Shedd v. Wells Fargo Bank, N.A.

Decision Date31 August 2016
Docket NumberCIVIL ACTION 14-0275-WS-M
PartiesGEORGE P. SHEDD, JR., et al., Plaintiffs, v. WELLS FARGO BANK, N.A., et al., Defendants.
CourtU.S. District Court — Southern District of Alabama

This matter comes before the Court on plaintiff Pam Shedd's Motion to Amend and Certify for Interlocutory Review, or in the Alternative for Entry of Rule 54(b) Final Judgment (doc. 224). The Motion has been briefed and is now ripe.

I. Relevant Background.

This case is a mortgage-loan dispute, presenting a fact pattern not dissimilar from those in many actions that have been brought in this and other federal courts around the country in recent years. It has, however, followed a very different trajectory than those myriad other likeminded cases. Plaintiffs, George and Pamela Shedd, filed a Third Amended Complaint (doc. 152) that spans 128 pages and 16 causes of action asserted against three different defendants, Wells Fargo Bank, N.A., Barclays Capital Real Estate, Inc., and Monument Street Funding, II, LLC. In the 26 months it has been pending in this District Court, this action has been litigated quite aggressively, as there are already more than 225 docket entries. Unfortunately, this legacy of Sturm und Drang has not been accompanied by considerable tangible progress. Discovery remains ongoing, and the discovery period will not close until December 2016, with trial set for May 2017.

In April 2016, defendant Wells Fargo Bank, N.A. filed a Motion for Judgment on the Pleadings (doc. 176), seeking dismissal of, inter alia, Count Sixteen, a statutory claim for violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA"). Among its arguments for Rule 12(c) dismissal of that claim, Wells Fargo invoked the exemption found at 15 U.S.C. § 1692a(6)(A). That section provides that the term "debt collector" does not include "any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor." 15 U.S.C. § 1692a(6)(A). In support of its contention that the § 1692a(6)(A) exemption applies here, Wells Fargo cited several decisions interpreting the statute in that manner and pointed out that well-pleaded facts in the Shedds' Third Amended Complaint admit that Wells Fargo is the owner of the loan. (Doc. 177, at 8-9.) The sum total of plaintiffs' response to Wells Fargo's invocation of the § 1692a(6)(A) exemption was to quote the statutory language, then state as follows: "It is curious how an exemption solely for an officer or employee of a creditor collecting its own debts could be misconstrued to apply to the creditor itself; the other exemptions after (6)(A) provide escape routes for the creditor, but not (6)(A)." (Doc. 200, at 11.) Plaintiffs cited no authority lending support, either specifically or generally, to their reading of § 1692a(6)(A).1 Nor did the Shedds' response brief express objection to or dissatisfaction with Wells Fargo's interpretation of the well-pleaded allegations of the Third Amended Complaint casting it as a "creditor" for FDCPA purposes.

Despite the decidedly one-sided briefing on application of the § 1692a(6)(A) exemption, the undersigned did not simply take Wells Fargo's word for it; rather, the Court conducted its own research to examine how other courts have construed that provision. That research yielded a plethora of district court decisions (including many from this Circuit) interpreting § 1692a(6)(A) as covering creditors themselves, rather than simply their officers or employees. These authorities appeared unanimous. Thus, the Court was confronted with the following set of circumstances: (i) Wells Fargo's contention that the FDCPA claim at Count Sixteen was not cognizable as a matter of law because of the § 1692a(6)(A) exemption; (ii) repeated, undisputed assertions in the pleadings that Wells Fargo owns the Shedds' debt, such that Wells Fargo is aperson to whom that debt is owed, rendering it a "creditor" under the FDCPA; (iii) extensive (and apparently unchallenged) authorities interpreting § 1692a(6)(A) as applying to creditors collecting debts in their own names; and (iv) a dearth of any supporting authority, reasoning or other development of plaintiffs' conclusory argument that § 1692a(6)(A) is limited to employees and officers of creditors.

Based on this universe of facts, law and argument presented by the parties and uncovered by the Court's own research, the undersigned entered an Order (doc. 220) on June 13, 2016 that, inter alia, granted Wells Fargo's Motion for Judgment on the Pleadings as to Count Sixteen. In so doing, the June 13 Order began with the premise that "[b]ased on the repeated, consistent allegations in both sides' pleadings that Wells Fargo owns the Shedds' debt, it cannot reasonably be disputed for Rule 12(c) purposes that Wells Fargo is a person to whom that debt is owed, thereby rendering it a 'creditor' under the FDCPA." (Doc. 220, at 14.)2 The June 13 Order then noted the Shedds' conclusory argument that the § 1692a(6)(A) exemption is not available to a creditor entity itself, but rejected that contention because "abundant authority has construed this exemption as reaching creditors themselves, not just their officers or employees." (Id. at 14-15.) The June 13 Order cited no fewer than 11 district court decisions (including eight from this Circuit) that have interpreted the § 1692a(6)(A) exemption in such a manner. The June 13 Order explained that "Plaintiffs' objection, unsupported by any citations to case authorities, that the § 1692a(6)(A) exemption is confined to officers and employees of creditors, and does not cover creditors, is refuted by this extensive decisional authority." (Id. at 15.) Based on these determinations, the June 13 Order concluded that Count Sixteen was properly dismissed andgranted the Motion for Judgment on the Pleadings as to that issue. The June 13 Order did not dismiss all claims asserted by the Shedds against Wells Fargo; to the contrary, as they acknowledge, plaintiffs are still pursuing three federal statutory causes of action - two RESPA claims and a FCRA claim - against Wells Fargo, not to mention their multiple pending claims against the other defendants, Monument and Barclays.

On July 10, 2016, plaintiff Pamela Shedd filed a Motion for Interlocutory Review or for Entry of Rule 54(b) Final Judgment (doc. 224). In that Motion and her supporting memoranda, Shedd submitted nearly 30 pages of argument attacking the June 13 Order's application of the § 1692a(6)(A) exemption to this case. The vast majority of those arguments had never been presented to this Court for consideration while the Rule 12(c) Motion was pending. At any rate, Shedd proposes two alternative methods of addressing what she calls an error of law, to-wit: (i) certification of the June 13 Order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b); or (ii) entry of a final judgment under Rule 54(b), Fed.R.Civ.P., to allow her to take an immediate appeal from the June 13 Order. Either way, she proposes that this action be stayed "insofar as it involves Wells Fargo and Monument, but ... allow her separate claims to proceed against Barclays, including discovery, as those claims are factually and legally independent of her claims against Wells Fargo and Monument, and to pursue discovery involving non-party witnesses not relevant to the FDCPA claim." (Doc. 224, at 1-2.)

II. Motion for Interlocutory Appeal.
A. Legal Standard.

Shedd's Motion for Interlocutory Appeal is governed by 28 U.S.C. § 1292(b). That section allows certification of an issue for interlocutory review when the district court is "of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that immediate appeal from the order may materially advance the ultimate termination of the litigation." 28 U.S.C. § 1292(b).

The Eleventh Circuit has explained that "§ 1292(b) sets a high threshold for certification to prevent piecemeal appeals." OFS Fitel, LLC v. Epstein, Becker and Green, P.C., 549 F.3d 1344, 1359 (11th Cir. 2008). In that regard, "to obtain § 1292(b) certification, the litigant must show not only that an immediate appeal will advance the termination of the litigation but also that the appeal involves a controlling question of law as to which there is substantial ground for difference of opinion." Id. (citation and internal quotation marks omitted). "Most interlocutoryorders do not meet this test." Id.; see also McFarlin v. Conseco Services, LLC, 381 F.3d 1251, 1264 (11th Cir. 2004) (in exercising § 1292(b) discretion, appellate court "should keep in mind that the great bulk of its review must be conducted after final judgment, with § 1292(b) interlocutory review being a rare exception"); Camacho v. Puerto Rico Ports Authority, 369 F.3d 570, 573 (1st Cir. 2004) ("Section 1292(b) is meant to be used sparingly, and appeals under it are, accordingly, hen's-teeth rare."). "Because permitting piecemeal appeals is bad policy, permitting liberal use of § 1292(b) interlocutory appeals is bad policy." McFarlin, 381 F.3d at 1259. Indeed, "interlocutory appeals are inherently disruptive, time-consuming, and expensive ... and consequently are generally disfavored." Prado-Steiman ex rel. Prado v. Bush, 221 F.3d 1266, 1276 (11th Cir. 2000). As the movant seeking interlocutory appeal, Shedd bears the burden of showing that all § 1292(b) prerequisites are satisfied and that this is one of the rare exceptions in which judicial discretion should be exercised to grant this disfavored remedy. See OFS Fitel, 549 F.3d at 1359; McFarlin, 381 F.3d at 1264 ("[t]he burden of persuading us that a question of law meeting the requirements of § 1292(b) clearly is presented is on the petitioning party").

B. The "Substantial Ground for Difference of Opinion" Requirement.

The Court agrees with Shedd that the June 13 Order involves a controlling question of law,...

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