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Rodriguez v. Anselmo, Lindberg & Associates, LLC

United States District Court, N.D. Illinois, Eastern Division

September 4, 2019

JOSE RODRIGUEZ and MARY ARROYO, on behalf of themselves and those similarly situated, Plaintiffs,



         Jose Rodriguez and Mary Arroyo allege that Anselmo, Lindberg & Associates, LLC, Bosco Credit II Trust Series 2010-1, and Franklin Credit Management Corporation violated the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., and the Illinois Consumer Fraud and Deceptive Practices Act (“ICFA”), 815 ILCS 505/1 et seq., by bringing a state court foreclosure action in violation of the Illinois Collection Agency Act (“ICAA”), 225 ILCS 425/1 et seq. Doc. 1. Defendants move to stay this suit under Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976). Doc. 19. The motion is granted.


         A. The State Court Foreclosure Action

         In April 2018, non-party Deutsche Bank National Trust Company-as trustee on behalf of Bosco, at the direction of Franklin as Bosco's loan servicer, and with Anselmo as its counsel-brought a state court foreclosure action against Plaintiffs. Doc. 1 at ¶¶ 14, 17, 23, 27-28, 34, 36-37; Doc. 1-1 at 2-15; see Deutsche Bank Nat'l Tr. Co. v. Rodriguez, No. 18 CH 5297 (Ill. Cir. Ct., Cook Cnty.). After filing a pro se answer, Plaintiffs retained counsel and on January 4, 2019 moved to amend their answer to assert as an affirmative defense that, because Bosco had not obtained a debt collection license, Defendants violated the ICAA by bringing the foreclosure action. Doc. 28-1. On February 6, 2019, the state court denied the motion without explanation. Doc. 28-2.

         Later that day, Plaintiffs filed another motion for leave to assert the same affirmative defense, this time attaching a proposed pleading. Doc. 28-3. Bosco opposed the motion on the ground that the proposed affirmative defense was futile, Doc. 28-4 at 2-3, and Plaintiffs replied at length that Defendants violated the ICAA by bringing the foreclosure action without Bosco having obtained a debt collection license, id. at 3-12. The state court denied Plaintiffs' motion, this time with an explanation that directly addressed the merits of the ICAA issue: “Defendant's motion for leave to file affirmative defenses is denied, the court finding no Collection Agency Act violation occurred.” Doc. 28-5 (emphasis added).

         B. This Lawsuit

         Plaintiffs brought this suit on January 14, 2019, ten days after filing their first motion for leave to amend in the foreclosure action. Doc. 1. Their complaint, which alleges violations of the FDCPA and the ICFA, rests on the same premise as their rejected affirmative defense in the foreclosure action-that Defendants violated the ICAA by bringing that action without Bosco first obtaining a debt collection license. Doc. 1 at ¶¶ 21-23, 25, 34, 38, 40-50, 53, 57, 63-64. In fact, Plaintiffs' rejected affirmative defense is substantially identical their complaint in this case. Compare id. at ¶¶ 15, 18, 20, 25, 33, 38, 40-48 with Doc. 28-3 at pp. 8-12, ¶¶ 7-8, 10-11, 13-24.


         The Colorado River doctrine provides that “a federal court may stay or dismiss a suit in federal court when a concurrent state court case is underway, but only under exceptional circumstances and if it would promote ‘wise judicial administration.'” Freed v. JPMorgan Chase Bank, N.A., 756 F.3d 1013, 1018 (7th Cir. 2014) (quoting Colorado River, 424 U.S. at 818); see also Caminiti & Iatarola, Ltd. v. Behnke Warehousing, Inc., 962 F.2d 698, 700 (7th Cir. 1992). The Supreme Court “has cautioned that abstention is appropriate only in ‘exceptional circumstances,' and has also emphasized that federal courts have a ‘virtually unflagging obligation … to exercise the jurisdiction given them.'” AXA Corp. Sols. v. Underwriters Reins. Corp., 347 F.3d 272, 278 (7th Cir. 2003) (alteration in original) (quoting Colorado River, 424 U.S. at 813, 817). In determining whether to abstain, the court's task is “not to find some substantial reason for the exercise of federal jurisdiction by the district court; rather, the task is to ascertain whether there exist exceptional circumstances, the clearest of justifications, that can suffice under Colorado River to justify the surrender of that jurisdiction.” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25-26 (1983) (internal quotation marks and emphases omitted).

         The Colorado River analysis has two steps. First, the court asks “whether the state and federal court actions are parallel.” Freed, 756 F.3d at 1018. If the proceedings are not parallel, Colorado River abstention must be denied. See ibid. If the proceedings are parallel, the court must weigh ten non-exclusive factors to determine whether abstention is proper. See ibid.

         I. The Federal and State Suits Are Parallel.

         “[F]or Colorado River purposes … [p]recisely formal symmetry” between the state and federal suits “is unnecessary” to find parallelism. Adkins v. VIM Recycling, Inc., 644 F.3d 483, 498-99 (7th Cir. 2011); see also Interstate Material Corp. v. City of Chicago, 847 F.2d 1285, 1288 (7th Cir. 1988) (“Interstate is correct in its assertion that differences [between the two suits] exist. However, the requirement is of parallel suits, not identical suits.”). Rather, suits are parallel where “substantially the same parties are contemporaneously litigating substantially the same issues in another forum.” Freed, 756 F.3d at 1019 (internal quotation marks omitted). Thus, “[t]he question is not whether the suits are formally symmetrical, but whether there is a substantial likelihood that the [state] litigation will dispose of all claims presented in the federal case.” AAR Int'l, Inc. v. Nimelias Enters. S.A., 250 F.3d 510, 518 (7th Cir. 2001) (internal quotation marks omitted); see also Huon v. Johnson & Bell, Ltd., 657 F.3d 641, 646 (7th Cir. 2011) (same). “Any doubt regarding the parallel nature of the [state] suit should be resolved in favor of exercising jurisdiction.” Adkins, 644 F.3d at 499 (alteration in original, internal quotation marks omitted).

         The parallelism test is satisfied here. Plaintiffs' FDCPA and ICFA claims rest on the premise that Defendants violated the ICAA by bringing the foreclosure action without Bosco having obtained a debt collection license. If there was no ICAA violation in connection with the foreclosure action, Plaintiffs' FDCPA or ICFA claims necessarily fail. So, the central issue here-whether Defendants violated the ICAA-is being litigated in the foreclosure action, and the state trial court has already ruled that there was no violation. Doc. 28-5. If Plaintiffs do not appeal that ruling, or if they appeal unsuccessfully, the foreclosure action “will dispose of all claims presented in the federal case” on preclusion grounds, AAR Int'l, Inc., 250 F.3d at 518 (internal quotation marks omitted), by undercutting an essential premise of Plaintiffs' FDCPA and ICFA claims. That establishes parallelism between the present suit and the foreclosure action. See ibid. (holding that Colorado River requires only that there be a “substantial likelihood, ” not a certainty, ...

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