms. Palmer's motion to change venue [Dkt. 31], the University's motion for a protective order [Dkt. 33], and the University's motion for a hearing [Dkt. 35].

B. Factual Background

The present dispute arises out of an alleged wrongful debt collection. [Dkt. 1]. The consumer debt arises from Ms. Palmer's attendance at the University. Id. However, Ms. Palmer's education was interrupted on October 2, 2017 due to Hurricane Maria. Id. Ms. Palmer alleges that the University demanded tuition from her for the 2018 spring semester, although the campus was closed due to Hurricane Maria's damage. Id.

Allegedly, the University mailed a tuition invoice in the amount of $5,568.68 to Ms. Palmer. Id. Then, Ms. Palmer contends that the University hired Idalia as a third-party debt collector. Id. Plaintiff states that Idalia "added an unauthorized 30% ($1,666.86) collection fee to the alleged balance owed." Id.

Then, Idalia mailed a collection letter to Ms. Palmer that allegedly violated the FDCPA. Id. More specifically, Ms. Palmer asserts three FDCPA violations, all of which concern mandatory notices of statutory rights under the FDCPA.² Id. Additionally, Ms. Palmer alleges that the University violated several provisions of the TDCA by employing Idalia to collect on the consumer debt.³ Id.

II. RELEVANT LAW

A. Personal Jurisdiction

Federal Rule of Civil Procedure 12(b)(2) requires a court to dismiss a claim if the court does not have personal jurisdiction over the defendant. FED. R. CIV. P. 12(b)(2). Therefore, when a nonresident defendant files a motion to dismiss for lack of personal jurisdiction, the burden shifts to the plaintiff to establish that in personam jurisdiction exists. Bullion v. Gillespie , 895 F.2d 213, 217 (5th Cir. 1990) (citing WNS, Inc. v. Farrow , 884 F.2d 200, 202 (5th Cir. 1989) ); Wilson v. Belin , 20 F.3d 644, 648 (5th Cir. 1994) ; Bulkley & Assocs., LLC v. Occupational Safety & Health Appeals Bd. of California , No. 4:18-CV-642, 2019 WL 2411544, at *1 (E.D. Tex. June 7, 2019).

To satisfy that burden, the party seeking to invoke the court's jurisdiction must "present sufficient facts as to make out only a prima facie case supporting jurisdiction" if the court rules on the motion without an evidentiary hearing.⁴ Alpine View Co. v. Atlas Copco AB , 205 F.3d 208, 215 (5th Cir. 2000). However, if the court holds an evidentiary hearing, the plaintiff "must establish jurisdiction by a preponderance of the evidence." In re Chinese Manufactured Drywall Prods. Liab. Lit. , 742 F.3d 576, 585 (5th Cir. 2014) (citing Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co. , 517 F.3d 235, 241–42 (5th Cir. 2008) ). When considering a motion to dismiss, allegations in the plaintiff's complaint are taken as true, except to the extent that they are contradicted by the defendant. Stuart v. Spademan , 772 F.2d 1185, 1192 (5th Cir. 1985) ; Wyatt v. Kaplan , 686 F.2d 276, 282–83 n. 13 (5th Cir. 1982) ; accord Black v. Acme Mkts., Inc. , 564 F.2d 681, 683 n. 3 (5th Cir. 1977). Any material and genuine, conflicting facts are resolved in favor of the plaintiff for the purpose of determining whether a prima facie case exists. Jones v. Petty-Ray Geophysical Geosource, Inc. , 954 F.2d 1061, 1067 (5th Cir. 1992).

A federal court may exercise personal jurisdiction over a nonresident defendant if "(1) the long-arm statute of the forum state creates personal jurisdiction over the defendant; and (2) the exercise of personal jurisdiction is consistent with the due process guarantees of the United States Constitution." Revell v. Lidov , 317 F.3d 467, 469 (5th Cir. 2002) ; see also FED. R. CIV. P. 4(k)(2). Therefore, the Court must look to the Texas long-arm statute. Pedelahore v. Astropark, Inc. , 745 F.2d 346, 347 (5th Cir. 1984). The Texas long-arm statute is coextensive with the federal constitutional limits of due process and normally generates an inquiry limited to the scope of the Fourteenth Amendment's Due Process Clause. Stroman Realty, Inc. v. Wercinski , 513 F.3d 476, 482 (5th Cir. 2008) ; Religious Tech. Ctr. v. Liebreich , 339 F.3d 369, 373 (5th Cir. 2003).

The Texas long-arm statute states:

In addition to other acts that may constitute doing business, a nonresident does business in this state if the nonresident:

(1) Contracts by mail or otherwise with a Texas resident and either party is to perform the contract in whole or in part of this state; [or]

(2) Commits a tort in whole or in part in this state;...

TEX. CIV. PRAC. & REM. CODE ANN. § 17.042. " ‘[N]onresident’ includes: (1) an individual who is not a resident of this state; and (2) a foreign corporation, joint-stock company, association, or partnership." Id. at § 17.041.

Whether or not the Texas long-arm statute encompasses invoices mailed by an extraterritorial university, the Court finds that exercising personal jurisdiction over the University in the Eastern District of Texas would violate due process. The Due Process Clause of the Fourteenth Amendment prohibits the exercise of personal jurisdiction over a nonresident defendant unless the defendant has meaningful "contacts, ties, or relations" with the forum state. Int'l Shoe Co. v. Wash. , 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Jurisdiction may be general or specific. Wilson v. Belin , 20 F.3d 644, 647 (5th Cir. 1994). Where a defendant has "continuous and systematic general business contacts" with the forum state, the court may exercise general jurisdiction over any action brought against that defendant. Helicopteros Nacionales de Colombia, S.A. v. Hall , 466 U.S. 408, 415–16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Where the contacts are less pervasive, the court may still exercise specific jurisdiction "in a suit arising out of or related to the defendant's contacts with the forum." Id. at 414 n. 8, 104 S.Ct. 1868 (1984). This case presents only the question of specific jurisdiction.⁵

The constitutional requirement for specific jurisdiction is that the defendant has "minimum contacts" with the forum state such that imposing a judgment would not "offend traditional notions of fair play and substantial justice." Int'l Shoe , 326 U.S. at 316, 66 S.Ct. 154. The Fifth Circuit has held that the specific personal jurisdiction inquiry involves a three-step analysis:

(1) Whether the defendant ... purposefully directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there;

(2) Whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and

(3) Whether the exercise of personal jurisdiction is fair and reasonable.

Stroman Realty, Inc. v. Wercinski , 513 F.3d 476, 484 (5th Cir. 2008) (citing Burger King Corp. v. Rudzewicz , 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ).

1. Minimum Contacts

To determine whether the University has "minimum contacts" with Texas, we must identify some act whereby it "purposefully availed" itself of the privilege of conducting activities in Texas, "thus invoking the benefits and protections of its laws." Hanson v. Denckla , 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). The University's conduct must show that it "reasonably anticipat[ed] being haled into court" in Texas. World-Wide Volkswagen Corp. v. Woodson (Volkswagen I) , 444 U.S. 286, 297, 100 S.Ct. 580, 62 L.Ed.2d 490 (1980) ; see also Burger King , 471 U.S. at 472, 105 S.Ct. 2174 (1977) (Stevens, J., concurring) (reasoning that the person should have fair warning that their activity may subject them to jurisdiction in the foreign sovereign).

It is well established that "merely contracting with a resident of the forum state is insufficient to subject the nonresident to the forum's jurisdiction." Freudensprung v. Offshore Technical Services, Inc. , 379 F.3d 327, 344 (5th Cir. 2004) (citing Holt Oil & Gas Corp. v. Harvey , 801 F.2d 773, 778 (5th Cir. 1986) ); Colwell Realty Investments v....