July 14, 2020

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July 13, 2020

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FCRA Defendant Falls Victim of its Own Success, Gets Caught in Catch-22 of Subject Matter Jurisdiction

Yesterday, a federal court ruled that it did not have subject matter jurisdiction to decide a FCRA-related case.  Specifically, the court ruled that the plaintiff did not allege sufficient facts for him to have standing under Spokeo.  While such rulings often represent victories for defendants, here it was the plaintiff that did not want the Court to assert subject matter jurisdiction.  This is because of the unique history of this particular case.

In Ratliff v. LTI Trucking Services, Inc., the plaintiff first filed a FCRA suit in federal court in Illinois.  That court, citing Spokeo’s requirement that a plaintiff must have a concrete injury to establish standing, dismissed the case for lack of subject matter jurisdiction.  The plaintiff re-filed in state court.  The defendant removed the case to federal court, and simultaneously moved to dismiss the case for lack of subject matter jurisdiction.  The plaintiff argued that the court did not have the subject matter needed to dismiss the case and moved to remand the case back to state court.

The Court agreed with the plaintiff.  In other words, while the defendant was successful in convincing the Court that it lacked subject matter jurisdiction, the Court elected to impose the plaintiff’s preferred remedy of removal.  The case will now go back to state court over the defendant’s objections.

In spite of this ruling, defendants should not ignore Spokeo arguments for fear of their case being re-filed in state court.  Such cases already dismissed from federal courts would often be meritless and should frequently be dismissed by state courts.  Moreover, the Ratliff Court considered whether the state court lawsuit was futile and noted that a circuit split exists which allows courts to dismiss futile cases outright in the Fifth and Ninth Circuits.

Copyright © 2020 Womble Bond Dickinson (US) LLP All Rights Reserved.National Law Review, Volume IX, Number 4


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Scott is a business-focused attorney who delivers practical solutions for his clients. Scott listens to his clients’ goals and starts with those in mind. A strategic thinker, he regularly works with private equity principals, business owners and management teams to help them chart efficient paths through transactions, commercial negotiations and board-level decisions.

Scott leads executives and deal teams on major transactions and advises businesses as general outside counsel on a daily basis. He has particular depth in technology-enabled...