United States District Court, M.D. North Carolina
IRIS POUNDS, CARLTON MILLER, VILAYUAN SAYAPHET-TYLER, RHONDA HALL, and PIA TOWNES, on behalf of themselves and all others similarly situated, Plaintiffs,
PORTFOLIO RECOVERY ASSOCIATES, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
WILLIUM L. OSTEEN, JR., DISTRICT JUDGE.
matter comes before the court on Plaintiffs' Motion to
Remand. (Doc. 11.) Defendant Portfolio Recovery Associates,
LLC (“PRA”) responded, (Doc. 17), and Plaintiffs
replied, (Doc. 21). An oral argument was held October 5,
2017, and the parties submitted supplemental briefing. (Docs.
32-33, 35-36.) This matter is now ripe for resolution, and,
for the reasons stated fully below, the court will grant in
part and deny in part Plaintiffs' Motion to Remand.
before the court are Plaintiffs' Motion for Expedited
Determination of Motion to Remand, (Doc. 22), and Motion to
Defer Time to File Federal Motion for Class Certification,
(Doc. 27). These motions have been briefed and are also ripe
for resolution. (Docs. 23, 28, 29.) This court will deny
Plaintiffs' Motion to Expedite as moot and, having
considered the parties' arguments, will grant in part and
deny as moot in part the Motion to Defer Time to File Federal
Motion for Class Certification.
commenced the present putative class action in Durham County
in the Superior Court Division of the General Court of
Justice of the State of North Carolina on November 21, 2016,
against Defendant PRA. (Class Action Complaint
(“Compl.”) (Doc. 3) at 1.) Defendant was
served on November 21, 2016. (Notice of Removal
(“NOR”) (Doc. 1) at 2; Civil Summons (Doc. 4).)
filed its NOR in this court on December 9, 2016, (NOR (Doc.
1) at 3), on the basis of diversity jurisdiction pursuant to
the Class Action Fairness Act of 2005 (“CAFA”).
28 U.S.C. §§ 1332(d), 1453. In the NOR, Defendant,
relying on Plaintiffs' allegations and its own
assertions, alleged complete diversity of citizenship, an
aggregate amount in controversy exceeding $5 million, and a
proposed class size greater than 100 persons. (NOR (Doc. 1)
at 3-4.) Plaintiffs move this court under 28 U.S.C. §
1447(c) to remand the case on the grounds that the court
lacks jurisdiction over the claims pursuant to the
Rooker-Feldman doctrine. (Mot. to Remand (Doc. 11) at 1-2.)
Complaint seeks to set aside certain default judgments
obtained by PRA in North Carolina state courts, and seeks to
recover actual damages and civil penalties for alleged
violations of N.C. Gen. Stat. §§ 58-70-115(7),
58-70-130, and 58-70-155. (Compl. (Doc. 3) at 1-2, 6-7,
a debt buyer and collection agency under North Carolina law.
See N.C. Gen. Stat. §§ 58-70-15(b)(4),
58-70-155. As a debt buyer, PRA is required to file certain
“properly authenticated” evidence with a court
“[p]rior to entry of a default judgment” against
a debtor. See Id. § 58-70-155. Rule 55(b) of
the North Carolina Rules of Civil Procedure also governs the
entry of default judgments. Id. § 1A-1, Rule
55(b). When a plaintiff's claim is for a “sum
certain or for a sum which can by computation be made
certain, ” then the clerk has the authority to enter a
default judgment. Id. § 1A-1, Rule 55(b)(1).
Absent a sum certain, the default judgment must be entered by
a judge. Id. § 1A-1, Rule 55(b)(2).
§ 58-70-155 became effective in October 2009, PRA has
filed thousands of lawsuits in North Carolina state courts in
which it subsequently obtained default judgments. (Compl.
(Doc. 3) ¶¶ 32-35.) PRA obtained default judgments
against each of the named plaintiffs in this action.
(Id. ¶¶ 26-31.) Plaintiffs claim that
“PRA failed to satisfy the [§] 58-70-155
prerequisites that required it to file properly authenticated
business records providing an itemization of the amount
claimed to be owed.” (Id. ¶ 26.)
Plaintiff Pia Townes has additionally filed and been granted
a motion pursuant to Rule 60(b) of the North Carolina Rules
of Civil Procedure to set aside her default judgment.
(Id. ¶¶ 31, 39.)
filed this action seeking relief on behalf of “[a]ll
persons against whom PRA obtained a default judgment entered
by a North Carolina court in a case filed on or after October
1, 2009.” (See Id. ¶ 15.) On behalf of
all proposed class members whose default judgments have not
yet been vacated, Plaintiffs' first claim (“Claim
I”) seeks a declaratory judgment that the default
judgments violate § 58-70-155 (and, in some cases, Rule
55(b)(1)) and are void, and seeks an associated injunction
requiring PRA to cease collection activity and file notices
of vacatur. (Id. ¶¶ 50-57.)
behalf of all class members, Plaintiffs' second claim for
relief (“Claim II” or “statutory penalties
claim”) seeks statutory penalties authorized by N.C.
Gen. Stat. § 58-70-130(b). (Id. ¶¶
58-63.) Section 58-70-130 imposes civil liability in the form
of actual damages and statutory penalties on collection
agencies that engage in prohibited practices, including
specific “unfair practices.” § 58-70-115.
One such unfair practice is “[f]ailing to comply with
Part 5 of this Article.” Id. §
58-70-115(7). Part 5 includes § 58-70-155, entitled
“Prerequisites to entering a default or summary
judgment against a debtor under this Part.”
Id. § 58-70-155. Plaintiffs thus claim that PRA
violated § 58-70-115(7) by “requesting and
obtaining default judgments” that do not conform to
§ 58-70-155's prerequisites, entitling them to
statutory penalties under § 58-70-130(b). (Compl. (Doc.
3) ¶¶ 59-61.)
Plaintiffs' third claim for relief (“Claim
III” or “actual damages claim”) seeks
actual damages authorized by § 58-70-130(a) in the
amount PRA has collected from the Plaintiffs' default
judgments, on behalf of any proposed class members who made
post-default-judgment payments to PRA. (Compl. (Doc. 3)
argue that this court lacks subject matter jurisdiction over
this action under the Rooker-Feldman doctrine. (Plaintiffs'
Brief in Support of Motion to Remand (“Pls.'
Br.”) (Doc. 12); Plaintiffs' Reply Brief in Support
of Motion to Remand (Doc. 21).) The Rooker-Feldman doctrine
is a jurisdictional doctrine that prohibits federal district
courts from “‘exercising appellate jurisdiction
over final state-court judgments.'” See Thana
v. Bd. of License Comm'rs, 827 F.3d 314, 319 (4th
Cir. 2016) (quoting Lance v. Dennis, 546 U.S. 459,
463 (2006) (per curiam)). The presence or absence of subject
matter jurisdiction under Rooker-Feldman is a threshold issue
that this court must determine before considering the merits
of the case. Friedman's, Inc. v. Dunlap, 290
F.3d 191, 196 (4th Cir. 2002).
Rooker-Feldman originally limited federal-question
jurisdiction, the Supreme Court has recognized the
applicability of the doctrine to cases brought under
Rooker and Feldman exhibit the limited circumstances in which
this Court's appellate jurisdiction over state-court
judgments, 28 U.S.C. § 1257, precludes a United States
district court from exercising subject-matter jurisdiction in
an action it would otherwise be empowered to adjudicate under
a congressional grant of authority, e.g., § 1330 (suits
against foreign states), § 1331 (federal question), and
§ 1332 (diversity).
Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544
U.S. 280, 291-92 (2005). Diversity proceedings removed to
federal court under CAFA, likewise, are within the
doctrine's purview. See, e.g., Dell Webb Cmtys., Inc.
v. Carlson,817 F.3d 867, 872 (4th Cir.), cert. Denied,
___ U.S.____, 137 S.Ct. 567 (2016); Bergquist v. Mann
Bracken, LLP,592 F.3d 816, 818 (7th Cir. 2010);