Abplanalp v. United Collection Bureau, Inc.

Filing 25

MEMORANDUM AND RECOMMENDATIONS on 13 MOTION to Compel Arbitration and to Dismiss or Stay the Case filed by United Collection Bureau, Inc. ( Objections to M&R due by 1/25/2016), ORDER that parties shall file a Status Report on April 1, 2016 and every ninety(90) days until this action is closed. Signed by Magistrate Judge David Keesler on 1/7/16. (tob)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:15-CV-203-RJC-DCK
ZEENATH ABPLANALP,
Plaintiff,
v.

UNITED COLLECTION BUREAU, INC.,
Defendant.

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MEMORANDUM AND
RECOMMENDATION
AND ORDER

THIS MATTER IS BEFORE THE COURT on “Defendant United Collection Bureau,
Inc.’s Motion To Dismiss And To Compel Arbitration, Or, In The Alternative, To Stay The
Proceedings” (Document No. 13). This motion has been referred to the undersigned Magistrate
Judge pursuant to 28 U.S.C. §636(b), and is now ripe for disposition. Having carefully considered
the arguments, the record, and the applicable authority, the undersigned will respectfully
recommend that the motion be granted in part and denied in part.
BACKGROUND
Plaintiff Zeenath Abplanalp (“Abplanalp” or “Plaintiff”) filed a “Complaint” (Document
No. 1-1, pp.3-11) against United Collection Bureau, Inc. (“UCB” or “Defendant”) in the Superior
Court of Mecklenburg County, North Carolina, on March 30, 2015. Defendant filed a “Notice Of
Removal Of Civil Action” (Document No. 1) with this Court on May 5, 2015. Defendant notes in
its “Notice Of Removal…” that “Plaintiff asserts three causes of action purporting to arise under
(1) N.C. Gen. Stat. § 58-70-90, et seq., (2) the Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. § 1692 et seq., and (3) the Telephone Consumer Protection Act (“TCPA”) 47 U.S.C. § 227
et seq.” (Document No. 1, p.1).

The Court issued a “Pretrial Order And Case Management Plan” (Document No. 5) on
June 24, 2015. The “…Case Management Plan” includes the following deadlines: discovery
completion – November 6, 2015; mediation – November 30, 2015; dispositive motions –
December 7, 2015; and trial – March 7, 2016. (Document No. 5).
Defendant filed the pending “… Motion To Dismiss And To Compel Arbitration, Or, In
The Alternative, To Stay The Proceedings” (Document No. 13) and “…Memorandum In
Support…” (Document No. 14) on October 30, 2015. The “Response To Defendant United
Collection Bureau Inc.’s Motion To Dismiss And To Compel Arbitration. . .” (Document No. 19)
was filed on November 20, 2015. Defendant’s “…Reply In Support…” was then filed on
December 4, 2015.
This instant motion is ripe for review and disposition, and as such, a Memorandum And
Recommendation to the Honorable Robert J. Conrad, Jr. is now appropriate.
DISCUSSION
By its motion, Defendant requests that the Court issue an Order dismissing Plaintiff’s
Complaint without prejudice and compelling Plaintiff to submit her claims to arbitration.
(Document No. 13, p.1). Or, in the alternative, Defendant requests that the Court stay these
proceedings pending: (1) resolution of challenges currently before the Federal Communications
Commission (“FCC”); and (2) class action settlement in Graff v. United Collection Bureau, Inc.,
2:12-CV-02402 (E.D.N.Y.). (Document No. 13, p.1; Document No. 14, p.2).
A. Arbitration Agreement
Defendant first asserts that Plaintiff “is required to arbitrate her claims brought in this
lawsuit against UCB under the Federal Arbitration Act (“FAA”).” (Document No. 14, p.1).
Defendant notes that Plaintiff’s claims are asserted against Defendant UCB for its alleged actions

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in attempting to collect a debt on behalf of Citibank, N.A. (“Citibank”). Id. Defendant contends
that “Plaintiff’s Card Agreement with Citibank contains a written arbitration provision
(“Arbitration Agreement”)” that “provides that claims by Plaintiff against anyone connected with
or claiming through Citibank, including anyone to whom Plaintiff’s debt was assigned for
collection . . . are subject to arbitration.” (Document No. 14, pp.1-2).
In support of its position that there is an applicable Arbitration Agreement, Defendant cites
to the “Declaration Of Colene McNinch” (Document No. 10-2) and its attached “Card Agreement”
(Document No. 10-2, pp.4-9) that were filed as exhibits to Defendant’s “…Reply In Support Of
Motion For Leave To File First Amended Answer” (Document No. 10) on October 26, 2015. See
(Document No. 14, pp.3-5).
In response, Plaintiff asserts that she was “never noticed of an arbitration agreement.”
(Document No. 19, p.1). Plaintiff also notes that the Card Agreement produced by Defendant is
not signed by Plaintiff, that the only date on the document is a copyright for 2011, and that there
is no proof of notice attached. Id. (citing Document No. 10-2, pp.4-9). Plaintiff further suggests
that the “Declaration of Colene McNinch” lacks sufficient specificity to link the cited Card
Agreement and/or alleged Arbitration Agreement to Plaintiff. Id. Plaintiff concludes that there is
no evidence that the proffered Arbitration Agreement “applies to any account of Plaintiff’s.”
(Document No. 19, p.3).
Defendant’s reply contends that “unrebutted evidence establishes Plaintiff is a party to the
Arbitration Agreement” and that the gateway question of arbitrability should be decided by an
arbitrator. (Document No. 22, p.1). Specifically, Defendant argues that “Plaintiff agreed to the
Arbitration Agreement because she used her credit card account.” (Document No. 22, p.2)
(citations omitted).

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The undersigned finds that this issue presents a close call. After careful consideration of
the arguments and authority presented to the Court, the undersigned is persuaded that Plaintiff has
raised compelling questions regarding the validity of the parties’ alleged Arbitration Agreement.
In particular, the undersigned is concerned that neither the McNinch Declaration, nor the alleged
Card Agreement containing the alleged Arbitration Agreement, include any information that
connects Plaintiff to those Agreements. See (Document No. 10-2). As noted by Plaintiff,
Defendant has failed to show or allege, inter alia, any dates, signatures, or account numbers that
supposedly connect the Arbitration Agreement to any account owned by Plaintiff. (Document No.
19).
Under the circumstances, the undersigned will recommend that the motion to dismiss this
case and compel arbitration be denied without prejudice. Even if the undersigned determined there
is an applicable arbitration agreement between these parties, it is more likely that this case would
be stayed than dismissed, pending the outcome of arbitration. Regardless, based on the arguments
and authority presented by the parties, the undersigned is not persuaded that arbitration should be
compelled.
B. FCC Resolution
Next, Defendant makes the alternative argument that this case should be stayed “pending
resolution of challenges currently before the Federal Communications Commission (“FCC”)
concerning what telephony systems qualify as an automatic telephone dialing system (“ATDS”),
which should be dispositive of the Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq.,
(“TCPA”) claims asserted by Plaintiff.” (Document No. 14, pp. 2, 16-21). Defendant contends
that “Plaintiff’s claims for alleged violations of the TCPA are subject to a pending challenge to the
FCC’s July 2015 Declaratory Ruling and Order interpreting the TCPA.” (Document No. 14, p.2)

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(citing In the Matter of Rules and Regulations Implementing the Telephone Consumer Protection
Act of 1991, Declaratory Ruling and Order, 30 FCC Rcd. 7961 (2015) (the “FCC Order”).
Defendant contends that “Plaintiff alleges that calls placed manually to her alleged cellular
phone number are violations of the TCPA because, although the calls were manually dialed,
Plaintiff claims the telephony system used to place calls had the capacity to place an autodialed
call and thus she claims it qualifies as an ATDS within the TCPA, in particular as an ATDS is
defined by the FCC Order.” (Document No. 14, pp.2-3). See also, (Document No. 1-1, pp.5, 89).
Defendant notes that there are several appeals of the FCC Order “proceeding in the Court
of Appeals for the District of Columbia Circuit, the resolution of any of which could be dispositive
to the TCPA claims in this case.” (Document No. 14, p.3) (citing ACA Int’l v. FCC, No. 15-1211
(D.C. Cir. July 10, 2015).

According to Defendant, the United States Judicial Panel on

Multidistrict Litigation consolidated these lawsuits before the Court of Appeals for the District of
Columbia (the “Challenge Lawsuit”). (Document No. 14, p.17). Defendant argues that the
pending challenge(s) to the FCC Order favor a stay, pursuant to the primary jurisdiction doctrine.
(Document No. 14, p.3).
More specifically, Defendant asserts that to prove her TCPA claims, Plaintiff must prove
that Defendant UCB used an ATDS to call Plaintiff’s cell phone. (Document No. 14, p.20).
Defendant argues that the telephone system used to place the calls at issue in this case is not an
ATDS, but acknowledges that the FCC Order has caused significant confusion on this point. Id.
Defendant concludes that a final resolution of the definition of ATDS under the TCPA is necessary
to resolve the claims in this case. (Document No. 14, p.21).

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Plaintiff’s “Response…” (Document No. 19) declines to rebut, or even mention,
Defendant’s argument for a stay based on the pending appeal(s) of the FCC Order.
In reply, Defendant notes that “Plaintiff entirely failed to address the other reason for
staying this proceeding,” and argues that “the Court should find this argument to be uncontested.”
(Document No. 22, p.11). Defendant re-asserts that resolution of the definition of ATDS under
the TCPA is critical to resolving the issues in this case, and therefore, in the interests of judicial
economy this matter should be stayed.1
Based on Defendant’s arguments and citations, and the lack of any rebuttal from Plaintiff,
the undersigned finds good cause to recommend that this matter be stayed until the related
Challenge Lawsuit regarding the FCC Order, currently before the United States Court of Appeals
for the District of Columbia Circuit, is resolved.
C. Graff Class Action
Finally, Defendant argues that Plaintiff is a member of the settlement class in Graff v.
United Collection Bureau, Inc., Case no. 2:12-cv-02402 (E.D.N.Y.), which should be dispositive
of claims brought by Plaintiff. (Document No. 14, pp.2-3, 21-23). As such, Defendant presents
an additional alternative argument that this matter should be stayed pending final approval of the
class action settlement in Graff. Id.
Because the undersigned is persuaded that there is already sufficient support for staying
this matter pending appellate review of the FCC Order, the undersigned will decline to make a full
analysis of Defendant’s alternative argument based on the Graff lawsuit. Instead, the undersigned

“Defendant’s Suggestion Of Subsequently Decided Authority” (Document No. 23) was filed on
December 21, 2015. That filing attaches a recent decision by the United States District for the Central
District of California staying a case pending a ruling by the Court of Appeals on the FCC Order.
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recommends that Plaintiff’s final alternative request to stay this case pursuant to Graff be denied
as moot, without prejudice to re-file at a later date if necessary and appropriate.
RECOMMENDATION AND ORDER
FOR THE FOREGOING REASONS, the undersigned respectfully recommends that
“Defendant United Collection Bureau, Inc.’s Motion To Dismiss And To Compel Arbitration, Or,
In The Alternative, To Stay The Proceedings” (Document No. 13) be GRANTED in part and
DENIED in part. Specifically, the undersigned recommends that the request to dismiss and/or
compel arbitration be denied, but that the request to stay be granted.
IT IS FURTHER ORDERED that the parties shall file a Status Report, jointly if possible,
on April 1, 2016, and every ninety (90) days thereafter, until this action is CLOSED.
TIME FOR OBJECTIONS
The parties are hereby advised that pursuant to 28 U.S.C. § 636(b)(1)(C), and Rule 72 of
the Federal Rules of Civil Procedure, written objections to the proposed findings of fact,
conclusions of law, and recommendation contained herein may be filed within fourteen (14) days
of service of same. Responses to objections may be filed within fourteen (14) days after service
of the objections. Fed.R.Civ.P. 72(b)(2). Failure to file objections to this Memorandum and
Recommendation with the District Court constitutes a waiver of the right to de novo review by the
District Court. Diamond v. Colonial Life, 416 F.3d 310, 315-16 (4th Cir. 2005). Moreover, failure
to file timely objections will preclude the parties from raising such objections on appeal. Diamond,
416 F.3d at 316; Page v. Lee, 337 F.3d 411, 416 n.3 (4th Cir. 2003); Snyder v. Ridenhour, 889
F.2d 1363, 1365 (4th Cir. 1989); Thomas v. Arn, 474 U.S. 140, 147-48 (1985), reh’g denied, 474
U.S. 1111 (1986).
IT IS SO RECOMMENDED AND ORDERED.

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Signed: January 7, 2016

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