United States District Court, D. Massachusetts
JACKELINE BARBOSA, MARK ANDERSON, and DOUGLASS BAKER, individually and on behalf of others similarly situated, Plaintiffs,
MIDLAND CREDIT MANAGEMENT, INC., SCHREIBER/COHEN, LLC, and LUSTIG GLASER & WILSON P.C., Defendants.
REPORT AND RECOMMENDATION ON DEFENDANTS' MOTIONS
TO DISMISS AND/OR COMPEL ARBITRATION
Gail Dein United States Magistrate Judg
a putative class action suit pertaining to debt collection
litigation pursued in state court. The named plaintiffs
allegedly incurred credit card debt on accounts held with
Barclays Bank Delaware (“Barclays”). Midland
Funding LLC (“Midland Funding”) later acquired
the plaintiffs' accounts from Barclays, for whom
defendant Midland Credit Management (“MCM”) is a
servicer and agent. The plaintiffs were subsequently sued by
Midland Funding, allegedly at the direction of MCM, to
collect outstanding credit card debt. Defendants
Schreiber/Cohen, LLC (“Schreiber”) and Lustig
Glaser & Wilson P.C. (“Lustig”)
(collectively, “lawyer defendants”), are law
firms that were retained by Midland Funding to sue the
plaintiffs for the outstanding debts.
of the debt collection suits initiated by Midland Funding,
judgment was ultimately entered in favor of the debtor. In
the instant action, the plaintiffs allege that each debt
collection suit was filed after the relevant statute of
limitations period had run. They further allege that these
suits caused them emotional distress and resulted in lost
wages, legal fees, and other expenses. Accordingly, the
plaintiffs have brought a Fair Debt Collection Practices Act
(“FDCPA”) claim (Count I) and a claim under Mass.
Gen. Laws ch. 93A (Count II) against MCM and the lawyer
defendants for initiating these allegedly time-barred debt
matter is before the court on “Defendants
Schreiber/Cohen, LLC and Lustig, Glaser & Wilson,
P.C.'s Motion to Dismiss Plaintiffs' Amended
Complaint or, in the Alternative, Compel Arbitration or
Abstention” (Docket No. 24) and “Defendant
Midland Credit Management, Inc.'s Motion to Compel
Arbitration, Dismiss the Case, and Strike Class Allegations,
or in the Alternative, Motion to Stay” (Docket No. 26).
As discussed herein, case law mandates the conclusion that a
valid arbitration provision exists between the parties and
that arbitration must be compelled. In addition, this court
concludes that the class allegations of plaintiffs Barbosa
and Anderson must be stricken. Therefore, this court
recommends to the District Judge to whom this case is
assigned that MCM's motion and the lawyer defendants'
motion be ALLOWED IN PART. Specifically, this court
recommends that the class action claims of plaintiffs Barbosa
and Anderson be stricken, that the court compel arbitration
pursuant to the plaintiffs' agreements with Barclays Bank
Delaware, and that this action be dismissed without
STATEMENT OF FACTS
court summarizes the facts as alleged in the plaintiffs'
Amended Complaint (Docket No. 4 (“Amended
Complaint”)), with additional uncontested facts where
noted. The named plaintiffs are all Massachusetts residents
who opened credit card accounts with Barclays. (Amended
Complaint ¶¶ 1-3; see Amended Complaint
¶¶ 20, 32, 41). Each plaintiff's credit card
agreement with Barclays (“Barclays agreement” or
“the agreement” or “cardmember
agreement”) specified that Delaware law would apply to
any disputes arising out of the agreement. (Id.
¶¶ 22, 36, 45). Additionally, the cardmember
agreement contained a provision permitting the assignment of
the cardmember account. (See Docket No. 27-1, Ex. B
at 2, Ex. E at 2, Ex. H at 2). The agreement also contained
an arbitration provision allowing parties to elect to resolve
disputes via binding arbitration. (See id.). The
arbitration provision stated in pertinent part:
At the election of either you or us, any claim, dispute or
controversy (“Claim”) by either you or us against
the other, or against the employees, agents or assigns of the
other, arising from or relating in any way to this Agreement
or your Account, or any transaction on your Account including
(without limitation) Claims based on contract, tort
(including intentional torts), fraud, agency, negligence,
statutory or regulatory provisions or any other source of law
and (except as specifically provided in this Agreement)
Claims regarding the applicability of this arbitration clause
or the validity of the entire Agreement, shall be resolved
exclusively and finally by binding arbitration . . . . For
purposes of this provision, . . . “we” or
“us” includes our employees, parents,
subsidiaries, affiliates, beneficiaries, agents and assigns .
. . . Claims made and remedies sought as part of a class
action, private attorney general or other representative
action (hereafter all included in the term “class
action”) are subject to arbitration on an individual
basis, not on a class or representative basis. . . .
Alternatively, you and we may pursue a Claim within the
jurisdiction of the Justice of the Peace Court in Delaware,
or the equivalent court in your home jurisdiction (each a
“Small Claims Court”), provided
that the action remains in that court, is made on behalf of
or against you only and is not made part of
a class action, private attorney general action or other
representative or collective action. . . .
. . . This arbitration agreement is made pursuant to a
transaction involving interstate commerce, and shall be
governed by the Federal Arbitration Act, 9 U.S.C.
§§ 1-16. . . .
ARBITRATION WITH RESPECT TO A CLAIM IS BINDING AND NEITHER
YOU NOR WE WILL HAVE THE RIGHT TO LITIGATE THAT CLAIM THROUGH
A COURT. IN ARBITRATION YOU AND WE WILL NOT HAVE THE RIGHTS
THAT ARE PROVIDED IN COURT INCLUDING THE RIGHT TO A TRIAL BY
JUDGE OR JURY AND THE RIGHT TO PARTICIPATE OR BE REPRESENTED
IN PROCEEDINGS BROUGHT BY OTHERS SUCH AS CLASS ACTIONS OR
SIMILAR PROCEEDINGS. IN ADDITION, THE RIGHT TO DISCOVERY AND
THE RIGHT TO APPEAL ARE ALSO LIMITED OR ELIMINATED BY
ARBITRATION. ALL OF THESE RIGHTS ARE WAIVED AND ALL CLAIMS
MUST BE RESOLVED THROUGH ARBITRATION.
(Id. Ex. B at 2 (emphasis in original); see
id. Ex. E at 2, Ex. H at 2). Barclays subsequently sold
the plaintiffs' credit card accounts to Midland Funding.
(See Amended Complaint ¶¶ 20, 32, 41).
Funding is a corporation that acquires charged-off consumer
debts from creditors. (Id. ¶ 7). A debt that is
“charged-off” is one that is deemed uncollectable
by a creditor and written off as a loss. (Id. ¶
8). Midland Funding utilizes MCM as its servicer and agent
for collecting such charged-off consumer debts. (Id.
¶ 9). After acquiring the plaintiffs' credit card
accounts from Barclays, Midland Funding initiated debt
collection lawsuits against each of the plaintiffs.
(Id. ¶¶ 20, 33, 42). MCM directed,
approved, and/or ratified the initiation of each of these
suits and the lawyer defendants served as counsel for Midland
Funding during the judicial proceedings. (Id.
¶¶ 20, 21, 33, 34, 42, 43). The specific factual
allegations as to each of the plaintiffs are detailed below.
October 10, 2017, Midland Funding sued Jackeline Barbosa in
the Small Claims Session of the Roxbury Division of the
Boston Municipal Court, with defendant Schreiber serving as
counsel for Midland Funding. (Id. ¶ 20).
Midland Funding alleged that Ms. Barbosa had last made a
payment on her Barclays account on November 7, 2012.
(Id. ¶ 23). The Boston Municipal Court issued
judgment in favor of Ms. Barbosa, concluding that Midland
Funding had failed to prove that it owned the debt at issue.
(Id. ¶ 30).
placed for collection with Schreiber the charged-off consumer
debt of Mark Anderson. (Id. ¶ 32).
Subsequently, on March 23, 2018, Midland Funding sued
Anderson in the Small Claims Session of the Roxbury Division
of the Boston Municipal Court, with defendant Schreiber
serving as counsel for Midland Funding. (See id.
¶¶ 33, 35). Midland Funding alleged that Mr.
Anderson had last made a payment on his Barclays account on
December 15, 2014. (Id. ¶ 35). The Boston
Municipal Court ultimately entered judgment in Mr.
Anderson's favor.(Id. ¶ 40).
placed for collection with Lustig the charged-off consumer
debt of Douglass Baker. (Id. ¶ 41).
Subsequently, on December 6, 2016, Midland Funding sued Baker
in the Orange District Court, with defendant Lustig serving
as counsel for Midland Funding. (Id. ¶ 42).
Midland Funding alleged that Mr. Baker had last made a
payment on his Barclays account on March 5, 2012.
(Id. ¶ 44). The court ruled that Midland
Funding's claim was barred by the Delaware statute of
limitations and entered judgment in favor of Mr. Baker.
(Id. ¶ 50). Midland Funding has filed a notice
of appeal in Mr. Baker's case. (Id. ¶ 51).
named plaintiffs allegedly suffered significant emotional
distress as a result of the lawsuits initiated by Midland
Funding, as well as financial costs and interruptions to
their daily lives. (Id. ¶¶ 24-27, 37-39,
facts will be provided below where appropriate.