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Griffith v. Educap, Inc.

United States District Court, District of Columbia

September 27, 2019

EDUCAP, INC., Defendant.



         Before the Court are the parties’ cross-motions for summary judgment, see Griffith’s Mot., Dkt. 38; EduCap’s Cross-Mot., Dkt. 41, and their supplemental briefing on the basis for this Court’s jurisdiction, see EduCap’s Suppl. Br., Dkt. 47; Griffith’s Suppl. Br., Dkt. 48. For the reasons that follow, the Court will dismiss the case without prejudice for lack of jurisdiction and deny the cross-motions for summary judgment as moot.

         I. BACKGROUND

         According to plaintiff Natasha Griffith, HSBC Bank extended a student loan to Robert Blocker on February 13, 2007, and Griffith co-signed the loan so that Blocker could attend Bowie State University. Third Am. Compl. ¶¶ 5, 25–26, Dkt. 23. When Blocker eventually defaulted, defendant EduCap, Inc., a student loan servicer, filed a debt collection action against Griffith in D.C. Superior Court. Id. ¶¶ 28–29, 31. The complaint in that action identified the plaintiff as “EDUCAP Inc. on behalf of HSBC Bank USA, National Association.” Id. ¶ 29; see also Griffith’s Mot. Attach. 3 (Verified Compl.) at 1, Dkt. 38-3.

         On May 26, 2015, the D.C. Superior Court granted EduCap’s motion for summary judgment and entered judgment against Griffith in the amount of $24, 855.80, plus interest and certain attorney fees. May 26, 2015 Order & J. at 9–10, Dkt. 41-7. In the course of that ruling, the Superior Court rejected one of Griffith’s several arguments: that “Edu[C]ap [was] not the real party in interest and only HSBC ha[d] the right to file suit against her.” Id. at 4.

         In February 2016, however, the D.C. Court of Appeals reversed the grant of summary judgment on EduCap’s monetary claims because EduCap was not the real party in interest, and only the real party in interest-here, HSBC-may sue to enforce a substantive right. Griffith’s Mot. Attach. 3 (Feb. 24, 2016 Mem. Op. & J.) at 96–97. It then remanded “for the trial court to exercise the responsibility entrusted to it by [Federal Rule of Civil Procedure] 17(a), namely to allow ‘a reasonable time for ratification of commencement of the action by, or joinder or substitution of, the real party in interest, ’ HSBC.” Id. at 97 (quoting Fed. R. Civ. P. 17(a)(3)).

         On remand, the trial court accepted the invitation to substitute HSBC, reasoning that there was no evidence of bad faith or “willful waiver of a fair opportunity to join” HSBC and that Griffith had “not made compelling arguments as to whether HSBC’s substitution would prejudice her case.” July 11, 2016 Order at 5, Dkt. 41-8. It explained that “the underlying facts, law, and loan instruments w[ould] remain the same, whether Edu[C]ap or HSBC prosecute[d] the claim.” Id. But it refused to grant summary judgment in favor of HSBC, on the ground that Griffith would be prejudiced if she were denied an opportunity to obtain discovery against the bank. Id. at 5–6. HSBC then continued to prosecute its claims for nine months before it dismissed the action with Griffith’s consent. See Griffith’s Mot. Attach. 3 (Apr. 20, 2017 Order) at 100.

         Meanwhile, Griffith sued EduCap, Weinstock, Friedman & Friedman, and HSBC in this Court for violations of the federal Fair Debt Collection Practices Act, violations of the D.C. Debt Collection Law (DCDCL), abuse of process, and malicious prosecution. Third Am. Compl. ¶¶ 50–87. Among other things, she alleged that “EduCap ha[d] been filing thousands of debt collection lawsuits across the country falsely claiming to be the real party in interest by suing ‘on behalf of HSBC Bank USA, N.A., ’” id. ¶ 23, and that it “willfully engag[ed] in unfair or unconscionable conduct to collect [Griffith’s] debt in filing suit falsely claiming Griffith ‘entered into a written promissory note with EduCap.’” id. ¶ 70. In support of this Court’s jurisdiction, she alleged that the federal claim provided federal question jurisdiction and that the Court also had diversity jurisdiction because there was complete diversity of citizenship and the amount in controversy exceeded $75, 000. Id. ¶¶ 1–2.

         The parties have submitted several rounds of briefing since Griffith filed her third amended complaint.[1] In response to a motion to dismiss, this Court dismissed all but the DCDCL claim against EduCap. See Sept. 10, 2018 Order, Dkt. 36. Within a week, Griffith moved for summary judgment without seeking discovery. See Griffith’s Mot.; see also Joint Case Mgmt. Report at 2, Dkt. 42 (“The parties agree that discovery should not commence until the Court issues its ruling on the parties’ cross-motions for summary judgment.”). EduCap then timely filed an opposition and cross-motion for summary judgment. See EduCap’s Cross-Mot. And after reviewing the parties’ submissions, the Court sua sponte ordered supplemental briefing “addressing whether the Court has jurisdiction over the sole remaining claim in this action” and, to the extent the parties maintain that the Court has diversity jurisdiction, explaining “with specificity how the amount in controversy exceeds $75, 000.” Sept. 6, 2019 Minute Order. The parties have since provided that supplemental briefing. See EduCap’s Suppl. Br.; Griffith’s Suppl. Br.


         Federal district courts are courts of limited jurisdiction, and it is “presumed that a cause lies outside this limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). The plaintiff therefore bears the burden of establishing jurisdiction. Id.; see also Spokeo v. Robins, 136 S.Ct. 1540, 1547 (2016). Moreover, “because it involves a court’s power to hear a case, ” subject matter jurisdiction “can never be forfeited or waived.” Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) (internal quotation marks omitted). To the contrary, courts have “an independent obligation to determine whether subject-matter jurisdiction exists, even in the absence of a challenge from any party.” Id.; see also Gonzalez v. Thaler, 565 U.S. 134, 141 (2012) (“When a requirement goes to subject-matter jurisdiction, courts are obligated to consider sua sponte issues that the parties have disclaimed or have not presented.” (italics omitted)). And if a court “determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action” under Federal Rule of Civil Procedure 12(h)(3).

         III. ANALYSIS

         Both parties maintain that the Court may exercise jurisdiction over this case, but they disagree on the basis of that jurisdiction. Griffith argues that the Court has diversity jurisdiction. See Griffith’s Suppl. Br. at 2–5. EduCap argues that the amount in controversy does not permit diversity jurisdiction, but it contends that the Court should nevertheless exercise supplemental jurisdiction based on the now-dismissed federal claim. See EduCap’s Suppl. Br. at 2–3. The Court concludes that it does not have diversity jurisdiction, and it declines to exercise supplemental jurisdiction.

         A. ...

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