Brock v. Resurgent Capital Services, LP, et al
Order denying the 44 MOTION to Stay. The briefing schedule on the motion to dismiss (doc. 46) is suspended. Plaintiff's response to the 40 MOTION for Judgment on the Pleadings is due by 7/31/2015, Defendant's reply due by 8/7/2015. Signed by Chief Judge William H. Steele on 7/17/2015. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
JUDY N. BROCK, et al., etc.,
RESURGENT CAPITAL SERVICES,
LP, et al.,
) CIVIL ACTION 14-0324-WS-M
The plaintiffs have filed a motion to stay discovery and all other
proceedings in this action pending the Eleventh Circuit’s resolution of an appeal of
this Court’s decision in Johnson v. Midland Funding, LLC, 528 B.R. 462 (S.D.
Ala. 2015). (Doc. 44). The defendants oppose the motion. (Doc. 47).
The amended complaint alleges that the defendants violated the Fair Debt
Collection Practices Act (“the Act”) by filing proofs of claim in their Chapter 13
bankruptcy proceedings on a debt barred by the statute of limitations. (Doc. 1 at
2-4). The Court in Johnson held that, while the Act “provides that it is unlawful
for a debt collector to file a proof of claim in a Chapter 13 proceeding knowing the
claim to be time-barred,” the Bankruptcy Code generally “permits creditors to file
proofs of claim in Chapter 13 proceedings on debts known to be time-barred.”
528 B.R. at 465, 470. The two provisions are “in irreconcilable conflict,” with the
result that “the Act must give way to the Code,” id. at 473, precluding the
plaintiff’s cause of action. The Johnson plaintiff appealed that ruling in March
The instant motion was triggered by two dispositive motions filed by the
defendants. The motion to dismiss argues that the claim of plaintiff Brock is
barred under the Rooker-Feldman doctrine. (Doc. 37). The motion for judgment
on the pleadings argues that the claims of both plaintiffs are due to be dismissed
for several reasons: (1) filing a proof of claim on a time-barred debt cannot
violate the Act; (2) even if such conduct does violate the Act, the Act is in
irreconcilable conflict with the Code and cannot be enforced; (3) filing a proof of
claim on a time-barred debt is not false, deceptive or otherwise violative of the
Act; and (4) the proofs of claim will not support liability under the competentlawyer standard. (Doc. 41 at 3-4). The plaintiffs assert that the issues presented in
Johnson “are substantially the same as in this case,” such that “the most efficient
use of this Court’s and the parties’ resources and time” is to stay this action
“pending a final decision by the Eleventh Circuit in Johnson.” (Doc. 44 at 2).
“[A] district court [has] discretion to stay a case pending the resolution of
related proceedings in another forum.” Ortega Trujillo v. Conover & Co.
Communications, Inc., 221 F.3d 1262, 1264 (11th Cir. 2000). However, a stay that
is “immoderate” abuses that discretion. Id. “In considering whether a stay is
‘immoderate,’ we examine both the scope of the stay (including its potential
duration) and the reasons cited by the district court for the stay.” Id.
As noted, the plaintiffs seek a stay until the Eleventh Circuit proceedings
are concluded, without offering a specific end date. Such proceedings may of
course extend past briefing, oral argument and written decision to rehearing by the
panel and/or en banc. An “indefinite” stay, such as one (as requested here) to
continue until the related litigation is fully exhausted, may be deemed immoderate.
Ortega Trujillo, 221 F.3d at 1264-65.
The plaintiffs’ only reason for seeking a stay is “efficien[cy].” But, “in a
case like this one, the interests of judicial economy alone are insufficient to justify
such an indefinite stay.” Ortega Trujillo, 221 F.3d at 1265.
For the reasons set forth above, the Court exercises its discretion against the
imposition of a stay. The plaintiffs’ motion to stay is denied.
The Court previously entered a briefing schedule on the defendants’ motion
to dismiss but not on their motion for judgment on the pleadings. It now appears,
however, that consideration of the latter motion first would be most efficient. The
defendants therein argue, (Doc. 41 at 31-43), that any cause of action under the
Act is precluded by the Code – the very argument accepted by the Court in
Johnson. Accordingly, the briefing schedule on the motion to dismiss, (Docs. 43,
46), is suspended. The plaintiffs are ordered to file and serve, on or before July
31, 2015, their response to that portion of the motion for judgment on the
pleadings that presents a Johnson argument. The defendants are ordered to file
and serve any reply on or before August 7, 2015. The Court will take that portion
of the motion for judgment on the pleadings under submission on August 7, 2015.1
DONE and ORDERED this 17th day of July, 2015.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
The defendants indicate they are amenable to a stay of discovery pending
resolution of their threshold motions. They, or the parties jointly, are free to file, for
consideration by the Magistrate Judge, a motion seeking such relief.
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