Rosenberg v. McCarthy, Burgess & Wolff, Inc.

• Decision Date: 01 August 2022
• Docket Number: 21-CV-2199 (MKB)
• Court: U.S. District Court — Eastern District of New York
• Parties: NAFTALI ROSENBERG, individually and on behalf of all others similarly situated, Plaintiff, v. MCCARTHY, BURGESS & WOLFF, INC., Defendant.

NAFTALI ROSENBERG, individually and on behalf of all others similarly situated, Plaintiff, v. MCCARTHY, BURGESS & WOLFF, INC., Defendant.

No. 21-CV-2199 (MKB)

United States District Court, E.D. New York

August 1, 2022

MEMORANDUM & ORDER

MARGO K. BRODIE, UNITED STATES DISTRICT JUDGE

Plaintiff Naftali Rosenberg, individually and on behalf of all others similarly situated, commenced the above-captioned putative class action against Defendant McCarthy, Burgess & Wolff Inc. on April 21, 2021, alleging that Defendant violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the “FDCPA”) by sending Plaintiff a debt collection letter seeking $103.60 in unauthorized fees and other charges, thus misrepresenting the amount of Plaintiff's debt. (Compl. ¶¶ 27-30, Docket Entry No. 1.) Defendant moves to dismiss the Amended Complaint for lack of standing and failure to state a claim pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, and Plaintiff opposes the motion.^[1]

For the reasons set forth below, the Court grants Defendant's motion and dismisses the Amended Complaint without prejudice for lack of subject matter jurisdiction.

I. Background

Plaintiff is a New York State resident and a “consumer” as defined by the FDCPA.^[2](Am. Compl. ¶¶ 7, 24.) Defendant is a debt collection company and a “debt collector” as defined by the FDCPA. (Id. ¶¶ 8-9, 22, 26.)

Prior to June 19, 2020, Plaintiff incurred a debt obligation to Verizon Wireless (“Verizon”) from “a mobile telephone debt” incurred for “personal, household or family purposes.” (Id. ¶¶ 20 23.) Plaintiff alleges the debt obligation is “consumer-related” and therefore a “debt” as defined by the FDCPA. (Id. ¶ 25.) Verizon initially contracted with MRS BPO, L.L.C. d/b/a MRS Associates (“MRS”) to collect the debt. (Id. ¶¶ 21-22.) On May 1, 2020, MRS “sent Plaintiff a collection letter” seeking a balance of $575.56, plus $57.55 in “Verizon Collection Fees,” for a total of $633.11. (Id. ¶¶ 30-31; MRS Letter dated May 1, 2020, annexed to Am. Compl. as Ex. B., Docket Entry No. 12-2.) Verizon later contracted with Defendant to collect the debt. (Am. Compl. ¶¶ 21-22.) Although the “express terms of the governing contract only allow for one application of a collection fee,” Defendant sent Plaintiff a separate collection letter (the “Collection Letter”) seeking the same balance of $575.56, plus the new amount of $103.60 in “[f]ees and other charges,” for a total of $679.16. (Id. ¶¶ 27-29, 32; Collection Letter dated June 19, 2020, annexed to Am. Compl. as Ex. A, Docket Entry No. 12-1.)

Plaintiff alleges that Defendant “seeks to collect an amount that misrepresents the debt” because Defendant “was not expressly authorized by the agreement” between Plaintiff and Verizon or permitted by law to charge $103.60 in “excessive” fees. (Am. Compl. ¶¶ 34-37.) In addition, Plaintiff alleges that while “thes[e] fees are defined as ‘Verizon Collection Fees,'” this amount “has not been spent on collection,” as Defendant sent “only one letter,” causing Plaintiff confusion “as to the amount of the account balance” and thus “an informational injury” that has “damaged” Plaintiff. (Id. ¶¶ 38-43.)

Plaintiff alleges that Defendant (1) “falsely represent[ed] the true amount of the debt” in violation of 15 U.S.C. § 1692(e)(2)(A); (2) made “a false and deceptive representation” in violation of 15 U.S.C. § 1692e(10); (3) sought to collect $103.60 in “fees or other charges” that are “not expressly authorized” by Plaintiff's agreement with Verizon “or permitted by law” in violation of 15 U.S.C. § 1692f(1); and (4) falsely represented “the true amount of the debt” in violation of 15 U.S.C. § 1692g(a)(1). (Id. ¶¶ 47, 52, 57.) Plaintiff seeks statutory damages, actual damages, costs, and attorneys' fees. (Id. at 11.)

II. Discussion

a. Standards of review

i. Rule 12(b)(1)

A district court may dismiss an action for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure when the court “lacks the statutory or constitutional power to adjudicate it.” Huntress v. United States, 810 Fed.Appx. 74, 75 (2d Cir. 2020) (quoting Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000)); Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.A.R.L., 790 F.3d 411, 416-17 (2d Cir. 2015) (quoting Makarova, 201 F.3d at 113); Shabaj v. Holder, 718 F.3d 48, 50 (2d Cir. 2013) (per curiam) (quoting Aurecchione v. Schoolman Transp. Sys., Inc., 426 F.3d 635, 638 (2d Cir. 2005)). “‘[C]ourt[s] must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of [the] plaintiff,' but ‘jurisdiction must be shown affirmatively, and that showing is not made by drawing from the pleadings inferences favorable to the party asserting it.'” Morrison v. Nat'l Austl. Bank Ltd., 547 F.3d 167, 170 (2d Cir. 2008) (citation omitted) (first quoting Nat. Res. Def. Council v. Johnson, 461 F.3d 164, 171 (2d Cir. 2006); and then quoting APWU v. Potter, 343 F.3d 619, 623 (2d Cir. 2003)), aff'd, 561 U.S. 247 (2010). Ultimately, “the party asserting subject matter jurisdiction ‘has the burden of proving by a preponderance of the evidence that it exists.'” Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir. 2014) (quoting Makarova, 201 F.3d at 113); see also Suarez v. Mosaic Sales Sols. U.S. Operating Co., 720 Fed.Appx. 52, 53 (2d Cir. 2018) (citing Morrison, 547 F.3d at 170); Clayton v. United States, No. 18-CV-5867, 2020 WL 1545542, at *3 (E.D.N.Y. Mar. 31, 2020) (quoting Tandon, 752 F.3d at 243); Fed. Deposit Ins. Corp. v. Bank of N.Y. Mellon, 369 F.Supp.3d 547, 552 (S.D.N.Y. 2019) (quoting Tandon, 752 F.3d at 243).

ii. Rule 12(b)(6)

In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must construe the complaint liberally, “accepting all factual allegations therein as true and drawing all reasonable inferences in the plaintiffs' favor.” Sacerdote v. N.Y.U., 9 F.4th 95, 106-107 (2d Cir. 2021); Vaughn v. Phoenix House N.Y. Inc., 957 F.3d 141, 145 (2d Cir. 2020). A complaint must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007); Bacon v. Phelps, 961 F.3d 533, 540 (2d Cir. 2020) (quoting Twombly, 550 U.S. at 570). A claim is plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Matson v. Bd. of Educ., 631 F.3d 57, 63 (2d Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)); Cavello Bay Reinsurance Ltd. v. Shubin Stein, 986 F.3d 161, 165 (2d Cir. 2021) (quoting Iqbal, 556 U.S. at 678).

Although all allegations contained in the Amended Complaint are assumed to be true, this tenet is “inapplicable to legal conclusions.” Iqbal, 556 U.S. at 678; Vaughn, 957 F.3d at 145 (same).

b. Standing

Defendant argues that the Court should dismiss the Amended Complaint for lack of subject matter jurisdiction because, under the Supreme Court's recent holding in Trans Union LLC v. Ramirez, __U.S. ___, __, 141 S.Ct. 2190, 2203 (June 25, 2021), Plaintiff has failed “to articulate a particularized concrete harm necessary to establish Article III standing.” (Def.'s Mem. 9-16.) In addition, Defendant argues that the fact that Plaintiff “may be obligated to engage in protracted litigation to free himself from the obligation to pay Verizon's collection fee” does not establish standing because “Plaintiff has asserted no intention of paying the debt” and “this is an assertion of a potential risk of future harm.” (Def.'s Reply 7 n.2.)

Plaintiff argues that recent cases confirm that 15 U.S.C. §§ 1692e and 1692f “confer substantive rights the violation of which, in and of itself, constitutes concrete harm under Article III.”^[3] (Pl.'s Opp'n 6-12.) In addition, Plaintiff argues that “Defendant wrongfully imposed additional collection charges by referring the debt to two different collection agencies, thereby triggering the collection fee provision in the agreement at issue,” and the “liabilities imposed” due to Defendant's wrongful conduct also give rise to standing. (Id. at 13-14.)

“‘Standing to sue is a doctrine' that ‘limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.'” Liberian Cmty. Ass'n of Conn. v. Lamont, 970 F.3d 174, 183-84 (2d Cir. 2020) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)). In order to show standing, a plaintiff must establish three things: (1) an “injury in fact - an invasion of a legally protected interest which is concrete and particularized and . . . actual or imminent, not conjectural or hypothetical,” (2) “a causal connection between the injury and the conduct complained of,” and (3) redressability of the injury “by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992) (internal citations and quotation marks omitted); see also Harty v. W. Point Realty, Inc., 28 F.4th 435, 442 (2d Cir. 2022) (same); Pincus v. Nat'l R.R. Passenger Corp., 581 Fed.Appx. 88, 89 (2d Cir. 2014) (quoting Lujan, 504 U.S. at 560-65) (describing the three elements of standing); Cacchillo v. Insmed, Inc., 638 F.3d 401, 404 (2d Cir. 2011) (“[A] plaintiff must show the three familiar elements of standing: injury in fact, causation, and redressability.” (citing Summers v. Earth Island Inst., 555 U.S. 488 (2009))). “An injury in fact must be ‘particularized,' and it must be ‘concrete.'” Harty, 28 F.4th at 442 (quoting Spokeo, Inc., 578 U.S. at 340). “[S]tanding is required for subject matter jurisdiction.” James v. Willis, No. 21-501, 2022 WL 481812, at *1 (2d Cir. Feb. 17,...