Waters et al v. Columbia Debt Recovery, LLC et al

Filing 142

OPINION; signed by Chief Judge Hala Y. Jarbou (aks)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

MADISON WATERS, et al.,
Plaintiffs,
Case No. 1:24-cv-972
v.
Hon. Hala Y. Jarbou
COLUMBIA DEBT RECOVERY, LLC,
et al.,
Defendants.
___________________________________/
OPINION
Plaintiffs Madison Waters and her mother, Patricia Waters, brought this action under
federal and state law against the following Defendants: Columbia Debt Recovery, LLC
(“Columbia”); GREP Southwest, LLC (“Greystar”); “Equifax Inc. through Information Services,
LLC” (“Equifax”); and “Trans Union Corp. through Trans Union Consumer Solutions” (“Trans
Union”). (2d Am. Compl. 1, ECF No. 96.) Before the Court are a motion to dismiss filed by
Equifax and Trans Union (ECF No. 97), and a motion to dismiss filed by Greystar (ECF No. 98).
For the reasons herein, the Court will grant the motions.
I. BACKGROUND
A. Plaintiffs’ Allegations
According to the second amended complaint, on November 15, 2018, Madison completed
a rental application and entered a lease agreement to lease a room at “The Rocks,” a residential
complex operated by Greystar in East Lansing, Michigan. (2d. Am. Comp. ¶¶ 10, 13.) The term
of the lease was from August 17, 2019, to July 31, 2020. When Madison signed the lease
application, she included Patricia as a guarantor for the lease. (See Lease Appl., ECF No. 96-2,

PageID.888.) After receiving a copy of the lease agreement and the guaranty form, Patricia called
Greystar on December 7, 2018, to discuss her objections to the lease. She told Greystar that she
would guarantee payment of the lease, but she did not intend to sign the guaranty form. (2d Am.
Compl. ¶ 21.) Greystar accepted her “verbal guarantee” of the lease and gave her access to an
online account to be used for making lease payments. (Id. ¶ 23.) Greystar accepted a security
deposit on December 12, 2018. (Id. ¶ 25.)
In April 2019, Madison received her room assignment from Greystar. Greystar assigned
her a room with Madison’s chosen roommates, as it had promised as an incentive for Madison to
agree to sign the lease agreement early. A few days later, however, Greystar assigned Madison to
a different room with new roommates, telling her that she had no choice but to accept the new
room assignment. (Id. ¶ 27.)
Due to concerns about the lease terms and the room assignment, Madison decided to
terminate the lease and did so on July 29, 2019, three weeks before her expected move-in date.
(Id. ¶ 28.) On August 23, 2019, Greystar contacted Madison by letter and told her that she owed
$5,884.50. That amount apparently included 12 months of “accelerated rent” at $564.00 per
month, minus Madison’s security deposit of $883.50. (See 8/12/2019 Final Account Statement,
ECF No. 96-15, PageID.967.) Plaintiffs contend that Madison did not owe this full amount
because Greystar promised, and the lease agreement provided, that any rent Madison owed would
be offset by rent received from a replacement tenant. (2d Am. Compl. ¶¶ 33-35.) Greystar sent
similar letters to Madison on August 30 and October 10, 2019, telling her that she owed $5,884.50,
with interest accruing on unpaid balances.

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Patricia contacted a Greystar representative by phone on January 6, 2020, asking about
Greystar’s “mitigation obligation.” (Id. ¶ 46.) The representative said she “didn’t know anything
about that.” (Id.)
Greystar then hired Rent Recovery Solutions, LLC to recover the asserted debt. In
February 2020, Madison received a letter from Rent Recovery attempting to collect $6,019.12,
which included the unpaid balance of $5,884.50, plus interest. (Id. ¶ 48.)
In March 2020, Plaintiffs confirmed that someone had moved into the room Madison had
intended to lease, which meant that Greystar had been able to recover at least some of the rent
Madison owed under the lease agreement. Consequently, according to Plaintiffs, they did not owe
the full amount sought by Greystar or by Rent Recovery. Patricia then told Rent Recovery that
they disputed the debt because Greystar had mitigated some of it. Rent Recovery responded by
pointing to a “final accounting statement” from Greystar purporting to show the amount due. (Id.
¶ 91.)
Greystar and/or Rent Recovery sent details about the debt to Equifax and Trans Union,
who recorded it in Madison’s credit file. Patricia then wrote to Equifax and Trans Union on behalf
of Madison in November 2021, telling them that she and Madison disputed the debt sought by
Rent Recovery. Equifax and Trans Union eventually removed the record of her debt on December
18, 2021, after Rent Recovery “withdrew the erroneous reporting.” (Id. ¶ 98.)
Greystar then hired Columbia to recover the debt it claimed Madison owed. In February
2022, Columbia reported to Equifax and Trans Union that Madison owed $5,884.50. (Id. ¶¶ 57,
100.) Columbia contacted Plaintiffs in March 2022, telling them about the debt owed. By this
time, Plaintiffs had moved to Maryland. In response, Plaintiffs told Columbia that they disputed
the debt because Greystar had mitigated part of the amount due. Plaintiffs supported their dispute

3

with evidence that Madison never occupied the rental property and that someone else had leased
the room from Greystar, thereby reducing Madison’s debt. (Id. ¶ 109.) Columbia replied that the
debt was valid.
On April 18, 2022, Patricia contacted Equifax and Trans Union disputing the information
provided to them. (Id. ¶ 121.)
In June 2023, Greystar allegedly acknowledged that it had mitigated the amount originally
due under the lease agreement by leasing the room to another tenant as early as January 2020. (Id.
¶ 62.) Plaintiffs claim that this mitigation reduced the amount owed to approximately $1,936.50.
(Id. ¶ 67.) Nevertheless, Greystar had sought to recover the full amount and hired Rent Recovery
and Columbia to collect it.
Plaintiffs allege that Madison suffered injury due to the inaccurate debt reported to Equifax
and Trans Union. When she applied to rent another apartment, her application was denied due to
the information in her credit report. (Id. ¶ 126.)
B. Plaintiffs’ Claims
Based on the foregoing allegations, Plaintiffs assert six claims.
In Count I, they assert that Greystar made various misrepresentations to Plaintiffs about
the amount owed after termination of the lease, about its intent to find a replacement tenant who
would reduce that amount, and about its practice of removing a credit listing when a replacement
tenant is found. In addition, Greystar allegedly made false statements to Rent Recovery and
Columbia about the amount due under the terminated lease.
In Count II, Plaintiffs contend that Greystar and Columbia violated the Maryland
Consumer Debt Collection Act (“MCDCA”) by claiming Plaintiffs owed an amount that
Defendants knew they did not owe.

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In Count III, Plaintiffs contend that Columbia defamed Madison by “open[ing] a tradeline
against Plaintiff” after it was aware that Madison did not owe Greystar any money, thereby
impacting Madison’s credit report and credit reputation. (Id. ¶¶ 159, 161-62.)
Count IV asserts that Columbia engaged in unfair trade practices under Maryland law by
seeking recovery of a debt Plaintiffs did not owe and by opening the tradeline that adversely
impacted Madison’s credit report.
Count V asserts that Columbia violated the Fair Debt Collection Practices Act (FDCPA)
(citing 15 U.S.C. § 1681s-2(b)), by failing to conduct a reasonable investigation of Plaintiffs’
dispute regarding the debt owed to Greystar.
Count VI asserts that Equifax and Trans Union violated the Fair Credit Reporting Act
(FCRA), particularly 15 U.S.C. § 1681i(a), by failing to conduct a reasonable reinvestigation to
determine whether the debt reported by Rent Recovery and Columbia was accurate.
C. Procedural History
Plaintiffs filed their action in the United States District Court for the District of Maryland
in October of 2022. In August of 2024, while Defendants’ motions to dismiss were pending, that
court transferred the case to this district “pursuant to 28 U.S.C. § 1404(a) and in the interest of
justice.” (8/22/2024 Order, ECF No. 122, PageID.1149.)
II. STANDARD
A. Applicable Law
Due to the transfer, the Court must clarify whether it applies the law of this Court or the
law applicable to the District of Maryland. When “a federal court transfers a diversity case under
§ 1404(a), the transferee court applies the state law that the transferor court would have applied to
any questions of state law.” AER Advisors, Inc. v. Fidelity Brokerage Servs., LLC, 921 F.3d 282,
289 (1st Cir. 2019).

But “‘[n]othing’ . . . compels one federal court to apply another’s
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interpretation of federal law after a case’s transfer.” Id. at 290 (quoting In re Korean Air Lines
Disaster of Sept. 1, 1983, 829 F.2d 1171, 1186 (D.C. Cir. 1987) (Ginsburg, J., concurring)); see
15 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3846 (4th ed. 2024)
(“[C]ourts generally conclude that . . . [t]he transferee court applies its own interpretation of
federal law.”). “Since the federal courts are all interpreting the same federal law, uniformity does
not require that transferee courts defer to the law of the transferor circuit.” Murphy v. FDIC, 208
F.3d 959, 966 (11th Cir. 2000) (cited with approval in In re U.S. Dep’t of Def., U.S.E.P.A. Final
Rule: Clean Water Rule: Definition of Waters of U.S., 817 F.3d 261, 272 (6th Cir. 2016), rev’d on
other grounds by, Nat’l Ass’n of Mfrs. v. Dep’t of Def., 583 U.S. 109 (2018)). Thus, as to Plaintiffs’
federal claims and issues of federal law and procedure, the Court applies precedent from the Sixth
Circuit.
B. Rule 12(b)(6)
A plaintiff’s complaint must make a “short and plain statement of the claim showing that
the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). The statement must contain “sufficient
factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009). While “[t]he plausibility standard . . . is not akin to a probability
requirement . . . it asks for more than a sheer possibility” that the alleged misconduct occurred. Id.
“Specific facts are not necessary; the statement need only give the defendant fair notice of what
the . . . claim is and the grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93 (2007)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
When considering a motion to dismiss under Rule 12(b)(6), courts “construe the complaint
in the light most favorable to the plaintiff, accepting all well-pleaded factual allegations as true.”
Parrino v. Price, 869 F.3d 392, 397 (6th Cir. 2017). The Court need not accept “threadbare recitals

6

of the elements of a cause of action, supported by mere conclusory statements,” Iqbal, 556 U.S. at
678, or “formulaic recitations of the elements of a cause of action.” Twombly, 550 U.S. at 555.
Courts are generally bound to consider only the complaint when resolving a motion to
dismiss under Rule 12(b)(6) unless the Court converts the motion to one for summary judgment.
Wysocki v. IBM Corp., 607 F.3d 1102, 1104 (6th Cir. 2010). “However, a court may consider
exhibits attached to the complaint, public records, items appearing in the record of the case, and
exhibits attached to defendant’s motion to dismiss, so long as they are referred to in the complaint
and are central to the claims contained therein, without converting the motion to one for summary
judgment.” Gavitt v. Born, 835 F.3d 623, 640 (6th Cir. 2016) (internal citations omitted).
C. Rule 12(b)(1)
The standard for evaluating a Rule 12(b)(1) motion depends on the nature of the “attack”
on subject matter jurisdiction. A “facial attack” on subject matter jurisdiction “merely questions
the sufficiency of the [complaint].” Ohio Nat’l Life Ins. Co. v. United States, 922 F.3d 320, 325
(6th Cir. 1990). Facial attacks like the one here are reviewed under the same standard as applied
to a Rule 12(b)(6) motion: the Court accepts the plaintiff's well-pleaded allegations as true and
asks whether subject matter jurisdiction exists based on the complaint. Id.
III. ANALYSIS
A. Federal Claims
1. FCRA (Count VI)
Plaintiffs contend that Equifax and Trans Union violated the FCRA, 15 U.S.C. § 1681i, by
failing to review and reinvestigate the information provided to them about the debt owed by
Madison and then failing to correct that information in Madison’s credit file. “The FCRA was
passed to ‘ensure fair and accurate credit reporting, promote efficiency in the banking system, and
protect consumer privacy.’” Berry v. Experian Info. Sols., Inc., 115 F.4th 528, 533 (6th Cir. 2024)
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(quoting Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007)). The statute requires credit
reporting agencies (“CRAs”) like Equifax and Trans Union “‘to adopt reasonable procedures’ for
reporting that ‘assure maximum possible accuracy of the information concerning the individual
about whom the report relates.’” Id. at 533-34 (quoting 15 U.S.C. §§ 1681(b), 1681e(b)) (internal
citation omitted).
When a consumer makes a dispute about the accuracy of information in their credit file,
“the CRA must ‘conduct a reasonable reinvestigation to determine whether the disputed
information is inaccurate and record the current status of the disputed information, or delete the
item from the [consumer’s] file.’” Id. at 534 (quoting 15 U.S.C. § 1681i(a)(1)(A)). The FCRA
permits a consumer to bring suit for a negligent or willful violation of the accuracy requirements.
Id. (citing 15 U.S.C. §§ 1681n, 1681o).
To successfully plead a claim, Plaintiffs must allege the following: (1) Defendants’
consumer files about Plaintiffs contained inaccurate information; (2) Defendants negligently or
willfully failed to conduct a reasonable reinvestigation to ensure maximum possible accuracy of
Plaintiffs’ information in response to a dispute; (3) Plaintiffs were injured; and (4) Defendants
were the proximate cause of their injury. See id. at 536.
(a) Patricia
Defendants argue that Patricia lacks standing to assert a claim under the FCRA. “In order
to satisfy the requirements of Article III standing, a plaintiff must show a concrete and
particularized injury-in-fact that is fairly traceable to the defendant’s actions and that is likely to
be redressed by a favorable decision of the court.” Doe v. Univ. of Mich., 78 F.4th 929, 942 (6th
Cir. 2023). “[A] plaintiff must demonstrate standing for each claim he seeks to press and for each
form of relief that is sought because standing is not dispensed in gross.” Id. (citations omitted).
Here, Patricia alleges no personal injury stemming from the alleged FCRA violations, all of which
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pertain to Madison’s credit file. Plaintiffs do not contend that Equifax or Trans Union did anything
that impacted Patricia’s credit file. Instead, they contend that these defendants failed to investigate
and remove inaccurate information in Madison’s credit file. Plaintiffs allege no facts from which
to infer that such conduct injured Patricia.
Patricia relies on her efforts to assist Madison as her injury, but a “plaintiff generally must
assert [her] own legal rights and interests, and cannot rest [her] claim to relief on the legal rights
or interests of third parties.” Warth v. Seldin, 422 U.S. 490, 499 (1975). Patricia’s efforts to assist
Madison were not injuries to Patricia’s rights and interests. Just as a lawyer does not obtain
standing when assisting a client, Patricia did not obtain standing by assisting her daughter.
Consequently, Patricia lacks standing to pursue the FCRA claims at issue in this case.
(b) Madison
Equifax and Trans Union argue that Madison does not state a claim against them because
she raised a legal dispute regarding the debt shown in her credit file, rather than an actionable
inaccuracy that a CRA could reinvestigate. Courts recognize that “CRAs are not well suited to
adjudicate legal defenses to a debt.” Berry, 115 F.4th at 538. For that reason, “they are not liable
for reporting information that may be legally inaccurate.” Chaitoff v. Experian Info. Sols., Inc., 79
F.4th 800, 814 (7th Cir. 2023) (emphasis added). A legal inaccuracy is one that requires applying
the law to a set of facts. See id. at 815. “‘The power to resolve these legal issues exceeds the
competencies of consumer reporting agencies’”; hence, a CRA is unable to resolve such a
dispute—“only a court could.” Id. at 814 (quoting Denan v. Trans Union LLC, 959 F.3d 290, 295
(7th Cir. 2020)). “And since no amount of investigation by the CRA could substitute for a binding
adjudication of the parties’ legal dispute,” a CRA is not liable for reporting such disputed
information or failing to reinvestigate it; the information is “accurate” as far as the CRA is
concerned. Id.
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“The paradigmatic example of a legal dispute is when a consumer argues that although his
debt exists and is reported in the right amount, it is invalid due to a violation of law.” Id. at 815
(quoting Chuluunbat v. Experian Info. Sols., Inc., 4 F.4th 562, 567 (7th Cir. 2021)). Such disputes
“amount to collateral attacks on the disputed debt,” which the FCRA does not require CRAs to
resolve. See id. In short, inaccuracies that require “interpreting legal rights” or “making legal
judgments” to resolve fall outside the scope of a CRA’s reinvestigation obligations under the
FCRA. Chuluunbat, 4 F.4th at 569.
Here, Madison’s credit file allegedly showed an unpaid debt of $6,019.12 sought by Rent
Recovery. Later, it showed that she owed a debt of $5,884.50 sought by Columbia. Plaintiffs
allegedly disputed both these amounts with Equifax and Trans Union. Patricia’s letter to Equifax
and Trans Union in November 2021, which is attached to the complaint, reveals the nature of the
disputes regarding that information.
In that letter, Patricia asserted multiple legal defenses to Greystar’s and Rent Recovery’s
right to recover the debt. Among other things, she argued that Michigan law prohibited Greystar
from recovering accelerated rent payments unless that amount “is determined by the courts,” which
had not happened. (11/21/2021 Letter to CRAs, ECF No. 96-13, PageID.951.) She also argued
that both Michigan law and the terms of the lease required Greystar “to mitigate (minimize) the
damages.” (Id.) She pointed to an addendum to the lease agreement stating that a tenant “may not
be liable for the total accelerated amount because of Owner’s obligation to minimize damages.”
(Id. (emphasis added).) She claimed that Greystar had mitigated its damages by leasing the room
to another tenant; consequently, Madison owed no debt at all. (Id., PageID.951.) Alternatively,
Patricia argued that, under Michigan law, Greystar had “released” Madison’s obligations under
the lease by assigning her space to a new tenant. (Id., PageID.952.) Patricia further argued that

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neither Greystar nor Rent Recovery could recover any unpaid rent until they obtained a judgment
in state court, which they elected not to do. She asserted that their attempts to collect on the debt
violated the FDCPA.
The issues raised in the letter are legal disputes that CRAs are not competent to resolve.
To evaluate Plaintiffs’ claim that Madison was not liable for the debt, either in whole or in part,
the CRAs would have had to apply Michigan law or interpret the terms of the lease and determine
the extent to which Madison could rely upon her defenses. Plaintiffs frame their dispute as one
about a factual inaccuracy in the amount of debt Madison owed rather than the validity of the debt
itself. Neither Equifax nor Trans Union were qualified or obligated to reinvestigate or correct that
inaccuracy because such an investigation would have required evaluation of legal arguments
concerning Greystar’s duty to mitigate in order to determine the allegedly correct amount that
Madison owed.
Plaintiffs also note that Rent Recovery reported a debt of $6,019.12, and then withdrew
that report. Later, Columbia reported a debt of $5,884.50. Plaintiffs argue that the different
amounts reported should have triggered a reasonable reinvestigation by the CRAs. However, the
underlying issue is the same. Plaintiffs do not contend that Madison satisfied the debt owed and
possessed records conclusively establishing that fact. Instead, they contend that the amounts
reported to the CRAs were inaccurate because they did not account for Greystar’s mitigation or
Madison’s legal rights. As discussed above, neither Equifax nor Trans Union were competent to
resolve those issues, which were legal disputes.
In short, Madison does not state a claim under the FCRA because she has not alleged
factual inaccuracies. The inaccuracies she challenges are founded on legal disputes and do not
give rise to a claim against a CRA. See Berry, 115 F.4th at 538-39 (citing Chaitoff and

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Chuluunbat). Accordingly, the Court will dismiss Equifax and Trans Union for failure to state a
claim.
2. FDCPA (Count V)
In the title of Count V, Plaintiffs purport to assert a claim against Columbia under the
FDCPA, 15 U.S.C. § 1692, though the body of that particular count relies solely on a provision of
the FRCA, 15 U.S.C. § 1681s-2(b). (See 2d Am. Compl. ¶ 176.) That provision imposes
obligations on the “furnishers” of consumer information to CRAs; it requires them to reinvestigate
disputes regarding the completeness or accuracy of the information provided to CRAs. 15
U.S.C.§ 1681s-2(b)(1). Elsewhere in their complaint, Plaintiffs contend Columbia did not observe
a fourteen-day period to communicate with an alleged debtor before pursuing collection efforts, as
required by the FDCPA. (See 2d Am. Compl. ¶ 106.) Columbia has not moved to dismiss the
claims against it.
Nevertheless, the Court can sua sponte dismiss a claim for lack of jurisdiction. For reasons
similar to those stated above with respect to Patricia’s FCRA claim, Patricia lacks standing to
pursue claims under the FDCPA against Columbia. As discussed above, Plaintiffs do not allege
that Columbia disclosed anything about Patricia to the CRAs. Nor do Plaintiffs allege that
Columbia sought to recover a debt from Patricia. Consequently, she does not allege a cognizable
injury to her own rights or interests stemming from the alleged violations of the FDCPA or the
FCRA by Columbia.

Accordingly, the Court will dismiss Patricia’s federal claim against

Columbia in Count V. Dismissal of Patricia’s federal claim against Columbia does not impact
Madison’s claim against Columbia in Count V, which remains pending.
B. State Law Claims
Apart from Madison’s claim against Columbia under the FDCPA/FCRA, Plaintiffs’
remaining claims arise under state law. Count I asserts that Greystar misrepresented what was
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owed under the lease. Count II asserts that Greystar and Columbia violated Maryland’s Consumer
Debt Collection Act, Md. Code, Com. Law § 14-202, by attempting to collect sums that they
allegedly knew Plaintiffs were not responsible for. Count III asserts that Columbia defamed
Madison by falsely reporting to the CRAs that she owed a particular debt. Count IV asserts that
Columbia violated Maryland’s Consumer Protection Act, Md. Code, Com. Law § 13-101, by
pursuing recovery of a debt that Madison did not owe.
1. Subject Matter Jurisdiction
Greystar argues that the Court lacks subject matter jurisdiction over the state-law claims
against Greystar. The Court disagrees.
(a) Supplemental Jurisdiction
As the basis for this Court’s subject matter jurisdiction, Plaintiffs’ complaint cites 28
U.S.C. § 1331, which gives the Court original jurisdiction over actions “arising under” federal law.
Id. That provision applies here because Plaintiffs assert federal claims. This Court possesses
supplemental jurisdiction over Plaintiffs’ state-law claims if they “are so related to the claims in
the action within such original jurisdiction that they form part of the same case or controversy
under Article III of the United States Constitution.” 28 U.S.C. § 1367(a).
Greystar argues that Plaintiffs’ claims against it (i.e., Counts I and II) are not part of the
same case or controversy as the federal claims. It argues that Counts I and II concern its rights
under a contract between it and Madison. It contends that the remaining claims concern the actions
of debt collectors and CRAs, which involve a different case or controversy.
Claims are part of the same case or controversy when they “‘derive from a common nucleus
of operative fact’ such that a plaintiff ‘would ordinarily be expected to try them all in one judicial
proceeding.’” Batista Holdings, LLC v. Ellsworth Twp., 710 F. App’x 688, 694 (6th Cir. 2017)
(quoting United Mine Workers of Am. v. Gibbs, 383 U.S. 715 (1966)). Here, the common nucleus
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of operative fact is Madison’s debt to Greystar.

Claims against Greystar regarding its

representations about that debt share a common nucleus with the claims against Columbia and the
CRAs regarding the collection and reporting of that same debt. Thus, the state-law claims are part
of the same case or controversy as the federal claims, giving the Court supplemental jurisdiction.
(b) Diversity Jurisdiction
Plaintiffs argue, in the alternative, that the Court might possess original jurisdiction over
their state-law claims because the parties are diverse. Under 28 U.S.C. § 1332, the Court has
jurisdiction over actions where the “amount in controversy exceeds the sum or value of $75,000”
and the suit is between citizens of different states. 28 U.S.C. § 1332(a)(1). However, Plaintiffs
do not attempt to establish all the elements of diversity jurisdiction, even though it is their burden
to do so. See Hertz Corp. v. Friend, 559 U.S. 77, 96 (2010) (“The burden of persuasion for
establishing diversity jurisdiction, of course, remains on the party asserting it.”). For instance,
neither Plaintiffs’ complaint nor their briefing addresses the amount-in-controversy requirement.
Indeed, it is not clear how the damages at issue here could amount to more than $75,000.
Furthermore, Plaintiffs do not adequately address the diversity requirement. In their
briefing, they simply contend that they are Maryland residents, that Columbia is a “foreign
corporation,” that Equifax maintains its principal place of business in Georgia, that Trans Union
is a Delaware corporation with its principal place of business in Illinois, and that Greystar is a
Delaware limited liability company. (Pls.’ Resp. Br. 15, ECF No. 104.) These assertions do not
clarify the citizenships of any Defendant other than Trans Union. According to the complaint,
Equifax, Columbia, and Greystar are limited liability companies. The citizenship of a limited
liability company is the citizenship of each of its partners or members. Delay v. Rosenthal Collins
Grp., LLC, 585 F.3d 1003, 1005 (6th Cir. 2009). Plaintiffs do not identify the citizenships of any

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member or partner of Equifax, Columbia, or Greystar,1 so the Court is not persuaded that it
possesses diversity jurisdiction. In the absence of diversity jurisdiction, the Court possesses only
supplemental jurisdiction over Plaintiffs’ state-law claims.
(c) Exercising Supplemental Jurisdiction
Greystar asks the Court to decline to exercise supplemental jurisdiction over the claims
against it, which arise only under state law.

The Court’s exercise of that jurisdiction is

discretionary. The Court can decline to exercise supplemental jurisdiction over claims arising
under state law if they “substantially predominate” over the federal claims. 28 U.S.C. § 1367(c)(2).
A state law claim can substantially predominate “in terms of proof, of the scope of the issues
raised, or of the comprehensiveness of the remedy sought[.]” United Mine Workers of Am. v.
Gibbs, 383 U.S. 715, 726 (1966). The Court can also consider “the likelihood of jury confusion
in treating divergent legal theories of relief, that would justify separating state and federal claims
for trial[.]” Id. “A district court should look to ‘values of judicial economy, convenience, fairness,
and comity’ in deciding whether the exercise of supplemental jurisdiction is proper.’” McDaniels
v. Plymouth-Canton Cmty. Schs., 755 F. App’x 461, 468 (6th Cir. 2018) (quoting Gamel v. City of
Cincinnati, 625 F.3d 949, 951-52 (6th Cir. 2010)).
Here, Plaintiffs’ sole remaining federal claim concerns Columbia’s obligations under
federal law after reporting a debt to the CRAs that Plaintiffs disputed. By contrast, Plaintiffs’ four
remaining claims under state law largely pertain to Columbia and Greystar’s representations to
Plaintiffs and their attempts to collect a full year of rent before and after Greystar allegedly
mitigated what Madison owed under the full term of the lease. There is some overlap between the

1

According to its corporate disclosure statement, Greystar has a complex set of owners. (See GREP Southwest, LLC
Disclosure Statement, ECF No. 88.)

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federal and state-law claims to the extent that the lease generally governed Madison’s obligations
to Greystar (and, by extension, her debt obligations to Columbia), but the state-law claims involve
a broader scope of conduct and are subject to different legal standards than the federal claim. And
each of those state-law claims requires a separate analysis. Consequently, the state-law claims
involve a wider scope of proofs and issues, substantially predominating over the single federal
claim against Columbia.
Plaintiffs assert that it would be inconvenient to litigate their case in more than one court,
but there would be only one claim left to litigate in federal court. There is no reason why the others
could not be adequately litigated in state court, which as a matter of comity, is better positioned to
resolve Plaintiffs’ state-law claims.
Plaintiffs also point to the fact that this case has been pending for several years. They
contend that declining jurisdiction will result in further delay. But any delay up to this point is
due, in large part, to Plaintiffs’ multiple amendments to its complaint, the most recent of which it
filed in February 2024. Further delay resulting from a dismissal of the state-law claims without
prejudice will not significantly impact the parties at this stage. There is no indication that the
parties have engaged in any significant discovery. And until now, no court has examined any of
Plaintiffs’ claims on their merits. In particular, no court has invested significant time in examining
Plaintiffs’ state-law claims, so exercising jurisdiction over them would do little to achieve judicial
economy. Accordingly, the balance of factors weighs against exercising supplemental jurisdiction
over Plaintiffs’ state-law claims.
IV. REQUEST TO STRIKE
As part of its motion to dismiss, Greystar asks the Court to strike paragraphs 79 through
85 of the second amended complaint under Rule 12(f) of the Federal Rules of Civil Procedure. In
short, these paragraphs allege that: (1) Patricia Waters suffered harm by expending time and money
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disputing the debt; (2) Greystar threatened to injure Madison’s credit worthiness in order to coerce
her to pay the debt; (3) Greystar and its related entities have a pattern or practice of assessing
charges they have no right to collect and then using credit reporting or a collections agency to
coerce payment; and (4) there are other lawsuits demonstrating similar conduct by Greystar (or an
entity related to it).
Ruel 12(f) permits the Court to strike matter that is “redundant, immaterial, impertinent, or
scandalous.” Fed. R. Civ. P. 12(f). Motions to strike are discretionary, disfavored, and not
frequently granted. Operating Eng’rs Loc. 324 Health Care Plan v. G&W Constr. Co., 783 F.3d
1045, 1050 (6th Cir. 2015). “The function of the motion is to ‘avoid the expenditure of time and
money that must arise from litigating spurious issues by dispensing with’ them early in the case.”
Id. (quoting Kennedy v. City of Cleveland, 797 F.2d 297, 305 (6th Cir. 1986)). But courts are very
reluctant to determine legal issues on a motion to strike. See ACT, Inc. v. Worldwide Interactive
Network, Inc., 46 F.4th 489, 499 (6th Cir. 2022). Similarly, this Court is reluctant to strike factual
matters that have even a slim possibility of relevance to the case. The Court discerns no prejudice
to Greystar by leaving them in the complaint. Accordingly, the Court will deny Greystar’s request.
V. CONCLUSION
In summary, the Court will grant the motions to dismiss. Specifically, the Court will
dismiss Count VI of the second amended complaint, the only claim against Equifax or Trans
Union. The Court will also dismiss Patricia Waters’s claim against Columbia Debt Recovery,
LLC in Count V of the second amended complaint for lack of standing. And the Court will dismiss
Plaintiffs’ claims arising under state law because the Court declines to exercise supplemental

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jurisdiction over them. The Court will not strike portions of the complaint. The only claim
remaining in this case is Madison Waters’s federal claim against Columbia in Count V of the
second amended complaint.
An order will enter consistent with this Opinion.

Dated: October 25, 2024

/s/ Hala Y. Jarbou
HALA Y. JARBOU
CHIEF UNITED STATES DISTRICT JUDGE

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