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Ensz v. Chase Bank USA NA

United States District Court, N.D. Iowa, Eastern Division, Waterloo

January 7, 2019

STARLYN ENSZ, Plaintiff/Counter-Defendant,
CHASE BANK USA NA, Defendant/Counter-Plaintiff.


          C.J. Williams United States District Judge

         This matter is before the Court on plaintiff Starlyn Ensz's Motion to Dismiss Counterclaim Pursuant to Rule 12(b)(1). (Doc. 13). Defendant Chase Bank timely filed a resistance. (Doc. 15). Concurrently with its resistance, defendant filed a Request for Judicial Notice, in which defendant requests that the Court take judicial notice of the requests for production that plaintiff propounded on defendant. (Docs. 15-1, 15-2). Plaintiff did not file a resistance to defendant's request for judicial notice. For the following reasons, plaintiff's motion (Doc. 13) is granted, and defendant's request for judicial notice (Doc. 15-1) is denied.

         I. BACKGROUND

         Plaintiff brought her two-count complaint alleging violations of the Telephone Consumer Protection Act, Title 47, United States Code, Section 227(b)(3) (“TCPA”). (Doc. 1). Plaintiff's complaint alleges that “[d]efendant placed collection calls to [p]laintiff seeking and attempting to collect on alleged debts incurred through purchases made on credit issued by [d]efendant.” (Id., at 2). Plaintiff alleges that these collection calls violated the TCPA. (Id., at 2-5). Plaintiff further alleges that she never consented to the aforementioned collection calls, or if she consented she revoked consent prior to the calls at issue in this case. (Id., at 3).

         In its answer, defendant raised numerous affirmative defenses, including the affirmative defenses of “Set Off” and “Prior Express Consent.” (Doc. 6, at 12-13). Defendant also brought three counterclaims for breach of contract, account stated, and quantum meruit, based on the allegations that pursuant to a written agreement with plaintiff, defendant issued a credit card account in plaintiff's name, and that plaintiff incurred $4, 742.90 in charges that are now past due. (Doc. 6, at 15-19). In response, plaintiff filed her motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), arguing that this Court lacks subject matter jurisdiction over defendant's counterclaims. (Doc. 13).

         Defendant urges the Court not to dismiss the counterclaims because the counterclaims bear a “loose connection” to the facts underlying plaintiff's complaint. (Doc. 15, at 11). Specifically, defendant argues that its aforementioned affirmative defenses put the cardmember agreement and the amount of plaintiff's alleged debt “squarely at issue” in this case. (Id., at 7, 13-16). Defendant further asserts that it placed the calls at issue to collect the same alleged $4, 742.90 debt underlying the counterclaims. (Id., at 16-18). For these reasons, defendant asserts that the counterclaims meet the standard for the Court to exercise supplemental jurisdiction over the counterclaims. (Id., at 16-20). Finally, defendant urges the Court to exercise jurisdiction over defendant's counterclaims because doing so will promote efficiency, and there is no basis upon which the Court may exercise its discretion to decline supplemental jurisdiction. (Id., at 20-25).


         A party may move, before its answer, to dismiss a claim for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). “In deciding a motion under Rule 12(b)(1), the district court must distinguish between a facial attack-where it looks only to the face of the pleadings-and a factual attack-where it may consider matters outside the pleadings.” Croyle ex. rel. Croyle v. United States, 908 F.3d 377, 380 (8th Cir. 2018).

         In ruling on a facial challenge, the court assumes all factual allegations regarding jurisdiction are true, and the court will grant the motion if claimant fails to allege sufficient facts to confer subject matter jurisdiction on the court. Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993). Accordingly, “[t]he burden of proving federal jurisdiction . . . is on the party seeking to establish it, and [t]his burden may not be shifted to the other party.” Great Rivers Habitat All. v. Fed. Emergency Mgmt. Agency, 615 F.3d 985, 988 (8th Cir. 2010) (second alteration in original) (internal quotation marks omitted).

         In determining subject matter jurisdiction, the Court is mindful that “[f]ederal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013) (citations and internal quotation marks omitted). “Federal district courts have original jurisdiction over ‘all civil actions arising under the Constitution, laws, or treaties of the United States' and ‘all civil actions' where the amount in controversy exceeds $75, 000 and complete diversity of citizenship exists between the parties.” Graf v. Pinnacle Asset Grp., LLC, Civ. No. 14-1822-SRN/SER, 2015 WL 632180, at *2 (D. Minn. Feb. 12, 2015) (quoting 28 U.S.C. §§ 1331, 1332). In addition to federal question and diversity jurisdiction, courts also have supplemental jurisdiction:

Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.

28 U.S.C. § 1367(a). Claims are a part of the same case or controversy if they “derive from a common nucleus of operative fact, ” and the parties would ordinarily expect to try them in one judicial proceeding. ABF Freight Sys., Inc. v. Int'l Bhd. of Teamsters, 645 F.3d 954, 963 (8th Cir. 2011) (internal quotation marks omitted). Section 1367 provides district courts discretion to decline supplemental jurisdiction in certain cases, including under “exceptional circumstances” where “there are other compelling reasons for declining jurisdiction.” 28 U.S.C. § 1367(c)(4).

         There is no dispute that courts have supplemental jurisdiction over compulsory counterclaims, St. Jude Med., Inc. v. Lifecare Int'l, Inc., 250 F.3d 587, 594 (8th Cir. 2001), which are claims “aris[ing] out of the transaction or occurrence that is the subject matter of the opposing party's claim.” Fed.R.Civ.P. 13(a). The parties have not cited, nor has the Court found, binding authority addressing whether supplemental jurisdiction under Section 1367(a) extends beyond the scope of Rule 13(a) to permissive counterclaims as defined in Rule 13(b). Some courts have held that supplemental jurisdiction under Section 1367(a) applies only to compulsory counterclaims, while other courts have found that supplemental jurisdiction extends to some permissive counterclaims. See Graf, 2015 WL 632180, at *3 (citing numerous cases comparing the competing views on supplemental jurisdiction).

         III. ...

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