The opinion
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CASSANDRA A. VALENTINE, individually
and on behalf of all others similarly situated,
Plaintiffs, Civ. No. 2:20-cv-14152 (WJM)
Vv.
MULLOOLY, JEFFREY, ROONEY & OPINION
FLYNN LLP et al,
Defendants.
WILLIAM J. MARTINI, U.S.D.J.
In this putative class action, plaintiff Cassandra A. Valentine (‘Plaintiff’) claims
that a collection letter sent by defendants Mullooly, Jeffrey, Rooney & Flynn LLP and its
general partner, John Sheerin, (together, “Defendants”) violates the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seg. This matter is now before the Court on
Defendants’ motion to dismiss Plaintiff's First Amended Complaint pursuant to Federal
Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction due to Plaintiff's
lack of Article II standing. Defs.’ Mot. (“Motion”), ECF No. 57. For the reasons set forth
below, Defendants’ Motion is GRANTED.
1. BACKGROUND
Plaintiff allegedly incurred, and then defaulted on, a debt (“Debt”) “primarily for
the Plaintiff's personal, family, or household purposes.” First Am. Compl. “FAC”) §¥ 14,
17, ECF No, 56, After the account was in default, Distressed Asset Portfolio HI, LLC
(“DAP III”) purchased the account and ultimately placed the account with Defendants for
collection. FAC 9§ 21-23. Acting on behalf of DAP III in an attempt to collect the Debt,
Defendants then mailed to Plaintiff a collection letter dated October 8, 2019 (the “MIR&F
Letter”), a copy of which is attached to Plaintiffs original complaint in this action as
Exhibit A. FAC ff 24, 26; Ex. A, Compl., ECF No. 1. The MIR&F Letter includes a block
of text identifying the entities related to Plaintiff's account:
Assignee for Collection Purposes: UNIFUND CCR, LLC
Current Creditor to whom the debt is Owed: DISTRESSED ASSET PORTFOLIO
Til, LLC
Original Creditor: CAPITAL ONE BANK (USA), N.A.
Ex. A, Compl. The MIR&F Letter then states: “The above Current Creditor through their
assignee has turned over to us for collection the above account in the sum of $2,787.94.”
ld.
H. PROCEDURAL HISTORY
Plaintiff filed the present action on October 8, 2020. ECF No. 1. On May 20, 2022,
Defendants moved to dismiss the complaint for failure to state a claim. ECF No. 44, On
July 6, 2022, the Court granted the motion in part and denied the motion in part. ECF Nos.
52-53.
On August 5, 2022, Plaintiff filed its First Amended Complaint. ECF No. 56.
Plaintiff alleges that DAP III, the current creditor to whom the Debt is owed, impermissibly
bought and assigned the Debt without first obtaining a license as a “consumer lender” or
“sales finance company” from the New Jersey Department of Banking and Insurance
(“NJDOBI”), as required under the New Jersey Consumer Finance Licensing Act
(“NICFLA”), N.J. Stat. Ann, § 17:11C-3. FAC 9§ 29-36. Plaintiff argues that under the
NJCFLA, Defendants’ unlicensed attempts to collect the Debt rendered the Debt void and
that no amount was owed to DAP III. FAC ff 39-40. Because of this, Plaintiff asserts that
the MIR&F Letter misstates the “amount of debt” owed and the “creditor to whom the debt
is owed[.]” FAC §§ 41-42. Due to these misstatements, Plaintiff alleges that the MIR&F
Letter deprived Plaintiff—and other New Jersey consumers to whom Defendants sent a
similar letter—of truthful, non-misleading, information in connection with Defendants’
attempt to collect a debt. FAC §f 38, 44. As such, Plaintiff asserts that by sending the
MIR&F Letter, “Defendants engaged in unlawful practices in violation of the FDCPA
including but not limited to 15 U.S.C. §§ 1692e, 1692e(2)(A), 1692e(5), 1692e(10), 1692f,
1692g, 1692g(a)(1), and 1692g(a)(2).” FAC 4 45.
Defendants now move to dismiss the FAC, arguing that this Court lacks subject
matter jurisdiction because Plaintiff has not alleged that she suffered concrete harm
sufficient to establish Article IIT standing under the Supreme Court’s recent decision in
TransUnion LLC v. Ramirez, 141 8S. Ct. 2190 (2021). See generally Defs.’ Mot.
(“Motion”), ECF No. 57,
A. The Valentine I Action
The Honorable John M. Vazquez, U.S.D.I., addressed this very issue on a motion
to dismiss in an earlier-filed companion case involving the same underlying Debt.’ See
Valentine v. Unifund CCR, LLC (Valentine 1D, No. CV 20-5024, 2023 WL 22423 (D.N.J.
' These cases are consolidated for pretrial discovery purposes only. See Order, ECF No. 22.
Jan. 3, 2023). In Valentine J, Plaintiff sued DAP Ii and Unifund CCR, LLC (“Unifund’”)
over a collection letter sent to Plaintiff by Unifund that also attempted to collect the Debt
on behalf of DAP III. /d. at *1. The present case adds one more link in the chain: DAP □□□□
through Unifund, has now turned the Debt over to Defendants for collection from Plaintiff.
See Ex, A., Compl. The cases involve the same counsel and are both premised on Plaintiff’ s
allegation that the respective collection letters violate the FOCPA because DAP III is not
licensed pursuant to the NJCFLA. See Valentine I, 2021 WL 912854, at *1.
Similar to the instant motion, the defendants in Valentine 7 moved to dismiss the
complaint pursuant to Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter
jurisdiction, arguing that Plaintiff failed to establish that she had Article III standing to sue
in federal court. Finding that Plaintiff failed to sufficiently allege the first requirement of
standing—that she suffered a concrete “injury in fact’—Judge Vazquez granted Unifund
and DAP HI’s motion and dismissed the complaint. See id. at *5.
Now, on the instant motion to dismiss, and without addressing the decision in
Valentine I, Defendants advance arguments identical to those made by Unifund and DAP
III in Valentine I concerning Plaintiff's lack of Article III standing. Finding no basis to
substantially depart from Judge Vazquez’s reasoning in Valentine I, which the Court
incorporates info its own analysis below, Defendants’ Motion will be denied on similar
grounds,”
Il. LEGAL STANDARD
Federal Rule of Civil Procedure 12(b)(1) is the proper vehicle for challenging
Article [II standing, which is a component of subject matter jurisdiction. Fed. R. Civ.
P, 12(b)(1); see Society Hill Towers Owners’ Ass’n v. Rendell, 210 F.3d 168, 175 Gd Cir.
2000). The parties and Court agree that Defendants’ Motion constitutes a “facial attack”
against Plaintiff's FAC, meaning that the motion “challenges subject matter jurisdiction
without disputing the facts alleged in the complaint, and... . requires the court to ‘consider
the allegations of the complaint as true.’” Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir.
2016) (citations omitted).
Article II of the Constitution limits the jurisdiction of federal courts to “Cases” and
“Controversies.” U.S. Const. art. II, § 2. One element of this case-or-controversy
requirement is that Plaintiff, as the party invoking federal court jurisdiction, must establish
that she has standing to sue. See Raines v. Byrd, 521 U.S. 811, 818 (1997) (citing Lujan v.
Defenders of Wildlife, 504 U.S. 555, 561 (1992)). To satisfy Article II[I’s standing
* Previously, the defendants in Valentine J filed a Motion to Dismiss on the merits in front of Judge
Vazquez, which was nearly identical to the Motion to Dismiss filed on May 20, 2022 by Defendants
in the instant case, See Mot. to Dismiss, ECF No. 44. This Court incorporated Judge Vazquez’s
reasoning in granting and denying the motion in part. See Opinion, ECF No. 52.
requirements, Plaintiff must “clearly ... allege facts demonstrating” all three elements of
constitutional standing: (1) an “injury in fact,” (2) that is “fairly traceable” to Defendants’
challenged conduct, and (3) “that is likely to be redressed by a favorable judicial decision.”
Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016) (citations omitted). “To establish injury
in fact, a plaintiff must show that he or she suffered ‘an invasion of a legally protected
interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or
hypothetical.” fd. at 339 (quoting Lujan, 504 U.S. at 560). Concrete injuries can be
tangible or intangible. See TransUnion LLC y. Ramirez, 141 8. Ct. 2190, 2204 (2021),
“Absent Article III standing, a federal court does not have subject matter jurisdiction to
address a plaintiffs claims, and they must be dismissed.” Taliaferro v. Darby Twp. Zoning
Bd., 458 F.3d 181, 188 (3d Cir. 2006). The Court presumes that it “lack[s] jurisdiction
unless the contrary appears affirmatively from the record.” Jn re Johnson & Johnson
Talcum Powder Prod. Mktg., Sales Pracs. & Liab. Litig., 903 F.3d 278, 288 (3d Cir. 2018)
(citations and quotation marks omitted).
IV. DISCUSSION
At issue here, as it was in Valentine J, is whether Plaintiff sufficiently alleged that
she suffered an “injury in fact” that is “concrete and particularized.” As discussed supra,
the FAC alleges that “Defendants attempted to collect on accounts that were made void by
DAP IIIs failure” to obtain the required licenses under the NJCFLA, FAC § 66, and
“misrepresented the amount of the debt that they could collect upon in their communication
to Plaintiff’ via the MIR&F Letter, in violation of the FDCPA, FAC 4 67. Plaintiff asserts
that she “received and reviewed the MJIR&F Letter,” FAC § 28, and that “Defendants”
allegation [of the Debt] and direct communication with Plaintiff to collect the [D]ebt [via
the MIR&F Letter] was a concrete harm sufficient for standing[,]” Pl.’s Opp. (“Opp.”) at
2, ECF No. 58.
The Supreme Court “has rejected the proposition that ‘a plaintiff automatically
satisfies 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.” TransUnion, 141 S.
Ct. at 2205 (quoting Spokeo, 578 U.S. at 341). “[U]nder Article III, an injury in law is not
an injury in fact. Only those plaintiffs who have been concretely harmed by a defendant’s
statutory violation may sue that private defendant over that violation in federal court.” Jd.
“Central to assessing concreteness is whether the asserted harm has a ‘close relationship’
to a harm traditionally recognized as providing a basis for a lawsuit in American courts—
such as physical harm, monetary harm, or various intangible harms including . . .
reputational harm.” /d. at 2200 (quoting Spokeo, 578 U.S. at 340-41).
In TransUnion, the Court held that class members who were labeled as potential
terrorists in credit reports disseminated to third parties “suffered a harm with a ‘close
relationship’ to the harm associated with the tort of defamation[,]” and as such, “suffered
a concrete harm that qualifies as an injury in fact.” Jd, at 2209. Applying this holding to
the instant case, Plaintiff asserts that “[jJust as the plaintiffs in [TransUnion] had standing
because the defendant communicated the misleading statement, Plaintiff has standing
because Defendants communicated materially false, deceptive, and misleading
statements,” Opp, at 11-12. Importantly, however, the communications in TransUnion that
gave rise to a concrete harm were disseminated to third parties, and it is this dissemination
that gave the communication “a sufficiently close relationship to the harm from a false and
defamatory statement.” TransUnion, 141 8. Ct. at 2209. By contrast, the TransUnion Court
held that other class members whose credit reports were not disseminated to a third party
“did not suffer a concrete harm,” even though their reports also contained misleading
labels. Jd. at 2209, 2212, Plaintiff has not alleged that the MIR&F Letter was disseminated
to any third parties.
Further, “merely receiving a ‘misleading’ collection letter, as alleged here, is
insufficient to establish a concrete injury, absent some action or inaction taken in response
or other form of injury.” Valentine I, No. CV 20-5024, 2023 WL 22423, at *3 (collecting
cases). Plaintiff alleges only that “the MJR&F Letter deprived Plaintiff and other New
Jersey consumers of truthful, non-misleading, information in connection with Defendants’
attempt to collect a debt.” FAC 4] 38. She has not alleged that she has experienced any
“downstream consequences” or “adverse effects” as a result of the MIR&F Letter,
TransUnion, 141 8. Ct. at 2214, or that she took any “action or inaction in reliance” on it,
Valentine I, No. CV 20-5024, 2023 WL 22423, at *3. As such, Plaintiff has not asserted
that she has suffered an injury-in-fact sufficient to satisfy the requirements of Article III.
In her opposition, Plaintiff points to Morales v. Healthcare Revenue Recovery Grp.,
LLC, 859 F, App’x 625 (3d Cir. 2021) as an example of where the Third Circuit allegedly
concluded that a consumer had standing to raise his FDCPA claim “without showing any
harm other than the violation of his statutory rights,” Opp. at 12. However, Morales does
not dispense with the requirement that a harm must be concrete. In fact, the court explicitly
states that “not all transgressions create standing—procedural gaffes that cause no
‘concrete’ injury fall short of Article III's requirements.” Morales, 859 F. App’x at 626.
The circuit states only that “/i/fa statutory harm is concrete, no ‘additional harm beyond
the one Congress has identified’ is required.” Jd, at 626-27 (emphasis added and omitted)
(citing Spokeo, 578 U.S. at 342). Ultimately, the Morales Court held that the plaintiff had
standing to bring an FDCPA claim after a debt collector placed a QR code on an envelope
mailed to the debtor because “[t]he envelope’s barcode disclosed [plaintiff's] protected
information, which caused a concrete injury in fact under the FDCPA.” /d, at 628. Plaintiff
here does not allege any such disclosure, and thus Morales is inapposite.
Plaintiff also asserts that the Supreme Court’s decision in Uzuegbunam v.
Preczewski, 141 8, Ct. 792 (2021) concludes that “every violation of the law necessarily
presumes an injury.” Opp. at 15. However, the issue in Uzwegbunam is not analogous to
the issue in the instant case. There, the Court considered whether a plaintiff who
“establishes the first two elements of standing (injury and traceability) can establish the
third [redressability] by requesting only nominal damages.” Uzuegbunam, 141 S. Ct. at
797. Because the Uzuegbunam Court's “holding concerns only redressability[,]” and not
injury, it is not controlling here. Jd. at 802.
Lastly, the Court is not swayed by the post-TransUnion cases cited favorably by
Plaintiff, because as Plaintiff notes, the decisions rely on pre-7ransUnion authority. Opp.
at 13-14, 19.
Vv. CONCLUSION
For the reasons set forth above, Defendants’ motion to dismiss, ECF No. 57, is
GRANTED. Plaintiff shall have thirty (30) days to file an amended complaint that cures
the deficiencies articulated herein. If Plaintiff does not file an amended pleading within
that time, the claims will be dismissed with prejudice,
An appropriate Order accompanies this Opinion.
hg Yih. U.S.D.S.
Date: Mareh ] , 2023