United States District Court, D. New Jersey
ALISON GEORGE, individually and on behalf of those similarly situated, Plaintiff,
MIDLAND FUNDING, LLC; MIDLAND CREDIT MANAGEMENT, INC.; and JOHN DOES 1 TO 10, Defendants.
WILLIAM J. MARTINI, U.S.D.J.
MATTER comes before the Court on a Motion to Compel
Arbitration filed by Defendants Midland Funding, LLC and
Midland Credit Management (together, “Midland”).
ECF No. . There was no oral argument pursuant to Federal
Rule of Civil Procedure 78(b). For the reasons set forth
below the Motion is GRANTED.
Allegations in the Amended Complaint
Alison George (“Plaintiff”) brings this putative
class action against Midland for alleged violations of the
Fair Debt Collection Practices Act (“FDCPA”), 15
U.S.C. §§ 1692- 1692p. ECF No. . ¶ 1.
Plaintiff allegedly incurred personal debts on a Citibank
Sears credit card that became past due and in default.
Id. ¶¶ 22-24. The debts were subsequently
“assigned, placed, transferred or sold” to
Midland for collection. Id. ¶ 25. To collect
the debts, Midland sent two letters to Plaintiff which
allegedly contained a “false threat of interest”
accruing on the amount of the stale debt. Id.
¶¶ 28-31. Plaintiff alleges that these letters
stated that she had a “current balance” of $6,
483.88 and deceptively created the false impression that
interest and fees she agreed to under the Terms and
Conditions of her Citibank Sears credit card agreement
(“Agreement”) were accruing on the
“balance.” In reality, Plaintiff's debt had
been purchased from Citibank by Midland and no further
interest or fees were accruing.
alleges that these letters were deceptive given
“Plaintiff's understanding and belief that, under
the terms and conditions applicable to her use of the
Account, interest, late charges, and other charges and fees
(such as annual fees) could accrue.” Id.
¶ 30. In addition, Plaintiff also alleges that the
letters contained additional violations of the FDCPA because
they failed to disclose that Plaintiff had no legal liability
as to the stale debt because any legal action would be barred
by the statute of limitations. Id. ¶¶
44-49. Plaintiff attaches to her complaint copies of the
letters she received, but she does not attach a copy of the
credit card agreement with Citibank or any documents related
to Defendants' eventual purchase of her stale debt.
on these allegations, Plaintiff asserts a single claim for
violation of the FDCPA and proposes to represent two
subclasses of New Jersey residents receiving similar
collection letters from Midland. Id. ¶ 74.
Arguments of the Parties
move to compel arbitration and dismiss this action. ECF No.
. The Agreement contains an arbitration clause, and
Defendants assert that Plaintiff's claims arise from
debts incurred pursuant to the Agreement. ECF No. [14-7] at
9-12. In support of that contention, Defendants submit a
declaration from Sean Mulcahy, an employee of Midland, which
attaches several documents related to Midland's purchase
of Plaintiff's delinquent account. ECF Nos. [14-2] &
[14-3]. Defendants also attach a second declaration of
William Peck, a Citibank employee, who avers that “a
notice of change and amended card agreement, setting forth
new applicable terms and conditions for the account, was
mailed to Plaintiff” and that he “believes that
[certain handling and quality control procedures] were in
effect and being followed, at all relevant times. ECF No.
[14-6] ¶ 11. Peck's declaration attaches a
“true and correct copy of the new card agreement mailed
to Plaintiff in connection with the Account.”
Id.; see also ECF No. [14-7]
(“Agreement”). The Agreement's arbitration
clause reads, in relevant part:
PLEASE READ THIS PROVISION OF THE AGREEMENT
CAREFULLY. IT PROVIDES THAT ANY DISPUTE MAY BE RESOLVED
BY BINDING ARBITRATION. ARBITRATION REPLACES THE RIGHT TO GO
TO COURT, INCLUDING THE RIGHT TO A JURY AND THE RIGHT TO
PARTICIPATE IN A CLASS ACTION OR SIMILAR PROCEEDING. IN
ARBITRATION, A DISPUTE IS RESOLVED BY AN ARBITRATOR INSTEAD
OF A JUDGE OR JURY. ARBITRATION PROCEDURES ARE SIMPLER AND
MORE LIMITED THAN COURT PROCEDURES.
What Claims are subject to arbitration? All
Claims relating to your account, a prior related account, or
our relationship are subject to arbitration, including claims
regarding the application, enforceability, or interpretation
of this Agreement and this arbitration provision. All Claims
are subject to arbitration, no mater what legal theory they
are based on or what remedy . . . they seek. . . . Claims and
remedies sought as part of a class action, private attorney
general or other representative action are subject to
arbitration on an individual (non-class, non-representative)
basis, and the arbitrator may award relief only on an
individual (non-class, non-representative) basis.
Whose claims are subject to arbitration? Not
only ours and yours, but also Claims made by or against
anyone connected with us or you or claiming through us or
such as . . . [an] affiliated company, predecessor or
successor, heir, [or] assignee . . . .”
What about debt collections? We and anyone
to whom we assign your debt will not initiate an arbitration
proceeding to collect a debt from you unless you assert a
Claim against us or our assignee. We and any assignee may
seek arbitration on an individual basis of any Claim asserted
by you, whether in arbitration or any proceeding, including
in a proceeding to collect a debt . . . .”
Who can be a party? Claims must be brought
in the name of an individual person or entity and must
proceed on an individual (non-class, non-representative)
basis. The arbitrator will not award relief for or against
anyone who is not a party. If you or we require arbitration
of a Claim, neither you, we, nor any other person may pursue
the Claim in arbitration as a class action, private attorney
general action or other representative action, nor may such
Claim be pursued on your or our behalf in any litigation in
any court. ...