Chaga v. Simon's Agency Inc.
| Decision Date | 23 February 2023 |
| Docket Number | Civil Action 21-4110 |
| Parties | JASON CHAGA, Plaintiff v. SIMON'S AGENCY INC., Defendant |
| Court | U.S. District Court — Eastern District of Pennsylvania |
GENE E.K. PRATTER, UNITED STATES DISTRICT JUDGE.
Apparently believing that too many choices means no choice, Jason Chaga on behalf of himself and similarly situated individuals accuses Simon's Agency Inc. of violating the Fair Debt Collection Practices Act when it issued him a debt collection letter with two different addresses on it. Mr. Chaga, somehow immobilized by confusion because the letter listed two addresses for Simon's, decided not to communicate by mail or phone to inquire or clarify how he could dispute or pay his debt. Simon's moved for summary judgment. Because Mr Chaga has no standing to bring this suit, his complaint is dismissed without prejudice for lack of subject matter jurisdiction.
Around August 10, 2021, a creditor, Crozer (Cerner), placed Jason Chaga's account with Simon's Agency Inc. for collection of a debt. Simon's sent Mr. Chaga a debt collection letter, dated August 11, 2021, seeking payment of $64.73, the balance owed to Crozer (Cerner).
The letter included two addresses. The first address was the remittance address of Simon's, located in the top left and bottom right corners of the detachable lower portion, or coupon, of the letter:
Pl's Ex. A, Doc, No. 1-4; Def.'s Ex. 1 ¶ 13 Doc. 13-2. The second was the headquarters address of Simon's, located in the top left corner of the letter:
Pl.'s Ex. A, Doc. No. 1-4; Def.'s Ex. 1 ¶ 14, Doc. 13-2. The letter does not specify which address to use when sending written disputes. The letter also provided the website address and two telephone numbers for Simon's.
According to Simon's, both the Syracuse remittance and Liverpool headquarters addresses can process correspondence received at either address, including requests for validation and disputes concerning a financial obligation, as well as any mailed payments. On the “Frequently Asked Questions” page on the Simon's website, the Syracuse remittance address is listed under the subheading “Mail,” while the Liverpool headquarters address falls under the subheading “Corporate Address.” Pl.'s Ex. A; Pl.'s Mem. of Law in Opp'n to Def.'s Mot. for Summ, J. ¶ 9(a), Doc. No, 19. The webpage also states that “[p]ayments in cash can be made in-person during normal business hours at our corporate headquarters: 4963 Wintersweet Drive, Liverpool, NY 13088.” Pl.'s Ex. A.
The parties agree that the agency never received any payments or written correspondence from Mr. Chaga at either the Syracuse remittance or Liverpool headquarters addresses or via electronic means, nor did Mr. Chaga make any telephone calls to the company regarding his account. Mr. Chaga argues that the confusion caused by the letter having the two addresses resulted in his inability to dispute the debt, his loss of his validation rights under the FDCPA, and the additional costs of lost time, money, and effort spent reviewing the letter and fear of losing his validation rights.
Mi'. Chaga now seeks to bring a class action under the FDCPA against Simon's, alleging that the two mailing addresses “confused” Mr. Chaga regarding “how to properly dispute the debt” or where to send any written disputes. Compl. ¶¶ 11, 33. Mr. Chaga claims that he was “misled to his detriment by the statements in the dunning letter, and relied on the contents of the letter to his detriment” and that the letter violated 15 U.S.C. §§ 1692e, 1692f, and 1692g. Compl. ¶¶ 43, 46-60. Simon's has moved for summary judgment, which Mr. Chaga opposes. The Court heard oral argument, and the motion is ripe for decision.
Article III of the Constitution limits federal court jurisdiction to cases and controversies. Lujan v. Defs. of Wildlife, 504 U.S. 555, 559 (1992). “The law of Article III standing, which is built on separation-of-powers principles, serves to prevent the judicial process from being used to usurp the powers of the political branches.” Clapper v. Amnesty Int'l USA, 568 U.S. 398, 408 (2013).
To establish Article III standing, “a plaintiff must show (i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” TransUnion LLC v. Ramirez, 141 S.Ct. 2190,2203 (2021). “The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing these elements.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). A court may determine at any time that it lacks subject matter jurisdiction, at which point it must dismiss the case without prejudice. Fed.R.Civ.P. 12(h)(3). The Court itself can focus on jurisdiction without the necessity of there being a motion from a party. Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 420 (3d Cir. 2010).
Attacks on subject matter jurisdiction come in two variations; facial and factual. CNA v. United States, 535 F.3d 132, 139 (3d Cir. 2008). Facial attacks concern “an alleged pleading deficiency.” Id. (quoting United States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir. 2007)). Factual attacks, on the other hand, represent an “actual failure of [a plaintiffs] claims to comport [factually] with the jurisdictional prerequisites.” A/. (quoting Atkinson, 473 F.3d at 514). A factual attack on subject matter jurisdiction results in certain procedural consequences: (1) the district court need not accept a plaintiffs allegations as true; (2) the burden of proof falls on the plaintiff; and (3) the court has authority to make factual findings decisive to the issue. Id.
The Supreme Court has rejected the idea “that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Spokeo, 578 U.S. at 341. The injury-in-fact element of Article III standing requires the plaintiff to allege that the injury is both “concrete and particularized.” Id. at 334. Concrete harms are “real, and not abstract.” Id. at 340 (internal quotations omitted). Although “Congress may elevate harms that exist in the real world before Congress recognized them to actionable legal status, it may not simply enact an injury into existence, using its lawmaking power to transform something that is not remotely harmful into something that is.” TransUnion, 141 S.Ct. at 2205 (internal quotation marks omitted). In making a standing determination, courts also “consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American Courts.” Spokeo, 578 U.S. at 340-41.
While the Third Circuit Court of Appeals has not yet issued an opinion regarding concrete injury on the basis of misleading communications of debt collectors, other courts of appeals have. Huber v. Simon's Agency, Inc., No. 19-cv-1424, 2022 WL 1801497, at *3 (E.D. Pa. June 2, 2022) (collecting cases). Injury-in-fact may be found where the allegedly deceptive letter “leads a plaintiff to pay extra money, affects [his] credit, or otherwise alters [his] response to a debt.” Markakos v. Medicredit, Inc., 997 F,3d 778, 780 (7th Cir. 2021). “Adequacy of informational harms for standing purposes therefore turns on a plaintiff's consequential action or inaction following receipt of a misleading or deceptive collection letter; confusion itself is not enough.” Huber, 2022 WL 1801497, at *4 (emphasis added); see also Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 867 (6th Cir. 2020) ().
Misleading communications may cause concrete harms sufficient to establish Article III standing under an analogue of fraudulent or negligent misrepresentation. Madlinger v. Enhanced Recovery Co., No. 21-cv-154, 2022 WL 2442430, at *5-6 (D.N.J. July 5, 2022). In Pennsylvania, fraudulent misrepresentation consists of “(1) a misrepresentation; (2) the fraudulent utterance thereof; (3) an intention by the maker that the recipient will be induced to act; (4) justifiable reliance by the recipient on the misrepresentation; and (5) damage to the recipient as a proximate result of the reliance.” Coleman v. Sears, Roebuck & Co., 319 F.Supp.2d 544, 550 (W.D. Pa. 2003). Negligent misrepresentation requires a showing of “(1) a misrepresentation of a material fact; (2) made when [the] defendant ought to have known its falsity; (3) with intent to induce another to act on it; and (4) which causes injury to a party acting in justifiable reliance on the misrepresentation.” McGrain v. C.R. Bard, Inc., 551 F.Supp.3d. 529, 544 n.14 (E.D. Pa. 2021). Hence, a key element of both common-law claims is reliance. Rabinowitz v. Alltran Financial LP, No. 21-CV-12756, 2022 WL 16362460, at *11 (D.N.J. Oct. 25, 2022).
For a court to grant summary judgment, the movant must prove “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). To be “material,” the fact must have the potential to “affect the outcome of the suit.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For a dispute about that fact to be “genuine,” there must be enough evidence such that a...
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