Smith v. Solomon and Solomon, P.C. , 714 F.3d 73 ( 2013 )

United States Court of Appeals
For the First Circuit
No. 12-2169
JENNIFER SMITH,
Plaintiff, Appellant,
v.
SOLOMON & SOLOMON, P.C.;
JULIE B. SOLOMON,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert B. Collings, U.S. Magistrate Judge]
Before
Thompson, Circuit Judge,
Souter,* Associate Justice,
and Stahl, Circuit Judge.
Roger Stanford and Stanford & Schall on brief for appellant.
Julie B. Solomon and Solomon & Solomon, P.C. on brief for
appellees.
April 24, 2013
*
Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
STAHL, Circuit Judge. This case requires us to decide
whether the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C.
§ 1692 et seq., controls the choice of venue in a post-judgment
enforcement action to recover a debt under Massachusetts trustee
process law. We conclude that it does not.
The facts of this case are neither complex nor contested.
The plaintiff-appellant is Jennifer Smith, formerly known as
Jennifer Gonsalves, who was, at all relevant times, a resident of
New Bedford, Massachusetts and an employee of the U.S. Department
of the Interior. The defendants-appellees are Solomon & Solomon,
P.C., a law firm that specializes in debt collection, and Julie B.
Solomon, an attorney who serves as a director at the firm.
In May 2010, the New Bedford District Court entered a
default judgment against Smith in a suit filed by Solomon & Solomon
to recover a consumer debt. In March 2011, Solomon & Solomon then
brought a second suit in the Attleboro District Court, seeking to
collect on the 2010 default judgment by attaching Smith's wages
from the Department of the Interior, via trustee process. North
Attleboro is one of the locations in which the Department of the
Interior maintains a usual place of business.
In February 2012, Smith filed the present action to
recover damages, alleging that the defendants-appellees violated
the FDCPA venue provision, 15 U.S.C. § 1692i(a), when they brought
the 2011 Attleboro suit in a district other than the one in which
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she resides or signed the underlying contract, see id. § 1692k
(FDCPA civil liability provision); Fox v. Citicorp Credit Services,
Inc., 15 F.3d 1507, 1511 (9th Cir. 1994) ("The parties agree that
a violation of the venue provision may support civil liability.");
Pickens v. Collection Services of Athens, Inc., 165 F. Supp. 2d
1376, 1379 (M.D. Ga.), aff'd, 273 F.3d 1121 (11th Cir. 2001)
(Table) ("Violation of the venue provision is sufficient to
establish liability."). The defendants-appellees moved to dismiss,
see Fed. R. Civ. P. 12(b)(6), and requested fees and costs, arguing
that Smith's claim was baseless in that it ignored Massachusetts
trustee process law. Although the district court granted the
motion to dismiss, it denied the request for fees. Smith v.
Solomon & Solomon, P.C., 887 F. Supp. 2d 334 (D. Mass. 2012). This
appeal followed; our review is de novo. See Pruell v. Caritas
Christi, 645 F.3d 81, 83 (1st Cir. 2011).
In Massachusetts, a plaintiff cannot attach a debtor's
wages or salary "except on a claim that has first been reduced to
judgment or otherwise authorized by law." Mass. R. Civ. P. 4.2(a).
The defendants-appellees reduced their claim to judgment through
the initial New Bedford District Court action, and Smith concedes
that venue was proper in that suit. Thus, this case, unlike
Harrington v. CACV of Colo., LLC, 508 F. Supp. 2d 128, 131, 133-34
(D. Mass. 2007), concerns the question of what venue is proper in
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a post-judgment enforcement proceeding, not an initial collections
action.
The FDCPA venue provision requires "[a]ny debt collector
who brings any legal action on a debt against any consumer" to do
so "only in the judicial district or similar legal entity -- (A) in
which such consumer signed the contract sued upon; or (B) in which
such consumer resides at the commencement of the action." 15
U.S.C. § 1692i(a). The parties agree that the defendants-appellees
qualify as debt collectors, that the 2011 trustee process suit was
a "legal action on a debt" within the meaning of the FDCPA, that it
was not filed in a judicial district in which Smith "signed the
contract sued upon" or in which she resided, and that the FDCPA
venue provision applies only to legal actions brought "against any
consumer." Id. What they vigorously dispute is whether a post-
judgment enforcement proceeding -- here, under Massachusetts
trustee process law -- qualifies as a legal action "against any
consumer." Id. The text of the FDCPA provides no definition of
that phrase and thus no guidance on the issue. See id.
As far as we are aware, only one circuit court has
reviewed the exact question before us. In Pickens, 273 F.3d 1121,
the Eleventh Circuit affirmed a district court's conclusion that a
garnishment action under Georgia law is not against the consumer
within the meaning of the FDCPA, 165 F. Supp. 2d at 1380-81. The
district court relied on the fact that the Georgia statutory scheme
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described a garnishment proceeding as an action between the
judgment creditor and the garnishee and required venue to be based
on the garnishee's place of business, id. at 1380, and on the fact
that the judgment debtor had already had a chance to defend against
the original debt action, id. at 1381.1
Smith points to Fox, in which the Ninth Circuit concluded
generally that "[t]he plain meaning of the term 'legal action'" in
the FDCPA venue provision "encompasses all judicial proceedings,
including those in enforcement of a previously-adjudicated right."
15 F.3d at 1515; see also Flores v. Quick Collect, Inc., No.
06-1564-AA, 2007 WL 2769003, at *3 (D. Or. Sept. 18, 2007)
(following Fox). However, Fox did not address the "against any
consumer" language in the FDCPA, nor was the court apparently asked
to decide whether the garnishment process under the applicable
state law fell within that definition. Our task today is to
consider those issues.
Trustee process in Massachusetts is governed by Chapter
246 of the Massachusetts General Laws and Massachusetts Rule of
Civil Procedure 4.2. We agree with the district court that the
1
At least two district courts, in addition to the one below
and the one in Pickens, have also weighed in on the issue. Compare
Schuback v. Law Offices of Phillip S. Van Embden, P.C., No.
1:12–CV–320, 2013 WL 432641, at *2-6 (M.D. Pa. Feb. 1, 2013)
(holding that a writ of execution under New Jersey law is not an
action against the consumer), with Adkins v. Weltman, Weinberg &
Reis Co., L.P.A., No. 2:11–cv–00619, 2012 WL 604249, at *4-7 (S.D.
Ohio Feb. 24, 2012) (holding that a garnishment proceeding is an
action against the consumer).
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state statute and rule define trustee process as "a legal action
directed against the third-party trustee, not the consumer."
Smith, 887 F. Supp. 2d at 338. We see no need to rehash the
district court's thorough and persuasive opinion and will therefore
keep our explanation brief.
Once the defendants-appellees obtained the default
judgment against Smith, the Massachusetts trustee process scheme
required them to file their subsequent suit to collect on the
judgment in a county in which the trustee (here, the Department of
the Interior) resides or has a usual place of business. See Mass.
Gen. Laws ch. 246, § 4 (mandating that "[n]o person shall be held
to answer as a trustee in an action in a district court . . . in
any county other than that where he dwells or has a usual place of
business"). Smith, the defendant debtor, could then move for a
change of venue, see id. § 4A, but the fact that a trustee process
action in Massachusetts can only be initiated in the venue in which
the trustee is located indicates that the action is directed
against the trustee, not the debtor.
The specific procedures for seeking trustee process laid
out in Rule 4.2 provide further support for that proposition. The
summons must be directed to the trustee, who is the party required
to answer. See Mass. R. Civ. P. 4.2(b). The defendant debtor can
appear to be heard on the motion for approval of attachment but
does not thereby submit herself to the court's jurisdiction. See
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Mass. R. Civ. P. 4.2(c).2 There is no doubt that the debtor has an
interest in the proceeding; she must be given notice of the hearing
and an opportunity to contest the attachment. See id.
Fundamentally, however, a Massachusetts trustee process action is
geared toward compelling the trustee to act, not the debtor. See
Smith, 887 F. Supp. 2d at 340.3
We find no conflict between that state statutory scheme
and the FDCPA. The Congressional concern underlying the FDCPA
venue provision was that a debt collector would file in an
inconvenient forum, obtain a default judgment, and thereby deny the
consumer an opportunity to defend herself. See S. Rep. No. 95–382,
at 5 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. That
concern is not present in the case of a post-judgment enforcement
proceeding under Massachusetts trustee process law. The original
suit to collect on the debt occurred in a forum that was convenient
for Smith, and she had an opportunity to defend against it. She
was not, in the words of Congress, "denied [her] day in court."
Id.
2
An order approving trustee process can also be entered ex
parte, without prior notice to the debtor. See Mass. R. Civ. P.
4.2(g). The debtor has a right to appear and challenge an ex parte
order, but again "without thereby submitting his person to the
jurisdiction of the court." Mass. R. Civ. P. 4.2(h).
3
We agree with the district court that the fact that the
complaint in this case named Smith as the defendant was merely a
"procedural convention." Smith, 887 F. Supp. 2d at 338.
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The Federal Trade Commission (FTC) seems to agree that
the FDCPA venue provision does not control in a post-judgment
enforcement proceeding like the one at issue here. The FTC's
commentary to the FDCPA provides that, "[i]f a judgment is obtained
in a forum that satisfies the requirements of [15 U.S.C. § 1692i],
it may be enforced in another jurisdiction, because the consumer
previously has had the opportunity to defend the original action in
a convenient forum." Statements of General Policy or
Interpretation Staff Commentary On the Fair Debt Collection
Practices Act, 53 Fed. Reg. 50,097, 50,109 (Dec. 13, 1988). The
commentary is not entitled to Chevron deference, see id. at 50,101;
Gulley v. Markoff & Krasny, 664 F.3d 1073, 1074-75 (7th Cir. 2011);
Brown v. Card Serv. Ctr., 464 F.3d 450, 455 (3d Cir. 2006), but it
lends further support to our conclusion today.
Smith relies heavily on the Ninth Circuit's contrary
decision in Fox, 15 F.3d 1507, and on Adkins v. Weltman, Weinberg
& Reis Co., L.P.A., No. 2:11–cv–00619, 2012 WL 604249 (S.D. Ohio
Feb. 24, 2012). We find those cases unpersuasive. Fox did not
consider the "against any consumer" language in the FDCPA venue
provision at all, and Adkins considered it in the context of an
entirely different state statutory scheme. See Smith, 887 F. Supp.
2d at 339.4 Furthermore, if we were to interpret the FDCPA venue
4
Although the Adkins court did not explicitly rely on the
text of the relevant Ohio garnishment statute in reaching its
conclusion, see 2012 WL 604249, at *6-7, the statute defined
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provision as Fox and Adkins do, it would be impossible for a debt
collector to enforce a prior judgment through trustee process in
Massachusetts unless the judgment debtor happened to reside or to
have signed the underlying contract in the same county in which the
trustee had a usual place of business. See Smith, 887 F. Supp. 2d
at 340. We do not read the FDCPA as mandating such a strange
result.
We turn, finally, to the defendants-appellees' request
for fees. They did not appeal the district court's denial of fees
below but have requested fees on appeal, claiming that Smith's
appeal was frivolous. "An application for an award of fees on
appeal should be filed as a separate motion within 30 days of the
entry of final judgment in this court." Spooner v. EEN, Inc., 644
F.3d 62, 71 n.6 (1st Cir. 2011); see also 1st Cir. R. 39.1. Should
the defendants-appellees wish to pursue their fee application
further, they will need to follow the proper procedure.
The judgment of the district court is affirmed.
garnishment proceedings as being against the judgment debtor, not
the garnishee, and thus differed significantly from the
Massachusetts trustee process scheme, see Smith, 887 F. Supp. 2d at
339 (citing Ohio Rev. Code Ann. § 2716.03).
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