Sanders v. Enhanced Recovery Company, LLC

Filing 9

ORDER GRANTING 7 Motion to Remand; this case is REMANDED to the Justice of the Peace Court, Precinct 1, Llano County, Texas. Signed by Judge Sam Sparks. (kkc)

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

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L.

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JA

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TLXAS

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DOUGLAS W. SANDERS,

Plaintiff,
Case No. A-14-CA-1071-SS

-vs-

ENHANCED RECOVERY COMPANY, LLC,
Defendant.

ORDER
BE IT REMEMBERED on this day the Court reviewed the file in the above-styled cause, and
specifically Plaintiff Douglas W. Sanders's Motion to Remand [#7] and Defendant Enhanced

Recovery Company, LLC' s Response [#8]. Having considered the documents, the file as a whole,

and the governing law, the Court enters the following opinion and order GRANTING the motion
and REMANDING the case to the Justice of the Peace Court, Precinct 1, Llano County, Texas.

Background
Plaintiff Douglas Sanders filed this lawsuit against Defendant Enhanced Recovery Company,
LLC (ERC) in Llano County, Texas by filling out a form petition in small claims court. The

handwritten petition alleges ERC seeks to collect a debt from Sanders which he claims not to owe.
Specifically, Sanders found a supposed three-year-old collection case for $156 on his credit report
and after notifying ERC the debt was erroneous, ERC refused to expunge the alleged false debt from
his credit report. Sanders asserts causes of action for "defamation, fraud, and a violation of the Fair

Debt Collection Practices Act." Def.'s Resp. [#8-1] (Orig. Pet.) at 1. He requests an injunction

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requiring ERC to expunge the false statements from his credit report, damages in the amount of
$10,000, and attorney's fees. Id.
On November 25, 2014, ERC answered, and the next day ERC removed the case to this

Court on the sole basis of federal questionjurisdiction.

See Notice

Removal [#1] ¶ 4. As ERC reads

Sanders's petition, he alleges a violation of the "Fair Debt Collection Practices Act," which must
refer to the federal debt collection statute, not its Texas equivalent. Id. ¶ 1. On December 10, 2014,
Sanders filed a motion to remand, representing he "is not seeking any relief under federal law," and

"the statute to which [he] refers in his State Court Petition is the Texas Fair Debt Collection

Practices Act, Tex. Fin. Code Ann. Sections 392.00 1, et. seq." Mot. Remand [#7] at

1.

Because his

claims "are based solely on Texas state statutory and tort law," Sanders seeks remand. Id.

Analysis
The issue on this motion to remand is straightforward: whether Sanders is pursuing any relief

under federal law. If not, there is no basis for this Court's jurisdiction. Sanders contends he is not

pursuing any relief under federal law. ERC disputes this contention, arguing Sanders alleged a

violation of the "Fair Debt Collection Practices Act," which is a title exclusively reserved for the
federal statute.

See

Def. 's Resp. [#8] ¶ 5. According to ERC, if Sanders wanted to sue for violations

of the Texas laws, he needed to write down its proper title: the "Texas Debt Collection Practices
Act." Id.

ERC's argument, even if technically correct, ignores common sense. ERC suggests Sanders
"made a deliberate choice to proceed under the Fair Debt Collection Practices Act and cannot now

disavow his federal claim in an effort to defeat removal." Id. ¶ 6. Sanders made no such choice; he
intended to proceed under Texas law, and in case his use of the language "Fair Debt Collection
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Practices Act" created confusion, his pleadings before this Court make clear he is proceeding solely
based on Texas statutory and tort law. He is not suing under the federal Fair Debt Collection

Practices Act.
While the Court thinks it unnecessary to actually address whether the words "Fair Debt
Collection Practices Act" must, ipso facto, refer to the federal statute rather than the Texas analog,
it does note many courts, including the Fifth Circuit, have referred to the Texas law as both the

"Texas Debt Collection Practices Act" and the "Texas Fair Debt Collection Practices Act."

Compare Payne

v.

Progressive Fin. Servs., 748 F.3d 605, 606 (5th Cir. 2014) (referring to the

federal statute as the "Fair Debt Collection Practices Act" and the Texas statute as the "Texas Debt
Collection Practices Act"), with Massey

v.

EMC Mortg. Corp., 546 F. App'x 477, 480 (5th Cir.

2013) (unpublished) (referring to the Texas statute as the "Texas Fair Debt Collection Practices

Act"). This interchangeable use of the term "Fair Debt Collection Practices Act" to refer both to the
federal statute and the Texas law is consistent with this Court's experience.

ERC argues courts calling the Texas law the "Texas Fair Debt Collection Practices Act" are
wrong, but even assuming ERC is correct on this point, certainly Sanders can be excused for

referring to the Texas law as the "Fair Debt Collection Practices Act" when the Fifth Circuit has
done the same. Giving Sanders some leeway is particularly appropriate in this case when Sanders,

while he is a lawyer, is representing himself, and the petition at issue is a handwritten form in small
claims court. The bottom line is that Sanders's pleadings before this Court are clear he proceeds
only under state law. ERC's "gotcha" attempt to bind Sanders to some unclear wording does not

trump practicality.
ERC also argues Sanders has failed to timely amend his pleadings as a matter of course
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within the time period specified for doing so under Federal Rule of Civil Procedure 1 5(a)( 1). Rule
15(a)(2), however, provides "[i]n all other cases, a party may amend its pleading only with the

opposing party's written consent or the court's leave. The court should freely give leave when

justice so requires."

FED.

R. Civ. P. 1 5(a)(2). If Sanders moved for leave to amend his pleadings

and clarify he was referring to the Texas debt collection law in his petition, and he is solely pursuing
state remedies (as he has clarified in his motion to remand), the Court would grant the motion.

Lacking jurisdiction, the Court would proceed to remand the case where it belongs.

Conclusion
ERC removed this case on the sole ground of federal questionjurisdiction. Yet Sanders sues

ERC for causes of action based exclusively in Texas statutory and tort law. Lackingjurisdiction, the

Court GRANTS Sanders's motion to remand. Sanders has also requested costs and attorney's fees.
A district court has discretion to award costs and attorney's fees incurred as result of removal. See
28 U.S.C.

§

1447(c). In examining the question, the district court should not award attorney's fees

when the removing party has an objectively reasonable basis for removal. See Martin

v.

Franklin

Capital Corp., 546 U.S. 132, 136 (2005). While the Court rejects ERC's hyper-technical basis for
removal, it does not consider the argument made in bad faith. Sanders's request for costs and

attorney's fees is DENIED.
Accordingly,
IT IS ORDERED that Plaintiff Douglas W. Sanders's Motion to Remand [#7] is

GRANTED;
IT IS FURTHER ORDERED that this case is REMANDED to the Justice of the

Peace Court, Precinct

1,

Llano County, Texas;

IT IS FURTHER ORDERED that the Clerk's office shall send a certified copy of this

Order to the Clerk of the Justice of the Peace Court, Precinct 1, Llano County, Texas;
IT IS FINALLY ORDERED that the parties shall bear their own costs of this

removal, for which let execution issue.
SIGNED this the

Jq\y of January 2015.

SAC7

UNITED STATES DISTRICT JUDGE

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