Hess v. Llp

• Citation: 637 F.3d 117
• Decision Date: 23 February 2011
• Docket Number: Docket No. 10–424–cv.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
• Parties: Jonathan HESS, Plaintiff–Appellant,v.COHEN & SLAMOWITZ LLP, Defendant–Appellee.

637 F.3d 117

Jonathan HESS, Plaintiff–Appellant,

v.COHEN & SLAMOWITZ LLP, Defendant–Appellee.

Docket No. 10–424–cv.

United States Court of Appeals, Second Circuit.

Argued: Jan. 10, 2011.Decided: Feb. 23, 2011.

Brian L. Bromberg, Bromberg Law Office, P.C., New York, N.Y. (Peter T. Lane, Bromberg Law Office, P.C., New York, N.Y., Anthony J. Pietrafesa, Law Office of Anthony J. Pietrafesa, Altamont, N.Y., on the brief), for Plaintiff–Appellant.Daniel R. Ryan, Smith, Sovik, Kendrick & Sugnet, P.C., Syracuse, N.Y., for Defendant–Appellee.Before: POOLER, KATZMANN, and WESLEY, Circuit Judges.KATZMANN, Circuit Judge:

The Fair Debt Collection Practices Act (“FDCPA”) delimits the proper venues in which a debt collector may bring a legal action to collect on a consumer debt. In pertinent part, the FDCPA's venue provisions require that such actions be brought “only in the judicial district or similar legal entity ... in which [the] consumer resides at the commencement of the action.” 15 U.S.C. § 1692i(a)(2)(B). Here, Defendant–Appellee Cohen & Slamowitz LLP (“C & S”) brought a debt collection action against Plaintiff–Appellant Jonathan Hess in Syracuse City Court. Hess obtained the dismissal of that action pursuant to Section 213 of New York's Uniform City Court Act on the basis that he did not reside in the City of Syracuse or a town contiguous thereto. Hess then brought suit against C & S in federal court alleging that C & S violated the FDCPA's venue provisions by suing him in Syracuse City Court. He appeals from the district court's dismissal of his complaint for failure to state a claim.

This case calls upon us to decide a question of first impression in this Circuit: whether a debt collector violates the FDCPA's venue provisions by suing a consumer in a city court in the State of New York when that court lacks power to hear the action because the consumer does not reside in that city or a town contiguous thereto. We hold that such a suit is not brought in the “judicial district or similar legal entity” in which the consumer resides, even when the consumer resides elsewhere within the county containing the city court, and therefore determine that Hess's complaint states a claim upon which relief can be granted. Accordingly, we vacate the judgment of the district court and remand for further proceedings consistent with this opinion.

BACKGROUND

Hess's complaint contains the following well-pleaded, non-conclusory factual allegations, which we must accept as true for purposes of this appeal from the district court's grant of a motion to dismiss. See, e.g., Harrington v. Cnty. of Suffolk, 607 F.3d 31, 33 (2d Cir.2010).

Hess is a resident of the Town of Clay, which is located in Onondaga County, New York. Hess lived in Clay at all times relevant to this action, and during that time, never lived, worked, or maintained a place of business in the City of Syracuse, New York. Syracuse also is located in Onondaga County, but Clay and Syracuse are not contiguous by land.

C & S, a Woodbury, New York-based limited liability partnership, is a “debt collector” within the meaning of the FDCPA, 15 U.S.C. § 1692a(6). In April 2009, C & S sued Hess in Syracuse City Court on behalf of an entity called Midland Funding LLC (“Midland”). Midland's complaint, which was signed by C & S, alleged that Midland was the successor-in-interest to HSBC, to which Hess owed $1520.68 plus interest in credit card debt. The complaint also alleged that Midland was a “foreign limited liability company” and that, “upon information and belief,” Hess “resides or has an office in the county in which this action is brought,” or that Hess “transacted business within the county in which this action is brought ... and the instant cause of action arose out of said transaction.” App. 12. Hess was served with a summons and this complaint at his home in Clay.

Hess then hired an attorney at a cost of $400. Through this attorney, Hess moved to dismiss the complaint for lack of jurisdiction based on Section 213 of New York's Uniform City Court Act because none of the parties resided in Syracuse or a town that was contiguous thereto by land. In connection with that motion, Hess provided evidence that Midland is a Delaware limited liability company with its place of business in California. Midland did not object to the dismissal of the action without prejudice to its recommencing the suit in the proper court, and the Syracuse City Court granted that relief by letter dated July 28, 2009.

In August 2009, pursuant to the FDCPA's civil liability provisions, 15 U.S.C. § 1692k, Hess brought suit against C & S in the United States District Court for the Northern District of New York, alleging that C & S violated the FDCPA's venue provisions by suing him in a judicial district in which he did not reside. C & S moved to dismiss Hess's complaint for failure to state a claim upon which relief could be granted. The district court granted this motion on two alternative grounds. First, the district court looked to the “common law within the Second Circuit” to conclude that the FDCPA's term “judicial district” meant “county.” Second, the district court stated that dismissal was warranted because it “ha[d] difficulty concluding” that C & S's act of bringing suit in Syracuse City Court was “intended to be unfair, harassing, and deceptive,” and because even if this act were so intended, adopting Hess's interpretation of the venue provisions would, in the district court's view, impose undue restrictions on ethical debt collectors. Hess v. Cohen & Slamowitz, LLP, No. 5:09–CV–0954 (GTS/DEP), 2010 WL 60322, at *1–2 (N.D.N.Y. Jan. 7, 2010).

This appeal followed.

DISCUSSION

“We review de novo a district court's dismissal for failure to state a claim....” Harrington, 607 F.3d at 33.

Congress enacted the FDCPA “to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). Among the abusive practices that Congress intended the FDCPA to address was the “problem of ‘forum abuse,’ an unfair practice in which debt collectors file suit against consumers in courts which are so distant or inconvenient that consumers are unable to appear,” hence permitting the debt collector to obtain a default judgment. S.Rep. No. 95–382, at 5 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. As a result, Congress adopted venue provisions to ensure that “[a] debt collector who files suit [does] so either where the consumer resides or where the underlying contract was signed.” Id.

These provisions, codified in 15 U.S.C. § 1692i, state in pertinent part:

(a) Venue

Any debt collector who brings any legal action on a debt against any consumer shall—

...

(2) ... bring such action only in the judicial district or similar legal entity—

(A) in which such consumer signed the contract sued upon; or

(B) in which such consumer resides at the commencement of the action.

Here, it is undisputed that C & S is a debt collector and that Hess is a consumer, and C & S makes no claims regarding the location where the contract sued upon was signed. The sole disputed issue on appeal is whether C & S brought suit in the “judicial district or similar legal entity” where Hess resided as of the commencement of the action.

Where, as here, we are called upon to interpret the meaning of a federal statute, “we look first to the language of the statute itself.” Marvel Characters, Inc. v. Simon, 310 F.3d 280, 290 (2d Cir.2002). “When the language of a statute is unambiguous, ‘judicial inquiry is complete.’ ” Id. (quoting Conn. Nat'l Bank v. Germain, 503 U.S. 249, 254, 112 S.Ct. 1146, 117 L.Ed.2d 391 (1992)). In conducting this inquiry, we “review the statutory text, considering the ordinary or natural meaning of the words chosen by Congress, as well as the placement and purpose of those words in the statutory scheme.” Dobrova v. Holder, 607 F.3d 297, 301 (2d Cir.2010) (internal quotation marks omitted).

We begin by considering the meaning of the term “judicial district.” ¹ The word “district” has been defined to mean “a territorial division (as of a nation, state, county, or city) marked off or defined for administrative, electoral, judicial, or other purposes.” Webster's Third New International Dictionary 660 (2002); accord Black's Law Dictionary 544 (9th ed. 2009) (defining “district” to mean “[a] territorial area into which a country, state, county, municipality, or other political subdivision is divided for judicial, political, electoral, or administrative purposes”). Similarly, at the time the FDCPA was enacted, Black's Law Dictionary defined the phrase “judicial district” as:

One of the circuits or precincts into which a state is commonly divided for judicial purposes; a court of general original jurisdiction being usually provided in each of such districts, and the boundaries of the district marking the territorial limits of its authority; or the district may include two or more counties, having separate and independent county courts, but in that case they are presided over by the same judge.Newsom v. Friedman, 76 F.3d 813, 817 (7th Cir.1996) (quoting Black's Law Dictionary 848 (6th ed. 1990), and noting that previous editions contained the same definition). From these definitions, it is clear that Congress meant the phrase “judicial district” to refer to some territorial subdivision of the courts, but we are still left with the task of identifying which of the multitude of such subdivisions among the nation's various court systems establishes the pertinent boundary as applied to the facts of a particular case.

The parties here assume that when the underlying debt collection action is brought in state court, the term “judicial district” must be determined with respect to the...