387 F. Supp. 3d 867
E.D. Ill.2019Background
- Plaintiffs (Snyder, Mansanarez, Beecroft) allege Ocwen made automated TCPA debt-collection calls while servicing mortgage loans that were held in trusts for which U.S. Bank, Wilmington Trust, and Deutsche Bank served as trustees. Plaintiffs claim the banks directed/ratified Ocwen's calls.
- Plaintiffs previously sued Ocwen for the same calls, reached a settlement with Ocwen that preserved claims against the banks, and consolidated related proceedings.
- Plaintiffs sued the banks in both their individual capacities and as trustees of multiple mortgage-backed trusts; defendants moved for partial judgment on the pleadings under Rule 12(c).
- Defendants argued (1) plaintiffs failed to plead injuries traceable to the banks in their individual capacities, and (2) the named plaintiffs lack Article III standing to sue banks as trustees of trusts other than those holding the named plaintiffs’ loans.
- The court treated the complaint’s factual allegations as true for purposes of the Rule 12(c) motion and denied the motion, finding plaintiffs sufficiently pleaded claims against banks in both capacities and deferring the broader trustee-standing/class linkage issue until class-certification stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs sufficiently pleaded claims against banks in their individual capacities | Banks are the functional "creditors" and may be directly liable under TCPA; plaintiffs alleged banks caused/directed/ratified Ocwen’s calls | Plaintiffs failed to allege banks owned the loans or acted other than as trustees; trustees are distinct and claims against banks individually are unsupported | Denied: complaint plausibly alleges facts (direction/ratification) to proceed against banks in both individual and trustee capacities at pleading stage |
| Whether named plaintiffs have standing to sue banks as trustees of trusts other than the three trusts that held their loans | The common injury is Ocwen’s use of the dialer on behalf of banks; standing inquiry should focus on injury-in-fact | Named plaintiffs can only trace injuries to trustees of the specific trusts holding their mortgages; other trustee-defendants are legally distinct | Denied (for now): court defers full standing/traceability analysis until class-certification stage under Payton (may address standing in tandem with certification) |
| Whether court should decide standing to sue multiple trustee-defendants before class certification | N/A — plaintiffs emphasize common scheme and common proof connecting defendants | Defendants ask court to resolve traceability now and limit defendants to those to whom named plaintiffs can trace injury | Court follows Seventh Circuit precedent allowing deferment of standing in putative class actions tied by a "juridical link"; consider standing alongside class certification |
Key Cases Cited
- Kanter v. Barr, 919 F.3d 437 (7th Cir. 2019) (pleading-stage factual acceptance standard)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Article III standing elements at pleading stage)
- Payton v. County of Kane, 308 F.3d 673 (7th Cir. 2002) (defer standing analysis until class certification when defendants are linked by a common scheme)
- Unite Here Local 1 v. Hyatt Corp., 862 F.3d 588 (7th Cir. 2017) (standard for judgment on the pleadings)
- ADM Alliance Nutrition, Inc. v. SGA Pharm Lab, Inc., 877 F.3d 742 (7th Cir. 2017) (Rule 12(c)/12(b)(6) plausibility standard)