Pazymino V Midland Funding LLC

Case 2:16-cv-09547-JMV-MF Document 17 Filed 06/06/17 Page 1 of 48 PageID: 216
UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY
PAOLA PAZYMINO,
on behalf of herself and those similarly
situated,
Plaintiff, Civil Action No.
vs. 2:16-cv-09547-JMV-MF
MIDLAND FUNDING LLC,
Defendants.
PLAINTIFF’S BRIEF IN OPPOSITION TO DEFENDANT’S MOTION TO

DISMISS PLAINTIFF’S COMPLAINT AND TO COMPEL ARBITRATION
Kim Law Firm LLC

411 Hackensack Avenue 2nd Floor
Hackensack, New Jersey 07601
(201) 273-7117
ykim@kimlf.com
Attorneys for Plaintiff
Yongmoon Kim, Esq.

Eric N. Aglow, Esq.
On the Brief
TABLE OF CONTENTS
TABLE OF AUTHORITIES .................................................................................. I

FACTS AND PROCEDURAL HISTORY................................................................1
LEGAL ARGUMENT .............................................................................................3
POINT I. DEFENDANT CANNOT ENFORCE THE PURPORTED
ARBITRATION AGREEMENT ........................................................3
A. Standard of Review .............................................................................3
B. Defendant has Failed to Meet its Burden of Proof to Compel
Arbitration ..........................................................................................3
C. Midland Waived Arbitration .............................................................16
D. The Purported Arbitration Provision is Unconscionable and
Unseverable ......................................................................................21
E. The Purported Arbitration Provision Does Not Apply to Plaintiff’s
FDCPA Claims .................................................................................23
POINT II. PLAINTIFF HAS ARTICLE III STANDING TO SEEK REDRESS
FOR DEFENDANT’S UNLAWFUL ACTS ....................................23
POINT III. DEFENDANT VIOLATED THE FDPCA BY THREATENING
ATTORNEY’S FEES .......................................................................24
A. The Elements of a Cause of Action under the FDCPA.....................24
B. The FDCPA Protects the Least Sophisticated Consumer ................24
C. The State Court’s Taxing of Costs Does Not Excuse Midland’s
Wrongful Demand for both Costs and Attorney’s Fees....................26
D. Defendant Misinterprets N.J. Stat. § 22A:2-42 ................................27
E. Defendant’s Misrepresentations are Material .................................33
F. Demand for Attorney’s Fees in the State Collection Complaint in
Addition to Costs under the State Statute is an Unfair Practice in
Violation of 15 U.S.C. §§ 1692f and 1692f(1). .................................34
POINT IV. DEFENDANT VIOLATED THE FDCPA BY DISCLOSING
PERSONAL IDENTIFYING INFORMATION OF PLAINTIFF ...35
A. The Policies and Purposes of the FDCPA Include Invasions of
Individual Privacy. ...........................................................................35
B. New Jersey Law Prohibits the Public Disclosure of More than Three
Consecutive Social Security Numbers ..............................................36
C. Defendant’s Unlawful Disclosure of Plaintiff’s Four Consecutive
Digits of her Social Security Number—which is prohibited by New
Jersey Court Rule 1:38-7(a), (b) and N.J. Stat. § 56:8-164—Violates
the FDCPA........................................................................................38
CONCLUSION.......................................................................................................40
TABLE OF AUTHORITIES
CASES
Allen ex rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364 (3d Cir. 2011) ...............25
Alltel Corp. v. Sumner, 203 S.W.3d 77 (Ark. 2005)................................................10
Asset Acceptance v. Lodge, 325 S.W.3d 525 (Mo. App. 2010)...............................12
Atalese v. U.S. Legal Serv. Group, 219 N.J. 430, 99 A.3d 306 (2014) .................5, 6
Bancredit, Inc. v. Bethea, 65 N.J. Super. 538 (App. Div. 1961) .............................29
Bernstein v. Howe, No. IP 02-192-C-K/H, 2003 WL 1702254 (S.D. Ind. Mar. 31,
2003) .....................................................................................................................33
Berry v. ARS Nat’l Servs., No. 15-1529, 2015 U.S. Dist. LEXIS 171043 (E.D. Pa.
Dec. 23, 2015) ......................................................................................................36
Bock v. Pressler & Pressler, LLP, No. 11-cv-7593-KM-SCM, 2017 U.S. Dist.
LEXIS 81058 (D.N.J. May 25, 2017) ..................................................................24
Brokenbaugh v. Exel Logistics North American, Inc., 174 Fed. Appx. 39 (3d Cir.
2006) .....................................................................................................................13
Brown v. Card Serv. Ctr, 464 F.3d 450 (3d Cir. 2006.............................................25
Buford v. Palisades Collection, LLC, 552 F. Supp. 2d 800 (N.D. Ill. 2008) ..........12
Cabinetree of Wis., Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388 (7th Cir. 1995)
..............................................................................................................................19
Cach, LLC v. Askew, 358 S.W.3d 58 (Mo. 2012)....................................................12
Cach, LLC v. Viscuso, No. 7034/09, 2009 WL 2920863, 2009 N.Y. Misc. LEXIS
5463 (N.Y. Sup. Ct. Aug. 18, 2009) .....................................................................11
Campuzano-Burgos v. Midland Credit Mgmt., Inc., 550 F.3d 294 (3d Cir. 2008) .25
Caprio v. Healthcare Revenue Recovery Grp., LLC, 709 F.3d 142 (3d Cir. 2013) 28
Chase Bank USA, N.A. v. Leggio, 997 So. 2d 887 (La. Ct. App. 2008) ..................10
Chase Bank USA, N.A. v. Staffenberg, 419 N.J. Super. 386 (App. Div. 2011) 28, 29
Checksmart v. Morgan, 8th Dist. No. 80856, 2003-Ohio-163, 2003 WL 125130,
2003 Ohio App. LEXIS 111 (Ct. App. 2003) ......................................................20
Cole v. Jersey City Med. Ctr., 215 N.J. 265 (2013).................................................16
Comer v. Micor, Inc., 436 F.3d 1098 (9th Cir. 2006)................................................5
Commonwealth Fin. Sys. v. Smith, 15 A.3d 492 (Pa. Super. Ct. 2011)...................10
Day v. Check Brokerage Corp., 511 F. Supp. 2d 950 (N.D. Ill. 2007) ...................32
Discover Bank v. Shea, 362 N.J. Super. 200 (Law Div. 2001)............................9, 22
Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014).......... 36, 38, 39
Dreyfus v. Telecare Global Solutions, 349 F. App’x 551 (2d Cir. 2009) ...............11
Duffy v. Landberg, 215 F.3d 871 (8th Cir.), rehearing denied, 2000 U.S. App.
LEXIS 16039 (8th Cir. July 10, 2000) .................................................................33
EEOC v. Waffle House, Inc., 534 U.S. 279 (2002)....................................................4
i
Ellis v. Solomon & Solomon, P.C., 591 F.3d 130 (2d Cir. 2010) ............................25
FIA Card Servs., N.A. v. Weaver, 62 So. 3d 709 (La. 2011) ...................................10
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) ..........................4, 21
Flanary v. Carl Gregory Dodge of Johnson City, LLC, No. E2004-00620-COA-
R3-CV, 2005 Tenn. App. LEXIS 319 (Tenn. Ct. App. May 31, 2005) ...............11
Framan Mech., Inc. v. Lakeland Reg’l High Sch. Bd. Of Educ., No. A-4062-04,
2005 WL 2877923, 2005 N.J. Super. Unpub. LEXIS 354 (App. Div. Nov. 3,
2005) .....................................................................................................................18
FTC v. Check Investors, Inc., 502 F.3d 159 (3d Cir. 2007) ....................................24
Garcia v. Midland Funding LLC, No. 16-5248 (JLL), 2017 WL 215971, 2017 U.S.
Dist. LEXIS 6895 (D.N.J. Jan. 17, 2017) .............................................................30
Garcia v. Midland Funding, LLC, No. 15-6119-(RBK/KMW), 2017 U.S. Dist.
LEXIS 68870 (D.N.J. May 5, 2017) ....................................................................13
Gionti v. Crown Motor Freight Co., 128 N.J.L. 407 (E. & A. 1942)........................6
Gold Coast Mall, Inc. v. Larmar Corp., 468 A.2d 91 (Md. 1983) ..........................18
Gray Holdco, Inc. v. Cassady, 654 F.3d 444 (3d Cir. 2011) ...................................19
Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013) ....3
Hendrick v. Brown & Root, Inc., 50 F. Supp. 2d 527 (E.D. Va. 1999) .................4, 5
Hengeller v. Brumbaugh & Quandahl, P.C., 894 F. Supp. 2d 1180 (D. Neb. 2012)9
Hoffman v. Supplements Togo Mgmt., LLC, 419 N.J. Super. 596 (App. Div. 2011),
certif. granted, 209 N.J. 231 (2012)......................................................................11
Hovermale v. Immediate Credit Recovery Inc., 2016 U.S. Dist. LEXIS 102206
(D.N.J. Aug. 4, 2016) ...........................................................................................14
In re Cognate Cases, Nos. 1:13–CV–1338; 1:14–CV–34; 1:14–CV–234, 2014 WL
2933230, 2014 U.S. Dist. LEXIS 89159 (W.D. Mich. June 30, 2014)..................8
Jensen v. Pressler and Pressler, LLP, 791 F.3d 413 (3rd Cir. 2015)............... 26, 34
Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) .25
Jetts Recycling, Inc. v. Watts, 71 S.W.3d 224 (Mo. Ct. App. 2002) .......................18
Johnson v. Riddle, 305 F.3d 1107 (10th Cir. 2002) .................................................25
Kaymark v. Bank of Am., N.A., 783 F.3d 168 (3d Cir. 2015) ..................................35
Kirk v. Credit Acceptance Corp., 829 N.W.2d 522 (Wis. Ct. App. 2013) ..............20
Knorr v. Smeal, 178 N.J. 169 (2003) .......................................................................16
Kulig v. Midland Funding, LLC, No. 13 Civ. 4715 (PKC), 2013 WL 6017444,
2013 U.S. Dist. LEXIS 161960 (S.D.N.Y. Nov. 13, 2013) .................................10
La. Stadium & Exposition Dist. v. Merrill Lynch, Pierce, Fenner & Smith Inc., 626
F.3d 156 (2d Cir. 2010) ................................................................................. 18, 19
Lesher v. Law Offices of Mitchell N. Kay, PC, 650 F.3d 993 (3d Cir. 2011)... 25, 26
Levonas v. Regency Heritage Nursing & Rehab. Ctr., L.L.C., No. A-4995-11, 2013
WL 4554509, 2013 N.J. Super. Unpub. LEXIS 2155 (App. Div. Aug. 29, 2013)
..............................................................................................................................20
ii
Liberty Credit Servs. v. Yonker, 11th Dist. No. 2012-P-0096, 2013-Ohio-3976,

2013 WL 5221219, 2013 Ohio App. LEXIS 4158 (Ct. App. Sept. 16, 2013) .....20
Lox v. CDA, Ltd., 689 F.3d 818 (7th Cir. 2012) .............................................. 31, 32
Martinez v. Midland Credit Mgmt., Inc., 250 S.W.3d 481 (Tex. App. 2008) .........12
Merrill Lynch v. Cantone Research, Inc., 427 N.J. Super. 45 (App. Div.), certif.
denied, 212 N.J. 460 (2012) ...................................................................................6
Midland Funding LLC v. Bordeaux, 447 N.J. Super. 330 (App. Div. 2016) . 5, 6, 16
Mills v. Jaguar-Cleveland Motors, Inc., 430 N.E.2d 965 (Ohio Ct. App. 1980) ....18
Morse v. Servicemaster Global Holdings, Inc., No. C 10-00628 SI, 2012 U.S. Dist.
LEXIS 144691 (N.D. Cal. Oct. 4, 2012) ................................................................4
Muhammad v. Cty. Bank of Rehoboth Beach, Del., 189 N.J. 1, 912 A.2d 88 (2006)
..............................................................................................................................22
NAACP of Camden Cnty. E. v. Foulke Mgmt., 421 N.J. Super. 404, 24 A.3d 777
(App. Div.), certif. granted, 209 N.J. 96, 35 A.3d 679 (2011), appeal dismissed
per settlement, 213 N.J. 47, 59 A.3d 1083 (2013) .................................................6
Nat’l Found. for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d 772
(D.C. Cir. 1987) ....................................................................................................19
NCO Portfolio Mgmt. Inc. v. Gougisha, 985 So. 2d 731 (La. App. 2008) ..............11
Newman v. CheckRite California, Inc., 912 F. Supp. 1354 (E.D. Cal. 1995) .........33
Nicasio v. Law Offices of Faloni, No. 2:16-0474 (WJM), 2016 U.S. Dist. LEXIS
167174 (D.N.J. Dec. 5, 2016).................................................................................3
Otis Hous. Ass’n v. Ha, 201 P.3d 309 (Wash. 2009) ...............................................18
Owen v. MBPXL Corp., 173 F. Supp. 2d 905 (N.D. Iowa 2001 .............................10
Palisades Collection LLC v. Kalal, 781 N.W.2d 503 (Wis. App. 2010).................12
Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51 (3d Cir. 1980).......4, 7
Piper v. Portnoff Law Assocs., 396 F.3d 227 (3d Cir. 2005) ..................................24
Pipiles v. Credit Bureau, Inc., 886 F.2d 22 (2d Cir. 1989) .....................................32
Poulson v. Trans Union LLC, 406 F. Supp. 2d 744 (E.D. Texas 2005) ..................10
Royal Fin. Group, L.L.C. v. Perkins, 414 S.W.3d 501 (Mo. Ct. App. 2013) ..........33
Rudbart v. N. Jersey Dist. Water Supply Com, 127 N.J. 344, 605 A.2d 681 (1992)
..............................................................................................................................22
Sacks v. DJA Auto., No. 12-284, 2013 U.S. Dist. LEXIS 7824 (E.D. Pa. Jan. 18,
2013) .....................................................................................................................19
Salvati v. Deutsche Bank Nat’l Trust Co., 575 Fed. Appx. 49 (3d Cir. 2014) ........32
Scioli v. Goldman & Warshaw P.C., 651 F. Supp. 2d 273 (D.N.J. 2009)...............29
Sherrill v. Grayco Builders, Inc., 475 N.E.2d 772 (N.Y. 1985) ..............................19
Sitogum Holdings, Inc. v. Ropes, 352 N.J. Super. 555, 800 A.2d 915 (Ch. Div.
2002) .....................................................................................................................21
Spaeth v. Srinivasan, 403 N.J. Super. 508 (App. Div. 2008) ..................................17
Specht v. Netscape Comm. Corp., 306 F.3d 17 (2d Cir. 2002) ...............................10
iii
Spokeo v. Robbins, 136 S. Ct. 1540 (2016) .............................................................23

Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) ..................4, 23
Strange v. Wexler, 796 F. Supp. 1117 (N.D. Ill. 1992) ...........................................33
Thomas v. Youderian, No. 2:16-cv-01408-KM-MAH, 2017 U.S. Dist. LEXIS
16585 (D.N.J. Feb. 3, 2017) .................................................................................39
Triffin v. Quality Urban Hous. Partners, 352 N.J. Super. 538 (App. Div. 2002) ....7,
13
Victoria v. Super. Ct., 40 Cal. 3d 734 (1985) ............................................................5
Volt Info. Sciences, Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489
U.S. 468 (1989) ........................................................................................... 4, 6, 23
Webb v. Midland Credit Mgmt., Inc., No. 11 C 5111, 2012 WL 2022013, 2012
U.S. Dist. LEXIS 80006 (N.D. Ill. May 31, 2012) ..........................................7, 12
Yates v. CACV of Colo., LLC, 693 S.E.2d 629 (Ga. Ct. App. 2010) .......................10
STATUTES
15 U.S.C. § 1692(a) .......................................................................................... 24, 35
15 U.S.C. § 1692(b) .......................................................................................... 24, 35
15 U.S.C. § 1692(e) .................................................................................................25
15 U.S.C. § 1692a(3) ....................................................................................................1
15 U.S.C. § 1692a(6) ....................................................................................................1
15 U.S.C. § 1692e ....................................................................................................34
15 U.S.C. § 1692e(10) .............................................................................................33
15 U.S.C. § 1692e(2)(A) ..........................................................................................32
15 U.S.C. § 1692e(5) ...............................................................................................33
15 U.S.C. § 1692f........................................................................................ 36, 38, 39
15 U.S.C. § 1692n ....................................................................................................39
28 U.S.C. § 1746 ......................................................................................................13
9 U.S.C. § 1 et seq....................................................................................................23
9 U.S.C. § 2 ................................................................................................................5
N.J. Stat. § 17:16C-50 ..............................................................................................29
N.J. Stat. § 22A:2-42............................................................................. 27, 28, 31, 33
N.J. Stat. § 56:8-164...................................................................................... 2, 36, 38
N.J. Stat. § 56:8-164a(1), (4) ...................................................................................37
OTHER AUTHORITIES
2005 N.J. ALS 226...................................................................................................36
S. Rep. No. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1698 ......25
RULES
iv
Fed. R. Civ. P. 12(b)(6)..............................................................................................3

Fed. R. Evid. 803(6) .................................................................................................11
N.J. Ct. R. 1:38-7(a), (b) ................................................................................... 37, 38
N.J. Ct. R. 1:38-7(d).................................................................................................37
v
FACTS AND PROCEDURAL HISTORY
Plaintiff’s First Amended Class Action Complaint (“Amended Complaint”) seeks
relief under the Fair Debt Collections Practices Act against Defendant Midland Funding
LLC. (ECF No. 6). Plaintiff Paola Pazymino is a natural person and a consumer as
defined by 15 U.S.C. § 1692a(3). (Amended Compl. ¶¶ 4, 71). Defendant is a debt
collector as defined by 15 U.S.C. § 1692a(6). (Amended Compl. ¶¶ 5-10, 73).
On November 20, 2015, Midland commenced a debt collection lawsuit (“State
Collection Action”) against Pazymino by filing a collection complaint (“State Collection
Complaint”) in the Superior Court of New Jersey, Bergen County, Special Civil Part;
which was assigned docket number BER-DC-016410-15. (Amended Compl. Ex. A).
Defendant also filed numerous collection complaints against New Jersey consumers in
state court. (Amended Compl. ¶¶ 22, 56).
The State Collection Complaint filed against Pazymino demanded “judgment
against [Pazymino] in the sum of $549.81 together with costs and disbursements of this
action, attorneys’ fees . . . .” (Amended Compl. Ex. A) (emphasis added). The State
Collection Complaint did not include any reference to the actual amount of attorney’s
fees to which Midland is allegedly entitled thereby leaving said threat to the imagination
of the least sophisticated consumer. Id. Midland did not reference N.J. Stat. § 22A:2-42,
which provides:
There shall be taxed by the clerk of the Superior Court,

Law Division, Special Civil Part in the costs against the
1
judgment debtor, a fee to the attorney of the prevailing

party, of five per centum (5%) of the first five hundred
dollars ($500.00) of the judgment, and two per centum
(2%) of any excess thereof.
(Emphasis added). The State Collection Complaint omits that the maximum costs that
can be awarded to Midland would be $27.49 (i.e., 5% of $549.81). (Amended Compl.
Ex. A). Thereafter, in Midland filed a motion to enter default judgment out of time
(“State Collection Motion”) in the State Collection Action; however, Midland never
sought attorney’s fees. (Amended Compl. ¶¶ 28, 30, Ex. B).
Both the State Collection Complaint and the State Collection Motion
unnecessarily revealed Pazymino’s personal identifying information, including the last
four digits of Pazymino’s social security number, date of birth and phone number. The
disclosure of last four digits of Pazymino’s Social Security Number is strictly
prohibited by New Jersey Court Rule 1:38-7(a), (b) and N.J. Stat. § 56:8-164.
On November 21, 2016, Pazymino filed suit against Midland in the Superior
Court of New Jersey, alleging violations of the FDPCA. (ECF No. 1-1). Annexed
to Pazymino’s complaint was Midland’s unlawful State Collection Complaint. On
December 28, 2016, Defendant removed this action to this Court. (ECF No. 1).
On January 4, 2017, Defendant moved to dismiss the complaint. (ECF No.
3). The motion was administratively terminated by the Court (ECF No. 9) as a
result of the filing of Plaintiff’s Amended Complaint on January 25, 2017 (ECF
No. 6). The First Amended Class Action Complaint also annexed Midland’s State
2
Collection Motion—the State Collection Motion was dated within one-year of the
Amended Complaint.
Plaintiff now submits this Brief in opposition to Defendant’s Motion to
Dismiss Plaintiff’s Complaint and to Compel Arbitration. (ECF No. 12).
LEGAL ARGUMENT
POINT I. DEFENDANT CANNOT ENFORCE THE

PURPORTED ARBITRATION AGREEMENT
A. Standard of Review
The Third Circuit has set forth which standard to apply when a question
arises as to whether a valid arbitration agreement exists. “Where arbitrability is
apparent on the face of the complaint, a Rule 12(b)(6) standard of review should be
applied to the motion to compel arbitration. However, where the complaint does
not establish on its face that the parties have agreed to arbitrate, or when the party
opposing arbitration has come forward with reliable evidence that it did not intend
to be bound by an arbitration agreement, the non-movant must be given a limited
opportunity to conduct discovery on the narrow issue of whether an arbitration
agreement exists.” Nicasio v. Law Offices of Faloni, No. 2:16-0474 (WJM), 2016
U.S. Dist. LEXIS 167174, at *4 (D.N.J. Dec. 5, 2016) (citing Guidotti v. Legal
Helpers Debt Resolution, L.L.C., 716 F.3d 764 (3d Cir. 2013)).
B. Defendant has Failed to Meet its Burden of Proof to Compel

Arbitration
3
“Arbitration is a matter of contract between the parties and a judicial
mandate to arbitrate must be predicated upon an agreement to that effect.” Par-
Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51, 54 (3d Cir. 1980)
(citations omitted). In deciding whether a dispute is arbitrable, courts must ensure
that “arbitration agreements, like other contracts, are enforced according to their
terms and according to the intentions of the parties.” First Options of Chicago, Inc.
v. Kaplan, 514 U.S. 938, 947 (1995) (internal quotations omitted). The Federal
Arbitration Act (“FAA”) therefore “does not require parties to arbitrate when they
have not agreed to do so.” EEOC v. Waffle House, Inc., 534 U.S. 279, 294 (2002);
see also Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 681 (2010)
(“arbitration is a matter of consent, not coercion”).
While the FAA creates a presumption in favor of arbitration, that
presumption “does not confer a right to compel arbitration of any dispute at any
time.” Morse v. Servicemaster Global Holdings, Inc., No. C 10-00628 SI, 2012
U.S. Dist. LEXIS 144691, at *9 (N.D. Cal. Oct. 4, 2012) (citing Volt Info.
Sciences, Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468,
474 (1989)). Indeed, the presumption in favor of arbitration “does not apply in
resolving doubts respecting whether the parties have reached an agreement
respecting what they will arbitrate.” Hendrick v. Brown & Root, Inc., 50 F. Supp.
2d 527, 533 (E.D. Va. 1999); see also Comer v. Micor, Inc., 436 F.3d 1098, 1104
4
(9th Cir. 2006) (“The question here is not whether a particular issue is arbitrable,
but whether a particular party is bound by the arbitration agreement. Under these
circumstances, the liberal federal policy regarding the scope of arbitrable issues is
inapposite.”). Instead, “[o]rdinary state-law principles that govern the formation of
contract” apply to decide the issue of whether an agreement to arbitrate certain
disputes, such as disputes inapplicable to the creditor, exists, including the
principle “that ambiguities in unilaterally prepared contracts are to be resolved
against the drafter.” Hendrick, 50 F. Supp. 2d at 533; First Options of Chicago,
Inc. v. Kaplan, 514 U.S. 938, 944 (1995); Victoria v. Super. Ct., 40 Cal. 3d 734,
745 (1985) (resolving ambiguous arbitration clause against the drafter where it was
disputed that the parties agreed to arbitrate the claims at issue). Thus, arbitration
agreements may be invalidated “upon such grounds as exist at law or in equity for
the revocation of any contract.” 9 U.S.C. § 2.
“It is now settled law in this State that an agreement to arbitrate, like any
other contract, must be the product of mutual assent, as determined under
customary principles of contract law. As the party seeking to enforce this alleged
contractual provision, [Midland] has the burden to prove, by a preponderance of
the evidence, that [the consumer] assented to it.” Midland Funding LLC v.
Bordeaux, 447 N.J. Super. 330, 335-36 (App. Div. 2016) (internal quotation marks
omitted) (quoting Atalese v. U.S. Legal Servs. Group, 219 N.J. 430, 442 (2014)).
5
There must be “a meeting of the minds.” NAACP of Camden Cnty. E. v. Foulke
Mgmt. Corp., 421 N.J. Super. 404, 424 (App. Div.) (internal quotations omitted),
certif. granted, 209 N.J. 96 (2011) at 425, appeal dismissed per settlement, 213 N.J.
47 (2013). Conversely, parties should not be forced “to arbitrate when they did not
agree to do so.” Volt Info. Scis. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S.
468, 478 (1989). “Moreover, because the arbitration clause constitutes a waiver of
[one’s] constitutional right to adjudicate this dispute in a court of law, [Defendant]
must prove that [Plaintiff] had full knowledge of her legal rights and intended to
surrender those rights.” Bordeaux, 447 N.J. Super. at 336 (citing Atalese, 219 N.J.
at 442-43)).
Under ordinary principles of New Jersey contract law, the party asserting a
contractual right bears the burden of proof. Gionti v. Crown Motor Freight Co.,
128 N.J.L. 407, 412 (E. & A. 1942). Defendant, therefore, has the burden of
showing that a valid, enforceable agreement to arbitrate exists that evidences
mutual assent between Plaintiff and the original issuer of the credit card account.
Merrill Lynch v. Cantone Research, Inc., 427 N.J. Super. 45, 59 (App. Div.), certif.
denied, 212 N.J. 460 (2012). “The district court, when considering a motion to
compel arbitration which is opposed on the ground that no agreement to arbitrate
had been made between the parties, should give to the opposing party the benefit of
6
all reasonable doubts and inferences that may arise.” Par-Knit Mills, Inc. v.
Stockbridge Fabrics Co., 636 F.2d 51, 54 (3d Cir. 1980).
As a purported assignee, Midland additionally has to show that although not
a party to the original agreements, it is capable of enforcing the agreement against
Plaintiff now. See Webb v. Midland Credit Mgmt., Inc., No. 11 C 5111, 2012 WL
2022013, 2012 U.S. Dist. LEXIS 80006 (N.D. Ill. May 31, 2012) (a putative
assignee must prove all assignments beginning with the person to whom the
obligor was in privity); Triffin v. Quality Urban Hous. Partners, 352 N.J. Super.
538, 543 (App. Div. 2002) (purchaser of dishonored check who sought to recover
on that check must prove that assignment was valid). Midland has fallen far short
of meeting either of these burdens. First, missing from the record is any document
setting forth the scope of the rights allegedly assigned to Midland along with the
alleged debt. Midland merely states legal conclusions in a footnote that “Midland
acquired the Account from Synchrony Bank by assignment of all rights, title and
interest to the Account.” (Def’s Br. p. 2 n. 1, ECF No. 12-4). Mere legal
conclusions that reference documents not proffered as evidence are clear hearsay,
and should not be given any weight. Such documents are mandatory in order to
determine whether the right to enforce the arbitration agreement was assigned.
A federal district court in Michigan outlined some of these systemic
evidentiary shortcomings in an opinion denying motions to compel arbitration in
7
three of sixteen consolidated cases brought by consumers as putative class actions
under the FDCPA:
Upon review of the supplemental documents, it is

not especially surprising that they fail to fill the gap. It
was not the debt buyers who originated the relationship
with the cardmember. And when the debt buyer
purchased the charged off accounts from Chase,
cardmember terms, arbitration agreements and even the
prospect of active litigation were not important to the
debt buyers. At least that is the story the relevant
Purchase Agreements tell. The debt buyers expressly
warrant to Chase that their “primary purpose . . . is not to
commence an action or proceeding against
chardholders.” [sic] In fact, the only information the debt
buyers really cared about were the dollars and cents of
each account: specifically, how much did the
cardmember owe at charge off? This and related
collection information is all Chase was obligated to
provide. If the debt buyer ever wanted additional
documentation-including the original cardmember
agreement-it would have to ask Chase and possibly pay
extra to obtain it. Moreover, Chase would only have to
provide such a document if it was “reasonably available,”
and then only for 3 years post closing, a date that has
passed. Chase made no representation or warranty about
the cardmember terms, and the debt buyer accepted the
accounts “as is” and without any warranty about any such
contractual terms. Since the debt buyer did not care about
possible arbitration provisions or other cardmember
terms at the time they acquired the “Accounts”-a defined
term that makes no reference to underlying cardmember
terms-it's not surprising the debt buyers are having
trouble finding and authenticating such items now.
In re Cognate Cases, Nos. 1:13–CV–1338; 1:14–CV–34; 1:14–CV–234, 2014 WL
2933230, at *2, 2014 U.S. Dist. LEXIS 89159, at *6-8 (W.D. Mich. June 30, 2014)
8
(citations omitted). And as the federal district court in Nebraska noted in another
FDCPA case:
[D]ebt buyers often receive only a computerized

summary of the creditor’s records when they purchase a
portfolio and typically do not have access to the original
credit application with the consumer's signature, the
specific contract that applied to the consumer's account,
copies of original credit statements, or customer service
records that could confirm or clarify a fraud claim or a
legitimate consumer dispute.
Hengeller v. Brumbaugh & Quandahl, P.C., 894 F. Supp. 2d 1180, 1188 (D. Neb.
2012) (internal quotations and alterations omitted).
Requiring Midland to submit admissible evidence of the purported
arbitration agreements at issue is not out of step with the requirements imposed by
the courts nor is it a more demanding standard of proof than that applied to other
parties seeking to enforce arbitration agreements over the objections of their
litigation adversaries. A plethora of decisions from federal and state courts
throughout the country have rejected attempts to compel arbitration, made by debt
buyers and other types of businesses alike, when evidence of mutual assent was
lacking—often on far more robust evidentiary submissions than what Midland here
has offered.1
1
See, e.g., Discover Bank v. Shea, 362 N.J. Super. 200, 209-210 (Law Div. 2001),
appeal dismissed per settlement, 362 N.J. Super. 90 (App. Div. 2003) (denying
Discover’s demand to compel arbitration where "bill stuffer" amendment requiring
arbitration of contract of adhesion claims is unconscionable and unenforceable);
9
Specht v. Netscape Comm. Corp., 306 F.3d 17, 23, 27-28 (2d Cir. 2002) (affirming
denial of motion to compel arbitration where company failed to prove that the
plaintiffs agreed to arbitration); Kulig v. Midland Funding, LLC, No. 13 Civ. 4715
(PKC), 2013 WL 6017444, at *7, 2013 U.S. Dist. LEXIS 161960, at *18
(S.D.N.Y. Nov. 13, 2013) (denying motion to compel arbitration where “Midland
has failed to come forward with evidence which, if believed, demonstrates that Ms.
Kulig manifested her assent to the terms of the March 22, 2009 Cardmember
Agreement, including the arbitration provision.”); Poulson v. Trans Union LLC,
406 F. Supp. 2d 744 (E.D. Texas 2005) (refusing to compel arbitration where
credit card issuer failed to prove that original contract gave issuer right to make
arbitration provision binding by sending notice and requiring opt-out); Owen v.
MBPXL Corp., 173 F. Supp. 2d 905, 921-25 (N.D. Iowa 2001) (finding no
persuasive evidence that document including arbitration provision was mailed to
employee and “absolutely no evidence” that he received it, and denying motion to
compel arbitration for lack of proof of mutual assent); Alltel Corp. v. Sumner, 203
S.W.3d 77, 81 (Ark. 2005) (cell phone company could not prove consumers had
received welcome packet with arbitration agreement based on affidavit stating that
the company’s policy was to send packet to all new subscribers but without any
evidence confirming that the policy was followed for the particular subscribers
who were representatives of the putative class); Yates v. CACV of Colo., LLC, 693
S.E.2d 629, 634-35 (Ga. Ct. App. 2010) (“an undated, unauthenticated photocopy
of certain ‘additional’ terms and conditions” not enough to meet the burden of
proving the existence of an arbitration agreement); FIA Card Servs., N.A. v.
Weaver, 62 So. 3d 709, 719 (La. 2011) (“[T]his Court is constrained by the
evidence in the record, and from this evidence we are unable to conclude that
Weaver ever consented to resolve his credit card disputes via arbitration.”); Chase
Bank USA, N.A. v. Leggio, 997 So. 2d 887, 890 (La. Ct. App. 2008) (evidence that
defendant used credit card was not sufficient to show, by itself, that defendant was
on notice of the arbitration provision when all plaintiff submitted was an undated,
unsigned exemplar Cardmember Agreement and “the plaintiff failed to
demonstrate that defendant ever received or signed a ‘Cardmember Agreement’
which actually contained the arbitration clause language at issue.”);
Commonwealth Fin. Sys. v. Smith, 15 A.3d 492, 499-500 (Pa. Super. Ct. 2011)
(documents that debt collection company sought to introduce to prove its right to
collect, in proceeding to confirm arbitration award it had obtained, were not
admissible because employee who attempted to authenticate them “was not in a
position to know” if the Citibank records of the original credit card contract were
reliable or trustworthy); Flanary v. Carl Gregory Dodge of Johnson City, LLC, No.
E2004-00620-COA-R3-CV, 2005 Tenn. App. LEXIS 319 (Tenn. Ct. App. May 31,
10
Courts have taken a similarly dim view of attempts to compel arbitration
based on the type of arbitration agreement that Midland has proffered, particularly
where those documents are not signed by and do not even reference the other party
to the alleged arbitration agreement. 2
Midland is seeking to navigate the evidentiary challenges it faces here by
seeking to have the purportedly applicable contracts, and other documents created
by their predecessors in interest, admitted under the business records exception to
the hearsay rule. See Fed. R. Evid. 803(6). Courts, however, have roundly rejected
these efforts, pointing to the debt buyers’ lack of personal knowledge of the
2005) (party seeking to compel arbitration was not entitled to summary judgment,
where genuine issue of material fact existed as to whether there was mutual
agreement); cf. Hoffman v. Supplements Togo Mgmt., LLC, 419 N.J. Super. 596,
612 (App. Div. 2011), certif. granted, 209 N.J. 231 (2012) (forum selection clause
on website only visible on "submerged" portion of page was presumptively
unenforceable).
2
See, e.g., Dreyfus v. Telecare Global Solutions, 349 F. App’x 551, 554 (2d Cir.
2009) (denying employer’s motion to compel arbitration and commenting that the
employer’s “suggestion that the Court simply enforce the two-page fragment as
though it were the full document runs afoul of basic contract principles”) (internal
quotations omitted); Cach, LLC v. Viscuso, No. 7034/09, 2009 WL 2920863, 2009
N.Y. Misc. LEXIS 5463 (N.Y. Sup. Ct. Aug. 18, 2009) (insufficient prima facie
evidence of agreement to arbitrate where debt buyer submitted an unsigned,
undated exemplar credit card agreement, “portions of which are illegible or cut
off” and which “lacks specific reference to the respondent, or to any other obligor
on the credit card account”); NCO Portfolio Mgmt. Inc. v. Gougisha, 985 So. 2d
731, 736-37 (La. App. 2008) (creditors failed to prove binding agreement to
arbitrate where the documents submitted were unsigned, difficult to read and
sometimes illegible form agreements, and did not contain names of customers or
other evidence “to show a relationship between these alleged debtor/defendants
and these creditor/plaintiffs”).
11
business practices of the third parties who created the records. 3 The logic of these
decisions applies with equal force here.
Finally, courts have required comparably rigorous proof of the rights that
debt buyers have purportedly gained through assignment before allowing them to
enforce those rights in court, another area where Midland has fallen far below the
mark here. 4 This is very important, as this Court previously found when denying
Midland’s motion to compel arbitration:
3
See, e.g., Webb v. Midland Credit Mgmt., Inc., No. 11 C 5111, 2012 WL
2022013, at *5, 2012 U.S. Dist. LEXIS 80006, at *15 (N.D. Ill. May 31, 2012)
(affiant who sought to introduce billing statements from credit card issuer and bills
of sale assigning rights through several different entities was not knowledgeable
about the recordkeeping procedures of the entities whose records he sought to
introduce, so the business records exception did not apply); Asset Acceptance v.
Lodge, 325 S.W.3d 525, 529 (Mo. App. 2010) (HSBC records transferred to Asset
Acceptance were not admissible under the business records exception because
Asset employee was not qualified to testify about the records her company did not
prepare); Palisades Collection LLC v. Kalal, 781 N.W.2d 503, 510 (Wis. App.
2010) (records inadmissible where collection agency employee’s affidavit
contained no facts showing that the employee was knowledgeable about how
Chase’s records were prepared or whether they were prepared in the ordinary
course of Chase’s business); Martinez v. Midland Credit Mgmt., Inc., 250 S.W.3d
481, 485 (Tex. App. 2008) (account statement not admissible under business
records exception, and summary judgment against debtor reversed, because affiant
did not identify predecessor in interest or indicate in any way that the affiant had
knowledge of the predecessor’s recordkeeping policies).
4
See, e.g., Buford v. Palisades Collection, LLC, 552 F. Supp. 2d 800, 810 (N.D.
Ill. 2008) (because Palisades had not shown that it acquired through assignment all
of the rights that AT&T had against customers under its terms of service, Palisades
could not enforce the class action waiver contained in those terms of service);
Cach, LLC v. Askew, 358 S.W.3d 58, 65 (Mo. 2012) (holding that where debt
buyer had adduced no competent evidence of the chain of assignment of rights
under the contract at issue, it had no standing to pursue the action)
12
The Court finds that, even with a ‘healthy regard for the
strong federal policy in favor of arbitration,’ the
Agreement did not clearly convey the right to demand
individual arbitration in the instant case from GECRB to
Defendant. . . . [T]he Court does not find that the
Agreement transferred all of the rights associated with
Plaintiff's account to Defendant. . . . Defendant acquired
the right to collect the receivable, the right to bring an
action to collect the receivable, etc., but the Agreement
does not, on its face, convey the broad right to compel
arbitration for ‘any dispute or claim’ relating to
Plaintiff's Account. . . . The right to compel arbitration
for Plaintiff's FDCPA claim is not associated with legally
enforcing, filing suit, collecting, settling, or a similar
action with respect to the receivable. Therefore,
Defendant's motion to compel arbitration will be denied.
Garcia v. Midland Funding, LLC, No. 15-6119-(RBK/KMW), 2017 U.S. Dist.
LEXIS 68870, at *10-12 (D.N.J. May 5, 2017). Thus, as the purported final
assignee of these accounts, Midland, inter alia, had to show that although not a
party to the original agreement, it is capable of enforcing the agreement against
Plaintiff. See Triffin, 352 N.J. Super. at 543 (purchaser of dishonored check who
sought to recover on that check must prove that assignment was valid).
Here, Midland cites to documents that are not properly submitted to the
Court. The alleged documents are attached to the deficient affidavits of Vicki Scott
and Michael Burger. (ECF Nos. 12-1 and 12-2). These statements are unsworn and
does not comply with 28 U.S.C. § 1746; cf. Brokenbaugh v. Exel Logistics North
American, Inc., 174 Fed. Appx. 39, 43 n.2 (3d Cir. 2006) (holding that a
declaration complying with 28 U.S.C. § 1746 is a "valid affidavit" for purposes of
13
a summary judgment motion). Thus, the statements and the annexed documents
have no evidentiary value as this Court has held recently in Hovermale v.
Immediate Credit Recovery Inc.:
Defendant here is asking this Court to consider as

evidence an unsworn statement not declared under the
penalty of perjury. . . . [T]he Court cannot and will not
consider Mr. Martin's unsworn statement as a valid
affidavit. This Court agrees with Plaintiff that Mr.
Martin's statement is not a valid affidavit and does not
provide evidentiary support for Defendant's Motion.
Defendant also cites to various documents. But

Defendant does not properly admit any of these
documents to the record. Mr. Martin's unsworn,
inadmissible statement can neither lay the foundation for
nor authenticate those documents. . . .
2016 U.S. Dist. LEXIS 102206, at *4-5 (D.N.J. Aug. 4, 2016) (citations omitted).
Further, consistent with Garcia v. Midland Funding, LLC, Defendant must
produce the underlying assignment/sale agreements/contracts—between Credit
One Bank and FNMB, LLC; between FNMB and Sherman Originator III, LLC;
between MHC Receivables, LLC and Sherman Originator III, LLC; and between
Sherman Originator III, LLC and Midland—in order to prove what rights, if any,
were assigned between these entities. 2017 U.S. Dist. LEXIS 68870, at *10-12
Defendant has failed to do so here.
Moreover, the documents submitted by Midland to advance its demand for
arbitration consists of a boilerplate, non-negotiable six-page adhesion document
14
universally utilized by Credit One Bank apparently for all of its Visa or Mastercard
Cardholder accounts (Scott Aff. Ex. B., ECF No. 12-1). That document does not
refer specifically to Plaintiff nor any other individual. It is neither signed nor dated
by the original creditor or Plaintiff.
Further, an inappropriate and ineffectual attempt is made by Defendant to
authenticate this document by the submission of the deficient affidavit by Vicki
Scott; in which she states in a conclusory fashion that “[Plaintiff] accept[ed] the
Account terms and conditions, including arbitration, when plaintiff submitted an
application for the credit card . . . .” (Scott Aff. ¶ 9, ECF No. 12-1). This assertion
is obviously specious since Midland does not refer to or submit a copy of said
application. This statement is hearsay and a legal conclusion that holds no
evidentiary weight. Without said application there is simply no proof whatsoever
that Plaintiff knew the terms concerning arbitration or even that the application
refers to any mandatory arbitration.
There is, therefore, absolutely no proof presented by the moving party of
actual assent to the alleged arbitration agreement by Plaintiff, at the time Plaintiff
applied for the account. The moving party has presented no admissible proof that
the Plaintiff requested, received, signed or used any card issued by Credit One
Bank.
15
Here, in support of their motion, Defendant has submitted two defective
affidavits. (ECF No. 12). As in Bordeaux, there is absolutely no reference to the
issue of assent by Plaintiff. Defendant has failed to meet that burden in any way
whatsoever. None of these facts have been proven by any so-called evidentiary
documents submitted in support of the motion.
C. Midland Waived Arbitration
“An arbitration agreement is a contract, and is subject, in general, to the
legal rules governing construction of contracts.” McKeeby v. Arthur, 7 N.J. 174,
181 (1951) (citation omitted). As such, parties may waive their right to arbitrate
based on “the same principles govern[ing] . . . waiver of any other right.” Cole v.
Jersey City Med. Ctr., 215 N.J. 265, 276 (2013). “Waiver is a voluntary and
intentional relinquishment of a known right.” Knorr v. Smeal, 178 N.J. 169, 177
(2003). Waiver need not be stated expressly but may be implied, “provided the
circumstances clearly show that the party knew of the right and then abandoned it,
either by design or indifference.” Id.
The paradigmatic way for a party to imply, through a clear circumstantial
showing, that it is abandoning any right it may have had to arbitrate a claim is by
bringing that claim in court instead. As the New Jersey Supreme Court explained:
It is generally considered that the bringing of an action at

law is a revocation of an agreement to arbitrate, and
although our former Supreme Court, in Knaus v. Jenkins,
supra, held that a suit at law by one of the parties was not
16
a revocation, we are of the opinion that the bringing of

action by both parties on the subject matter of the
agreement manifests a mutual change of mind and does
accomplish a revocation. When all parties to an
agreement to arbitrate elect to prosecute their respective
claims by actions at law, and institute and carry forward
the course thus elected, the logical, indeed the necessary,
result of that course is an abandonment of arbitration and
a revocation of the agreement to pursue that form of
adjudication.
McKeeby v. Arthur, 7 N.J. at 182; see also Cain v. Midland Funding, 156 A.3d 807
(Md. 2017) (“Because Midland’s [previous] collection action is related to Cain's
claims, Midland waived its right to arbitrate the current claims when it chose to
litigate the collection action. In addition, Cain does not have to demonstrate that he
suffered prejudice to establish that Midland waived the arbitration provision.”)
New Jersey’s Appellate Division has previously instructed that a showing of
waiver must be supported by “clear and convincing evidence that the party
asserting” arbitration first “chose to seek relief in a different forum.” Spaeth v.
Srinivasan, 403 N.J. Super. 508, 514 (App. Div. 2008). Filing a complaint in state
court to collect an alleged debt, where the complaint says nothing about an
applicable arbitration agreement, is clear and convincing evidence that Midland
chose a different, judicial, forum before changing its mind and seeking to arbitrate
this dispute. See, e.g., Framan Mech., Inc. v. Lakeland Reg’l High Sch. Bd. Of
Educ., No. A-4062-04, 2005 WL 2877923, 2005 N.J. Super. Unpub. LEXIS 354
17
(App. Div. Nov. 3, 2005) (finding waiver where plaintiff did not mention
arbitration in its complaint, which “sought substantive resolution of its claims”). 5
But Defendant here did more than simply file the State Collection Complaint
that made no reference to arbitration. It certified in its State Collection Complaint
that “the matter in controversy is not the subject of any other pending or
contemplated judicial or arbitration proceeding.” (Amended Compl. Ex. A, ECF
No. 6-1). Defendant, repeat litigants in the New Jersey courts, have waived
arbitration by filing tens of thousands of complaints against Plaintiff and other
New Jersey consumers in state court.
Furthermore, Defendant waived arbitration by invoking this Court’s
jurisdiction and seeking a decision on the merits in this case. (See Def’s Mot.
Dismiss, ECF No. 3). In Defendant’s first motion to dismiss, Defendant sought a
5
See, e.g., La. Stadium & Exposition Dist. v. Merrill Lynch, Pierce, Fenner &
Smith Inc., 626 F.3d 156, 160-61 (2d Cir. 2010) (“If [the plaintiff] had sufficient
information to hail [the defendant] into federal court, it should also have been
aware that it could arbitrate its claims against” that defendant); Gold Coast Mall,
Inc. v. Larmar Corp., 468 A.2d 91, 113-114 (Md. 1983) (“A party asserting a
claim who sues instead of seeking arbitration is in essence refusing to arbitrate and
is itself in default of the arbitration agreement.”); Jetts Recycling, Inc. v. Watts, 71
S.W.3d 224, 229 (Mo. Ct. App. 2002) (“There is . . . no question that [the plaintiff]
acted inconsistently with its right to arbitrate, given that it first initiated suit for
breach of contract . . . in Jackson County, Missouri.”); Mills v. Jaguar-Cleveland
Motors, Inc., 430 N.E.2d 965, 967 (Ohio Ct. App. 1980) (“[W]hen the plaintiff in
the present case filed his complaint in United States District Court, he waived
arbitration.”); Otis Hous. Ass’n v. Ha, 201 P.3d 309, 312 (Wash. 2009) (“Simply
put, we hold that a party waives a right to arbitrate if it elects to litigate instead of
arbitrate.”).
18
decision on the merits from this Court, and is continuing to seek a decision on the
merits in this instant motion. Defendant “should not be allowed to delay its
demand for arbitration and use federal court proceedings to test the water before
taking a swim.” Gray Holdco, Inc. v. Cassady, 654 F.3d 444, 453 (3d Cir. 2011)
(internal quotation marks omitted); see also Sacks v. DJA Auto., No. 12-284, 2013
U.S. Dist. LEXIS 7824, at *17 (E.D. Pa. Jan. 18, 2013) (Defendant . . . seeks to
have both its proverbial cake and to eat it too: it only wants arbitration if it does not
win on summary judgment. . . . By choosing not to compel arbitration after
plaintiff filed his complaint, defendant has obligated plaintiff to defend his case on
its merits in this Court and has imposed unnecessary expense and delay on
plaintiff.”) (collecting cases).
“[A]rbitration may not be used as a strategy to manipulate the legal process.”
Nat’l Found. for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d 772,
775 (D.C. Cir. 1987). 6 Or as the New York Court of Appeals put it: “The
courtroom may not be used as a vestibule to the arbitration hall so as to allow a
party to create his own structure combining litigation and arbitration.” Sherrill v.
Grayco Builders, Inc., 475 N.E.2d 772, 777 (N.Y. 1985) (internal quotations
6
See also La. Stadium & Exposition Dist., 626 F.3d at 161 (“a litigant is not
entitled to use arbitration as a means of aborting a suit that did not go as planned in
the district court.”); Cabinetree of Wis., Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d
388, 391 (7th Cir. 1995) (a party may not delay in invoking arbitration to first “see
how the case was going in federal district court” in order to “play heads I win, tails
you lose.”).
19
omitted). Defendant’s actions in this case smack of just such procedural
gamesmanship, and they should not be tolerated.
Perhaps responding to these equitable considerations as well as the legal
principles of waiver, courts both within and outside New Jersey have refused to
allow corporations to bring collection actions in court and then move the
proceedings to arbitration when the defendant filed a counterclaim or related action
against them. 7
Just like Levonas, Yonker, Morgan and Kirk, Defendant should not be
permitted to bring a collection action in court and then run to another forum now
that Plaintiff exercised their legal rights related to the same account. The totality of
the circumstances under Cole reveal a party whose litigation conduct, both in this
7
See, e.g., Levonas v. Regency Heritage Nursing & Rehab. Ctr., L.L.C., No. A-
4995-11, 2013 WL 4554509, 2013 N.J. Super. Unpub. LEXIS 2155 (App. Div.
Aug. 29, 2013) (nursing home that filed collection action against former resident’s
estate for allegedly unpaid bills waived right to arbitrate subsequent wrongful
death action brought by estate); see also Liberty Credit Servs. v. Yonker, 11th Dist.
No. 2012-P-0096, 2013-Ohio-3976, 2013 WL 5221219, at *4-6, 2013 Ohio App.
LEXIS 4158, *13-15 (Ct. App. Sept. 16, 2013) (holding that debt buyer who filed
collection action in federal court, did not assert arbitration as an affirmative
defense to the consumer’s counterclaim, and litigated in both state and federal
court before moving to compel arbitration waived its right to do so, characterizing
its conduct as “attempts at forum shopping”); Checksmart v. Morgan, 8th Dist. No.
80856, 2003-Ohio-163, 2003 WL 125130, 2003 Ohio App. LEXIS 111, at *10 (Ct.
App. 2003) (instituting a previous lawsuit to recover on a dishonored check waived
defendant’s right to arbitrate counterclaim brought against it under the Payday
Loan Act); Kirk v. Credit Acceptance Corp., 829 N.W.2d 522, 532-33 (Wis. Ct.
App. 2013) (by filing an action for deficiency judgment against plaintiff, defendant
had waived its right to arbitrate the plaintiff’s claims against it brought nine
months later under the Wisconsin Consumer Act).
20
case and the tens of thousands of cases it files every year in this state, is
inconsistent with any right to arbitrate. Defendant chose to file lawsuits in court,
then invoke this Court’s jurisdiction by seeking a decision on the merits; this Court
should find that arbitration has been waived.
D. The Purported Arbitration Provision is Unconscionable and

Unseverable
Under the Supreme Court’s FAA jurisprudence, courts are empowered to
invalidate arbitration agreements based on any “generally applicable contract
defenses, such as fraud, duress, or unconscionability.” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 339 (2011) (citations and internal quotation marks
omitted). To determine whether to invalidate an arbitration agreement, courts
“apply ordinary state-law principles that govern the formation of contracts.” First
Options, 514 U.S. at 944.
In New Jersey, the unconscionability doctrine is comprised of two elements:
procedural and substantive unconscionability. Sitogum Holdings, Inc. v. Ropes,
352 N.J. Super. 555, 564-66, 800 A.2d 915, 921 (Ch. Div. 2002). The procedural
element of the doctrine looks to the “variety of inadequacies, such as age, literacy,
lack of sophistication, hidden or unduly complex contract terms, bargaining tactics,
and the particular setting existing during the contract formation process.” Id. at
564, 800 A.2d at 921 (citations omitted).
Substantive unconscionability focuses on the content of the relevant
21
agreement and asks whether the terms are harsh or involve unfair one-sided terms.
Muhammad v. Cty. Bank of Rehoboth Beach, Del., 189 N.J. 1, 15, 912 A.2d 88, 96
(2006) (citing Rudbart v. N. Jersey Dist. Water Supply Com, 127 N.J. 344, 605
A.2d 681 (1992)) (class-action waiver included in arbitration agreement was, under
the circumstances, unconscionable, violative of public policy, and therefore
unenforceable).
“Because adhesion contracts invariably evidence some characteristics of
procedural unconscionability . . . a careful fact-sensitive examination into
substantive unconscionability is required. Muhammad, 189 N.J. at 16, 912 A.2d at
97 (citations omitted). This requires a “multi-factor analysis.” Id. New Jersey
courts have found “bill stuffer” contracts of adhesion unenforceable. See, e.g.,
Discover Bank v. Shea, 362 N.J. Super. 200, 209-210 (Law Div. 2001) (applying
New Jersey contract law and determining that a "bill stuffer" amendment requiring
arbitration of contract of adhesion claims is unconscionable and unenforceable).
Defendant seeks to enforce two provisions of the cardholder agreement: the
arbitration provision and the class action ban. The provisions are procedurally
unconscionable. Plaintiff submits that these clauses are adhesive agreements—
wherein the non-drafting party is presented with terms on a take-it-or-leave-it
basis. Further, such waivers of Plaintiff’s constitutional rights to a trial in court are
substantively unconscionable.
22
E. The Purported Arbitration Provision Does Not Apply to Plaintiff’s

FDCPA Claims
“Arbitration under the [Federal Arbitration] Act is a matter of consent, not
coercion” for the FAA’s primary purpose is to ensure “that private agreements to
arbitrate are enforced according to their terms.” Volt Info. Sciences, Inc., 489 U.S.
at 479. Based on “the contractual nature of arbitration,” the U.S. Supreme Court
has also held that “parties may specify with whom they choose to arbitrate their
disputes.” Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 683 (2010).
As discussed above, the alleged card agreement proffered by Defendant clearly
limits the arbitration provisions to the consumer and the bank (and its successor or
assignee). The Plaintiff could not have foreseen its applicability to FDCPA claims
since FDCPA does not apply to the original creditor but rather only to debt
collectors. For that reason, enforcing the agreement according to its terms would
exclude a FDCPA claims against a third-party collection agency.
POINT II. PLAINTIFF HAS ARTICLE III STANDING TO

SEEK REDRESS FOR DEFENDANT’S UNLAWFUL ACTS
Following Spokeo v. Robbins, 136 S. Ct. 1540 (2016), many courts have
addressed whether a consumer alleging a violation of the FDCPA suffers a
sufficient injury to have Article III standing. There is not yet any Third Circuit
authority, but decisions from this District consistently hold such a violation is an
invasion of consumer’s substantive rights sufficient to establish standing even in
23
the absence of actual damages. See Bock v. Pressler & Pressler, No. 11-7593
(KM)(SCM), 2017 WL 2304643, 2017 U.S. Dist. LEXIS 81058 (D.N.J. May 25,
2017) (collecting cases). Thus, Defendant’s standing arguments lack merit.
POINT III. DEFENDANT VIOLATED THE FDPCA BY

THREATENING ATTORNEY’S FEES
A. The Elements of a Cause of Action under the FDCPA
"To prevail on an FDCPA claim, a plaintiff must prove that (1) she is a
consumer, (2) the defendant is a debt collector, (3) the defendant's challenged
practice involves an attempt to collect a "debt" as the Act defines it, and (4) the
defendant has violated a provision of the FDCPA in attempting to collect the debt.”
Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014) (citing
Piper v. Portnoff Law Assocs., 396 F.3d 227, 232 (3d Cir. 2005)). Defendant does
not challenge the first three elements.
B. The FDCPA Protects the Least Sophisticated Consumer
The FDCPA was enacted because existing consumer protection laws were
found to be inadequate to protect the honest but unfortunate debtor based on
abundant evidence of abusive, deceptive, and unfair debt collection practices by
many debt collectors which contributed to the number of personal bankruptcies,
marital instability, loss of jobs, and invasions of individual privacy. 15 U.S.C. §§
1692(a) and 1692(b); FTC v. Check Investors, Inc., 502 F.3d 159, 165 (3d Cir.
2007). Moreover, abusive tactics by some collectors gave the unscrupulous ones a
24
competitive advantage over the ethical ones. Thus, Congress adopted the FDCPA
with the “express purpose to eliminate abusive debt collection practices by debt
collectors, and to insure that those debt collectors who refrain from using abusive
debt collection practices are not competitively disadvantaged.” Jerman v. Carlisle,
McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (emphasis added)
(internal quotation marks omitted); 15 U.S.C. § 1692(e); see also S. Rep. No. 95-
382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1698 (the Act was meant
to suppress unfair and deceptive debt-collection practices).
The Act’s provisions should be liberally construed in favor of the consumer
to effectuate its remedial purpose. Lesher v. Law Offices of Mitchell N. Kay, PC,
650 F.3d 993, 997 (3d Cir. 2011). Consequently, a debt collector’s conduct is
judged from the standpoint of the “least sophisticated consumer.” Brown v. Card
Serv. Ctr, 464 F.3d 450, 453n1 (3d Cir. 2006). In this way, “the FDCPA protects
all consumers, the gullible as well as the shrewd.” Lesher, 650 F.3d at 997. For
example, a “debt collection letter is deceptive where it can be reasonably read to
have two or more different meanings, one of which is inaccurate.” Brown, 464
F.3d at 455. Furthermore, except where the Act expressly makes knowledge or
intent an element of the violation, the “FDCPA is a strict liability statute.” Allen ex
rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011).
25
“The [least sophisticated consumer] standard is an objective one, meaning
that the specific plaintiff need not prove that she was actually confused or misled,
only that the objective least sophisticated debtor would be.” Jensen v. Pressler and
Pressler, LLP, 791 F.3d 413, 419 (3rd Cir. 2015). “Thus, the FDCPA enlists the
efforts of sophisticated consumers … as private attorneys general to aid their less
sophisticated counterparts, who are unlikely themselves to bring suit under the Act,
but who are assumed by the Act to benefit from the deterrent effect of civil actions
brought by others.” Id. (internal quotation marks omitted).
The least sophisticated consumer is a “low standard” which “protects naïve
consumers.” Lesher, 650 F.3d at 997. At the same time, “it also prevents liability
for bizarre or idiosyncratic interpretations of collection notices by preserving a
quotient of reasonableness and presuming a basic level of understanding and
willingness to read with care.” Id. at 354-355 (internal quotation marks omitted).
The application of the least sophisticated consumer standard is a question of
law decided by a judge. Wilson v. Quadramed Corp., 225 F.3d 350, 353 n.2. (3d
Cir. 2000). When determining the legality of Defendant’s communication from the
standpoint of the least sophisticated consumer, the allegedly unlawful language
must be “capable of influencing the decision of the least sophisticated consumer.”
Jensen, 791 F.3d at 421.
C. The State Court’s Taxing of Costs Does Not Excuse Midland’s

Wrongful Demand for both Costs and Attorney’s Fees.
26
The sole argument enunciated by Midland in its Motion to Dismiss is that
the State Collection Complaint did not violate any provision of the FDPCA since
N.J. Stat. § 22A:2-42 permits the recovery of “the costs against the judgment
debtor, a fee to the attorney of the prevailing party, of five per centum (5%) of the
first five hundred dollars ($500.00) of the judgment, and two per centum (2%) of
any excess thereof.” (emphasis added). Defendant’s reliance on N.J. Stat. § 22A:2-
42 is misplaced.
D. Defendant Misinterprets N.J. Stat. § 22A:2-42

Defendant’s argument is an example of the aphorism, “You can’t have your
cake and eat it.” In its State Collection Complaint, Midland’s demand for “costs”
included, among other things, the amount awardable under N.J. Stat. § 22A:2-42
(the “State Statute”). The State Statute provides:
There shall be taxed by the clerk of the Superior Court,

Law Division, Special Civil Part in the costs against the
judgment debtor, a fee to the attorney of the prevailing
party, of five per centum (5%) of the first five hundred
dollars ($500.00) of the judgment, and two per centum
(2%) of any excess thereof.
N.J. Stat. § 22A:2-42 (emphasis added). The jurisdiction of the Special Civil
Part is $15,000; consequently, the taxable amount is limited to $315.00 or, in Ms.
Pazymino’s case, to $27.39 (i.e., 5% of $549.81).
27
Midland, having already demanded the nominal sum awardable under the
State Statute, then demanded “attorney’s fees.” Midland, however, could not
lawfully recover any additional attorney’s fees other than the nominal statutory
amount because Midland used in-house counsel to prosecute its claim. Chase Bank
USA, N.A. v. Staffenberg, 419 N.J. Super. 386 (App. Div. 2011).
Midland cannot claim that its demand for “attorney’s fees” meant the
amount awardable under the State Statute because it already demanded that amount
when it sought “costs.” Indeed, had Midland never included a demand for
“attorney’s fees,” the amount awardable under the State Statute would have been
automatically included in the Clerk’s taxing of costs. Id.
To the extent Midland argued that “attorney’s fees” could also mean the
amount recoverable under the State Statute notwithstanding its request for “costs,”
then its State Collection Complaint is susceptible to two meanings, one of which is
false and, therefore, violates the FDCPA. Caprio v. Healthcare Revenue Recovery
Grp., LLC, 709 F.3d 142, 152 (3d Cir. 2013) (“We therefore conclude that the
Collection Letter was deceptive because it can be reasonably read to have two or
more different meanings, one of which is inaccurate”).
N.J. Stat. § 22A:2-42, does not award recovery of reasonable or liquidated
sum of “attorney’s fees” so as to depart from the American rule. It is a nominal
sum—capped at $315—included as a taxed cost of suit meant to shift a small
28
portion of the costs incurred, not to reflect the actual expense of retaining
counsel—such as actual attorney’s fees. Chase Bank USA, N.A. v. Staffenberg, 419
N.J. Super. 386, 397 (App. Div. 2011). There is a fundamental difference between
taxed costs and attorney’s fees recoverable under a contractual provision or a fee
shifting statute which NJ Courts have long recognized. Id. at 407. Staffenberg
relied on Bancredit, Inc. v. Bethea, 65 N.J. Super. 538, 552 (App. Div. 1961),
which “recognized the qualitative distinction between statutory counsel fees
awarded as taxed costs under N.J.S.A. 22A:2-42 and counsel fees recoverable
under contractual provisions.” (emphasis added)).
Recognizing the distinction between taxed costs under the State Statute and
recovery of contractual attorney’s fees, this District rejected an FDCPA claim
where the debt collector sought an award of both because there was a right to
collect both. Scioli v. Goldman & Warshaw P.C., 651 F. Supp. 2d 273 (D.N.J.
2009). In Scioli, the consumer mistakenly argued that both were not recoverable.
Unlike Scioli, however, Midland is not entitled to recover both. Like
Midland, the creditor in Staffenberg used in-house counsel to prosecute its credit
card collection case. Thus, New Jersey’s Retail Installment Sales Act (RISA),
N.J.S.A. 17:16C-50, prohibited the recovery of contractual attorney’s fees. The
consumer argued that RISA’s prohibition should apply to the State Statute. The
New Jersey Appellate Division disagreed by concluding that taxable attorney’s
29
fees did not represent a recovery of actual fees and was a mandatory cost taxed
against every unsuccessful defendant in the Special Civil Part. Likewise, Midland
was entitled to taxed attorney’s fees but not contractual attorney’s fees. Here,
however, Midland’s State Collection Complaint demanded both when Midland had
no legal right to both.
In Garcia v. Midland Funding LLC, No. 16-5248 (JLL), 2017 WL 215971,
2017 U.S. Dist. LEXIS 6895 (D.N.J. Jan. 17, 2017), the consumer complained that
Midland was not entitled to any attorney’s fees in the New Jersey state court
collection case. Thus, by virtue of Midland’s entitlement to taxed attorney’s fees,
the consumer’s claims were dismissed. Here, by contrast, Plaintiff concedes
Midland’s entitlement to taxed attorney’s fees as part of its award of costs and
Midland properly demanded them when it demanded “costs.” When Midland
additionally demanded an award of “attorney’s fees” Garcia is distinguishable
because Midland is entitled to recovery nominal attorney’s fees as a taxable cost
while, here, Midland attempted to collect contractual attorney’s fees in addition to
taxable costs when there was no lawful right to collect both.
By seeking contractual attorney’s fees when there was no legal right to them,
Midland violated the FDCPA.
The in-house counsels for Midland were obviously well aware, or certainly
should have been, that the State Statute allowing for the taxing of said costs would
30
mean only an additional $27.49 added to the judgment. The State Collection
Complaint specifically requests that the judgment include both the underlying
alleged debt-$549.81 “together with costs and . . . attorneys’ fees.” This conveys to
the least sophisticated debtor that the total judgment will include the relatively
small debt, costs plus an unknown amount of attorney’s fees. The debtor, therefore,
is enticed to act upon the falsely altruistic pronouncements, possibly by contacting
Midland, and to pay the debt in full, even if she might dispute it, to avoid the
unspecified and catastrophic amount of “attorney’s fees.”
There is simply no need for Midland to include the language demanding
attorney’s fees since such demand is not required to receive the taxable costs—it is
mandatory for the clerk to tax the costs to the prevailing party regardless. N.J. Stat.
§ 22A:2-42 (“There shall be taxed by the clerk . . . in the costs against the
judgment debtor, a fee to the attorney of the prevailing party . . . .”); see also N.J.
Ct. R. 6:6-5 (“The clerk shall thereupon enter the judgment and tax the costs.”).
In Lox v. CDA, Ltd., the Seventh Circuit was presented with a collection
letter that stated “if the courts award judgment they could allow court costs and
attorney fees.” 689 F.3d 818, 821 (7th Cir. 2012). In Lox, the state law precluded
any attorney’s fees, thereby causing the court to find that the letter was deceptive
and in violation of the FDCPA. Most importantly, the Seventh Circuit found that
the false threat itself “would have undoubtedly been a factor in [the consumer’s]
31
decision making process, and very well could have led to a decision to pay a debt
that he would have preferred to contest.” Id. at 827. The fact that New Jersey has a
statute that allows a clerk to tax costs on a judgment debtor does not mean that
there is not an obvious analogy to the philosophy and holding by the Court in Lox.
It is irrelevant that the State Statute permits the clerk to tax costs. The issue
is not whether the state court clerk can tax costs against the judgment debtor in the
amount of $27.49—the clerk undoubtedly can. Rather, the sole issue for
consideration and analysis is whether attorney’s fees in addition to taxable costs
was lawful and whether a request for such additional relief can mislead the least
sophisticated consumer. In Salvati v. Deutsche Bank Nat’l Trust Co., 575 Fed.
Appx. 49 (3d Cir. 2014) the consumer stated a claim where a collection law firm
asserted a right to attorney fees that were not allowed by state law even though the
consumer did not pay the unlawful fees.
Section 1692e(2)(A) explicitly prohibits a debt collector from falsely stating
the amount of the debt. This section of the FDCPA also prohibits veiled threats as
well as explicit threats. See e.g., Pipiles v. Credit Bureau, Inc., 886 F.2d 22 (2d
Cir. 1989). Midland’s collection complaint explicitly and implicitly misstates the
amount of the debt by giving the false impression that the ultimate judgment will
include actual or reasonable attorney’s fees, in violation of section 1692e(2)(A).
See, e.g., Day v. Check Brokerage Corp., 511 F. Supp. 2d 950 (N.D. Ill. 2007)
32
(false statement that the consumer “could be liable” for treble damages, attorneys
fee, and court costs, it violated § 1692e and 1692e(2)(A)); Bernstein v. Howe, No.
IP 02-192-C-K/H, 2003 WL 1702254 (S.D. Ind. Mar. 31, 2003) (A collection letter
demanding payment of a specific amount “plus interest and attorneys fees”
violated § 1692e(2)(a) because no attorney fees were actually owed at the time of
the letter); Strange v. Wexler, 796 F. Supp. 1117 (N.D. Ill. 1992) (complaint filed
by the attorney collector claiming attorney fees to which he was not entitled
violated § 1692e(2)(B)). Midland’s falsity is only amplified by the fact that the
total amount that the clerk could tax as costs for the prevailing party’s attorney is
only $27.25.
The inclusion is also in violation of sections 1692e(5) and 1692e(10) since it
is a false threat to take an action, i.e., the collection of attorney’s fees in addition to
costs, when such an option is not legally available to Midland. 8
E. Defendant’s Misrepresentations are Material
8
See, e.g., Duffy v. Landberg, 215 F.3d 871 (8th Cir.), rehearing denied, 2000 U.S.
App. LEXIS 16039 (8th Cir. July 10, 2000) (the imposition of attorney fees when
state law did not authorize them for small checks violated § 1692e(5)); Newman v.
CheckRite California, Inc., 912 F. Supp. 1354 (E.D. Cal. 1995) (Lawyers
collecting debts for a check collection agency violated §§ 1692e(5) and 1692f(1)
by seeking attorney fees in a state action to collect a dishonored check when no
attorney fees were authorized); Royal Fin. Group, L.L.C. v. Perkins, 414 S.W.3d
501 (Mo. Ct. App. 2013) (debt collector’s unfounded claim for attorney fees was
held to constitute both a threat of action that cannot legally be taken, in violation of
§ 1692(e)(5), and deceptive means to collect a debt in violation of § 1692(e)(10)).
33
The materiality requirement is applicable to section 1692e claims. See
Jensen v. Pressler & Pressler, 791 F.3d 413 (3d Cir. 2015). “[A] statement in a
communication is material if it is capable of influencing the decision of the least
sophisticated debtor.” Id. at 421 (citation omitted). The false statements are
material misrepresentations because they affect the decision making of the least
sophisticated consumer.
The least sophisticated consumer will understand that one would face
significant amount of attorney’s fees if one defends herself and chooses to litigate.
As explained above, the least sophisticated consumer will be less likely to
negotiate a reduced settlement or enforce her rights in fear of the consequences—a
large award of attorney’s fees. The least sophisticated consumer will understand
that the Defendant is legally entitled to and will charge attorney’s fees in addition
to costs under the State Statute, when in fact it is legally prohibited from doing so.
Therefore, Defendant’s misrepresentations are material with respect to section
1692e.
F. Demand for Attorney’s Fees in the State Collection Complaint in

Addition to Costs under the State Statute is an Unfair Practice in
Violation of 15 U.S.C. §§ 1692f and 1692f(1).
The pleadings, along with inferences favorable to Plaintiff, allege that
Defendant misrepresented its ability to collect and attempted to collect “attorney’s
fees,” in addition to the costs under the State Statute, not “expressly authorized by
34
the agreement creating the debt or permitted by law.” 15 U.S.C. § 1692f(1); see
also Kaymark v. Bank of Am., N.A., 783 F.3d 168 (3d Cir. 2015) (demanding
attorney’s fees allowed by contract but not yet incurred in foreclosure complaints
violates section 1692f(1)).
By virtue of using in-house counsel, Midland never had any contractual right
to recovery of actual or reasonable attorney’s fees. Staffenburg, supra. Therefore,
Defendant has violated the FDCPA. See Barrows v. Chase Manhattan Mortg.
Corp., 465 F. Supp. 2d 347, 354 (D.N.J. 2006) (“Defendants attempted to collect
attorneys' fees and costs not permitted by law in violation of the FDCPA.”).
POINT IV. DEFENDANT VIOLATED THE FDCPA BY

DISCLOSING PERSONAL IDENTIFYING INFORMATION
OF PLAINTIFF
A. The Policies and Purposes of the FDCPA Include Invasions of
Individual Privacy.
The FDCPA was enacted because existing consumer protection laws were
found to be inadequate to protect the honest but unfortunate debtor based on
“abundant evidence of abusive, deceptive, and unfair debt collection practices by
many debt collectors. . . . [which] contribute to the number of personal
bankruptcies, to marital instability, to the loss of jobs, and to invasions of
individual privacy.” 15 U.S.C. §§ 1692(a) and 1692(b) (emphasis added). The
Third Circuit has already emphasized the FDCPA’s concerns for individual
privacy by deciding that the debt collector’s account number “is impermissible
35
language or symbols under § 1692f(8)” because its “disclosure implicates a core
concern animating the FDCPA-the invasion of privacy.” Douglass, 765 F.3d at
303, 306. Further, when enacting N.J. Stat. § 56:8-164, New Jersey Legislature
found “[i]t is therefore a valid public purpose for the New Jersey Legislature to
ensure that the Social Security numbers of the citizens of the State of New Jersey
are less accessible in order to detect and prevent identity theft and to enact certain
other protections and remedies related thereto and thereby further the public
safety.” See 2005 N.J. ALS 226.
Numerous district courts—including this Court—have applied the reasoning
in Douglass to the consumer’s favor.9 If the temporary disclosure debt collector’s
account number through the mail—which cannot be used to make any purchases or
has no use outside of the debt collector’s collection system—violates the FDCPA,
a fortiori, the unlawful and permanent disclosure of more than three consecutive
digits of Plaintiff’s social security number violates the FDCPA. Plaintiff submits
that the public disclosure of a single extra digit of his social security number
creates more threat of harm—such as identity theft—than a debt collector’s
account number.
B. New Jersey Law Prohibits the Public Disclosure of More than Three
Consecutive Social Security Numbers
9
Berry v. ARS Nat’l Servs., No. 15-1529, 2015 U.S. Dist. LEXIS 171043 (E.D. Pa.
Dec. 23, 2015) (collecting cases).
36
New Jersey Court Rule 1:38-7(a), (b) specifically prohibits the filing of any
digit of a social security number. One exception to the prohibition exists. “Any
writ, order, or judgment issued by the court involving a judgment debtor or any
application therefor may include the . . . the last three digits of the individual's
Social Security number. No other personal identifiers shall be included.” N.J. Ct.
R. 1:38-7(d). Further, New Jersey law strictly prohibits the “[p]ublic[] post[ing] or
public[] display [of] an individual’s Social Security number, or any four or more
consecutive numbers taken from the individual’s Social Security number;” as well
as “[i]ntentionally communicat[ing] or otherwise mak[ing] available to the general
public an individual’s social security number[.]” N.J. Stat. § 56:8-164a(1), (4).
Here, Defendant filed four consecutive digits of Plaintiff’s social security
number in its State Collection Complaint and State Collection Motion, in violation
of New Jersey Court Rule 1:38-7(a), (b) and N.J. Stat. § 56:8-164a(1), (4). In fact,
Defendant’s in-house counsel certified in its collection complaint, that
“confidential personal identifiers have been redacted from documents now
submitted to the court and will be redacted from all documents submitted in the
future in accordance with R. 1:38-7(b). I understand that if any of the foregoing
statements made by me are willfully false I am subject to punishment.”
Defendant unnecessarily exposed Plaintiff’s personal identifying and
sensitive information permanently to the public. The Social Security numbers
37
exposed to the public by Defendant are personal identifying and sensitive
information, and its disclosure has the potential to cause harm to the consumer.
Even the last four digits, combined with other identifying information such as the
name and address, can be used to for identity theft. See “Social Security Cards
Explained” https://youtu.be/Erp8IAUouus. Defendant violated the FDCPA.
C. Defendant’s Unlawful Disclosure of Plaintiff’s Four Consecutive Digits

of her Social Security Number—which is prohibited by New Jersey
Court Rule 1:38-7(a), (b) and N.J. Stat. § 56:8-164—Violates the
FDCPA
Section 1692f of the FDCPA provides that “[a] debt collector may not use
unfair or unconscionable means to collect or attempt to collect any debt.” 15
U.S.C. § 1692f. Defendant’s violation of New Jersey Court Rules and New Jersey
law also violates the FDCPA as it is an unfair and unconscionable means to collect
a debt. Thus, “Plaintiff’s [] theory—i.e., Defendants' failure to redact personal
information—states a claim under § 1692f.” Qureshi v. OPS 9, LLC, No. 14-cv-
1806-MCA, 2015 U.S. Dist. LEXIS 143456, at *16-17 (D.N.J. Oct. 21, 2015).
In Qureshi, the debt collector filed in New Jersey state court the consumer’s
checking account information, which became public records. Id. at *18. In holding
that the consumer stated a claim under section 1692f, this Court reasoned:
under Third Circuit law, the Court is satisfied that

Plaintiff states a claim under the catchall provision, §
1692f. See Douglass v. Convergent Outsourcing, 765
F.3d 299 (3d Cir. 2014) (finding debt collector violated §
1692f(8) by disclosing debtor's account numbers on
38
envelope). As the court in Douglass noted, "Section

1692f evinces Congress's intent to screen from public
view information pertinent to the debt collection . . .
[D]isclosure [of account information] implicates a core
concern animating the FDCPA—the invasion of
privacy." Id. at 302-03. The court accordingly found that
a debt collector violated § 1692f(8) when it mailed a
letter leaving the debtor's account number visible through
the envelope's glassine window. Id. at 306. [T]he account
number is not meaningless," the court explained, "it is a
piece of information capable of identifying [the plaintiff]
as a debtor. And its disclosure has the potential to cause
harm to a consumer that the FDCPA was enacted to
address." Id. at 305-06.
Id. at *17-18. Plaintiff submits that the last four digits of his Social Security
number has more meaning than the debt collector’s account number in Douglass,
which disclosure is now a matter public record, available for anyone to access.
Further, the New Jersey legislature and rules committee of the Superior of
Court of New Jersey clearly thought the disclosure of any digit of the Social
Security number posed a significant privacy and identity theft threat. The FDCPA
“does not annul, alter, or affect, or exempt any [debt collector] from complying
with the laws of any State with respect to debt collection practices . . . .” 15 U.S.C.
§ 1692n. The FDCPA encourages state laws that provides “protection . . . greater
than the protection provided by [the FDCPA].” Id.
The materiality requirement does not apply to violations of section 1692f.
Thomas v. Youderian, No. 2:16-cv-01408-KM-MAH, 2017 U.S. Dist. LEXIS
16585, at *30 (D.N.J. Feb. 3, 2017). Nevertheless, Plaintiff submits violating New
39
Jersey law and publicly displaying the last four-digits of Plaintiff’s social security
number, in addition to other personal identifying information, is material because it
makes Plaintiff more susceptible to invasions of privacy and identity theft. Further,
the least sophisticated consumer will be misled into believing the attorney’s
certification of compliance of the redaction requirements, and therefore would be
less likely to challenge such unnecessary and oppressive conduct by Defendant.
CONCLUSION
Therefore, Plaintiff submits that Defendant’s Motion should be denied.
Respectfully submitted,
DATED: June 6, 2017 s/ Yongmoon Kim

Yongmoon Kim, Esq.
Kim Law Firm LLC
40
Case 2:16-cv-09547-JMV-MF Document 17-1 Filed 06/06/17 Page 1 of 1 PageID: 264
UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY
PAOLA PAZYMINO, Civil Action No. 2:16-cv-09547-JMV-MF

on behalf of herself and those similarly
situated,
Plaintiff,
vs.
CERTIFICATE OF SERVICE
MIDLAND FUNDING, LLC,
Defendant.
I hereby certify that on this 6th day of June 2017, I caused a true and correct copy of
Plaintiff's Brief in Opposition to Defendant's Motion to Dismiss to be served on this date via the
Court's CM/ECF system upon:
Han Sheng Beh, Esq.

Hinshaw & Culbertson LLP
800 Third Avenue, 13th Floor
New York, New York 10017
Attorneys for Defendant Midland Funding, LLC
KIM LAW FIRM LLC

/s/ Yongmoon Kim

Yongmoon Kim
DATED: June 6, 2017
Page 1 of 1

Pazymino V Midland Funding LLC

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Case 2:16-cv-09547-JMV-MF Document 17 Filed 06/06/17 Page 1 of 48 PageID: 216

UNITED STATES DISTRICT COURT

Plaintiff, Civil Action No.

MIDLAND FUNDING LLC,

PLAINTIFF’S BRIEF IN OPPOSITION TO DEFENDANT’S MOTION TO

Kim Law Firm LLC

Yongmoon Kim, Esq.

TABLE OF AUTHORITIES .................................................................................. I

Liberty Credit Servs. v. Yonker, 11th Dist. No. 2012-P-0096, 2013-Ohio-3976,

Spokeo v. Robbins, 136 S. Ct. 1540 (2016) .............................................................23

Fed. R. Civ. P. 12(b)(6)..............................................................................................3

FACTS AND PROCEDURAL HISTORY

Plaintiff’s First Amended Class Action Complaint (“Amended Complaint”) seeks

defined by 15 U.S.C. § 1692a(3). (Amended Compl. ¶¶ 4, 71). Defendant is a debt

collector as defined by 15 U.S.C. § 1692a(6). (Amended Compl. ¶¶ 5-10, 73).

On November 20, 2015, Midland commenced a debt collection lawsuit (“State

Collection Action”) against Pazymino by filing a collection complaint (“State Collection

state court. (Amended Compl. ¶¶ 22, 56).

The State Collection Complaint filed against Pazymino demanded “judgment

There shall be taxed by the clerk of the Superior Court,

judgment debtor, a fee to the attorney of the prevailing

can be awarded to Midland would be $27.49 (i.e., 5% of $549.81). (Amended Compl.

sought attorney’s fees. (Amended Compl. ¶¶ 28, 30, Ex. B).

unnecessarily revealed Pazymino’s personal identifying information, including the last

disclosure of last four digits of Pazymino’s Social Security Number is strictly

to Pazymino’s complaint was Midland’s unlawful State Collection Complaint. On

On January 4, 2017, Defendant moved to dismiss the complaint. (ECF No.

Plaintiff now submits this Brief in opposition to Defendant’s Motion to

Dismiss Plaintiff’s Complaint and to Compel Arbitration. (ECF No. 12).

POINT I. DEFENDANT CANNOT ENFORCE THE

arises as to whether a valid arbitration agreement exists. “Where arbitrability is

to be bound by an arbitration agreement, the non-movant must be given a limited

opportunity to conduct discovery on the narrow issue of whether an arbitration

B. Defendant has Failed to Meet its Burden of Proof to Compel

“Arbitration is a matter of contract between the parties and a judicial

mandate to arbitrate must be predicated upon an agreement to that effect.” Par-

(citations omitted). In deciding whether a dispute is arbitrable, courts must ensure

(“arbitration is a matter of consent, not coercion”).

While the FAA creates a presumption in favor of arbitration, that

resolving doubts respecting whether the parties have reached an agreement

inapposite.”). Instead, “[o]rdinary state-law principles that govern the formation of

contract” apply to decide the issue of whether an agreement to arbitrate certain

disputes, such as disputes inapplicable to the creditor, exists, including the

principle “that ambiguities in unilaterally prepared contracts are to be resolved

against the drafter.” Hendrick, 50 F. Supp. 2d at 533; First Options of Chicago,

the revocation of any contract.” 9 U.S.C. § 2.

other contract, must be the product of mutual assent, as determined under

contractual provision, [Midland] has the burden to prove, by a preponderance of

There must be “a meeting of the minds.” NAACP of Camden Cnty. E. v. Foulke

[one’s] constitutional right to adjudicate this dispute in a court of law, [Defendant]

showing that a valid, enforceable agreement to arbitrate exists that evidences

compel arbitration which is opposed on the ground that no agreement to arbitrate

Stockbridge Fabrics Co., 636 F.2d 51, 54 (3d Cir. 1980).

As a purported assignee, Midland additionally has to show that although not

a party to the original agreements, it is capable of enforcing the agreement against

A federal district court in Michigan outlined some of these systemic

evidentiary shortcomings in an opinion denying motions to compel arbitration in

three of sixteen consolidated cases brought by consumers as putative class actions

under the FDCPA:

Upon review of the supplemental documents, it is

In re Cognate Cases, Nos. 1:13–CV–1338; 1:14–CV–34; 1:14–CV–234, 2014 WL

[D]ebt buyers often receive only a computerized

2012) (internal quotations and alterations omitted).