Opposition Brief — MacDermid v. Discover Financial Services (No. 09-598)

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Supreme Gourt, US.

“EN FILED

OF REC 18 209

\No/09-598 .

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IN THE

Supreme Court of the United States

DONALD H. MACDERMID, individually and as

Administrator of the Estate of Nina Kay MacDermid,

Petitioner,

DISCOVER FINANCIAL SERVICES,

d/b/a DISCOVER CHARGE CARD,

Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES Court OF APPEALS FOR THE SIXTH CIRCUIT

BRIEF IN OPPOSITION

ScoTtr D. CAREY RONALD S. RANGE, JR.

CourTNEY H. GILMER Counsel of Record

BAKER, DONELSON, BEARMAN BAKER, DONELSON, BEARMAN

CALDWELL & BERKOWITZ CALDWELL & BERKOWITZ

Commerce Center 100 Med Tech Parkway

Suite 1000 Suite 200

211 Commerce Street PO. Box 3088

PO. Box 190613 Johnson City, TN 37602

Nashville, TN 37219 (423) 928-0181

(615) 726-5600

Attorneys for Respondent

Discover Financial Services LLC, now known as

DFS Services LLC

22778 ce

COUNSEL PRESS

(80U) 274-3321 * (800) 359-6859

CORPORATE DISCLOSURE STATEMENT

Morgan Stanley is the ultimate parent of

Respondent Discover Financial Services LLC, now

known as DFS Services LLC. No other publicly held

company owns 10% or more of the stock of the

Respondent.

TABLE OF CONTENTS

Page

CORPORATE DISCLOSURE STATEMENT .. i

TABLE OF CONTENTS .................... ii

TABLE OF CITED AUTHORITIES ......... iii

I STATEMENT OF THE CASE ......... l

A. The Petition Fails to Address the

Criteria Set Forth in Rule 10....... l

B. The Petition Erroneously

Represents Certain Key Facts ..... 3

Il. RESPONSE TO PETITIONER’S

QUESTIONS PRESENTED FOR

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A. Limitations on the Conduct of

a Credit Card Collection

MOUPOBOMTRLIVE . 2.6.0... cece ees 5

B. Subsequent Review by a Court of

De 5

C. Limitations on Threatening Words

Used in the Collection of Credit Card

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TABLE OF CITEDAUTHORITIES

Page

Case:

Hyatt v. People, 188 U.S. 691, 23 S. Ct. 456,

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Rules:

Se eS bean oe cana tao eree ee 1,2

Federal Rule of Civil Procedure 12(b)(6) ....... 6, 7

Federal Rule of Civil Procedure 56 ........... 6, 7

]

I. STATEMENT OF THE CASE

Pursuant to Rule 15 of the Supreme Court Rules,

Respondent Discover Financial Services LLC

(“Discover”) submits this Response in Opposition to the

Petition for Writ of Certiorari (the “Petition”) filed by

Petitioner Donald H. MacDermid, Individually and as

Administrator of the Estate of Nina Kay MacDermid.

There is no basis for granting the Petition, and it should

be denied.

A. The Petition Fails to Address the Criteria Set

Forth in Rule 10

The Petition is fundamentally flawed in that

Petitioner fails even to set forth, much less attempt to

rely upon, any of the considerations governing review

on writ of certiorari provided in Rule 10 of the Supreme

Court Rules. As that Rule notes, “[R]Jeview on a writ of

certiorari is not a matter of right, but of judicial

discretion. A petition for writ of certiorari will be granted

only for compelling reasons.” Sup. Ct. R. 10. Rule 10

then sets forth three factors meant to “indicate the

character of the reasons the Court considers ...

Id. Those three factors are:

(a) a United States court of appeals has

entered a decision in conflict with the decision

of another United States court of appeals on

the same important matter; has decided an

important federal question in a way that

conflicts with a decision by a state court of last

resort; or has so far departed from the

accepted and usual course of judicial

proceedings, or sanctioned such a departure

by a lower court, as to call for an exercise of

this Court’s supervisory power;

(b) a state court of last resort has decided an

important federal question in a way that conflicts

with the decision of another state court of last resort

or of a United States court of appeals;

has decided an important question of federal law

that has not been, but should be, settled by this

Court, or has decided an important federal

question in a way that conflicts with relevant

decisions of this Court.

ld.

In the Petition, Petitioner fails to cite or rely upon

any of the factors set forth in Rule 10. Here, there is no

conflict between the federal circuits or between state

and federal courts, no federal question or federal law at

issue, and no need for the exercise of this Court’s

supervisory power over a lower court. At best, the

errors Petitioner asserts consist of “erroneous factual

findings or the misapplication of a properly stated rule

of law,” which are alleged errors that this Court rarely

decides to review. /d. Because none of the factors set

forth in Rule 10 are applicable here, this Court should

deny the Petition.

B. The Petition Erroneously Represents Certain

Key Facts

While, as noted above, this Court rarely seeks to

correct erroneous factual findings via discretionary

review, many of the alleged errors of which Petitioner

complains are not in fact errors at all. Rather, the

Petition itself erroneously represents certain key facts

in this matter. For example, in the fourth paragraph on

page 7 the Petition states: “Mrs. MacDermid applicd in

her husband’s name, as a co-obligor, but stated no

false facts.” This statement is incorrect in that

Mrs. MacDermid did not apply as a co-obligor, and did

state false facts.

As the United States Court of Appeals for the Sixth

Circuit noted in its opinion, it was a violation of the terms

of Discover’s online credit card application to “request

issuance of a Discover credit card in a party’s name

without that party’s consent or knowledge.” [Appendix

A, p. 2a]. In each of the three applications for eredit

eards submitted by Nina Kay MacDermid, she listed her

husband, Petitioner, as the “Primary Applicant” and

listed herself as an “Authorized Buyer.” [/d.]. As aresult,

all three credit cards were established as individual

accounts in Mr. MacDermid’s name rather than as joint

accounts belonging to both Mr. and Mrs. MacDermid.

[/d.]. Moreover, Mr. MacDermid conceded that he did

not apply for the credit cards, and that the applications

submitted to Discover were made without his knowledge

or permission. [|/d.]. Petitioner’s statement that Mr. and

Mrs. MacDermid were “co-obligors” on the Diseover

credit card accounts is thus incorrect - Mr. MacDermid

was the only account holder, and Mrs. MacDermid was

listed merely as an authorized buyer. Further,

Petitioner’s statement that there were no false facts set

forth in the application is incorrect. The terms of use of

the Discover website, not surprisingly, prohibit

applications submitted without a party’s consent and

knowledge. The Petitioner acknowledged below that he

did not apply for the credit cards issued in his name

and was not aware of the applications. Indeed, the

applications in issue are the very embodiment of a false

statement of fact as they were submitted without the

alleged applicant’s knowledge, and were therefore

fraudulent.

In addition, Petitioner makes other statements that

are unsupported by the record in this case. or example,

Petitioner states that, “[D Jiscover intensified a campaign

of harassment and threats, which included repeated

threats of criminal prosecution and jail, if the bill was

not paid.” (Petition, p. 7]. Calling the collection efforts

which occurred “a campaign of harassment and threats”

is rank hyperbole intended to cast Petitioner’s case ina

light not supported by the record.

II. RESPONSE TO PETITIONER’S QUESTIONS

PRESENTED FOR REVIEW

Petitioner appears to present three questions for

the Court’s review on page 7 of his Petition. However,

those questions do not relate to the legal or factual

issues decided below, but rather appear to be purported

policy arguments which Petitioner attempts to link to

the current economie climate. While Respondent

believes that Petitioner has chosen the wrong forum (and

indeed, the wrong branch of government) in which to

advance such arguments, Respondent will briefly

address each question along with an explanation of why

the question is inappropriate for this Court’s review.

A. Limitations on the Conduct of a Credit Card

Collection Representative

Petitioner relies upon the case of //yatt v. People,

188 U.S. 691, 23 S. Ct. 456, 47 L. Ed. 657 (1903), and the

“nation’s current economic climate” in an attempt to

cast the Petition as one involving broadly applicable

principles of debtor/creditor law. This argument fails to

acknowledge that the only claim at issue below was a

single common law claim for outrageous conduct (a/k/a

intentional infliction of emotional distress) under

Tennessee law. Further, this case involves an allegedly

mentally ill woman who committed suicide, leaving

behind a note that did not mention Discover, credit cards,

collection efforts, threats of jail, or fear of incarceration.

[Appendix A., p. 4a}.

Petitioner argues that the decisions below, when

evaluated in the context of Hyatt, leave the law

“unsettled.” This is incorrect, because the facts of this

matter are unique and fundamentally different than

those present in Hyatt or in the context of general

debtor/creditor law. As a result, the question is

inappropriate for this Court’s review.

Bb. Subsequent Review by a Court of Appeals

Panel

The second question presented for review, i.e.,

whether stare decisis prohibits a subsequent appellate

panel from disregarding a prior decision in the same

case, implies that the Court of Appeals made inconsistent

findings in the two separate appeals of this case to that

Court and that stare decisis barred the second decision

issued August 18, 2009. This argument ignores the fact

that in the first Court of Appeals decision, the Court

found only that it could not agree with “dismissal of the

outrageous conduct claim at the 12(b)(6) stage,” but

agreed that “’Tennessee’s outrageous conduct standard,

as in many states, is a formidable one.” [Appendix C.,

p. 50a and 57aj. The second decision of the Court of

Appeals, which affirmed the grant of summary judgment

to Respondent, is not contrary to the first decision

because the undisputed facts had been developed at

that stage and the Court of Appeals concluded on the

basis of those facts that “Discover’s legitimate threats

of criminal prosecution against [Mrs. MacDermid]

during debt collection failed to constitute outrageous

conduct as a matter of law.” [Appendix A, p. 26a).

Petitioner is apparently arguing that, because the

Court of Appeals once found that Discover did not meet

the Federal Rule of Civil Procedure 12(b)(6) standard

for dismissal of a claim, Discover could never develop

undisputed facts sufficient to allow it to prevail on a

Motion for Summary Judgment pursuant to Rule 56.

Petitioner’s argument in this regard is without merit.

In response to the original Court of Appeals decision,

Discover developed additional facts through the

discovery process and subsequently moved on the basis

of such facts for summary judgment on the remaining

claim of outrageous conduct. The District Court granted

Discover’s Motion for Summary Judgment. On appeal

from the District Court’s denial of Petitioner’s Motion

to Alter or Amend the Order granting Discover’s

Motion for Summary Judgment, the Court of Appeals

considered the undisputed facts and the summary

judgment standard and affirmed the District Court’s

decision to deny Petitioner’s Motion to Alter or Amend.

[Appendix A, p. 27a]. The law of stare decisis is simply

not implicated in this case because the prior decision of

the Court of Appeals addressing a Rule 12(b)(6) motion

to dismiss was not relevant to or binding on the

subsequent panel examining a different record under

the Rule 56 summary judgment standard. Consequently,

this Court should not grant review of this question.

C. Limitations on Threatening Words Used in

the Collection of Credit Card

Accounts

Just as with Petitioner’s first question for review

(which appears not to differ from this question),

Petitioner argues that “limitations” should be imposed

on threatening criminal prosecution in collection of a

debt. Respondent submits that these limitations already

exist, and the limitations and exceptions to such

limitations were acknowledyed and discussed in some

detail by the courts below. As to the precise conduct at

issue here, i.e., whether a creditor can threaten to

pursue criminal prosection, the courts below both held

that a creditor can be justified in threatening criminal

prosecution if a crime has indeed been committed.

[Appendix A, p. 26a]. The District Court and Court of

Appeals both applied the undisputed facts to the

applicable Tennessee criminal statutes and found that

probable cause existed to prosecute Mrs. MacDermid

under the applicable Tennessee criminal statutes. As a

result, the Court of Appeals found that any alleged

threats of criminal prosecution of Mrs. MacDermid were

legitimate and failed to constitute outrageous conduct

as a matter of law. [Appendix A., p. 26a]. Discover

respectfully submits that this Court should not grant.

review of this question.

Hl. CONCLUSION

Respondent Discover Financial Services LLC

respectfully submits that this Court should deny the

Petition for Certiorari because the Petition fails to

demonstrate any reason for further review of the

decision of the United States Court of Appeals for the

Sixth Circuit.

Respectfully submitted,

Scott D. CAREY RONALD S. RANGE, JR.

CourRTNEY H. GILMER Counsel of Record