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Riazi v. Ally Financial, Inc.

United States District Court, E.D. Missouri, Eastern Division

September 26, 2017

ELAINE RIAZI, Plaintiff,
v.
ALLY FINANCIAL, INC., Defendant.

          MEMORANDUM AND ORDER

          JEAN C. HAMILTON UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff's Motion to Dismiss Defendant's Counterclaim. (ECF 12). The Motion is fully briefed and ready for disposition.

         BACKGROUND

         On June 16, 2017, Plaintiff Elaine Riazi filed a Complaint against Defendant Ally Financial, Inc., (Ally) based on the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, et seq. (ECF 1). As relevant, the TCPA, 47 U.S.C. § 227(b)(1), provides:

         It shall be unlawful for any person within the United States, or any person outside the United States if the recipient is within the United States-

(A) to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice
. . . .
(iii) to any telephone number assigned to a paging service, cellular telephone service, specialized mobile radio service, or other radio common carrier service, or any service for which the called party is charged for the call;

Riazi's Complaint alleges that Ally made harassing phone calls to her cellular phone, without consent, in violation of the TCPA. (ECF 1). Specifically, Riazi alleges: Ally placed calls to her cellular telephone; the calls were not for emergency purposes; the calls were to collect payments on an alleged debt; Ally placed these calls by using an automatic telephone dialing system (ATDS); Riazi withdrew any prior express consent for Ally to use an ATDS to call her cell phone; on June 29, 2016, Riazi instructed Ally to stop calling her cell phone; since that date, Ally called Riazi's cell phone approximately two hundred times; Riazi also received numerous text messages from Ally; Riazi received numerous voicemails from Ally where she heard beeps or silence on the other end of the line; Ally used an ATDS to place these calls and texts; and Ally placed these calls voluntarily and of its own free will. Riazi seeks statutory damages of $500 for each negligent violation of the TCPA and $1, 500 for each willful violation. (ECF 1, ¶¶ 7-29).

         On August 14, 2017, Ally filed an Answer, Affirmative Defenses and Counterclaim. (ECF 11). Ally's counterclaim alleges Breach of Contract in that Riazi breached a Retail Installment Sale Contract (the Contract) whereby she agreed to purchase a vehicle. In support of its counterclaim Ally alleges: the Contract was assigned to Ally; Riazi failed to make timely payments under the Contract; Riazi is in default of the Contract; Ally made a demand of Riazi to cure her default; and Riazi has “failed to cure.” Ally seeks judgment of “not less than $16, 052.43, plus finance charges” of 14.45%, and additional sums including late fees, attorneys' fees and costs incurred by Ally in connection with “retaking, holding and selling the vehicle” at issue. (ECF 11 at 9-12).

         In the pending Motion, Riazi seeks dismissal of Ally's counterclaim for lack of subject matter jurisdiction because the counterclaim does not assert a basis for federal jurisdiction and is not derived from a common nucleus of operative facts. Riazi argues that permitting Ally to proceed on its counterclaim would dissuade TCPA plaintiffs from asserting their rights.

         In response to the pending Motion, Ally argues that courts have held that supplemental jurisdiction is proper over a breach of contract counterclaim in relation to a claim under the TCPA, and that the Court has supplemental jurisdiction because its breach of contract counterclaim “forms part of the same case or controversy as Plaintiff's TCPA claim.” Additionally, Ally argues that this Court should consider “the common law factors of judicial economy, convenience, fairness and comity, ” and that “this Court should exercise jurisdiction over its Counterclaim because it has a right to defensive set-off.” (ECF 13 at 1-10).

         LEGAL FRAMEWORK

         “[J]urisdiction is a threshold question and must be answered before all other questions.” Ginters v. Frazier, 614 F.3d 822, 826 (8th Cir. 2010) (citing Auto-Owners Ins. Co. v. Tribal Ct. of Spirit Lake Indian Reservation, 495 F.3d 1017, 1020 (8th Cir. 2007)). Federal district courts have original jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States” and “all civil actions” where the amount in controversy exceeds $75, 000 and complete diversity of citizenship exists between ...


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