Oliphant v. Midland Funding LLC
| Decision Date | 20 February 2020 |
| Docket Number | No. 4:19 CV 1204 RWS,4:19 CV 1204 RWS |
| Parties | CARL OLIPHANT and MOHAMMED JABER, individually and on behalf of all others similarly situated, Plaintiffs, v. MIDLAND FUNDING LLC, Defendant. |
| Court | U.S. District Court — Eastern District of Missouri |
Plaintiffs Carl Oliphant and Mohammed Jaber are consumers against whom Defendant Midland Funding, LLC (Midland) obtained default judgments in state court actions. Oliphant alleges that Midland's use of the default judgment to obtain an order of garnishment against him violates the Fair Debt Collection Practices Act (FDCPA). Jaber alleges that Midland's conduct violated the Missouri Merchandising Practices Act. Oliphant and Jaber jointly allege that Midland is liable to them for unjust enrichment.
Oliphant originally filed this case in the Circuit Court of the City of St. Louis, Missouri on March 29, 2019. Oliphant and Jaber filed an amended complaint, adding Jaber's claims, on May 6, 2019, while the case was still before the circuit court. On May 8, 2019, Midland removed this case to the United States District Court for the Eastern District of Missouri under 28 U.S.C. § 1331, because the complaint alleges Midland violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.
This case is presently before me on Plaintiffs' motion to remand the case to state court and Defendant's motion to dismiss. For the reasons below, I will dismiss Oliphant's FDCPA count and remand the remaining counts in the complaint to the Circuit Court of the City of St. Louis, Missouri.
Midland filed a lawsuit against Oliphant in state court on June 24, 2014, alleging that Oliphant owed a credit card debt to which Midland obtained all rights, title, and interest. In that lawsuit, Midland filed a request to appoint special process servers to serve Oliphant in that court action. The court or court clerk never signed the request approving Midland's request for the process server appointment. Midland also did not file a return of service, but it requested that the court enter default judgment against Oliphant on August 11, 2014. The court entered default judgment against Oliphant for $782.19 plus court costs. On April 6, 2018, Midland filed a garnishment application with the court to collect on the default judgment, which the clerk later issued.
Oliphant does not allege that he directly challenged or moved to set aside the default judgment or the garnishment action before filing this suit.
In ruling on a motion to dismiss brought under Fed. R. Civ. P. 12(b)(6), I must accept as true all factual allegations in the complaint and view them in the light most favorable to the plaintiff. Kohl v. Casson, 5 F.3d 1141, 1148 (8th Cir. 1993). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. While a court must accept factual allegations as true, it is "not bound to accept as true a legal conclusion couched as a factual allegation." Carton v. Gen. Motor Acceptance Corp., 611 F.3d 451, 454 (8th Cir. 2010) (internal citations omitted). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678 (internal citations omitted).
A plaintiff may move to remand "any time before final judgment if it appears that the district court lacks subject matter jurisdiction." 28 U.S.C. § 1447. "[T]he case must be remanded if it appears that the district court lacks subject matter jurisdiction." Bumpus v. United Conveyor Corp., No. 1:09-CV-171, 2010 WL 431794, at *1 (E.D. Mo. Feb. 2, 2010). The defendant bears the burden of proof in establishing that the federal court has subject matter jurisdiction. Id. "All doubts about federal jurisdiction should be resolved in favor of remand to state court." Id. (citing Wilkinson v. Shackelford, 478 F.3d 957, 963 (8th Cir. 2007)).
In this lawsuit, Plaintiffs seek monetary damages, injunctive relief, and invalidation of the default judgments Midland obtained against them. In the motion to remand, they argue that the Court does not have jurisdiction over this case under the Rooker-Feldman doctrine, because they argue that I cannot rule on their claims without also ruling on the propriety of the state court default judgments in Midland's original collection actions. Midland moves to dismiss on the grounds that it followed the proper rules of service in the state court debt collection action and that its efforts to enforce outstanding judgments, entered by a state court, did not violate the FDCPA.
Plaintiffs contend that this Court does not have jurisdiction to hear this case under the Rooker-Feldman doctrine. "The Rooker-Feldman doctrine precludes lower federal courts from exercising jurisdiction over actions seeking review of, or relief from, state court judgments." Hageman v. Barton, 817 F.3d 611, 614 (8th Cir. 2016)). Rooker-Feldman can sometimes require federal district courts to abstain in cases arising under 28 U.S.C. § 1331. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 291 (2005) (). However, "the doctrine is limited in scope and does not bar jurisdiction over actions alleging independent claims arising from conduct in underlying state proceedings." Hageman, 817 F.3d at 614.
In this order, I will only rule on the FDCPA claims in Count I of the complaint before declining to exercise jurisdiction over the state law claims. Rooker-Feldman does not require me to abstain from ruling on the complaint's FDCPA claims, because my review of the FDCPA claims does not require "review and rejection" or reversal of a state court decision. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). Oliphant's FDCPA claims are ultimately a challenge to Midland's conduct in the garnishment action againstOliphant. As I explain further below, the conduct Oliphant alleges does not constitute an FDCPA violation regardless of the validity of the state court default judgment. I will not remand this case on Rooker-Feldman grounds.
Midland first argues that I should dismiss this case because Midland's service of process in the state court cases against Oliphant and Jaber comported with state law. I will not reach that question, because I find that even if Midland did not follow the correct procedure to initially serve Oliphant, and regardless of whether the state court had jurisdiction to enter the default judgment, Midland did not violate the FDCPA based on the facts alleged in Oliphant's complaint.
"The purpose of the FDCPA is to eliminate abusive debt collection practices by debt collectors." Dunham v. Portfolio Recovery Assocs., LLC, 663 F.3d 997, 1000 (8th Cir. 2011) (citations omitted); see also 15 U.S.C. 1692(e). Among other practices, the FDCPA prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt" and "the use of any false representation or deceptive means to obtain information concerning a consumer." 15 U.S.C. § 1692e; 15 U.S.C. § 1692e(10). These abusive practices often include actions debt collectors undertake to collect debts in court. Hageman v. Barton, 817 F.3d 611, 615 (8th Cir. 2016) ().
Oliphant's allegations do not state abusive debt collection practices in violation of 15 U.S.C. §§ 1692e, 1692e(10), or 1692f. Though Oliphant states numerous factual allegations about the process by which Midland obtained a default judgment against him, the FDCPA violations Oliphant allege all pertain to Midland's attempt to collect Oliphant's debt after obtaining the default judgment. Specifically, Oliphant alleges that Midland (a) used a void default judgment to obtain an order of garnishment and (b) represented that a valid judgment had been entered against Oliphant. See Amended Compl. ¶¶ 36-38 (alleging violations of 15 U.S.C. §§ 1692e, 1692e(10), 1692f).
Oliphant does not support his conclusory claim that Midland represented a valid judgment was entered against Oliphant when it applied for the garnishment order. Midland's application for garnishment against Oliphant is attached to the Amended Complaint as Exhibit 3, and I may consider it as "part of the pleading." Fed. R. Civ. P. 10(c). In the garnishment application, Midland's counsel signs below a statement representing only that "a judgment was entered on the above referenced date and remains unsatisfied" and "the garnishor knows or has reason to believe the garnishee is indebted to debtor." [ECF No. 7-1, p. 19] Midland does not represent in the application that the default judgment was "valid." By filing thegarnishment application, Midland represented only that a default judgement was in fact entered against Oliphant, that it remained unsatisfied, and that Midland knew or had reason to believe Oliphant was indebted to Midland.
Even if the default judgement was void for lack of personal jurisdiction, Oliphant does not allege any actual representations that Midland made to obtain the garnishment order that were false, deceptive, or misrepresentative. Absent factual support for an allegation that Midland engaged in false,...
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