District Court (Wash.) Holds that Allowing Permissive Counter-Claim on Underlying Debt in TCPA/FDCPA Case Does Not Impede the Policies Underlying Enforcement of those Statutes

In Wilson v. Discover Bank, 2012 WL 1899539 (W.D.Wash. 2012), Judge Leighton exercised permissive supplemental jurisdiction over a counter-claim for the underlying $4,000 debt in a case filed under the TCPA.  Judge Leighton found that exercising jurisdiction over the debt collection claim did not impede enforcement of the consumer’s rights under the TCPA.

Where supplemental jurisdiction exists, a district court may decline to exercise such jurisdiction. § 1367(c). The statute provides four justifications for declining to exercise supplemental jurisdiction:  (1) the claim raises a novel or complex issue of State law, (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the district court has dismissed all claims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction. § 1367(c). Here, Ms. Wilson argues that allowing Discover to seek to collect the underlying debt in a federal action to enforce the TCPA might “impede the expeditious enforcement of the policies giving rise to enactment of the [TCPA] and would have a chilling effect on the exercise of the consumers’ rights under the [TCPA].” Pl.’s Mot. Dismiss at 9 (citing Campos v. W. Dental Servs., Inc., 404 F.Supp.2d 1164, 1170 (N.D.Cal.2005); Sparrow v. Mazda Am. Credit, 385 F.Supp.2d 1063, 1071 (E.D.Cal.2005); Cabrera v. Courtesy Auto, Inc., 192 F.Supp.2d 1012, 1020 (D.Neb.2002)). Discover argues that any hesitation to bring a TCPA claim will not result from allowing this type of counterclaim because, unlike the FDCPA cases, most TCPA cases will not involve such counterclaims. Def.’s Opp’n Mot. Dismiss at 8. Indeed, debt collection calls are exempt from the TCPA. Id. at 9 (citing Meadows v. Franklin Collection Serv., Inc., 414 Fed. Appx. 230, 235 (11th Cir.2011)).  In addition, given the relatively small amount of the alleged debt, $4,034.34 plus costs and fees, it appears unlikely that the Court’s exercise of supplemental jurisdiction over Discover’s counterclaim against Ms. Wilson would have a “chilling effect” on Ms. Wilson’s TCPA claim or on future TCPA claims by other individuals. Nor would it predominate over Ms. Wilson’s TCPA claim, as she argues, because of the small amount of debt owed and the connection to Discover’s affirmative defense. See Pl.’s Mot. Dismiss at 7. Moreover, the exercise of supplemental jurisdiction here will promote the goals of judicial economy and efficiency, as all claims related to the alleged debt incurred by Ms. Wilson will be resolved in a single action.