Dunlap v. Credit Protection Ass'n., L.P.

• Decision Date: 16 August 2005
• Docket Number: No. 03-56511.,03-56511.
• Parties: John DUNLAP, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. CREDIT PROTECTION ASSOCIATION, L.P., Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1011

419 F.3d 1011

John DUNLAP, on behalf of himself and all others similarly situated, Plaintiff-Appellant, v. CREDIT PROTECTION ASSOCIATION, L.P., Defendant-Appellee.

No. 03-56511.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted June 7, 2005.

Filed August 16, 2005.

Robert L. Arleo, New York, New York, and Jeffrey P. Fink, San Diego, California, for the plaintiff-appellant.

Stephen H. Turner, David J. Kaminski, and Joseph R. Zamora, Los Angeles, California, for the defendant-appellee.

Appeal from the United States District Court for the Southern District of California; Barry T. Moskowitz, District Judge, Presiding. D.C. No. CV-02-02393-BTM.

Before B. FLETCHER, RYMER, and FISHER, Circuit Judges.

PER CURIAM.

Plaintiff-appellant John Dunlap claims that the use of the name, "Credit Protection Association," in the context of a debt collection letter, violates various provisions of the Fair Debt Collection Practices Act ("FDCPA"). 15 U.S.C. § 1692e. The district court dismissed the case on the pleadings and granted judgment in favor of the defendant-appellee, Credit Protection Association, L.P. ("CPA"). We affirm.¹

Dunlap allegedly incurred a debt of $12.90 to Blockbuster Video. Blockbuster referred the alleged debt to CPA for collection purposes. On November 15, 2002, CPA sent a collection or "dunning" letter to Dunlap. The letterhead bears the defendant's name, "Credit Protection Association," in large, capital lettering. The letterhead's sub-headings indicate that CPA is a "nationwide collection company" and warn that the letter "is an attempt to collect a debt" and that "any information obtained will be used for that purpose," in compliance with the FDCPA. 15 U.S.C. § 1692e(11). The body of the letter notifies Dunlap that Blockbuster's records indicate that his account is past due and informs him of his right to dispute the debt, as required by 15 U.S.C. § 1692g(a).

The FDCPA broadly prohibits a debt collector from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. § 1692e. "Without limiting the general application of the foregoing," § 1692e also specifically proscribes various debt collection practices. Dunlap argues that the CPA letter violates § 1692e generally, as well as subsection 1692e(2)(A), which prohibits the false representation of "the character, amount, or legal status of any debt," and subsection 1692e(5), which prohibits "[t]he threat to take any action that cannot legally be taken or that is not intended to be taken."

All of Dunlap's claims are based on the following reasoning: use of the name, "Credit Protection Association," coupled with the demand for payment, implies that CPA will damage the debtor's credit by reporting the debt to credit reporting agencies if a payment is not made. In other words, the name implies that the debtor must make a payment in order to "protect his credit." Because credit reporting agencies generally do not report de minimis debts, and CPA has no intention of actually reporting debtors who owe only de minimis amounts, the name's implication is misleading and threatens unintended action.

The impact of language alleged to violate the FDCPA is judged under the "least sophisticated debtor" standard. See, e.g., Swanson v. Southern Or. Credit Serv., Inc., 869 F.2d 1222, 1227 (9th Cir.1988). We find that CPA's letter would not impermissibly mislead the least sophisticated debtor into believing that his credit would be damaged by a failure to pay a de minimis debt. Any inference regarding credit reporting that can be drawn from CPA's name is, at best, very weak. Moreover, any such inference is not sustained by the letter's main text, which mentions nothing about credit reporting, complies with FDCPA requirements, and is straightforward and non-threatening. Although CPA does not inform debtors that de minimis debts are rarely reported, the mere omission of this information is not so misleading that it violates the FDCPA.

Nor is there any threat of unintended action: CPA's collection letter, at worst, only vaguely and generally implies that the reader should pay his debt in order to protect his credit rating. In Wade v. Regional Credit Ass'n, 87...