Brown v. Midland Credit Management, Inc.

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

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:

SHYRINE BROWN, :

:

Plaintiff, :

: 20-CV-4239 (JMF)

-v- :

: MEMORANDUM OPINION

MIDLAND CREDIT MANAGEMENT, INC., : AND ORDER

:

Defendant. :

:

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JESSE M. FURMAN, United States District Judge:

In this putative class action, Plaintiff Shyrine Brown sues Defendant Midland Credit

Management, Inc. (“Midland”) for alleged violations of the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. § 1692 et seq. See ECF No. 1 at 1. Midland now moves, pursuant to the

Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., to compel arbitration. See ECF No. 12 at

1. Notably, in opposing Midland’s motion, Brown does not dispute that, when she obtained the

credit card that resulted in the debt at issue here, she entered into an agreement requiring

arbitration of “any dispute or claim” that “relates to [her] account.” ECF No. 13-1 (the “Account

Agreement”), at 4. Instead, she argues that Midland’s motion should be denied for either of two

reasons: first, because Midland was not a party to the Account Agreement and, thus, “cannot

enforce its terms,” ECF No. 16 (“Pl.’s Opp’n”), at 7; and second, because her FDCPA claim is

not “relate[d] to [her] account,” Account Agreement 4; see Pl.’s Opp’n 9-11.

Brown’s arguments are without merit. First, in arguing that Midland cannot enforce the

arbitration provision because it is not a party to the Account Agreement, Brown ignores the fact

that Synchrony Bank, her original counterparty, assigned its rights under the Agreement to

Midland. The Account Agreement expressly permitted Synchrony Bank to “sell, assign or

transfer any or all of [its] rights or duties under this Agreement or [Brown’s] account.” Account

Agreement 4. And on or about February 26, 2019 — before the events that give rise to this suit

— Synchrony Bank did assign its rights under the Agreement to Midland. See ECF No. 14, ¶ 4;

ECF No. 14-1 (“Bill of Sale”); see also ECF No. 1, ¶¶ 20, 27. Under Utah law — which the

parties agree (by virtue of the Account Agreement) applies, see ECF No. 15 (“Def.’s Br.”), at 6

n.1; Pl.’s Opp’n 6 n.1; see also Account Agreement 4-5 — that means that Midland “stands in

the shoes of” Symphony. Sunridge Dev. Corp. v. RB & G Eng’g, Inc., 2010 UT 6, ¶ 13, 230

P.3d 1000, 1003 (alterations and internal quotation marks omitted). It follows — as other courts

have held in nearly identical circumstances — that Midland is entitled to enforce the arbitration

provision. See, e.g., Campbell v. Jacob, No. 4:19-CV-179 (JM), 2019 WL 4020690, at *3-4

(E.D. Ark. Aug. 26, 2019); Dotson v. Midland Funding, LLC, No. 18-CV-16253 (KSH) (JAD),

2019 WL 5678371, at *6 (D.N.J. Aug. 1, 2019), report and recommendation adopted, 2020 WL

291537 (D.N.J. Jan. 21, 2020); Clemons v. Midland Credit Mgmt., Inc., No. 1:18-CV-16883

(NLH) (AMD), 2019 WL 3336421, at *4 (D.N.J. July 25, 2019).

The authorities upon which Brown relies in arguing otherwise are easily distinguished.

In many of the cases she cites, the party seeking to compel arbitration was not an assignee of the

original party to the agreement, as Midland is here. See, e.g., Cavlovic v. J.C. Penney Corp., 884

F.3d 1051, 1057-58 (10th Cir. 2018); Wojcik v. Midland Credit Mgmt., Inc., No. 18-CV-3628

(MKB) (RML), 2019 WL 3423567, at *2 (E.D.N.Y. July 30, 2019); Smith v. GC Servs. Ltd.

P’ship, 289 F. Supp. 3d 935, 937 (S.D. Ind.), aff’d, 907 F.3d 495 (7th Cir. 2018); McGinnis v.

John C. Bonewicz, P.C., No. 11-2210, 2012 WL 604430, at *4 (C.D. Ill. Feb. 2, 2012), report

and recommendation adopted, 2012 WL 604427 (C.D. Ill. Feb. 24, 2012). And in the other

cases she cites, the contract at issue did not contemplate the transfer of rights to assignees, as the

Account Agreement does here. See, e.g., Hopkins v. Genesis FS Card Servs., Inc., No. 3:19-CV-

00157 (AC), 2020 WL 466636, at *16 (D. Or. Jan. 9, 2020), report and recommendation

adopted, No. 3:19-CV-00157 (AC), 2020 WL 437544 (D. Or. Jan. 28, 2020). In short, Midland

is entitled to enforce the Account Agreement’s arbitration provision.

Brown’s only other argument — that her FDCPA claim does not fall within the scope of

the arbitration provision — fares no better. As noted, the Account Agreement provides that “any

dispute or claim . . . [that] relates to [Brown’s] account” must be arbitrated. Account Agreement

4. In the case of such a broad arbitration clause, “there arises a presumption of arbitrability and

arbitration of even a collateral matter will be ordered if the claim alleged implicates issues of

contract construction or the parties’ rights and obligations under it.” Louis Dreyfus Negoce S.A.

v. Blystad Shipping & Trading, Inc., 252 F.3d 218, 224 (2d Cir. 2001) (internal quotation marks

omitted). Brown’s FDCPA claim is not even collateral; it plainly “relates” to the Account

Agreement, as it arises from Midland’s efforts to collect a debt incurred in connection with the

Agreement. Not surprisingly, therefore, courts have nearly uniformly held in identical

circumstances that FDCPA claims are subject to arbitration. See, e.g., Kernaghan v. Foster &

Garbus, LLP, No. 18-CV-204 (SJF) (AKT), 2019 WL 981640, at *5 (E.D.N.Y. Feb. 25, 2019);

Biggs v. Midland Credit Mgmt., Inc., No. 17-CV-340 (JFB) (ARL), 2018 WL 1225539, at *10

(E.D.N.Y. Mar. 9, 2018); see also Shetiwy v. Midland Credit Mgmt., 959 F. Supp. 2d 469, 474-

75 (S.D.N.Y. 2013); Fedotov v. Peter T. Roach & Assocs., P.C., No. 03-CV-8823 (CSH), 2006

WL 692002, at *3 (S.D.N.Y. Mar. 16, 2006). With one exception, the cases on which Brown

relies to argue otherwise are again easily distinguished, as they involved FDCPA claims raised

against a non-assignee. See, e.g., White v. Sunoco, Inc., 870 F.3d 257, 260 (3d Cir. 2017);

Wojcik, 2019 WL 3423567, at *2; Smith, 289 F. Supp. 3d at 937; Pacanowski v. Alltran Fin.,

L.P., 271 F. Supp. 3d 738, 749 (M.D. Pa. 2017), Fox v. Nationwide Credit, Inc., No. 09-CV-

7111, 2010 WL 3420172, at *6 (N.D. Ill. Aug. 25, 2010).

The one exception is Bazemore v. Jefferson Capital Systems, LLC, No. 3:14-CV-115,

2015 WL 2220057 (S.D. Ga. May 11, 2015), aff’d on other grounds, 827 F.3d 1325 (11th Cir.

2016), in which the court denied a motion to compel arbitration of an FDCPA claim despite

similar contractual language. The court acknowledged that the FAA would call for it to “broadly

read the delegation clause, with its use of the terms ‘arising from’ and ‘relating to’ [the

plaintiff’s] account, to favor arbitration.” Id. at *7. But, the court continued, that federal policy

needed to be “balance[d] . . . against the strong federal interest in its consumer advocacy laws,

the principal purpose of which is to protect consumers from unfair, abusive and deceptive debt

collection practices.” Id. Conspicuously, however, the court cited no authority in support of that

proposition. More significantly, the proposition is in tension, if not conflict, with binding

Supreme Court precedent. See, e.g., Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91

(2000) (“[E]ven claims arising under a statute designed to further important social policies may

be arbitrated because so long as the prospective litigant effectively may vindicate his or her

statutory cause of action in the arbitral forum, the statute serves its functions.” (internal

quotation marks and brackets omitted)). Thus, like at least one other court, the Court declines to

follow Bazemore. See, e.g., Bailey v. Diversified Consultants Inc., 444 F. Supp. 3d 1330, 1336

(N.D. Ala. 2020).

Accordingly, the Court concludes that Brown’s arguments against arbitration are without

merit and that Midland’s motion to compel must be GRANTED. Had Midland requested it, the

Court would have been prepared to stay the case pending arbitration rather than dismiss. See,

e.g., Katz v. Cellco P’ship, 794 F.3d 341, 345 (2d Cir. 2015) (“We join those Circuits that

consider a stay of proceedings necessary after all claims have been referred to arbitration and a

stay requested.” (emphasis added)). But Midland explicitly requests dismissal, see ECF No. 12

at 1 (seeking an order “dismissing Plaintiff's Complaint in its entirety”), and Brown does not

oppose that request for relief. Accordingly, the case is dismissed. See, e.g., Spencer-Franklin v.

Citigroup/Citibank N.A., No. 06-CV-3475 (GBD) (GWG), 2007 WL 521295, at *4 (S.D.N.Y.

Feb. 21, 2007) (noting that “where all of the issues raised in the Complaint must be submitted to

arbitration” and “defendants have sought dismissal rather than a stay, courts in this district have

granted dismissal” (citing cases) (internal quotation marks and brackets omitted)), report and

recommendation adopted, 2007 WL 1052451 (S.D.N.Y. Apr. 5, 2007).

The Clerk of Court is directed to terminate Docket Nos. 12 and 19 and to close the case.

All conferences are canceled.

SO ORDERED.

Dated: August 31, 2020

New York, New York SSE M-fURMAN

nited States District Judge