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Birch v. Pioneer Credit Recovery

June 8, 2007

STEWART BIRCH, PLAINTIFF,
v.
PIONEER CREDIT RECOVERY, INC., DEFENDANT.



The opinion of the court was delivered by: Michael A. Telesca United States District Judge

DECISION and ORDER

INTRODUCTION

Plaintiff Stewart Birch ("plaintiff") brings this action against Pioneer Credit Recovery, Inc., ("defendant" and/or "Pioneer"), alleging that defendant violated the Privacy Act under 5 U.S.C. § 552a and that Pioneer committed a prima facie tort against plaintiff. See Complaint, ¶¶ 51-74. Defendant moves to dismiss plaintiff's Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6), alleging that plaintiff has failed to state a claim upon which relief may be granted with respect to the violation of the Privacy Act claim and that defendant is entitled to a dismissal as a matter of law. Upon dismissal of plaintiff's Privacy Act claim, defendant asks the court to decline the exercise of supplemental jurisdiction over plaintiff's prima facie tort claim and dismiss that claim. Alternatively, defendant argues that plaintiff's prima facie tort claim should also be dismissed because it fails to allege facts sufficient to state a cause of action and is barred by New York's prohibition against at-will employees bringing wrongful discharge claims. For the reasons set forth below, defendant's motion to dismiss plaintiff's Complaint is granted as to the first cause of action with prejudice and the second cause of action is also dismissed since this Court declines to exercise pendent jurisdiction over plaintiff's prima facie tort claim.

BACKGROUND

I. Facts

Plaintiff was employed by Pioneer as a debt collector from March 11, 2002 until March 24, 2006. See Complaint, ¶ 5. Pioneer is a third-party collection agency that provides collection services for a number of public and private clients, which include the Internal Revenue Service ("IRS"), U.S. Department of Education ("Education Dept.") and the U.S. Treasury Department ("Treasury Dept."). See Grasso Dec. Ex. C.*fn1 Defendant is a Delaware Corporation and a wholly-owned subsidiary of SLM Corporation ("SLM"). Id. SLM is a fortune 500 company and is publicly traded on the New York Stock Exchange. See Grasso Dec. Ex. B. Originally, SLM was chartered as a U.S. government-sponsored enterprise. Id. In 2004, however, SLM dissolved its government charter and eliminated its corporate ties to the federal government. Id.

During plaintiff's employment, Pioneer had contracts with the IRS, Education Dept. and Treasury Dept. to perform debt collection on behalf of those agencies. See Complaint, ¶ 7. Pursuant to the contracts with the above-mentioned agencies, defendant is required to have all of its employees, including plaintiff, fill out security clearance packages in order to be qualified to collect debts on behalf of those three agencies. Id., ¶¶ 9, 12. According to plaintiff, the information requested in the security packages were of a highly private and personal nature. Id., ¶¶ 10, 21. Pioneer obtained completed security clearance packages from plaintiff and submitted them to the IRS, Education Dept. and Treasury Dept. Id., ¶¶ 11-12, 14.*fn2

In March 2006, plaintiff was designated a "systems administrator" for defendant's IRS contract and pursuant to the contract, he filled out an IRS security package, which he gave to Pioneer to be turned over to the IRS. Id., ¶¶ 14-15. According to plaintiff, it was at this time that he learned that defendant was copying the security clearance packages and keeping a permanent record of them in the employees personnel files. Id., ¶¶ 16-17. Plaintiff claims that he did not give his consent to this practice, informed defendant many times that his privacy was being violated, and demanded that all copies of his security packages kept by Pioneer be returned to him. See Complaint. On June 14, 2006, plaintiff received a copy of the Education Dept.'s security package, but did not receive the Treasury Dept.'s package. Id., ¶47. Further, plaintiff asserts that upon inspection of the copy of Education Dept.'s security package, the dates on the package have been changed and his initials have been forged next to each of those changes. Id., ¶ 47. Pioneer argues that it did not retain a copy of plaintiff's Treasury Dept. security clearance package and denies that it altered the signature dates on all the forms contained in plaintiff's Education Dept. security clearance package as alleged by plaintiff in his complaint.

II. Procedural History

Plaintiff filed his complaint on October 5, 2006 alleging that Pioneer violated the Privacy Act under 5 U.S.C. §§ 552a and committed a prima facie tort under New York State law. See Complaint. In lieu of an answer, Pioneer filed a motion to dismiss plaintiff's complaint for failure to state a cause of action under Fed. R. Civ. P. 12(b)(6), and for lack of subject matter jurisdiction under Rule 12(b)(1). Plaintiff opposed defendant's motion, and further moved this Court for leave to amend his Complaint under Fed. R. Civ. P. 15(a) as well as Motion for Continuation of Discovery under Fed. R. Civ. P. 56(f). Thereafter, Pioneer filed a reply memorandum of law in further support of its motion to dismiss plaintiff's complaint.

DISCUSSION

I. Defendant's Motion to Dismiss

Rule 12(b)(6) of the Federal Rules of Civil Procedure provides for dismissal of the complaint where the plaintiff has failed to state a claim upon which relief can be granted. When evaluating a Rule 12(b)(6) motion, the court must ascertain, after presuming all factual allegations in the pleading to be true and viewing them in the light most favorable to the plaintiff, whether or not the plaintiff has stated any valid ground for relief. Ferran v. Town of Nassau, 11 F.3d 21, 22 (2d Cir. 1993), cert. denied, 513 U.S. 1014, 115 S.Ct. 572 (1994). The court may grant a Rule 12(b)(6) motion only where "`it appears beyond doubt that the plaintiff can prove no set of facts in ...


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