Saadiq v. Frederick J. Hanna & Associates, P. C. et alREPLY BRIEF re MOTION to Dismiss Plaintiff's Consumer Protection Act ClaimsN.D. Ga.October 6, 201628245989 v1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION ABDULHAKIM SAADIQ, ) ) Plaintiff, ) ) vs. ) CIVIL ACTION NO. ) 1:16-cv-2433-CC-JFK MIDLAND FUNDING, LLC; ) FREDERICK J. HANNA & ) ASSOCIATES, P.C.; FREDERICK ) J. HANNA, individually; JOSEPH ) C. COOLING, individually; and ) ROBERT A. WINTER, individually, ) ) ) Defendants. ) MIDLAND FUNDING, LLC'S REPLY IN SUPPORT OF MOTION TO DISMISS PLAINTIFF'S CONSUMER PROTECTION ACT CLAIMS COMES NOW defendant Midland Funding, LLC ("Midland" or "Defendant"), by and through its undersigned counsel, and hereby files this reply in support of its Motion to Dismiss Plaintiff's Consumer Protection Act Claims (Doc. 19), stating as follows: I. ARGUMENT Plaintiff's response in opposition to Midland's Motion to Dismiss fails to provide any basis for saving his Consumer Protection Act claims from dismissal. Indeed, Plaintiff admits that the Consumer Protection Act "is silent as to whether it Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 1 of 9 28245989 v1 2 allows for a private right of action" and that "Sections 5531 and 5536 [of the Act] do not provide for a private right of action." (Doc. 22 at 3, 4.) Plaintiff further acknowledges that 12 U.S.C. § 5531 authorizes the Consumer Financial Protection Bureau—not private plaintiffs—to take action to enforce the Act. (Doc. 22 at 4.) Nonetheless, Plaintiff contends that Cort v. Ash, 422 U.S. 66 (1975), provides a basis for implying a private right of action. Plaintiff is wrong. In Cort v. Ash, the Supreme Court laid out the following factors as relevant to determining whether an implied private right of action can be found in a statute: First, is the plaintiff ‘one of the class for whose especial benefit the statute was enacted,’ Texas & Pacific R. Co. v. Rigsby, 241 U.S. 33, 39, 36 S.Ct. 482, 484, 60 L.Ed. 874 (1916) (emphasis supplied)—that is, does the statute create a federal right in favor of the plaintiff? Second, is there any indication of legislative intent, explicit or implicit, either to create such a remedy or to deny one? See, e.g., National Railroad Passenger Corp. v. National Assn. of Railroad Passengers, 414 U.S. 453, 458, 460, 94 S.Ct. 690, 693, 694, 38 L.Ed.2d 646 (1974) (Amtrak). Third, is it consistent with the underlying purposes of the legislative scheme to imply such a remedy for the plaintiff? See, e.g., Amtrak, supra; Securities Investor Protection Corp. v. Barbour, 421 U.S. 412, 423, 95 S.Ct. 1733, 1740, 44 L.Ed.2d 263 (1975); Calhoon v. Harvey, 379 U.S. 134, 85 S.Ct. 292, 13 L.Ed.2d 190 (1964). And finally, is the cause of action one traditionally relegated to state law, in an area basically the concern of the States, so that it would be inappropriate to infer a cause of action based solely on federal law? 422 U.S. at 78. Plaintiff claims that he is "one of the class for whose especial [sic] benefit the statute was enacted to protect," without citing to any language of the Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 2 of 9 28245989 v1 3 statute to support this conclusion. (Doc. 22 at 6.) Plaintiff also fails to provide any support for any of the remaining Cort factors, which he simply restates rather than discusses, except for citing to the fact that 12 U.S.C. § 5536(a)(1)(B) "makes it unlawful for any covered person or service provider to engage in any unfair, deceptive, or abusive act or practice." (Doc. 22 at 6.) In fact, as to the last factor, Plaintiff states that "the cause of action is traditionally relegated to state law under Georgia so that it would be inappropriate to infer a cause of action based solely on federal law." (Id.) This weighs against, rather than in favor of, finding an implied private right of action in the Consumer Protection Act. See Bright v. Nimmo, 756 F.2d 1513, 1516 (11th Cir. 1985) (in holding that no private right of action existed under VA loan guidelines for failing to help borrower avoid foreclosure, court noted that the plaintiff may still have access to state remedies to set aside the foreclosure, remedies which are "traditionally relegated to state law"); Dallas County, Ala. v. City of Selma, Ala., No. 05-0350, 2006 WL 463869, at *5 (S.D. Ala. Feb. 24, 2006) (in holding that private right of action was not available to local political entities under The Homeland Security Act of 2002, court noted that the fourth Cort factor weighed against implying a private right of action because "the essence of this dispute . . . [is between] two local, political entities who cannot agree where to put a Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 3 of 9 28245989 v1 4 communications tower. The federal government . . . has no real interest in the dispute"). Further, while Plaintiff cites Cannon v. University of Chicago, 441 U.S. 677 (1979), Plaintiff fails to explain why any of the factors that caused the Cannon court to find a private right of action under Title IX of the Education Amendments of 1972 are applicable to the Consumer Protection Act. (Doc. 22 at 6.) In Cannon, the Court noted that Title IX was explicitly patterned after Title VI of the Civil Rights Act, which had been interpreted as containing a private remedy at the time Title IX was enacted. 441 U.S. at 694-97. The Court also explained that language in other statutes comparable to the language in Title IX had been found to contain a private right of action. Id. at 698. Moreover, Title IX contained a provision permitting courts to award attorney's fees to prevailing parties other than the United States "in private actions brought against public educational agencies. . ." Id. The Court found that this language "explicitly presumes the availability of private suits to enforce Title VI [of the Civil Rights Act] in the education context." Id. at 699. Here, in contrast, Plaintiff has not shown that the Consumer Protection Act was modeled after another statute containing a private right of action, that any comparable language in other statutes has been interpreted as containing a private right of action, or that any language regarding the award of attorney's fees to Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 4 of 9 28245989 v1 5 private parties exists anywhere in the Consumer Protection Act such that implying a presumption of a private right of action would be proper. In Transamerica Mortgage Advisors, Inc. v. Lewis, the Supreme Court declined to find an implied private right of action under the Investment Advisers Act of 1940 under circumstances similar to the present case. Lewis, 444 U.S. 11 (1979). In Transamerica, a shareholder of Mortgage Trust of America sought to sue Transamerica Mortgage Advisors, Inc. and other entities under the Investment Advisers Act for fraud and breach of fiduciary duty in the course of advising and managing Mortgage Trust of America. Id. at 13. In holding that a private right of action did not exist for the damages claims asserted, the Court explained that the Act does not expressly provide for a private cause of action, and the only provision that authorizes enforcement suits permits the Securities and Exchange Commission—not private parties—to bring suits to enforce the Act. Id. at 14. Although the plaintiffs argued that an implied right of action should be found because the plaintiffs were the intended beneficiaries of the Act, the court explained that "the mere fact that the statute was designed to protect advisers' clients does not require the implication of a private cause of action for damages on their behalf." Id. at 24. The Court also emphasized that, "If monetary liability to a private plaintiff is to be found, it must be read into the Act. Yet it is an elemental Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 5 of 9 28245989 v1 6 canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it." Id. at 19-20. Transamerica is directly applicable to Plaintiff's claims under the Consumer Protection Act and forecloses the implication of a private right of action. As in Transamerica, the mere fact that Plaintiff may be a party that was intended to benefit from the Consumer Protection Act "does not require the implication of a private cause of action for damages on [his] behalf." Id. at 24. This is particularly the case where, as in Transamerica, the statute at issue provides that it shall be enforced by a federal agency. See 12 U.S.C. § 5531(a) (providing authority for the Bureau of Consumer Financial Protection to enforce the Consumer Protection Act); Alabama v. PCI Gaming Authority, 801 F.3d 1278, 1295 (11th Cir. 2015) ("[W]hen the 'statutory structure provides a discernible enforcement mechanism . . . we ought not imply a private right of action"). Additionally, as in Transamerica, providing any relief to Plaintiff under the Consumer Protection Act via a private action such as this one would require reading liability into the Act that does not exist, which the Supreme Court has warned courts against doing. 444 U.S. at 19-20. Accordingly, Plaintiff's claims under the Consumer Protection Act are due to be dismissed due to the lack of a private right of action, as numerous other courts have held. See, e.g., Tillman v. Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 6 of 9 28245989 v1 7 Autovest, LLC, No. 2:16-cv-211-RDP, 2016 U.S. Dist. Lexis 108844, at *22 (N.D. Ala. Aug. 17, 2016); Cornwall v. Third Federal Savings & Loan, No. 8:15-cv- 2616-T-EAK-AAS, 2016 U.S. Dist. Lexis 96920, *6 (M.D. Fla. July 25, 2016). II. CONCLUSION For all of these reasons, and the reasons discussed in Defendant's Motion to Dismiss, Plaintiff's claims under the Consumer Protection in the First Amended Complaint, (Doc. 8), are due to be dismissed for failure to state a claim upon which relief can be granted. Respectfully submitted this 6th day of October, 2016, /s/ Rachel R. Friedman R. Frank Springfield Georgia Bar No. 316045 fspringf@burr.com Rachel R. Friedman Georgia Bar No. 456493 rfriedman@burr.com BURR & FORMAN, LLP 171 Seventeenth Street, NW, Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Attorneys for Defendant MIDLAND FUNDING, LLC Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 7 of 9 28245989 v1 8 CERTIFICATION OF COUNSEL I hereby certify that the foregoing brief has been prepared with Times New Roman, 14 point font, one of the font and point selections approved by the Court in LR 5.1C. s/ Rachel R. Friedman Rachel R. Friedman Georgia Bar No. 456493 rfriedman@burr.com BURR & FORMAN LLP 171 Seventeenth Street, NW, Suite 1100 Atlanta, Georgia 30363 Telephone: (404) 815-3000 Facsimile: (404) 817-3244 Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 8 of 9 28245989 v1 9 CERTIFICATE OF SERVICE I hereby certify that on October 6, 2016, I presented the foregoing motion to the Clerk of Court for filing and uploading to the CM/ECF system, which will automatically send email notification of such filing to the following parties: Abdulhakim Saadiq Law Office of Abdulhakim Saadiq Suite 202 544 Medlock Road Decatur, GA 30030 asaadiq@bellsouth.net John H. Bedard, Jr. Michael K. Chapman Bedard Law Group PC 2810 Peachtree Industrial Blvd Suite D Duluth, GA 30097 jbedard@bedardlawgroup.com mchapman@bedardlawgroup.com I hereby certify that I have mailed by United States Postal Service the document to the following non-CM/ECF participants: NONE s/ Rachel R. Friedman Rachel R. Friedman Georgia Bar No. 456493 rfriedman@burr.com Case 1:16-cv-02433-CC-JFK Document 29 Filed 10/06/16 Page 9 of 9