PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 19-3703

______________

TERRY L. KLOTZ, on behalf of

herself and those similarly situated,

Appellant

v.

CELENTANO STADTMAUER

AND WALENTOWICZ LLP

_______________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil Action No. 2-19-cv-00248)

District Judge: Honorable Susan D. Wigenton

______________

Argued: September 24, 2020

Before: AMBRO, PORTER, and ROTH, Circuit Judges.

(Filed: March 16, 2021)

______________
2

Scott C. Borison [ARGUED]

BORISON FIRM

30 North Gould Street

Sheridan, WY 82801

Yongmoon Kim

KIM LAW FIRM

411 Hackensack Avenue

Hackensack, NJ 07601

Counsel for Plaintiff-Appellant Terry L. Klotz

Lawrence J. Bartel [ARGUED]

Andrew M. Schwartz

GORDON REES SCULLY MANSUKHANI

Three Logan Square

1717 Arch Street

Philadelphia, PA 19103

Counsel for Defendant-Appellee Celentano 

Stadtmauer and Walentowicz LLP

______________

OPINION OF THE COURT

______________

PORTER, Circuit Judge.

Terry Klotz’s now-deceased husband received medical 

services from Hackensack University Medical Center (the 

“Hospital”) and incurred a $1,580 debt. Klotz’s husband did 

not pay the medical debt before he died, and he left no estate. 
3

The Hospital retained Celentano, Stadtmauer and 

Walentowicz, LLP (“CSW”) to collect the debt, and it mailed 

two collection letters to Klotz.

Klotz claims she is not liable for the debt and asks us to 

hold that the Equal Credit Opportunity Act (“ECOA”), 15 

U.S.C. § 1691 et seq., preempts New Jersey’s common-law 

doctrine of necessaries (where a spouse is jointly liable for necessary expenses incurred by the other spouse). Preemption of 

this doctrine would allow her to pursue a case against CSW for 

an alleged violation of the Fair Debt Collection Practices Act

(“FDCPA”), 15 U.S.C. § 1692 et seq. We hold that the ECOA 

does not preempt New Jersey’s doctrine of necessaries. Klotz 

also argues that CSW failed to follow the procedural requirements of the doctrine of necessaries and that she should be 

allowed to amend her complaint. We reject these additional 

arguments and will affirm the District Court’s judgment.

I

Klotz believed that she was not liable for the debt, so 

she sued CSW for violating 15 U.S.C. §§ 1692e and 1692f of 

the FDCPA because CSW’s collection letters sought payment 

of a debt that she did not owe. CSW moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing 

that Klotz owed the debt under New Jersey’s common-law 

doctrine of necessaries because her deceased husband incurred 

the debt for medical treatment. The District Court agreed with 

CSW and dismissed the complaint with prejudice. Klotz 

moved under Federal Rule of Civil Procedure 59(e) for reconsideration of the District Court’s order and for leave to file an 

amended complaint with additional allegations. The District 
4

Court denied the motion, reasoning that amendment would be 

futile. Klotz timely appealed.

II

The District Court had subject-matter jurisdiction under 

28 U.S.C. § 1331 and 15 U.S.C. § 1692k(d). We have appellate jurisdiction under 28 U.S.C. § 1291.

We review de novo a district court’s grant of a motion 

to dismiss for failure to state a claim under Rule 12(b)(6). 

Foglia v. Renal Ventures Mgmt., LLC, 754 F.3d 153, 154 n.1 

(3d Cir. 2014). To survive a Rule 12(b)(6) motion, a complaint 

must set forth enough factual allegations to “state a claim to 

relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 

550 U.S. 544, 570 (2007). A claim is facially plausible “when 

the plaintiff pleads factual content that allows the court to draw 

the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). 

When reviewing a Rule 12(b)(6) motion, we accept as true all 

factual allegations in the complaint and view those facts in the 

light most favorable to the non-moving party. Foglia, 754 F.3d 

at 154 n.1.

We review a district court’s denial of a Rule 59(e) 

motion to amend the complaint for abuse of discretion, but we 

review the district court’s underlying legal determinations de 

novo and factual determinations for clear error. Burtch v. 

Milberg Factors, Inc., 662 F.3d 212, 220 (3d Cir. 2011). When 

a plaintiff moves to amend her complaint under Rule 59(e), we 

apply the same factors as when a party files a motion to amend 

a pleading under Federal Rule of Civil Procedure 15(a). See 

Adams v. Gould Inc., 739 F.2d 858, 864 (3d Cir. 1984). Those 
5

factors include whether the amendment would be futile. 

Burtch, 662 F.3d at 231. A proposed amendment to a complaint 

is futile if the amended complaint would fail to state a claim 

for relief under Rule 12(b)(6). See Alvin v. Suzuki, 227 F.3d 

107, 121 (3d Cir. 2000). 

III

The FDCPA prohibits debt collectors from using false, 

misleading, and unfair debt-collection practices by seeking to 

collect on a debt that is not authorized by law. See 

15 U.S.C. §§ 1692e, 1692f. As noted, Klotz believes that she 

does not owe her husband’s medical debt. She argues that 

CSW’s debt-collection letters misrepresent “the character, 

amount, or legal status of [the] debt” in violation of the 

FDCPA. 15 U.S.C. § 1692e(2)(A).

In response, CSW argues that Klotz had a legal obligation to pay the debt under New Jersey’s common-law doctrine 

of necessaries. In Jersey Shore Medical Center-Fitkin Hospital 

v. Estate of Baum, the Supreme Court of New Jersey held that 

“both spouses are liable for necessary expenses incurred by 

either spouse in the course of the marriage.” 417 A.2d 1003, 

1005 (N.J. 1980). Additionally, a non-debtor is liable for the 

debts of her spouse only if “the assets of the spouse who 

incurred the debt are insufficient.” Id. at 1010. CSW’s arguments prevailed in the District Court. 

Klotz argues the following on appeal: (1) federal law 

preempts the doctrine of necessaries, and thus CSW’s collection effort violated the FDCPA; (2) CSW failed to follow the 

doctrine’s procedural requirement that CSW seek repayment 

from her husband before seeking repayment from her; and (3) 
6

she should be permitted to amend her complaint. All three 

arguments fail.

A

First, Klotz argues that the ECOA preempts the doctrine 

of necessaries. Federal law1 can preempt state law in three 

ways: (1) express preemption; (2) field preemption; or (3) conflict preemption. Farina v. Nokia Inc., 625 F.3d 97, 115 (3d 

Cir. 2010). Conflict preemption, the only type of preemption 

relevant here, “exists where compliance with both state and 

federal law is impossible, or where the state law stands as an 

obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Oneok, Inc. v. Learjet, Inc., 

575 U.S. 373, 377 (2015) (internal quotation marks omitted)

(quoting California v. ARC Am. Corp., 490 U.S. 93, 100–01 

(1989)).

Two principles guide a conflict-preemption analysis. 

First, “all preemption arguments[] must be grounded in the text 

and structure of the [federal] statute at issue.” Kansas v. 

Garcia, 140 S. Ct. 791, 804 (2020) (internal quotation marks 

omitted) (quoting CSX Transp., Inc. v. Easterwood, 507 U.S. 

658, 664 (1993)). Second, “there is a strong presumption 

against preemption in areas of the law that States have traditionally occupied.” Sikkelee v. Precision Airmotive Corp., 822 

F.3d 680, 687 (3d Cir. 2016) (citing Medtronic, Inc. v. Lohr, 

518 U.S. 470, 485 (1996)).

1 Federal regulations can also have preemptive effect. See 

Fellner v. Tri-Union Seafoods, L.L.C., 539 F.3d 237, 243 (3d 

Cir. 2008).
7

The ECOA prohibits “any creditor” from “discriminat[ing] against any applicant, with respect to any aspect of a 

credit transaction[] on the basis of . . . marital status.” 

15 U.S.C. § 1691(a)(1). As relevant here, one regulation

implementing the ECOA provides that “a creditor shall not 

require the signature of an applicant’s spouse . . . on any credit 

instrument if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit 

requested.” 12 C.F.R. § 202.7(d)(1) (2021). 

Klotz argues that the doctrine of necessaries conflicts 

with the spousal-signature prohibition found at 

12 C.F.R. § 202.7(d)(1).

2 By imposing liability for her 

deceased husband’s debt, Klotz argues, the doctrine effectively 

treats her as a spousal co-signer on the debt in violation of the 

spousal-signature prohibition. This conflict means the spousalsignature prohibition preempts the doctrine.

Putting aside questions such as whether CSW is a “creditor” and Klotz an “applicant” under the spousal-signature prohibition, we hold that the ECOA does not preempt the doctrine 

of necessaries because the debt is “incidental credit” exempt 

from the prohibition. The Federal Reserve Board may exempt 

certain categories of transactions from the scope of the ECOA 

“after making an express finding that the application of . . . any

2 We cite to the Federal Reserve Board’s regulations but note 

for completeness that much of the rulemaking authority under 

the ECOA was transferred to the Consumer Financial 

Protection Bureau (“CFPB”) in 2011. The CFPB restated the 

Federal Reserve’s regulations at 12 C.F.R. pt. 1002, 76 Fed. 

Reg. 79,442 (Dec. 21, 2011); see also Tyson v. Sterling Rental, 

Inc., 836 F.3d 571, 578 (6th Cir. 2016). 
8

provision . . . would not contribute substantially to effecting 

the purposes of [the ECOA].” 15 U.S.C. § 1691b(b). The 

agency exercised this authority by exempting “incidental 

credit” from the § 202.7(d) spousal-signature prohibition. See

12 C.F.R. § 202.3(c)(2)(v) (2021); Equal Credit Opportunity, 

68 Fed. Reg. 13,144, 13,145 (March 18, 2003) (to be codified 

at 12 C.F.R. pt. 202). “Incidental credit refers to extensions of 

consumer credit . . . (i) [t]hat are not made pursuant to the terms 

of a credit card account; (ii) [t]hat are not subject to a finance 

charge . . . and (iii) [t]hat are not payable by agreement in more 

than four installments.” Id. § 202.3(c)(1). 

Klotz’s medical debt qualifies as incidental credit 

because it satisfies all three criteria. She does not dispute that 

the debt is not related to a credit card account, not subject to a 

finance charge, and not subject to installment payments. See 

Equal Credit Opportunity, 68 Fed. Reg. at 13,188 (listing medical debt from a hospital or doctor that “allows the client or 

customer to defer the payment of a bill” as an example of incidental credit); Mays v. Buckeye Rural Elec. Coop., Inc., 277 

F.3d 873, 877–79 (6th Cir. 2002) (holding that money owed to 

an electrical utility was incidental credit under 

12 C.F.R. § 202.3(c) because the utility “ha[d] no credit card 

accounts, d[id] not permit installment payments for electrical 

service, and d[id] not impose finance charges”). Because the 

medical debt CSW sought to collect is incidental credit exempt 

from the spousal-signature prohibition, CSW’s attempt to collect the debt cannot violate the prohibition.

Given that the spousal-signature prohibition does not 

apply, we hold the ECOA and its regulations do not conflictpreempt the doctrine of necessaries. To succeed on a conflictpreemption argument, Klotz must demonstrate that the doc-
9

trine of necessaries either (1) makes compliance with the 

ECOA impossible or (2) “stand[s] as an obstacle to the accomplishment and execution of the full purposes” of the ECOA. 

Garcia, 140 S. Ct. at 806 (internal quotation marks omitted). 

The identification of the purpose “cannot be based on a freewheeling judicial inquiry into whether a state statute is in tension with federal objectives.” Id. at 801 (internal quotation 

marks and citation omitted).

CSW’s use of the doctrine of necessaries complies with 

the ECOA because the medical debt is incidental credit exempt 

from the spousal-signature prohibition. Further, Klotz’s 

attempt to invoke the general objectives of the ECOA fails, as 

the statute was focused on ensuring the availability of credit 

rather than the allocation of liability between spouses. See 

Moran Foods, Inc. v. Mid-Atlantic Mkt. Dev. Co., LLC, 476 

F.3d 436, 441 (7th Cir. 2007) (“[I]t is apparent that what the 

Act was intended to do was to forbid a creditor to deny credit 

to a [married] woman on the basis of a belief that she would 

not be a good credit risk.”). Because CSW’s use of the doctrine 

of necessaries complies with the ECOA and does not frustrate 

the purpose of the ECOA, we hold the ECOA has not 

preempted the doctrine. Garcia, 140 S. Ct. at 804. 

B

Klotz next argues that CSW failed to comply with the 

requirements of the doctrine of necessaries. But she did not 

plead adequate facts to support her argument, and her husband 
10

does not have an estate that could pay the debt, so the argument 

fails. 

Before resorting to the doctrine of necessaries, a creditor must “first seek satisfaction from the income and other 

property of the spouse who incurred the debt.” Jersey Shore, 

417 A.2d at 1005. This step ensures that the doctrine applies 

“only where the financial resources of the spouse who incurred 

the necessary expense are insufficient.” Id. at 1010. Klotz’s 

complaint does not allege that CSW flouted the doctrine’s 

requirement that it first seek satisfaction from her deceased 

husband. Nor does the complaint allege that her husband’s 

estate possessed funds to cover the debt. Public records—

which we may consider when reviewing the grant of a Rule 

12(b)(6) motion, see Mayer v. Belichick, 605 F.3d 223, 230 (3d 

Cir. 2010)—explain this omission: they show that Klotz’s husband does not have an estate.

Klotz argues that CSW should have sought administration of her husband’s estate under N.J. Rev. Stat. § 3B:10-2 

(explaining who can seek administration of an estate). Jersey 

Shore forecloses this argument. There, the “defendant’s late 

husband[] died at the hospital after a long illness which 

exhausted his medicaid benefits and left a balance due the hospital of $25,709.50.” Jersey Shore, 417 A.2d at 1004. “[The 

husband’s] estate was insolvent, and no one [had] sought letters of administration.” Id. Yet the Supreme Court of New 

Jersey permitted the creditor hospital to assert a doctrine-ofnecessaries argument against the surviving wife. See id. at 

1006–07. Klotz fails to explain what other action CSW should 

have taken to satisfy the requirements of Jersey Shore.
11

C

Third, Klotz argues that the District Court abused its 

discretion by denying her motion for leave to file an amended 

complaint. The District Court denied Klotz’s motion because

the amendment would be futile. We agree.

A proposed amendment to a complaint is futile if the 

complaint, as amended, would fail to state a claim upon which 

relief could be granted. See Suzuki, 227 F.3d at 121. Klotz 

argues that her proposed amended complaint would not be 

futile because it would plead that CSW’s letters sought to collect an amount beyond what the doctrine of necessaries permits. CSW’s letters sought to collect a debt of $1,580. Klotz 

pleads that her husband was a Medicare beneficiary with a 

Medicare deductible of $1,316, thus implying that some 

amount of the debt in the collection letter was not covered by 

Medicare. She also pleads that the collection amount “included 

copayments, expenses, fees, costs and/or other charges 

incurred on additional dates beyond the ‘Date of Service’ specified in the [collection letters].” App. at 123.

Even if the debt included a small amount of ancillary 

charges beyond the Medicare deductible of Klotz’s husband, 

these allegations do not change whether the debt resulted from 

the provision of a necessary service. Indeed, necessaries can be 

costs that “directly or indirectly are designed to preserve the 

assets of [a] marriage or to permit [a debtor spouse] to continue 

his normal life, including the ability to make income and support the family either through employment or providing services or emotional well-being in the household.” See DuBois 

v. DeLarm, 578 A.2d 1250, 1255 (N.J. Super. Ct. App. Div. 

1990) (emphasis added). None of Klotz’s proposed allegations 
12

challenge whether the debt incurred falls outside the definition 

of a necessary under New Jersey law. Her “complaint pleads 

facts that are ‘merely consistent with’ [CSW]’s liability” but 

“stops short of the line between possibility and plausibility of 

entitlement to relief.” Iqbal, 556 U.S. at 678 (internal quotation 

marks omitted). The District Court did not abuse its discretion 

when it denied Klotz’s request for leave to amend for futility. 

* * *

The ECOA does not preempt New Jersey’s doctrine of 

necessaries, so the doctrine permitted CSW to send its collection letters to Klotz without violating the FDCPA. Additionally, CSW followed the procedural requirements of the doctrine, and Klotz’s filing an amended complaint would be futile. 

So we will affirm the District Court’s judgment dismissing

Klotz’s complaint.