1 2 FILED IN THE U.S. DISTRICT COURT 3 EASTERN DISTRICT OF WASHINGTON Jul 14, 2020 4 SEAN F. MCAVOY, CLERK 5
6 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 7 DANIEL MORGAN, an individual, and 8 all those similarly situated, NO. 2:20-CV-00157-SAB 9 Plaintiff, 10 ORDER DENYING v. DEFENDANT’S MOTION TO 11 DISMISS AND REMANDING 12 BANK OF AMERICA, N.A., TO SUPERIOR COURT
13 Defendant. 14 15 Before the Court is Defendant’s Fed. R. Civ. P. 12(b)(1) and 12(b)(6) 16 Motion to Dismiss, ECF No. 3. Having considered the parties’ briefs and oral 17 arguments and the relevant caselaw, the Court DENIES Defendant’s Motion to 18 Dismiss and GRANTS Plaintiff’s Construed Motion to Remand the case to the 19 Spokane County Superior Court. 20 BACKGROUND 21 This case stems from a credit card debt Plaintiff incurred with FIA Card 22 Services, N.A., which initiated a collection action against Plaintiff in the Spokane 23 County District Court in 2012. While the action was ongoing, FIA Card Services 24 merged into Defendant in 2014, and Defendant continued to litigate under FIA’s 25 name “for more than half a decade.” ECF No. 5 at 8. Plaintiff alleges that 26 Defendant’s collection activities violated the Fair Debt Collection Practices Act 15 27 U.S.C. § 1692 et seq. (“FDCPA”) in three ways. First, on or about February 23, 28 2015, the Spokane County District Court issued a Notice for Dismissal for Want of 1 Prosecution, effective after 30 days, unless Defendant undertook timely action as 2 specified in the Notice. Defendant did not undertake timely action as specified, but 3 instead filed two Motions for Summary Judgment on or about June 19, 2017 and 4 October 31, 2019, respectively. Plaintiff alleges that Defendant attempted to collect 5 money from Plaintiff more than 30 days after the Spokane County District Court’s 6 February 23, 2015 Notice, in violation of 15 U.S.C. §§ 1692e(2) and 1692e(5). 7 Second, in the debt collection complaint, Defendant claimed that Plaintiff owed 8 $13,559.85 and Plaintiff’s last payment was on October 4, 2010. But in its October 9 31, 2019 Motion for Summary Judgment, Defendant averred that Plaintiff’s last 10 payment was made on October 18, 2013 in the amount of $50. Plaintiff argues that 11 Defendant did not credit any payments to the $13,559.85 debt since October 4, 12 2010. Plaintiff alleges that Defendant violated 15 U.S.C. § 1692f(1) by attempting 13 to collect $13,559.85, the full amount alleged due on October 4, 2010, even as 14 Defendant acknowledged Plaintiff’s last payment was on October 18, 2013 in the 15 amount of $50. Third, Plaintiff alleges Defendant violated 15 U.S.C. § 1692e(14) 16 by using the name “FIA Card Services,” a name other than its own true name, in 17 debt collection proceedings. 18 Plaintiff filed his Complaint in the Spokane County Superior Court on 19 March 18, 2020. On April 16, Defendant removed this case to federal court on the 20 basis of federal question jurisdiction. On May 4, Defendant moved to dismiss 21 Plaintiff’s claims with prejudice pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), 22 arguing that Plaintiff lacks Article III standing, that Defendant was not a “debt 23 collector” under the FDCPA, and that Plaintiff’s claims are time-barred by the 24 FDCPA’s one-year statute of limitations. In response, Plaintiff conceded that he 25 “allege[d] nowhere that he suffered an injury that would satisfy Article III,” which 26 was “precisely why Plaintiff filed his case in state court, rather than in this Court.” 27 Instead, Plaintiff requested the Court to deny the Motion, remand the case to state 28 1 court, and award attorney fees and costs for work performed in response to 2 Defendant’s removal. 3 STANDARD OF REVIEW 4 When reviewing a motion to dismiss, a district court must accept as true all 5 material allegations in the complaint and must construe the complaint in the 6 nonmovant’s favor. Bernhardt v. Cty. of Los Angeles, 279 F.3d 862, 867 (9th Cir. 7 2002). A plaintiff needs only to plead “general factual allegations” of injury to 8 survive a motion to dismiss, as opposed to the “specific facts” needed to survive a 9 motion for summary judgment. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 10 (1992). 11 DISCUSSION 12 1. Standing and Subject Matter Jurisdiction 13 At issue here is whether Plaintiff has standing to proceed in federal court—a 14 forum this Court notes Plaintiff did not choose and which he is in against his will. 15 “Standing to sue is a doctrine rooted in the traditional understanding of a case or 16 controversy” under Article III of the Constitution. Spokeo, Inc. v. Robins, 136 S. 17 Ct. 1540, 1549 (2016). “The doctrine developed in our case law to ensure that 18 federal courts do not exceed their authority as it has been traditionally understood.” 19 Id. The “irreducible constitutional minimum of standing” consists of three 20 elements, all of which the party invoking federal jurisdiction bears the burden of 21 establishing: first, the plaintiff must have suffered an “injury in fact”; second, there 22 must be a causal connection between the injury and the conduct complained of; 23 and third, the injury will likely be “redressed by a favorable decision.” Lujan, 504 24 U.S. at 560-561. 25 Relevant here is the injury-in-fact element. To establish this element, the 26 plaintiff must have suffered “an invasion of a legally protected interest” that is 27 “concrete and particularized” and “actual or imminent, not conjectural or 28 hypothetical.” Id. at 560. A plaintiff does not “automatically satisf[y] the injury-in- 1 fact requirement whenever a statute grants a person a statutory right and purports 2 to authorize that person to sue to vindicate that right.” Spokeo, 136 S. Ct. at 1549. 3 In other words, “Article III standing requires a concrete injury even in the context 4 of a statutory violation.” Id. For that reason, a plaintiff cannot “allege a bare 5 procedural violation, divorced from any concrete harm, and satisfy the injury-in- 6 fact requirement of Article III.” Id. 7 Here, both parties agree that Plaintiff alleges no concrete injury and thus 8 lacks Article III standing. ECF No. 3 at 7-10; ECF No. 5 at 3-4. The Court has no 9 reason to find otherwise. As the party invoking federal jurisdiction, the burden was 10 on Defendant, not Plaintiff, to prove that all the elements of federal jurisdiction 11 were satisfied upon removal. Defendant’s attempt to invoke federal jurisdiction for 12 purposes of removal and then argue for dismissal based on the lack of standing—a 13 fundamental element of this Court’s jurisdiction—does not satisfy its burden. 14 Accordingly, the Court finds that it lacks jurisdiction to consider this case. 15 2. Dismissal or Remand 16 In absence of standing, the Court next considers whether this case should be 17 dismissed or remanded to state court. 18 Where standing is absent in a removed case, “the case shall be remanded.” 19 28 U.S.C. § 1447
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1 2 FILED IN THE U.S. DISTRICT COURT 3 EASTERN DISTRICT OF WASHINGTON Jul 14, 2020 4 SEAN F. MCAVOY, CLERK 5
6 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 7 DANIEL MORGAN, an individual, and 8 all those similarly situated, NO. 2:20-CV-00157-SAB 9 Plaintiff, 10 ORDER DENYING v. DEFENDANT’S MOTION TO 11 DISMISS AND REMANDING 12 BANK OF AMERICA, N.A., TO SUPERIOR COURT
13 Defendant. 14 15 Before the Court is Defendant’s Fed. R. Civ. P. 12(b)(1) and 12(b)(6) 16 Motion to Dismiss, ECF No. 3. Having considered the parties’ briefs and oral 17 arguments and the relevant caselaw, the Court DENIES Defendant’s Motion to 18 Dismiss and GRANTS Plaintiff’s Construed Motion to Remand the case to the 19 Spokane County Superior Court. 20 BACKGROUND 21 This case stems from a credit card debt Plaintiff incurred with FIA Card 22 Services, N.A., which initiated a collection action against Plaintiff in the Spokane 23 County District Court in 2012. While the action was ongoing, FIA Card Services 24 merged into Defendant in 2014, and Defendant continued to litigate under FIA’s 25 name “for more than half a decade.” ECF No. 5 at 8. Plaintiff alleges that 26 Defendant’s collection activities violated the Fair Debt Collection Practices Act 15 27 U.S.C. § 1692 et seq. (“FDCPA”) in three ways. First, on or about February 23, 28 2015, the Spokane County District Court issued a Notice for Dismissal for Want of 1 Prosecution, effective after 30 days, unless Defendant undertook timely action as 2 specified in the Notice. Defendant did not undertake timely action as specified, but 3 instead filed two Motions for Summary Judgment on or about June 19, 2017 and 4 October 31, 2019, respectively. Plaintiff alleges that Defendant attempted to collect 5 money from Plaintiff more than 30 days after the Spokane County District Court’s 6 February 23, 2015 Notice, in violation of 15 U.S.C. §§ 1692e(2) and 1692e(5). 7 Second, in the debt collection complaint, Defendant claimed that Plaintiff owed 8 $13,559.85 and Plaintiff’s last payment was on October 4, 2010. But in its October 9 31, 2019 Motion for Summary Judgment, Defendant averred that Plaintiff’s last 10 payment was made on October 18, 2013 in the amount of $50. Plaintiff argues that 11 Defendant did not credit any payments to the $13,559.85 debt since October 4, 12 2010. Plaintiff alleges that Defendant violated 15 U.S.C. § 1692f(1) by attempting 13 to collect $13,559.85, the full amount alleged due on October 4, 2010, even as 14 Defendant acknowledged Plaintiff’s last payment was on October 18, 2013 in the 15 amount of $50. Third, Plaintiff alleges Defendant violated 15 U.S.C. § 1692e(14) 16 by using the name “FIA Card Services,” a name other than its own true name, in 17 debt collection proceedings. 18 Plaintiff filed his Complaint in the Spokane County Superior Court on 19 March 18, 2020. On April 16, Defendant removed this case to federal court on the 20 basis of federal question jurisdiction. On May 4, Defendant moved to dismiss 21 Plaintiff’s claims with prejudice pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), 22 arguing that Plaintiff lacks Article III standing, that Defendant was not a “debt 23 collector” under the FDCPA, and that Plaintiff’s claims are time-barred by the 24 FDCPA’s one-year statute of limitations. In response, Plaintiff conceded that he 25 “allege[d] nowhere that he suffered an injury that would satisfy Article III,” which 26 was “precisely why Plaintiff filed his case in state court, rather than in this Court.” 27 Instead, Plaintiff requested the Court to deny the Motion, remand the case to state 28 1 court, and award attorney fees and costs for work performed in response to 2 Defendant’s removal. 3 STANDARD OF REVIEW 4 When reviewing a motion to dismiss, a district court must accept as true all 5 material allegations in the complaint and must construe the complaint in the 6 nonmovant’s favor. Bernhardt v. Cty. of Los Angeles, 279 F.3d 862, 867 (9th Cir. 7 2002). A plaintiff needs only to plead “general factual allegations” of injury to 8 survive a motion to dismiss, as opposed to the “specific facts” needed to survive a 9 motion for summary judgment. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 10 (1992). 11 DISCUSSION 12 1. Standing and Subject Matter Jurisdiction 13 At issue here is whether Plaintiff has standing to proceed in federal court—a 14 forum this Court notes Plaintiff did not choose and which he is in against his will. 15 “Standing to sue is a doctrine rooted in the traditional understanding of a case or 16 controversy” under Article III of the Constitution. Spokeo, Inc. v. Robins, 136 S. 17 Ct. 1540, 1549 (2016). “The doctrine developed in our case law to ensure that 18 federal courts do not exceed their authority as it has been traditionally understood.” 19 Id. The “irreducible constitutional minimum of standing” consists of three 20 elements, all of which the party invoking federal jurisdiction bears the burden of 21 establishing: first, the plaintiff must have suffered an “injury in fact”; second, there 22 must be a causal connection between the injury and the conduct complained of; 23 and third, the injury will likely be “redressed by a favorable decision.” Lujan, 504 24 U.S. at 560-561. 25 Relevant here is the injury-in-fact element. To establish this element, the 26 plaintiff must have suffered “an invasion of a legally protected interest” that is 27 “concrete and particularized” and “actual or imminent, not conjectural or 28 hypothetical.” Id. at 560. A plaintiff does not “automatically satisf[y] the injury-in- 1 fact requirement whenever a statute grants a person a statutory right and purports 2 to authorize that person to sue to vindicate that right.” Spokeo, 136 S. Ct. at 1549. 3 In other words, “Article III standing requires a concrete injury even in the context 4 of a statutory violation.” Id. For that reason, a plaintiff cannot “allege a bare 5 procedural violation, divorced from any concrete harm, and satisfy the injury-in- 6 fact requirement of Article III.” Id. 7 Here, both parties agree that Plaintiff alleges no concrete injury and thus 8 lacks Article III standing. ECF No. 3 at 7-10; ECF No. 5 at 3-4. The Court has no 9 reason to find otherwise. As the party invoking federal jurisdiction, the burden was 10 on Defendant, not Plaintiff, to prove that all the elements of federal jurisdiction 11 were satisfied upon removal. Defendant’s attempt to invoke federal jurisdiction for 12 purposes of removal and then argue for dismissal based on the lack of standing—a 13 fundamental element of this Court’s jurisdiction—does not satisfy its burden. 14 Accordingly, the Court finds that it lacks jurisdiction to consider this case. 15 2. Dismissal or Remand 16 In absence of standing, the Court next considers whether this case should be 17 dismissed or remanded to state court. 18 Where standing is absent in a removed case, “the case shall be remanded.” 19 28 U.S.C. § 1447(c). The Court may remand a case either on a party’s motion or 20 sua sponte. Historically, there was a futility exception to the remand rule—a 21 district court could dismiss a case without remand to state court if it had “absolute 22 certainty” that the state court would inevitably dismiss the case, rendering a 23 remand “futile.” Bell v. City of Kellogg, 922 F.2d 1418, 1425 (9th Cir. 1999) 24 (quoting M.A.I.N. v. Comm’r, Maine Dept. of Human Servs., 876 F.2d 1051, 1054 25 (1st Cir.1989)). However, the Supreme Court declined to apply the futility 26 exception in Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S. 27 72, 88-89 (1991), and thereafter a number of circuits expressly rejected the futility 28 doctrine. Polo v. Innoventions Int’l., LLC, 833 F.3d 1193, 1197-1198 (9th Cir. 1 2016) (citing Hill v. Vanderbilt Capital Advisors, LLC, 702 F.3d 1220, 1225-26 2 (10th Cir. 2012) (collecting cases)). Defendant argues that the futility doctrine is 3 still prevalent since the Ninth Circuit did not overrule Bell in Polo. ECF No. 7 at 4. 4 However, the only reason the Ninth Circuit did not overrule Bell in Polo was 5 because the plaintiff in that case failed to raise that argument, and the Circuit was 6 unwilling to explicitly overrule its precedent sua sponte. Polo, 833 F.3d at 1198. 7 That is not the case here. The Court notes that many district courts within this 8 circuit have joined the trend of abandoning the futility doctrine and remanding 9 removed cases to state courts on either the plaintiffs’ or their own motion. See, e.g., 10 Gordon v. Healthy Halo Ins. Serv. Inc., No. 2:19-CV-0387-TOR, 2020 WL 11 1317446, at *1 (E.D. Wash. Mar. 20, 2020); Williamson v. Genentech, Inc., No. 12 19-cv-01840-JSC, 2020 WL 1281532, at *3 (N.D. Cal. Mar. 18, 2020); Terrell v. 13 Costco Wholesale Corp., No. C16-1415JLR, 2017 WL 2169805, at *2 (W.D. 14 Wash. May 16, 2017). “Remand is the correct remedy because a failure of federal 15 subject matter jurisdiction means only that the federal courts have no power to 16 adjudicate the matter. State courts are not bound by the constraints of Article III.” 17 Polo, 833 F.3d at 1196 (citing ASARCO Inc. v. Kadish, 490 U.S. 605, 617 (1989)). 18 Therefore, the Court denies Defendant’s Motion to Dismiss and grants 19 Plaintiff’s Construed Motion to Remand to state court for further proceedings. The 20 Court need not—and indeed cannot—address Defendant’s arguments on the merits 21 of Plaintiff’s FDCPA claims. 22 3. Attorney’s Fees 23 Lastly, the Court turns to Plaintiff’s request for attorney fees and costs for 24 work performed in response to Defendant’s removal. 25 “An order remanding the case may require payment of just costs and any 26 actual expenses, including attorney fees, incurred as a result of the removal.” 28 27 U.S.C. § 1447(c). The statute “strikes a balance that effectuates Congress’s intent 28 of allowing removal in appropriate circumstances while reducing ‘the 1 attractiveness of removal as a method for delaying litigation and imposing costs on 2 the plaintiff.’” Mocek v. Allsaints USA Ltd., 220 F. Supp. 3d 910, 914-915 (N.D. 3 Ill. 2016) (quoting Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (2005)). 4 “Absent unusual circumstances, courts may award attorney’s fees under § 1447(c) 5 only where the removing party lacked an objectively reasonable basis for seeking 6 removal.” Martin, 546 U.S. at 141. See Mocek, 220 F. Supp. 3d at 914 (holding the 7 defendant lacked an objectively reasonable basis for seeking removal and the 8 plaintiff was entitled to attorney’s fees, where the defendant removed the case on 9 the basis of federal jurisdiction, only to turn around and seek dismissal with 10 prejudice on the ground that federal jurisdiction was lacking). Contra Siglin v. Sixt 11 Rent A Car, LLC, No. 20-cv-503-DMS, 2020 WL 3468220, at *4 (S.D. Cal. June 12 25, 2020) (declining to award attorney’s fees, where the defendant sought 13 dismissal for improper claim splitting, not lack of federal jurisdiction, following 14 removal); Ybarra v. Universal City Studios, LLC, No. CV-13-4976-PSG, 2013 WL 15 5522009, at *6-7 (C.D. Cal. Oct. 2, 2013) (declining to award attorney’s fees, 16 where the case was remanded on the plaintiff’s, not the defendant’s, motion for 17 lack of federal jurisdiction). 18 Here, Defendant pursued the same avenue as the defendant in Mocek did. 19 The Court has no trouble concluding that Defendant lacked “an objectively 20 reasonable basis for seeking removal” where it is acknowledged by both parties 21 that this Court lacks jurisdiction over this case. Martin, 546 U.S. at 141. Therefore, 22 Plaintiff is entitled to recover his attorney fees and costs incurred as a result of the 23 removal. 24 Accordingly, IT IS HEREBY ORDERED: 25 1. Defendant’s Motion to Dismiss, ECF No. 3, is DENIED. 26 2. Plaintiff’s Construed Motion to Remand, ECF No. 5, is GRANTED. 27 3. The above-captioned case is REMANDED to the Spokane County 28 Superior Court. 1 4. Plaintiff's Motion for Attorney’s Fees, ECF No. 5, is GRANTED. 2 5. Plaintiff is ORDERED to submit a fee/cost summary within ten days of entry of this Order. IT IS SO ORDERED. The District Court Clerk is hereby directed to enter 5|| this Order and provide copies to counsel. DATED this 14th day of July 2020.
8 9 10 by Siesta
Stanley A. Bastian
3 United States District Judge
14 15 16 17 18 19 20 21 22) 23 24 25 26 27 28 ORDER DENYING DEFENDANT?’S MOTION TO DISMISS AND DUATANRMNING TH CIIDEDINGD CATIDT WA