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Campbell v. Jacob
United States District Court, E.D. Arkansas, Western Division
August 26, 2019
LAURA K. CAMPBELL, on behalf of herself and all others similarly situated, Plaintiff
MICHAEL A. JACOB, II; JACOB LAW GROUP, PLLC; JEFFERSON CAPITAL SYSTEMS, LLC, Defendants JEANNETTE WELCH, on behalf of herself and all others similarly situated, Plaintiff
MICHAEL A. JACOB, II; JACOB LAW GROUP, PLLC; MIDLAND FUNDING, LLC; MIDLAND CREDIT MANAGEMENT, INC. Defendants LILLIE BROWNLEE, on behalf of herself and all others similarly situated, Plaintiff
MICHAEL A. JACOB, II; JACOB LAW GROUP, PLLC; MIDLAND FUNDING, LLC; MIDLAND CREDIT MANAGEMENT, INC. Defendants BETTY JOHNSON, on behalf of herself and all others similarly situated, Plaintiff
MICHAEL A. JACOB, II; JACOB LAW GROUP, PLLC; MIDLAND FUNDING, LLC; MIDLAND CREDIT MANAGEMENT, INC. Defendants.
M. Moody Jr. United States District Judge.
is the motion to compel arbitration and to strike class
allegations of Plaintiff Lillie Brownlee filed on behalf of
Defendants Midland Funding LLC and Midland Credit Management,
Inc. (collectively “Midland”). (Docket # 41).
Defendants Michael A. Jacob, II and Jacob Law Group, PLLC
(collectively “JLG”) have joined the motion and
filed a supporting brief. (Docket # 56 and 57). Plaintiff has
filed a response and Defendants have filed replies. For the
reasons stated herein, the motion is GRANTED.
Brownlee filed this action alleging that Defendants Michael
A. Jacob, II, Jacob Law Group, PLLC (“JLG”) and
Midland Funding, LLC (“Midland Funding”) and
Midland Credit Management, Inc. (“MCM”) attempted
to collect consumer debts from her and putative class members
through standardized, form debt collection complaints filed
in Arkansas state courts that fraudulently and falsely
averred that Midland Funding LLC “holds in due course a
claim. . . pursuant to a defaulted Synchrony Bank credit card
account.” Plaintiff asserts that Midland is not a
holder in due course of Synchrony Bank accounts and that this
representation violates the Fair Debt Collection Practices
Act (“FDCPA”), 15 U.S.C §1692 et seq. and
the Arkansas Fair Debt Collection Practices Act
(“AFDCA”), Ark. Code Ann. §17-24-501 et seq.
about March 27, 2015, Plaintiff Brownlee opened a Synchrony
JC Penny credit card account with an account number ending in
6793. (“the Account”). A letter containing the
credit card and the cardholder agreement was mailed to her.
Plaintiff made purchases using the credit card. Plaintiff
failed to make the required payments on the Account and on
April 2, 2017, the account was charged-off.
Cardholder Agreement is governed by Utah law and contains the
following arbitration provision ("the Arbitration
RESOLVING A DISPUTE WITH ARBITRATION
What claims are subject to arbitration.
1. If either you or we make a demand for
arbitration, you and we must arbitrate any dispute or claim
between you or any other user of your account, and us, our
affiliate, agents and/or J.C. Penny Corporation Inc. if it
relates to your account, except as noted below.
2. We will not require you to arbitrate: (1)
any individual case in small claims court or your states
equivalent court, so long as it remains an individual case in
that court; or (2) a case we file to collect money you owe
us. However, if you respond to the collection lawsuit by
claiming any wrongdoing, we may require you to arbitrate
3. Notwithstanding any other language in
this section, only a court, not an arbitrator, will decide
disputes about the validity, enforceability, coverage or
scope of this section or any part thereof (including, without
limitation, the next paragraph of this section and/or this
sentence). However, any dispute or argument that concerns the
validity or enforceability of the Agreement as a whole is for
the arbitrator, not the court, to decide.
No Class Actions
YOU AGREE NOT TO PARTICIPATE IN A CLASS,
REPRESENTATIVE OR PRIVATE ATTORNEY GENERAL ACTION AGAINST
U.S. IN COURT OR ARBITRATION. ALSO, YOU MAY NOT BRING CLAIMS
AGAINST U.S. ON BEHALF OF ANY ACCOUNTHOLDERWO IS NOT AN
ACCOUNTHOLDER ON YOUR ACOUNT, AND YOU AGREE THAT ONLY
ACCOUNTHOLDERS ON YOUR ACCOUNT MAY BE JOINED IN A SINGLE
ARBITRATION WITH ANY CLAIM YOU HAVE . . . .
Arbitration Provision also contains the following language in
bold and all capital letters: “PLEASE READ THIS SECTION
CAREFULLY, IF YOU DO NOT REJECT IT, THIS SECTION WILL APPLY
TO YOUR ACCOUNT, AND MOST DISPUTES BETWEEN YOU AND U.S. WILL
BE SUBJECT TO INDIVIDUAL ARBITRATION. THIS MEANS THAT: (1)
NEITHER A COURT NOR A JURY WILL RESOLVE ANY SUCH DISPUTE; (2)
YOU WILL NOT BE ABLE TO PARTICIPATE IN A CLASS ACTION OR
SIMILAR PROCEEDING; (3) LESS INFORMATION WILL BE AVAILABLE;
AND (4) APPEAL RIGHTS WILL BE LIMITED.” Plaintiff does
not claim to have rejected the Arbitration Provision.
2017, Midland Funding LLC purchased the Account from
Synchrony as part of a portfolio of charged-off debts.
Synchrony “transfer[red], s[old], convey[ed],
grant[ed], and deliver[ed] to [Midland Funding LLC], its
successors and assign, . . . the Account.” (ECF #41-1,
p. 14). Synchrony assigned to Midland Funding LLC all of its
rights, title and interest in Brownlee's Account. (ECF
#53 p. 9). Defendants argue that the assignment of
Synchrony's right, title, and interest in the Account was
expressly contemplated by the Cardholder Agreement which
states: "Assignment. We may sell,
assign or transfer any or all of our rights or duties under
this Agreement or your account, including our rights to
payments. We do not have to give you prior notice of such
action. You may not sell, assign or transfer any of your
rights or duties under this Agreement or your account.”
(ECF #41-2, p. 7). Defendants argue this ...