CHARLESTON – In an unusual move, a debt collection harassment case seeking less than $10,000 plus attorney fees has been removed from magistrate court to federal court.
The original complaint was filed August 21 in Kanawha County Magistrate Court by Makenzie McDonald against Portfolio Recovery Associates LLC.
In that complaint, the plaintiff accuses the Virginia-based defendant of engaging in a series of abusive illegal debt collection techniques. The plaintiff claims Portfolio employed an illegal campaign of telephone calls in an attempt to collect the alleged debt, causing humiliation, mental anguish, annoyance, stress and embarrassment.
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The plaintiff seeks compensatory damages for general and specific damages and for the undue and unreasonable harassment, oppression, abuse, aggravation, annoyance and inconvenience as well as statutory damages adjusted for inflation, punitive damages, interest, court costs, attorney fees, relief in the amount of $9,500 and other relief.
In its September 25 notice of removal to federal court, Portfolio Recovery lists diversity as one of the reasons for removal, noting Portfolio is a Delaware limited liability company with its principal place of business in Norfolk, Va.
Portfolio also says the amount in controversy is an issue.
While the original magistrate court complaint lists $9,500 in relief sought, Portfolio notes in its removal that the lawsuit involves allegations that Portfolio made calls and sent letters to the plaintiff that were allegedly illegal in nature. The West Virginia Consumer Credit and Protection Act awards actual damages and the right to recover $1,000 per violation adjusted for inflation.
When reviewing its records, Portfolio says it made a total of 77 phone calls to the plaintiff in attempts to collect the debt from September 10, 2023, to May 23, 2024. With $1,000 per violation of the WVCCPA, that would surpass the $75,000 minimum threshold for a federal court case.
Adding the other relief sought, such as punitive damages, Portfolio says the case belongs in federal court.
In a footnote, Portfolio denies that any of the phone calls violated the WVCCPA or any other common law theory alleged by the plaintiff. It says it divulges the number of calls in an effort to illustrate the amount in controversy.
But on October 1, the plaintiff filed a motion to remand the case back to Kanawha Magistrate Court.
“Despite this clear limitation, and the express amount sought in the pleading, the defendant erroneously asserts federal court jurisdiction, neglecting the longstanding and fundamental principle that the amount in controversy must reflect the maximum potential judgment at the time of removal,” plaintiff attorney Michael Cary wrote. “Defendant has not and cannot meet the burden of establishing that the amount in controversy exceeds the jurisdictional threshold. This court must remand the action to the small claims court and recognize the removal as objectively baseless. …
“It is a mystery why the defendant removed this case. The barebones notice of removal truly offers no analysis or calculation supporting the amount in controversy requirement for jurisdiction before this court. Unnecessary delay is the only clear motivation for the action of the defendant.”
In the motion to remand back to magistrate court, Cary asks for attorney fees and court costs associated with the removal to federal court.
Both Cary and Matthew Ward, who is representing the defendant, declined further comment on the case. Cary owns Cary Law Office in Charleston. Ward works in Dinsmore & Shohl’s Huntington office. The case has been assigned in federal court to U.S. District Court Judge Joseph Goodwin.
U.S. District Court for the Southern District of West Virginia case number 2:24-cv-523 (Kanawha Magistrate Court case number 24-M20C-2326)