Kola v. Forster & Garbus LLP, 19-CV-10496 (CS)
| Decision Date | 10 September 2021 |
| Docket Number | 19-CV-10496 (CS) |
| Parties | AGE KOLA, individually and on behalf of all others similarly situated, Plaintiff, v. FORSTER & GARBUS LLP and JOHN DOES 1-25, Defendants. |
| Court | U.S. District Court — Southern District of New York |
Kenneth Willard Raphael Deutsch Stein Saks, PLLC Hackensack N.J. Counsel for Plaintiff
Robert L. Arleo Robert L. Arleo, Esq., P.C. New York, NY Counsel for Defendant
Before the Court are the parties' cross-motions for summary judgment. (Docs. 33, 42.) For the following reasons Defendant's motion is GRANTED and Plaintiff's motion is DENIED.
This Fair Debt Collection Practices Act (“FDCPA”) dispute arises out of an allegedly misleading debt collection letter sent to Plaintiff by Defendant Forster & Garbus LLP.
The following facts are based on the parties' Local Civil Rule 56.1 Statements, responsive 56.1 Statements, [1] declarations, and supporting materials. The facts are undisputed except as noted.
Plaintiff took out a credit card with Barclays Bank Delaware (“BBD”) and accrued charges that she failed to pay due to “financial stresses.” (Doc. 37 (“P's 56.1 Stmt.”) ¶¶ 1-3; see Doc. 37-8 (“Kola Dep.”) at 20:9-21:7, 23:5-12.) BBD brought suit in the New York Supreme Court, County of Rockland, and obtained a default judgment against the Plaintiff for $4, 225.74 on June 20, 2018. (Doc. 37-2; P's 56.1 Resp. ¶ 3.) Defendant served as counsel for BBD in that lawsuit and sent collection letters to Plaintiff after BBD obtained the default judgment. (P's 56.1 Resp. ¶¶ 2, 4.) Defendant is a debt collector as defined in the FDCPA, 15 U.S.C. § 1692a(6). (Doc. 1 (“Complaint”) ¶ 10; Doc. 15 (“Amended Answer”) ¶ 9.)
Defendant sent collection letters to Plaintiff on June 21, 2018, July 25, 2018, August 29, 2018, and October 3, 2018, all of which stated that the balance due was $4, 225.74. (Docs. 37-3, 37-4, 37-5, 37-6, 37-7.) One of the letters indicated that non-payment could result in judgment enforcement proceedings under article 52 of the New York Civil Practice Law and Rules, (, and another stated that Defendant was searching for assets with which to satisfy the judgment, (P's 56.1 Stmt. ¶ 7; Doc. 37-4). On February 8, 2019, Defendant sent a letter that explained that Defendant had been authorized to offer a settlement at a “substantial discount off the balance due”; the offer was for Plaintiff to settle the debt for “[o]ne payment of $3, 169.31” which was due by February 28, 2019. (P's 56.1 Stmt. ¶ 10; Doc. 37-7.) That letter also reflected that the full balance due was $4, 225.74. (Doc. 37-7.)
On August 5, 2019, Defendant sent a collection letter that stated the balance due was $3, 996.74. (Doc. 37-1 (“August 5 Letter”); see P's 56.1 Stmt. ¶ 11.) The August 5 Letter stated: (August 5 Letter.) Defendant has submitted evidence that the amount of the debt was reduced to $3, 996.74 because BBD decided not to pass on certain costs awarded with the judgment to consumers, and that payment of that amount would have satisfied Plaintiff's debt in total. [2]The August 5 Letter, which was not phrased as a settlement offer, did not include any explanation for the lower balance as compared to previous communications, (August 5 Letter), and there is no evidence that Defendant provided any such explanation prior to this lawsuit.
Plaintiff has not made any payment on the debt owed to BBD. (P's 56.1 Stmt. ¶ 12; Kola Dep. at 39:10-12.) At her deposition, Plaintiff testified that she did not know whether she owed the money reflected in the judgment because she did not know if the charges were all hers. (Kola Dep. at 22:9-23:24, 30:14-31:11, 31:19-32:4.) In explaining her uncertainty about whether the charges were hers, she stated that “there's something off” because “one [letter] says one and another [letter] says another.” (Id. at 22:13-22.) She explained that she called her lawyer in response to the August 5 Letter because she did not know what to do and got “anxious” because she “d[id]n't know how to handle it.” (Id. at 30:4-13.) In response to questioning about whether she intended to pay the debt, Plaintiff stated that she needed to know the accurate amount and did not want to pay charges that were not hers to pay. (Id. at 33:4-22.)
At the same deposition, Plaintiff also conceded that she had used the credit card and could not pay for it. (Id. at 23:5-12.) She stated that, at the time she received the August 5 Letter and at the time she received the previous letters, she lacked the financial means to pay the debt owed to BBD, regardless of which amount was correct. (Id. at 37:7-10, 44:20-45:20.) When asked what she would do “if the defendant produced all of your purchase statements and demonstrated to you that you do owe this amount of money, ” Plaintiff responded that she would still not be able to pay the debt because she lacked the means to do so. (Id. at 48:20-25.)
Plaintiff brought this suit on November 12, 2019, asserting claims on behalf of herself and others similarly situated under FDCPA Sections 1692e[3] and 1692f[4] against Defendant Forster & Garbus LLP as well as “John Does 1-25.”[5] (Complaint ¶¶ 12-20, 40-49.) The class alleged in the Complaint was to consist of individuals in New York to whom Defendant had sent a collection letter containing, without explanation, a different balance than previous communications. (Id. ¶ 13.) Plaintiff has not sought to certify a class in this case. Nor has Plaintiff sought to name any additional parties as defendants.
Defendant first answered the complaint on December 19, 2019, (Doc. 6), and subsequently sought leave to amend its answer to include an additional affirmative defense. The Court granted leave, (see Minute Entry dated Jan. 16, 2020), and Defendant filed its Amended Answer on January 23, 2020, (Doc. 15). The parties engaged in discovery for approximately six months, after which Defendant sought a briefing schedule for its summary judgment motion. (Doc. 18.) The Court held a pre-motion conference on July 22, 2020, after which Plaintiff submitted a letter stating her intention to cross-move for summary judgment. (Doc. 22.)
On January 29, 2021, after the instant cross-motions were fully briefed, Defendant sought leave to re-open briefing to add an additional argument challenging Plaintiff's Article III standing based on several out-of-circuit decisions, some of which were issued in December 2020 and January 2021. (Doc. 50.) Plaintiff responded on February 1, 2021, arguing that the Court should not permit additional briefing due to the clarity of Second Circuit law on standing, which would not be affected by the cases raised in Defendant's letter. (Doc. 51.) The Court granted Defendant's request, noting that this was a fast-developing area of law. (Doc. 52.) Defendant filed its supplemental letter brief on February 4, 2021, (Doc. 53), but subsequently submitted a request to withdraw both that letter and the request to add the standing argument, (Doc. 54).[6]Plaintiff nonetheless submitted a letter in setting out her argument in favor of standing on March 1, 2021. (Doc. 55.)
On July 13, 2021, Defendant wrote to the Court, in the wake of the Supreme Court's decision in TransUnion, LLC v. Ramirez, 141 S.Ct. 2190 (2021), to state its position that under TransUnion, Plaintiff does not have Article III standing in this case, and to note that a judge in the Eastern District of New York had issued orders to show cause to FDCPA plaintiffs regarding standing. (Doc. 58.) The Court directed Plaintiff to respond by letter, (Doc. 59), and she did so, (Doc. 60).
Article III of the Constitution limits a federal court's jurisdiction to actual “Cases” and “Controversies.” U.S. Const. art. III, § 2; see Lujan v. Defs. of Wildlife, 504 U.S. 555, 560 (1992). “Constitutional standing is the threshold question in every federal case, determining the power of the court to entertain the suit.” Leibovitz v. N.Y.C. Transit Auth., 252 F.3d 179, 184 (2d Cir. 2001) (cleaned up). That is, where a party lacks standing to bring a claim, the court lacks subject matter jurisdiction over that claim and must dismiss it. See SM Kids, LLC v. Google LLC, 963 F.3d 206, 210 (2d Cir. 2020).
“The objection that a federal court lacks subject-matter jurisdiction may be raised by a party, or by a court on its own initiative, at any stage in the litigation, even after trial and the entry of judgment.” Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006) (cleaned up). Under Rule 12(h)(3), “[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed.R.Civ.P. 12(h)(3).
“A plaintiff must demonstrate standing ‘with the manner and degree of evidence required at the successive stages of the litigation.'” TransUnion, 141 S.Ct. at 2208 (quoting Lujan, 504 U.S. at 561). While “[a]t the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice” to establish standing, on a motion for summary judgment “the plaintiff can no longer rest on such ‘mere allegations,' but must ‘set forth' by affidavit or other evidence ‘specific facts'” that demonstrate standing. Lujan, 504 U.S. at 561 (quoting Fed.R.Civ.P. 56(e)). “The party asserting jurisdiction . . . bears the burden of proof as to standing.” Nat. Res. Def. Council, Inc. v. U.S. Food & Drug Admin., 710 F.3d 71, 79 (2d Cir. 2013), as amended (Mar. 21, 2013).
Summary judgment is appropriate...
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