Judge Denies MTD in FDCPA Case After Defendant Moves Case to Federal Court

A defendant that was sued in state court for allegedly violating the Fair Debt Collection Practices Act and then moved to have the case tried in a federal court instead has had its motion to dismiss based on the plaintiff’s lack of standing denied and will also be on the hook for the plaintiff’s attorney’s fees relative to the defendant’s removal of the case, a District Court judge in Washington has ruled.

A copy of the ruling in the case of Morgan v. Bank of America can be accessed by clicking here.

The plaintiff was sued by a credit card lender in 2012 for an unpaid credit card debt. In 2014, the credit card lender merged with the defendant. This March, the plaintiff filed suit in a Washington state court alleging the defendant violated the FDCPA in a number of ways relative to the original suit seeking to collect on the unpaid debt.

After it was sued in state court, the defendant sought to have the case removed to federal court on the basis of the federal question jurisdiction and then quickly sought a motion to dismiss, arguing it did not meet the definition of “debt collector” under the FDCPA and that the plaintiff’s claims were time-barred.

While both parties admit that the plaintiff did not have standing to sue in federal court, the burden was on the defendant to “prove that all the elements of federal jurisdiction were satisfied upon removal,” wrote Judge Stanley Bastian of the District Court for the Eastern District of Washington. The defendant’s attempt to invoke federal jurisdiction and then argue for dismissal based on a lack of standing did not satisfy that burden, Judge Bastian ruled. Rather than dismiss the case, Judge Bastian remanded it back to state court for further proceedings.

Ruling that the defendant lacked “an objectively reasonable basis for seeking removal”of the case to federal court, Judge Bastian also granted the plaintiff’s motion to have his attorney’s fees covered as a result of the removal.

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