Opinion
Case No. 5:00-CV-104.
March 27, 2001.
ORDER
IT IS HEREBY ORDERED that Defendant Onyx Acceptance Corporation's Motion to Dismiss (Dkt. No. 15) is DENIED . IT IS FURTHER ORDERED that Defendants Illiana Recovery Systems, Inc., Ken McKenzie, and Steven Markel's Motion to Dismiss (Dkt. No. 16) is DENIED .
OPINION
Defendant Onyz Acceptance Corporation has moved to dismiss this matter pursuant to 28 U.S.C. § 1367. Defendants Illiana Recovery Systems, Inc., Ken McKenzie and Steven Markel have also moved to dismiss this action pursuant to 28 U.S.C. § 1367. Plaintiffs Jeffrey Shoup, Charlotte Shoup and Richard Shoup have opposed both motions. The time for briefing the motions under Local Civil Rule 7.2 having elapsed, the Court now addresses the motions. It does so without oral argument because oral argument is unnecessary in light of the previous briefing and the issues presented.
I. Allegations and Procedural History
This lawsuit was filed on August 25, 2000. Plaintiffs' Complaint alleges fourteen counts. Thirteen of the fourteen counts are based on state common law or state statutes. The one federal claim alleged — violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (hereafter "FDCPA") — is against all Defendants except Defendant Onyx Acceptance Corporation. All of the counts concern the allegedly improper repossession of Jeffery Shoup's 1996 Ford Mustang on July 10, 1999 at a time when allegedly Defendants had accepted payment and were not entitled to repossession of the vehicle. Plaintiffs claim that the alleged conduct violates the FDCPA because the statute allows recovery for repossessions affected when the actor lacks a right to present possession of the secured property. See 15 U.S.C. § 1692f(c)(6)(A). The state law counts, similarly, are premised on the nature of the wrongful repossession — i. e., common law and statutory conversion, negligence, and violation of the Michigan Consumer Protection Act and the Occupational Code — and conduct associated with the manner of the repossession — i e., assault, infliction of emotional distress, and defamation.
II. Legal Standards
Title 28 U.S.C. § 1367(c) permits the district court to decline to exercise jurisdiction over state law claims in certain enumerated instances:
(c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if —
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.28 U.S.C. § 1367(c).
Determination under these legal standards is a matter within the broad discretion of the district court. City of Chicago v. International College of Surgeons, 522 U.S. 156, 172 (1997); Doe v. Sundquist, 106 F.3d 702, 708 (6th Cir. 1997); Gold v. Local 7 United Food and Commercial Workers Union, 159 F.3d 1307, 1310 (10th Cir. 1998); Alger v. Ganick, O'Brien Sarin, 35 F. Supp.2d 148, 156 (D.Mass. 1999) (citing Vera-Lozano v. International Broadcasting, 50 F.3d 67, 70 (1st Cir. 1995); Penobscot Indian Nation v. Key Bank of Maine, 112 F.3d 538, 564 (1st Cir. 1997)). In International College of Surgeons, the United States Supreme Court explained the exercise of this discretion as follows:
Depending on a host of factors, then — including the circumstances of the particular case, the nature of the state law claims, the character of the governing state law, and the relationship between the state and federal claims — district courts may decline to exercise jurisdiction over supplemental state law claims. The statute thereby reflects the understanding that, when deciding whether to exercise supplemental jurisdiction, "a federal court should consider and weigh in each case, and at every stage of the litigation, the values of judicial economy, convenience, fairness, and comity."International College of Surgeons, 522 U.S. at 173 (quoting Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 357 (1988)). See also United Mine Workers v. Gibbs, 383 U.S. 715, 726 (1966).
Case law interpreting subsections (c)(1) and (c)(2) of section 1367, has likewise focused on the factors of judicial economy, convenience, fairness and comity in assessing the exercise of supplemental jurisdiction. See Borough of West Mifflin v. Lancaster, 45 F.3d 780, 789 (3rd Cir. 1995); Vera-Lozano v. International Broadcasting, 50 F.3d 67, 70 (1st Cir. 1995); Detroit Edison Co. v. Michigan Dept. of Environmental Quality, 29 F. Supp.2d 786, 793 (E.D.Mich. 1998). This analysis is not intended to merely compare the number of state and federal claims, but rather is to focus on the relatedness of the federal and state claims, the strength of the various claims, the comprehensiveness of the remedies sought as to the various claims, the extent of the proofs as to the various claims, the legal novelty of the state law claims and the interests of the state courts in deciding them, and the extent to which dismissal of state claims would save or cause the expenditure of additional resources. See Borough of West Mifflin, 45 F.3d at 789; Detroit Edison Co., 29 F. Supp.2d at 793. As for the narrow exception of "exceptional circumstances" under subsection (c)(4) of section 1367, this exception was intended by Congress to be applied narrowly in compelling circumstances and in a manner consistent with the framework assessing judicial economy, convenience, fairness and comity. Itar-Tass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 448 (2nd Cir. 1998); Executive Software North America, Inc. v. United States District Court for the Central District of California, 24 F.3d 1545, 1558 (9th Cir. 1994).
III. Legal Analysis
As noted earlier, Plaintiffs' sole federal claim is under the FDCPA for the wrongful repossession of the automobile. Plaintiff's several state law claims essentially seek recovery for the same losses on common law and state statutory bases. The FDCPA provision in question assumes reference to state law questions of security interests, ownership and breach of the peace. In enacting the FDCPA, Congress expressly found that its purposes included the discouragement of rogue debt collectors, the promotion of consistent state regulation of debt collection, and the remediation of inadequate state laws. 15 U.S.C. § 1692. This presupposes an active federal role in enforcement under the FDCPA.
Herein, it appears that the federal and state law claims stand on an equal footing in terms of their relative strength because they are, for the most part, premised on same factual and legal issues — whether the Defendants had a present right to possess the automobile and whether they breached the peace in taking possession of the vehicle. As such, the resolution of those claims is likely to depend upon the presentation of roughly identical proofs. It further appears that the extent of the relief available under the federal law is at least as great as under the state laws in that the federal statute in question provides explicitly for actual damages, statutory damages, and attorney fees. See 15 U.S.C. § 1692k. The state law claims asserted generally involve state law issues which would have to be addressed under the FDCPA regardless of the presence of the state law claims. Furthermore, as described in Plaintiff's briefing, the resolution of those issues are in the main straightforward and commonplace such that the State of Michigan does not have a large interest in separately resolving those issues. See Itar-Tass Russian News Agency, 140 F.3d at 448 (holding that state law claims were not complex when they involve commonplace claims with straightforward application). The resolution of these issues in federal court, as anticipated by the FDCPA, is most likely to lead to greater judicial efficiencies and would avoid inefficiencies such as inconsistent verdicts. The Court also determines that there are no "exceptional circumstances" which compel the Court to decline jurisdiction over the state law claims. Therefore, the Court concludes that balance of factors to be assessed under section 1367(c) strongly favors the exercise of jurisdiction over the state law claims. See Newman v. Checkrite California, Inc., 912 F. Supp. 1354, 1373-74 (E.D.Cal. 1995) (holding that state law claims as to illegal collection activities did not predominate over FDCPA legal claim and that state law claims were not sufficiently complex to warrant declining jurisdiction under section 1367(c)); see also Smith v. K-Mart Corp., 899 F. Supp. 503 (E.D.Wash. 1995).
CONCLUSION
In accordance with this Opinion, an Order shall enter denying Defendants' Motions to Dismiss.