SHEPARD v. CREDIT PROTECTION ASSOCIATION, LP, 1:17-cv-03104

Shepard contracted with Spectrum for home broadband; service was deactivated for arrears and account referred to Credit Protection Association L.P. (CPA) for collection.
Shepard disputed a portion of the debt and demanded verification; CPA warned it would report the debt if unpaid and then reported it despite Shepard timely paying Spectrum in full.
CPA later corrected reports and closed its file after Shepard notified it of the error.
Shepard sued in Indiana state court alleging federal and state claims against CPA and Spectrum; he voluntarily dismissed CPA in state court before defendants removed the case.
Defendants removed to federal court asserting federal-question jurisdiction based on alleged FDCPA and FCRA issues; Shepard moved to remand.
The court evaluated whether the complaint, as pleaded after CPA’s dismissal, established federal subject-matter jurisdiction.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal-question jurisdiction exists under the FDCPA	Shepard contends dismissed CPA removed the federal claim, leaving no FDCPA basis	Spectrum contends complaint alleges it is vicariously liable for CPA’s FDCPA violations, creating federal question	No FDCPA jurisdiction: Spectrum is a creditor, not a “debt collector” under the FDCPA, so alleged facts do not state FDCPA claims against Spectrum without CPA
Whether FCRA creates federal jurisdiction	Shepard says no plausible FCRA private claim is pled	Spectrum points to allegations about credit reporting and disputes	No FCRA jurisdiction: duties to furnishers cited are enforced by agencies; no private cause of action for those duties alleged
Effect of Shepard’s voluntary dismissal of CPA on removal	Shepard argues dismissal eliminated the federal-defendant basis for removal	Defendants removed before realizing dismissal; removal nevertheless relies on federal claims against remaining defendant	Remand required: with CPA dismissed and no plausible federal claim against Spectrum, federal jurisdiction is lacking; remand to state court granted
Entitlement to costs and fees for improper removal	Shepard seeks costs under 28 U.S.C. § 1447(c)	Defendants argue removal was reasonable given complaint’s allegations against CPA	Denied: removal was objectively reasonable because defendants likely did not know CPA had been dismissed when they removed

Franchise Tax Bd. v. Construction Laborers Vacation Trust for S. Cal., 463 U.S. 1 (jurisdiction determined from the plaintiff's complaint)
Taylor v. Anderson, 234 U.S. 74 (same principle on removal jurisdiction)
Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718 (creditors are not "debt collectors" under the FDCPA)
Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317 (creditors need not monitor third-party collectors for FDCPA compliance)
Sanders v. Mountain Am. Fed. Credit Union, 689 F.3d 1138 (duties of furnishers under the FCRA are not privately enforceable)
Bergquist v. Mann Bracken, LLP, 592 F.3d 816 (supplemental jurisdiction discretion after federal claims resolved)
Wells Fargo Bank, N.A. v. Younan Properties, Inc., 737 F.3d 465 (awarding removal costs requires objectively unreasonable removal)
Martin v. Franklin Capital Corp., 546 U.S. 132 (standard for fee awards on remand)