Downey v. Midland Funding Llc et alMOTION TO DISMISS FOR FAILURE TO STATE A CLAIM and Certificate of Service with Brief In SupportN.D. Ga.June 5, 20171 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION JUDY DOWNEY PLAINTIFF v. Civil Action No. 1:17-CV-00632-SCJ-JCF MIDLAND FUNDING, LLC, ENCORE CAPITAL GROUP, INC., MIDLAND CREDIT MANAGEMENT, INC., and GREENE & COOPER, LLP, DEFENDANTS MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM COMES NOW the Defendant, Greene & Cooper, LLP (“G&C”), by counsel, pursuant to rule 12(b)(6) of the Federal Rules of Civil Procedure and moves the Court to dismiss the above cause of action against the Defendant based upon the grounds stated more particularly in their memorandum in support. Defendant by filing this motion do not waive, and specifically reserve, any and all defenses available to them. WHEREFORE, Defendant, by counsel, respectfully requests that the Court dismiss the claims asserted in the Plaintiff’s Complaint pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure and for all other appropriate relief. Case 1:17-cv-00632-SCJ-JCF Document 12 Filed 06/05/17 Page 1 of 3 2 This 5th day of June, 2017 /s/ Kathleen Steil Kathleen Steil Georgia Bar No. 598895 Mary L. Morris, Georgia Bar No. 122059 Kathyrn Sherry, Georgia Bar No. 642399 Vincent Paul Leibbrandt, Georgia Bar No. 318178 Taisa Nadia Meighan, Georgia Bar No. 525855 Counsel for Greene & Cooper, LLP GREENE & COOPER, LLP 615 Colonial Park Drive, Suite 104 Roswell, GAQ 30075 Telephone: (678) 507-0213 ksteil@greenecooper.com Case 1:17-cv-00632-SCJ-JCF Document 12 Filed 06/05/17 Page 2 of 3 3 CERTIFICATE OF SERVICE I certify that on June 5, 2017, I electronically filed the foregoing MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM and corresponding MEMORANDUM IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM with the Clerk of Court using the ECF system which sent notification of such filing to the following: E. Talley Gray Law Offices of E. Talley Gray 3449-E Lawrenceville Suwanee Road Suwanee, GA 30024 I further certify that on June 5, 2017, I served the foregoing MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM and corresponding MEMORANDUM IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM by depositing in the United States Mail a copy of the same in a property addressed envelope with adequate postage affixed thereon to assure delivery to: E. Talley Gray Law Offices of E. Talley Gray 3449-E Lawrenceville Suwanee Road Suwanee, GA 30024 /s/ Kathleen Steil Kathleen Steil Georgia Bar No. 598895 Mary L. Morris, Georgia Bar No. 122059 Kathyrn Sherry, Georgia Bar No. 642399 Vincent Paul Leibbrandt, Georgia Bar No. 318178 Taisa Nadia Meighan, Georgia Bar No. 525855 Counsel for Greene & Cooper, LLP GREENE & COOPER, LLP 615 Colonial Park Drive, Suite 104 Roswell, GA 30075 Telephone: (678) 507-0213 ksteil@greenecooper.com Case 1:17-cv-00632-SCJ-JCF Document 12 Filed 06/05/17 Page 3 of 3 1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION JUDY DOWNEY PLAINTIFF v. Civil Action No. 1:17-CV-00632-SCJ-JCF MIDLAND FUNDING, LLC, ENCORE CAPITAL GROUP, INC., MIDLAND CREDIT MANAGEMENT, INC., and GREENE & COOPER, LLP, DEFENDANTS MEMORANDUM IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM Comes now Defendant Greene & Cooper, LLP (“G&C”) and for its memorandum in support of Motion to Dismiss for Failure to State a Claim states as follows: INTRODUCTION G&C is not without sympathy for the Plaintiff, Judy Downey (hereinafter “Ms. Downey” and/or “Plaintiff”).The facts show that she is heavily in debt and in need of good counsel. G&C is a small creditor’s rights firm, founded in 1987 by Kyle Cooper and Joe Greene. Mr. Greene retired several years ago, and Mr. Cooper’s two daughters are now also members of the firm. G&C strives to vigorously represent its client’s interests while complying with all applicable Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 1 of 25 2 federal laws. The instant litigation arose as a result of a Gwinnett County Magistrate Court Judgment against Plaintiff for a $10,938.31 debt. G&C represented Defendant Midland Funding, LLC to collect the $10,938.31 debt Ms. Downey incurred through her use of a Citibank Cash Card. Plaintiff is no stranger to collection actions filed against her. She has been sued three other times by creditors in Gwinnett County Courts. See Midland Funding LLC v. Downey (Case No. 12-M-34745); Portfolio Recovery Associates LLC v. Downey (Case No. 13-M-07018); Cach v. Downey, (Case No.15-C-05276- S3). This suit is the second FDCPA suit Plaintiff has brought in the last year resulting from collection actions filed against Ms. Downey in state court. See Downey v. Cach, et al, U.S. District Court for the Northern District of Georgia,1:16-cv-03727-AT. Ms. Downey is swept up in the tide of FDCPA lawsuits sweeping the nation as lawyers have learned that the fee shifting statute in the FDCPA can prove profitable1. Such lawsuits are an abuse of a law meant to protect consumers. The instant case is such a claim, because the facts do not state a facially plausible claim for relief under the FDCPA. While the chief mechanism of the 1 In fact, some FDCPA CLEs advise attorneys to prepare their clients for windfall judgments in which the attorney receives a far higher award than their client. Oftentimes settlements are bifurcated to ensure that the attorney receives a much larger share of the payment than their clients. Robert W. Murphy, Esq., FDCPA Practice Fundamentals (or the care and feeding of your FDCPA case). Fair Debt Collection Practices Conference (March 12, 2015), https://www.nclc.org/images/pdf/conferences_and_webinars/fdcp/2015/exp/practice- fundamentals.pdf * at p. 31-33 (visted June 2, 2016 at 10:08 A.M.). Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 2 of 25 3 FDCPA is to protect consumers from abusive practices, the FDCPA preserves a creditor’s ability to exercise its judicial remedy. The FDCPA was not meant to replace the bankruptcy system as an escape hatch or a fresh start. A Judgment was levied against Ms. Downey in Magistrate Court. Ms. Downey’s allegations exclusively rely on the pleadings filed against her in Magistrate Court2. But the facts show that Ms. Downey incurred the debt, defended the case through counsel from the beginning of the Magistrate Court case3, and did not bother to show up at trial. The blame for the Magistrate Court’s Judgment lies squarely at her own feet. If Plaintiff needs relief from the Judgment entered against her in Magistrate Court, a federal remedy exists for her through a discharge in bankruptcy4 , not under the FDCPA. As such, G&C respectfully requests the Court to award Defendant its costs and reasonable attorney’s fees in defending an action brought in bad faith for the purpose of harassment, and to dismiss this action with prejudice. FACTS 2 Plaintiff’s entire claim rests on the allegation that the Statement of Claim filed against her in Magistrate Court (which satisfied the Magistrate Court to such an extent that it granted Judgment against her) misrepresented the character, amount and legal status of the debt she owed and demonstrated a lack of meaningful attorney involvement. (Doc 1 “Plaintiff’s Complaint” at p, 4- 9, ¶ 22-33). 3 Counsel for the Plaintiff signed and filed an answer on Plaintiff’s behalf in the Magistrate Court case. See Exhibit “C” (Signed by E. Tally Grey as “Defendant’s Agent”). G&C is unsure why Plaintiff alleged in her Complaint that she was pro se in the underlying litigation, as Plaintiff is currently represented by the same Counsel who signed and filed Plaintiff’s Answer in the Magistrate Court case and defended Plaintiff at the bench trial. (Doc 1 “Plaintiff’s Complaint” at p, 9, ¶ 34); see also the Magistrate Court Answer attached as Exhibit “C” and the Magistrate Court Judgment attached as Exhibit “D”. 4 Another solution is to work out a payment arrangement or post-Judgment settlement with the creditor. Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 3 of 25 4 1. Plaintiff (hereinafter “Plaintiff” or “Ms. Downey”) incurred the $10,938.31 debt through her use of a Citibank Cash Card. That $10,938.31 debt is the underlying subject of this litigation. A copy of her statement showing the debt is attached hereto and incorporated herein by reference as Exhibit “A”. 2. Defendant, Midland Funding, LLC (“Midland”) is the successor in interest of Citibank, who originally owned the debt. Defendants made numerous attempts to resolve the debt, including letters and phone calls, all of which fell on deaf ears. 3. G&C is a law firm with experience handling creditor’s rights claims. G&C undertook representation of Midland for its claim against Ms. Downey. Pursuant to the Georgia Rules of Professional Conduct, G&C had a duty to zealously represent its client. 4. Because Plaintiff refused to repay the debt she owed, G&C carefully reviewed the claim, determined the documents constituted prima facie evidence of a cause of action, and decided that its client’s best interests merited litigation to collect the debt. For this reason, G&C instigated an action in Magistrate Court on behalf of its client to collect the $10,938.31 incurred by Plaintiff using her Citibank Cash Card. 5. Pursuant to O.C.G.A. §15-10-43, G&C commenced the Magistrate Court action against Plaintiff by filing a Statement of Claim (hereinafter the Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 4 of 25 5 “Statement of Claim”). A copy of the Statement of Claim is attached hereto and incorporated herein by reference as Exhibit “B”. 6. The Statement of Claim filed by G&C, along with its attachments incorporated therein, exceeded the minimum requirements under Georgia law to bring forth a claim in Magistrate Court. G&C attached ten pages of supporting documents to the Statement of Claim, including the assignment documents showing G&C’s client as the successor in interest to the debt, a statement of account, and an affidavit of claim. See Exhibit “B”. 7. Plaintiff was served at 2720 Kingstream Way, Snellville, Georgia 30039 (hereinafter referred to as the “Kingstream address”) at 8:27am on June 28, 2016. The account statements all show the same Kingstream address. See attached Exhibit “A” and p. 7 of Exhibit “B”. 8. Plaintiff’s counsel responded to the Magistrate Court suit by filing an Answer on August 9, 2015. The Answer was signed by E. Talley Gray of 3449 E. Lawrenceville-Suwanee Rd, Suwanee, GA 30024, (678) 428-4868 as Defendant’s agent. The Answer was notarized. G&C’s address is correctly listed in the subject heading. A copy of the Answer is attached hereto and incorporated herein by reference as Exhibit “C”. 9. The matter was resolved in a bench trial. Plaintiff’s counsel appeared and defended her at the trial. Plaintiff, herself, did not attend the trial. The Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 5 of 25 6 Magistrate Court entered a Final Order and Judgment (the “Judgment”) in favor of G&C’s client, Midland, against Ms. Downey. A copy of the Magistrate Court’s Judgment is attached hereto and incorporated herein by reference as Exhibit “D”. 10. Plaintiff has filed an appeal of the Magistrate Court Judgment, which is currently pending, and this federal action. STANDARD A complaint may be dismissed if the facts as pled do not state a claim for relief that is plausible on its face. Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1261 (11th Cir. 2009) citing Ashcroft v. Iqbal, 556 U.S. 129 S. Ct. 1937 (2009) [“a complaint must state a plausible claim for relief to survive a motion to dismiss”] Bell Atl. Corp. v. Twombly, 550 U.S. 544, 561-62, 570, 127 S. Ct. 1955, 1968-69, 1974 (2007). In Iqbal, the Supreme Court indicated that Fed. R. Civ. P. 8 does not require detailed factual allegations but requires “more than an unadorned, the- defendant-unlawfully-harmed-me accusation.” Sinaltrainal at 1261 citing Iqbal, 129 S. Ct. at 1949. A complaint must state a plausible claim for relief, and “[a] claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Plausibility does not require probability, “but it asks for more than a sheer Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 6 of 25 7 possibility that a defendant has acted unlawfully.” Iqbal, 129 S. Ct. at 1949. “Where a complaint pleads facts that are merely consistent with a defendant’s liability, it ‘stops short of the line between possibility and plausibility of entitlement to relief.’” Id. The “plausibility” standard applies to all civil actions...because it is an interpretation of Rule 8.” American Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010). ARGUMENT A. PLAINTIFF’S COMPLAINT FAILS TO STATE A CLAIM UNDER THE FDCPA. Plaintiff seeks relief under 15 U.S.C. § 1692(e)(2), § 1692(e)(3) and 15 U.S.C. 1692(f)5. (Doc 1 “Plaintiff’s Complaint” at ¶ 36-41; 48-49). Congress enacted the “FDCPA in order to eliminate ‘the use of abusive, deceptive, and unfair debt collection practices.’” Harvey v. Great Seneca Financial Corp., 453 F.3d 324 at 330 (6th Cir. 2006)(citing 15 U.S.C. § 1692(a)). The FDCPA was intended to target oppressive conduct, such as “tactics intended to embarrass, upset or frighten a debtor” that are likely to cause “‘suffering and anguish’ which occur when a debt collector attempts to collect money which the debtor, through no fault of his own, does not have.” Id. The sections under which Plaintiff is suing specifically grant relief to consumers who are the victims of creditors that make 5 As is more fully discussed later, G&C is also asking the Court for relief under the FDCPA, under 15 U.S.C. § 1692(k)(a)(3), which allows Courts to award attorney’s fees and costs to Defendants after a finding that the FDCPA claim was brought in bad faith and for the purpose of harassment. Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 7 of 25 8 false representations6 or use unfair or unconscionable means to collect a debt. 15 U.S.C. §§ 1692(e)(2), 1692(e)(3) and 1692(f). The debt collection tactics forbidden by the FDCPA are “not comparable to the single filing of a debt-collection law suit”. Id. It is not unfair or deceptive to file a Statement of Claim in Magistrate Court to collect a debt. See Miljkovic v. Shafritz and Dinkin P.A., 791 F.3d 1291, 1307 (11th Cir. 2015); see also Harvey v. Great Seneca Financial Corp., 453 F.3d 324, 330-333 (6th Circuit 2006). The FDCPA preserves a creditor’s access to the court system. Miljkovic, 791 F.3d at 1307; see also Heintz v. Jenkins, 514 U.S. 291, 296 (1995)(The Supreme Court recognized the FDCPA’s “apparent objective of preserving creditors’ judicial remedies”). The Eleventh Circuit has recognized that “disagreement is the nature of litigation” and for judicial proceedings “to accurately resolve disputes, including debt collection disputes, debt-collector attorneys must be permitted to present legal arguments in their clients’ favor and to invoke the remedies available to them”. Id. at 1298 & 1309. The facts of the case are as follows: Plaintiff ran up charges on a Citibank Cash Card, Midland became the successor-in-interest to the debt, G&C, as counsel 6 Ms. Downey’s allegations are particularly ironic in that she asserts G&C attorneys falsely represented that they were meaningfully involved attorneys when Ms. Downey’s own counsel appears to be guilty of just the opposite by falsely representing to the Court in her Complaint that she was not an attorney when she filed an Answer on behalf of her client in the Magistrate Court action. See Exhibit “C” (Answer signed by E. Talley Grey as “Defendant’s Agent”). Counsel for Ms. Downey failed to include her required Bar Number and simply identified herself as an agent, instead of counsel; thus leading others to believe that Ms. Downey was Pro Se. Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 8 of 25 9 for Midland, filed a Statement of Claim in Magistrate Court, Plaintiff appeared, through counsel7, and defended herself, and the Court granted Judgment for Midland. Plaintiff’s only argument is that the Statement of Claim was insufficient to prove Plaintiff owed Midland the $10,938.31 debt she incurred through the use of her Citibank Cash Card. In fact, the Statement of Claim as filed was sufficient to persuade the Magistrate Court to grant Judgment against the Plaintiff8 in Midland’s favor. As for meaningful attorney involvement, the Magistrate Court decided that Midland, through counsel, presented enough evidence to enter judgment against Defendant, despite the defense presented by Ms. Downey’s counsel. . In Miljkovic the Court noted that while a threatened “lawsuit might cause a consumer embarrassment, inconvenience, and further expense,” the “consequences of a debt collection (or any other) lawsuit are so commonplace that even a consumer susceptible to harassment, oppression, or abuse would not have been harassed, oppressed or abused by the statement in and of itself.” Id. at 1305(citing Jeter v. Credit Bureau, Inc., 760 F.2d, 1168, 1179 (11 Cir. 1985)). The Court goes on to say: If the filing of a lawsuit does not have the natural consequence of harassing, abusing, or oppressing a debtor, surely a simple oppositional statement does 7 Plaintiff appeared and defended herself through the Answer she filed by counsel and her counsel’s oral argument at the trial, though she declined to attend any of the proceedings in person. See Exhibits “C” & “D”. 8 Plaintiff’s lawsuit looks suspiciously like an attack on the integrity of the Gwinnett County state court system, which granted Judgment against Ms. Downey in Magistrate Court and in which Ms. Downey has filed an Appeal based on the same issues as the instant litigation. Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 9 of 25 10 not ‘represent[] the type of coercion and delving into the personal lives of debtors that the FDCPA in general, and § 1692d in particular, was designed to address.’ It is not enough that the sworn reply caused Appellant unwanted ‘embarrassment, inconvenience, and further expense,’ indeed, as the Sixth Circuit has noted, ‘[a]ny attempt to collect a defaulted debt will be unwanted by a debtor[.]’[] Rather, the debt collector's conduct must manifest "a tone of intimidation[.]" Id. at 1305(citations omitted)(quoting Jeter, 760 F.2d at 1179 & 1180 n. 12)(citing Harvey v. Great Seneca Fin. Corp., 452 F.3d at 330). Plaintiff’s Complaint, as pled, lacks any allegation of such a “tone of intimidation” or “the type of coercion and delving into the personal lives of debtors that the FDCPA in general” was designed to address. Rather, Ms. Downey’s chief issue is that G&C’s Statement of Claim, as she sees it9, did not prove that Midland was the successor-in-interest to the $10,938.31 debt that Ms. Downey does not dispute she owes. (Doc 1 “Plaintiff’s Complaint” at ¶ 40, 45-47). The Magistrate Court Judgment specifically states that Ms. Downey was represented by counsel and that the Judgment was based “upon the submission of Plaintiff’s records and oral argument by counsel10.” See Exhibit “D”. The Magistrate Court’s findings are significant because they indicate that the Court ruled for Midland because of the documents presented in the Statement of Claim. 9 G&C, Midland and the Gwinnett County Magistrate Court all disagree with Plaintiff’s interpretation of the documents attached to the Statement of Claim. 10 The Magistrate Court Judgment also proves that the arguments of G&C’s meaningfully involved attorneys were more persuasive than those of Ms. Downey’s counsel. Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 10 of 25 11 Id. These findings show that the Magistrate Court was satisfied with the exact same documents that Plaintiff points to as the basis of this claim. Miljkovic stands for the proposition that mere disagreement with statements made in a pleading does not entitle a Plaintiff to relief under the FDCPA. Miljkovic, 791 F.3d at 1305. The basis for Plaintiff’s claim is that she disagrees with G&C’s assessment of her liability and the Gwinnett County Magistrate Court’s Judgment that she owes $10,938.31 to Midland. Her alleged injury is that the Magistrate Court entered Judgment against her. The FDCPA does not provide a basis for relief for such an injury. Rather, the procedurally proper remedy for Plaintiff is the appeal of the Magistrate Court Judgment, which she has filed concurrently with this lawsuit, or to seek discharge in bankruptcy. As such, Plaintiff has failed to present a prima facie case for an FDCPA violation. Since Plaintiff has not presented any valid claims, Plaintiff’s Complaint should be dismissed with prejudice pursuant to Fed.R.Civ.P. 12(b)(6). B. PLAINTIFF’S ALLEGATION OF A LACK OF MEANINGFUL ATTORNEY INVOLVEMENT IS AN ATTEMPT TO VIOLATE THE SANCTITY OF THE ATTORNEY- CLIENT RELATIONSHIP. As counsel for Midland, G&C is bound by the rules of professional conduct not to disclose communications and analysis subject to attorney client confidentiality. GA Rules of Prof’l Conduct R. 1.6(a). The argument alleging lack of meaningful attorney involvement is an attempt to delve into counsel’s Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 11 of 25 12 confidential communications with its client. An attorney’s communication with its client, no matter the type of case, regarding the client’s rights, remedies and strategy are confidential and sacred. Plaintiff’s allegations of a “lack of meaningful attorney involvement” are actually a veiled attack on the attorney-client relationship, which is closely protected by the courts, legislature, and the State Bar of Georgia. There is a strong public policy directive against interference with the attorney-client relationship. The general public must feel safe in communicating with their attorneys. If actions can be maintained through unfounded accusations of “lack of meaningful attorney involvement” without being more specifically pled, then the effect is to shift the burden of proof away from the Plaintiff and on to the Defendant to prove attorney involvement. This burden would force law firms to disclose their process, procedures, internal communications and protected communications with the client simply to defend themselves against accusations that by the Plaintiff’s own admission are only founded on her “information and belief”. Speculation is simply not enough evidence to justify law firms bearing the burden of costs and litigation to show that they are meaningfully involved, especially when attorney involvement is already regulated by the Georgia Supreme Court and the Georgia State Bar. To allow claims like Ms. Downey’s to go forward, without requiring her to plead specific Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 12 of 25 13 facts evidencing her assertions, will set a new standard for lawyers. Guarding against spurious allegations, creditor’s rights lawyers would have to modify their lawsuits to include affirmative statements regarding meaningful attorney involvement to build a case in advance. Such a standard tramples on the sanctity of the attorney-client relationship, makes the attorney a party to the litigation and a potential witness and will bury small creditor’s rights litigation firms under the costs of meritless litigation. These are the same policy arguments that prompted the special pleading rules for certain claims. The Supreme Court in Twombly recognized that “[o]n certain subjects understood to raise a high risk of abusive litigation, a plaintiff must state factual allegations with greater particularity than Rule 8 requires.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 569 n. 14 (2007). This is to prevent a plaintiff with a “largely groundless claim” to be allowed to “take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value”. Id. at 558(quoting Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 347 (2005). Claims for lack of meaningful attorney involvement under the FDCPA contain the type of high risk of abusive litigation recognized by the Supreme Court in Twombly. Other Courts have recognized the potential for abusive litigation arising out of the FDCPA. For example, the Court in Huebner noted on the subject of FDCPA litigation that Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 13 of 25 14 In this Court, however, and I suspect in many others, the use of the statute has evolved into something quite different than its original purpose would suggest. The majority of cases that I see under the statute are brought by a handful of the same lawyers, based on complaints that read much more like legal briefs than complaints. Frequently, these cases are brought on behalf of the same debtor-plaintiffs, who seize on the most technical alleged defects in collection notices or telephone communications, often raising claims of " confusion" or " deception" regarding practices as to which no one, not even the least sophisticated consumer, could reasonably be confused or misled. These cases are often brought for the non-salutary purpose of squeezing a nuisance settlement and a pittance of attorneys' fees out of a collection company, which it will often find cheaper to pay than to litigate. A cottage industry among limited players -- plaintiffs' lawyers, debtors, and even defendants' lawyers -- appears to be the primary progeny of the statute. Huebner v. Midland Credit Management, Inc., 85 F.Supp.3d 672, 673 (E.D.N.Y. 2015). See also Scroggin v. Credit Bureau of Jonesboro, Inc., 973 F.Supp.2d 961(E.D. Arkansas 2013)(awarding costs and attorney’s fees for an action brought out of “dishonesty of belief or purpose…hatred, ill will, and spirit of revenge”). The instant litigation is such a groundless claim, brought for the purpose of terrifying a small firm like G&C into a settlement. 1. Statement of Claim G&C attached ten pages of supporting documentation to the Statement of Claim showing that Midland had a prima facie case against Plaintiff in Magistrate Court. Georgia is a notice pleading state. See Dillingham v. Doctors Clinic P.A., 223 S.E.2d 625, 626 (Ga. 1976) .Statements of Claim in Magistrate Court are required to be in concise form, free from technicalities and include a brief statement of the claim giving the defendant reasonable notice of the basis for each Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 14 of 25 15 claim.” O.C.G.A. §15-10-43. G&C filed a Statement of Claim in the Magistrate Court case that exceeded the minimum requirements under Georgia law for bringing forth a complaint in Magistrate Court. The Statement of Claim was clear and concise, informing Ms. Downey of the contract theory, the principal amount, the original creditor, “CITIBANK, N.A.”, the last four digits of the account number “8070” and that Midland Funding had purchased the account. See p. 1of Exhibit “B”. Despite the fact that Georgia is a notice pleading state, with minimal requirements to file a lawsuit, the Statement of Claim contained numerous exhibits demonstrating the chain of title of the account and evidencing Midland Funding’s ownership interest in said account. Id.at p. 2-11. The exhibits attached to the Statement of Claim demonstrated purchase and assignment from Citibank, N.A. to Midland Funding. Id. at 5. The Midland Affidavit and Field Data Form are consistent in the account number and principal balance and the data form has Ms. Downey’s name and address and other identification information. Id. at 7-9. The name and address listed for Ms. Downey on the Affidavit and Field Data Form are the same name and address under which she was served with the Statement of Claim in the Magistrate Court proceeding. Plaintiff has not disputed that the account number, balance, her name or address are correct. Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 15 of 25 16 The documents attached to the Statement of Claim showed Midland had a prima facie cause of action against Ms. Downey and exceeded the O.C.G.A. §15- 10-43 standard for bringing a claim. In addition to attacking the documents attached to the Statement of Claim, Plaintiff makes a series of unsubstantiated allegations. Specifically, Ms. Downey alleges that the Purchase and Sale Agreement between Citibank and Midland do not entitle Midland to rely on the accuracy of statements made to it by Citibank, that the affiant lacks personal knowledge in the Affidavit attached to the Statement of Claim, the Field Data Form is hearsay, and that G&C falsely represented that the Statement of Claim was prepared and filed by attorneys exercising their professional judgment, oversight and supervision, when there was no meaningful attorney involvement in the preparation or filing of the Statement of Claim. (Doc 1 “Plaintiff’s Complaint” at ¶ 33-37, 44, 48). The Eleventh Circuit in Sinaltrainal addressed similarly unsubstantiated allegations in affirming the dismissal of a claim brought in district court. The Court explained as follows: We reiterate that to state a plausible claim for relief, the plaintiffs must plead “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949…Furthermore, unwarranted deductions of fact in a complaint are not admitted as true for the purpose of testing the sufficiency of the allegations…Here, the Garcia plaintiffs’ attenuated chain of conspiracy fails to nudge their claims across the line from conceivable to plausible. Twombly, 550 U.S. at 570, 127 S.Ct. at 1974. First, while the plaintiffs allege “Aponte’s plan necessarily required the cooperation and complicity of the arresting police officers,” we are not required to admit as true this Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 16 of 25 17 unwarranted deduction of fact. Second, the plaintiffs’ allegations of conspiracy are “based on information and belief,” and fail to provide any factual content that allows us to “draw the reasonable inference that defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949…The premise for the conspiracy is alleged to be either payment of money or a shared ideology. The vague and conclusory nature of these allegations is insufficient to state a claim for relief, and “will not do.” Twombly, 550 U.S. at 555, 127 S.Ct. at 1965. Sinaltrainal v. Coca-Cola Co., 578 F.3d 1252, 1268-9 (11th Cir. 2009)(emphasis added). Plaintiff’s Complaint as pled is analogous to Sinaltrainal. She fails to plead any factual content that allows for a reasonable inference that G&C attorneys were not meaningfully involved in the review and signing of the Statement of Claim, that the Affiant lacked personal information, that the Field Data Form was hearsay, or that Citibank disclaimed the veracity of their records. Instead, Plaintiff presents her case through a recitation of various unwarranted deductions of fact. As to the specious allegation Plaintiff makes in her Complaint that G&C attorneys were not meaningfully involved in the Magistrate Court action, G&C attorneys are officers of the Court and bound by the Georgia Rules of Professional Conduct11. Further, G&C’s attorneys had to be meaningfully involved to convince 11 Ms. Downey’s counsel, as an attorney licensed in Georgia, is also bound by the Georgia Rules of Professional Conduct. Additionally, the Federal Rules of Civil Procedure provide “by presenting to the court a pleading, written motion, or other paper-whether by signing, filing, submitting, or later advocating it-an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances…the denials of factual contentions are warranted on the evidence.” FRCP 11(b)(3). Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 17 of 25 18 a Gwinnett County Magistrate Court to enter Judgment in their client’s favor despite the fact that Plaintiff was represented and defended herself, through counsel, by an Answer and oral argument at trial. The Judgment specifically mentions the records submitted by G&C and oral arguments of counsel as the basis for the Magistrate Court’s decision. Exhibit “D”. G&C attorneys were meaningfully involved at every stage of the Magistrate Court case. Plaintiff’s allegations of hearsay, lack of personal knowledge and “secret terms” between Citibank and Midland are equally vague and conclusory. Neither Ms. Downey, nor her counsel, pleads any facts that suggest they are privy to such information. Rather, Plaintiff relies on the same tactic as the plaintiffs in Sinaltrainal and states that these allegations are based on her “information and belief”. (Doc 1 “Plaintiff’s Complaint” at ¶ 33). In reality, these allegations are nothing more than unwarranted deductions of fact that the Court is not required to admit as true. As such, Plaintiff’s attenuated claims of lack of meaningful attorney involvement and a defective pleading fail to nudge her claim across the line from conceivable to plausible and the instant action should be dismissed with prejudice. 2. Court Costs G&C included $105.00 in costs in the Statement of Claim. See p. 1 of Exhibit “B”. The $105.00 reflects the actual costs required to file the claim in Magistrate Court and serve Ms. Downey. The collection of court costs in a Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 18 of 25 19 collection action is expressly authorized. The Magistrate Court granted the request for costs G&C included in the Statement of Claim in the Judgment. See Exhibit “D”. Ms. Downey’s allegation that Midland’s request for court costs (which were awarded by the Magistrate Court) constitutes an FDCPA violation is clearly outrageous. Where a plaintiff “has specially pleaded and has made prayer therefor” and where the defendant has “acted in bad faith, has been stubbornly litigious, or has caused the plaintiff unnecessary trouble and expense” the expenses of litigation may be allowed as part of the damages. O.C.G.A. § 13-6-11. The statute specifically requires a plaintiff to plead and make prayer for the expenses of litigation when that plaintiff believes that the circumstances warrant the imposition of court costs. Here, G&C and Midland both tried to settle the debt out of court on numerous occasions, without any effort or dispute by Ms. Downey. Plaintiff alleges G&C violated section 1692(f) in asking for the Court costs permitted by O.C.G.A. 13-6-11. (Doc. 1 “Plaintiff’s Complaint” at ¶ 41 & 45). Section 1692(f)(1) forbids the collection of any amount “unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” Id. Whether a party has exhibited bad faith, has been stubbornly litigious or has caused the other party unnecessary trouble and expense is an issue for a trier of fact to determine. Goia v. CitiFinancial Auto, 1:10-cv-2405-WSD, Northern District of Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 19 of 25 20 Georgia (Jan. 13, 2012). As is more specifically discussed later, the issue of whether Plaintiff’s actions merited the imposition of costs was adjudicated by the relevant factfinder, the Gwinnett County Magistrate Court. The Magistrate Court granted G&C’s request for court costs based on the Statement of Claim and hearing G&C’s oral arguments. See Exhibit “D”. Implicit in that Judgment is the finding that Plaintiff’s actions merited the imposition of court costs under the laws of the state of Georgia. Because G&C’s inclusion of court costs in the Statement of Claim was expressly permitted by law it does not constitute an FDCPA violation. C. UNDER THE ROOKER-FELDMAN DOCTRINE THE COURT LACKS SUBJECT MATTER JURISDICTION. Ms. Downey is a state court loser and is barred by the Roker-Fedlman doctrine from using this Court as a court of appeals. Under the Rooker-Feldman doctrine, this Court lacks subject matter jurisdiction over Plaintiff’s claims. The Rooker-Feldman doctrine provides that federal courts, other than the Supreme Court, have no authority to review the final judgments of state courts. Rooker v. Fid. Trust Co., 263 U.S. 413 (1923); Dist. of Columbia Court of Appeals v. Feldman, 460 U.S. 462, 476-82 (1983); Exxon Mobil Corp. v. Saudi Basic Inds. Corp., 544 U.S. 280, 1521-22 (2005). The Eleventh Circuit set forth the following four factor test to guide the application of the Rooker-Feldman doctrine. Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 20 of 25 21 (1) the party in federal court is the same as the party in state court, see Roe v. Alabama, 43 F.3d 574, 580 (11th Cir.1995); (2) the prior state court ruling was a final or conclusive judgment on the merits, see David Vincent, Inc. v. Broward County, 200 F.3d 1325, 1332 (11th Cir.2000); (3) the party seeking relief in federal court had a reasonable opportunity to raise its federal claims in the state court proceeding, see Dale v. Moore, 121 F.3d 624, 626 (11th Cir.1997) (per curiam); and (4) the issue before the federal court was either adjudicated by the state court or was inextricably intertwined with the state court's judgment, see Goodman ex rel. Goodman v. Sipos, 259 F.3d 1327, 1332 (11th Cir.2001). Nicholson v. Shafe, 558 F.3d 1266, 1272 (11th Cir. 2009)(emphasis added). Plaintiff’s claim fails the fourth factor. Pursuant to the doctrine, federal courts are prohibited from reviewing claims that are “inextricably intertwined” with a state court judgment. Casale v. Tillman, 558 F.3d 1258, 1260 (11th Cir. 2009). A federal claim is “inextricably intertwined” with a state court judgment if the federal claim succeeds only to the extent that the state court wrongly decided the issues before it. Id. The Magistrate Court Judgment was adjudicated on the merits, through pleadings and a bench trial. The Court explicitly found for G&C’s client as a result of “submission of Plaintiff’s records and oral argument by counsel”. See Exhibit “D”. A finding by this Court that the Statement of Claim was defective and thereby the FDCPA was violated effectively nullifies the Magistrate Court’s express finding that Plaintiff owes Midland $10,938.31 plus costs. The Rooker-Feldman doctrine is confined to cases “brought by state-court losers complaining of injuries caused by state-court judgments rendered before the Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 21 of 25 22 district court proceedings commenced and inviting district court review and rejection of those judgments.” Shedd v. Bank of Am., N.A., No. 4:11-CV-202 (CDL), 2012 U.S. Dist. LEXIS 86903, at *10 (M.D. Ga. June 22, 2012) (citations omitted). Plaintiff’s claim, by its very nature, invites this court to review and reject the Magistrate Court Judgment. Accordingly, it is improper for Plaintiff to ask this Court to find that the Georgia state court wrongfully entered judgment based on the Statement of Claim. In effect, Plaintiff is seeking a collateral attack in federal court of a valid state court decision.. In the meantime, this Court cannot review or overturn the state court judgment. See Dale v. Moore, 121 F.3d 624, 626 (11th Cir. 1997) (under Rooker-Feldman doctrine, federal court “lacks jurisdiction to review, reverse or invalidate a final state court decision”); Parker v. Potter, 368 Fed. Appx. 945 (11th Cir. 2010) (barring review of borrower’s claim under Rooker-Feldman after state court had ruled); Termarsch v. Argent Mortg. Co., LLC, No. 8:07-CV- 1725-T-30TBM, 2008 U.S. Dist. LEXIS 31394, at *10 (M.D. Fla., April 16, 2008) (dismissing plaintiff’s federal court complaint alleging wrongful foreclosure because Rooker-Feldman “precludes a federal action if the relief requested would effectively reverse the state court decision or void its ruling”). Lacking subject matter jurisdiction to rule on the validity of the state court judgment, this Court has no basis on which to decide any of the claims brought by Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 22 of 25 23 Plaintiff against the G&C. The claim is entirely dependent on Plaintiff’s contention that the Statement of Claim filed in the Magistrate Court action was defective. As a result, this Court should dismiss Plaintiff’s claim with prejudice. D. G&C RESPECTFULLY ASKS THE COURT TO FIND THAT THE INSTANT ACTION WAS BROUGHT IN BAD FAITH AND FOR THE PURPOSE OF HARASSMENT UNDER §1692(K)(A)(3). Section 1692(k)(a)(3) provides that a Court may award the defendant attorney’s fees on a finding by the court that an action under this section was “brought in bad faith and for the purpose of harassment”. Id. Plaintiff’s lawsuit not only lacks merit, but is procedurally improper. Plaintiff’s counsel misrepresented her involvement in the underlying case and brought this claim without diligent effort to serve G&C, test the validity of the facts she alleges, or research the relevant law. Plaintiff has a history of collaterally attacking state court collection actions through the FDCPA. The lawsuit is a disguised attempt to nullify a Magistrate Court Judgment for the purpose of pulling Plaintiff out of extreme debt. The proper recourse for such an action is an appeal or bankruptcy. As such, Plaintiff’s claim was brought in bad faith and for the purpose of harassment. CONCLUSION Under the foregoing, Plaintiff’s complaint fails to state a claim under the §§ 1692(e) or 1692(f) of the FDCPA and should be dismissed. Additionally, G&C Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 23 of 25 24 asks the Court to find that this suit was brought in bad faith and award Defendant the costs and attorney’s fees suffered in defending it. Wherefore, Defendant respectfully request that this Court enter an order dismissing Plaintiff’s Complaint for failure to state a claim and awarding Defendant its costs and reasonable attorney’s fees. Respectfully submitted, /s/ Kathleen Steil Kathleen Steil Georgia Bar No. 598895 Mary L. Morris, Georgia Bar No. 122059 Kathyrn Sherry, Georgia Bar No. 642399 Vincent Paul Leibbrandt, Georgia Bar No. 318178 Taisa Nadia Meighan, Georgia Bar No. 525855 Counsel for Greene & Cooper, LLP GREENE & COOPER, LLP 615 Colonial Park Drive, Suite 104 Roswell, GAQ 30075 Telephone: (678) 507-0213 ksteil@greenecooper.com Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 24 of 25 25 CERTIFICATE OF COUNSEL REGARDING FONT SIZE Counsel certifies that the foregoing has been prepared using Times New Roman font size 14 in accordance with Local Rules 5.1(B)(3) and 7.1(D). This 5th day of June, 2017 /s/ Kathleen Steil Kathleen Steil Georgia Bar No. 598895 Mary L. Morris, Georgia Bar No. 122059 Kathyrn Sherry, Georgia Bar No. 642399 Vincent Paul Leibbrandt, Georgia Bar No. 318178 Taisa Nadia Meighan, Georgia Bar No. 525855 Counsel for Greene & Cooper, LLP GREENE & COOPER, LLP 615 Colonial Park Drive, Suite 104 Roswell, GA 30075 Telephone: (678) 507-0213 ksteil@greenecooper.com Case 1:17-cv-00632-SCJ-JCF Document 12-1 Filed 06/05/17 Page 25 of 25 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 1 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 2 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 3 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 4 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 5 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 6 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 7 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 8 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-2 Filed 06/05/17 Page 9 of 9 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 1 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 2 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 3 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 4 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 5 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 6 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 7 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 8 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 9 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 10 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 11 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-3 Filed 06/05/17 Page 12 of 12 Case 1:17-cv-00632-SCJ-JCF Document 12-4 Filed 06/05/17 Page 1 of 2 Case 1:17-cv-00632-SCJ-JCF Document 12-4 Filed 06/05/17 Page 2 of 2 Case 1:17-cv-00632-SCJ-JCF Document 12-5 Filed 06/05/17 Page 1 of 2 Case 1:17-cv-00632-SCJ-JCF Document 12-5 Filed 06/05/17 Page 2 of 2