United States District Court, E.D. Michigan, Northern Division
OPINION AND ORDER DENYING DEFENDANT'S MOTION TO
L. LUDINGTON United States District Judge
United States of America initiated this case against
Defendant COPOCO Community Credit Union
(“COPOCO”) on July 26, 2016. See Comp.,
ECF No. 1. Plaintiff alleged that Defendants COPOCO violated
the Servicemembers Civil Relief Act (“SCRA”), 50
U.S.C. § 3952(a) by repossessing a motor vehicle from a
servicemember during military service without a court order,
where the servicemember had made payments before entering
military service. See Compl. ¶¶ 1, 13.
Plaintiff further alleges that Defendant has engaged in a
pattern or practice of violating the SCRA in violation of
§ 3852(a) that raises significant issues of public
concern. See Compl. ¶¶ 19-20.
August 30, 2016 Defendant COPOCO filed a motion to dismiss
Plaintiff's complaint pursuant to Federal Rule of Civil
Procedure 12(b)(6). Defendant argues that Plaintiff has not
sufficiently alleged either that Defendant has engaged in any
pattern or practice of violating the SCRA or that its actions
raise significant issues of public concern as required by
§ 3852(a). See Def.'s Mot. Dismiss, ECF No.
7. For the reasons stated below, Defendant's motion will
COPOCO is a credit union chartered under the laws of Michigan
with its headquarters located in Bay City, Michigan. Compl.
¶ 5. As of March 31, 2016 Defendant COPOCO had total
assets of $101, 583, 663, including loan assets of nearly
$68, 000, 000. Id. at ¶ 7.
and Alyssa Carriveau are a married couple that previously
lived in Pinconning, Michigan. Id. at ¶ 8. In
April of 2014, the Carriveaus purchased a 2010 GMC Terrain
from a dealership. Id. The Carriveaus obtained
financing at the dealership, and received a loan from
Defendant COPOCO. Id. The Carriveaus made their
first loan payment in May of 2014. Id.
thereafter, the Carriveaus moved to the state of Washington,
where Mr. Carriveau enlisted in the United States Army as a
Private First Class. Id. at ¶ 9. He began
active duty in January of 2015. Id. At that time
Mrs. Carriveau contacted Defendant to explain that their next
loan payment might be late due to the military's payday
schedule. Id. The Carriveaus then fell behind on
their loan payments during the summer of 2015, but resumed
making payments that September. Id.
about October 5, 2015, Defendant repossessed the vehicle -
along with the child's car seat located within - from the
Carriveau's driveway without a court order while Mr.
Carriveau was away for military training. Id. at
¶ 10. Upon learning that the car had been repossessed,
Mrs. Carriveau called the Department of Justice on October 6,
2015. Id. at ¶ 11. As a result, the Department
of Justice arranged to have the vehicle returned to the
Carrivaus that evening. Id. In the meantime Mrs.
Carriveau missed work and suffered emotional distress.
October 29, 2015, the Department of Justice notified
Defendant that it was opening an investigation into
Defendant's motor vehicle loan servicing policies,
practices, and procedures. Id. at ¶ 12. During
the course of the investigation, the Department of Justice
learned that as of October 6, 2015 Defendant's vehicle
repossession procedures did not include checking the Defense
Manpower Data Center (“DMDC”) database: an
automated database provided by the Department of Defense in
order to allow lenders to check whether their customers are
SCRA-protected service members. Id. at ¶¶
14-15. Moreover, Defendant did not have any other procedures
to determine customers' military status, and until at
least December 16, 2015 had no written policies concerning
SCRA compliance. Id. The Department of Justice then
initiated the present matter on July 26, 2016. See
ECF No. 1.
now moves to dismiss the Government's suit for failure to
state a claim upon which relief can be granted under Federal
Rule of Civil Procedure 12(b)(6). A pleading fails to state a
claim under Rule 12(b)(6) if it does not contain allegations
that support recovery under any recognizable legal theory.
Ashcroft v. Iqbal, 556 U.S. 662, 678, (2009). In
considering a Rule 12(b)(6) motion, the Court construes the
pleading in the non-movant's favor and accepts the
allegations of facts therein as true. See Lambert,
517 F.3d at 439. The pleader need not have provided
“detailed factual allegations” to survive
dismissal, but the “obligation to provide the
‘grounds' of his ‘entitle[ment] to
relief' requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action
will not do.” Bell Atlantic Corp. v. Twombly,
550 U.S. 544, 555 (2007). In essence, the pleading
“must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its
face” and “the tenet that a court must accept as
true all of the allegations contained in a complaint is
inapplicable to legal conclusions.” Iqbal, 556
U.S. at 678-79 (quotations and citation omitted).
Servicemembers Civil Relief Act was passed “to enable
[servicemembers] to devote their entire energy to the defense
needs of the Nation.” 50 U.S.C. App. § 502(1). It
accomplishes this purpose by imposing limitations on judicial
proceedings that could take place while a member of the armed
forces is on active duty, including loans, contract
enforcement, and other civil actions. 50 U.S.C. App. §
501 et seq. These limitations are “always to
be liberally construed to protect those who have been obliged
to drop their own affairs to take up the burdens of the
nation.” Boone v. Lightner, 319 U.S. 561, 575
(1943). The original version of the SCRA was passed during
World War I. See Gordon v. Pete's Auto Serv. of
Denbigh, Inc., 637 F.3d 454, 457 (4th Cir. 2011).
Following the SCRA's reenactment in 1940, it has been
revised and expanded numerous times between 1942 and 2003.
Id. Despite this long history, there is little
precedent interpreting the act.
alleged violation falls under 50 U.S.C. § 3952(a)(1),
governing protections for purchases or leases under
installment contracts. Pursuant to that provision:
[a]fter a servicemember enters military service, a contract
by the servicemember for … the purchase of real or
personal property (including a motor vehicle) … may
not be rescinded or terminated for a breach of terms of the
contract occurring before or during that person's