Marshall v. Classic Kia of Ellicott City

Filing 11

REPORT AND RECOMMENDATIONS re 9 MOTION for Default Judgment as to filed by Larnette Marshall. Signed by Magistrate Judge Stephanie A Gallagher on 1/25/2017. (c/m 1/25/17) (krs, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
LARNETTE MARSHALL
v.
CLASSIC KIA OF ELLICOTT CITY

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Case No. RDB-16-1557

REPORT AND RECOMMENDATIONS
This Report and Recommendations addresses the Motion for Entry of Default Judgment
(ECF No. 9) filed by Plaintiff Larnette Marshall against the Defendant, Classic Kia of Ellicott
City (“Defendant”). The Defendant has not filed an opposition, and its deadline has now passed.
On January 4, 2017, Judge Bennett referred this case to me to review Ms. Marshall’s motion and
to make recommendations concerning damages, pursuant to 28 U.S.C. § 301 and Local Rule
301.6. (ECF No. 10). No hearing is deemed necessary. Local Rule 105.6 (D. Md. 2016). For
the reasons discussed below, I respectfully recommend that Ms. Marshall’s motion (ECF No. 9)
be DENIED, and I further recommend that the case be DISMISSED.
I.

BACKGROUND
On May 20, 2016, Ms. Marshall filed a Complaint in this Court alleging that the

Defendant had failed to display and include proper information on a buyer’s guide on the
windows of the vehicle offered to her for sale.1 [ECF No. 1]. According to the Complaint, on
August 22, 2014, Ms. Marshall purchased what she believed to be a brand new car from
Defendant that turned out to be “a demonstrator/tester vehicle” which has since experienced
“many problems.” Id. at 5-6. According to supplemental filings to the Complaint, as of August

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While Ms. Marshall did not specifically reference any federal statute or regulation, the Used Motor Vehicle Trade
Regulations Rule, 16 C.F.R. § 455.1 et seq., requires a buyer’s guide to be displayed on all used vehicles offered for
sale.

22, 2014, Ms. Marshall owed a balance for the car in the amount of $23,433.14. [ECF No. 5-1].
Through the instant motion, Plaintiff seeks relief from the Court “to find [the] original contract
presented to Plaintiff Larnette Marshall by Defendant Classic Kia of Ellicott City, that was paid
by Plaintiff in cash from credit union null and void and award Plaintiff the sum of $39,000. The
breakdown of [the] amount [sought] includes the cost of the car plus interest, fees incurred by
Plaintiff in court filing and travel, the time and effort of looking for another vehicle[, and a]
rental vehicle needed to get to work [once the subject] Kia is returned to Defendant.” [ECF No.
9].
Defendant was served with the summons and Complaint on June 21, 2016. [ECF No. 4].
Defendant failed to file an answer or to otherwise respond within the time frames allowed in the
Federal Rules of Civil Procedure. On November 29, 2016, the Clerk entered an Order of Default
against Defendant. [ECF No. 8]. On December 29, 2016, Ms. Marshall filed the instant Motion
for Default Judgment. [ECF No. 9].
II.

STANDARD FOR DEFAULT JUDGMENT
In reviewing a Motion for Default Judgment, the court accepts as true the well-pleaded

factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network, 253 F.3d
778, 780-81 (4th Cir. 2001). It, however, remains for the court to determine whether these
unchallenged factual allegations constitute a legitimate cause of action. Id.; see also 10A
Wright, Miller & Kane, Federal Practice and Procedure § 2688 (3d ed. Supp. 2010)
(“[L]iability is not deemed established simply because of the default . . . and the court, in its
discretion, may require some proof of the facts that must be established in order to determine
liability.”).

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If the court determines that liability is established, the court must then determine the
appropriate amount of damages. Ryan, 253 F.3d at 780-81. The court does not accept factual
allegations regarding damages as true, but rather must make an independent determination
regarding such allegations. See, e.g., Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d
151, 154 (2d Cir. 1999).
In sum, (1) the court must determine whether the unchallenged facts in Ms. Marshall’s
Complaint constitute a legitimate cause of action, and, if they do, (2) the court must make an
independent determination regarding the appropriate amount of damages and the appropriate
injunctive relief.
III.

DISCUSSION
a. The Used Motor Vehicle Trade Regulations Rule
The Used Motor Vehicle Trade Regulations Rule, 16 C.F.R. § 455.1 et seq. (“Rule”), was

enacted under the authority of the Federal Trade Commission Act, 15 U.S.C. 41 et seq. (“FTC
Act”), and the Magnusson Moss Warranty Act, 15 U.S.C. 2309 (“MMWA”). 49 FR 45692
(1984). “A violation of the Rule constitutes an unfair or deceptive act or practice under the FTC
Act, and one who violates the Rule is subject to civil penalties of up to $10,000 per violation.
The… Rule is primarily intended to prevent and to discourage oral misrepresentations and unfair
omissions of material facts by used car dealers concerning warranty coverage.” 60 FR 62195.
The Rule is designed to be enforced by the Federal Trade Commission once it learns about
improper used vehicle sales. In order for Ms. Marshall’s case to proceed in this Court, the Rule
must also afford a private right of action to civil litigants. See, e.g., Williams v. Mead Westvaco
Corp., 2007 WL 2327586, at *1 (W.D. Va. Aug. 10, 2007) (“The existence of a private right of
action is a ‘prerequisite for finding federal question jurisdiction.’”) (citing Smith v. Indus. Valley

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Title Ins. Co., 957 F.2d 90, 93 (3d Cir. 1992) (applying Merrell Dow Pharm., Inc. v. Thompson,
478 U.S. 804 (1986)). The Rule, however, provides no such right. See Holloway v. BristolMyers Corp., 485 F.2d 986, 988-89 (D.C. Cir. 1973) (“The [FTC] Act nowhere purports to
confer upon private individuals … a right of action to enjoin the practices prohibited by the Act
or to obtain damages following the commission of such acts. …[W]e find strong indication that
Congress did not contemplate or intend such a private right of action.”); Betskoff v. Enterprise
Rent-A-Car Co. of Baltimore, LLC, 2012 WL 32575 (D. Md. Jan. 4, 2012) (finding that
“enforcement of [the FTC Act] is exclusive to the [Federal Trade Commission]”) (citations
omitted); Penn–Plax, Inc. v. L. Schultz, Inc., 988 F. Supp. 906, 911 n.1 (D. Md. 1997) (“Under
the [FTC Act] no private party—consumer or competitor—has standing to sue.”). See also 60
FR 62195 (“Even if a private right of action would be useful, the Commission has no apparent
authority to create one. There is no private right of action for violation of any FTC rule
promulgated under the [MMWA]. In addition, federal courts consistently have held that there is
no private remedy under the FTC Act.”) (emphasis added).
Accordingly, Ms. Marshall’s allegation of a Rule violation fails to state a claim upon
which relief can be granted. Ms. Marshall has not alleged any violations of federal law other
than the failure to provide a buyer’s guide, and there is no general federal consumer protection
statute similar to that existing in state law. Even when construed liberally in favor of Ms.
Marshall as a pro se litigant, see, e.g., Coulibaly v. J.P. Morgan Chase Bank, N.A., 2011 WL
3476994, at *6 (D. Md. Aug. 8, 2011) (citing Hughes, v. Rowe, 449 U.S. 5, 9 (1980)), the
Complaint presents no federal claim.

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Conclusion
For the reasons set forth above, I recommend that the Court DENY Plaintiff’s Motion for
Default Judgment (ECF No. 9) and DISMISS this case for failure to establish a legitimate cause
of action.
I also direct the Clerk to mail a copy of this Report and Recommendations to the Plaintiff
at the address listed in her Complaint (ECF No. 1).

Any objections to this Report and

Recommendations must be served and filed within fourteen (14) days, pursuant to Fed. R. Civ. P.
72(b) and Local Rule 301.5.b.
Notice to Parties
Failure to file written objections to the proposed findings, conclusions, and
recommendations of the Magistrate Judge contained in the foregoing report within fourteen (14)
days after being served with a copy of this report may result in the waiver of any right to a de
novo review of the determinations contained in the report, and such failure shall bar you from
challenging on appeal the findings and conclusions accepted and adopted by the District Judge,
except upon grounds of plain error.

Dated: January 25, 2017

/s/
Stephanie A. Gallagher
United States Magistrate Judge

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