Balon v. Enhanced Recovery Co.

• Decision Date: 28 August 2017
• Docket Number: CIVIL ACTION NO. 3:16–CV–0410
• Citation: 264 F.Supp.3d 597
• Parties: Kariann BALON, Plaintiff v. ENHANCED RECOVERY COMPANY, INC., Defendant
• Court: U.S. District Court — Middle District of Pennsylvania

264 F.Supp.3d 597

Kariann BALON, Plaintiff

v.ENHANCED RECOVERY COMPANY, INC., Defendant

CIVIL ACTION NO. 3:16–CV–0410

United States District Court, M.D. Pennsylvania.

Signed August 28, 2017

Carlo Sabatini, Brett M. Freeman, Sabatini Law Firm, LLC, Dunmore, PA, for Plaintiff.

Richard J. Perr, Monica M. Littman, Fineman Krekstein & Harris, P.C., Philadelphia, PA, for Defendant.

MEMORANDUM

William J. Nealon, United States District Judge

Plaintiff, Kariann Balon, filed a complaint against Defendant, Enhanced Recovery Company, Inc., in the Court of Common Pleas of Luzerne County, Pennsylvania, alleging that Defendant violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 etseq. ("FDCPA"). (Doc. 1). On March 8, 2016, Defendant removed the action to this Court. (Id. ).

On March 16, 2016, Defendant filed a Rule 12(b)(6) motion to dismiss Plaintiff's complaint. (Doc. 3). On June 2, 2016, Defendant's motion was denied. (Docs. 9, 10). On June 16, 2016, Defendant filed an answer to the complaint. (Doc. 11). On June 29, 2016, Defendant filed an amended answer. (Doc. 15).

On July 25, 2016, Plaintiff filed a motion to strike the second and third affirmative defenses presented in the amended answer. (Doc. 18). On September 15, 2016, Plaintiff's motion to strike was granted. (Doc. 22). On October 6, 2016, Defendant filed a second amended answer. (Doc. 24).

On December 28, 2016, Defendant filed a motion to dismiss the complaint for lack of subject matter jurisdiction and brief in support. (Docs. 27, 28). On that same date, Plaintiff filed a motion for summary judgment, statement of undisputed material facts, and brief in support. (Docs. 29, 30, 31). On January 11, 2017, Plaintiff filed a brief in opposition to Defendant's motion to dismiss. (Doc. 32). Also on January 11, 2017, Plaintiff filed a motion to remand the above-captioned action to state court. (Doc. 33). On January 18, 2017, Defendant filed a brief in opposition to Plaintiff's motion for summary judgment and response to Plaintiff's statement of undisputed material facts. (Docs. 34, 35). On January 25, 2017, Plaintiff filed a brief in support of her motion to remand. (Doc. 36). On that same date, Defendant filed a reply to Plaintiff's brief in opposition to Defendant's motion to dismiss. (Doc. 37). On February 1, 2017, Plaintiff filed a reply to Defendant's brief in opposition to Plaintiff's motion for summary judgment. (Doc. 38). On February 8, 2017, Defendant filed a brief in opposition to Plaintiff's motion to remand. (Doc. 39). On February 20, 2017, Plaintiff filed a reply to Defendant's brief in opposition to Plaintiff's motion to remand. (Doc. 40).

In sum, there are currently three (3) motions pending before the Court, each of which has been fully briefed. See (Docs. 27–32, 34–35, 37–40). As discussed in more detail below, Defendant's motion to dismiss the complaint for lack of subject matter jurisdiction, (Doc. 27), and Plaintiff's motion to remand, (Doc. 33), will be denied. Plaintiff's motion for summary judgment, (Doc. 29), on the other hand, will be granted.

I. DEFENDANT'S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION

A. Factual Allegations

Plaintiff's complaint makes the following allegations: Defendant has attempted to collect a debt from Plaintiff on an "account that was identified by a number ending in 2418." (Doc. 1–1, p. 2). "On or about February 9, 2015, [Defendant] caused to be mailed a letter addressed to Plaintiff." (Id. ). "The letter was an attempt to collect on the Account." (Id. ). The letter states, in part, that "any indebtedness of $600.00 or more, which is discharged as a result of a settlement, may be reported to the IRS as taxable income pursuant to the Internal Revenue Code 6050 (P) and related federal law." (Id. ). "The amount of the alleged debt at the time that the letter was sent was $798.67....[and] [t]he offer to settle was for $638.94." (Id. ). "[T]he amount of savings if the offer was accepted would be $159.73." (Id. at pp. 2–3).

B. Standard of Review

"Federal courts are courts of limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). "They possess only that power authorized by Constitution and statute, which is not to be expanded by judicial decree." Id. (internal citations omitted).

In this case, Defendant's motion is brought pursuant to Federal Rule of Civil Procedure 12(b)(1), which allows for the dismissal of an action for lack of subject matter jurisdiction. FED. R. CIV. P. 12(b)(1). A Rule 12(b)(1) motion to dismiss can present facial and factual challenges to subject matter jurisdiction. See Hartig Drug Co. v. Senju Pharm. Co., 836 F.3d 261, 268 (3d Cir. 2016).

When presented with a 12(b)(1) motion, "[a] district court has to first determine...whether [that] motion presents a ‘facial’ attack or a ‘factual’ attack on the claim at issue, because that distinction determines how the pleading must be reviewed." Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014). In particular, "[a] facial 12(b)(1) challenge, which attacks the complaint on its face without contesting its alleged facts, is like a 12(b)(6) motion in requiring the court to ‘consider the allegations of the complaint as true.’ " Hartig Drug Co., 836 F.3d at 268 (quoting Petruska v. Gannon Univ., 462 F.3d 294, 302 n.3 (3d Cir. 2006) ).

Where, as here, the moving party brings a factual challenge to subject matter jurisdiction, it "attacks allegations underlying the assertion of jurisdiction in the complaint, and it allows the defendant to present competing facts." Hartig Drug Co., 836 F.3d at 268 (citing Aichele, 757 F.3d at 358 ). When presenting a factual challenge:

"the plaintiff [has] the burden of proof that jurisdiction does in fact exist," the court "is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case," and "no presumptive truthfulness attaches to [the] plaintiff's allegations

...."

Id. (alterations in original) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977) ). "And, when reviewing a factual challenge, ‘a court may weigh and consider evidence outside the pleadings.’ " Id. (quoting Aichele, 757 F.3d at 358 ). "Therefore, a 12(b)(1) factual challenge strips the plaintiff of the protections and factual deference provided under 12(b)(6) review." Id. (citing Davis v. Wells Fargo, 824 F.3d 333, 348–50 (3d Cir. 2016) ). Notably, "a Rule 12(b)(1) factual evaluation ‘may occur at any stage of the proceedings, from the time the answer has been served until after the trial has been completed.’ " Sprague v. Cortes, 223 F.Supp.3d 248, 266 (M.D. Pa. 2016) (Mariani, J.) (quoting Mortensen, 549 F.2d at 891–92 ). "However, ‘[a] factual jurisdictional proceeding cannot occur until plaintiff's allegations have been controverted.’ " Wayne Land and Mineral Grp., LLC v. Del. River Basin Comm'n, ––– F.Supp.3d ––––, ––––, 2017 WL 1100565, at *9, 2017 U.S. Dist. LEXIS 42622, at *24 (M.D. Pa. Mar. 23, 2017) (Mariani, J.) (quoting Mortensen, 549 F.2d at 892 n.17 ). Further, " ‘[t]he party invoking federal jurisdiction bears the burden of establishing’ the elements of standing and ‘each element must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.’ " Patel v. Allstate N.J. Ins. Co., 648 Fed.Appx. 258, 260 (3d Cir. 2016) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) ). At the motion to dismiss stage, "general factual allegations of injury resulting from defendant's conduct may suffice." Lujan, 504 U.S. at 561, 112 S.Ct. 2130. However, " ‘[i]n response to a summary judgment motion...the plaintiff can no longer rest on such "mere allegations," but must "set forth" by affidavit or other evidence "specific facts," Fed. R. Civ. P. 56(e), which for purposes of the summary judgment motion will be taken to be true.’ " Blunt v. Lower Merion Sch. Dist., 767 F.3d 247, 279 (3d Cir. 2014) (quoting Lujan, 504 U.S. at 561, 112 S.Ct. 2130 ).

C. Discussion

Defendant argues in support of its Rule 12(b)(1) motion to dismiss that the Court lacks subject matter jurisdiction over Plaintiff's claims because she lacks standing under Article III of the United States Constitution. (Doc. 28, pp. 10, 14–22). Defendant reaches this conclusion, at least in part, as a result of certain responses made by Plaintiff during discovery. (Doc. 28, pp. 4–6, 20–21); (Doc. 39, pp. 7–8). According to Defendant, a number of these discovery responses establish that Plaintiff has not suffered a concrete injury, which, as discussed in more detail below, is a requisite to establish Article III standing. (Id. ). Clearly, since it relies on facts presented outside of the pleadings, Defendant presents a factual attack on the subject matter jurisdiction over Plaintiff's claim. Hartig Drug Co., 836 F.3d at 268 (citing Aichele, 757 F.3d at 358 ).

In response, Plaintiff states that it is undisputed "that she has not suffered a concrete injury, and that jurisdiction is therefore not appropriate in federal court.[footnote omitted]." (Doc. 32, p. 1) (emphasis in original); see (Doc. 28, 10–22); (Doc. 33, p. 1); (Doc. 36, p. 1); (Doc. 37, p. 4). Rather, "Plaintiff does dispute whether Defendant is entitled to the relief it requests in its motion." (Doc. 32, p. 1). According to Plaintiff, Defendant's request for dismissal should be denied "because Plaintiff's claim was initially filed in state court, the proper recourse here is remand rather than dismissal."¹ (Id. ).

Importantly, however, the apparent agreement between the parties concerning Plaintiff's lack of standing under Article III is not dispositive. Rather, "federal courts ‘have an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party...