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Federal Trade Commission v. Green Tree Servicing LLC

United States District Court, D. Minnesota

January 8, 2018

Federal Trade Commission and Consumer Financial Protection Bureau, Plaintiffs,
v.
Green Tree Servicing LLC, Defendant.

          REPORT AND RECOMMENDATION

          STEVEN E. RAU, United States Magistrate Judge.

         The above captioned case is before the Court on Roy J. Dixon's (“Dixon”) Verified Emergency Motion for Civil Contempt and Injunction Relief (“Motion”) [Doc. No. 6]. This matter was referred to the undersigned pursuant 28 U.S.C. § 636(b)(1) and District of Minnesota Local Rule 72.1(a)(3)(A) for a Report and Recommendation. See (Order of Referral) [Doc. No. 8]. For the reasons set forth below, this Court recommends that Dixon's Motion be denied because he has no standing to enforce the Stipulated Order for Permanent Injunction and Monetary Judgment (“Consent Order”) [Doc. No. 5].

         I. BACKGROUND

         Plaintiffs Federal Trade Commission (“FTC”) and Consumer Financial Protection Bureau (collectively, “Plaintiffs”), filed a lawsuit against Green Tree Servicing LLC (“Green Tree”)

under Sections 5(a) and 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(a) and 53(b); the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692-1692p; and the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681-1681x, to obtain permanent injunctive relief, restitution, disgorgement, and other equitable relief for violations of the FDCPA, Section 5 of the FTC Act, and the FCRA.

(Compl.) [Doc. No. 1 ¶ 1]. Soon thereafter, the parties entered into a stipulated consent order. See (Consent Order). Green Tree was ordered to pay Plaintiffs $48, 000, 000 to establish a redress fund (the “Fund”), that Plaintiffs managed. (Id. § I). In particular, it was Plaintiffs' responsibility to redress Green Tree's consumers on the basis of the alleged violations. See (id. § I.C).

         Furthermore, the Consent Order established an oversight regime whereby Plaintiffs would oversee Green Tree's compliance with the Consent Order. For example, Green Tree must: (1) submit compliance reports to Plaintiffs, (2) respond to requests for additional information by Plaintiff regarding compliance reports and compliance in general; and (3) comply with Plaintiffs' subsequent discovery requests without court intervention. See, e.g., (id. §§ XV, XVIII, XX). Plaintiffs “have overseen Green Tree's compliance with the Consent Order since it was entered in April 2015, and there were no fillings or other activity before this Court until Dixon filed his pro se motion on May 5, 2017.” (Green Tree Servicing LLC's Resp. to Pro Se Non-Party Claimant Roy Dixon's “Verified Emergency Mot. for Civil Contempt & Inj. Relief, ” “Green Tree's Resp.”) [Doc. No. 12 at 3].

         In Dixon's Motion, he requests that the Court order Green Tree to show cause that it did not violate the Consent Order with respect to the handling of Dixon's mortgage and foreclosure of his property in Florida. See (Mot. at 1, 3-5).[1] In addition to an order to show cause, Dixon also requests that the Court stay the sale of his Florida property and enjoin Green Tree “from taking any further action against [his] property.” See (id. at 5).

         This Court ordered the parties to respond to Dixon's Motion. See (Text Only Order Dated Aug. 31, 2017) [Doc. No. 9]. Each of the parties to the Consent Order provided an individual Response. See (Pl. Federal Trade Commission's Resp. to Roy Dixon's Mot. for Civil Contempt & Inj. Relief, “FTC's Resp.”) [Doc. No. 11]; (Green Tree's Resp.). The FTC asserts that Green Tree “does not appear to have violated Section V or Section VIII [of the Consent Order], but the FTC needs more information [from Green Tree] to address the potential violations of Section IV and IX.” See (FTC's Resp. at 3); see also (id. 3-7) (FTC's arguments directed thereto).

         Green Tree asserts that Dixon's Motion should be denied because he lacks standing to enforce the Consent Order. (Green Tree's Resp. at 1-2, 9-13). Specifically, Green Tree asserts that “nothing in the Consent Order authorizes Dixon (or any other non-party) to enforce its provisions.” (Id. at 12), Specifically, Green Tree argues that because Dixon is a non-party to the Consent Order, for him to have standing he must demonstrate that the Consent Order “intended to give [him] a legally binding and enforceable right to [benefits under the Consent Order], ” which he has failed to do. (Id. at 11) (internal quotation marks omitted) (first alteration in original). Green Tree also asserts the terms of the Consent Order preclude third party enforcement. See (id.). In particular, sections I-III, VI, VIII, XV, XVIII, and XX of the Consent Order allegedly support Green Tree's position that only Plaintiffs had enforcement rights and that consumers did not retain any individual rights to assert claims against the Fund. (Id.). Alternatively, Green Tree asserts that Dixon's claims are foreclosed on the basis of res judicata and collateral estoppel because the harms alleged by Dixon have been adjudicated to his detriment in both federal and state courts. See (Green Tree's Resp. at 2, 13-21).[2]

         Dixon filed a Reply to these Reponses. (Third-Party Claimant Roy J. Dixon's Reply with Suppl. Evidence Exs. in Supp., “Dixon's Reply”) [Doc. No. 17]. Most of Dixon's Reply deals with the Florida federal and state court decisions and Green Tree's alleged wrong-doing. See generally (Dixon's Reply). Dixon provides no rebuttals regarding Green Tree's standing argument. See (Dixon's Reply at 10-11).[3] With respect to Green Tree's res judicata and collateral estoppel arguments, Dixon's position is difficult to decipher, but apparently he believes that the Florida state court decisions does not have preclusive effect because the court lacked subject matter jurisdiction. See (id. at 10) Specifically, it is Dixon's position that the Florida state court lacked subject matter jurisdiction because Green Tree merged with another entity in August 2015 and Green Tree was never substituted in the state court action. See (id.); see also (FTC's Resp. at 2) (mentioning the Green Tree merger).

         II. DISCUSSION

         Regardless of the procedural irregularities implicated by the manner in which Dixon filed his Motion, this Court lacks jurisdiction to entertain Dixon's requests for relief because he lacks standing. Cf. (Green Tree's Resp. at 7) (suggesting that Dixon's Motion be denied because he did not timely file a motion to intervene under Rule 24 of the Federal Rules of Civil Procedure and because he did not properly serve his Motion). In other words, even if Dixon had properly brought a motion to intervene under the Federal Rules of Civil Procedure, the Court could not entertain it because Dixon has no standing to effectuate the relief that he seeks. As a result, this Court recommends Dixon's Motion be denied. Because Dixon's Motion fails on the threshold issue of standing, this Court does not address Green Tree's other arguments related to the Rule 24 of the Federal Rules of Civil Procedure, res judicata, or collateral estoppel.

         A. ...


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