Key Points

  • Sixth Circuit reversed dismissal of an FDCPA suit against an Oklahoma law firm, finding personal jurisdiction proper in Michigan based on the firm's use of a default judgment to garnish wages there
  • The panel distinguished Walden v. Fiore and relied on Calder v. Jones and Johnson v. Griffin, finding the firm intentionally targeted a Michigan resident's wages despite routing the garnishment summons through an out-of-state intermediary
  • The court held that wages earned and paid within Michigan constitute forum-connected property, supporting both due process minimum contacts and Michigan's long-arm statute
  • The decision narrows a jurisdictional defense debt-collection firms have used when pursuing out-of-state default judgments against debtors who relocate

The Sixth Circuit has revived a Fair Debt Collection Practices Act lawsuit against an Oklahoma law firm, holding that the firm's use of an Oklahoma default judgment to garnish a debtor's wages in Michigan was enough to establish personal jurisdiction in that state.

The case, Alexander Ross v. Robinson, Hoover & Fudge, PLLC, arose after Ross and his then-wife bought a used car in Oklahoma, later defaulted on payments, and Ross moved to Michigan following the couple's divorce. Robinson, Hoover & Fudge, PLLC (RHF), an Oklahoma-based law firm, brought a breach-of-contract action against Ross in Oklahoma state court, eventually obtaining a default judgment after Ross could not be personally served. RHF then used that judgment to pursue garnishment against Ross's employer, ultimately reaching Detroit Diesel, where Ross worked in Michigan. As of June 2024, more than $2,500 had been garnished from Ross's paycheck, with garnishments continuing, on an underlying debt of roughly $8,500.

Ross sued RHF in the Eastern District of Michigan under the FDCPA and the Michigan Regulation of Collection Practices Act, alleging that RHF garnished his wages without properly domesticating the Oklahoma judgment under Michigan's Uniform Enforcement of Foreign Judgments Act. The district court dismissed the case for lack of personal jurisdiction, finding that RHF lacked sufficient minimum contacts with Michigan.

On appeal, a panel of Judges Siler, Moore, and Bloomekatz disagreed. Writing for the panel, Judge Moore rejected RHF's argument that the case was controlled by the Supreme Court's decision in Walden v. Fiore, which held that a plaintiff's unilateral connection to a forum cannot establish jurisdiction over a defendant. Instead, the panel found the facts closer to Calder v. Jones and the Sixth Circuit's own decision in Johnson v. Griffin, both of which found jurisdiction proper where a defendant's conduct was expressly aimed at a forum resident.

The court emphasized that RHF knew, well before it pursued garnishment, that Ross was living and working in Michigan. AAF had told RHF that Ross's last-known address was in Michigan, a process server reported that Ross had moved "somewhere up north," and a garnishment answer from a prior employer, Penske, confirmed Ross's Michigan address. RHF then sent a garnishment summons to Daimler Truck in Oregon, which was passed to its Michigan subsidiary, Detroit Diesel, resulting in continuing withholding from wages Ross earned at a Michigan factory.

"RHF has targeted the wages Ross earns working in Michigan, and allegedly has done so in a manner that impermissibly circumvents the MUEFJA."

The panel also rejected RHF's contention that Ross's injury never actually occurred in Michigan because the garnished funds were processed through an Ohio bank account and an Oregon-based notary before reaching RHF. The court found that evidence in the record, including Ross's paystub listing a Michigan address for Detroit Diesel, supported the inference that Detroit Diesel paid Ross from Michigan, and that RHF's contrary submissions were irrelevant given the procedural posture.

The court further reasoned that Ross's wages constitute Michigan property under state law, noting that Michigan regulates minimum wage, payment timing, and taxation of wages earned within the state, and that Michigan case law recognizes wages as a form of property subject to protection from wrongful garnishment.

"A State generally has a 'manifest interest' in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors."

Turning to RHF's argument that it lacked actual knowledge of Ross's Michigan residence when it sent the garnishment summons, the panel found that RHF's own admissions and the documentary record contradicted that claim, and that any factual dispute on the point should have been resolved through an evidentiary hearing that RHF never requested.

Having found personal jurisdiction proper under the Due Process Clause, the panel also held that Michigan's long-arm statute independently authorized jurisdiction, because RHF's conduct caused tortious consequences to occur in the state. The court reversed the dismissal and remanded the case for further proceedings on Ross's FDCPA and state-law claims.