Dennis Rhodes v. Rosemary Diamond, 433 F. App'x 78

Appellants filed a class-action-style complaint on March 25, 2009 against Phelan Hallinan & Schmieg LLP and seven attorneys for FDCPA and state-law claims, plus common-law tortious interference.
Allegations centered on inflated bankruptcy proofs of claim with fees tied to sheriffs’ sales but not amended after sales were cancelled and some fees refunded.
Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing disputes over proofs of claim belong in bankruptcy court.
Appellants sought leave to amend to add lenders and new theories, including non-bankruptcy-based FDCPA and state-law claims.
The district court dismissed the complaint with prejudice and denied leave to amend, finding amendment futile and that relief lay in bankruptcy court proceedings.
On appeal, the Third Circuit vacated the district court’s order and remanded to focus on claims by non-bankrupt putative class members.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Preemption of bankruptcy claims	Appellants contend bankruptcy context cannot bar FDCPA/state-law claims.	PHS and lenders argue claims arise from bankruptcy-related filings and are precluded.	Bankruptcy context precludes these FDCPA/state-law claims.
Amendment futility	Amendment adds non-bankruptcy-based claims and additional defendants; not futile.	Amendment would be futile given preemption and existing district ruling.	Amendment would be futile on the pleaded theories; court should remand for focused consideration.
Scope of remand	Should proceed on non-bankruptcy-related claims against non-bankrupt class members.	Bankruptcy-based issues predominate; court should defer to Bankruptcy Court for core claims.	Remand should focus on non-bankrupt putative class members and their claims.

Foman v. Davis, 371 U.S. 178 (Supreme Court, 1962) (abuse of discretion standard for denying leave to amend)
Fowler v. UPMC Shadyside, 578 F.3d 203 (3d Cir. 2009) (plenary standard for district court dismissal and abuse of discretion review)
Lake v. Arnold, 232 F.3d 360 (3d Cir. 2000) (abuse of discretion standard for denial of leave to amend)