IT Machines vs Masterfile / NCS Recovery: 15 - Defendant Opposition to Plaintiff Motion for Remand

8/3/2019 IT Machines vs Masterfile / NCS Recovery: 15 - Defendant Opposition to Plaintiff Motion for Remand

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1 MORRIS PETERSONSteve Morris, Bar No. 15432 Rex D. Garner, Bar No. 9401900 Bank of America Plaza3 300 South Fourth StreetLas Vegas NV 89101Telephone: (702) 474 9400Facsimile: (702) 474-9422

6 Attorneys for DefendantMasterfile Corporation78 UNITED STATES DISTRICT COURT9 DISTRICT OF NEVADA10 IT MACHINES, L.L.C., individually and ) CASE NO : 2:09-cv-00782-PMP-RJJon behalf of all similarly situated Class )Members, )12 )Plaintiff, ) DEFENDANT MASTERFILES

) OPPOSITION TO PLAINTIFF IT13) MACHINES MOTION FOR14 ) REMANDMASTERFILE CORPORATION, a )15 corporation; NCS RECOVERY )

CORPORATION, a full service collection )16 agency; PHUSION 25; and DOES 1 )through 100, inclusive, )17 )1 Defendants. )8 )1920 MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION22 The only purported ground for Plaintiff IT Machines remand motion is its

assertion that its complaint alleges claims under state rather than federal law.2324 This assertion cannot be reconciled with the four corners of the complaint that IT2526 1 IT Machines alleges no procedural defects, nor could it do so. MasterfileCorporation (Masterfile) removed this action from the District Court for Clark27 County, Nevada on May 1, 2009, thirty days after it was filed (before it had evenbeen served on Masterfile). In doing so, Masterfile complied with the provisions28 of 28 U.S.C. 1446(d). As IT Machines complaint asserts putative class actionMORRIS PETERSON allegations,Masterfile properly removed the action without first seeking consentof the other defendants (who had not yet been served in any event).

LAS VEGAS, NEVADA 89101702/474-9400

FAX 702/474-9422

Case 2:09-cv-00782-PMP-RJJ Document 15 Filed 06/15/09 Page 1 of 10


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1 Machines chose to file. The complaint asserts claims for alleged violation of fair2 debt collection practices and quotes liberally from the federal Fair Debt Collection

Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Indeed, the only legal citation inthe complaint is to the United States Code. The FDCPA provides for federaljurisdiction and therefore presents a federal question sufficient for removal.

6 .IT Machines cannot back away from the obvious federal claims in itscomplaint by asserting after removal that it intends to rely only upon state law.

8 The language of the complaint determines whether a federal question is alleged.IT Machines motion is in effect an attempt to amend the complaint after removal,

10 which cannot defeat federal jurisdiction. Moreover, even if IT Machines had notdirectly alleged federal claims (which it clearly did in its complaint), its assertion

12 of the FDCPA as the basis for its allegations of wrongdoing would require this13 Court to interpret and apply federal law. That alone is sufficient to raise a federal14 question under controlling Supreme Court precedent.15 IT Machines also cannot avoid federal jurisdiction by admitting that it has16 no standing to assert the federal claims that it has alleged. That admission will be17 relevant to a motion to dismiss, but federal jurisdiction exists based on the18 assertion of a claim, not its merit.

IT Machines complaint clearly alleges claims arising under federal law, and20 removal was therefore proper.21

II. ARGUMENT22 A. Removal Is Proper When A Complaint Asserts A Claim Arising23 Under Federal Law

28 U.S.C. 1441 provides that:25 (a) Except as otherwise provided by act of Congress, any civil26 action brought in a State court of which the district courts of the27 United States have original jurisdiction, may be removed by the

MORRIS PETERSON defendant or defendants, to the district court of the UnitedATTORNEYSAT LAW

00 BANK OF AMERICA PLAZA300 SOUTH FOURTH STREETLAS VEGAS, NEVADA 89101

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1 States for the district and division embracing the place where2 such action is pending.3 .. . .(b) Any civil action of which the district courts have original

jurisdiction founded on a claim or right arising under theConstitution, treaties or laws of the United States shall be

6 removable without regard to the citizenship or residence of the7 parties.8 Thus, a defendant may remove an action to federal court if the action could

have been brought in federal court originally. 28 U.S.C. 1441; Builders &10 Contractors v. International of Elec. Workers, 109 F.3d 1353, 1356 (9th Cir. 1997)

(citing Caterpillar, Inc. v. Williams, 482 U.S. 386, 392 (1987)).12 . . . . . .Federal question jurisdiction is governed by the well-pleaded complaint13 ,, . . . .rule. Under that rule, federal jurisdiction exists when a federal question is14 presented on the face of a plaintiffs complaint. Builders & Contractors, 109 F.3d at15 1356. The question of whether a case is removable is therefore determined from16 the complaint as it existed at the time of removal. Id.

A post-removal amendment dropping a federal claim does not affect the18 federal courts subject matter jurisdiction, even if only state law claims remain. See19 Sparta Surgical Corp. v. National Assn of Securities Dealers, Inc., 159 F.3d 1209, 121320 (9th Cir. 1998) (a plaintiff may not compel remand by amending a complaint to21

eliminate the federal question upon which removal was based).22 B. Removal Was Proper, Because IT Machines Complaint Contains23 Federal Claims for Alleged Violations of the Fair Debt Collection24 Practices Act (15 U.S.C. 1692, et seq.)25 IT Machines complaint expressly alleges claims based upon a federal26 statute. The complaint alleges that the defendants, including Masterfile, violated27 the FDCPA by engaging in, and conspiring to engage in, unfair debt collection

MORRIS PETERSON practices. The FDCPA provides for federal jurisdiction. See 15 U.S.C. 1692k.ATTORNEYS AT LAW

00 BANK OF AMERICA PLAZA300 SOUTH FOURTH STREET 3LAS VEGAS, NEVADA B9101

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1 Thus, Masterfiles removal was proper, and IT Machines motion for remand2 . . .should be denied, because the complaint is founded on a claim or right arising

under the laws of the United States. Se e 28 U.S.C. 1441(b).IT Machines complaint asserts claims on behalf of a purported class of

similarly situated persons who were subject to Defendants unlawful practices of6 3) debt collection on the part of Defendant. Complaint 11:1215.2 IT

Machines contends that it and other class members were subjected to unfair debt8 collection practices. Complaint 13(c):1-2.

The complaint does not simply contain incidental, casual, or illustrative10 references to federal law. Although the complaint does not cite the FDCPA by

name or code section, it alleges violations of fair debt collection practices by12 quoting directly from the statute. The complaint asserts that the defendants13 alleged conduct was in violation of the aforementioned title of the U.S.C.14 Complaint, 17:7-9. The complaint also individually alleges three specific15 purported violations of the FDCPA. Complaint 91 15, 16, and 17.16 In paragraph 15 , IT Machines alleges that Defendant is in violation of fair17 debt collection practices. The complaint describes these alleged violations by18 quoting language from 15 U.S.C. 1692e(3) and alleging that defendant made a19 false representation or implication that any individual is an attorney or that any20 communication is from an attorney. Complaint 15:9-10. In paragraph 16, IT21 Machines again alleges that Defendant is in violation of fair debt collection22 practices. Complaint 16:1. The complaint again describes the alleged violation23 of the fair debt collection practice by quoting 15 U.S.C. 1692g(b) and asserting24 that defendant failed to comply with the requirements of the FDCPA to cease25 collection on a disputed debt. Complaint 9116:24-25. Specifically, the complaint26 alleges that Defendants violated the following requirement:2728

MORRIS PETERSON 2 References to IT Machines complaint include paragraph and line number.ATTORNFYS AT LAW00 BANK OF AMERICA PLAZA300 SOUTH FOURTH STREETLAS VEGAS, NEVADA 89101

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1 If the consumer notifies the debt collector in writing within the thirty-2 day period described in subsection (a ) of this section that the debt, or

any portion thereof, is disputed, or that the consumer requests thename and address of the original creditor, the debt collector shallcease collection of the debt, or any disputed portion thereof, until the

6 debt collector obtains verification of the debt or a copy of a judgment78 See 15 U.S.C. 1692g; Complaint 9116:18-24.

In paragraph 17 , IT Machines alleges that Defendant is in violation of fair10 debt collection practices. Complaint 17:1. In that paragraph, IT Machines

claims that Defendant sent a copy of a complaint to be filed in the United States12 District Court for the Southern District of New York. Complaint 17:6-7. The13 complaint alleges that this complaint was i n violation of the aforementioned title14 of the U.S.C. because Plaintiff did not sign a contract in the Southern District of15 New York nor did plaintiff reside in said District upon commencement of the16 action. Complaint 91 17:7-9. Thus, IT Machines alleges that the defendants17 violated the following venue section of the FDCPA:18 Any debt collector who brings any legal action on a debt19 against any consumer shall20 (1) in the case of an action to enforce an interest in real property21 securing the consumers obligation, bring such action only in a22 judicial district or similar legal entity in which such real property is23 located; or24 (2) in the case of an action not described in paragraph (1), bring2526 The complaint alleges a claim for unfair debt collections practices against27 Defendants and each of them. Complaint, 18. In addition, the complaintalleges that the defendants participated in a civil conspiracy to engage in the28 conduct that it alleges (Complaint, 21), so on its face it purports to allege federal

MORRIS PETERSON claims against each defendant.ATTORNEYS AT LAW


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1 such action only in the judicial district or similar legal entity2 (A ) in which such consumer signed the contract sued upon; or

(B) in which such consumer resides at the commencement of the4 action.

15 U.s.c 1692i; complaint 17:1-5.6 IT Machines is therefore simply incorrect in asserting that [n]owhere in the

complaint is the act cited as the basis for the claims made in the complaint. See8 Motion for Remand pg. 2, 3.

Finally, the FDCPA serves as the basis for IT Machines claims for relief.10 Specifically, IT Machines alleges that the putative class members have been

damaged by the defendants? alleged unfair debt collections practices and prays12 for damages. See Complaint 9191 18:14-15; 28:11-18. In addition, IT Machines13 expressly seeks all other recovery authorized by the. . . fair debt practices14 collection laws[.] Complaint 11:18.15 Notably, the only law cited in IT Machines complaint is the16 aforementioned provision of the U.S.C. namely, the fair debt collection17 requirements in the FDCPA that it quotes. The complaint cites no state law and18 makes no mention of any state fair debt collection requirements. IT Machines19 current assertion that it intended to rely exclusively on state law is therefore20 specious. Motion for Remand 91 4-5.21 In any event, even if the complaint did not expressly assert federal claims,22 IT Machines claims would require this Court to construe federal law in deciding23 whether the quoted sections of the FDCPA were violated. Even without an24 express federal claim, [a] case may arise under federal law where the vindication25 of a right under state law necessarily turn[s] on some construction of federal law.26 Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808 (1986) (quoting Franchise27

Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1,9 (1983)).28MORRIS PETERSON

ATFORNEYS AT LAW00 BANK OF AMERICA PLAZA300 SOUTh FOURTH STREETLAS VEGAS, NEVADA 89101

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1 Here, IT Machines has alleged violations of fair debt practices collections2 laws, unfair debt collection practices, and conduct allegedly in violation of fair

debt collection practices. Complaint 11:18; 13(c):2; 15:6; 16:18; and 17:1. Thecomplaint relies upon the FDCPA to define the purported unfair practices. Thecomplaint therefore would require this Court to determine (1) what is a fair debt

6 collection practice and (2) whether the defendants conduct violated such apractice. In both instances, federal law is a necessary element of IT Machines

8 purported claims. IT Machines fair debt collection claims are purely defined bythe FDCPA, and its requests for relief therefore necessarily depend on the

10 resolution of a substantial question of federal law. See Franchise Tax Bd., 463 U.s.at 27-28.

12 When a plaintiff chooses to plead what must be regarded as a federal13 claim, then removal is at the defendants option. Sparta Surgical Corp., 159 F.3d14 at 1213 (quoting Caterpillar, Inc., 482 U.S. at 399). IT Machines chose to assert15 federal claims, and removal was therefore proper.16 C. IT Machines May Not Avoid Federal Jurisdiction By Attempting To17 Amend Its Complaint Following Removal18 IT Machines in essence attempts to amend the plain language of its own19 complaint by asserting in its motion that [t]he FDCPA is not the basis of the20 prosecution against Masterfile. . . Despite the numerous references to the21 FDCPA in the complaint and its express claims for relief for alleged unfair debt22 collection practices, IT Machines asserts that [sitate common law principles of23 good faith and fair dealing, fair business practices, and fraud are the basis for the24 claims made. Motion for Remand 9 J 5-6.25 A plaintiff cannot avoid federal jurisdiction by abandoning federal claims26 after removal. Sparta Surgical Corp. v. National Assn ofSecurities Dealers, Inc., supra,27

159 F.3d at 1213 (a plaintiff may not compel remand by amending a complaint toMORRIS PETERSON eliminate the federal question upon which removal was based). Federal

ATTORNEYS AT LAW00 BANI( OF AMERICA PLAZA300 SOUTH FOURTH STREETLAS VEGAS, NEVADA 89101

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1 jurisdiction is determined at the time of removal, and the allegations of the2 complaint therefore control. Id. IT Machines federal claims appear on the face of

its complaint and it cannot now seek remand by disavowing those claims.IT Machines also cannot avoid federal jurisdiction by admitting that its

federal claims are meritless. IT Machines concedes that it lacks standing to assert6 claims under 15 U.S.C. 1692a. However, federal jurisdiction is determined basedupon the allegations that a plaintiff makes, not whether those allegations have

8 merit. Even if a complaint may be dismissed for the failure to allege all the9 elements of a federal claim, a federal court nevertheless has jurisdiction to10 . . .consider that claim. For example, in Sparta Surgical, supra, the district court

properly exercised its jurisdiction in dismissing the plaintiffs complaint followingremoval because the federal claims were untenable and the remaining claims

13 were subject to an immunity defense. 159 F.3d at 1213. Similarly, here, whether14 IT Machines federal claims are subject to dismissal does not determine whether15 this Court has jurisdiction.16 D. IT Machines Request for Fees Should Be Denied17 IT Machines motion for remand should be denied, making its request18 for fees moot. However, there is no ground for an award of fees or costs no matter19 the outcome of its motion. [A]bsent unusual circumstances, attorneys fees20 should not be awarded when the removing party has an objectively reasonable21 basis for removal. Martin v. Franklin Capital Corp., 546 U.S. 132 , 137 (2005). IT22 Machines complaint presents an objectively reasonable basis for removal by23 expressly relying upon a federal statute that provides for federal jurisdiction.2425262728

MCRRLS PETERSONATTORNEYS AT LAW


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III. CONCLUSION2 For all the foregoing reasons, IT Machines Motion for Remand and its

request for attorneys fees and costs should be denied.4 Respectfully submitted,56 MORRIS PETERSON7 By /s/Rex D. Garner8 Steve Morris, Bar No. 1543Rex D. Garner, Bar No. 9401900 Bank of America Plaza

10 300 South Fourth StreetLas Vegas, NV 8910111 Attorneys for Defendant12 Masterfile13141516171819202122232425262728

MORRIS PETERSONATTORNEYS AT LAW

00 RANK OF AMERICA PLAZA300 SOUTH FOURTH STREETLAS VEGAS, NEVADA 89101

702/474-9400FAX 702/474-9422


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CERTIFICATE OF SERVICE2 Pursuant to Fed. R. Civ. P. 5(b) and Section IV of District of Nevada

Electronic Filing Procedures, I certify that I am an employee of MORRISPETERSON, and that the following documents were served via electronic service:DEFENDANT MASTERFILES OPPOSITION TO PLAINTIFF IT MACHINES

6 MOTION FOR REMAND78 To :Thomas Christensen9 Christensen Law Offices, L.L.C.1000 S. Valley View Blvd.

10 Las Vegas, Nevada 8910711 Attorney for Plaintiff12

I further certify that I am familiar with the firms practice of collection and13processing documents for mailing; that in accordance therewith, I caused the14above-named document to be deposited with the U.S. Postal service at Las Vegas,15

16 Nevada, in a sealed envelope, with first class postage prepaid, on the date and tothe addressee(s) shown below:17

18 Jeffrey I. ColemereWrona Law Offices19 Bach Commons Building11650 s. State Street, Ste 10320 Draper, UT 8406021 Attorney for Phusion 2522 Tom EboliPresident23 NCS Recovery Corporation24 5975 Cattlemen LaneP.O. Bo x 5027625 Sarasota, FL 34232-030226 Dated this 15th day of June, 2009.27 By: /s/Fiona Ingalls28

MORRIS PETERSONATTORNEYS AT LAW


702/474-9400FAX 702/474-9422


IT Machines vs Masterfile / NCS Recovery: 15 - Defendant Opposition to Plaintiff Motion for Remand

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Transcript of IT Machines vs Masterfile / NCS Recovery: 15 - Defendant Opposition to Plaintiff Motion for Remand