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Freedman v. Suntrust Banks, Inc.

United States District Court, D. Columbia

September 21, 2015

SHANA FREEDMAN, on behalf of herself and all others similarly situated, Plaintiff
v.
SUNTRUST BANKS, INC. and SUNTRUST MORTGAGE, INC., Defendants

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[Copyrighted Material Omitted]

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          For SHANA FREEDMAN, on behalf of herself and all others similarly situated, Plaintiff: Jamie L. Crook, PRO HAC VICE, RELMAN, DANE & COLFAX, Washington, DC; Sasha Samberg-Champion, PRO HAC VICE, RELMAN & DANE PLLC, Washignton, DC; John Peter Relman, RELMAN, DANE & COLFAX, PLLC, Washington, DC.

         For SUNTRUST BANKS, INC., SUNTRUST MORTGAGE, INC., Defendants: Syed M. Reza, LEAD ATTORNEY, TROUTMAN SANDERS LLP, Tysons Corner, VA; David N. Anthony, PRO HAC VICE, TROUTMAN SANDERS LLP, Richmond, VA.

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         MEMORANDUM OPINION

         COLLEEN KOLLAR-KOTELLY, United States District Judge.

         Presently before the Court is Defendants' [14] Motion to Dismiss For Lack of Personal Jurisdiction and Plaintiff's [24] Motion for Leave to File Limited Surreply. Upon consideration of the pleadings,[1] the relevant legal authorities, and the record as a whole, the Court DENIES Defendants' Motion to Dismiss and DENIES Plaintiff's Motion for Leave to File Limited Surreply. For the reasons described herein, the Court finds that it lacks personal jurisdiction over Defendants and that jurisdictional discovery is not warranted but that it is in the interest of justice to transfer the matter to the U.S. District Court for the Middle District of Florida pursuant to 28 U.S.C. § 1406(a) and 28 U.S.C. § 1631.

         I. BACKGROUND

         For the purposes of the motion before the Court, the Court accepts as true the well-pleaded allegations in Plaintiff's Complaint. The Court does " not accept as true, however, the plaintiff's legal conclusions or inferences that are unsupported by the facts alleged." Ralls Corp. v. Comm. on Foreign Inv. in U.S., 758 F.3d 296, 315, 411 U.S.App.D.C. 105 (D.C. Cir. 2014). The Court recites the principal facts pertaining to the issues raised in the pending motions, reserving further presentation of the facts for the discussion of the individual issues below.

         Plaintiff Shana Freedman (" Plaintiff" ) is a Florida resident who unsuccessfully sought a home loan from SunTrust Mortgage (" SunTrust" ) in the fall of 2012. Compl. ¶ 3, 17, 40. Plaintiff, whose income consists of long-term Social Security Disability Insurance (" SSDI" ), was ultimately unable to submit a loan application for processing due to a SunTrust policy requiring her to provide firm assurances that her disability benefits would continue. Id. ¶ 37. Plaintiff first experienced difficulties obtaining a home loan from SunTrust in October 2012 when she attempted to complete an online loan application that did not permit her to indicate income in the form of SSDI payments. Id. ¶ 26. Plaintiff contacted a SunTrust loan officer to seek assistance with the application, explaining that she was disabled and that her income consisted of SSDI payments. Id.

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¶ 26. Plaintiff also faxed the loan officer her most recent SSDI award letter, which had no expiration date for her long-term disability benefits. Id. ¶ 31. Following consultation with SunTrust's underwriting department, the loan officer informed Plaintiff that SunTrust had a policy requiring loan applicants whose income consisted of long-term disability benefits to submit documentation " from a Doctor or from Social Security" indicating that " the income is going to continue." Id. ¶ 33. Plaintiff could not provide the requested documentation from the Social Security Administration because that agency does not guarantee future benefits. Id. ¶ 35. Because Plaintiff was unable to obtain the requested documentation, SunTrust refused to process her loan application. Id. ¶ 37. When Plaintiff contacted SunTrust one month later, the loan officer confirmed that SunTrust's income-verification policy continued. Id. In accordance with this policy, SunTrust again refused to process Plaintiff's application. Id. ¶ 37. On September 16, 2014, Plaintiff filed this lawsuit as a putative class action on behalf of herself and other similarly situated borrowers whose income derives from long-term disability assistance. Id. ¶ 41. Plaintiff alleges that SunTrust's policy of requesting sensitive medical information regarding an applicant's disability violates the Fair Housing Act, 42 U.S.C. § 3601 et seq., and the Equal Credit Opportunity Act (" ECOA" ), 15 U.S.C. § 1691 et seq. Id. ¶ 42-43.

         The defendants in this action are SunTrust Banks Inc. and SunTrust Mortgage, Inc. (" Defendants" ). SunTrust Banks, Inc. is an American bank holding company. Compl. ¶ 12. It is a Georgia corporation with its principal place of business at 303 Peachtree Street NE, Atlanta, Georgia, 30308. Defs.' Mot. Exhibit A.[2] SunTrust Banks, Inc. is one of the largest financial services organization in the United States, operating 1,700 banks throughout the United States, including in the District of Columbia. Compl. ¶ 12. SunTrust Banks, Inc. operates a number of retail bank branches in the District of Columbia and maintains a mortgage office in the District. Id. Defs.' Mot. Exhibit B. SunTrust Bank, Inc.'s website advertises that SunTrust Bank and its affiliates offer retail and mortgage banking services " primarily in Florida, Georgia, Maryland, North Carolina, South Carolina, Tennessee, Virginia, and the District of Columbia." Pl.'s Opp'n Exhibit A.

         SunTrust Mortgage, Inc. is a wholly-owned subsidiary of Defendant SunTrust Banks, Inc.. Id. ¶ 13. SunTrust Mortgage, Inc. is a Virginia Corporation with its principal place of business at 901 Semmes Avenue, Richmond, Virginia 23224. Defs.' Mot. Exhibit B. SunTrust Mortgage, Inc. operates loans in SunTrust markets throughout the South and mid-Atlantic regions of the United States, including the District of Columbia. Compl. ¶ 13. It services loans in approximately 48 states and the District of Columbia. Id. In 2013, SunTrust Mortgage was ranked number eight in mortgage originations in the United States. Id. Plaintiff alleges that SunTrust Mortgage, Inc. " is and at all relevant

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times has been a subsidiary of, controlled by, a mere instrumentality of, and an agent of SunTrust Banks such that SunTrust Banks is liable for its acts alleged herein." Id. ¶ 13.

         On February 17, 2015, Defendants filed a Motion to Dismiss for Lack of Personal Jurisdiction. On April 2, 2015, Plaintiff filed her Opposition to Defendant's Motion, requesting in the alternative that the Court transfer the case to the Middle District of Florida. After Defendants filed their Reply brief on April 27, 2015, Plaintiff filed a motion on May 6, 2015 for leave to file a surreply to bolster arguments in support of the transfer request previously made in her Opposition brief. Defendants' Reply brief did nothing more than respond to Plaintiff's arguments in support of her transfer request. Because Defendants did not raise any new arguments in their Reply brief, the Court denies Plaintiff's motion for leave to file a surreply. Crummey v. Soc. Sec. Admin., 794 F.Supp.2d 46, 63 (D.D.C. 2011) aff'd, No. 11-5231, 2012 WL 556317 (D.C. Cir. Feb. 6, 2012) (" [A] surreply is not a vehicle for rehashing arguments that have already been raised and briefed by the parties." ).

         II. LEGAL STANDARD

         When personal jurisdiction is challenged under Rule 12(b)(2), the plaintiff bears the burden of establishing a factual basis for asserting personal jurisdiction over a defendant. See Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456, 282 U.S.App.D.C. 295 (D.C. Cir. 1990). At this stage, the plaintiff " can satisfy that burden with a prima facie showing." Mwani v. bin Laden, 417 F.3d 1, 7, 368 U.S.App.D.C. 1 (D.C. Cir. 2005) (quoting Edmond v. United States Postal Serv. Gen. Counsel, 949 F.2d 415, 424, 292 U.S.App.D.C. 240 (D.C. Cir. 1991)) (emphasis in original). To do so, the plaintiff cannot rest on bare allegations or conclusory statements but " must allege specific acts connecting [the] defendant with the forum." Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524, 348 U.S.App.D.C. 238 (D.C. Cir. 2001) (internal quotation marks omitted). " To make such a showing, the plaintiff is not required to adduce evidence that meets the standards of admissibility reserved for summary judgment and trial[; ]" but rather, the plaintiff may " rest her arguments on the pleadings, 'bolstered by such affidavits and other written materials as [she] can otherwise obtain.'" Urban Inst. v. FINCON Servs., 681 F.Supp.2d 41, 44 (D.D.C. 2010) (quoting Mwani, 417 F.3d at 7).

         In order to obtain jurisdictional discovery a " plaintiff must have at least a good faith belief that such discovery will enable it to show that the court has personal jurisdiction over the defendant." Caribbean Broad. Sys. Ltd. v. Cable & Wireless PLC, 148 F.3d 1080, 1090, 331 U.S.App.D.C. 226 (D.C. Cir. 1998); see also Exponential Biotherapies, Inc. v. Houthoff Buruma N.V., 638 F.Supp.2d 1, 11 (D.D.C. 2009) (holding that [j]urisdictional discovery ... is justified only if the plaintiff reasonably 'demonstrates that it can supplement its jurisdictional allegations through discovery.'" ) (quoting Kopff v. Battaglia, 425 F.Supp.2d 76, 89 (D.D.C. 2006)). " Mere conjecture or speculation" is not enough to justify jurisdictional discovery. FC Investment Group LC v. IFX Markets Ltd., 529 F.3d 1087, 1094, 381 U.S.App.D.C. 383 (D.C. Cir. 2008).

         Pursuant to 28 U.S.C. § 1406, courts have authority to transfer a case " laying venue in the wrong division or district" to " any district or division in which it could have been brought," if such a transfer would be " in the interest of justice." The decision whether a transfer under Section 1406 is in the " interest of justice" rests " within the sound discretion of the district court." Naartex Consulting Corp. v. Watt, 722 F.2d 779, 789, 232 U.S.App.D.C. 293 (D.C. Cir.

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1983). Transfer is appropriate " when procedural obstacles [such as lack of personal jurisdiction, improper venue, and statute-of-limitations bars] impede an expeditious and orderly adjudication on the merits." Sinclair v. Kleindienst, 711 F.2d 291, 293-94, 229 U.S.App.D.C. 13 (D.C. Cir. 1983). Generally, the interests of justice require transferring a case to the appropriate judicial district rather than dismissing it. See Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962).

         Courts also have authority under 28 U.S.C. § 1631 to transfer a case filed in the wrong jurisdiction, " if it is in the interest of justice" to do so. When a case is transferred pursuant to 28 U.S.C. § 1631, it " proceed[s] as if it had been filed in . . . the court to which it is transferred on the date upon which it was actually filed in ... the court from which it is transferred." Id. " There are three elements to a section 1631 transfer: (1) there must be a lack of jurisdiction in the district court; (2) the transfer must be in the interest of justice; and (3) the transfer can be made only to a court in which the action could have been brought at the time it was filed or noticed." Fasolyak v. The Cradle Soc'y, Inc., No. 06-1126, 2007 WL 2071644, at *11 (D.D.C. July 19, 2007) (quoting Ukiah Adventist Hosp. v. FTC, 981 F.2d 543, 549, 299 U.S.App.D.C. 54 (D.C. Cir. 1992)). As the party requesting transfer, Plaintiff bears the burden of establishing that the elements of a § 1631 transfer have been met. See Osage Tribe of Indians of Okla. v. U.S., No. 04-283, 2005 WL 578171, at *2 (D.D.C. Mar. 9, 2005).

         III. DISCUSSION

         Defendants move to dismiss this action under Rule 12(b)(2) for lack of personal jurisdiction, arguing that it has insufficient contacts with the District of Columbia to support jurisdiction. Plaintiff opposes Defendants' motion and requests in the alternative that the Court permit jurisdictional discovery or transfer the case to the U.S. District Court for the Middle District of Florida pursuant to 28 U.S.C. § 1406, or in the alternative, to 28 U.S.C. § 1631.

         The Court finds that there is not jurisdiction over Defendants and that jurisdictional discovery is not warranted. The Court further finds that it is in the interest of justice to transfer the matter to the U.S. District Court for the Middle District of Florida, which is a competent jurisdiction to hear Plaintiff's claims, pursuant to either 28 U.S.C. § 1406 or 28 U.S.C. § 1631.

         A. The Court Lacks Personal Jurisdiction over Defendants

         Defendant moves to dismiss this action under Rule 12(b)(2) for lack of personal jurisdiction, arguing that they have insufficient contacts with the District of Columbia to support jurisdiction. See Defs.' Mot. at 7-9. Plaintiff argues that the District of Columbia has general personal jurisdiction over Defendants because of their " continuous and systematic affiliations with the forum state." Pl.'s Mot. at 9. Plaintiff is " not aware of facts indicating that her claims arose in the District of Columbia, and she therefore does not attempt to establish specific jurisdiction." Pl.'s Mot. at 1.

         a. The Court's Analysis is Governed by the Supreme Court's ...


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