Desmond Conboy v. SBA

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 20-1726

____________

DESMOND CONBOY; BRENDAN GILSENAN,

Appellants

v.

UNITED STATES SMALL BUSINESS

ADMINISTRATION;

CBE GROUP; FIRST NATIONAL BANK, d/b/a Metro

Bank; SEDA COG

____________

On Appeal from the United States District Court

for the Middle District of Pennsylvania

(D.C. No. 3-18-cv-00224)

District Judge: Honorable Malachy E. Mannion

____________

Submitted on January 21, 2021

Before: HARDIMAN, ROTH, Circuit Judges, and

PRATTER, District Judge.

(Filed: March 19, 2021)

Joshua L. Thomas

225 Wilmington-West Chester Pike

Suite 200

Chadds Ford, PA 19317

Counsel for Appellants

David J. Freed

Samuel S. Dalke

Office of United States Attorney

Middle District of Pennsylvania

228 Walnut Street, P.O. Box 11754

220 Federal Building and Courthouse

Harrisburg, PA 17108

Counsel for Appellee United States Small Business

Administration

Robbie Malone

Eugene X. Martin, IV

Malone Frost Martin



The Honorable Gene E.K. Pratter, United States District

Judge for the Eastern District of Pennsylvania, sitting by

designation.

2

8750 North Central Expressway

NorthPark Central, Suite 1850

Dallas, TX 75231

Justin M. Tuskan

Metz Lewis Brodman Must O’Keefe

535 Smithfield Street

Suite 800

Pittsburgh, PA 15222

Counsel for Appellee CBE Group

Jeffrey E. Havran

Margolis Edelstein

220 Penn Avenue

Suite 305

Scranton, PA 18503

Counsel for Appellee Seda Cog

___________

OPINION OF THE COURT

____________

HARDIMAN, Circuit Judge.

Almost two decades ago, this Court declared that “[a]n

appeal is not just the procedural next step in every lawsuit,”

and the decision to challenge “an order of the District Court is

not a matter to be taken lightly.” Beam v. Bauer, 383 F.3d 106,

108 (3d Cir. 2004). Today we reemphasize these truths. In this

appeal, counsel for Appellants Desmond Conboy and Brendan

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Gilsenan filed a brief that was essentially a copy of the one he

filed in the District Court. Because the substance of this appeal

is as frivolous as its form, we will affirm the District Court’s

summary judgment and grant Appellee CBE Group’s motion

for damages under Rule 38 of the Federal Rules of Appellate

Procedure.

I

The case arises out of an unpaid debt. Appellants

Conboy and Gilsenan, with help from a $594,000 loan from the

United States Small Business Administration, bought and

renovated a commercial property in Harrisburg, Pennsylvania

that became Ceoltas Irish Pub. Conboy and Gilsenan executed

a note, mortgage, and unconditional guarantees that they would

repay the loan. The guarantees provided that federal law would

control the enforcement of the note and guarantees and that

Conboy and Gilsenan may not invoke any state or local law to

deny their obligation to the SBA.

Conboy and Gilsenan defaulted on the loan and sold the

property. The SBA allowed the sale to proceed but declined to

release Appellants from their loan obligations.

After repeated attempts to collect the debt failed, the

SBA assigned the debt to CBE Group for collection. Rather

than pay the debt, Conboy and Gilsenan sued the SBA, the

United States Treasury Department, First National Bank, Seda

Cog (an agency that facilitated the original loan transaction),

and CBE in the Court of Common Pleas of Monroe County,

Pennsylvania. The SBA removed the case to the United States

District Court for the Middle District of Pennsylvania. The

Treasury Department and First National Bank were dismissed

from the litigation with Conboy and Gilsenan’s consent.

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In an amended complaint, Conboy and Gilsenan alleged

federal claims for violating the Fair Debt Collection Practices

Act (FDCPA), 15 U.S.C. §§ 1692, et seq., and the Fair Credit

Reporting Act (FCRA), 15 U.S.C. §§ 1681, et seq. They also

alleged state law claims for violating the Pennsylvania Unfair

Trade Practices and Consumer Protection Law (UTPCPL), 73

PA. CONS. STAT. §§ 201-1, et seq., breach of contract, unjust

enrichment, and defamation.

After discovery, Defendants moved for summary

judgment, and CBE sought sanctions under Rules 11 and 37 of

the Federal Rules of Civil Procedure. CBE argued that Conboy

and Gilsenan brought frivolous claims and disobeyed

discovery orders. Conboy and Gilsenan filed an untimely brief

opposing both sanctions and summary judgment, which did not

include the separate responsive statement of material facts

required by Local Rule 56.1. Under the Local Rule, that failure

to provide a responsive statement conceded the material facts

set forth in the moving parties’ statements.

The District Court granted summary judgment and

denied the sanctions motions. It held, among other things: (1)

that the FDCPA and UTPCPL claims failed because neither

statute applies to commercial debts; (2) Conboy and Gilsenan

identified no material facts in the record supporting their

claims against Seda Cog, their unjust enrichment claim against

CBE, or their FCRA claim against the SBA; (3) the contract

claim against the SBA failed because Conboy and Gilsenan

“admitted”—by not filing a counterstatement of material

facts—that the unconditional loan guarantees foreclosed

bringing a state law claim to deny their loan obligations; (4)

they admitted they had no contract with CBE; and (5)

sovereign immunity barred the unjust enrichment and

defamation claims against the SBA. The District Court also

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held that “no extraordinary circumstances” justified Rule 11

sanctions, and that Rule 37 sanctions were unnecessary

because Conboy and Gilsenan’s conduct during discovery did

not “significantly prejudice[] CBE.” Conboy v. U.S. Small Bus.

Admin., 2020 WL 1244352, at *7 (M.D. Pa. Mar. 16, 2020).

Conboy and Gilsenan appealed the summary judgment.

II1

Conboy and Gilsenan’s opening brief begins with a

proper introductory sentence arguing that the District Court

should not have granted summary judgment. Opening Br. at 1.

But it quickly goes awry in the next paragraph: “The district

court has subject-matter jurisdiction over this case . . . .” Id.

One could readily assume that the sentence included a

typographical error, using “has” instead of “had.” But just two

sentences later, the brief declares: “Venue is appropriately laid

in the District Court of New Jersey . . . .” Id. This second use

of the present tense, denoting the wrong trial court, presages

what comes after, which belies the notion of an honest mistake.

In the first sentence of his legal argument, counsel

describes the summary judgment standard. Id. at 6. Two pages

later, he argues that “summary judgment should be denied

. . . .” Id. at 8. In the next section of his argument, counsel again

writes as if the case remains in the District Court, claiming

“there is no reason to grant summary judgment based on

jurisdictional reasons for either party.” Id. at 13. Apart from

1

The District Court had jurisdiction under 28 U.S.C. §§ 1331,

1367, and 15 U.S.C. § 1692k(d). We have jurisdiction under

28 U.S.C. § 1291. We review the District Court’s summary

judgment de novo. Faush v. Tuesday Morning, Inc., 808 F.3d

208, 215 (3d Cir. 2015).

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these unusual (and inappropriate) references to the case

pending in the District Court, counsel’s fifteen pages of

“argument” do not mention how the District Court erred. This

left us with the suspicion that something was amiss with

counsel’s brief.

Unfortunately, our suspicions were confirmed. Counsel

for Conboy and Gilsenan simply took the summary judgment

section of his District Court brief and copied and pasted it into

his appellate brief, with minor changes such as swapping

“Defendant” for “Appellee.” Compare Appendix A hereto,

with Appendix B. This is not proper appellate advocacy.

Unsurprisingly, the lack of appellate argument reflects

the correctness of the District Court’s summary judgment. The

Court properly granted judgment on the UTPCPL and FDCPA

claims because those statutes apply to consumer debts, not

commercial ones like the debt at issue. In re Smith, 866 F.2d

576, 583 (3d Cir. 1989) (73 PA. CONS. STAT. § 201-9.2, the

UTPCPL section on private actions, applies “only [to] those

persons who purchase or lease goods or services primarily for

consumer use rather than for commercial use”); Staub v.

Harris, 626 F.2d 275, 278 (3d Cir. 1980) (the FDCPA “was

intended to apply only to debts contracted by consumers for

personal, family or household purposes” (citation and internal

quotation marks omitted)). Conboy and Gilsenan did not

identify evidence supporting their claims against Seda Cog,

their unjust enrichment claim against CBE, or their FCRA

claim against the SBA. Nor did they point to evidence of any

contract with CBE. In addition, the unconditional loan

guarantees preempted the contract claim against the SBA, and

the defamation claim against the SBA failed because of

sovereign immunity. See Brumfield v. Sanders, 232 F.3d 376,

382 (3d Cir. 2000) (“[D]efamation suits against the United

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States are prohibited.”). Finally, although we have not

explicitly addressed whether the United States has waived

sovereign immunity as to unjust enrichment claims, we need

not resolve that issue here because Conboy and Gilsenan cited

no record evidence creating a factual dispute material to their

unjust enrichment claim against the SBA. See Kabakjian v.

United States, 267 F.3d 208, 213 (3d Cir. 2001) (“We may

affirm a judgment on any ground apparent from the record.”).

Regrettably, counsel’s response to CBE’s motion for

damages under Rule 38 of the Federal Rules of Appellate

Procedure is yet another copy-and-paste job. Counsel copied

Conboy and Gilsenan’s previous opposition to sanctions in the

District Court under Civil Rules 11 and 37—with only

insignificant alterations and additions. Compare Appendix C

hereto, with Appendix A at 10–12. Contrary to counsel’s

assertion, the Rule 38 motion did not duplicate the sanctions

motions, and we will grant it even though the District Court’s

denial of sanctions was well within its discretion.

Rule 38 authorizes compensatory damages—not

sanctions or punishment—to reimburse appellees who must

defend judgments against frivolous appeals, “and to preserve

the appellate court calendar for cases worthy of consideration.”

Kerchner v. Obama, 612 F.3d 204, 209 (3d Cir. 2010) (quoting

Huck v. Dawson, 106 F.3d 45, 52 (3d Cir. 1997)); Beam, 383

F.3d at 108. We “employ[] an objective standard to determine

whether or not an appeal is frivolous” on the merits, without

considering appellants’ “good or bad faith.” Kerchner, 612

F.3d at 209 (quoting Hilmon Co. (V.I.) v. Hyatt Int’l, 899 F.2d

250, 253 (3d Cir. 1990)). “Here, despite many cues from . . .

the District Court that [their] cause was wholly meritless,” see

Beam, 383 F.3d at 109, Conboy and Gilsenan’s counsel filed a

copy-and-paste appeal without bothering to explain what the

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District Court did wrong. It is hard to imagine a clearer case

for Rule 38 damages.

We may impose these damages on clients, but here we

will place responsibility for payment on the lawyer. See id.

“[A]ttorneys have an affirmative obligation to research the law

and to determine if a claim on appeal is utterly without merit

and may be deemed frivolous.” Hilmon, 899 F.2d at 254.

“[B]ecause it would be unfair to charge a damage award

against [parties who have] relied upon [their] counsel’s

expertise in deciding whether to appeal, we have routinely

imposed Rule 38 damages upon counsel when a frivolous

appeal stems from counsel’s professional error.” Beam, 383

F.3d at 109. In this case, Conboy and Gilsenan’s attorney is to

blame for recycling meritless arguments without engaging the

District Court’s analysis.

* * *

It’s not easy to become a lawyer. The practice of law is

challenging, and even the best lawyers make mistakes from

time to time. So we err on the side of leniency toward the bar

in close cases. But the copy-and-paste jobs before us reflect a

dereliction of duty, not an honest mistake. We will therefore

affirm the District Court’s summary judgment and grant CBE’s

motion for Rule 38 sanctions after counsel for CBE files an

appropriate fee petition and counsel for Appellants has a

chance to respond.

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APPENDIX A

An unaltered copy of Appellants’ District Court brief

opposing summary judgment and sanctions

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IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF PENNSYLVANIA

DESMOND CONBOY and BRENDAN

GILSENAN, CIVIL ACTION NO.: 3:18-CV-00224

Plaintiffs, Civil Action

v.

CBE Group, Seda Cog, First National Bank

s/b/m Metro Bank and U.S. Small Business

Administration

Defendant.

PLAINTIFF’S OPPOSITION TO DEFENDANTS U.S. SMALL BUSINESS

ADMINISTRATION’S, CBE GROUP AND SEDA COG MOTIONS FOR SUMMARY

JUDGMENT AND SANCTIONS

STATEMENT OF FACTS

Plaintiffs sold the property, known as 310 North Second Street, Harrisburg PA 18360 by

on February 17, 2016. (See Exhibit A – HUD1)1. As part of that sale, there were two loans paid

off to First National Bank S/B/M Metro Bank, the first mortgage of $432,113.49 and the second

mortgage for $45,340.43. Defendant SBA was responsible for backing the second mortgage that

was paid off the $45,340.43. Defendant SBA signed off and agreed to permit this sale to take

place. As such, there was an alleged deficiency to the SBA of $276,315.61. This information

was, in fact, sent for the first time to Plaintiffs on September 3, 2016, which was 6 months and

18 days after the sale. (See Exhibit B). This was beyond the 6 month cutoff for a deficiency

judgment on a mortgage to be pursued. After that time, Defendant SBA transferred the debt

1

All exhibits incorporated by reference from prior pleading and complaint for sake of brevity.

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improperly to Defendant CBE Group. As of October 19, 2017, Defendant CBE has not only

made many collection attempts in writing, but added on interested and fees so the current debt

balance is now allegedly at $374,258.64. (see Exhibit C). At no time was a lawsuit brought or a

judgment received during the 6 month period after the sale of the property took place. Defendant

CBE has been informed that their collection efforts are not legal, yet they have continued to

pursue those efforts despite this knowledge. Further, on or around February 9, 2018, Defendant

SBA reported an outstanding balance to the Credit Bureaus for Mr. Conboy. This report stated

that the account was allegedly opened on April 15, 2005, the “high balance” was for $594,000,

there was a balance of 271,799 and the last time Mr. Conboy allegedly made a payment was

October 11, 2017. Further, it had a status of “charged off”. This report was done solely to

damage Mr. Conboy’s credit and in retaliation for the filing of this suit, as there had never been a

report previously. There was no reasonable or legal reason for this report, and it was done for

completely improper purposes, with the express intent to damage Mr. Conboy, his ability to

receive credit and to defame him for anyone else who would potentially attempt to lend him

money and see such a derogatory report.

Further, there is no question that Seda Cog had an interest in this matter. (See Exhibit D –

modification). Additionally, they were communicating with Plaintiff as late as 2015. Some of the

people who communicated with Plaintiff from Seda Cog were X and B. There is no question

they still had an interest in this matter and were actively attempting to collect on this debt. As

such, they belong as a party to this matter as well.

LEGAL ARGUMENT

I. BOTH DEFENDANTS’ MOTIONS FAIL TO SHOW THEY ARE ENTITLED

TO SUMMARY JUDGMENT

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Summary judgment is appropriate “if the movant shows that there is no genuine dispute

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

56(a). The “mere existence of some alleged factual dispute between the parties will not defeat an

otherwise properly supported motion for summary judgment; the requirement is that there be no

genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). A

fact is only “material” for purposes of a summary judgment motion if a dispute over that fact

“might affect the outcome of the suit under the governing law.” Id. at 248. A dispute about a

material fact is “genuine” if “the evidence is such that a reasonable jury could return a verdict for

the nonmoving party.” Id. The dispute is not genuine if it merely involves “some metaphysical

doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586 (1986).

The moving party must show that if the evidentiary material of record were reduced to

admissible evidence in court, it would be insufficient to permit the nonmoving party to carry its

burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). Once the moving party

meets its initial burden, the burden then shifts to the nonmovant who must set forth specific facts

showing a genuine issue for trial and may not rest upon the mere allegations, speculations,

unsupported assertions or denials of its pleadings. Shields v. Zuccarini, 254 F.3d 476, 481 (3d

Cir. 2001). “In considering a motion for summary judgment, a district court may not make

credibility determinations or engage in any weighing of the evidence; instead, the non-moving

party’s evidence ‘is to be believed and all justifiable inferences are to be drawn in his favor.’”

Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) (quoting Anderson, 477 U.S. at

255). Furthermore, in deciding the merits of a party's motion for summary judgment, the court's

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role is not to evaluate the evidence and decide the truth of the matter, but to determine whether

there is a genuine issue for trial. Anderson, 477 U.S. at 249.

In this case, summary judgment should be denied because Defendants not only rely on

insufficient evidence, but outdated case law, inapplicable arguments and their evidence is so

contradictory, that Defendants essentially defeat themselves with their own evidence. To further

these proofs though, Defendants now present their own evidence as well, to show substantial

material facts now in issue.

As stated in the relatively recent case, Tepper v Amos, No. 17-2851 3rd Cir., Aug. 7, 2018, The

Court discussed the “default” test and ultimately choose to say that, based on the Supreme court

case of Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718 (2017), it would no longer

apply. Instead, the court chose to follow the plain text of the statute: “an entity whose principal

purpose of business is the collection of any debts is a debt collector regardless whether the entity

owns the debts it collects. Id.

Further, the FDCPA is a “remedial legislation” aimed, as already noted, “to eliminate

abusive debt collection practices by debt collectors.” Kaymark v. Bank of Am., N.A., 783 F.3d

168, 174 (3d Cir. 2015) (quoting § 1692(e); Caprio v. Healthcare Revenue Recovery Grp., LLC,

709 F.3d 142, 148 (3d Cir. 2013)). Importantly, it applies only to “debt collectors,” Pollice v.

Nat’l Tax Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000), defined as any person: (1) “who uses

any instrumentality of interstate commerce or the mails in any business the principal purpose of

which is the collection of any debts” (the “principal purpose” definition); or (2) “who regularly

collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or

due another” (the “regularly collects for another,” or “regularly collects,” definition).1 §

1692a(6). Further, and most importantly, “The FDCPA is a strict liability statute to the extent

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that it imposes liability without proof of an intentional violation.” Allen ex. rel, Martin v.

LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011).

As stated previously, the Supreme Court, in Henson v. Santander Consumer USA Inc.,

137 S. Ct. 1718 (2017), has recently repealed the “default” test. Debtors claimed that Santander

Bank, which had purchased their loans already in default and attempted to collect on them, met

the second definition of “debt collector,” i.e., one who “regularly collects or attempts to collect . .

. debts owed or due . . . another.” Id. at 1721 (quoting § 1692a(6)). They asserted as well that the

Bank met the “principal purpose” definition, but the Court did not review that claim because it

was not litigated in the District Court. Id. The Supreme Court began “with a careful examination

of the statutory text,” in particular the definition’s limitation to debts “owed . . . another.” Id. It

reasoned that “by its plain terms this language seems to focus our attention on third party

collection agents working for a debt owner—not on a debt owner seeking to collect debts for

itself.” Id. This language does not suggest that “whether the owner originated the debt or came

by it only through later purchase” determines if it is a debt collector. Id. “All that matters is

whether the target of the lawsuit regularly seeks to collect debts for its own account or does so

for ‘another.’” Id. Hence the Bank, which collected debts for its own account, did not meet the

“regularly collects for another” definition. Id. at 1721–22. The Court also addressed the

suggestion that everyone who attempts to collect debt is either a “debt collector” or a “creditor”

with respect to a particular debt, but cannot be both. Id. “[S]potting (without granting) th[at]

premise,” it stated that a company such as the Bank, which collects on debt it purchased for its

own account, “would hardly seem to be barred from qualifying as a creditor under the statute’s

plain terms.” Id. But excluded from the definition of “creditor” are those who acquire a debt after

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default when the debt is assigned or transferred “solely for the purpose of facilitating collection

of such debt for another.” Id. (quoting § 1692a(4)).

II. DEFENDANT SBA’s MOTION FOR SUMMARY JUDGMENT MUST BE

DENIED

This Court has subject matter jurisdiction under 28 U.S.C. § 1331 because this action

arises in part out of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et. seq. and Fair

Credit Reporting Act (the “FCRA”), 15 U.S.C. § 1681, et seq. See Alfaro V. Wells Fargo N.A.,

d/b/a America's Servicing Company, Civil Action No. 16-7950 (DNJ 2017). While it is accurate

that these are not the only claims, they are the Federal claims in this matter and, it is bad faith for

Defendant to only remove the action and the turn around and claim the court lacks jurisdiction

and also to move for summary judgment on similar grounds. See Generally Rivas v. Bowling

Green Associates, L.P. No. 13-cv-7812, , at *4-5 (S.D.N.Y. July 24, 2014)). As such, for

Defendant to remove to Federal Court, for the sole purpose of attempting dismissal or procuring

improper summary judgment, would be tantamount to bad faith. Further, there is no question that

this court can hear the related state claims as well based on Supplemental jurisdiction.

Supplemental jurisdiction is the authority of United States federal courts to hear additional

claims substantially related to the original claim even though the court would lack the subject-

matter jurisdiction to hear the additional claims independently. 28 U.S.C. § 1367. As such, there

is no reason to grant summary judgment based on jurisdictional reasons for either party.

As stated by Defendant, it is axiomatic that the United States and its agencies and officers

are immune from suit unless they have consented to be sued. FDIC v. Meyer, 510 U.S. 471, 475

(1994); United States v. Mitchell, 445 U.S. 535, 538 (1980). In re Epps, 110 B.R. 691 (E.D. Pa.

1990) (sovereign immunity waived under National Housing Act authorizing HUD to "sue and be

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sued" in carrying out certain provisions of the Act). Such "sue and be sued" statutes waive

sovereign immunity only of particular agencies, not the United States generally. See Lomas &

Nettleton Co. v. Pierce, 636 F.2d 971, 972-73 (5th Cir. 1981); Indus. Indem., Inc. v. Landrieu,

615 F.2d 644, 646 (5th Cir. 1980). If the judgment sought by the plaintiff would "expend itself

on the public Treasury," the suit is in reality against the United States regardless of whether the

complaint names only Federal agencies or officials. Dugan v. Rank, 372 U.S. 609, 620 (1963)

(quoting Land v. Dollar, 330 U.S. 731, 738 (1947)); see also FHA V. Burr, 309 U.S. 242, 250-51

(1940) (garnishment action against Federal agency permitted only to the extent it had funds

outside the Treasury); Presidential Gardens Assocs. v. United States ex rel. Sec'y of HUD, 175

F.3d 132, 141 (2d Cir. 1999) (waiver of HUD's immunity limited to funds under control of HUD,

does not reach general Treasury funds). Finally, in the case of "sue-and-be-sued" agencies, one

can argue that, although such governmental units may have independent litigating authority, the

Bankruptcy Code, § 106, places limits upon the jurisdiction of the bankruptcy courts over any

governmental unit. Cf. Aetna Cas. & Sur. Co. v. United States, 655 F.2d 1047 (Ct. Cl. 1981)

(although HUD might be suable in other courts upon certain causes of action, Tucker Act places

limits upon Court of Claims' jurisdiction over them).

In this case, by transferring the interest in the underlying debt for the sole purpose of

attempting to collect on that debt, that was an affirmative action that effectively waived

sovereign immunity. Even though it is admitted that the SBA transferred the debt, they were still

responsible for the apparent “deficiency” and the initiation of the transfer. As such, even the

SBA was not the primary party to begin the debt collection process, it was still their actions that

permitted it to proceed. As such, they can be sued for their actions that left to the collection

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action, even if they were not directly the party doing so. Specifically, the SBA can be held

accountable for their actions under the FCRA.

In Kent v. TransUnion, plaintiff Rowdy Kent sued multiple consumer reporting agencies

and the United States Defense Finance and Accounting Services for alleged violations of the Fair

Credit Reporting Act. See Kent v. Trans Union, LLC, docket number 16-322 (2017) DFAS

moved to dismiss Kent’s claims, arguing that it possesses sovereign immunity from claims under

the FCRA. On August 25, 2017 the District Court for the Northern District of Texas rejected

DFAS’s contention, finding that Congress had waived sovereign immunity for claims under the

FCRA. As such, because the actions taken by the SBA led to damage to Plaintiff Conboy’s

credit, that is enough to keep them in the case for the FCRA violation and related stated claims

as well as not granting summary judgment.

Further, there is a relevant exception to the sovereign immunity waiver. If the plaintiff

seeks less than $10,000 in damages, the federal district courts have concurrent jurisdiction with

the United States Court of Federal Claims based on 28 U.S.C. § 1346, also known as the “Little

Tucker Act”. The current version gives concurrent jurisdiction to the Court of Federal Claims

and the District Courts "for the recovery of … any sum alleged to have been excessive or in any

manner wrongfully collected … and for claims below $10,000" See 28 U.S.C. § 1346(a)(2). For

this case, Plaintiffs are willing to limit their claim against the SBA to below $10,000.00 for the

damage they caused through the transfer they effectuated as well as the damage to credit,

particularly if the SBA agrees to repair said damage. As such, even if the FDCPA cannot be

brought against Defendant SBA, it can still proceed against the other Defendants and as such,

summary judgment should be granted to the claim fully. As such, the SBA essentially admitted

and agreed that the other claims, as long as they are each limited to $10,000.00 can proceed. The

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only other “argument” is a failure to exhaust “administrative remedies” but in none of the

pleadings is it stated what remedies should have been pursued before filing this suit. As such,

this argument should be considered a red herring at most, and can be denied.

III. DEFENDANT SED COGA AND CBE GROUP’S MOTION FOR SUMMARY

JUDGMENT MUST BE DENIED

Seda Cog and CBE Group rely primarily on the assertion they “transferred their rights

away” in 2006. This simply is not accurate, as a modification was signed with them in 2013 (see

Exhibit D) and they were contacting Plaintiff as late as 2015. As such, their implicit statute of

limitations argument against the claims against them must be denied.

Several of the above arguments can be applied to Seda Cog as well and are incorporated

by reference. As in the Alfaro case, the Plaintiffs are “not inviting the district court to review and

reject any state judgment under this cause of action.” Alfaro V. Wells Fargo N.A., d/b/a

America's Servicing Company, Civil Action No. 16-7950 (DNJ 2017). The reason for this is

because the actionable offenses that the statute would have applied occurred, as Defendants

admitted well within the two years statute. The actions that occurred by Defendant previously

clearly show the scheme at issue here. Even though they try to claim they had no interest since

2006, that is simply not accurate. As such, they must remain as Defendants in this action for all

of the damages caused to Plaintiffs,

As to the breach of contract, unjust enrichment and the other state claims, the statute that

applies is the a four year statute, rather than a two year statue, as per either 42 Pa. Consol. Stat. §

5525(7), (8); 42 Pa. Consol. Stat. § 5529 for written contracts or 42 Pa. Consol. Stat. § 5525(3)

for oral contracts. These relate to the modification that was offered and which payments were

made on it.

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Additionally, there should be no question that Defendant Seda Cog can be considered a

Debt Collector. Defendant squarely falls into the definition of a “debt collector” because they

certainly qualify as “any person who uses any instrumentality of interstate commerce or the

mails in any business the principal purpose of which is the collection of any debts, or who

regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be

owed or due another.” 15 U.S.C. § 1692(a)(6). Further, a party is also a “debt collector” if the

obligation is already in default when it is assigned. Evankavitch v. Green Tree Servicing, LLC,

793 F.3d 355, 358, fn. 2 (3d Cir. 2015). In this case, by either standard, Defendant would be

considered a debt collector, as through their actions there is now an attempt to collect the

underlying debt in question. Finally whether or not a party was a “debt collector” is a material

fact for a fact finder to decide. A mere allegation a part was not is insufficient and since

Defendants attached no actual evidence to this matter, the argument should be deemed moot.

IV. THE MOTIONS FOR SANCTIONS SHOULD BE DENIED

Defendants’ motions utterly lacks merit and was filed for an improper purpose, and its

denial should be compounded by a corresponding levy of sanctions and costs against Defendants.

Defendants have used both the threat and the filing of the motion, not as a means to filter a

frivolous claim but as a bullying tactic intended to intimidate Plaintiffs into withdrawing

legitimate claims This misuse of Rule 11 is in and of itself sanctionable. Indeed, the Advisory

Committee notes point out that Rule 11 should not be used “to emphasize the merits of a party’s

position, to exact an unjust settlement, [or] to intimidate an adversary into withdrawing

contentions that are fairly debatable.” See Laborers Local 938 Joint Health & Welfare Trust

Fund v. B.R. Starnes Co. of Florida, 827 F.2d 1454, 1458 (11th Cir. 1987) (affirming the denial

10

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of 12

of sanctions where the issues were fairly debatable and not easily resolved, and there was no

clear binding precedent).

The standard under Rule 11 is “stringent” because sanctions “1) are in derogation of the general

American policy of encouraging resort to the courts for peaceful resolution of disputes, 2) tend to

spawn satellite litigation counter-productive to efficient disposition of cases, and 3) increase

tensions among the litigating bar and between [the] bench and [the] bar.” Doering v. Union Cty.

Bd. of Chosen Freeholders, 857 F.2d 191, 194 (3d Cir. 1988). While the focus of Rule 11 is on

whether a claim is wholly without merit, and is not dictated by whether resources will be

expended in deciding the motion, Rule 11 motions should conserve rather than misuse judicial

resources. See Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90, 99 (3d Cir. 1988) (“Rather than

misusing scarce resources, [the] timely filing and disposition of Rule 11 motions should conserve

judicial energies.”).

Defendants’ motions fail not only for its lack of merit, but it also violates the ethical

underpinnings of Rule 11. Rule 11 imposes a duty on the party seeking sanctions to be

circumspect in pursuing such a drastic remedy and to not to use the device for an improper

purpose lest it may discourage expansion of the law through creative legal theories. See Ario v.

Underwriting Members of Syndicate 53 at Lloyds, 618 F.3d 277, 297 (3d Cir. 2010) (Rule 11

“should not be applied to adventuresome, though responsible, lawyering which advocates

creative legal theories.”)(citations omitted). Sanctions are a drastic remedy reserved for only the

most extraordinary circumstances. See, Park v. Seoul Broad. Sys. Co., 2008 U.S. Dist. LEXIS

17277, at *1 (S.D.N.Y. Mar. 6, 2008). Whether a claim can survive on the merits is wholly

distinct from whether that claim is frivolous. See Abdelhamid v. Altria Group, Inc., 515 F. Supp.

2d 384, 392 (S.D.N.Y. 2007)(“‘When divining the point at which an argument turns from merely

11

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losing to losing and sanctionable’ courts must ‘resolve all doubts in favor of the signer of the

pleading.’”)

V. CONCLUSION

For the foregoing reasons, Defendants respectfully request that this Court deny

Defendants’ motions in full.

_/s/ Joshua Thomas, Esq._

Joshua Thomas, Esq.

Attorneys for Plaintiffs

Dated: September 30, 2019

12

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APPENDIX B

A redline copy of Appellants’ opening appellate brief

compared to their District Court brief

Case: 20-1726 Document: 003113816284 Page: 15 Date Filed: 03/19/2021

No. 20-1726

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

DESMOND CONBOY and

BRENDAN GILSENAN

v.

CBE GROUP, SEDA COG, FIRST NATIONAL BANK S/B/M

METRO BANK AND U.S. SMALL BUSINESS

ADMINISTRATION

DESMOND CONBOY and

BRENDAN GILSENAN,

Appellant

On Appeal from the U.S. District Court

for the MIDDLE DISTRICT OF PENNSYLVANIA

Civil Action No. 3:18-CV-00224

APPELLANT’S OPENING BRIEF AND

APPENDIX

Attorney for Appellants

Joshua L. Thomas & Associates

Joshua Thomas Esq.

Supreme Court ID No. 312476

225 Wilmington-West Chester Pike Suite 200

Chadds Ford, PA 19317

Phone: (215) 806-1733

Fax: (888) 314-8910

Email: JoshuaLThomas@gmail.com

Case: 20-1726 Document: 003113816284 Page: 16 Date Filed: 03/19/2021

TABLE OF CONTENTS

TABLE OF CONTENTS ....................................... i

TABLE OF AUTHORITIES .................................. iiii

I. INTRODUCTION ....................................... 1

II. STATEMENT OF JURISDICTION ............................ 1

III. STATEMENT OF ISSUES ................................. 2

IV. STATEMENT OF THE RELATED CASES ........................ 2

V. STATEMENT OF THE CASE AND FACTS ....................... 2

VI. STANDARD OF REVIEW .................................. 5

VII. LEGAL ARGUMENT ...................................... 6

1.Both Appellees’ Motions Failed To Show They Were

Entitled To Summary Judgment………………………………………………… 6

2.Appellee Sba’s Motion For Summary Judgment Should

Have Been Be Denied………..........................12

3.Appellee Sed Coga And Cbe Group’s Motion For

Summary Judgment Should Have Been Denied ……....18

VIII. CONCLUSION ....................................... 21

IX. CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME LIMITATION,

TYPEFACE REQUIREMENTS, AND TYPE STYLE REQUIREMENTS .......... 22

X. CERTIFICATE OF IDENTICAL COMPLIANCE OF BRIEFS AND

CERTIFICATE OF PERFORMANCE OF VIRUS CHECK .................. 23

XI. CERTIFICATE OF SERVICE .............................. 24

ii

Case: 20-1726 Document: 003113816284 Page: 17 Date Filed: 03/19/2021

TABLE OF AUTHORITIES

Federal and State Codes

15 U.S.C. § 1681 .................................... 10

15 U.S.C. § 1692(e) .................................. 8

15 U.S.C. § 1692a ............................. 8, 9, 14

28 U.S.C. § 1331 ................................... 10

28 U.S.C. § 1367 ...................................10

42 Pa. Consol. Stat. § 5525 . ........................ 13

42 Pa. Consol. Stat. § 5529 . ........................ 13

Fed. R. Civ. P. 56(a). ................................ 6

Court Cases

Alfaro V. Wells Fargo N.A., d/b/a America's Servicing Company, Civil Action No.

16-7950 (DNJ 2017) ................................... 8, 13

Allen ex. rel, Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011) .... 8

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48 (1986). .............. 6

Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142, 148

(3d Cir. 2013) ........................................... 8

Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986) .................. 7

Cf. Aetna Cas. & Sur. Co. v. United States, 655 F.2d 1047 (Ct. Cl. 1981) .......... 11

Dugan v. Rank, 372 U.S. 609, 620 (1963) ......................... 11

Evankavitch v. Green Tree Servicing, LLC,

793 F.3d 355, 358, fn. 2 (3d Cir. 2015). .......................... 14

FDIC v. Meyer, 510 U.S. 471, 475 (1994) ......................... 10

FHA V. Burr, 309 U.S. 242, 250-51 (1940) ............................ 11

Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718 (2017) ....... 7, 9

In re Epps, 110 B.R. 691 (E.D. Pa. 1990) ......................... 10

Indus. Indem., Inc. v. Landrieu, 615 F.2d 644, 646 (5th Cir. 1980) ......... 11

iii

Case: 20-1726 Document: 003113816284 Page: 18 Date Filed: 03/19/2021

Lomas & Nettleton Co. v. Pierce, 636 F.2d 971, 972-73 (5th Cir. 1981) .. 10, 11

Kaymark v. Bank of Am., N.A., 783 F.3d 168, 174 (3d Cir. 2015) ........... 8

Kent v. Trans Union, LLC, docket number 16-322 (2017) .................... 12

Marino v. Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004) ............ 7

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) ... 7

Presidential Gardens Assocs. v. United States ex rel. Sec'y of HUD, 175 F.3d 132,

141 (2d Cir. 1999) ....................................... 11

Pollice v. Nat’l Tax Funding, L.P., 225 F.3d 379, 403 (3d Cir. 2000) .......... 8

Rivas v. Bowling Green Associates, L.P. No. 13-cv-7812, , at *4-5 (S.D.N.Y. July 24,

2014)) .............................................. 10

Shields v. Zuccarini, 254 F.3d 476, 481 (3d Cir. 2001) ................... 7

Tepper v Amos, No. 17-2851 3rd Cir., Aug. 7, 2018 ..................... 7

United States v. Mitchell, 445 U.S. 535, 538 (1980) ................... 10

>$SSHOODWHEULHI VIURQWPDWWHUUHSODFHG'LVWULFW&RXUWEULHI VFDSWLRQ@

iv

Case: 20-1726 Document: 003113816284 Page: 19 Date Filed: 03/19/2021

I. INTRODUCTION

The primary issue at the heart of this case is,

that summary judgment was improperly granted, and the

parties should have been permitted to have this heard

on the merits, as it should have been.

II. STATEMENT OF JURISDICTION

The district court has subject-matter

jurisdiction over this case pursuant to 28 U.S.C. §

1331, and 28 U.S.C. § 1332. This Court has

supplemental jurisdiction over Appellees and the

state law based claims pursuant to 28 U.S. Code §

1367. Venue is appropriately laid in the District

Court of New Jersey pursuant to 28 USC §1391(b)(2) as

the events giving rise to the claim occurred

substantially within the State of New Jersey. This

Court has jurisdiction over this appeal under 28 U.S.

Code §᩿1291 (Final decisions of district courts).

III. STATEMENT OF ISSUES

1.Whether Appellees’ Motions Failed To Show They Were

Entitled To Summary Judgment?

1

Case: 20-1726 Document: 003113816284 Page: 20 Date Filed: 03/19/2021

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Case: 20-1726 Document: 003113816284 Page: 21 Date Filed: 03/19/2021

$276,315.61. This information was, in fact, sent for the

first time to Appellants on September 3, 2016, which was

3ODLQWLIIV

6 months and 18 days after the sale. (See APPENDIX A1).

([KLELW%

This was beyond the 6 month cutoff for a deficiency

judgment on a mortgage to be pursued. After that time,

Appellee SBA transferred the debt improperly to Appellee

'HIHQGDQW 'HIHQGDQW

CBE Group. As of October 19, 2017, Appellee CBE has not

'HIHQGDQW

only made many collection attempts in writing, but added

on interested and fees so the current debt balance is

now allegedly at $374,258.64. (see APPENDIX A1). At no

([KLELW&

time was a lawsuit brought or a judgment received during

the 6 month period after the sale of the property took

place. Appellee CBE has been informed that their

'HIHQGDQW

collection efforts are not legal, yet they have

continued to pursue those efforts despite this

knowledge. Further, on or around February 9, 2018,

Appellee SBA reported an outstanding balance to the

'HIHQGDQW

Credit Bureaus for Mr. Conboy. This report stated that

the account was allegedly opened on April 15, 2005, the

“high balance” was for $594,000, there was a balance of

3

Case: 20-1726 Document: 003113816284 Page: 22 Date Filed: 03/19/2021

271,799 and the last time Mr. Conboy allegedly made a

payment was October 11, 2017. Further, it had a status

of “charged off”. This report was done solely to damage

Mr. Conboy’s credit and in retaliation for the filing

of this suit, as there had never been a report

previously. There was no reasonable or legal reason for

this report, and it was done for completely improper

purposes, with the express intent to damage Mr. Conboy,

his ability to receive credit and to defame him for

anyone else who would potentially attempt to lend him

money and see such a derogatory report.

Further, there is no question that Seda Cog had an

interest in this matter. (See APPENDIX A1 –

([KLELW'

modification). Additionally, they were communicating

with Appellant as late as 2015. Some of the people who

3ODLQWLII

communicated with Appellant from Seda Cog were X and B.

3ODLQWLII

There is no question they still had an interest in this

matter and were actively attempting to collect on this

debt. As such, they belong as a party to this matter as

well.

4

Case: 20-1726 Document: 003113816284 Page: 23 Date Filed: 03/19/2021

VI. STANDARD OF REVIEW

This Court reviews de novo a district court’s

ruling on an order to dismiss for failure to state a

claim. McTernan v. City of York, 577 F.3d 521, 526,

530-31 (3d Cir. 2009) (citing Ashcroft v. Iqbal, 556

U.S. 662 (2009), and Bell Atl. Corp. v. Twombly, 550

U.S. 544 (2007) ). “To survive a motion to dismiss, a

complaint must contain sufficient factual matter,

accepted as true, to ‘state a claim to relief that is

plausible on its face.’” Iqbal, 556 U.S. at 678

(quoting Twombly, 550 U.S. at 570). “Factual

allegations must be enough to raise a right to relief

above the speculative level,” Twombly, 550 U.S. at

555, and a complaint must plead specific facts that

raise “more than a sheer possibility that a Appellee

has acted unlawfully,” Iqbal, 556 U.S. at 678. A court

need not, and may not, accept legal conclusions

packaged as factual allegations. See, e.g., Iqbal, 556

U.S. at 678-79; Twombly, 550 U.S. at 555-56.

5

Case: 20-1726 Document: 003113816284 Page: 24 Date Filed: 03/19/2021

Case: 20-1726 Document: 003113816284 Page: 25 Date Filed: 03/19/2021

The moving party must show that if the evidentiary

material of record were reduced to admissible evidence

in court, it would be insufficient to permit the

nonmoving party to carry its burden of proof. Celotex

Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). Once the

moving party meets its initial burden, the burden then

shifts to the nonmovant who must set forth specific facts

showing a genuine issue for trial and may not rest upon

the mere allegations, speculations, unsupported

assertions or denials of its pleadings. Shields v.

Zuccarini, 254 F.3d 476, 481 (3d Cir. 2001). “In

considering a motion for summary judgment, a district

court may not make credibility determinations or engage

in any weighing of the evidence; instead, the non-moving

party’s evidence ‘is to be believed and all justifiable

inferences are to be drawn in his favor.’” Marino v.

Indus. Crating Co., 358 F.3d 241, 247 (3d Cir. 2004)

(quoting Anderson, 477 U.S. at 255). Furthermore, in

deciding the merits of a party's motion for summary

judgment, the court's role is not to evaluate the

7

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Case: 20-1726 Document: 003113816284 Page: 27 Date Filed: 03/19/2021

debt collector regardless whether the entity owns the

debts it collects. Id.

Further, the FDCPA is a “remedial legislation”

aimed, as already noted, “to eliminate abusive debt

collection practices by debt collectors.” Kaymark v.

Bank of Am., N.A., 783 F.3d 168, 174 (3d Cir. 2015)

(quoting § 1692(e); Caprio v. Healthcare Revenue

Recovery Grp., LLC, 709 F.3d 142, 148 (3d Cir. 2013)).

Importantly, it applies only to “debt collectors,”

Pollice v. Nat’l Tax Funding, L.P., 225 F.3d 379, 403

(3d Cir. 2000), defined as any person: (1) “who uses any

instrumentality of interstate commerce or the mails in

any business the principal purpose of which is the

collection of any debts” (the “principal purpose”

definition); or (2) “who regularly collects or attempts

to collect, directly or indirectly, debts owed or due

or asserted to be owed or due another” (the “regularly

collects for another,” or “regularly collects,”

definition).1 § 1692a(6). Further, and most importantly,

“The FDCPA is a strict liability statute to the extent

9

Case: 20-1726 Document: 003113816284 Page: 28 Date Filed: 03/19/2021

that it imposes liability without proof of an

intentional violation.” Allen ex. rel, Martin v. LaSalle

Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011).

As stated previously, the Supreme Court, in Henson

v. Santander Consumer USA Inc., 137 S. Ct. 1718 (2017),

has recently repealed the “default” test. Debtors

claimed that Santander Bank, which had purchased their

loans already in default and attempted to collect on

them, met the second definition of “debt collector,”

i.e., one who “regularly collects or attempts to collect

. . . debts owed or due . . . another.” Id. at 1721



(quoting § 1692a(6)). They asserted as well that the

Bank met the “principal purpose” definition, but the

Court did not review that claim because it was not

litigated in the District Court. Id. The Supreme Court

began “with a careful examination of the statutory

text,” in particular the definition’s limitation to

debts “owed . . . another.” Id. It reasoned that “by its

plain terms this language seems to focus our attention

on third party collection agents working for a debt

10

Case: 20-1726 Document: 003113816284 Page: 29 Date Filed: 03/19/2021

owner—not on a debt owner seeking to collect debts for

itself.” Id. This language does not suggest that

“whether the owner originated the debt or came by it

only through later purchase” determines if it is a debt

collector. Id. “All that matters is whether the target

of the lawsuit regularly seeks to collect debts for its

own account or does so for ‘another.’” Id. Hence the

Bank, which collected debts for its own account, did not

meet the “regularly collects for another” definition.

Id. at 1721–22. The Court also addressed the suggestion

that everyone who attempts to collect debt is either a

“debt collector” or a “creditor” with respect to a

particular debt, but cannot be both. Id. “[S]potting

(without granting) th[at] premise,” it stated that a

company such as the Bank, which collects on debt it

purchased for its own account, “would hardly seem to be

barred from qualifying as a creditor under the statute’s

plain terms.” Id. But excluded from the definition of

“creditor” are those who acquire a debt after default

when the debt is assigned or transferred “solely for the

11

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Case: 20-1726 Document: 003113816284 Page: 31 Date Filed: 03/19/2021

be tantamount to bad faith. Further, there is no question

that this court can hear the related state claims as

well based on Supplemental jurisdiction. Supplemental

jurisdiction is the authority of United States federal

courts to hear additional claims substantially related

to the original claim even though the court would lack

the subject-matter jurisdiction to hear the additional

claims independently. 28 U.S.C. § 1367. As such, there

is no reason to grant summary judgment based on

jurisdictional reasons for either party.

As stated by Appellee, it is axiomatic that the

'HIHQGDQW

United States and its agencies and officers are immune

from suit unless they have consented to be sued. FDIC

v. Meyer, 510 U.S. 471, 475

(1994); United States v. Mitchell, 445 U.S. 535, 538

(1980). In re Epps, 110 B.R. 691 (E.D. Pa. 1990)

(sovereign immunity waived under National Housing Act

authorizing HUD to "sue and be sued" in carrying out

certain provisions of the Act). Such "sue and be sued"

statutes waive sovereign immunity only of particular

13

Case: 20-1726 Document: 003113816284 Page: 32 Date Filed: 03/19/2021

agencies, not the United States generally. See Lomas &

Nettleton Co. v. Pierce, 636 F.2d 971, 972-73 (5th Cir.

1981); Indus. Indem., Inc. v. Landrieu, 615 F.2d 644,

646 (5th Cir. 1980). If the judgment sought by the

Appellant would "expend itself on the public Treasury,"

SODLQWLII

the suit is in reality against the United States

regardless of whether the complaint names only Federal

agencies or officials. Dugan v. Rank, 372 U.S. 609, 620

(1963) (quoting Land v. Dollar, 330 U.S. 731, 738

(1947)); see also FHA V. Burr, 309 U.S. 242, 250-51

(1940) (garnishment action against Federal agency

permitted only to the extent it had funds outside the

Treasury); Presidential Gardens Assocs. v. United States

ex rel. Sec'y of HUD, 175 F.3d 132, 141 (2d Cir. 1999)

(waiver of HUD's immunity limited to funds under control

of HUD, does not reach general Treasury funds). Finally,

in the case of "sue-and-be-sued" agencies, one can argue

that, although such governmental units may have

independent litigating authority, the Bankruptcy Code,

§ 106, places limits upon the jurisdiction of the

14

Case: 20-1726 Document: 003113816284 Page: 33 Date Filed: 03/19/2021

bankruptcy courts over any governmental unit. Cf. Aetna

Cas. & Sur. Co. v. United States, 655 F.2d 1047 (Ct. Cl.

1981) (although HUD might be suable in other courts upon

certain causes of action, Tucker Act places limits upon

Court of Claims' jurisdiction over them).

In this case, by transferring the interest in the

underlying debt for the sole purpose of attempting to

collect on that debt, that was an affirmative action

that effectively waived sovereign immunity. Even though

it is admitted that the SBA transferred the debt, they

were still responsible for the apparent “deficiency” and

the initiation of the transfer. As such, even the SBA

was not the primary party to begin the debt collection

process, it was still their actions that permitted it

to proceed. As such, they can be sued for their actions

that left to the collection action, even if they were

not directly the party doing so. Specifically, the SBA

can be held accountable for their actions under the

FCRA.

15

Case: 20-1726 Document: 003113816284 Page: 34 Date Filed: 03/19/2021

Case: 20-1726 Document: 003113816284 Page: 35 Date Filed: 03/19/2021

Case: 20-1726 Document: 003113816284 Page: 36 Date Filed: 03/19/2021

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Case: 20-1726 Document: 003113816284 Page: 39 Date Filed: 03/19/2021

>2ULJLQDOVLJQDWXUHEORFNDQGGDWHRPLWWHG@

Respectfully submitted,

Dated: August 17, 2020 ___/s/ Joshua Thomas________

Joshua L. Thomas and Assoc.

Joshua Thomas Esq.

Supreme Court ID No. 312476

225 Wilmington-West Chester

Pike

Suite 200

Chadds Ford, PA 19317

Phone: (215) 806-1733

Email: JoshuaLThomas@gmail.com

21

Case: 20-1726 Document: 003113816284 Page: 40 Date Filed: 03/19/2021

CERTIFICATE OF COMPLIANCE WITH TYPE-VOLUME

LIMITATION, TYPEFACE REQUIREMENTS, AND TYPE

STYLE REQUIREMENTS

This brief complies with the type-volume limitation

of Fed. R. App. P. 32(a) (7) (B) because the brief

contains 4612 words, excluding the parts of the brief

exempted by Fed. R. App. P. 32(a)(7)(B)(iii).

This brief complies with the typeface requirements of

Fed. R. App. P. 32(a)(5) and the type style

requirements of Fed. R. App. P. 32(a)(6) because this

brief has been prepared in a proportionally spaced

typeface using Microsoft Word 2010, in 14-point

Courier New.

August 17, 2020 /s/ Joshua Thomas

Joshua Thomas, Esq.

22

Case: 20-1726 Document: 003113816284 Page: 41 Date Filed: 03/19/2021

CERTIFICATE

I, Joshua L. Thomas, Esquire, hereby certify that to

the best of my knowledge, the hard copy brief and the

electronic version submitted in this matter are

identical.

I certify that I have checked these filings and

have been scanned for viruses by virus protection

program, AVG Anti- Virus, and they are free from any

viruses.

/s/ Joshua Thomas

Joshua Thomas, Esq.

23

Case: 20-1726 Document: 003113816284 Page: 42 Date Filed: 03/19/2021

CERTIFICATE OF SERVICE

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

I, Joshua L. Thomas, Esquire, hereby certify that

a true and correct copy of Appellant’s Brief was

served via ECF and/or regular mail upon all parties.

/s/ Joshua Thomas

Joshua Thomas, Esq.

24

Case: 20-1726 Document: 003113816284 Page: 43 Date Filed: 03/19/2021

APPENDIX C

A redline copy of Appellants’ opposition to Rule 38

damages compared to their District Court brief

Case: 20-1726 Document: 003113816284 Page: 44 Date Filed: 03/19/2021

 



No. 20-1726

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT





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Appellant

On Appeal from the U.S. District Court

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Civil Action No. 3:18-CV-00224 

APPELLANT’S OPPOSITION TO

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