Evory v. Rjm Acquisitions Funding L.L.C.
| Decision Date | 23 October 2007 |
| Docket Number | No. 06-2132.,No. 06-2130.,No. 06-3327.,No. 06-3439.,No. 06-2130, et al.,No. 06-2131.,No. 06-2134.,No. 06-2157.,No. 06-3129.,No. 06-2271.,No. 06-3446.,No. 06-3162.,06-2130.,06-2131.,06-2132.,06-2134.,06-2157.,06-2271.,06-3129.,06-2130, et al.,06-3162.,06-3327.,06-3439.,06-3446. |
| Citation | 505 F.3d 769 |
| Parties | Tammy A. EVORY, et al., individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. RJM ACQUISITIONS FUNDING L.L.C., et al., Defendants-Appellees. Kelly Lauer and Karla Lauer, Plaintiffs-Appellants, v. Mason, Silver, Wenk & Mishkin, LLC, et al., Defendants-Appellees. Kevin I. Captain, Plaintiff-Appellant, v. ARS National Services, Inc., Defendant-Appellee. Philip Jackson, et al., individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. National Action Financial Services, Inc., et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
David J. Philipps (argued), Philipps & Philipps, Palos Hills, IL, for Tammy A. Evory, Angela T. Hubbard, Christian M. Cline, Kevin I. Captain, Phillip Jackson, Sharon Ackman, Daniece Bonner, Plaintiffs-Appellants.
David J. Philipps (argued), Derek B. Rieman, Edelman, Combs & Latturner, Chicago, IL, for Kevin L. Headen, Plaintiff-Appellant.
David J. Philipps (argued), Daniel A. Edelman, Edelman, Combs, Latturner, Chicago, IL, for Noah Downs, Jr., Plaintiff-Appellant.
Chip G. Schoneberger (argued), Clausen Miller, Chicago, IL, for Mason, Silver, Wenk & Mishkin, LLC, Timothy E. Hirsch, Defendants-Appellees.
David L. Hartsell (argued), McGuire Woods, Chicago, IL, for ARS National Services, Inc., Defendant-Appellee.
Christine Olson-McTigue, David M. Schultz (argued), Hinshaw & Culbertson, Chicago, IL, Tomio Narita, Simmonds & Narita, San Francisco, CA, for Midland Credit Management, Inc., Midland Funding NCC-2, Corp., Defendants-Appellees.
Christopher V. Langone, Mark T. Lavery (argued), Chicago, IL, for Kelly Lauer, Karla Lauer, Plaintiffs-Appellants.
David Schultz (argued), Amy R. Jonker, Messer & Stilp, Chicago, IL, for RJM Acquisitions Funding, L.L.C., Defendant-Appellee.
Christine Olson McTigue, David M. Schultz (argued), Hinshaw & Culbertson, Chicago, IL, for Midland Credit Management, Inc., MRC Receivables Corp., Asset Acceptance, LLC, National Action Financial Services, Inc., Defendants-Appellees.
David Schultz (argued), David L. Hartsell, McGuire Woods, Chicago, IL, for M.R.S. Assoc., Inc., Defendant-Appellee.
Before CUDAHY, POSNER, and WILLIAMS, Circuit Judges.
We have consolidated for decision four intertwined cases that present nine questions under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq., several of which have engendered considerable controversy at the circuit level and even some circuit splits. We shall first try to answer the questions and then indicate the disposition of each of the appeals that follows from our answers.
Here are the questions:
1. Whether, if the consumer (as the statute refers to the putative debtor) is represented by a lawyer, a debt collector must give the same written notice to the lawyer that section 1692g would require were the consumer unrepresented and the notice sent directly to him.
2. Whether communications to lawyers are subject to sections 1692d through 1692f, which forbid harassing, deceptive, and unfair practices in debt collection. Compare Sayyed v. Wolpoff & Abramson, 485 F.3d 226 (4th Cir. 2007), answering yes, with Guerrero v. RJM Acquisitions LLC, 499 F.3d 926 (9th Cir.2007) (per curiam), and Kropelnicki v. Siegel, 290 F.3d 118, 128 (2d Cir.2002), both answering no.
3. Whether, if the answer to question 2 is yes, the standard applicable to determining whether a representation is false, deceptive, or misleading under section 1692e is the same whether the representation is made to the lawyer or to his client.
4. Whether a settlement offer contained in a letter from the debt collector to a consumer is lawful per se under section 1692f. Compare Lewis v. ACB Business Services, Inc., 135 F.3d 389, 398-400 (6th Cir.1998) (yes), with Goswami v. American Collections Enterprise, Inc., 377 F.3d 488, 495 (5th Cir. 2004) (no).
5. If it is not per se lawful, whether its lawfulness should be affected by whether it is addressed to a lawyer, rather than to the consumer directly.
6. Whether there should be a safe harbor for a debt collector accused of violating section 1692e by making such an offer.
7. Again, if such a letter is not per se lawful, what type of evidence a plaintiff must present to prove that a settlement offer violates section 1692e.
8. Whether the determination that a representation is or is not false, deceptive, or misleading under section 1692 is always to be treated as a matter of law. Compare McMillan v. Collection Professionals, Inc., 455 F.3d 754, 759 (7th Cir.2006); Taylor v. Cavalry Investment, LLC, 365 F.3d 572, 575 (7th Cir. 2004), and Walker v. National Recovery, Inc., 200 F.3d 500, 502, 504 (7th Cir. 1999) (no), with Wilson v. Quadramed Corp., 225 F.3d 350, 353 n. 2 (3d Cir. 2000), and Terran v. Kaplan, 109 F.3d 1428, 1432-33 (9th Cir.1997) (yes).
9. Whether, if that determination is not always a matter of law, nevertheless a charge under section 1692e can sometimes be dismissed on the pleadings on the ground that the challenged representation was, as a matter of law, not false or misleading.
The questions thus fall into three overlapping groups. The first is the application of the Fair Debt Collection Practices Act to lawyers (questions 1 through 3, and 5); the second is the proper treatment under the Act of settlement offers (questions 4 through 7); and the last (questions 8 and 9) concerns the role of Fed.R.Civ.P. 12(c) in deciding claims of violation of section 1692e.
Section 1692g provides:
(a) Notice of debt; contents
Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
(There are additional subsections, but they do not require discussion.) The required written notice must be sent to "the consumer," that is, to the person claimed to owe a debt. The consumer's lawyer is not that person. But if the debt collector knows that the consumer is represented by a lawyer, then (with immaterial exceptions) he may not communicate with the consumer directly. § 1692c(a)(2). He must go through the lawyer. The lawyer receives the notice and shares it with, or explains it to, his client. Hence the debt collector is communicating with the consumer within the meaning of the Act, which defines "communication" as "the conveying of information regarding a debt directly or indirectly to any person through any medium." § 1692a(2) (emphasis added). The lawyer is both "any person" and "any medium."
It would be passing odd if the fact that a consumer was represented excused the debt collector from having to convey to the consumer the information to which the statute entitles him. For example, sections 1692g(a)(1) and (2) provide that the required notice must state the amount of the debt and the name of the creditor. Is it to be believed that by retaining a lawyer the debtor disentitles himself to the information? Or that the debt collector, though knowing that the debtor is represented, can communicate directly with him in defiance of the principle that once a party to a legal dispute is represented, the other party must deal with him through his lawyer, and not directly? We conclude that any written notice sent to the lawyer must contain the information that would be required by the Act if the notice were sent to the consumer directly. National Consumer Law Center, Consumer Credit Law Manual § 8.02[5][b] (2004); cf. Heintz v. Jenkins, 514 U.S. 291, 115 S.Ct. 1489, 131 L.Ed.2d 395 (1995).
The next question is whether debt collectors can, without liability, threaten, make false representations to, or commit other abusive, deceptive, or unconscionable acts against a consumer's lawyer, in violation of sections 1692d, e, or f. These sections do not designate any class of persons, such as lawyers, who can be abused, misled, etc., by debt collectors with impunity. Section 1692d forbids "any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt" (emphasis added). Section 1692e forbids a debt collector to "use any false, deceptive, or misleading representation or means in connection with the collection of any debt." And section 1692f forbids a debt collector to "use any unfair or unconscionable means to collect or attempt to collect any debt."
It is true that a lawyer is less likely to be deceived, intimidated, harassed, and so forth (for simplicity, we shall assume that only deception is alleged) than a consumer. But that is an argument not for immunizing practices forbidden by the statute when they are directed against a consumer's lawyer, but rather for recognizing that the standard for...
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