DeSimone v. Select Portfolio Servicing, Inc, 1:20-cv-03837

Plaintiffs Lisa DeSimone (NY) and Deborah R. Snowden (MD) sued Select Portfolio Servicing, Inc. (SPS), the loan servicer for their mortgages, alleging SPS charged $5–$15 "EZ Pay" fees when borrowers paid by direct debit.
Plaintiffs asserted FDCPA claims (15 U.S.C. §§ 1692e, 1692f) and several state-law claims (breach of contract, GBL § 349, Maryland consumer statutes).
The Amended Complaint alleged repeated EZ Pay charges (2017–2020) and that SPS sometimes identified communications as attempts to collect a debt.
The Amended Complaint did not allege when SPS began servicing the loans or whether the loans were in default when SPS acquired servicing.
The court dismissed the FDCPA claims because plaintiffs failed to plausibly allege SPS was a "debt collector" (i.e., that SPS obtained the loans after default). State-law claims were dismissed without prejudice for lack of supplemental jurisdiction.
The court granted leave to amend to allege the timing/status of servicing; plaintiffs were given until February 3, 2022 to file a second amended complaint.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether SPS is a "debt collector" under the FDCPA	Plaintiffs argue SPS acted as a debt collector by charging EZ Pay fees while attempting to collect debts and by servicing distressed loans.	SPS argues it is a mortgage servicer, not a debt collector, because plaintiffs do not allege the loans were in default when SPS obtained servicing.	Court: Dismissed FDCPA claims—plaintiffs failed to allege loans were in default when SPS began servicing, so SPS not plausibly a "debt collector."
Sufficiency of pleading to state FDCPA claims (plausibility)	Plaintiffs rely on factual allegations of EZ Pay charges and debt-collection communications to show unlawful collection practices.	SPS contends the complaint lacks the key factual predicate (default-at-acquisition) required for FDCPA liability.	Court: Under Iqbal/Twombly standards, the complaint lacks the factual allegation that the loans were in default at acquisition; claims not plausible.
Whether to retain supplemental jurisdiction over state-law claims after dismissing federal claims	Plaintiffs seek to proceed on state claims in federal court.	SPS implicitly argues dismissal of federal claims warrants dismissal of state claims.	Court: Declined to exercise supplemental jurisdiction; state claims dismissed without prejudice.

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim under Twombly)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
Obduskey v. McCarthy & Holthus LLP, 139 S. Ct. 1029 (2019) (definition of "debt collector" in mortgage context)
Roth v. CitiMortgage Inc., 756 F.3d 178 (2d Cir. 2014) (FDCPA excludes servicers who obtained loans before default)
Qurashi v. Ocwen Loan Servicing, LLC, [citation="760 F. App'x 66"] (2d Cir. 2019) (affirming dismissal where complaint did not allege loan was in default when servicer acquired it)
Macias v. Ocwen Loan Servicing, LLC, [citation="718 F. App'x 32"] (2d Cir. 2017) (same principle applied to FDCPA claims against servicers)