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Nitti v. Penn Credit Corp.

United States District Court, E.D. Virginia, Richmond Division

October 2, 2017

ROBERT A. NITTI, Plaintiff,



         THIS MATTER is before the Court on Defendant Penn Credit Corporation's ("Defendant") Motion to Dismiss Plaintiffs Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) (ECF No. 9), filed on August 31, 2017, and Plaintiffs Motion to Amend Complaint (ECF No. 13), filed on September 13, 2017. The issues have been briefed and are ripe for review. The Court will dispense with oral argument because the facts and legal contentions are adequately presented in the materials presently before the Court and argument would not aid in the decisional process. E.D. Va. Local Civ. R. 7(J). For the reasons discussed herein, Defendant's Motion will be granted; because the Court finds that it lacks subject matter jurisdiction over the action, it does not reach Plaintiffs Motion.

         I. BACKGROUND

         Defendant is a debt collector that regularly operates in this district. (Am. Class Action Compl. ("Am. Compl.") ¶ 4, ECF No. 4.) Defendant has contracted with the Virginia Department of Taxation to collect Virginia individual income taxes. (Id. ¶ 6.) Defendant sent Robert A. Nitti ("Plaintiff) certain "Broken Promise" letters on or around February 1, 2016. (Id. ¶ 10.) The letters stated that they were "an attempt to collect a debt" and notified Plaintiff that, "It is important that you either make payment or contact our office today." (Id. ¶ 11.)[1] The letters further listed twenty-one debts that Plaintiff allegedly owed to the Virginia Department of Taxation. (Id.) At least one of the debts listed was for individual income tax that had first been assessed more than seven years prior, despite the fact that the limitations period for the collection of Virginia state taxes is seven years. (Id. ¶ 11-12 (citing Va. Code § 58.2-1802.1).)

         According to the Complaint, Defendant is aware of the statute of limitations for individual income tax collection. (Id. ¶ 14.) Nevertheless, Defendant does not investigate or have any procedure to verify whether the tax debts it attempts to collect are time-barred. (Id. ¶ 15.) Defendant merely sends letters to all individuals identified by the Virginia Department of Taxation as persons owing tax debts. (Id.) Plaintiff asserts that this behavior violates the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692e and 1692f. (Id. ¶¶ 26, 32.) Plaintiff, on behalf of himself and all other similarly situated, seeks a permanent injunction against Defendant, as well as statutory damages for himself and each class member and an award of reasonable attorney fees and costs. (Id. ¶¶ 27, 33.)

         In the Motion to Dismiss, Defendant asks the Court to dismiss the action for lack of subject matter jurisdiction, or in the alternative for failure to state a claim. Plaintiff, having already amended his Complaint once as a matter of right, now seeks leave to amend in order to better articulate standing and to restate his claim.


         A. 12(b)(1)

         A motion to dismiss for lack of subject matter jurisdiction is governed by Federal Rule of Civil Procedure 12(b)(1). As recognized by the Fourth Circuit, "[t]here are two critically different ways in which to present a motion to dismiss for lack of subject matter jurisdiction" under Rule 12(b)(1). Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). First, a defendant may challenge jurisdiction facially and "contend 'that a complaint simply fails to allege facts upon which subject matter jurisdiction can be based.'" Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009) (quoting Bain, 697 F.2d at 1219). "In that event, all the facts alleged in the complaint are assumed to be true and the plaintiff, in effect, is afforded the same procedural protection as he would receive under a Rule 12(b)(6) consideration." Bain, 697 F.2d at 1219.

         Alternatively, a defendant may challenge jurisdiction factually and "contend ... 'that the jurisdictional allegations of the complaint [are] not true.'" Kerns, 585 F.3d at 192 (alteration in original) (quoting Bain, 697 F.2d at 1219). When-and only when-a defendant takes this latter position, "'[a] trial court may ... go beyond the allegations of the complaint and in an evidentiary hearing determine if there are facts to support the jurisdictional allegations, ' without converting the motion to a summary judgment proceeding." Id. (quoting Bain, 697 F.2d at 1219).

         In this case, Defendant brings a facial challenge to standing. Accordingly, the Court's analysis is confined to the facts as pled in the Amended Complaint.

         B. Standing

         The Supreme Court has established that the "irreducible constitutional minimum" of standing includes three elements: (1) an injury-in-fact; (2) a causal connection between the injury and the alleged misconduct; and (3) a likelihood that the injury will be redressed by a favorable decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992) (citations omitted). "Where, as here, a case is at the pleading stage, the plaintiff must 'clearly ... allege facts demonstrating' each element." Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016) (as revised May 24, 2016) (quoting Warth v. Seldin, 422 U.S. 518 (1975)).

         In order to show injury-in-fact at the pleading stage, a plaintiff must allege "'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual and imminent, not conjectural or hypothetical.'" Id. at 1548 (quoting Lujan, 504 U.S. at 560). To satisfy the concreteness requirement, a plaintiff must allege an injury-either tangible or intangible-that actually exists. Id. at 1548-49. The Supreme Court has made clear that "Article III standing requires a concrete injury even in the context of a statutory violation." Id. at 1549. However, in certain limited circumstances the statutory violation ...

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