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Horton v. Jefferson Capital Systems, LLC

United States District Court, S.D. West Virginia, Beckley Division

March 22, 2017

THOMAS HORTON, Plaintiff,
v.
JEFFERSON CAPITAL SYSTEMS, LLC, et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          IRENE C. BERGER UNITED STATES DISTRICT JUDGE.

         The Court has reviewed the Plaintiff's Motion that the Court Require the Defendants to Prove the Jurisdictional Amount for CAFA Jurisdiction, or in the Alternative, to Permit Plaintiff to Conduct Limited Discovery of Defendants' Ability to Establish Amount in Controversy and Plaintiff's Motion to Remand (Document 7) and Jefferson Capital Systems, LLC's Opposition to Plaintiff's Motion to Remand (Document 15), as well as all exhibits. In addition, the Court has reviewed the Plaintiff's Individual and Class Action Complaint (Document 1-1) and Jefferson Capital Systems, LLC's Notice of Removal (Document 1). For the reasons stated herein, the Court finds that the motion to remand should be granted.

         FACTS

         Plaintiff Thomas Horton is a resident of Raleigh County, West Virginia. He filed his Individual and Class Action Complaint (Document 1-1) in the Circuit Court of Raleigh County on August 11, 2016, and the Defendants removed the action to federal court on September 16, 2016. Mr. Horton named the following Defendants: Jefferson Capital Systems, LLC (JCS), a Georgia corporation with a principal place of business in Minnesota; D&A Services, LLC, an Illinois corporation with a principal place of business in Illinois; and Fenton & McGarvey Law Firm, P.S.C, a Kentucky firm with principal offices in Kentucky. Mr. Horton obtained a credit card account from World Financial Network National Bank, later Comenity Bank. An alleged balance of $1, 015.00 remains, and Mr. Horton last made a payment on August 31, 2011. Comenity Bank sold the debt to JCS, which retained D&A and Fenton & McGarvey to collect it. D&A sent a collection letter dated December 2, 2015, and Fenton & McGarvey sent a collection letter dated May 3, 2016. The Plaintiff contends the debt was beyond the three-year statute of limitations under Delaware law at the time the collection letters were sent.[1] The collection letters did not contain language stating that the debt was time-barred, as required under West Virginia law.

         Mr. Horton alleges both individual and class claims. The tentative class definition in the complaint is: “All West Virginia consumers from whom defendants, or any one of them, attempted to collect a time-barred debt without the notice and disclaimers required by West Virginia Code 46A-2-128(f).” (Compl. at ¶ 15.) The complaint alleges violation(s) of the West Virginia Consumer Credit Protection Act (WVCCPA). The Plaintiff seeks the following relief:

A. That the Court enjoin Defendants from attempting to collect time-barred debt in the State of West Virginia;
B. That a statutory penalty of $1, 000.00, adjusted for inflation, pursuant to West Virginia Code §§ 46A-2-101(1) and 106 be awarded to Mr. Horton and each member of the class he represented for each violation of the WVCCPA;
C. That Defendants be ordered to account for all time-barred debt collected from the class and reimburse each such member of the class all monies collected with interest thereon for the four year period preceding the filing of this action;
D. That Defendants be ordered to pay Mr. Horton's reasonable attorney fees and costs pursuant to the provisions of West Virginia Code § 46A-5-104 and 15 U.S.C. § 1692k; E. Cancellation of all debt pursuant to West Virginia Code § 46A-5-105; and F. For such other and further relief as the Court may deem appropriate.

(Id. at 8.)

         JCS submitted a declaration by Sue Unterberger, a compliance manager. (Document 15-1.) She states that there are more than 100 West Virginia accounts that were more than three years old, but received collection letters from either JCS or an outside servicer without notice that the debt was beyond the statute of limitations. Further, Ms. Unterberger avers that JCS owns at least 10, 000 West Virginia accounts over three years old, with an aggregate balance of more than $5.6 million.

         The Plaintiff filed his motion to remand on October 17, 2016, and the Defendant filed its response on November 3, 2016. The Plaintiff did not file a reply, and the motion is now ripe for review.

         STANDARD OF REVIEW

         The Class Action Fairness Act (CAFA) provides for federal jurisdiction in civil class action cases with an amount in controversy over $5, 000, 000, at least 100 class members, and diversity between at least one plaintiff and at least one defendant. 28 U.S.C. § 1332(d). A defendant's notice of removal is held to the same pleading standards as a complaint, and need not supply supporting evidence. “[W]hen a defendant seeks federal-court adjudication, the defendant's amount-in-controversy allegation should be accepted when not contested by the plaintiff or questioned by the court.” Dart Cherokee Basin Operating Co., LLC v. Owens, 135 S.Ct. 547, 553 (2014). After a defendant's jurisdictional allegations have been challenged, “both sides submit proof and the court decides, by a preponderance of the evidence, whether the amount-in-controversy requirement has been satisfied.” Id. at 553-54. Contrary to the standard for removal and remand in diversity cases, “no antiremoval ...


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