Zellerino v. Roosen

118 F.Supp.3d 946

Janice ZELLERINO, Plaintiff,

v.Andrew ROOSEN, and Salem Shubash d/b/a Armored Investment Group, Defendants.

Case No. 14–12715.

United States District Court, E.D. Michigan, Southern Division.

Signed July 29, 2015.

Amanda Marie Longendyke, Carl Schwartz, Ian B. Lyngklip, Lyngklip & Associates Consumer Law Center, PLC, Southfield, MI, for Plaintiff.

Robert J. Hahn, Cummings, McClorey, Davis & Acho, P.L.C., Livonia, MI, for Defendants.

OPINION AND ORDER GRANTING IN PART DEFENDANTS' MOTION FOR JUDGMENT ON THE PLEADINGS, DISMISSING DISCOVERY MOTIONS AS MOOT, AND DISMISSING COMPLAINT WITHOUT PREJUDICE

DAVID M. LAWSON, District Judge.

Plaintiff Janice Zellerino has brought a class action lawsuit against defendants Andrew Roosen and Salem Shubash under the Fair Credit Reporting Act (FCRA). She alleges that the defendants impermissibly obtained her consumer report—and the reports of thousands of other people—through a company called Amored Investment Group for the sole purpose of soliciting debt relief services for their other companies. The defendants filed a motion for judgment on the pleadings and summary judgment, arguing, among other things, that the Court lacks personal jurisdiction. The plaintiff opposed the defendants' motion, arguing that the Court had personal jurisdiction because the defendants' actions impacted the plaintiff in Michigan. The Court heard oral argument on the motion on June 19, 2015. At the hearing, the Court noted that neither party had addressed the Supreme Court's decision of Walden v. Fiore, ––– U.S. ––––, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014), which this Court believed had a significant bearing on the question of personal jurisdiction in this case. The Court took the motion under advisement and permitted the parties to submit supplemental briefs addressing the case. Both parties have done so. After reviewing their submissions, the Court believes it must dismiss the case for lack of personal jurisdiction over the named defendants. Therefore, the case will be dismissed without prejudice.

I.

Plaintiff Janice Zellerino is a Michigan citizen. According to the plaintiff's complaint and the parties' motion papers, defendants Andrew Roosen and Salem Shubash operate a common law partnership called Amored [not "Armored"] Investment Group. The plaintiff alleges in conclusory style that Roosen and Shubash are "doing business in Michigan," but there are no facts to back up those allegations, and the plaintiff says that their business office is located at 9241 Irvine Boulevard, Irvine, California.

The plaintiff alleges that the defendants' partnership exists only to obtain consumer reports for use by the defendants' other businesses, which include Armored Financial Solutions, Armored Financial Services, Inc., Armored Investment Group, Armored Debt Center, Armored Home Loans, and LHDR or Legal Helpers Debt Resolution, all of which operate from the single office in Irvine, California.

The plaintiff alleges that the defendants unlawfully accessed her consumer report on March 21, 2012 while acting under the false trade name of Amored Investment Group. The entry on her credit report reads "PRM–Amored Investment Group" and the address for the company is listed as the Irvine Boulevard address. The plaintiff contends that the defendants did not have any permissible purpose to access her credit report and instead sought her credit information for the purpose of soliciting debt relief services for their other companies. The plaintiff alleges that the defendants falsely certified to Equifax or its agents that they would use the reports for permissible purposes only, they did not have a permissible purpose to access the report, and the plaintiff has suffered damages as a result, namely an invasion of privacy. The complaint alleges that the defendants have also obtained the credit reports of thousands of other people.

On July 11, 2014, the plaintiff filed a putative class-action lawsuit against the defendants for violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq. Zellerino seeks to represent "all persons within the United States whose identities in the records of Equifax as being the subject of consumer reports obtained by Amored Investment Group within the five years preceding the filing of the complaint."

On April 21, 2015, the defendants filed a motion for a judgment on the pleadings and for summary judgment. They argue that (1) the plaintiff makes no allegation of any injuries that caused her damages or alleged any improper use of any information that the defendants accessed; (2) the plaintiff cannot pierce the corporate veil and hold the defendants liable for any alleged wrongdoing; (3) the plaintiff's class definition is fatally defective because it does not define a class that has been subject to wrongdoing by the defendants, references "Amored Investment Group" but not defendants Roosen and Shubash, and the statute of limitations for bringing a claim is two years, but the plaintiff proposes a five year period for inclusion in the class; and (4) the plaintiff cannot establish personal jurisdiction over the defendants.

The first three arguments have no merit. The summary judgment aspect of the motion is premature. The plaintiff has not had an opportunity for meaningful discovery, and she has shown the need for such discovery through her affidavit under Federal Rule of Civil Procedure 56(d). The plaintiff's complaint states a plausible claim under the FCRA, since she is not required to establish an injury because the FCRA provides for statutory damages and the plaintiff has pleaded a plausible claim against the defendants in their individual capacities. And the plaintiff's proposed class definition appropriately includes those who may be entitled to relief and those who may not. Moreover, the plaintiff has stated plausible claims against the defendants in their personal capacities, and the possibility that some class members may have differing statute of limitations periods does not defeat the proposed class definition.

The fourth argument—addressing personal jurisdiction over the defendants—presents the plaintiff with some difficulties, especially in the wake of several recent decisions on the subject by the Supreme Court.

II.

The defendants' motion is styled as a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c). However, they challenge personal jurisdiction, which calls into play Federal Rule of Civil Procedure 12(b)(2).

In a motion to dismiss for want of personal jurisdiction under Rule 12(b)(2), the plaintiff has the burden of proving the court's jurisdiction over the defendants. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir.2002). "[I]n the face of a properly supported motion for dismissal, the plaintiff may not stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the court has jurisdiction." Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). However,

[w]here, as here, the district court relies solely on written submissions and affidavits to resolve a Rule 12(b)(2) motion, rather than resolving the motion after either an evidentiary hearing or limited discovery, the burden on the plaintiff is "relatively slight," Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir.1988), and "the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal." Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). In that instance, the pleadings and affidavits submitted must be viewed in a light most favorable to the plaintiff, and the district court should not weigh "the controverting assertions of the party seeking dismissal." Id. at 1459.

Air Prods. & Controls, Inc. v. Safetech Int'l., Inc., 503 F.3d 544, 549 (6th Cir.2007). A plaintiff "can meet this burden by ‘establishing with reasonable particularity sufficient contacts between [the defendant] and the forum state to support jurisdiction.’ " Neogen, 282 F.3d at 887 (citations omitted).

A court may exercise its adjudicatory power over a party based on general personal jurisdiction or specific personal jurisdiction. Indah v. U.S. S.E.C., 661 F.3d 914, 920 (6th Cir.2011). General jurisdiction allows a plaintiff to sue a defendant "on any and all claims against it, wherever in the world the claims may arise." Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 751, 187 L.Ed.2d 624 (2014). General jurisdiction exists if a defendant's contacts with a 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, ––– U.S. ––––, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 317, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). The plaintiff does not suggest that general jurisdiction exists in Michigan over Roosen or Shubash.

Specific jurisdiction allows a plaintiff to sue a defendant only for claims that arise out of the defendant's activities in the forum state. Ibid. A defendant is subject to specific jurisdiction "if the defendant has ‘certain minimum contacts with [the State] such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." ’ " Ibid. (quoting International Shoe, 326 U.S. at 316, 66 S.Ct. 154 ); see also J. McIntyre Mach., Ltd. v. Nicastro, ––– U.S. ––––, 131 S.Ct. 2780, 2788, 180 L.Ed.2d 765 (2011) (recognizing that "contact with and activity directed at a sovereign may justify specific jurisdiction ‘in a suit arising out of or related to the defendant's contacts with the forum’ ") (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) ). To satisfy this standard, the defendant must have, among other things, " ‘purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking...