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Molinari v. Stone & Hinds, P.C.

United States District Court, E.D. Tennessee

November 22, 2016

STONE & HINDS, P.C., Defendant.



         This civil action is before the Court on defendant's Amended Motion to Dismiss [Doc. 22]. Plaintiff filed a response in opposition to defendant's motion [Doc. 27], and defendant replied [Doc. 30]. For the reasons below, the Court will grant the motion to dismiss.

         I. Background[1]

         In 2008, Ford Motor Credit Company, LLC (“Ford”) brought an action against plaintiff in the General Sessions Court of Wilson County, Tennessee, to collect an owed debt [Doc. 1-1]. The debt was reduced to a final judgment, and the same court-at the request of defendant, on behalf of Ford-subsequently issued two writs of wage garnishment in 2013 and 2015, respectively, to plaintiff's employers, Dell and Insight Global [Docs. 1-1, 1-2]. These writs were served upon the employers' agents within the state of Tennessee [Docs. 1-1, 1-2].

         Plaintiff moved from Tennessee to Texas in 2011, and in 2013, she notified defendant that she had become a legal resident of Texas [Doc. 1 ¶ 22]. Plaintiff's wages continued to be withheld after she moved [Id. ¶ 25]. Accordingly, on October 27, 2015, plaintiff brought suit in the U.S. District Court for the Western District of Texas against defendant, alleging violations of the Federal Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, and the Texas Debt Collection Act (“TDCA”), Tex. Fin. Code § 392 [Id. ¶¶ 37, 57-79]. Defendant filed a motion to dismiss the action or, in the alternative, to transfer venue pursuant to 28 U.S.C. § 1406(a), due to lack of personal jurisdiction [Doc. 4]. On March 18, 2016, Judge Pitman of the Western District of Texas sustained defendant's objections to lack of personal jurisdiction and consequently transferred the action to this Court [Doc. 9].[2]

         Plaintiff claims that defendant is “currently conducting business in the State of Texas as a debt collector” and is therefore bound by the regulations governing Texas debt collectors [Doc. 1 ¶ 5]. Plaintiff asserts-and defendant does not dispute-that debt collectors must pay a bond before conducting business in Texas, and defendant is not bonded in Texas [Id. ¶ 10]. Additionally, defendant does not deny that Texas courts may not order the garnishment of wages-other than for child support or spousal support-under the Texas Constitution. See Tex. Const. art. XVI, § 28 (“No current wages for personal service shall ever be subject to garnishment, except for the enforcement of court-ordered: (1) child support payments; or (2) spousal maintenance.”).

         The parties are in disagreement, however, as to whether defendant is subject to these restrictions-and consequently in violation of the FDCPA and TDCA-based upon the garnishing of plaintiff's wages while she resides in Texas pursuant to the Tennessee state court judgment. Plaintiff claims that defendant “ha[s] not satisfied the legal requirements to collect any debt in the State of Texas” and is therefore acting in violation of the TDCA by “collecting a debt by using false, misleading, unfair and unconscionable debt collection conduct and representations” [Doc. 1 ¶¶ 9, 29]. Additionally, plaintiff argues that, by garnishing her wages, defendant is “collecting a debt they cannot legally collect in Texas, ” and thereby “maliciously, willfully, and/or negligently violating the Fair Debt Collection statutes in an attempt to collect [p]laintiff's alleged debt” [Id. 25, 31].

         Defendant states that plaintiff has failed to point to any such action by defendant, “other than the undisputed fact the [defendant] applied for, and obtained from the Tennessee state court, writs of garnishment as to two of [plaintiff's employers]” [Doc. 22 ¶ 2]. Consequently, defendant moves this Court to dismiss plaintiff's claims pursuant to Federal Rule of Civil Procedure 12(b)(6), arguing that plaintiff has failed to state a claim upon which relief can be granted because “[w]age garnishment of Texas residents by other courts is not prohibited, ” and the continuing garnishment of wages does not qualify as the institution of a legal action [Id. ¶ 11].

         II. Standard of Review

         Rule 8(a)(2) of the Federal Rules of Civil Procedure sets forth a liberal pleading standard. Smith v. City of Salem, 378 F.3d 566, 576 n.1 (6th Cir. 2004). It requires only “‘a short and plain statement of the claim showing that the pleader is entitled to relief, ' in order to ‘give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (alteration in original) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). Detailed factual allegations are not required, but a party's “obligation to provide the ‘grounds' of his ‘entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. at 555 (alteration in original) (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)). “Nor does a complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (alteration in original) (quoting Twombly, 550 U.S. at 557)).

         In deciding a Rule 12(b)(6) motion to dismiss, the Court must determine whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570. In doing so, the Court “construe[s] the complaint in the light most favorable to the plaintiff, accept[s] its allegations as true, and draw[s] all reasonable inferences in favor of the plaintiff.” Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007) (citation omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “Determining whether a complaint states a plausible claim for relief will . . . be a context- specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679 (citation omitted).

         III. Analysis

         Defendant argues that plaintiff's claims should be dismissed under Rule 12(b)(6) primarily based on the Full Faith and Credit Clause of the United States Constitution [Doc. 22 pp. 5-10]. Thus, the Court will begin by giving an overview of the Full Faith and Credit Clause and related law, then it will apply the law to this case.

         A. Full Faith ...

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