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Conway v. Portfolio Recovery Associates, LLC

United States District Court, E.D. Kentucky, Central Division, Frankfort

June 15, 2015

SEAN CONWAY, Plaintiff,
v.
PORTFOLIO RECOVERY ASSOCIATES, LLC, Defendant.

ORDER

GREGORY F. VAN TATENHOVE, District Judge.

"[I]t is beyond question that federal courts have a continuing obligation to inquire into the basis of subject-matter jurisdiction to satisfy themselves that jurisdiction to entertain an action exists..., and if jurisdiction is lacking, dismissal is mandatory." Campanella v. Commerce Exch. Bank, 137 F.3d 885, 890 (6th Cir.1998) (internal citations omitted); Fed.R.Civ.P. 12(h)(3). "The requirement that jurisdiction be established as a threshold matter spring[s] from the nature and limits of the judicial power of the United States' and is inflexible and without exception.'" United States v. Yeager, 303 F.3d 661, 664 (6th Cir. 2002) (quoting Steel Co. v. Citizens For A Better Env't, 523 U.S. 83, 94-95 (1998)). This matter is before the Court on the Motion to Dismiss for lack of subject matter jurisdiction filed by Defendant Portfolio Recovery Associates, LLC. [R. 35.] Although the parties have several other motions currently pending before the Court, because of the supreme importance of ensuring that the Court has subject matter jurisdiction at all stages of litigation, the Court must resolve jurisdictional questions before addressing any of the parties' other pending motions.

I

The relevant facts in this case are fairly simple. Plaintiff Sean Conway had a credit card account with Capital One Bank, N.A. (Capital One), but stopped making his payments on the credit card in early 2008. Defendant Portfolio Recovery Associates, LLC (PRA) subsequently purchased Conway's account from Capital One, and in March 2012 filed suit against Conway in Shelby District Court of Shelby County, Kentucky, seeking to collect on the alleged credit card debt. [R. 1 at 2.] Several months later, the parties jointly stipulated to the dismissal of the case in Shelby District Court. Conway then filed a putative class action suit against PRA in this Court, alleging that PRA had violated the Fair Debt Collections Practices Act (FDCPA), 15 U.S.C. §§ 1692, et seq. by bringing the collection suit in Shelby District Court outside of the applicable statute of limitations. The Court later denied PRA's motion to dismiss Conway's claims pursuant to Fed.R.Civ.P. 12(b)(6), finding that because Virginia's statute of limitations applied, Conway had at least stated a plausible claim sufficient to meet the requisite standard under Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).[1] [R. 16 at 19.]

PRA subsequently filed another motion to dismiss, this time contending that the Court lacked subject matter jurisdiction. [R. 35.] Specifically, PRA pointed out that on July 23, 2014, Conway filed his Federal Rule 26 disclosures, which requires Conway to identify each category of damages he claims to have sustained, and to include a computation of each category identified. Fed.R.Civ.P. 26(a)(1)(A)(iii). Conway's Rule 26 disclosure stated that he claimed "statutory damages of $1, 000.00 under 15 U.S.C. §1692k." [R. 35-2 at 3.] In addition to the statutory damages, the disclosure further stated that:

Plaintiff has actual damages in the form of legal fees and costs in defending the underlying state-court action. Plaintiff also has the right [to] recover his reasonable attorney's fees and costs under 15 U.S.C. § 1692k. These damages are ongoing and continuing.[2]

[R. 35-2 at 3.] On September 3, 2014, PRA made a Rule 68 Offer of Judgment, offering to allow judgment to be taken against it and in favor of Conway, and offering Conway the amount of $1, 501.00 on his individual statutory claims in addition to the actual costs, litigation expenses, and attorney's fees incurred by Conway in the related state court action in Shelby County as well as reasonable costs, litigation expenses, and attorney's fees incurred in the present federal action. [R. 35-3.] The offer remained open until September 17, 2014, but Conway did not accept the offer, and PRA filed the instant motion on September 26, 2014 seeking to dismiss the case for lack of subject matter jurisdiction. In its motion, PRA contends that because its Rule 68 Offer of Judgment offered Conway all the relief he sought, and even more, the offer renders Conway's claims moot, and therefore the case should be dismissed for lack of subject matter jurisdiction. [R. 35 at 3.] A few weeks later, Conway requested and received an extension of time in which to respond to PRA's motion. [R. 38.] On the newly extended deadline, October 30, 2014, Conway filed his response to PRA's motion, and on the same day[3] he also filed a motion for class certification, well over a month after the Rule 68 Offer expired. [R. 40.] Conway does not dispute that PRA's offer gives him all the relief he seeks, but he contends that dismissal is inappropriate in the context of moving for class certification.

II

A

Federal Rule of Civil Procedure 12(b)(1) allows a defendant to seek dismissal of a claim for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Courts, however, still have an independent and ongoing obligation to confirm that subject matter jurisdiction exists, even if neither party challenges it. Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006); see also Campanella v. Commerce Exch. Bank, 137 F.3d 885, 890 (6th Cir.1998) (noting that "it is beyond question that federal courts have a continuing obligation to inquire into the basis of subject-matter jurisdiction to satisfy themselves that jurisdiction to entertain an action exists"). Moreover, because subject matter jurisdiction "involves a court's power to hear a case, [it] can never be forfeited or waived." Arbaugh, 546 U.S. at 514 (quoting United States v. Cotton, 535 U.S. 625, 630 (2002)) (internal quotation marks omitted). Whenever "a federal court concludes that it lacks subject-matter jurisdiction, the court must dismiss the complaint in its entirety." Id. (citing J. Moore et al., Moore's Federal Practice § 106.66[1] (3d ed. 2005)). "In considering a Rule 12(b)(1) motion, we may look beyond the jurisdictional allegations in the complaint and consider submitted evidence." Taylor v. KeyCorp, 680 F.3d 609, 612 (6th Cir. 2012). "The plaintiff bears the burden of establishing that jurisdiction exists." Id. (citing Nichols v. Muskingum Coll., 318 F.3d 674, 677 (6th Cir. 2003)).

"Article III of the United States Constitution limits the jurisdiction of federal courts to cases' and controversies, ' U.S. Const. Art. III, § 2, cl. 1, a cradle-to-grave requirement' that must be satisfied at the time a plaintiff first brings suit and that must remain satisfied throughout the life of the case." Hrivnak v. NCO Portfolio Mgmt., Inc., 719 F.3d 564, 566-67 (6th Cir. 2013) (quoting Fialka-Feldman v. Oakland Univ. Bd. of Tr., 639 F.3d 711, 713 (6th Cir.2011)). "No principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of federal-court jurisdiction to actual cases or controversies." Taylor v. KeyCorp, 680 F.3d 609, 612 (6th Cir. 2012) (quoting Simon v. E. Ky. Welfare Rights Org., 426 U.S. 26, 37 (1976)) (internal quotation marks omitted). "The mootness doctrine is a critical component of this jurisdictional limitation. It requires that there be a live case or controversy at the time that a federal court decides the case.'" Green Party of Tennessee v. Hargett, 700 F.3d 816, 822 (6th Cir. 2012) (quoting Burke v. Barnes, 479 U.S. 361, 363(1987)).

PRA's instant motion to dismiss contests the Court's jurisdiction, contending that its Rule 68 offer of judgment renders the instant suit moot because there is no longer a case or controversy before the Court. Accordingly, the Court must address this question before it can consider any of the other pending motions, including PRA's motion to reconsider.

B

Here, PRA submitted a Rule 68 Offer of Judgment which more than satisfies the relief Conway requests. Thus, PRA contends that the offer eliminates the existence of a case or controversy, and that because Conway no longer has an interest in the instant suit, the case is moot and must be dismissed. Conway does not deny that PRA made such an offer, nor does he dispute that the offer of judgment fully satisfies all his claims in this case. Accordingly, there is no dispute here that PRA's Rule 68 Offer satisfies all of Conway's claims or that the offer in question represents the maximum recovery to which Conway would be entitled under the statute, and even offers him beyond that amount. Conway's only argument in opposition to PRA's motion is that even when an offer of judgment fully satisfies a plaintiff's claims, it is improper for a court to dismiss the case as moot when a motion for class certification is pending. [R. 41 at 2-3.] ...


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