Anderson v. Credit Collection Services, Inc.

• Decision Date: 09 June 2004
• Docket Number: No. 04-CV-0347W(RBB).,04-CV-0347W(RBB).
• Citation: 322 F.Supp.2d 1094
• Court: U.S. District Court — Southern District of California
• Parties: Dawn Marie ANDERSON, on behalf of herself and all other similarly situated, Plaintiff, v. CREDIT COLLECTION SERVICES, INC. Defendant.

322 F.Supp.2d 1094

Dawn Marie ANDERSON, on behalf of herself and all other similarly situated, Plaintiff, v. CREDIT COLLECTION SERVICES, INC. Defendant.

No. 04-CV-0347W(RBB).

United States District Court, S.D. California.

June 9, 2004.

Law Offices of Steven A Wickman, San Diego, CA, for Plaintiff.

Tim J. Vanden Heuvel, Lewis, D'Amato Brisbois and Bisgaard, San Diego, CA, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS; DENYING PLAINTIFF'S CROSS-MOTION FOR SUMMARY JUDGMENT

WHELAN, District Judge.

Defendant Credit Collection Services ("Defendant" or "CCS") moves to dismiss Plaintiff Dawn Marie Anderson's ("Plaintiff's") Fair Debt Collection Practices Act ("FDCPA") Complaint. See Fed.R.Civ.P. 12(b)(6). Plaintiff has filed a cross-motion for summary judgment. See Fed.R.Civ.P.56. Both parties, through counsel, oppose the respective motions. The Court decides the matter on the papers submitted and without oral argument. See Civ.L.R. 7.1(d.1). For the reasons outlined below, the Court grants Defendant's motion to dismiss, and denies Plaintiff's cross-motion for summary judgment.

I. BACKGROUND

On July 07, 2003 Defendant sent Plaintiff a debt collection letter seeking a $269.85 past due balance. The letter contained both Defendant's address and a Western Union logo and stated (caps in original):

IF CREDIT COLLECTION SERVICES CANNOT COLLECT YOUR DELINQUENT ACCOUNT, A REPORT WILL BE SENT TO YOUR CREDITOR STATING "VOLUNTARY COLLECTION DEEMED IMPOSSIBLE".

IN COMPLIANCE WITH FEDERAL LAW P.L. 95-109, 15 UNITED STATES CODE § 1692c(b):

"(b) WITHOUT THE PRIOR CONSENT OF A CONSUMER GIVEN DIRECTLY TO THE DEBT COLLECTOR, OR THE EXPRESS PERMISSION OF A COURT OF COMPETENT JURISDICTION, OR AS REASONABLY NECESSARY TO

EFFECTUATE A POSTJUDGMENT JUDICIAL REMEDY, A DEBT COLLECTOR MAY NOT COMMUNICATE IN CONNECTION WITH THE COLLECTION OF ANY DEBT, WITH ANY PERSON OTHER THAN THE CONSUMER, HIS ATTORNEY, A CONSUMER REPORTING AGENCY IF OTHERWISE PERMITTED BY LAW, THE CREDITOR, THE ATTORNEY OF THE CREDITOR, OR THE ATTORNEY OF THE DEBT COLLECTOR" (UNLESS PROHIBITED BY STATE LAW).

THIS OFFICE IS ONCE AGAIN ENCOURAGING YOU DIRECTLY TO CLEAR YOUR SERIOUSLY DELINQUENT OBLIGATION BY REMITTING FULL PAYMENT IN THE ENVELOPE PROVIDED, OR BY CONTACTING THIS OFFICE FOR ASSISTANCE.

THIS IS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. THIS COMMUNICATION WAS SENT BY A DEBT COLLECTOR.

On February 19, 2004 Plaintiff commenced this FDCPA lawsuit. Plaintiff contends the letter violates 15 U.S.C. § 1692 in two respects. First, Plaintiff argues that the letter's statutory reference ("The Paragraph") is false, deceptive and misleading, and harasses Plaintiff by falsely implying that legal action will soon commence.¹ Second, Plaintiff alleges that the Western Union logo simulates a telegram and implies a false sense of urgency. The parties' cross motions followed.

II. LEGAL STANDARD

A Rule 12(b)(6) motion to dismiss tests the complaint's sufficiency. See North Star Int'l. v. Arizona Corp. Comm'n., 720 F.2d 578, 581 (9th Cir.1983). Dismissing a claim under this rule is appropriate only where it "appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Levine v. Diamanthuset, Inc., 950 F.2d 1478, 1482 (9th Cir.1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)).

A complaint may be dismissed as a matter of law for two reasons: (1) lack of a cognizable legal theory, or (2) insufficient facts under a cognizable theory. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir.1984); Neitzke v. Williams, 490 U.S. 319, 326-27, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989) ("Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law."). In reviewing a Rule 12(b)(6) motion to dismiss, the court must assume all factual allegations as true, and must construe them in the light most favorable to the nonmoving party. Gompper v. VISX, Inc., 298 F.3d 893, 895 (9th Cir.2002). The complaint, and all reasonable inferences therefrom, must also be construed in plaintiff's favor. Walleri v. Fed. Home Loan Bank of Seattle, 83 F.3d 1575, 1580 (9th Cir.1996).

In the 9th Circuit, the court — and not the jury — determines whether a particular collection letter violates the FDCPA. Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1225-26 (9th Cir.1988); Terran v. Kaplan, 109 F.3d 1428, 1432 (9th Cir.1997); see also Baker v. Citibank (South Dakota), N.A., 13 F.Supp.2d 1037, 1041 (S.D.Cal.1998) (Rhoades, J.). The court examines the letter from the hypothetical "least sophisticated debtor" viewpoint ("LSD"), an objective standard applied as a matter of law. See Swanson, 869 F.2d at 1227 (holding that letter threatening investigation into employment should be reviewed by an objective least sophisticated debtor standard).²

III. DISCUSSION

A. THE FDCPA STATUTORY QUOTE

The narrow issue presently before this Court is whether Defendant's debt collection letter violates the FDCPA. Plaintiff contends that the collection letter is unlawful because it (1) falsely represents the debt's legal status and (2) unlawfully contains threats of unintended action. More specifically, Plaintiff argues that the statutory text's language, with words such as "postjudgment judicial remedy" and "attorney", violates 15 U.S.C. § 1692e because it causes a LSD to fear imminent legal action. In response, Defendant claims that the language is not threatening, and is included to notify the debtor that she should refer the matter to counsel if a bankruptcy or restructuring is occurring.

The Court agrees with Defendant.

The FDCPA prohibits debt collectors from falsely representing the character, amount, or legal status of any debt. 15 U.S.C. § 1692e(2)(A). Additionally, debt collectors may not (1) use false or deceptive means to collect a debt, or (2) threaten to initiate legal action against a debtor unless the creditor actually intends to do so. 15 U.S.C. §§ 1692e(5), 1692e10; see, e.g., Carrigan v. Central Adjustment Bureau 502 F.Supp. 468 (N.D.Ga.1980) (finding a FDCPA violation when a creditor threatens to transfer debtor's account "to an attorney" without any intention of actually filing suit); Bentley v. Great Lakes Collection Bureau, 6 F.3d 60 (2d Cir.1993) (creditor's false representation that it had "given the [debt collection agency] authority to initiate legal proceedings" violated FDCPA).

Here, dismissal is warranted for several reasons. First, Defendant's collection letter makes no overt threat of impending litigation. While Plaintiff may attempt to argue that verbatim statutory quotes constitute per se FDCPA violations, this argument is without merit. Indeed, federal law often explicitly requires that certain FDCPA provisions be included in certain collection letters.³ Moreover, courts have commonly held that mere FDCPA quotation, without more, does not violate the statute. See Renick v. Dun & Bradstreet Receivable Management Services, 290 F.3d 1055 (9th Cir.2002); Shapiro v. Dun & Bradstreet Receivable Management Services, Inc., 209 F.Supp.2d 330 (S.D.N.Y.2002). In sum, Plaintiff has failed to point to any language contained in Defendant's collection letter that overtly threatens litigation.

Having failed to establish an explicit litigation threat, Plaintiff argues that the statute's "legal jargon" creates an implicit threat. This argument is equally uncompelling. While the quoted language does include legal terms, Plaintiff invites this Court to hold (without any statutory or decisional support) that an accurate and complete statutory citation potentially violates the FDCPA. Several considerations mandate that this Court decline Plaintiff's tenuous invitation.

Under Plaintiff's FDCPA interpretation, a collection letter that includes any legal term — regardless of its placement, context, or meaning — would constitute a per se FDCPA violation. This interpretation fails from both a legal and common sense standpoint. From a legal perspective, Plaintiff has failed to provide this Court with a single case where an "implied" threat of litigation was actionable under the FDCPA. From a common sense perspective, Plaintiff's purported rule would preclude the creditor or debt collector from providing any legal information to the debtor without potential FDCPA liability. Indeed, the language at issue here actually benefits the debtor; the statutory language simply states that a creditor cannot contact third parties regarding the debt without the debtor's permission.

Decisional authority clearly provides that a collection letter is not actionable under the FDCPA unless the creditor (a) threatens to initiate legal action the creditor does not intend to take, or (b) includes an ambiguous or misleading statutory citation that could threaten further legal action. This Court will not hold Defendant liable for what at best is a "bizarre or idiosyncratic" interpretation of the collection letter at issue here.⁴ Plaintiff's cited, predominately unreported⁵ cases do not hold otherwise. The common thread to each of Plaintiff's cited cases is that those letters (1) contained incomplete or ambiguous statutory citations, or (2) cited statutes to support the letter's additional, overtly threatening language.

For example, Carroll was an "overshadowing" case that reviewed an initial collection letter to determine whether the defendant's collection letter forced the debtor waive his 30-day validation notice by threatening immediate federal court action. Carroll, 2002 WL 31936511 at *6. Moreover, the Carroll letter clearly stated "[i]mmediate payment of this claim will forestall further disposition of the matter" but gave no explanation as to possible actions encompassed by the "ominous sounding phrase `further disposition.'" Id. The letter ended with the bare phrase "[t]his statement is furnished in...