Favors v. Chase Bank USA, N.A.

Background

Joseph Anthony Favors sued Chase Bank USA, N.A., Alltran Financial, LP, and ARS National Services over efforts to collect a delinquent credit account in 2018. This was Favors’s third lawsuit concerning those events.

In an earlier federal lawsuit, Favors asserted claims under the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act, the Fair Credit Billing Act, and state law. The claims against Chase Bank were dismissed in 2019. The claims against Alltran Financial were later dismissed without prejudice for lack of prosecution. Favors also brought a related state-court lawsuit. In that case, his FDCPA claim against Chase Bank was dismissed with prejudice, while claims against Alltran Financial and ARS were dismissed without prejudice.

In this case, Favors moved to amend his complaint after the court ordered him to explain why the action should not be barred by claim preclusion, a rule that can prevent relitigation of claims resolved in an earlier case. His proposed amended complaint omitted the FDCPA claim against Chase Bank. It asserted an FDCPA claim against Alltran Financial and ARS based on an alleged “flat-rater” relationship, and a state-law unjust-enrichment claim against Chase Bank.

Motion to Amend

The court granted Favors’s motion to amend. Because the defendants had not yet been served, Favors was entitled under Federal Rule of Civil Procedure 15(a)(1) to amend once without needing the court’s permission. The court nevertheless granted the motion so that the proposed amended complaint would clearly be treated as the operative pleading.

Application to Proceed Without Paying the Filing Fee and Pleading Review

Favors applied to proceed in forma pauperis, meaning without paying the filing fee. The court assumed, for purposes of the order, that Favors’s financial representations were accurate and that he could not pay the fee. It then reviewed whether the amended complaint was frivolous, malicious, or failed to state a claim for relief under 28 U.S.C. § 1915(e)(2)(B).

The court concluded that the FDCPA claim against Alltran Financial and ARS was untimely. The FDCPA generally provides a one-year limitations period for civil claims. The last allegedly unlawful communication occurred on July 18, 2018, but Favors did not file this action until March 2021. The court treated the limitations period as jurisdictional and dismissed those claims without prejudice.

The remaining unjust-enrichment claim against Chase Bank was based on state law. Favors did not allege a federal question, and he did not allege that the parties were citizens of different states or invoke the diversity-jurisdiction statute. The court therefore held that Favors had not pleaded a basis for the court’s original jurisdiction and stated that it could not consider the merits of a claim over which it lacked jurisdiction.

The court denied the application to proceed without paying the filing fee and dismissed the action without prejudice for lack of jurisdiction.

Motion for Summary Judgment and Disposition

Favors also moved for summary judgment, which is a request for judgment without a trial when the law and undisputed facts show that one side is entitled to win. Because the court lacked jurisdiction over the claims in the amended complaint, it could not consider or grant summary judgment. The court denied that motion without prejudice.

Order

Judge Susan Richard Nelson ordered that the motion to amend was granted; the application to proceed in forma pauperis was denied; the motion for summary judgment was denied without prejudice; and the matter was dismissed without prejudice for lack of jurisdiction.