791 F.3d 413 (3rd Cir. 2015), 14-2808, Jensen v. Pressler & Pressler

Docket Nº:14-2808
Citation:791 F.3d 413
Opinion Judge:McKEE, Chief Judge.
Attorney:Sergei Lemberg, Esq. [ARGUED], LEMBERG LAW, LLC, Stamford, Connecticut, Attorney for Appellant. Mitchell L. Williamson, Esq. [ARGUED], PRESSLER & PRESSLER, LLP, Parsippany, NJ; Michael J. Peters, Esq., PRESSLER & PRESSLER, LLP, Parsippany, NJ, Attorneys for Appellee Pressler & Pressler. Lauren M....
Judge Panel:Before: MCKEE, Chief Judge, RENDELL and FUENTES, Circuit Judges.
Case Date:June 30, 2015
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 413

791 F.3d 413 (3rd Cir. 2015)




No. 14-2808

United States Court of Appeals, Third Circuit

June 30, 2015

Argued March 18, 2015

Page 414

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY. (D.C. No. 2-13-cv-01712). District Judge: Honorable Susan D. Wigenton.

Sergei Lemberg, Esq. [ARGUED], LEMBERG LAW, LLC, Stamford, Connecticut, Attorney for Appellant.

Mitchell L. Williamson, Esq. [ARGUED], PRESSLER & PRESSLER, LLP, Parsippany, NJ; Michael J. Peters, Esq., PRESSLER & PRESSLER, LLP, Parsippany, NJ, Attorneys for Appellee Pressler & Pressler.

Lauren M. Burnette, Esq. [ARGUED], Marshall, Dennehey, Warner, Coleman & Goggin, Camp Hill, PA, Attorney for Appellee Midland Funding LLC.

Before: MCKEE, Chief Judge, RENDELL and FUENTES, Circuit Judges.


Page 415

McKEE, Chief Judge.

We are asked to decide whether a false statement in a communication from a debt collector to a debtor must be material in order to be actionable under a provision of the Fair Debt Collection Practices Act (" FDCPA" ), 15 U.S.C. § 1692e. We conclude that materiality is required, as it is subsumed within the " least sophisticated debtor" standard that has traditionally governed FDCPA claims. Because we do not find the misstatement at issue in this case material, we will affirm the District Court's grant of summary judgment to Pressler & Pressler and Midland Funding, LLC.

Page 416


The facts of this case are largely undisputed. Appellant Paula Jensen defaulted on a Bank of America credit card, and her debt was eventually sold to Appellee Midland Funding, LLC (" Midland" ). Midland retained the law firm of Appellee Pressler & Pressler (" Pressler" ) to help collect Jensen's debt. Midland obtained a default judgment against Jensen in the Superior Court of New Jersey in the amount of $5,965.82. Pressler then attempted to collect on that judgment by serving an information subpoena and written questions on Jensen.

The information subpoena and accompanying questions sought personal and financial information from Jensen in aid of collection. It advised that " failure to comply . . . may result in . . . arrest and incarceration." The information subpoena was issued pursuant to Rule 1:9-1 of the Rules Governing the Courts of the State of New Jersey (" New Jersey Rules" ), which allows New Jersey attorneys to issue subpoenas in the name of the clerk of court. Information subpoenas issued under this rule properly bear the signature of the clerk, even though the clerk herself did not sign the subpoena and likely does not even have knowledge of it. The information subpoena here was based on the sample " form" in the Appendix to the New Jersey Rules. That form provides space for two electronic or typed signatures: one for the issuing attorney, and one for the clerk. Because Pressler sought to enforce a judgment from the Superior Court of New Jersey, the Superior Court clerk's name should have appeared on the clerk's signature line.

Instead, Pressler listed " Terrence D. Lee" on the clerk's signature line. Lee had never worked as a clerk of the Superior Court, and although he had been the County Clerk of Warren County, he left that position six years earlier. Ironically, Jensen knew Lee, and she also knew that he was not a clerk of the Superior Court. Roughly one month later, Jensen sent a letter to Pressler explaining that she was aware that Mr. Lee was not the Superior Court clerk and calling the subpoena " fraudulent." However, she also answered the questions that accompanied the information subpoena.

Thereafter, Jensen moved to vacate the state court judgment against her, but her motion was denied. She then filed a putative class action against Pressler and Midland (together, " Appellees" or " Collectors" ) in the U.S. District Court for the District of New Jersey, alleging a violation of § 1692e of the FDCPA, which prohibits making false, misleading, or deceptive statements in the collection of consumer debts. The District Court granted summary judgment in favor of the Collectors and denied Jensen's cross motion for summary judgment. It concluded that, because the misuse of Lee's name was not a material false statement, there could be no liability under § 1692e. See Jensen v. Pressler & Pressler, LLP, No. 13-CV-01712, 2014 WL 1745042, at *5 (D.N.J. Apr. 29, 2014). This appeal followed.1

We have not yet had occasion to decide whether § 1692e contains a materiality requirement. For the reasons that follow, we agree with the District Court's conclusion that misstatements must be material to be actionable under § 1692e. Accordingly, we will affirm.


" This Court exercises plenary review over a district court's grant of summary

Page 417

judgment, applying the same standard employed by the district court." Trinity Indus., Inc. v. Chi. Bridge & Iron Co., 735 F.3d 131, 134 (3d Cir. 2013). Summary judgment should only be granted where, after the close of discovery and viewing the evidence in the light most favorable to the non-moving party, the movant establishes that no genuine issue of material fact remains. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). " A factual dispute is material if it might affect the outcome of the suit under governing law." Lupyan v. Corinthian Colls. Inc., 761 F.3d 314, 317 (3d Cir. 2014) (citing Doe v. Luzerne Cnty., 660 F.3d 169, 175 (3d Cir. 2011)).


" To prevail on an FDCPA claim, a plaintiff must prove that (1) she is a consumer, (2) the defendant is a debt collector, (3) the defendant's challenged practice involves an attempt to collect a 'debt' as the Act defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt." Douglass v. Convergent Outsourcing, 765 F.3d 299, 303 (3d Cir. 2014). Only the fourth prong is disputed here. As noted, Jensen asserts that the subpoena violated § 1692e, the provision of the law dealing with communications from debt collectors to debtors. She also claims that the subpoena violated two more specific subsections, § 1692e(9) and § 1692e(10). Those provisions provide:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

* * * (9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval. (10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

15 U.S.C. § 1692e. Jensen argues that Pressler's use of Terrence Lee's electronic signature was a " false . . . representation" in violation of 15 U.S.C. § 1692e. Jensen is obviously correct as a factual matter, insofar as using Terrence Lee's name is a " false representation" in the most technical sense of the phrase. The subpoena represents Lee to be the Clerk of the Superior Court of New Jersey, but he was not the clerk and had never held that post.

However, Appellees argue that this technically false representation is not actionable under the FDCPA because it is not material. The Court of Appeals for the Seventh Circuit first addressed this issue in Hahn v. Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009). There, the court adopted a " materiality" requirement for false, misleading, or deceptive statements under the FDCPA. Id. at 757. A number of our sister Courts of Appeals subsequently adopted such a requirement. See Elyazidi v. SunTrust Bank, 780 F.3d 227, 234 (4th Cir. 2015); Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1033-34 (9th Cir. 2010); Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 596 (6th Cir. 2009). No Circuit Court that has addressed this issue has disagreed with Hahn and held that an immaterial false statement made during the collection of a consumer debt is

Page 418

actionable under the FDCPA. This dispute presents our Court with its first opportunity to decide if " false, deceptive, or misleading" statements must be material to be actionable under 15 U.S.C. § 1692e.2

Jensen correctly argues that the word " material" does not appear in the statute. However, that is not necessarily outcome determinative. Congress's intent guides our interpretation of statutes. See Allen ex rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364, 367 (3d Cir. 2011). Our interpretive task begins and ends with the text of the statute unless the text is ambiguous or does not reveal congressional intent " with sufficient precision" to resolve our inquiry. Id. However, " [w]here the statutory language does not express Congress's intent unequivocally, a court traditionally refers to the legislative history and the atmosphere in which the statute was enacted in an attempt to determine the congressional purpose." In re Lord Abbett Mut. Funds Fee Litig., 553 F.3d 248, 254 (3d Cir. 2009) (citation omitted). Jensen's reliance on the precise wording of the statute here ignores the fact that materiality requirement is simply a corollary of the well-established " least sophisticated debtor" standard, which courts have routinely applied to alleged violations of § 1692e in order to advance the congressional intent of the FDCPA. Indeed, the parties do not dispute this standard's validity and application to this case. Yet, that standard, like the disputed materiality requirement, appears nowhere in the text of the statute. As we will explain, we are satisfied that both the least sophisticated debtor standard and the materiality requirement supply a...

To continue reading