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Doyle v. Ad Astra Recovery Services, Inc.

United States District Court, D. New Jersey

March 6, 2018

MEGHAN DOYLE, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, Plaintiff,
v.
AD ASTRA RECOVERY SERVICES, INC., Defendant.

          BENJAMIN JARRET WOLF, JOSEPH K. JONES, JONES, WOLF & KAPASI, LLC On behalf of Plaintiff.

          MICHAEL I. METZ-TOPODAS, GARY JOHN REPKE, JR., COHEN SEGLIAS PALLAS GREENHALL & FURMAN PC On behalf of Defendants.

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This matter concerns claims by Plaintiff, on behalf of herself and other similarly situated parties, against a collection agency for its efforts to collect a debt. Presently before the Court is the motion of Defendant to compel arbitration of Plaintiff's claims. For the reasons expressed below, Defendant's motion will be granted.

         BACKGROUND

         On November 10, 2015, Plaintiff, Meghan Doyle, and Rapid Cash entered into an agreement for an unsecured high interest[1]installment loan for $1, 500.00 that was assigned account number ****899. Plaintiff's obligation was sent into default, and after Rapid Cash had exhausted its internal collection efforts, Plaintiff's obligation was referred to an outside collection agency, Defendant, Ad Astra Recovery Services, Inc., to undertake collection efforts.

         On March 17, 2017, Plaintiff sent a letter to Ad Astra disputing the debt. Plaintiff's letter referenced account number ****899 and asked for a breakdown of the balance allegedly owed by her. Plaintiff maintains that because Ad Astra has failed to report the debt as disputed, Ad Astra has violated various provisions of the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq.

         Plaintiff has filed a putative class action complaint against Ad Astra seeking damages, as well as declaratory and injunctive relief, arising from its alleged FDCPA violation, which prohibits debt collectors from engaging in abusive, deceptive and unfair practices. More specifically, Plaintiff alleges that Ad Astra violated §§ 1692e(8) and 1692e(10) of the FDCPA by communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a debt is disputed, and using false, deceptive or misleading representations or means in connection with its collection efforts.

         Ad Astra has moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) and to compel arbitration pursuant to the “Rapid Cash Unsecured High Interest Installment Loan Agreement and Disclosure Statement.” Plaintiff has opposed Ad Astra's motion, arguing that the motion should be denied because the agreement does not apply to Plaintiff's FDCPA claims. Plaintiff's argument is premised on assigned “special meanings” and specific definitions stated in the agreement, as well as language in the arbitration and class action waivers that she contends is conflicting. Plaintiff also argues that the entire agreement is invalid and unenforceable.

         DISCUSSION

         A. Subject matter jurisdiction

         Plaintiff brings this action for damages and declaratory relief arising from the Defendant's violation of 15 U.S.C. § 1692 et seq., the Fair Debt Collection Practices Act. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331.

         B. Standard for Motion to Dismiss and to Compel Arbitration

         In those cases in which a motion to compel arbitration can be decided without evidence, the Court will apply the familiar Rule 12(b)(6) standard to the face of the pleadings. Bacon v. Avis Budget Group, Inc., 2017 WL 2525009, at *3 (D.N.J. 2017) (citing Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 771 (3d Cir. 2013) (directing that where “the affirmative defense of arbitrability of claims is apparent on the face of a complaint (or . . . documents relied upon in the complaint), . . . the FAA would favor resolving a motion to compel arbitration under a motion to dismiss standard without the inherent delay of discovery”)).

         Here, even though Plaintiff's complaint does not attach the agreement that contains the arbitration provision at issue, the Court may consider it because Plaintiff's claims derive from the agreement, which Plaintiff entered into with Rapid Cash and which refers to Ad Astra as a “related party.”[2] Plaintiff also does not argue that discovery is required to interpret the agreement. The Court therefore may consider whether the action must be arbitrated by way of a motion to dismiss.[3]

         C. Analysis

         The Federal Arbitration Act (FAA) provides that a written arbitration provision contained in a “contract evidencing a transaction involving commerce . . . shall be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Under the FAA, a private arbitration agreement is enforceable if (1) a valid arbitration agreement exists between the parties and (2) the dispute before it falls within the scope of the agreement. AT&T Mobility LLC v. Conception, 563 U.S. 333, 344- 45 (2011); Century Indem. Co. v. Certain Underwriters at Lloyd's, London, 584 F.3d 513, 525 (3d Cir. 2009).[4]

         Additionally, arbitration agreements that contain waivers of class actions are valid, AT&T Mobility LLC, 563 U.S. at 348, [5]and arbitration clauses have been upheld in putative FDCPA class action cases, see, e.g., Gates v. Northland Group, Inc., 2017 WL 680258, at *1 (D.N.J. 2017); Harris v. Midland Credit Management, Inc., 2016 WL 475349, at *3 (D.N.J. 2016); Jeffreys v. Midland Credit Management, Inc., 2016 WL 4443164, at *1 (D.N.J. 2016). “[T]he party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.” Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79, 91 (2000).

         The Court's analysis of whether Plaintiff's claims must be arbitrated starts with the terms of the agreement. The “Rapid Cash Unsecured High Interest Installment Loan Agreement and Disclosure Statement” (see Docket No. 6-3) provides in relevant part:

         Terms ...


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