Wimberly v. Stern

Background

The court considered three motions: Jason Wimberly’s motion to reconsider an October 4, 2023 opinion and order; the GDB Defendants’ cross-motion to reconsider that order; and Wimberly’s motion to appeal without paying filing costs. Wimberly proceeded without a lawyer. The earlier order had granted in part and denied in part the GDB Defendants’ motion to dismiss, granted Melanie Stern and Spring Bank’s motion to dismiss, and denied Wimberly’s motions to amend his complaint, pause a related state proceeding, and obtain a temporary restraining order.

The earlier order allowed Wimberly’s claim under Section 1692e of the Fair Debt Collection Practices Act to proceed against the GDB Defendants. That provision prohibits debt collectors from using false, deceptive, or misleading representations in connection with collecting a debt. The earlier order also rejected Wimberly’s claims for declaratory relief and conspiracy against the GDB Defendants and concluded that Wimberly had not stated a claim against the Bank Defendants.

Wimberly’s Motion for Reconsideration

The court denied Wimberly’s motion for reconsideration. The court explained that reconsideration is an extraordinary remedy and is generally available only when the court overlooked controlling law or important information, when there is a change in controlling law, when new evidence becomes available, or when correction is needed to prevent a clear error or manifest injustice.

Wimberly argued that the defendants’ state-court counterclaims were untimely, but the court had already considered and rejected that argument. He also argued that filing a meritless lawsuit violated the Fair Debt Collection Practices Act, but the court had rejected that argument in the earlier order and Wimberly identified no controlling authority the court had overlooked. Wimberly further raised, for the first time, an argument that alleged state-law violations supported his federal debt-collection claims. The court rejected that argument because it could have been raised earlier.

The court likewise rejected Wimberly’s arguments concerning retaliation and discrimination under Title VI. The court stated that the earlier order had rejected the retaliation theory for several reasons, including that individual defendants could not be sued under Title VI, that Wimberly had not alleged the required federal funding, and that he had not established protected activity causing retaliation. The court also rejected the discrimination theory because Wimberly raised it for the first time in his reconsideration motion and provided no supporting evidence or argument.

GDB Defendants’ Cross-Motion

The GDB Defendants sought reconsideration on two grounds: that the court had overlooked the requirement that a challenged statement be materially misleading under Section 1692e, and that Wimberly lacked standing under Article III of the Constitution.

The court denied reconsideration on the materiality issue. Materiality is an objective requirement: a statement is material if it could influence the decision of the least sophisticated consumer. The challenged statement was that neither Jay Lawrence Hack nor Gallet, Dreyer & Berkey, LLP was a debt collector under the law. The court concluded that the statement could have led the least sophisticated consumer to believe that the consumer’s rights under the Fair Debt Collection Practices Act did not apply to the GDB Defendants. The court therefore found that Wimberly met the materiality requirement at the pleading stage.

The court granted reconsideration based on Article III standing. Standing requires a plaintiff to show a particularized and concrete injury. The court concluded that Wimberly had not alleged tangible or monetary harm, such as paying extra money, harm to his credit, or a changed response to a debt. The court also concluded that his allegations of emotional harm, confusion, and the statutory violation itself did not establish a concrete injury.

The court further stated that Wimberly had not alleged reliance on Hack’s statement. In the court’s view, reliance would be relevant to the common-law fraud or misrepresentation injury that could serve as a historical or legal comparison for the intangible harm asserted under Section 1692e. Because Wimberly did not allege a concrete injury, he lacked Article III standing, and his Section 1692e claim was dismissed.

Appeal Request and Disposition

The court denied Wimberly’s motion to appeal without paying filing costs. The court stated that the earlier order was not final and appealable, and that the Second Circuit had dismissed Wimberly’s earlier appeal because the district court had not issued a final order. In the conclusion, the court described the motion as denied as moot and stated that this denial was without prejudice to Wimberly seeking permission to appeal without paying filing costs from the final order entered in this case.

The court also denied as moot the GDB Defendants’ earlier letter motion for permission to file their reconsideration motion. The GDB Defendants’ cross-motion for reconsideration was granted in part and denied in part, and Wimberly’s Section 1692e claims were dismissed. The court stated that the case was dismissed with prejudice because amendment would be futile, directed the Clerk to close the case, and entered the order as a final order. Judge Vernon S. Broderick signed the order.