Kale v. Procollect, Inc., 2:20-cv-2776-SHM-tmp

• Court: United States District Courts. 6th Circuit. Western District of Tennessee
• Writing for the Court: SAMUEL H. MAYS, JR., UNITED STATES DISTRICT JUDGE
• Citation: 547 F.Supp.3d 793
• Parties: Swapna KALE, Individually and on behalf of all others similarly situated, Plaintiffs, v. PROCOLLECT, INC., and John Does 1-25, Defendants.
• Docket Number: No. 2:20-cv-2776-SHM-tmp,2:20-cv-2776-SHM-tmp
• Decision Date: 02 July 2021

547 F.Supp.3d 793

Swapna KALE, Individually and on behalf of all others similarly situated, Plaintiffs,
v.
PROCOLLECT, INC., and John Does 1-25, Defendants.

No. 2:20-cv-2776-SHM-tmp

United States District Court, W.D. Tennessee, Western Division.

Signed July 2, 2021

547 F.Supp.3d 794

ORDER GRANTING PROCOLLECT'S MOTION TO DISMISS

SAMUEL H. MAYS, JR., UNITED STATES DISTRICT JUDGE

Plaintiff Swapna Kale ("Kale") brings this action under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692, et seq., on behalf of herself and all others similarly situated. She seeks relief from Defendants ProCollect, Inc. ("ProCollect")

547 F.Supp.3d 795

and John Does 1-25. (D.E. No. 1.) Before the Court is ProCollect's November 19, 2020 Motion to Dismiss (the "Motion"). (D.E. No. 9.) Kale responded on December 17, 2020. (D.E. No. 11.) ProCollect replied on December 31, 2020. (D.E. No. 12.) The Motion is GRANTED.

I. Background

Kale incurred a debt to Centennial Gardens Apartments. (D.E. No. 1 ¶ 21.) Centennial Gardens Apartments contracted with ProCollect to collect the debt. (Id. ¶ 24.)

On or around April 21, 2020, ProCollect sent Kale a collection letter (the "Letter"). (Id. ¶ 26.) The Letter stated the amount Kale owed as $233.39. (Id. ¶ 27.) The amount owed was followed by an asterisk that corresponded to the following paragraph at the bottom of the letter:

Your agreement with the original creditor, or other applicable state law, may allow ProCollect to charge collection agency fees. If you have not already been put on notice of any applicable fee, this is your notice that a failure to pay the Amount Due within the applicable deadline set out in the agreement with the original creditor or state law, may result in ProCollect assessing collection agency fees allowed by such agreement or state law.

(Id. ¶ 28.) No information about how much the fees might be was included in the letter. (Id. ¶¶ 29-31.)

On October 26, 2020, Kale filed the Complaint. (D.E. No. 1.) She alleges three violations of 15 U.S.C. § 1692e. (Id. ¶¶ 37-41.) She alleges ProCollect failed "to truthfully represent the amount of the debt in the lawsuit pursuant to § 1692 [e](2)(A)." (Id. ¶ 40(a).) She alleges ProCollect failed to "provide the notices required in an initial collection letter in violation of § 1692e(10). (Id. ¶ 40(b).) She alleges ProCollect threatened to "take action (increasing the debt amount) that cannot legally be taken or that is not intended to be taken in violation of § 1692e(5)." (Id. ¶ 40(c).)

Kale alleges two violations of 15 U.S.C. § 1692f. She alleges ProCollect failed to state the amount of the debt and that ProCollect threatened "that the amount of the debt may increase even though it would not actually increase." (Id. ¶ 45.) Kale also alleges ProCollect violated 15 U.S.C. § 1692g by "[f]ailing to provide the actual amount of the debt." (Id. ¶ 50.)

Kale seeks actual and statutory damages, costs, and attorneys’ fees. (Id. ¶¶ 41, 46, 51.)

On November 19, 2020, ProCollect filed the Motion. (D.E. No. 9.) ProCollect argues that Kale lacks standing because she has failed to allege facts demonstrating that she suffered a concrete injury that was more than a bare procedural violation. (See id. at 54.) ProCollect argues that, even if Kale has standing, she has failed to allege facts sufficient to demonstrate that ProCollect violated the FDCPA. (Id. )

On December 17, 2020, Kale responded. (D.E. No. 11.) She argues that procedural violations of the FDCPA are injuries sufficient to support standing. (Id. at 90.) She lists several other injuries she suffered. (Id. ) She argues that the Complaint contains facts sufficient to state a claim that ProCollect violated the FDCPA. (Id. at 101-02.) Kale requests leave to amend the Complaint, should the Court grant the Motion. (Id. at 91.)

II. Jurisdiction

A. Federal Question Jurisdiction

Kale's claims arise under the FDCPA. (See D.E. No. 1.) Therefore, the Court has federal question jurisdiction under 28 U.S.C. § 1331.

547 F.Supp.3d 796

Although Kale asserts that the Court has supplemental jurisdiction over state law claims pursuant to 28 U.S.C. § 1367(a), her Complaint alleges no state law claims. (See D.E. No. 1.)

B. Standing

ProCollect challenges Kale's standing pursuant to Federal Rule of Civil Procedure 12(b)(1). (D.E. No. 9 at 54.) Standing is jurisdictional. Before considering the merits, the Court must ensure its subject-matter jurisdiction. Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 90 L.Ed. 939 (1946) ; see Coal Operators and Assocs., Inc. v. Babbitt, 291 F.3d 912, 915 (6th Cir. 2002). Challenges to standing can be facial or factual. DLX, Inc. v. Kentucky, 381 F.3d 511, 516 (6th Cir. 2004), overruled on other grounds, Knick v. Township of Scott, ––– U.S. ––––, 139 S. Ct. 2162, 204 L.Ed.2d 558 (2019) ("A Rule 12(b)(1) motion can either attack the claim of jurisdiction on its face, in which case all allegations of the plaintiff must be considered as true, or it can attack the factual basis for jurisdiction, in which case the trial court must weigh the evidence and the plaintiff bears the burden of proving that jurisdiction exists."). ProCollect raises both facial and factual challenges to Kale's standing. Because ProCollect's facial arguments resolve the standing issue, the Court need not reach ProCollect's factual arguments.

Article III of the Constitution limits the jurisdiction of federal courts to "Cases" and "Controversies." U.S. Const. art. 3, § 2. "[T]he core component of standing is an essential and unchanging part of the case-or-controversy requirement of Article III." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). The plaintiff bears the burden of establishing standing. Summers v. Earth Island Inst., 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009).

To establish standing a "plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 578 U.S. 330, 136 S. Ct. 1540, 1547, 194 L.Ed.2d 635 (2016) (citing Lujan, 504 U.S. at 560, 112 S.Ct. 2130 ). An injury in fact must be both "concrete" and "particularized." Id. at 1548. "A ‘concrete’ injury must be ‘de facto’; that is, it must actually exist." Id. (citing Black's Law Dictionary 479 (9th ed. 2009)). "For an injury to be ‘particularized,’ it ‘must affect the plaintiff in a personal and individual way.’ " Id. (quoting Lujan, 504 U.S. at 560, 112 S.Ct. 2130 ).

Until recently, Kale could have established the disputed element of standing, an injury in fact, in a suit for damages in one of two ways. Buchholz v. Meyer Njus Tanick, PA, 946 F.3d 855, 863 (6th Cir. 2020). She could have alleged that ProCollect "violated the statute in [ways] that caused [her] concrete harm" or that ProCollect's "violation[s] of the statute did not cause tangible harm but created a risk of harm that Congress intended to prevent." Id.; Garland v. Orlans, PC, 999 F.3d 432...