Shorts v. Cedars Business Services, LLC

Background

Sherrice Michelle Shorts filed this Fair Debt Collection Practices Act (FDCPA) lawsuit against Cedars Business Services, LLC in New York state court. The complaint alleged that Cedars sent her an email on February 28, 2024, seeking to collect $659.19 allegedly owed to iRobot. Shorts replied, “I refuse to pay.” Cedars sent another debt-collection email the next day. Shorts alleged that the conduct caused intrusion upon her seclusion, anger, anxiety, difficulty focusing at work, frustration, severe emotional distress, and headaches.

Cedars removed the case to the Southern District of New York based on federal-question jurisdiction. Shorts moved to remand, meaning to return the case to state court, for lack of subject-matter jurisdiction. Cedars moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Rule 12(b)(3) for improper venue. Shorts later stated that she consented to transfer the case to the Southern District of Texas, but Cedars disputed that the parties had mutually consented and said it would not agree to transfer without information about Shorts’s residence. The court did not reach the transfer arguments.

Motion to Remand

The court denied Shorts’s motion to remand. It explained that Article III standing requires a plaintiff to show an injury that is concrete and particularized, traceable to the defendant, and likely to be addressed by a favorable decision. A statutory violation alone is not always enough.

The court accepted the complaint’s allegations as true for purposes of the motion and held that the alleged intrusion upon seclusion was a concrete injury. It also concluded that Shorts’s alleged emotional anguish fit within the type of harm Congress sought to address through the FDCPA. The court distinguished a case involving a bare or perfunctory emotional-distress allegation because that case did not include an allegation of intrusion upon seclusion and involved different statutes.

Personal Jurisdiction

The court granted Cedars’s motion to dismiss for lack of personal jurisdiction. Because the FDCPA does not provide for nationwide service of process, the court applied New York’s personal-jurisdiction rules.

The court found no basis for general jurisdiction, which allows a court to hear all claims against a company because the company is essentially at home in the state. Shorts alleged that Cedars was registered as a foreign limited liability company in New York, but the court held that registering to do business in New York does not by itself establish general jurisdiction.

The court also found no basis for specific jurisdiction, which applies when the lawsuit arises from or relates to the defendant’s contacts with the state. Shorts did not allege that Cedars regularly conducted business in New York or that the alleged FDCPA violation occurred there. She also did not state where she lived when the alleged violation occurred. On that record, the court held that Shorts had not shown that the lawsuit arose from or related to Cedars’s contacts with New York.

Improper Venue and Disposition

The court denied Cedars’s motion to dismiss for improper venue as moot because it had already found no personal jurisdiction in the Southern District of New York. The court directed the clerk to terminate the motions and close the case.

The order did not decide whether Cedars violated the FDCPA. It also did not state whether the dismissal for lack of personal jurisdiction was with or without prejudice.