Davis v. American Education Services LLC ( 2024 )

1 UNITED STATES DISTRICT COURT 2 DISTRICT OF NEVADA 3 Case No.: 2:22-cv-01645-JAD-EJY Amanda Davis, 4 Plaintiff Order Adopting Bankruptcy Court’s 5 v. Recommendation and Dismissing and Closing Case 6 KeyBank N.A., et al., [ECF No. 59] 7 Defendants 8 Plaintiff Amanda Davis sues KeyBank N.A. and American Education Services, LLC for 9 collecting on debts that she claims were discharged in bankruptcy and for reporting those debts 10 as current to credit-reporting agencies. She brings claims for unjust enrichment and violations of 11 the bankruptcy code, the Fair Credit Reporting Act (FCRA), and Nevada’s Deceptive Trade 12 Practices Act (NDTPA).1 A year ago I referred to the District of Nevada Bankruptcy Court “all 13 core bankruptcy issues in this case and non-core issues that the parties consent to be adjudicated 14 by the bankruptcy court—subject to the limitations on that court’s jurisdiction.”2 15 On June 4, 2024, the bankruptcy court transmitted a memorandum decision dismissing 16 Davis’s claim that the defendants violated the court’s bankruptcy-discharge injunction under 11 17 U.S.C. § 524 (a core bankruptcy issue), finding that there is no private right of action under that 18 statute.3 The court also recommends that I dismiss Davis’s remaining unjust-enrichment, FCRA, 19 and NDTPA claims (non-core bankruptcy issues) because allowing those claims would “enable 20 21 1 See ECF No. 16 (amended complaint). 22 2 ECF No. 58. 3 ECF No. 59 at 10–13. The bankruptcy court retains jurisdiction over a motion for contempt 23 that Davis filed in that court challenging the defendants’ alleged violation of the discharge injunction. 1 Davis to bring a private right of action against defendants through the back door,” a move that is 2 foreclosed by Ninth Circuit precedent.4 3 Under 28 U.S.C. § 157(c)(1), “a bankruptcy court may hear a proceeding that is not a 4 core proceeding but that is otherwise related” to a core bankruptcy issue.5 To resolve those non- 5 core issues, “the bankruptcy judge [must] submit proposed findings of fact and conclusions of 6 law to the district court, and any final order or judgment [must] be entered by the district judge 7 after considering the bankruptcy judge’s proposed findings and conclusions and after reviewing 8 de novo those matters to which any party has timely and specifically objected.”6 Federal Rule of 9 Bankruptcy Procedure 9033 gives parties 14 days to “serve and file . . . written objections [that] 10 identify the specific proposed findings or conclusions objected to and state the grounds for such 11 objection.”7 Any part of the bankruptcy judge’s recommendation that has been objected to must 12 be reviewed de novo.8 13 Neither party objected to the bankruptcy court’s recommendation, and the deadline to do 14 so has passed. I find that the recommendation to dismiss Davis’s unjust-enrichment, FCRA, and 15 NDTPA claims is legally correct. In Brown v. Transworld Systems Inc., the Ninth Circuit 16 reiterated its longstanding holding that “a debtor who alleges a violation of a bankruptcy court’s 17 discharge order has no private right of action under 11 U.S.C. § 524” and cannot “pursue a [Fair 18 19 4 Id. at 13 (citing Walls v. Wells Fargo Bank N.A., 276 F.3d 502, 506–09 (9th Cir. 2002) and 20 Brown v. Transworld Sys., Inc., 73 F.4th 1030, 1038 (9th Cir. 2023)). 5 28 U.S.C. § 157(c)(1). 21 6 Id. 22 7 Fed. R. Bank. P. 9033(b). 8 Id. at 9033(c); see also In re Nantahala Village, Inc., 976 F.2d 876, 880 (4th Cir. 1992) 23 (holding that a district court need not review a bankruptcy judge’s findings and conclusions if the parties didn’t timely object). Debt Collection Practices Act] claim based on a violation of the discharge order,” since 2|| permitting such a claim “would allow a private right of action ‘through the back door.’”? The bankruptcy judge persuasively reasoned that the same prohibition applies to Davis’s attempts to challenge the defendants’ alleged discharge-injunction violations through her unjust-enrichment, 5]|FCRA, and NDTPA claims.!° As the bankruptcy judge held, Davis’s sole remedy is to seek a contempt order under 11 U.S.C. § 105, and she is currently pursuing that remedy in bankruptcy 7\|court. I agree with the bankruptcy judge’s reasoning, adopt it here, dismiss Davis’s remaining claims, and close this case. 9 Conclusion 10 IT IS THEREFORE ORDERED that the United States Bankruptcy Court for the District of Nevada’s recommendation to dismiss plaintiff Amanda Davis’s claims for unjust enrichment and violations of the Fair Credit Reporting Act and the Nevada Deceptive Trade Practices Act [ECF No. 59] is ADOPTED in its entirety. Those claims are DISMISSED with prejudice. The Clerk of Court is directed to CLOSE THIS CASE. 15 U.S. Distriet Judge Jenner 4 Dorsey 17 Jtiné 21, 2024 18 19 20 21 22 Brown, 73 F.4th at 1038. ECF No. 59 at 13-14.