Thome v. Sayer Law Grp., P.C.

• Decision Date: 07 October 2021
• Docket Number: 20-CV-3058-CJW-KEM
• Parties: Mary THOME on behalf of herself and all others similarly situated, Plaintiff, v. The SAYER LAW GROUP, P.C., Defendant.
• Court: U.S. District Court — Northern District of Iowa

567 F.Supp.3d 1057

Mary THOME on behalf of herself and all others similarly situated, Plaintiff,

v.The SAYER LAW GROUP, P.C., Defendant.

No. 20-CV-3058-CJW-KEM

United States District Court, N.D. Iowa, Central Division.

Signed October 7, 2021

Samuel Z. Marks, Marks Law Firm, Des Moines, IA, Thomas J. Lyons, Jr., Pro Hac Vice, Consumer Justice Center PA, Vadnais Heights, MN, for Plaintiff.

Kevin J. Visser, Paul D. Gamez, Nicholas Petersen, Simmons Perrine Moyer Bergman PLC, Cedar Rapids, IA, for Defendant.

ORDER

C.J. Williams, United States District Judge

TABLE OF CONTENTS

I. INTRODUCTION...––––

II. RELEVANT BACKGROUND...––––

III. APPLICABLE LAW...––––

A. 12(b)(1) Motions...––––

B. Standing...––––

C. FDCPA's Congressional Purpose...––––

IV. ANALYSIS...––––

A. Concrete Injury...––––

1. Intangible Harm...––––

a. The Supreme Court's TransUnion Opinion...––––

b. Defining a Close Relationship after TransUnion ...––––

c. Application...––––

2. Tangible Harm...––––

B. Causal Connection...––––

V. CONCLUSION...––––

I. INTRODUCTION

This matter is before the Court on defendant's renewed motion to dismiss plaintiff's Amended Complaint under Federal Rule of Civil Procedure 12(b)(1). (Doc. 44); see also (Doc. 11). Plaintiff timely filed a resistance. (Docs. 58, 61). Defendant timely filed a reply. (Doc. 64). For the following reasons, the Court denies defendant's motion.

II. RELEVANT BACKGROUND

The following facts are taken from plaintiff's Amended Complaint and are undisputed. (Doc. 11). This class action arises from defendant's alleged violations of the Fair Debt Collection Practices Act ("FDCPA"), Title 15, United States Code, Section 1692. (Id. , at 1). Plaintiff Mary Thome ("Thome") is an Iowa resident and "consumer" within the meaning of Section 1692a(3). (Id. , at 2).¹ Defendant is an Iowa corporation and an alleged debt collector as defined in Section 1692a(6). (Id. ).

Plaintiff brings one count against defendant for various violations of the FDCPA. (Id. , at 10–12). Plaintiff seeks, on behalf of herself and all others similarly situated, a "declaratory judgment, injunctive relief, as well as statutory damages against" defendant for its practice of sending debt collection letters to various consumers which allegedly violate Sections 1692e, 1692e(2), 1692e(2)(a), 1692e(5), 1692e(10), 1692f, 1692f(1), 1692g, 1692g(a)(3), and 1692g(b). (Id. , at 1, 11). Plaintiff asserts this Court has subject matter jurisdiction over this action under Title 28, United States Code, Section 1331, because plaintiff's claim arises under federal law. (Id. , at 1).

Title 15, United States Code, Section 1692g, the primary provision at issue here, concerns the specific content that a debt collector must include in a debt collection notice sent to a consumer. In relevant part, Section 1692g(a)(3) states that a debt collector must send the consumer a written notice containing "a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector. " 15 U.S.C. § 1692g(a)(3) (emphasis added). Further, Section 1692g(b) states that "[a]ny collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor."

On March 25, 2015, Thome took out a home loan ("Thome Note") for $49,000 secured by a mortgage ("Thome Mortgage") which was subsequently serviced by Wells Fargo Home Mortgage ("Wells Fargo"). (Doc. 11, at 3). Thome later defaulted on the Thome Note by failing to make monthly payments as required under the terms of the Thome Note and Thome Mortgage. (Id. ). As a result, Wells Fargo retained defendant's services. (Id. ). On January 27, 2020, defendant sent Thome a letter titled Demand for Payment which demanded that either Thome pay an accelerated balance of $46,055.75 within fourteen days or Wells Fargo would initiate foreclosure proceedings.² (Docs. 11, at 4; 11-2, at 1). An attachment to the letter titled Dispute & Validation Notice (the "Notice") warned Thome that if she did not signify to defendant that she disputed the debt within thirty days, then the debt would "be assumed to be valid." (Docs. 11, at 4; 11-2, at 1). It did not specify who would assume the debt's validity. (Id. ). See also 15 U.S.C. § 1692g(a)(3) (stating that the debt would be assumed to be valid "by the debt collector"). On February 11, 2020, defendant filed a foreclosure action against Thome. (Doc. 11, at 4). Thome alleges that the Notice left her "confused about her rights" and made her believe she could not contest the debt after fourteen days and the filing of the foreclosure action. (Id. , at 5). Thome further alleges that as a result of defendant's Notice, she believed that she lost her right to delay foreclosure, feared losing her home, and struggled with mental health and wellness issues. (Id. ).

Plaintiff alleges, on behalf of herself and others who are similarly situated, that the letter and Notice sent by defendant are improper for two reasons. (Id. , at 8). First, plaintiff argues that defendant's demand that the consumer pay the debt within fourteen days "overshadows and contradicts" the consumer's right to contest the debt within thirty days. (Id. ). Second, plaintiff argues defendant's failure to specify that only the debt collector, as opposed to a court or some other entity, is permitted to assume the debt is valid, if not timely disputed, misleads consumers about their rights. (Id. ).

On December 3, 2020, plaintiff filed her Complaint in this Court. (Doc. 1). On February 11, 2021, plaintiff filed her Amended Complaint. (Doc. 11). On February 17, 2021, defendant filed its motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), which the Court denied, allowing defendant to reassert its factual attack on the Amended Complaint under 12(b)(1) after further discovery. (Doc. 31). Following discovery, defendant filed this renewed motion to dismiss under 12(b)(1). (Doc. 44).

III. APPLICABLE LAW

A. 12(b)(1) Motions

Federal courts may only hear cases which fall within their limited subject matter jurisdiction. N. Cent. F.S., Inc. v. Brown , 951 F. Supp. 1383, 1391–92 (N.D. Iowa 1996). Title 28, United States Code, Section 1331, grants federal courts subject matter jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States."

Under Federal Rule of Civil Procedure 12(b)(1), a defendant may move to dismiss a complaint based on a "lack of subject-matter jurisdiction." The plaintiff bears the burden of proving subject matter jurisdiction by a preponderance of the evidence.

V S Ltd. P'ship v. Dept. of Hous. & Urb. Dev. , 235 F.3d 1109, 1112 (8th Cir. 2000) (citation omitted); Thompson v. Deloitte & Touche LLP , 503 F. Supp. 2d 1118, 1121 (S.D. Iowa 2007) (citing Blakemore v. Mo. Pac. R. Co. , 789 F.2d 616, 618 (8th Cir. 1986) ). A defendant can either attack the complaint's asserted jurisdictional basis on its face or the factual basis underlying the court's jurisdiction. Branson Label, Inc. v. City of Branson , 793 F.3d 910, 914 (8th Cir. 2015). In a facial challenge, "the court restricts itself to the face of the pleadings, and the non-moving party receives the same protections as it would defending against a motion brought under Rule 12(b)(6)." Osborn v. United States , 918 F.2d 724, 729 n.6 (8th Cir. 1990) (citations omitted). In such cases, the court must "accept as true all factual allegations in the complaint," Jackson v. Abendroth & Russell, P.C. , 207 F. Supp. 3d 945, 950 (S.D. Iowa 2016), and should not dismiss the complaint "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of [their] claim which would entitle [them] to relief," Osborn , 918 F.2d at 729 n.6 (citation and internal quotation marks omitted). "In a factual attack, the court considers matters outside the pleadings, and the non-moving party does not have the benefit of 12(b)(6) safeguards." Id. (citations omitted). In such cases, "the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case" and "no presumptive truthfulness attaches to the plaintiff's allegations." Id. at 730 (quoting Mortensen v. First Fed. Sav. & Loan Ass'n , 549 F.2d 884, 891 (3d Cir. 1977) ).

The Court has no subject matter jurisdiction if plaintiff lacks standing to pursue a claim. " Article III of the Constitution limits the judicial power of the United States to the resolution of Cases and Controversies, and Article III standing enforces the Constitution's case-or-controversy requirement." Hein v. Freedom from Religion Found., Inc. , 551 U.S. 587, 597–98, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007) (alteration, citation, and internal quotation marks omitted). A plaintiff must have "such a personal stake in the outcome of the controversy as to warrant [their] invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers on [their] behalf." Warth v. Seldin , 422 U.S. 490, 498–99, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) (citation and internal quotation marks omitted). In other words, the standing requirement ensures that courts hear only "those disputes which are appropriately resolved through the judicial process." Lujan v. Defenders of Wildlife , 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). If a plaintiff lacks standing to pursue a claim, then the court has no subject matter jurisdiction. Faibisch v. Univ. of Minn. , 304 F.3d 797, 801 (8th Cir. 2002). Thus, "a standing argument implicates Rule 12(b)(1)." Id.

B. Standing

The Supreme Court of the United States has established three elements of standing: (1) "the plaintiff must have suffered an ‘injury in fact’ " which is concrete, particularized, and actual or imminent; (2) "there must be a causal connection between the injury and the...