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Court rejects attempted ‘assignment’ of FLSA claim

Where an individual alleged that two credit corporations allegedly violated the Fair Debt Collection Practices Act, or FDCPA, he could not assign those claims to another individual to prosecute. Under Virginia law, only those causes of action for damage to real or personal property and causes of action ex contractu are assignable.

Background

Malik Jones, appearing pro se and as assignee of Deon Harkins, filed this action against Credit Management Control and Credit Control Corporation. Mr. Jones alleges that on or about Oct. 4, 2021, Deon Harkins “checked his [credit] report on ‘credit karma’” and observed tradelines from defendants that Mr. Harkins believed were inaccurate. Mr. Jones states that he “has been assigned 100 percent of these claim(s)” and that he is Mr. Harkins’s “Attorney-in-Fact” pursuant to Virginia Code § 64.2-1603. 

In an order entered on April 7, 2022, the court identified certain jurisdictional and pro se representation issues that required attention before this action could proceed and solicited a response from Mr. Jones. Mr. Jones filed a timely response to the court’s order and attached thereto a copy of the assignment, as well as a copy of a document titled, “Limited Power of Attorney.” 

In relevant part, the assignment, which was signed by Mr. Haskins on Oct. 5, 2021, purports to “transfer[] 100%” of Mr. Haskins’s interest in his Fair Debt Collection Practices Act, or FDCPA, claims to Mr. Jones. Mr. Jones argues that based on the terms of the assignment and the power of attorney, Mr. Jones “has standing to litigate this matter” and “is authorized to act on behalf” of Mr. Harkins.

Analysis

This court addressed a strikingly similar issue in Schmidt v. Fair Collection & Outsourcing, Inc., No. 1:17-cv-313, 2018 U.S. Dist. LEXIS 6982 (E.D. Va. Jan. 12, 2018). In Schmidt, a pro se plaintiff attempted to assert several claims, including an FDCPA claim, on behalf of another individual who was not named as a plaintiff in the action. The plaintiff claimed “that he acquired the account in question” from the other individual.

The court in Schmidt ultimately determined that the pro se plaintiff lacked standing to bring his asserted claims. The court noted that the plaintiff’s allegations arose from collection efforts that were targeted at an individual who was not the plaintiff. Although the plaintiff claimed that he had “acquired the account in question” from the other individual, the court explained that under Virginia law, “only those causes of action for damage to real property or personal property, … and causes of action ex contractu are assignable.” 

Thus, the court concluded that the plaintiff failed “to demonstrate that he [was] a real party of interest who ha[d] suffered an injury in fact, and therefore lack[ed] standing” to bring the asserted claims. Other courts faced with similar factual scenarios have reached the same outcome.

Here, Mr. Jones seeks to assert the FDCPA claims of Mr. Harkins based on a purported assignment of claim and/or under the authority of an alleged power of attorney. However, pursuant to Virginia law, “[o]nly those causes of action for damage to real or personal property … and causes of action ex contractu are assignable.” The FDCPA claims asserted by Mr. Jones do not fall into this limited category of assignable claims. Thus, the court finds that Mr. Jones’s purported assignment is invalid.

Without a valid assignment and without any factual allegations to suggest that Mr. Jones personally suffered any “injury-in-fact,” the court concludes that Mr. Jones lacks standing to bring the FDCPA claims asserted in this action. Because “standing is an integral component of the case or controversy requirement,” the court further concludes that it lacks jurisdiction over this action and that dismissal is warranted under Federal Rule 12(h)(3). 

Mr. Jones continues to argue that he may bring this action on behalf of Mr. Harkins based on the purported authority of a power of attorney that was executed by Mr. Harkins and Mr. Jones. However, as the court previously explained to Mr. Jones, “although a ‘power of attorney may confer certain decision-making rights under state law, . . . it does not allow [a plaintiff] to litigate pro se on behalf of [another] in federal court.’” Thus, the court finds that the power of attorney document attached to Mr. Jones’s response does not alter the court’s jurisdictional findings, as summarized above, and does not authorize Mr. Jones to litigate this action for Mr. Harkins on a pro se basis.

Suit dismissed for lack of subject matter jurisdiction.

Jones v. Credit Management Control, Case No. 4:21-cv-156, Aug. 29, 2022. EDVA at Newport News (Young). VLW 022-3-383. 9 pp.

VLW 022-3-383