Strange v. GMR Processing LLC

1

CLINTON STRANGE, Plaintiff, v. GMR PROCESSING LLC and APE PROCESSING LLC, Defendants.

Civil Action No. 1:21-cv-04469-SDG

United States District Court, N.D. Georgia, Atlanta Division

March 28, 2022

OPINION AND ORDER

Steven D. Grimberg, United States District Court Judge

This matter is before the Court on Plaintiff's motion for default judgment [ECF 36] and response to an order to show cause [ECF 41]. For the following reasons, Plaintiff's motion is GRANTED IN PART and DENIED IN PART.

I. Background

Proceeding pro se, Plaintiff Clinton Strange initiated this action on December 14, 2020, in the United States District Court for the District of Maine.^[1] His original Complaint alleged that the “Juice Man, ”^[2] a fictitious entity, willfully violated the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227(b)(1)(A)(iii), and the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692.

The “Juice Man” purportedly engaged in the collection of consumer debts.^[3]On September 23, 2019, Strange received a prerecorded voice call initiated by the “Juice Man” concerning debt collection.^[4] The telephone number reflected an area code (207) in Maine.^[5] Strange resides in Louisiana.^[6] He later returned the call and spoke with a female agent who indicated the communication concerned an attempt to collect on a credit card debt of approximately $1 200 that had been defaulted on in 2012.^[7] Strange alleged that the agent ultimately became verbally abusive and threatened him with a civil suit and other legal action.^[8]

Because Strange was initially unable to identify the actor behind the “Juice Man”, he sought and obtained pre-service discovery to uncover the names of the true defendants.^[9] On April 27, 2021, Strange filed an Amended Complaint substituting GMR Processing LLC (GMR) and A.P.E. Processing LLC (APE) for the “Juice Man.”^[10] The amended pleading makes the same general allegations as the original pleading, asserting that the September 23 call was placed or initiated by Defendants.^[11] Strange asserts causes of action for violations of the TCPA; the FDCPA; the Georgia Fair Business Practices Act; and, the Georgia Unfair or Deceptive Practices Toward the Elderly Act.^[12] APE is a Florida limited liability company (as a successor by conversion from a Georgia LLC).^[13] Its registered agent was served with process on May 3, 2021.^[14] GMR is a Georgia limited liability company.^[15] Its registered agent was served with process on May 21, 2021.^[16]

On May 28, 2021, Strange filed a motion for entry of default against APE, which was granted the same day.^[17] On June 21, he filed a similar motion as to GMR, which was granted the following day.^[18] On July 30, Strange filed a motion for default judgment against both Defendants.^[19] On September 29, however, the District of Maine court entered an Order to Show Cause questioning whether it had personal jurisdiction over Defendants.^[20] Strange responded by requesting that the court transfer the action to this Court in the event it concluded it lacked personal jurisdiction.^[21] On October 28, the district court did just that and transferred the case here.^[22] Strange's motion for default judgment, however, remained pending. It is that motion the Court now considers.

II. Applicable Law

Federal Rule of Civil Procedure 55 establishes a two-step process for a party to secure a default judgment. First, a party seeking default must obtain a Clerk's entry of default pursuant to Rule 55(a) by providing evidence “by affidavit or otherwise” that the opposing party “has failed to plead or otherwise defend.” Fed.R.Civ.P. 55. See also Frazier v. Absolute Collection Serv., Inc., 767 F.Supp.2d 1354, 1360 n.1 (N.D.Ga. 2011) (“First the clerk must enter a party's default . . . the party [seeking the default judgment] must then apply to the court for a default judgment.”) (cleaned up) (citing Fed.R.Civ.P. 55(a)). Second, after the Clerk has made an entry of default, the party seeking the judgment must file a motion under Rule 55(b)(1) or (2).

A default entered under Rule 55(a) constitutes an admission of all well-pleaded factual allegations in a complaint. Beringer v. Hearshe, Kemp, LLC, No. 1:10-cv-1399-WSD-ECS, 2011 WL 3444347, at *2 (N.D.Ga. Aug. 8, 2011) (citing Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005)). An entry of a default by the Clerk, however, does not automatically warrant the Court's entry of default judgment, as a defaulting defendant “is not held to admit facts that are not well-pleaded or to admit conclusions of law.” Frazier, 767 F.Supp.2d at 1362. See also United States v. Khan, 164 Fed.Appx. 855, 858 (11th Cir. 2006) (“[A] default judgment may not stand on a complaint that fails to state a claim.”). Thus, when considering a motion for default judgment, “a court must investigate the legal sufficiency of the allegations and ensure that the complaint states a plausible claim for relief.” Functional Prod. Trading, S.A. v. JITC, LLC, No. 1:12-cv-0355-WSD, 2014 WL 3749213, at *3 (N.D.Ga. July 29, 2014). See also Tyco Fire & Sec., LLC v. Alcocer, 218 Fed.Appx. 860, 863 (11th Cir. 2007). Ultimately, “[t]he entry of a default judgment is committed to the discretion of the district court.” Beringer, 2011 WL 3444347, at *2 (citing Hamm v. DeKalb Cnty., 774 F.2d 1567, 1576 (11th Cir. 1985)).

Notably, a defendant in default does not admit allegations relating to the amount of damages. Frazier, 767 F.Supp.2d at 1365. Thus, if a defendant seeking a default judgment requests an uncertain or speculative damage amount, “[a] court has an obligation to assure that there is a legitimate basis for any damage award it enters.” Anheuser Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003).

III. Discussion

A. Jurisdiction

The Court has personal jurisdiction over GMR, which is alleged to be a limited liability company organized under the laws of the State of Georgia.^[23]Although APE was originally created as a Georgia LLC, it was converted to a Florida LLC on March 28, 2017, and dissolved as a Georgia LLC shortly thereafter.^[24] Thus, at the time of the call relevant to Strange's claims and at the time this action was initiated, APE does not appear to have had a connection to the State of Georgia and the Amended Complaint does not supply one.

“The plaintiff has the burden of establishing a prima facie case of personal jurisdiction over a nonresident defendant.” Meier ex rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1268-69 (11th Cir. 2002) (citing Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988)).

Before granting a motion for default judgment, the Court must ensure that it has subject matter jurisdiction over the action and personal jurisdiction over the defendant. Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1217 (11th Cir. 2009) (explaining that a default judgment is void if the court that granted the default judgment lacked jurisdiction over the subject matter or parties); Burke v. Smith, 252 F.3d 1260, 1263 (11th Cir. 2001) (same); Rash v. Rash, 173 F.3d 1376, 1381 (11th Cir. 1999) (“A defendant may defeat subsequent enforcement of a default judgment in another forum by demonstrating that the judgment issued from a court lacking personal jurisdiction even if the court entering the default determined that it had personal jurisdiction over the defendant.”). The Court is unable to conclude that it has personal jurisdiction over APE based on the operative pleading.

The Supreme Court recognizes two types of personal jurisdiction: general and specific. Bristol-Myers Squibb Co. v. Super. Ct. of Cal., San Francisco Cnty., 137 S.Ct. 1773, 1779-80 (2017). “A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (quoting Int'l Shoe Co. v. Wash. Office of Unemployment Comp. & Placement, 326 U.S. 310, 317 (1945)). In contrast, specific jurisdiction “depends on an affiliation between the forum and the underlying controversy.” Id. (citation omitted).

That the Amended Complaint does not allege a basis for personal jurisdiction over APE is unsurprising given the procedural history of this case: Strange filed the amended pleading before the District of Maine court transferred the action here. As a result, this Court (as discussed further below) will provide Strange an opportunity to show why this Court has personal jurisdiction over APE, or alternatively that personal jurisdiction exists over APE in a United States District Court in the State of Florida.

B. Fair Debt Collection Practices Act

In Count I, Strange alleges that GMR violated the FDCPA.^[25] He asserts he has suffered “monetary loss, fear, stress, mental anguish, emotional stress, acute embarrassment, anxiety, loss of sleep, and suffering.”^[26] To establish a violation of the FDCPA, the plaintiff must show that

(1) [he][has] been the object of collection activity arising from a consumer debt; (2) the defendant attempting to collect the debt qualifies as a “debt collector” under the Act; and (3) the defendant has engaged in a prohibited act or has failed to perform a requirement imposed by the FDCPA.

Buckley v. Bayrock Mortg. Corp., No. CIV. A. 1:09-CV-1387-TWT, 2010 WL 476673, at *6 (N.D.Ga. Feb. 5, 2010) (citations omitted).

1. Collection Activity

The first element of an FDCPA claim has two requirements. First there must be collection activity; second, the activity must relate to a consumer debt. Frazier v. Absolute Collection Serv., Inc., 767 F.Supp.2d 1354, 1363 (N.D.Ga. 2011)...