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Balke v. Alliance One Receivables Management, Inc.

United States District Court, E.D. New York

June 19, 2017

CAROLE BALKE, Plaintiff,

          Barshay Sanders, PLLC Attorneys for the Plaintiff By: David M. Barshay, Esq. Craig B. Sanders, Esq., Of Counsel.

          Gordon & Rees LLP Attorneys for the Defendant By: Ronald A. Giller, Esq. Of Counsel.



         On October 7, 2016, the Plaintiff Carole Balke commenced this action against the Defendant Alliance One Receivables Management, Inc., alleging that a debt collection letter sent by the Defendant to the Plaintiff violated the provisions of the federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.

         Presently before the Court is a motion by the Defendant seeking to dismiss the complaint under Federal Rule of Civil Procedure (“Fed. R. Civ. P.”) 12(b)(1), on the ground that the Plaintiff lacks Article III standing. Alternatively, the Defendant moves under Fed.R.Civ.P. 12(b)(6) to dismiss the complaint for failing to state a plausible claim for relief.

         Also before the Court is a cross-motion by the Plaintiff, seeking leave to amend the complaint under Fed.R.Civ.P. 15(a).

         For the reasons that follow, the Defendant's motion to dismiss is denied in its entirety, and the Plaintiff's cross-motion to amend is granted.

         I. Background

         On an unspecified date, through TD Bank USA, N.A., the Plaintiff obtained a credit card account at Target retail stores. Using her Target credit card, the Plaintiff accrued an alleged debt and then defaulted on the required monthly payments. Her account was subsequently transferred to the Defendant, a debt collector, for collection.

         On or about December 7, 2015, the Defendant contacted the Plaintiff by letter (the “Collection Letter”), which forms the basis of this action.

         II. Discussion

         A. The Plaintiff's Standing

         Before turning to the sufficiency of the complaint, the Court first addresses whether the Plaintiff has standing to maintain this action.

         1. The Standard under Fed.R.Civ.P. 12(b)(1)

         “ ‘A motion to dismiss for lack of subject-matter jurisdiction under [Fed. R. Civ. P.] 12(b)(1) is the appropriate mechanism for challenging a plaintiff's constitutional standing to bring a particular claim.' ” Barnett v. Countrywide Bank, FSB, 60 F.Supp.3d 379, 385 (E.D.N.Y. 2014) (Spatt, J.) (quoting Ali v. NYC DOT, Nos. 14-cv-312 & 14-cv-313, 2014 U.S. Dist. LEXIS 158331, at *2 (E.D.N.Y. Nov. 4, 2014)). Although this is the Defendant's motion, the burden is on the Plaintiff, as the party seeking to invoke the Court's jurisdiction, to establish that she has standing, and by extension, that subject matter jurisdiction exists. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992).

         “Pursuant to Article III, § 2 of the United States Constitution, the jurisdiction of the federal courts is limited to ‘Cases' and ‘Controversies, ' which ‘restricts the authority of the federal courts to resolving ‘the legal rights of litigants in actual controversies.' ' ” Lary v. Rexall Sundown, Inc., 74 F.Supp.3d 540, 543-44 (E.D.N.Y. 2015) (quoting Genesis Healthcare Corp. v. Symczyk, __ U.S. __, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013)) (quoting, in turn, Valley Force Christian Coll. v. Arms United for Separation of Church and State, Inc., 454 U.S. 464, 471, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982)).

         Thus, “[s]tanding to sue, in the Constitutional sense, ‘is the showing by a plaintiff that his particular grievance meets this standard, the ‘essence of which is the presence of ‘injury in fact' suffered by the plaintiff as a result of the defendant's actions.' ” Brady v. Basic Research, LLC, 101 F.Supp.3d 217, 227 (E.D.N.Y. 2015) (quoting Evans v. Hills, 537 F.2d 571, 591 (2d Cir. 1975)); see Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 103, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (noting that an injury-in-fact is “[f]irst and foremost” among the elements of Article III standing).

         In general, an injury-in-fact “must be concrete and particularized, and actual or imminent, not conjectural or hypothetical.” Elliott v. City of New York, No. 06-cv-296, 2010 U.S. Dist. LEXIS 121334, at *31 (S.D.N.Y. Nov. 15, 2010) (citing Lujan, 504 U.S. at 560). These are constitutional requirements, which may not be abrogated or limited by Act of Congress. See Spokeo, Inc. v. Robins, ___ U.S. ___, 136 S.Ct. 1540, 1547-48, 194 L.Ed.2d 635 (2016) (citations omitted).

         2. Application to the Facts of this Case

         In this case, the Defendant contends that the Plaintiff has not plausibly alleged that she suffered an injury-in-fact sufficient to confer Article III standing. Rather, the Defendant argues that the Plaintiff has alleged bare procedural violations under the FDCPA, without any factual allegations to support a reasonable inference that she suffered a concrete harm.

         For this proposition, she relies on Spokeo, supra, in which the Supreme Court recognized that, although “Congress has the [legislative] power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before, ” Spokeo, 136 S.Ct. at 1549 (quoting Lujan, 504 U.S. at 580 (Kennedy, J., concurring)), a plaintiff does not “automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right, ” id. Rather, in order to have standing to enforce a statutory right, a plaintiff must nevertheless establish that she suffered an injury that was both concrete and particular. See id.

         However, the Defendant's argument is effectively foreclosed by the Second Circuit's recent decision in Papetti v. Doe, 2017 U.S. App. LEXIS 9165 (2d Cir. May 26, 2017) (Summary Order), in which the court characterized the same argument being advanced by the Defendant as a “misinterpret[ation]” of Spokeo:

As we observed in Strubel v. Comenity Bank, 842 F.3d 181, 189 (2d Cir. 2016), Spokeo does not “categorically . . . preclude[ ] violations of statutorily mandated procedures from qualifying as concrete injuries.” Rather, “some violations of statutorily mandated procedures may entail the concrete injury necessary for standing.” Id. In order “to determine whether a procedural violation manifests injury in fact, a court properly considers whether Congress conferred the procedural right in order to protect an individual's concrete interests.” Id.

Papetti, 2017 U.S. App. LEXIS 9165, at *3-*4.

         Applying these standards, the Second Circuit held that § 1692e and § 1692g of the FDCPA - namely, the same provisions upon which the Plaintiff's complaint in this case is premised - indisputably “protect an individual's concrete interests, ” so that an alleged violation of those provisions satisfies the injury-in-fact requirement of Article III. Id. at *4.

         Although mindful that Summary Orders of the Second Circuit lack precedential effect, see Aguas Lenders Recovery Grp. LLC v. Suez, S.A., 585 F.3d 696, 702 n.4 (2d Cir. 2009), the Court is nevertheless persuaded by the court's reasoning in Papetti, which is apparently dispositive on this issue and finds substantial support in the body of post-Spokeo district court cases in this Circuit. See, e.g., Winehouse v. GC Servs. Ltd. P'ship, No. 16-cv-3110, 2017 U.S. Dist. LEXIS 86791, at *4 (E.D.N.Y. June 6, 2017) (finding that standing could be premised on a violation of the informational rights embodied in sections 1692d and 1692e of the FDCPA); Guerrero v. GC Servs. Ltd. P'ship, No. 15-cv-7449, 2017 U.S. Dist. LEXIS 42884, at *29, *33 (E.D.N.Y. Mar. 23, 2017) (finding an argument substantially similar to the Defendant's argument in this case to be “misplaced, ” and concluding that Article III standing can be premised on alleged violations of § 1692e and § 1692g, which confer substantive rights); accord Garcia v. Law Offices Howard Lee Schiff, P.C., No. 16-cv-791, 2017 U.S .Dist. LEXIS 48071, at *9-*10 (D. Conn. Mar. 30, 2017); Remington v. Fin. Recovery Servs., No. 16-cv-865, 2017 U.S. Dist. LEXIS 36637, at *5-*6 (D. Conn. Mar. 15, 2017); Bautz v. ARS Nat' l Servs., No. 16-cv-768, 2016 U.S. Dist. LEXIS 178208, at *2-*3 (E.D.N.Y. Dec. 23, 2016).

         Accordingly, the Court finds that the Plaintiff's alleged failure to plead facts showing an injury beyond the statutory violations themselves does not divest her of Constitutional standing to maintain this action. See Spokeo, 136 S.Ct. at 1549 (noting that “a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified”) (emphasis in original).

         The Court notes that, originally, the Defendant also challenged the Plaintiff's standing on the alternative ground that she failed to properly include her FDCPA claim on the appropriate schedules in her March 2016 bankruptcy filing, and therefore, the present claims belong exclusively to her bankruptcy estate. However, it appears that the Defendant has since abandoned that argument.

         Accordingly, to the extent that the Defendant seeks to dismiss the complaint under Fed.R.Civ.P. 12(b)(1) on the ground that the Plaintiff lacks Article III standing, its motion for such relief is denied.

         B. The Sufficiency of the Complaint

         The Court now turns to the Defendant's argument that the complaint fails to state a plausible ...

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