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Smith v. National Collegiate Student Loan Trust 2007-4

United States District Court, E.D. Michigan, Southern Division

June 19, 2015

MARC D. SMITH and CAROLYN U.SMITH, Plaintiffs,
v.
NATIONAL COLLEGIATE STUDENT LOAN TRUST 2007-4, UNION FEDERAL SAVINGS BANK, Defendants.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS (Doc. 10) AND DISMISSING CASE[1]

AVERN COHN, District Judge.

I. Introduction

This is a debt collection case. Plaintiffs are proceeding pro se. As best as can be gleaned from the complaint, plaintiffs claim that defendants National Collegiate Student Loan Trust 2007-4 (the Trust), and Union Federal Savings Bank (the Bank), violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, in attempting to collect on a student loan debt. Plaintiffs appear to say that a credit reporting agency deleted a student loan debt from Marc Smith's credit file, that plaintiffs sought "verification" of the debt, and have requested documents to show that plaintiffs are "the holder in due course."

As will be explained, the complaint may also be read to raise additional claims.

Before the Court is the Trust's motion to strike and dismiss under Fed.R.Civ.P. 11(a), 12(f) and 12(b)(6). Plaintiffs filed a response[2] (Doc. 18) and the Trust filed a reply (Doc. 19). The matter is now ready for decision.

For the reasons that follow, the motion will be granted on the grounds that the complaint fails to state a claim upon which relief may be granted.[3]

II. Legal Standard

To survive a Rule 12(b)(6) motion to dismiss, the complaint's "factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the allegations in the complaint are true." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). See also Ass'n of Cleveland Fire Fighters v. City of Cleveland, Ohio, 502 F.3d 545, 548 (6th Cir. 2007). The court is "not bound to accept as true a legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted). In sum, "[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face." Id. at 678 (internal quotation marks and citation omitted).

III. Analysis

A. Federal Claims

The complaint refers to the FDCPA in two places. See Doc. 1 at p. 8-9. In order to plausibly plead a claim under the FDCPA: "(1) plaintiff must be a consumer' as defined by the Act; (2) the debt' must arises out of transactions which are primarily for personal, family or household purposes;' (3) defendant must be a debt collector' as defined by the Act; and (4) defendant must have violated § 1692e's [or other applicable] prohibitions [of the FDCPA]." Wallace v. Washington Mut. Bank, F.A., 683 F.3d 323, 326 (6th Cir. 2012); see also Dunn-Mason v. JP Morgan Chase Bank, N.A., No. 11-cv-13419, 2013 WL 5913684, *11 (E.D. Mich. Nov. 1, 2013).

The complaint does not meet these pleading requirements. Rather, the complaint refers to and quotes the statutory language of 15 U.S.C. §§ 1692e and 1692f, but does not have any factual statements as to any element of an FDCPA claim. There are no factual allegations regarding the nature of the obligation, factual allegations to warrant the inference that the Trust or any defendant is a debt collector, or that the Trust or any defendant took any action or communicated any information to plaintiffs in violation of any of the statutory requirements of the FDCPA. Even construing the complaint liberally, it contains no more than threadbare legal conclusions devoid of facts. In the absence of any allegations of collection activity regarding a consumer debt, the complaint fails to state a claim under the FDCPA.

In response, plaintiffs cite to cases that relate to ones status as a holder in due course. However, as the Trust explains, under the FDCPA, plaintiffs must point to something said or represented by the Trust or any defendant amounting to a false, deceptive, misleading, unfair or unconscionable statement upon which to base their claims. Plaintiffs have not pointed to anything said by the Trust or any defendant "about holders in due course [status]. And no reason exists to think that the least sophisticated consumer gives any thought to holders in due course-by definition, the least-sophisticated consumer lacks any knowledge of the concept." Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 596 (6th Cir. 2009)(emphasis original). See Kafele v. Javitch, Block, Eisen & Rathbone, LLP, No. 2:03 CV 638, 2004 WL 5178125, at *10 (S.D. Ohio Sept. 27, 2004)("Holder-in-due-course status is irrelevant to the purpose of the FDCPA verification requirement. Holder in due course status confers protections upon the holder of a negotiable instrument against certain defenses that the obligor of the instrument might have raised against a previous holder or the original obligee.... Holderin- due-course status therefore says nothing about who owes the debt, the amount owed, or whether it has already been paid. Therefore, plaintiff's claim that defendants violated... [the FDCPA] by failing to provide verification of Household Financial Services' holderin-due-course status is without merit.").

The only "fact" identified in plaintiffs' response relates to the absence of a representation or information on Marc Smith's credit report, allegedly deleted in response to a dispute. However, pre-dispute information conveyed to a credit reporting agency does not amount to a communication in connection with collection of a debt governed by the FDCPA. See McIvor v. Credit ...


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