Gerstle v. National Credit Adjusters, LLC, 76 F. Supp. 3d 503

Background

Plaintiffs Gerstle and Couser allege NCA purchased and tried to collect payday loans carrying interest rates over 32% and that NCA sent collection letters and presented a "telephone check" to Couser’s bank debiting $125 without authorization.
Fagan’s typewritten signature appears on two collection letters to Gerstle; an unsigned NCA letter and a presented telephone check relate to Couser.
NCA is a Kansas-based purchaser/collector of consumer debts; IFS is NCA’s manager and several individual defendants are NCA/IFS officers located in Kansas who allegedly "authorized" unlawful collection practices.
Plaintiffs assert claims under the FDCPA (Count I), N.Y. Gen. Bus. Law § 349 (Count II), New York civil usury law (Count III), and RICO (Count IV). RICO is not alleged against NCA or Fagan.
Defendants (all except NCA) move to dismiss for lack of personal jurisdiction; NCA and Fagan (the only defendants found with jurisdiction) move to dismiss for failure to state claims under Rule 12(b)(6).
Court grants 12(b)(2) as to IFS and all individual defendants except Fagan; denies 12(b)(6) dismissal of FDCPA and usury claims for defendants with jurisdiction and dismisses § 349 claim and RICO as to defendants without jurisdiction.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Personal jurisdiction over individual Kansas defendants (agency theory)	NCA acted as agent for IFS and individual officers who oversaw or authorized collection policies, so plaintiffs’ claims arise from those New York-directed collection activities	Allegations are conclusory; defendants did not themselves transact business in NY and agency allegations lack particulars	Dismissed for lack of personal jurisdiction as to Smith, Huston, Hochstein, Fletchall, Emmerich, Hyter, and IFS — agency allegations too vague to show these were primary actors
Personal jurisdiction over Fagan (direct contacts)	Fagan’s typed signature appears on collection letters sent to Gerstle in NY, showing purposeful direction of activities to NY resident	Fagan says she did not draft or create the letters (affidavit)	Jurisdiction proper over Fagan: signature on letters is a prima facie purposeful contact and reasonable for jurisdiction
FDCPA liability (Count I) against NCA and Fagan	Plaintiffs: NCA and Fagan engaged in debt-collection communications attempting to collect allegedly usurious (void) debt, violating FDCPA prohibitions on unlawful threats	Defendants (generally) argue defenses including timeliness and challenge to individual liability	Denied as to NCA and Fagan: Fagan’s signature on threatening collection letters plausibly alleges she personally engaged in prohibited conduct; FDCPA claim survives (statute-of-limitations argument rejected)
N.Y. Gen. Bus. Law § 349 deceptive practices (Count II)	Couser: NCA caused an unauthorized telephone check withdrawal from his account, a consumer-oriented deceptive act causing injury	NCA: Couser wasn’t personally misled into paying; injury resulted from bank’s processing, not a misrepresentation to him	Dismissed: plaintiff failed to allege he was personally misled or that his injury flowed from a deceptive communication to him
New York usury claim (Count III) against NCA	Couser: loan carried >32% interest; usurious loans are void under NY law	NCA moved to dismiss	Denied as to NCA: allegation of >32% interest states a plausible usury claim (Count III proceeds)

Key Cases Cited

Kreutter v. McFadden Oil Corp., 71 N.Y.2d 460 (N.Y. 1988) (agency/prima facie single-act jurisdiction under CPLR § 302(a))
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (minimum contacts and reasonableness for due process in specific jurisdiction)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleadings)
Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (pleading standards and reasonable inferences)
Licci v. Lebanese Canadian Bank, SAL, 732 F.3d 161 (2d Cir. 2013) (CPLR § 302(a) satisfaction usually also meets due process)