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Stevens v. Conn's, Inc.

United States District Court, E.D. Texas, Sherman Division

August 7, 2019

TONYA ERIN STEVENS,
v.
CONN'S, INC., ET AL.

          MEMORANDUM OPINION AND ORDER

          AMOS L. MAZZANT UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff's Motion to Confirm Arbitration Award and for Entry of Final Judgment (Dkt. #11), and Defendants' 12(b)(1) Motion to Dismiss Plaintiff's Motion to Confirm Arbitration Award (Dkt. #12). After careful consideration, Defendants' Motion to Dismiss will be denied, and Plaintiff's Motion to Confirm Arbitration Award will be granted.

         BACKGROUND [1]

         Defendants Conn's, Inc., Conn Appliances, Inc., and Conn Credit Corporation (collectively, “Conn”) sell consumer goods. As stated in its SEC filings, Conn provides high-interest loans to “customers that are considered higher-risk, subprime borrowers.” (Dkt. #1, pp. 6-7). This means that there is “a higher risk of customer default, higher delinquency rates, and higher losses than extending credit to more creditworthy customers.” (Dkt. #1, pp. 6-7). When a customer defaults, Conn uses prerecorded voice messages to help collect debts that may be owed. Conn's “predictive dialer system . . . helps [it] contact . . . over 26, 000 delinquent customers daily.” (Dkt. #1, ¶ 43). Conn also changes its phone numbers every day to make it impossible to block its calls.

         Plaintiff Tonya Erin Stevens is a Conn's customer that Conn believes owes it a debt. In 2015, Conn began calling Stevens daily, sometimes over ten times a day. Stevens repeatedly asked Conn to stop, informing Conn on one occasion that it called while she was sitting vigil as her grandmother passed. But Conn would not relent. One Conn employee told Stevens that the automatic calls continue until the payment is made in full. Altogether, Conn called Stevens over 1, 800 times.

         Stevens filed suit against Conn for violations of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227, and the Texas Business and Commerce Code, Chapter 305. At the Parties' request, the Court referred the case to arbitration, and stayed the case. In Arbitration, Stevens voluntarily dismissed her original claims, and amended her complaint to add a claim for a violation of the Texas Debt Collection Act (“TDCA”). After finding that Conn “oppressed, harassed, and abused” Stevens in violation on the TDCA, the Arbitrator awarded $184, 700 for actual damages ($100 per call), $28, 895.26 in attorney's fees, and interest (Dkt. #11, Exhibit 1).

         Stevens now moves to confirm the arbitration before the Court. Conn did not respond to the motion and, instead, moved to dismiss the case for lack of subject-matter jurisdiction. Stevens, in turn, argues that the TCPA claim in the original complaint establishes federal-question jurisdiction. The Court now considers the motions.

         LEGAL STANDARDS

         “Federal courts are courts of limited jurisdiction, possessing only that power authorized by Constitution and statute.” Gunn v. Minton, 568 U.S. 251, 256 (2013) (quoting Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)). Subject matter jurisdiction can be established by a federal question or diversity of citizenship between the parties. 28 U.S.C. §§ 1331, 1332. Federal-question jurisdiction authorizes original jurisdiction over “all civil actions arising under the Constitution, laws, or treaties in the United States.” 28 U.S.C. § 1331. Diversity jurisdiction authorizes the courts to have jurisdiction if the “matter in controversy exceeds the sum or value of $75, 000” and the parties are diverse in citizenship. 28 U.S.C. § 1332. “[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy.” 28 U.S.C. § 1367.

         When addressing whether the federal question sufficiently meets the requirements of the courts, the “well-pleaded complaint” rule must be applied, under which “a federal question must appear on the face of the complaint.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 399 (1987); Elam v. Kansas City S. Ry. Co., 635 F.3d 796, 803 (5th Cir. 2011). If there is a concern about the validity of jurisdiction, a motion to dismiss may be raised under the Federal Rule of Civil Procedure 12(b)(1). “The objection that a federal court lacks subject-matter jurisdiction may be raised by a party, or by the court on its own initiative, at any stage in the litigation.” Arbaugh v. Y & H Corp., 546 U.S. 500, 506 (2006) (citation omitted).

         DISCUSSION

         Because the Arbitrator dismissed the only federal claim raised, Conn asks the Court to dismiss the case for lack of subject-matter jurisdiction. Stevens counters that the Court retains federal-question jurisdiction, and asks the Court to confirm the arbitration award.

         I. Subject-matter jurisdiction

         Conn asks the Court to dismiss this case for a lack of subject-matter jurisdiction. The Court disagrees because ...


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