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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF FLORIDA 

NACSO NON-PROFIT BUSINESS 

LEAGUE INC., 

 Plaintiff, 

v. 

CONSUMER FINANCIAL 

PROTECTION BUREAU and FEDERAL 

TRADE COMMISSION, 

 Defendants. 

Case No.: 20-cv-61010 

RESPONSE IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS

 Plaintiff, Nacso Non-Profit Business League Inc. (“NACSO”), by and through undersigned 

counsel and pursuant to L.R. 7.1, files this Response in Opposition to Defendants’ Motion to 

Dismiss [Dkt. No. 25], and respectfully requests the Court to deny the Motion to Dismiss for the 

following reasons: 

 The claims set forth in the Amended Complaint [Dkt. No. 14] challenge the substantive

application of the Telemarketing Sales Rule, 16 C.F.R. § 310.4(a)(2)(ii) (the “TSR”) to 

credit repair organizations, including members of NACSO, within the last six (6) years. 

As a result, the claims are not barred by the statute of limitations period set forth in 28 

U.S.C. § 2401(a). 

 Defendants’ fail to identify parallel proceedings that present the same legal issues set 

forth in this litigation. As such, and pursuant to the authorities cited in the Motion to 

Dismiss, this Court should exercise its discretion to make the declaration of rights 

sought in this litigation and deny the Motion to Dismiss. 

 The Amended Complaint alleges, and the Motion to Dismiss acknowledges, the final 

agency action to be the promulgation of the TSR. The Amended Complaint further 

alleges the substantive application of the TSR within the last 6 years. Thus, the 

Amended Complaint states a claim for relief. 

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 Alternatively, if the Court finds that the Amended Complaint is somehow deficient in 

any area argued by Defendants, NACSO respectfully requests leave to amend to 

address any such deficiency, including without limitation, the procedural vehicle under 

which declaratory relief is sought, as Defendants suggestion that members of NACSO 

take a “wait and see approach” is not only illogical and contrary to the guidance of the 

United States Supreme Court, see, e.g., MedImmune, Inc. v. Genentech, Inc., 549 U.S. 

118, 129 (2007) (“where threatened action by government is concerned, we do not 

require a plaintiff to expose himself to liability before bringing a suit to challenge the 

basis for the threat—for example, the constitutionality of a law threated to be 

enforced”) (emphasis in original), but also ignores the very real conflict between the 

TSR and the Credit Repair Organizations Act, 15 U.S.C. §§ 1679 et seq. (“CROA”). 

I. ALLEGATIONS IN THE AMENDED COMPLAINT 

The claims asserted by NACSO arise out of the application and enforcement of the TSR 

by the Consumer Financial Protection Bureau (“CFPB”) against credit repair organizations, and 

only credit repair organizations, within the last six (6) years despite the promulgation of the TSR 

by the Federal Trade Commission (“FTC”) (collectively, the FTC and CFPB shall be referred to 

as “Defendants” or “Government”) having exceeded the statutory rulemaking authority conferred 

on it by the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §§ 6101 et 

seq. (the “Telemarketing Act”). Am. Compl. at ¶¶ 3, 20-24.The TSR prohibits credit repair 

organizations, and only credit repair organizations, from requesting or receiving payment for 

services already performed for a minimum of six-months after such services are rendered. Id. at 

¶¶ 2, 47. Within the last 6 years, CFPB not only has enforced the TSR against credit repair 

organizations, including members of NACSO, but also has encouraged credit reporting agencies 

to disregard “disputes submitted by credit repair organizations.” Id. at ¶¶ 3-4, 37-38, 50. Such 

enforcement and encouragement financially burdens credit repair organizations based on the 

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content of their speech, which, in turn, seeks to silence the speech of those organizations. Id. at ¶¶ 

6, 50. 

The TSR conflicts with CROA concerning when a credit repair organization may request 

or receive compensation for the performance of its services. Am. Compl. at ¶¶ 41-43. CROA 

provides a credit repair organization cannot charge or receive compensation for the performance 

of its service “before such service is fully performed.” Id. at ¶ 42. By contrast, the TSR provides a 

credit repair organization cannot receive, let alone request, compensation for the performance of 

its service “until [t]he [credit repair organization] has provided the person with documentation in 

the form of a consumer report from a consumer reporting agency”—the same agency CFPB has 

directed to disregard “disputes submitted by credit repair organizations”—“demonstrating that the 

promised results have been achieved, such report having been issued more than six months after 

the results were achieved.” Id. at ¶ 43. As a result, the TSR has a chilling effect on the speech of 

credit repair organizations, including members of NACSO, because such organizations must wait 

at least 6 months after the performance of service to request or receive compensation for services 

already performed. Id. at ¶ 48; see also id. at 76 (“the TSR, as applied, is ‘presumptively 

inconsistent with the First Amended because it imposes a financial burden on speakers because of 

the content of their speech.’ Simon & Schuster, Inc. v. Members of New York State Crime Victims 

Bd., 501 U.S. 105, 115 (1991).”). Such an arbitrary waiting period for payment, applicable only to 

credit repair organizations, eviscerates the ability of NACSO’s members to be paid for work 

already performed, which, in effect, puts the full burden of the consumer’s credit status on the 

credit repair organizations long after services were provided. Id. at Preliminary Statement, p. 2; 

see also id. at ¶ 75 (“should the credit repair organization ‘represent[] to...improve a person’s 

credit history, credit record, or credit rating’ and accomplish just that, but 5 months later the 

consumer then independently damages his/her credit record...thereby negating the 

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‘represented...improve[ment,]’ such credit repair organization would never be compensated for 

its services”). 

The TSR, as applied by the Government, infringes on the fully-protected speech of 

members of NACSO by imposing unconstitutional barriers that suppress their protected speech. 

Id. at ¶ 49. Because there is an actual, justifiable controversy among the parties, a present need for 

a declaration as to the invalidity and unenforceability of the TSR exists. Id. at ¶ 51. Accordingly, 

the Amended Complaint seeks a declaration from the Court that the TSR, as applied by the 

Government against credit repair organizations, including members of NACSO, within the last 6 

years: (a) exceeds the statutory authority conferred by the Telemarketing Act; (b) conflicts with 

CROA; and (c) is an illegal and unenforceable violation of the First Amendment rights of credit 

repair organizations. 

II. ARGUMENT 

A. Legal Standards to Dismiss 

1. Rule 12(b)(1) 

A motion to dismiss for lack of subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1) 

may be either “facial” or “factual.” Yela v. Trending Media Group, Inc., No. 19-21717-CIVMARTINEZ-OTAZO-REYES, 2020 WL 6271044, at *1 (S.D. Fla. Sept. 10, 2020) (citing 

Morrison v. Amway Corp., 323 F.3d 920, 924 n.5 (11th Cir. 2003). “Facial attacks challenge 

subject matter jurisdiction based on the allegations in the complaint....” Morrison, 323 F.3d at 

924, n.5 (citing Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990)). “In other words, the 

allegations themselves reveal that subject matter jurisdiction is deficient.” Dapeer v. Neutrogena 

Corp., 95 F. Supp. 3d 1366, 1371 (S.D. Fla. 2015). Facial attacks “require the court merely to look 

and see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the 

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allegations in [the] complaint are taken as true for the purposes of the motion.” Id. (citing Garcia 

v. Copenhaver, Bell & Associates, M.D.’s, P.A., 104 F.3d 1256, 1261 (11th Cir. 1997)). 

“By contrast, factual attacks contest the truth of the allegations, which, by themselves, 

would be sufficient to invoke federal jurisdiction.” Id.; see also Morrison, 323 F.3d at 924, n.5 

(“Factual attacks challenge subject matter jurisdiction in fact, irrespective of the pleadings.”). In 

resolving a Rule 12(b)(1) factual attack, the district court may consider evidence outside the 

pleading, such as testimony and affidavits. Morrison, 323 F.3d at 924, n.5. But, “a court’s power 

to make findings of fact and to weigh the evidence depends on whether the factual attack on 

jurisdiction also implicates the merits of plaintiff’s cause of action.” Lawrence, 919 F.2d at 1529. 

If such an attack does not implicate the merits of plaintiff’s cause of action, then: 

The trial court may proceed as it never could under 12(b)(6) or Fed. R. Civ. P. 56. 

Because at issue in a factual 12(b)(1) motion is the trial court’s jurisdiction—its 

very power to hear the case—there is substantial authority that the trial court is free 

to weigh the evidence and satisfy itself as to the existence of its power to hear the 

case. In short, no presumptive truthfulness attaches to plaintiff’s allegations, and 

the existence of disputed material facts will not preclude the trial court from 

evaluating for itself the merits of jurisdictional claims. 

Garcia, 104 F.3d at 1261 (quoting Lawrence, 919 F.2d at 1529). If, however, such an attack 

implicates the merits of a plaintiff’s cause of action, then: 

The proper course of action for the district court...is to find that jurisdiction exists 

and deal with the objection as a direct attack on the merits of the plaintiff’s 

case...Judicial economic is best promoted when the existence of a federal right is 

directly reached and, where no claim is found to exist, the case is dismissed on the 

merits. This refusal to treat indirect attacks on the merits as Rule 12(b)(1) motions 

provides, moreover, a greater level of protection to the plaintiff who in truth is 

facing a challenge to the validity of his claim: the defendant is forced to proceed 

under Rule 12(b)(6)...or Rule 56...both of which place great restrictions on the 

district court’s discretion....[A]s a general rule a claim cannot be dismissed for lack 

of subject matter jurisdiction because of the absence of a federal cause of action. 

The exceptions to this rule are narrowly drawn, and are intended to allow 

jurisdictional dismissals only in those cases where the federal claim is clearly 

immaterial or insubstantial. 

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Id. (quoting Williamson v. Tucker, 645 F.2d 404, 415-16 (5th Cir. 1981), cert denied, 454 U.S. 897 

(1981)). 

 Here, the Motion to Dismiss does not rely upon testimony, affidavits, or the like to mount 

a Fed. R. Civ. P. 12(b)(1) factual challenge to the Amended Complaint, but rather appears to assert 

a Fed. R. Civ. P. 12(b)(1) facial challenge to the Amended Complaint. As such, and as recognized 

by the Government, “the allegations in [the] complaint are taken as true for the purposes of the 

motion.” Dapeer, 95 F. Supp. 3d at 1371; see also Motion to Dismiss at § 1, p. 6 (“When 

determining whether the plaintiff has sufficiently alleged a basis for subject-matter jurisdiction, 

this Court should take the allegations in the complaint as true. McElmurray v. Consol. Gov’t of 

Augusta-Richmond Cty., 501 F.3d 1244, 1251 (11th Cir. 2007).”). 

2. Rule 12(b)(6) 

A complaint “must contain a short and plain statement of the claim showing that the pleader 

is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “To survive a motion to dismiss, a complaint must 

contain sufficient factual matter, accepted as true, to ‘state a claim that is plausible on its face.’” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 

570 (2007)). “A claim has facial plausibility when the plaintiff pleads content that allows the court 

to draw the reasonably inference that the defendant is liable for the misconduct alleged.” Id.

“Detailed factual allegations” are not required. Id. 

In considering a motion to dismiss for failure to state a claim under Fed. R. Civ. P 12(b)(6), 

a court must accept all factual allegations in the complaint as true and evaluate all inferences 

derived therefrom in the light most favorable to the plaintiff. See, e.g., Hill v. White, 321 F.3d 

1334, 1335 (11th Cir. 2003). As a result, “the threshold sufficiency that a complaint must meet to 

survive a motion to dismiss for failure to state a claim is exceedingly low.” Quality Foods de 

Centro Am. S.A. v. Latin Am. Agri-business Dev. Corp. S.A., 711 F.2d 989, 995 (11th Cir. 1983). 

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Indeed, “[a] complaint must not be dismissed unless it is shown that [the] plaintiff can prove no 

set of facts in support of [its] claim, which would entitle him to relief. Thus, the movant [must] 

sustain a very high burden.” Jackam v. Hosp. Corp. of America, 800 F.2d 1577, 1579 (11th Cir. 

1986); see also Beck v. Deloitte & Touche, 144 F.3d 732, 735 (11th Cir. 1998), 

B. NACSO’s Claims Are Timely 

As recognized by the very cases cited by the Government in its Motion to Dismiss, “a cause 

of action challenging the substantive application of a regulation may accrue well after the 

regulation was issued.” Fla. Keys Citizen Coalition Inc. v. West, 996 F. Supp. 1254, 1256 (S.D. 

Fla. 1998). Specifically, “substantive as-applied challenges may be brought up to six years after 

the regulation was allegedly unlawfully applied.” Id.; see also, e.g., Wind River Min. Corp. v. U.S., 

946 F.2d 710, 716 (9th Cir. 1991) (“We hold that a substantive challenge to an agency decision 

alleging lack of agency authority may be brought within six years of the agency’s application of 

that decision”). And those same cases cited by the Government also recognize the allowance of 

what could be an untimely challenge to a regulation “on the ground that the regulation was outside 

the agency’s statutory authority.” Alabama v. PCI Gaming Authority, 801 F.3d 1278, 1292 (11th 

Cir. 2015); see also Legal Env.’l Assistance Foundation, Inc. v. U.S. E.P.A., 118 F.3d 1467, 1473 

(11th Cir. 1997) (“we also have jurisdiction to entertain LEAF’s contention that the regulations 

upon which EPA relies are contrary to statute and therefore invalid, regardless of the fact that 

LEAF’s challenge is brought outside the statutory period for a direct challenge to the 

regulations.”); Wind River Min. Corp., 946 F.2d at 715 (“If, however, a challenger contests the 

substance of an agency decision as exceeding constitutional or statutory authority, the challenger 

may do so later than six years”). Indeed, “the government should not be permitted to avoid all 

challenges to its actions, even if ultra vires, simply because the agency took the action long before 

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anyone discovered the true state of affairs.” Wind River Min. Corp., 946 F.2d at 714. The 

Government appears to disagree. 

The Government’s analysis of its Fed. R. Civ. P. 12(b)(1) argument is predicated 

exclusively on the applicability of the 6 years statute of limitations period to a facial challenge to 

the TSR. See, e.g., Motion to Dismiss at § 1, p. 7 (citing and quoting West for the proposition that 

“a facial challenge to a regulation must be made within six years of the regulation’s issuance....” 

(emphasis added)). The Government does not so much as pay short-shrift to the applicability of 

the 6 years statute of limitations period to a substantive, as-applied challenge to the TSR, but, 

instead, simply ignores such applicability. The Government misconstrues the allegations asserted 

in the Amended Complaint 

NACSO is not asserting a facial challenge to the TSR. Rather, as set forth in the Amended 

Complaint, NACSO is asserting a substantive, as-applied challenge to the application of the 

unlawful TSR to credit repair organizations, including members of NACSO, within the past 6 

years. See, e.g., Am. Compl. at ¶¶ 3 (“Within the last 6 years, the CFPB has enforced, and continues 

to show that it intends to enforce, the TSR against credit repair organizations, including members 

of NACSO. Examples of such members include....”), 12 (“The substantive application of the TSR 

constitutes final agency action subject to review....”), 13 (“This action was filed within 6 years of 

the substantive application of the TSR to members of NACSO.”), 49 (“...the TSR’s six-month 

rule that the CFPB seeks to enforce against members of NACSO exceeds the statutory rulemaking 

authority conferred by Congress in the Telemarketing Act and, as applied, infringes on the fullyprotected speech of the members of NACSO by imposing unconstitutional barriers that, in light of 

the monetary penalties associated with a violation of the TSR, suppress their protected speech.”), 

74 (“As applied, the TSR targets the credit repair organization industry and chills the fullyprotected speech rights of those credit repair organizations, including members of NACSO, based 

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upon the content of the communication....”), 76 (“As a result, the TSR, as applied, is 

‘presumptively inconsistent with the First Amendment [because] is imposes a financial burden on 

speakers because of the content of their speech.’”). Accordingly, and based on the very cases cited 

by the Government in its Motion to Dismiss, the Motion to Dismiss should be denied as this Court 

has subject matter jurisdiction to proceed on the merits challenging the substantive application of 

the TSR to members of NACSO within the last 6 years. 

C. The Court Should Exercise Its Discretion and Permit the Claims To Proceed 

The Government is correct in that the Declaratory Judgment Act, 28 U.S.C. § 2201(a) 

provides that the Court “may declare the rights and other legal relations of any interested party[,]” 

not that it must. This is not controversial. As reflected in the cases cited in the Motion to Dismiss, 

the refusal to exercise such discretion is properly exercised where parallel court proceedings 

presenting the same legal issues are underway. See, e.g., Wilton v. Seven Falls Co., 515 U.S. 277 

(1995) (no abuse of discretion staying declaratory judgment action during parallel state court 

proceedings); Ameritas Variable Life Ins. Co. v. Roach, 411 F.3d 1328 (11th Cir. 2005) (no abuse 

of discretion dismissing declaratory judgment action in favor of parallel state court action); 

Intravascular Research Ltd., v. Endosonics Corp., 994 F. Supp. 564 (D. Del. 1998) (same). But, 

the Government does not advance such an argument. Instead, the Government appears to assert 

two contentions for the Court to refrain from addressing the merits of the Amended Complaint, 

both of which only further support the need for the declaration of rights sought by NACSO: 

1) The Government asserts that it should be permitted to continue to apply the 

unconstitutional TSR because without “assurance that [the TSR] is safe from 

facial challenge, administrative rulemaking—and business compliance—will 

be rendered perpetually uncertain....” Motion to Dismiss at § II, p. 10 (emphasis 

added). 

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2) The Government asserts that NACSO members will have “a full opportunity to 

challenge the TSR in an appropriate situation.” Motion to Dismiss at § II, p. 11. 

Concerning the first contention advanced by the Government, and as already discussed, the 

Amended Complaint does not assert a facial challenge to the TSR. See § II(B), supra. It asserts a 

substantive challenge to the TSR. Id. And the very cases the Government cites in support of its 

Fed. R. Civ. P. 12(b)(1) argument contradict such a contention as challenges to agency rulemaking 

were clearly permitted outside of the 6 year statute of limitations. Id. Unsurprisingly, the 

Government does not cite to any case law supporting the Government’s broad contention. 

Concerning the second contention advanced by the Government, the United States 

Supreme Court has made clear that “where threatened action by government is concerned, we do 

not require a plaintiff to expose himself to liability before bringing a suit to challenge the basis for 

the threat—for example, the constitutionality of a law threated to be enforced.” MedImmune, Inc., 

549 U.S. at 129 (emphasis in original). Yet this is exactly what the Government asserts: the Court 

should not address the constitutionality of the TSR because NACSO members can live with the 

threat of an unconstitutional rule being applied to them as they will have “a full opportunity to 

challenge the TSR” upon the enforcement of the TSR against such member. The Court should 

decline the Government’s request to forego a determination on the merits as to do so ignores the 

applicable guidance of the Supreme Court. See, e.g., id. 

D. Counts II and III State a Claim Upon Which Relief Can Be Granted 

The Government’s argument asserts Counts II and III should be dismissed because “these 

counts do not identify any final agency action and thus fail to state a claim upon which relief may 

be granted.” Contrary to such an argument, the Motion to Dismiss identifies the final agency action 

NACSO challenges, namely, “the TSR’s provision regarding credit repair services—in particular, 

the advance-fee prohibition.” Motion to Dismiss at § I, p. 8 (“The only final agency action NACSO 

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challenges is the TSR’s provision regarding credit repair services – in particular, the advance-fee 

prohibition.”). And the Fed. R. Civ. P. 12(b)(6) argument advanced by the Government appears to 

concede the promulgation of the TSR constitutes final agency action—and rightfully so. See id. at 

§ III, p. 13 (“Count II and III appear to challenge not only the promulgation of the TSR’s advancefee prohibition, but also efforts that the Bureau and Commission, have taken, or intend to take, to 

enforce that prohibition against NACSO’s members. [citations omitted]. To the extent that the 

counts do, in fact, challenge the agencies’ enforcement efforts, they must be dismissed because 

NACSO has failed to plead factual content....”). As is evident by the Government’s awareness of 

the nature and basis of the allegations contained in the Amended Complaint, NACSO has stated a 

claim for relief. 

III. CONCLUSION 

For the foregoing reasons, and as established by the very cases the Government cites in its 

Motion to Dismiss, the Court should deny the Motion to Dismiss and permit the litigation to 

proceed on the merits in order to declare the rights of the parties concerning whether (1) the FTC’s 

promulgation of the TSR exceeds its statutory authority, (2) the TSR is an unconstitutional contentbased restriction of the protected speech of credit repair organizations, and (3) the TSR is 

underinclusive and not narrowly tailored, and, thus, violates the U.S. Constitution. 

Dated: January 20, 2021 Respectfully submitted, 

 /s/ Beth-Ann E. Krimsky 

 Beth-Ann E. Krimsky 

 Florida Bar No. 968412 

 Lawren A. Zann 

 Florida Bar No. 42997 

 GREENSPOON MARDER LLP 

 200 E. Broward Blvd., Suite 1800 

 Fort Lauderdale, FL 33301 

 Tel: (954) 527-6296 

 Fax: (954) 333-4027 

 beth-ann.krimsky@gmlaw.com 

lawren.zann@gmlaw.com 

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CERTIFICATE OF SERVICE

 I HEREBY CERTIFY that the foregoing Response in Opposition to Motion to Dismiss 

was served on January 20, 2021, by transmission of Notices of Electronic Filing generated by 

CM/ECF on all counsel or parties of record. 

 /s/ Beth-Ann E. Krimsky 

 

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