CINTRON v. SAVIT ENTERPRISES et al

Filing 30

OPINION Signed by Judge Freda L. Wolfson on 4/8/2009. (ss, )

UNITED STATES DISTRICT COURT D IS T R I C T OF NEW JERSEY

_________________________________ : ID A N IA CINTRON, : : Plaintiff, : : v. : : S A V IT ENTERPRISES, et al. : : Defendants. : _________________________________: :

Civil Action No. 07-cv-04389(FLW)

OPINION

WOLFSON, United States District Judge: P re se n tly before the Court are Motions individually brought by Third Party D e fe n d a n ts Trans Union LLC ("Trans Union") and Experian Information Solutions Inc. (" E x p e ria n " ) (collectively "Third Party Defendants") to dismiss Defendant ACB Receivables M a n ag e m e n t's ("ACB") Third Party Complaint. In her Complaint, Plaintiff Idania Cintron (" P la in tiff" ) alleges that ACB violated the Fair Credit Reporting Act ("FCRA") and the Fair D e b t Collection Practices Act ("FDCPA"). In turn, ACB asserts as part of its Answer claims o f indemnification against Trans Union and Experian for their failure to properly report P la in tiff's credit status. For the reasons that follow, Trans Union and Experian's Motions to D ism iss ACB's Third Party Complaint for indemnification are granted. I . FACTUAL BACKGROUND AND PROCEDURAL HISTORY

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Since Third Party Defendants move to dismiss ACB's Third Party Complaint p u rsu a n t to Fed. R. Civ. P. 12(b)(6), all facts alleged in the Third Party Complaint are a ssu m e d to be true. Trans Union and Experian are separate consumer reporting agencies, responsible for fu rn ish in g credit information to entities such as ACB. Sometime in 2005, Plaintiff filed for C h a p te r 7 Bankruptcy protection. Pl.'s Compl. ¶ 9. On April 29, 2005, the bankruptcy court issu e d a discharge, including all alleged debts owed to Defendants. Id.1 According to P la in tiff, Defendants were in receipt of the bankruptcy petition and were aware of the d isc h a rge and automatic stay. Id. ¶ 10. Notwithstanding, Defendants "continued to attempt to collect these alleged debt[sic] by making collection calls and mailing collection letters to P la in tiff demanding payment of a discharged debt, threatening legal action which can not la w fu lly be taken and failing to include the statutorily required language in their c o rre sp o n d e n c e ." Id. In addition, "Defendants also continued to attempt to collect this a lle g e d debt by listing these debts as unpaid collections on Plaintiff's credit reports." Id. Plaintiff alleges, that as a consumer, as defined under the FDCPA, Defendants' actions v io la te d numerous provisions of the FDCPA. Plaintiff alleges, inter alia, that Defendants (1) m isre p re se n te d the amount character and status of the debt(s); (2) failed to contact Plaintiff's a tto rn e y; (3) violated the bankruptcy charge; (4) abused and harassed Plaintiff; (5)
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In her Complaint, Plaintiff does not individually identify which debts are attributed to w h ic h Defendants. Rather, the Complaint summarily alleges that "the alleged debts of D e fe n d a n ts" were included in the issuance of discharge. For instance, Plaintiff's entire C o m p la in t alleges Defendants collectively violated numerous provisions of the FDCPA w ith o u t specifying, for instance, which Defendant "list[ed] these debts as unpaid collections o f Plaintiff's credit reports." Pl.'s Compl. ¶ 10. 2

communicated credit information which Defendants knew or should have known was false; a n d (6) failed to inform the credit reporting agencies that the debt was disputed. Id. ¶ 15. P la in tiff filed this action in United States District Court for the District of New Jersey o n September 13, 2007. On September 17, 2007, Plaintiff filed an Amended Complaint. On F e b ru a ry 26, 2008, this Court entered a Stipulation and Order dismissing Plaintiff's C o m p la in t as to Defendants Savit Enterprises and Financial Credit Management, LLC, in d iv id u a lly . ACB filed a Motion to Dismiss on February 15, 2008 which this Court denied o n August 1, 2008. On August 20, 2008, ACB filed an Answer and Third Party Complaint, a lle g in g that Trans Union and Experian "were provided with information regarding Plaintiff. . .[and] published false information that [ACB] continued to report Plaintiff. . .as a debtor." ACB's Answer ¶¶ 5-6.2 Experian and Trans Union filed their individual Motions to Dismiss A C B 's Third Party Complaint on November 25 and November 26, 2008, respectively. For th e reasons that follow, Third Party Defendants' Motions to Dismiss are granted. II. DISCUSSION A . S ta n d a rd of Review W h e n reviewing a motion to dismiss on the pleadings, courts "accept all factual a lle g a tio n s as true, construe the complaint in the light most favorable to the plaintiff, and d e te rm in e whether, under any reasonable reading of the complaint, the plaintiff may be e n title d to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir.2008) (citation
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In its reply papers, Experian contests ACB's allegation that Experian and Trans Union fu rn ish information to entities such as ACB, rather, as Experian asserts, ACB is responsible fo r reporting information to Experian and Trans Union. Nonetheless, the gravamen of A C B 's Third Party Complaint is that Experian and Trans Union were publishing false in fo rm a tio n , which in turn, ACB used to its own detriment. 3

and quotations omitted). Recently, in Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 1 2 7 S.Ct. 1955 (2007), the Supreme Court clarified the 12(b)(6) standard. Specifically, the C o u rt "retired" the language contained in Conley v. Gibson, 355 U.S. 41, 45-46 (1957), that " a complaint should not be dismissed for failure to state a claim unless it appears beyond d o u b t that the plaintiff can prove no set of facts in support of his claim which would entitle h im to relief." Id. at 1968 (quoting Conley, 355 U.S. at 45-46). Instead, the factual allegations set forth in a complaint "must be enough to raise a right to relief above the speculative le v e l." Id. at 1965. As the Third Circuit has stated, "[t]he Supreme Court's Twombly fo rm u la tio n of the pleading standard can be summed up thus: `stating ... a claim requires a c o m p lain t with enough factual matter (taken as true) to suggest' the required element. This `d o e s not impose a probability requirement at the pleading stage,' but instead `simply calls for e n o u g h facts to raise a reasonable expectation that discovery will reveal evidence of' the n e c e ssa ry element." Phillips, 515 F.3d at 234 (quoting Twombly, 127 S.Ct. at 1965). B . R ig h t to Indemnification under FDCPA or the FCRA In itia lly , Third Party Defendants move to dismiss on the grounds that ACB cannot m a in ta in a cause of action for indemnification under the FDCPA or FCRA. In response, A C B argues that its right to indemnification arises under New Jersey common law, and as su c h , the FDCPA or FCRA have no bearing on its Third Party Complaint.3 A t the outset, the question whether indemnification or contribution is available to A C B is a one of federal, not state, law. Meyers v. Freedom Credit Union, No. 05-3526, 2007
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ACB does not allege that its right to indemnification arises under some contractual re la tio n sh ip with either Experian or Trans Union. 4

WL 2753172, at *7 (E.D. Pa. Sept. 21, 2007). A party seeking contribution or in d e m n ific a tio n under a federal statute must demonstrate that such a right arises (1) as a right c re a te d by Congress, either explicitly or implicitly; or (2) under the federal common law. D o h e rty v. Wireless Broadcasting Sys. of Sacramento, Inc., 151 F.3d 1129, 1131 (9th Cir. 1 9 9 8 ). Courts should be wary to imply a right of indemnification, guided by the principle th a t a statute which omits a particular remedy from its extensive enforcement mechanisms is d e m o n stra tiv e of Congress' intent to expressly forbid such remedial action. Conner v. Howe, 3 4 4 F. Supp. 2d 1164, 1171 (S.D. Ind. 2004). Stated another way, "[t]he presumption that a re m e d y was deliberately omitted from a statute is strongest when Congress has enacted a c o m p re h e n siv e legislative scheme." Northwest Airlines, Inc. v. Transport Workers, 451 U.S. 7 7 , 97 (1981). Other courts, when faced with the issue whether the FDCPA or the FCRA p ro v id e s for an implied right of indemnification, have found that both laws create c o m p re h e n siv e regulatory schemes, leaving no room for a court to infer a right to c o n trib u tio n or indemnification. See Meyers, 2007 WL 2753172, at *7; Conner, 344 F. Supp. 2 d at 1171 (finding no implied right of indemnification in either the FDCPA or the FCRA); see also Bowers v. NCAA, 346 F.3d 402, 425 (3d Cir. 2003) (cautioning that courts should n o t find an implied right to contribution where the federal statute at issue contains a c o m p re h e n siv e remedial scheme). It is also clear, as other courts have noted, that neither the F C R A , nor its sister act, the FDCPA, create an express cause of action for indemnification o r contribution. See, e.g., McMillan v. Equifax Credit Information Services, Inc., 153 F. S u p p . 2d 129, 132 (D. Conn. 2001).

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Similarly, the federal common law, as interpreted by other courts, does not authorize a right to indemnification under the FCRA or FDCPA. See, e.g., Beringer v. Standard P a rk in g O'HARE Joint Venture, No. 07-5027, 2008 WL 4890501, at *3 (N.D. Ill. Nov. 12, 2 0 0 8 ); In re Ameriquest Mortgage Co. Mortgage Lending Practices Litig., No. 05-7097, 2008 W L 630883, at *3 (N.D. Ill. Mar. 5, 2008); Nelson v. Equifax Information Services, LLC, 5 2 2 F. Supp. 2d 1222, 1239 (C.D. Cal. 2007). A right to indemnification or contribution a rise s under the federal common law if such a cause of action would implicate a "uniquely fe d e ra l interest" or, alternatively, "Congress has given the courts the power to develop su b stan tiv e law." Texas Industries, Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 640 (1981). The federal common law, however, rarely provides for a right of contribution or in d e m n ific a tio n . McSherry v. Capital One FSB, 236 F.R.D. 516, 522 (W.D. Wash. 2006). As to this inquiry, the Court finds the Meyer court's analysis particularly convincing. In Meyer, th e district court held that under the FCRA, a third party plaintiff could not seek in d e m n ific a tio n from a company that sent out letters incorrectly notifying creditors of a d v e rse actions against a person who later sued the third party plaintiff. In dismissing the th ird party complaint, the Court found that the federal common law did not provide for a rig h t of contribution or indemnification under the FCRA: A s to federal common law: A claimed cause of action for contribution or in d e m n ity is not cognizable under federal common law unless such a cause of a c tio n would implicate a "`uniquely federal interest,'" Tex. Indus., Inc. v. Radcliff M a te ria ls, Inc., 451 U.S. 630, 642, 101 S.Ct. 2061, 68 L.Ed.2d 500 (1981) ( q u o tin g Banco National de Cuba v. Sabbatino, 376 U.S. 398, 426, 84 S.Ct. 923, 1 1 L.Ed.2d 804 (1964)), or unless Congress can be deemed to have delegated to th e courts the power to "create governing rules of law." Id. Neither is the case h e re . Much as in Texas Industries, the only federal interest in contribution or 6

indemnification is the vindication of federal statutory rights, but because that in te re st "does not involve the duties of the Federal Government, the distribution o f powers in our federal system, or matters necessarily subject to federal control e v e n in the absence of statutory authority," it is insufficient to ground a federal c o m m o n law cause of action. Id. Similarly, FCRA contains no delegation to the c o u rts of the power to create additional or supplementary liabilities. M e y e rs, 2007 WL 2753172, at *7. In the present case, ACB's assertion that its claims for indemnification arise under N e w Jersey's common law is simply unavailing. Not surprisingly, ACB is unable to identify a n y provision within the FDCPA or FCRA that establishes, either explicitly or implicitly, a rig h t to indemnification. To that end, the Court's conclusion is amply supported by several o th er courts, including Meyer, that have declined to extend the FCRA or FDCPA's already ro b u st remedial measures to include a right to indemnification. As stated above, "the F D C P A provides very specific and articulated rights and remedies, leading one to conclude th a t if Congress had intended an explicit right to contribution or indemnity, it would have in c lu d ed it in the statute. There is no express right of action for either contribution or in d e m n ity in. . .the FDCPA." Irwin v. Mascott, 94 F. Supp. 2d 1052, 1058 (N.D. Cal. 2000); see also Crescent Wharf & Warehouse Co. v. Barracuda Tanker Corp., 696 F.2d 703, 706 (9 th Cir.1983) (finding that in the case of a statute with comprehensive regulatory measures, th e absence of a specific right creates a rebuttable presumption that Congress intended not to c re a te such a right under the statute). Moreover, federal common law, as other courts have found, does not give rise to a rig h t of contribution or indemnification under the FDCPA or the FCRA, nor has ACB a rg u e d otherwise. Indeed, the Court can safely assume, given the exhaustive remedial 7

measures as set forth in both statutes, that Congress' omission of a right to indemnification fo r non-consumers, such as ACB, was not unintentional.4 While New Jersey generally p e rm its a party to seek indemnification where it is without fault, Promaulayko v. Johns M a n v ille Sales Corp., 116 N.J. 505, 511 (1989), ACB cannot assert New Jersey's right to in d e m n ific a tio n in an effort to eschew Congress' decision to preclude a right of in d e m n ific a tio n or contribution as remedies under the FCRA or FDCPA. Accordingly, E x p eria n and Trans Union's Motions to Dismiss ACB's Third Party Complaint are granted. III. CONCLUSION F o r the foregoing reasons, Experian and Trans Union's Motions to Dismiss ACB's T h ird Party Complaint are granted.

D a te d April 8, 2009

s/ Freda L. Wolfson The Honorable Freda L. Wolfson United States District Judge

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As noted by Congress, the FCRA was enacted to protect consumers, especially in light of th e fact that "[c]onsumer reporting agencies have assumed a vital role in assembling and e v a lu a tin g consumer credit and other information on consumers," creating "a need to insure th a t consumer reporting agencies exercise their grave responsibilities with fairness, im p a rtia lity , and a respect for the consumer's right to privacy." 15 U.S.C. § 1681(a)(3)-(4). As a result, Congress sought to adopt reasonable procedures to ensure fair and equitable trea tm en t of the consumer. 15 U.S.C. § 1681(b). In McSherry, the district court observed th a t Congress, in passing the FCRA, had no interest "in `softening' the blow for joint w ro n g d o e rs," but rather seeking to provide consumers relief against consumer reporting a g e n c ie s. 236 F.R.D. at 522 (finding that the FCRA was not intended to provide consumer re p o rtin g agencies with the ability to seek indemnification from a joint wrongdoer). Likewise, the FDCPA provides "a remedy for consumers who have been subjected to a b u siv e , deceptive, or unfair debt collection practices by debt collectors." Pollice v. National T ax Funding, L.P., 225 F.3d 379, 400 (3d Cir. 2000) (citing Zimmerman v. HBO Affiliate G ro u p , 834 F.2d 1163, 1167 (3d Cir. 1987)). 8

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