United States District Court, D. Maryland
VELMA M. MELTON, Plaintiff,
SELECT PORTFOLIO SERVICING, INC. and STERLING JEWELERS, INC. dba Jared-Galleria of Jewelry, Defendants.
THEODORE D. CHUANG, UNITED STATES DISTRICT JUDGE
Velma M. Melton, a Maryland citizen and resident, filed suit
against Defendants Select Portfolio Servicing, Inc.
("SPS"), Sterling Jewelers, Inc. d/b/a
Jared-Galleria of Jewelry ("Sterling"), Prestige
Financial Services, Inc. ("Prestige"), Experian
Information Solutions, Inc. ("Experian"), Equifax
Information Services, LLC ("Equifax"), and Trans
Union, LLC ("Trans Union"), alleging that SPS,
Sterling, and Prestige reported inaccurate information to
consumer reporting agencies Experian, Equifax, and Trans
Union, failed to conduct reasonable investigations into her
disputes, and failed to correct their internal records for
reporting credit information, in violation of the Fair Credit
Reporting Act, 15 U.S.C. §§ 1681-1681x (2018).
Melton also asserts a common law tort claim of defamation
alleging that SPS, Sterling, and Experian published false and
misleading information in her credit report. Presently
pending before the Court is Sterling's Motion to Dismiss.
Upon review of the submitted materials, the Court finds that
no hearing is necessary. See D. Md. Local R. 105.6.
For the reasons set forth below, the Motion will be DENIED.
purposes of deciding this Motion, the Court accepts the facts
asserted in Melton's Second Amended Complaint as true. On
or about April 13, 2015, Melton, a resident of Hyattsville,
Maryland, purchased a piece of jewelry from the
Jared-Galleria of Jewelry retail store in Waldorf, Maryland
("the Jared Store"). The Jared Store is owned by
Sterling, a Delaware corporation with its principal place of
business in Ohio. Sterling has approximately 50
brick-and-mortar retail jewelry stores within Maryland,
including the Jared Store. Sterling advertises extensively
and directly to Maryland consumers through radio, television,
and internet commercial solicitations, and it uses the
Maryland courts and judicial system to enforce its contracts
with Maryland residents, including by filing approximately 90
lawsuits against Maryland residents in Maryland courts since
Melton bought jewelry from Sterling at the Jared Store, she
financed the purchase by opening a line of credit.
Specifically, while at the Jared Store, Melton signed a
financing contract with Sterling requiring Melton to pay the
purchase price plus interest over a period of time. Due to
financial difficulties, in January 2017, Melton fell behind
on the payments required by the contract. In order to resolve
the outstanding payments, Sterling representatives called
Melton twice in Maryland to request and arrange a payment.
Sterling eventually made a settlement offer to Melton which
would allow her to pay off the debt for an amount less than
what was due. After Sterling sent a letter to Melton
containing that settlement offer in writing, Melton accepted
the offer and authorized Sterling to debit the agreed amount
from her Navy Federal Credit Union account, located in
Maryland. Sterling received the payoff amount from that
account on March 29, 2017.
making this payment in satisfaction of the debt, Melton
discovered that Sterling was inaccurately reporting an unpaid
charge-off balance for the credit account to consumer
reporting agencies Experian, Equifax, and Trans Union
("the CRAs"). In the two years before she filed the
present action, Melton repeatedly requested and received
copies of her credit report, as compiled and maintained by
the CRAs, and saw that each credit report contained errors,
including statements that Melton continued to have an unpaid
charge-off balance relating to the debt to Sterling. Melton
sent letters to the CRAs disputing the inaccuracies regarding
the Sterling credit account, including in June 2017 and
November 2018. Melton alleges that the CRAs forwarded at
least some notice of her disputes to Sterling, but Sterling
failed to conduct a reasonable investigation into her
disputes or correct its flawed reporting. Instead, Melton
received correspondence back from the CRAs stating that
Sterling had verified that the status of the credit account
was being reported accurately.
Melton sent at least five dispute letters to Sterling over a
two-year period, but Sterling continued to refuse to stop
reporting the erroneous charge-off status to the CRAs. As a
result, Melton's credit report effectively reflects that
she was 180 days delinquent on the Sterling credit account,
even though she was only approximately 60 days past due on
the debt at the time of the settlement. As a result of these
derogatory items appearing on her credit report, Melton was
unable to obtain additional credit she sought.
January 22, 2019, Melton filed the present case. With leave
of the Court, Melton filed an Amended Complaint on March 27,
2019 and a Second Amended Complaint on June 21, 2019. The
CRAs and Prestige have since been voluntarily dismissed from
this action after settling individually with Melton. As
relevant here, in Melton's Second Amended Complaint, she
alleges that Sterling violated the FCRA, specifically, 15
U.S.C. § l68ls-2(b), and committed the tort of
defamation. Alleging that she has suffered "financial
loss, expenditure of time and resources, mental anguish,
humiliation, embarrassment and emotional distress,"
Melton seeks actual damages, statutory damages, punitive
damages, attorney's fees, and costs. Second Am. Compl.
¶¶ 106, 134, ECF No.47.
has moved for dismissal of the Second Amended Complaint for
lack of personal jurisdiction pursuant to Federal Rule of
Civil Procedure 12(b)(2): Sterling asserts that it is not
subject to personal jurisdiction in Maryland because Melton
has failed to allege sufficient facts demonstrating that the
exercise of personal jurisdiction over it comports with
either Maryland's long-arm statute or the Due Process
Clause of the Fourteenth Amendment to the United States
Constitution. Specifically, Sterling asserts that the
relevant provisions of Maryland's long-arm statute, Md.
Code Ann., Cts. & Jud. Proc. § 6-103(b)(1)-(b)(5)
(2013), do not authorize personal jurisdiction because the
conduct giving rise to Melton's claims occurred entirely
outside of Maryland, and because Sterling's contacts with
Maryland are "unrelated and outside of the causal link
to her FCRA suit." Mot. Dismiss at 2, ECF No. 31-1.
Sterling further asserts that the Court lacks specific
jurisdiction over it because its Maryland contacts are
unrelated to the cause of action, and that it lacks general
jurisdiction over it because Maryland is not Sterling's
state of incorporation or principal place of business, and
Sterling is not otherwise "at home" in Maryland.
Id. at 5.
the plaintiffs burden to establish personal jurisdiction.
See Mylan Labs. Inc. v. Akzo, N.V., 2 F.3d 56, 59-60
(4th Cir. 1993). To carry that burden at the pleading stage,
the plaintiff need only make a prima facie showing
that a defendant is properly subject to this Court's
jurisdiction. Id. In evaluating the plaintiffs
showing, this Court must accept the plaintiffs allegations as
true, and it must draw all reasonable inferences and resolve
any factual conflicts in the plaintiffs favor. Id.
The Court may consider evidence outside the pleadings in
resolving a Rule 12(b)(2) motion. CoStar Realty Info.,
Inc. v. Meissner, 604 F.Supp.2d. 757, 763-64 (D. Md.
2009). A district court's exercise of personal
jurisdiction over a non-resident defendant must satisfy both
the long-arm statute of the state in which the court sits and
the Due Process Clause of the Fourteenth Amendment.
Carefirst of Md., Inc. v. Carefirst Pregnancy Centers,
Inc., 334 F.3d 390, 396 (4th Cir. 2003).
Due Process Clause
the Due Process Clause, personal jurisdiction may be
exercised over a party upon a showing that the party has
sufficient "minimum contacts" with the forum state
such that "maintenance of the suit [in this state] does
not offend traditional notions of fair play and substantial
justice." Int'l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945). In assessing the presence of minimum
contacts, courts distinguish between two types of personal
jurisdiction: general and specific. General, or all-purpose,
jurisdiction offers a path to personal jurisdiction when the
suit brings "causes of action arising from dealings
entirely distinct from" the defendant's contacts
with the forum. Daimler AG v. Bauman,134 S.Ct. 746,
754 (2014) (quoting Int'l Shoe Co. v.
Washington,326 U.S. 310, 318 (1945)). Specific, or
case-linked, jurisdiction provides ...