United States of America v. Coker

Filing 29

ORDER signed by Judge John A. Mendez on 10/21/10 ORDERING that dft's 12 Motion to Dismiss for Lack of Jurisdiction is DENIED. (Benson, A.)

United States of America v. Coker

Doc. 29

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ROBBIN M. COKER, Defendant. v. UNITED STATES OF AMERICA, Plaintiff, ) ) ) ) ) ) ) ) ) ) ) ) Case No. 2:09-CV-02012-JAM-DAD ORDER DENYING DEFENDANTS MOTION TO DISMISS UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA

This matter is before the Court on Defendant Robbin M. Cokers ("Defendants") Motion to Dismiss (Doc. 12) Plaintiff the United States of Americas ("Plaintiffs") First Amended Complaint ("FAC") (Doc. 5). The FAC brings a claim for relief against Defendant

under the Federal Debt Collection Procedures Act ("FDCPA"), 28 U.S.C. §§ 3001 et seq. Defendant seeks dismissal of the FAC based

on Federal Rule of Civil Procedure 12(b)(2), 12(b)(3), 12(b)(4) and 12(b)(5). Plaintiff opposes the motion.1 Defendant did not submit

a reply brief addressing any of the points raised in Plaintiffs
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This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). 1
Dockets.Justia.com

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opposition brief. motion is denied.

For the reasons set forth below, Defendants

I.

Factual and Procedural Background

The FAC alleges that on May 1, 1996, Defendant signed an "Application/Promissory Note" consolidating various college and law school loans through the Student Marketing Loan Associations ("Sallie Mae") Smart Loan Account. at 9% interest per annum. on December 17, 1996. loan. Plaintiff alleges that pursuant to Title IV of the Higher Education Act of 1965, as amended 20 U.S.C. §§ 1071-1087ii, the loans were guaranteed loans for which the United States Department of Education provides reinsurance to the guarantor in the event of a debtors default. When Defendant defaulted, the loan guarantor The loan amounted to $60,466.00

Sallie Mae disbursed the loan proceeds

In June 1998, Defendant defaulted on the

paid Sallie Mae its claim for the unpaid debt, and then Plaintiff reimbursed the guarantor under the reinsurance agreement. The

guarantor assigned Plaintiff its right and title to the loan on August 18, 2003. Plaintiff alleges that it has demanded payment, As of August

but Defendant has failed to repay the defaulted loan.

28, 2009, Defendant owes Plaintiff $138,867.73, and interest continues to accrue on the principal sum at a daily rate of $17.25. Plaintiff also seeks to recover a surcharge of 10% of the amount due and owing to compensate it for its attorneys fees and collection costs pursuant to 28 U.S.C. § 3011. Plaintiff filed the original complaint (Doc. 1) in this Court on July 21, 2009. Plaintiff filed the FAC on August 28, 2009. 2

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Shortly thereafter, Defendant filed for bankruptcy under Chapter 13 of the Bankruptcy Code. to an automatic stay. Accordingly, this case was stayed pursuant (Doc. 6). The stay was lifted on January (Doc.

21, 2010 when Defendants bankruptcy petition was dismissed. 7).

Plaintiff served Defendant in North Carolina via substituted Defendant allegedly no longer resides

service on January 28, 2010.

in California, and now moves to dismiss the FAC for lack of personal jurisdiction, improper venue, insufficient process and insufficient service of process.

II. A. Legal Standard

Opinion

Federal Rule of Civil Procedure 12(b) sets forth defenses that may be raised in response to claims for relief, including lack of subject matter jurisdiction, lack of personal jurisdiction, improper venue, insufficient process, insufficient service of process, failure to state a claim, and failure to join a party under Rule 19. Fed. R. Civ. Proc. 12(b). A motion asserting any

of these defenses must be made before pleading if a responsive pleading is allowed. If a pleading sets out a claim for relief

that does not require a responsive pleading, an opposing party may assert at trial any defense to that claim. No defense or objection

is waived by joining it with one or more other defenses or objections in a responsive pleading or in a motion. Id. A party

waives any defense listed in Rule 12(b)(2)-(5) by (A) omitting it from a motion in the circumstances described in Rule 12(g)(2); or (B) failing to either make it by motion under this rule or include it in a responsive pleading or in an amendment allowed by Rule 3

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15(a)(1) as a matter of course.

Fed. R. Civ. Proc. 12(h).

B.

Defenses under Federal Rule of Civil Procedure 12(b) 1. Federal Rule of Civil Procedure 12(b)(2)

Defendant moves the Court to dismiss the FAC for lack of personal jurisdiction. Plaintiff contends that the Court has Federal Rule of Civil

personal jurisdiction over the FAC.

Procedure 12(b)(2) allows a party to assert lack of personal jurisdiction as a defense. When a defendant challenges personal

jurisdiction, the plaintiff bears the burden of establishing the courts personal jurisdiction over the defendant. Merchant, 744 F.2d 665,667 (9th Cir. 1984). Cubbage v.

If the district court

does not conduct an evidentiary hearing on the jurisdictional challenge, a plaintiff need only make a prima facie showing of personal jurisdiction. Action Embroidery Corp. v. Atlantic In

Embroidery, Inc., 368 F.3d 1174, 1177 (9th Cir. 2004).

determining if a prima facie showing has been made, the court must take the uncontroverted allegations of the complaint as true, and conflicts between the parties affidavits must be resolved in plaintiffs favor. Id.

Defendants Motion to Dismiss alleges that Defendant resides in North Carolina, and is therefore not subject to personal jurisdiction in California. However, as Plaintiff points out, the

FDCPA authorizes nationwide service of process over defendants indebted to the United States. 28 U.S.C. § 3004. The Ninth

Circuit has found that federal statutes that authorize the service of process beyond the boundaries of the forum state likewise expand the personal jurisdiction of the courts within that forum. 4 See Go

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Video, Inc. v. Akai Elec. Co., Ltd., 885 F.2d 1406, 1414 (9th Cir. 1989) (upholding personal jurisdiction over a foreign corporation under Section 12 of the Clayton Act, 15 U.S.C. § 22). The FDCPAs

nationwide service of process provision similarly confers national jurisdiction. Reese Bros. V United States Postal Service, 477 F.

Supp. 2d 31 (D.D.C. 2007), citing Go-Video, 885 F.2d at 1414. Furthermore, "when a statute authorizes nationwide service of process, national contacts analysis is appropriate. In such cases,

due process demands a showing of minimum contacts with the United States with respect to foreign defendants before a court can assert personal jurisdiction. Action Embroidery, 368 F.3d at 1180

(holding that a Virginia corporation operating in the United States clearly had such minimum contacts). Thus, Plaintiff need only show that Defendant has sufficient minimum contacts with the United States so as not to violate the ,,traditional notions of fair play and substantial justice. Reese,

477 F. Supp. 2d at 39, quoting Intl Shoe Co., v. Washington, 326 U.S. 310, 316 (1945). The evidence submitted by Plaintiff shows

that Defendant is an attorney licensed by the State Bar of California, maintains an active law practice in Sacramento, California and filed two bankruptcy petitions on behalf of a client in the Eastern District shortly after filing the present motion. Defendants motion alleged that Defendant is a resident of North Carolina, but did not address Defendants California law practice. Nor did Defendant submit any evidence challenging or denying these California contacts. Accordingly, Plaintiff has established the

Defendant has minimum contacts with the state of California, thus satisfying the national contacts test. 5 Defendants motion to

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dismiss for lack of personal jurisdiction is denied, as the Court finds that it has personal jurisdiction over Defendant. 2. Federal Rule of Civil Procedure 12(b)(3)

Federal Rule of Civil Procedure 12(b)(3) allows a defendant to assert improper venue as a defense. Here, Defendant argues that

North Carolina is the proper venue for this suit, because Defendant resides in North Carolina. However, Plaintiff argues that the

Eastern District of California is the proper venue, because Defendant applied for the loan and signed the promissory note in this district. Federal law does not limit venue to a defendants residence. 28 U.S.C. § 1391(b). Pursuant to 28 U.S.C. § 1391(b), venue for a

civil action is also proper in the "judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, . . ." 28 U.S.C. § 1391(b)(2). As Plaintiff

argues, the dispute in this case arises from the loan, which was applied for and signed in the Eastern District. Defendant listed

her Sacramento law practice as the presumed source to repay the loans, and has maintained that law practice after defaulting on the loan. Hence, the Court finds that the Eastern District of California is an appropriate venue for this suit, as a substantial part of the events and omissions giving rise to the FDCPA claim occurred in this district. 3. Federal Rules of Civil Procedure 12(b)(4)and(5)

Federal Rules of Civil Procedure 12(b)(4) and 12(b)(5) allow Defendant to assert insufficient process and insufficient service of process as defenses. Here, Defendant asserts both defenses,

arguing that service of process was insufficient because Defendant 6

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was not served in the Eastern District of California, but rather in North Carolina. Additionally, service of the FAC and the amended

summons was in the form of substitute service on a person described as Defendants "live in friend." Defendants motion to dismiss

alleges that Defendant has no such friend, and only received the amended summons in the mail. a copy of the FAC. Plaintiff argues that it properly executed substitute service at Plaintiffs home in North Carolina. Plaintiff submitted an Defendant alleges she never received

affidavit of its process server, attesting to service of process on an adult female residing at Plaintiffs home, who accepted service on Plaintiffs behalf. Service of process is governed by Federal Rule of Civil Procedure 4. Once service is challenged, the plaintiff bears the

burden of establishing that service was valid under Rule 4. Callans v. U.S. Postal Service, 2006 WL 3491141, *2 (N.D. Cal. Dec. 1, 2006), citing Brockmeyer v. May, 383 F. 3d 798, 801 (9th Cir. 2004). Factual questions concerning a 12(b)(5) motion, regarding

the manner in which service was executed, may be determined by the court through affidavits, depositions, or oral testimony. Covington v. U.S., 1991 WL 11010699, *1 (N.D. Cal. Dec. 20, 1991). Rule 4(e)(2)(B) authorizes serving an individual within a judicial district of the United States by leaving a copy of the summons and complaint at the individuals dwelling or usual place of abode with someone of suitable age and discretion who resides there. As previously discussed, the FDCPA authorizes nationwide Here, Plaintiff submitted an

service of a summons and complaint.

affidavit of service from its process server, attesting to service 7

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of process at Defendants home in North Carolina.

Defendant did

not submit any affidavit regarding service or lack thereof, and did not submit a reply brief responding to the evidence of service presented by Plaintiff. Plaintiff has shown that service was

properly executed at Defendants North Carolina home, meeting its burden of proof to overcome Defendants 12(b)(5) challenge. With

respect to 12(b)(4), Defendant has not articulated any specific objection to process under 12(b)(4). also denied. 4. Federal Rule of Civil Procedure 15 Accordingly this defense is

Lastly, Defendant argues that the amended complaint was not timely under Federal Rule of Civil Procedure 15 and should therefore be dismissed. Plaintiff is correct that Defendant cites

the version of Rule 15 that went into effect on December 1, 2009. Plaintiffs complaint was amended prior to that date, and therefore not subject to the timing requirement imposed after December 1, 2009. The FAC was served after December 1, 2009, due to the Accordingly, the FAC

automatic bankruptcy stay that was in place. is timely.

III. Order For the reasons set forth above, Defendants Motion to Dismiss is hereby DENIED. IT IS SO ORDERED.

Dated: October 21, 2010

____________________________ JOHN A. MENDEZ, UNITED STATES DISTRICT JUDGE

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