United States District Court, D. New Jersey
RICARDO VARELA, on behalf of himself and those similarly situated, Plaintiff,
PEE DEE MEDICAL COLLECTION SERVICES and MCLEOD HEALTH, Defendants.
REPORT AND RECOMMENDATION
DUNN WETTRE, UNITED STATES MAGISTRATE JUDGE.
the Court is defendants' motion to dismiss for lack of
personal jurisdiction. (ECF No. 12). Plaintiff opposes the
motion. (ECF No. 20). The Hon. Susan D. Wigenton, U.S.D.J.,
referred this motion to the undersigned for a Report and
Recommendation. The motion is decided without oral argument
pursuant to Rule 78 of the Federal Rules of Civil Procedure.
Having considered the parties' written submissions, and
for good cause shown, the Court recommends that
defendants' motion to dismiss be DENIED.
Ricardo Varela resides in New Jersey. (Compl. ¶ 4, ECF
No. 1). Defendant McLeod Health provides healthcare services
through a network of hospitals, primary care, and family
physicians' groups in North and South Carolina.
(Harrington Decl. ¶ 5, ECF No. 12-2). Pee Dee Medical
Collection Services (along with McLeod Health,
"defendants") is a fictitious name used by McLeod
Health and its affiliates when attempting to collect unpaid
medical bills. (Id. ¶ 19). McLeod Health is
organized under the laws of South Carolina with a principal
place of business in South Carolina. (Id.
¶¶ 4, 6-17). Plaintiff does not dispute for
purposes of this motion that defendants do not market or
solicit business in New Jersey, do not provide services in
New Jersey, have no employees, property, or bank accounts in
New Jersey, are not registered to do business in New Jersey,
and do not have a registered agent in New Jersey.
(Id. ¶¶ 20-27).
summer of 2017, plaintiff was traveling back from Florida to
his home in New Jersey; he stopped in South Carolina and
received medical services from McLeod Health. (Varela Aff.
¶¶ 4-5, ECF No. 20-1). Defendants mailed a letter
dated December 14, 2017 to plaintiff at his home address in
New Jersey requesting payment for a purportedly outstanding
medical bill. (Compl. ¶¶ 21-22, Ex. A; Varela Aff.
¶ 10). Thereafter, plaintiff received one phone call
from defendants and two additional collection letters dated
January 3, 2018 and July 31, 2018 mailed to his home address
in New Jersey. (Varela Aff. ¶¶ 11 -12, Ex. B). In a
putative class action amended complaint dated March 29, 2019,
plaintiff alleges that defendants' collection letters are
false and misleading in violation of the Fair Debt Collection
Practices Act ("FDCPA"), 15 U.S.C. § 1692
et seq. Defendants now move to dismiss for lack of
personal jurisdiction pursuant to Rule 12(b)(2) of the
Federal Rules of Civil Procedure.
bears the burden of establishing the court's jurisdiction
over a defendant. Metcalfe v. Renaissance Marine,
Inc., 566 F.3d 324, 330 (3d Cir. 2009). When the court
does not hold an evidentiary hearing, plaintiff must
establish only a prima facie case of personal jurisdiction.
Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97
(3d Cir. 2004). Under a prima facie standard, "the
plaintiffs allegations are presumed true and all factual
disputes are resolved in the plaintiffs favor."
LaSala v. Marfin Popular Bank Pub. Co., Ltd., 410
Fed.Appx. 474, 476 (3d Cir. 2011). As a Rule 12(b)(2) motion
"is inherently a matter which requires resolution of
factual issues outside the pleadings," the court may
consider sworn affidavits or other documents in its
jurisdictional analysis. Time Share Vacation Club v.
Atlantic Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir.
1984). If plaintiff makes a prima facie showing of personal
jurisdiction, "the burden shifts to the defendant to
establish the presence of other considerations that would
render the exercise of personal jurisdiction
unreasonable." Display Works, LLC v. Bartley,
182 F.Supp.3d 166, 172 (D.N.J. 2016).
federal court in New Jersey exercises jurisdiction to the
extent permitted by New Jersey law. See Miller Yacht
Sales, 384 F.3d at 96. New Jersey's long-arm statute
provides for the exercise of jurisdiction over non-residents
'"to the uttermost limits permitted by the United
States Constitution.'" Charles Gendler &
Co., Inc. v. Telecom Equip. Corp., 102 N.J. 460, 469
(1986) (quoting Avdel Corp. v. Mecure, 58 N.J. 264,
268 (1971)). Therefore, "we ask whether, under the Due
Process Clause, the defendant has certain minimum contacts
with [New Jersey] such that the maintenance of the suit does
not offend traditional notions of fair play and substantial
justice." O 'Connor v. Sandy Lane Hotel Co.,
Ltd., 496 F.3d 312, 316 (3d Cir. 2007) (internal
quotation and alteration omitted).
Court can assert either general or specific jurisdiction over
a defendant. Bristol-Myers Squibb Co. v. Super. Ct.
Cal, 137 S.Ct. 1773, 1780 (2017). Plaintiff claims only
specific jurisdiction over the defendants, and as McLeod
Health is a South Carolina corporation with a principal place
of business in that state, the record before the Court does
not establish any basis for the exercise of general
jurisdiction. See Daimler AG v. Baitman, 571 U.S.
117, 137 (2014) ("With respect to a corporation, the
place of incorporation and principal place of business are
paradigm bases for general jurisdiction." (internal
quotation and alterations omitted)). The Court may assert
specific personal jurisdiction over a defendant when the
lawsuit "'aris[es] out of or relate[s] to the
defendant's contacts with the forum.'"
Id. at 127 (quoting Helicopteros Nacionales
de Colombia, S.A, v. Hall, 466 U.S. 408, 414 n.8
(1984)). The Third Circuit has laid out a three-part test to
determine whether specific jurisdiction exists: (1) "the
defendant must have purposefully directed [its] activities at
the forum"; (2) "the litigation must arise out of
or relate to at least one of those activities"; and (3)
if the first two requirements are met, the exercise of
jurisdiction must "otherwise comport with fair play
and substantial justice." O 'Connor, 496
F.3d at 317 (internal quotations omitted). "A single
contact that creates a substantial connection with the forum
can be sufficient to support the exercise of personal
jurisdiction over a defendant." Miller Yacht
Sales, 384 F.3d at 96 (citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 n.18 (1985)).
defendants intentionally mailed three collection letters to
plaintiff at his New Jersey address seeking payment of a
medical bill, and in so doing, purposely directed collection
efforts at the forum state. See O'Connor, 496
F.3d at 318 (defendant's mailing of seasonal newsletters
and brochure to address in Pennsylvania was evidence that it
"deliberately reached into Pennsylvania to target two of
its citizens"); see also Dittig v. Elevate
Recoveries, LLC, Civ. A. No. 16-1155, 2016 WL 4447818,
at *2 n.l (W.D. Pa. Aug. 24, 2016) (finding personal
jurisdiction over out-of-state debt collector "based on
[defendant's] collection activity directed towards
Plaintiff in this forum"). And there can be no doubt
that plaintiffs claim that the language of the collection
letters was false or misleading under the FDCPA directly
arises from the defendants' act of mailing those letters
to New Jersey. See Eades v. Kennedy, PC Law Offices,
799 F.3d 161, 168 (2d Cir. 2015) ("Plaintiffs' FDCPA
claims arise directly from [the defendant debt
collector's] business communications into New
York."); Gentry v. Leading Edge Recovery Solutions,
LLC, Civ. A. No. 13-3398, 2014 WL 131811, at *4 (D.N.J.
Jan. 10, 2014) ("Defendant purposely established the
requisite minimum contacts with the State of New York by
sending the collection letter to Plaintiffs debt settlement
company in New York. In doing so, the Defendant purposely
availed itself of the privilege of conducting activities
within the State, thereby invoking the benefits and
protections of its laws. Moreover, the Plaintiffs FDCPA
claims directly relate to and exclusively arise out of
Defendant's transmission of the collection letter to her
debt settlement company in New York.").
dispute any deliberate targeting of New Jersey, arguing that
they directed their collection activities at the plaintiff,
and not at any particular forum state. In defendants'
view, plaintiff himself drew them into the forum by obtaining
medical services from McLeod Health in South Carolina and
then returning to his home in New Jersey without rendering
full payment. Defendants correctly cite Covenant Bank for
Savings v. Cohen for the proposition that a
defendant's contacts with the forum that respond to those
initiated by the plaintiff may not confer a
sufficient basis for specific jurisdiction. 806 F.Supp. 52,
55 (D.N.J. 1992). However, their attempt to shoehorn the
facts of this case into the rubric of Covenant Bank
is misplaced. In Covenant Bank, a New Jersey
plaintiff reached out from the forum state by telephone to a
Pennsylvania defendant and requested certain information; the
information provided in response to plaintiffs solicitation
was allegedly false. Id. at 54-55. The Covenant
Bank court declined to exercise specific jurisdiction
because "[t]he underlying transaction which gives rise
to plaintiffs claims against these defendants consists of a
single inquiry, initiated by [plaintiff], directed to [the
individual defendant] in Philadelphia" but "a
resident plaintiffs unilateral acts, directed to a
nonresident defendant, do not create sufficient minimum
contacts between the nonresident defendant and the
forum." Id. at 55.
there is nothing in the record to suggest that plaintiff
requested a statement of his account or otherwise solicited
information regarding his medical bill such that he could be
said to have prompted defendants to send a responsive
collection letter to New Jersey. Every FDCPA plaintiff
necessarily solicits credit from a creditor prior to
incurring a debt; their claims, however, arise not from the
underlying debt, but from the defendant's alleged conduct
when initiating debt collection activities. It follows that
the Court's specific jurisdiction inquiry is focused on
the debt collector's purposeful collection actions in the
forum and whether they relate to plaintiffs statutory claim -
the preceding "unilateral act" of plaintiff
incurring a debt plays no role in the specific jurisdiction
the Court persuaded by defendants' attempt to draw a
jurisdictional distinction between third-party debt
collectors hired to perform collection services on behalf of
creditors and companies like McLeod Health who utilize their
own collection departments. All debt collection activity is
technically "responsive" in the sense that the
plaintiff must incur a debt before any collection efforts can
occur. But the decision to contact a plaintiff about a debt
is proactive, and by directing collection calls or mail to a
plaintiff in his or her home state, both third-party and
first-party debt collectors purposely avail themselves of die
privilege of conducting collection activities within that
defendants have made no argument that subjecting them to
personal jurisdiction in New Jersey would in any way offend
the notions of fair play and substantial justice. "The
existence of minimum contacts makes jurisdiction
presumptively constitutional, and the defendant 'must
present a compelling case that the presence of some other
considerations would render jurisdiction
unreasonable.'" O'Connor, 496F.36 at 324
(quoting Burger King, 47\ U.S. at 477). Defendants have
not presented any reason why litigating in this Court would
impose a burden on them, and the Court is cognizant of
"the plaintiffs interest in obtaining convenient and
effective relief." Burger King, 471 U.S. at 477
(quotation omitted). The Court concludes that this is not the
rare case where an otherwise constitutional exercise of
personal jurisdiction would be unreasonable or unfair.
Indeed, this Court's exercise of specific jurisdiction
over the out-of-state debt collector aligns with the
decisions of a number of other courts in FDCPA actions.
See, e.g., Proescher v. Sec. Collection Agency, No.
17-cv-1052-J-32PDB, 2018 WL 3432737, at *6 (M.D. Fla. June 8,
2018) (finding specific jurisdiction over North Carolina debt
collector in FDCPA action based on one collection letter
mailed to plaintiff in Florida); Pronesti v. Nat'l
Credit Adjusters, Civ. A. No. 15-6319, 2016 WL 1598858,
at *2 (D.N.J. Apr. 20, 2016) (finding specific jurisdiction
over Kansas debt collector in FDCPA action where defendant
directed "repeated" communications to plaintiff in
New Jersey and "these intentional communications form
the fabric of her underlying suit"); Silva v. Jason
Head, PLC, Civ. A. No. 09-5768, 2010 WL 4593704, at *3
(N.D. Cal. Nov. 4, 2010) (finding specific jurisdiction over
FDCPA defendant based on single debt collection voicemail in
California); Maloon v. Schwartz, Zweban & Slingbaum,
L.L.P.,399 F.Supp.2d 1108, 1112-13 (D. Haw. 2005)
(finding specific jurisdiction over Florida debt collector in
FDCPA action based on single collection letter mailed to
plaintiff in Hawaii); Slays v. Hand, 831 ...