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Koch v. Compucredit Corp.

March 29, 2007

MARY KOCH, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED PLAINTIFF
v.
COMPUCREDIT CORPORATION, JEFFERSON CAPITAL, LLC, AND J.A. CAMBECE LAW OFFICE, P.C. DEFENDANTS



The opinion of the court was delivered by: Wm. R. Wilson, Jr. United States District Judge

ORDER

Pending is Defendants Compucredit Corporation ("Compucredit") and Jefferson Capital, LLC's ("Jefferson") Motion to Dismiss for Improper Venue or to Compel Arbitration, or in the Alternative, to Dismiss for Failure to State a Claim.*fn1 Plaintiff responded,*fn2 and Defendants replied.*fn3

I. Background

This is a class action brought under the Fair Debt Collection Practice Act,("FDCPA"),*fn4 and the Arkansas Deceptive Trade Practices Act ("ADTPA").*fn5

This action involves a Visa credit card issued to Plaintiff in 2000, by First North American National Bank ("FNB"). Plaintiff alleges that she settled her credit card balance with FNB in 2003 but two years later, Defendants Compucredit and Jefferson demanded payment for the debt that was already paid. Plaintiff contends that Defendants violated the FDCPA and the ADTPA by misrepresenting that she still owed the money, implying that her debt defenses were lost, and representing that the file had been reviewed by an attorney.

Defendants contend that this claim is subject to arbitration clause and choice of venue clauses contained in the credit agreement signed by Plaintiff and FNB. Under these clauses, proper venue is in Georgia, and Georgia common-law should be applied. Defendants also assert that Plaintiff should be compelled to arbitrate this dispute under the Federal Arbitration Act ("FAA").*fn6

Alternatively, Defendants argue that Plaintiff has failed to state a claim under the FDCPA for the following reasons: (1) they are not liable under the FDCPA -- because the alleged misrepresentations were made to Plaintiff's lawyer; (2) Compucredit is a parent company of Jefferson, and is not liable under the FDCPA or the ADTPA for the actions of its subsidiary; (3) since Plaintiff fails to state a claim for a federal question action, there are no grounds for subject-matter jurisdiction of Plaintiff's state-law claims.

II. Standard of Review

When ruling on a motion to dismiss, a court assumes all factual allegations of the complaint are true, and draws all reasonable inferences from those facts.*fn7 In considering a motion to dismiss, the complaint must be liberally construed in the light most favorable to the plaintiff.*fn8

III. Authority

A. The Federal Arbitration Act

The FAA was created to establish "a liberal federal policy favoring arbitration agreements."*fn9 In the Eighth Circuit, arbitration is required if a valid agreement exists and the dispute falls within the scope of the agreement.*fn10 The FAA mandates that courts "shall direct parties to arbitration on issues to which a valid arbitration agreement has been signed."*fn11

Whether an arbitration agreement has been entered into is a question of law, controlled by the ...


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