Echols v. Cong. Collection
| Decision Date | 10 August 2021 |
| Docket Number | 20-cv-12254 |
| Parties | DELINE ECHOLS, individually and on behalf of all others similarly situated, Plaintiff, v. CONGRESS COLLECTION, LLC, and John Does 1-25 Defendants. |
| Court | U.S. District Court — Eastern District of Michigan |
Plaintiff Deline Echols has filed this putative class action against Defendant Congress Collection LLC pursuant to the Fair Debt Collection Practices Act (FDCPA). Plaintiff's claims arise from a debt collection notice sent to her that allegedly contained false and deceptive information. Now before the Court is Defendant's Motion to Dismiss Plaintiff's Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction, arguing that Plaintiff has failed to articulate any injury in fact sufficient to confer Article III standing. (ECF No. 8.) The Court finds that the briefing adequately addresses the issues in contention and dispenses with a hearing pursuant to E.D Mich. L.R. 7.1(f)(2). For the reasons that follow, the Court GRANTS Defendant Congress Collection LLC's Motion to Dismiss Plaintiff's Complaint Pursuant to Fed.R.Civ.P 12(b)(1).
On or about June 16, 2020, Defendant Congress Collection sent Plaintiff a collection letter regarding a debt that had been placed with it for collection. (ECF No. 1, Complaint (Compl.) at ¶ 26, PageID.6) .) That Collection Letter sets forth the statutorily-required debt validation notice:
Unless you notify this office within 30 days after receiving this notice that you dispute the debt or any portion thereof, Congress Collection will assume this debt is valid. If you notify this office in writing within 30 days of receiving this notice, Congress Collection will obtain verification of the debt or obtain a copy of a judgment and mail a copy of such judgment or verification. If you submit a written request to Congress Collection within 30 days of receiving this notice, Congress Collection will provide you with the name & address of the original creditor, if different from the current creditor.
(Collection Letter, PageID.14.) The Letter further states: “This account may be placed on your personal credit file and thus negatively impact your credit score if left resolved.” (Id.)
Plaintiff alleges that this second statement is false and deceptive and “overshadows” the statutorily-required validation notice “by scaring Plaintiff into making payment immediately to avoid negative credit reporting instead of exercising his [sic] statutory right to dispute the debt as provided by the FDCPA.” (Compl. ¶¶ 31-32, PageID.8.) Plaintiff further asserts that “[t]his language is false and deceptive because Defendant has no way of knowing whether Plaintiff's credit score would decrease as a result of delaying payment.” (Id. ¶¶ 33-34, PageID.8.) Plaintiff claims that, “[a]s a result of Defendant's deceptive, misleading and unfair debt collection practices, Plaintiff has been damaged.” (Id. ¶ 36, PageID.8.) Plaintiff's Complaint otherwise contains no allegations regarding any alleged “injuries” Plaintiff suffered.
On August 20, 2020, Plaintiff filed this putative class action against Defendant. (Compl.) Plaintiff asserts two claims under the FDCPA: Count I - Violation of 15 U.S.C. §1692e “by creating a false and misleading representation of the legal status of the debt in violation of §1692e(10)” and “by falsely representing the character, amount or legal status of the debt in violation of §1692e(2)(A);” and Count II - Violation of 15 U.S.C. § 1692g “by threatening negative credit reporting, which overshadows the ‘g-notice' language and coerces the consumer not to exert its rights under the FDCPA.” (Id. PageID.9-11.)
Defendant filed a Motion to Dismiss Plaintiff's Complaint Pursuant to Fed.R.Civ.P. 12(b)(1). (ECF No. 8, Def.'s Mot.) Defendant argues that Plaintiff's Complaint should be dismissed because Plaintiff has not articulated any injury in fact traceable to the Collection Letter sufficient to confer Article III standing. Instead, she only speculates that the credit reporting statement in the Letter might “coerce” someone to waive their procedural rights and promptly pay a debt to avoid negative credit consequences. Defendant contends that this speculative consequence does not constitute a concrete injury sufficient to support Plaintiff's standing to bring this case.
Plaintiff filed a Response in opposition to Defendant's motion. (ECF No. 11, Pl.'s Resp.) Plaintiff argues that she has Article III standing based exclusively on Defendant's alleged statutory violations. She contends that Defendant's “deception” regarding negative credit reporting “puts Plaintiff at a materially greater risk” of causing her to forego and overlook her validation of rights, and that “risk of such forfeiture is enough to satisfy the injury-in-fact requirement of Article III because seeking validation of a debt is one of the central interests that Congress sought to protect under the statute.”
Defendant filed a reply brief in support of its motion. (ECF No. 14, Def.'s Reply.) Defendant contends that Plaintiff “concedes she has no tangible injuries.”
Defendant argues that Plaintiff's “blanket claim of harm from mere receipt of a letter disclosing the possibility of credit reporting” does not “establish a material risk of harm that her procedural right to dispute the debt or seek validation might be squandered.” Defendant concludes that Plaintiff has failed to demonstrate that she has legal standing to bring a claim under the FDCPA, and her Complaint should be dismissed.
Whether a party has standing is an issue of the court's subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). Lyshe v. Levy, 854 F.3d 855, 858 (6th Cir. 2017). Subject-matter jurisdiction is always a “threshold determination, ” American Telecom Co. v. Republic of Lebanon, 501 F.3d 534, 537 (6th Cir. 2007), and “may be raised at any stage in the proceedings.” Schultz v. General R.V. Ctr., 512 F.3d 754, 756 (6th Cir. 2008). Challenges to subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) “come in two varieties: a facial attack or a factual attack.” Gentek Bldg. Prods., Inc. v. Sherwin-Williams Co., 491 F.3d 320, 330 (6th Cir. 2007). As relevant here, a facial attack on the subject-matter jurisdiction alleged in the complaint questions the sufficiency of the pleading. Id. When reviewing a facial attack, a court must take the allegations in the complaint as true, which is a similar safeguard employed under 12(b)(6) motions to dismiss. Id. (citing Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990)). If those allegations establish federal claims, jurisdiction exists. Id. “If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed.R.Civ.P. 12(h)(3).
The FDCPA was enacted to “eliminate abusive debt collection practices by debt collectors.” 15 U.S.C. § 1692(e). “The FDCPA prohibits a wide array of specific conduct, but it also prohibits, in general terms, any harassing, unfair, or deceptive debt collection practice, which enables the courts, where appropriate, to proscribe other improper conduct which is not specifically addressed.” Currier v. First Resolution Inv. Corp., 762 F.3d 529, 533 (6th Cir. 2014). The FDCPA codified several specific consumer-protective rights, including those in Section 1692g, which sets out requirements for a debt collector's “initial communication with a consumer in connection with the collection of any debt, ” including that the communication notify the consumer of the right to dispute the debt and to seek verification of the validity of the debt through written notice and request to the creditor. 15 U.S.C. § 1692g(a). If the debtor makes such a written verification request, the debt collector must cease collection efforts until the verification is provided to the consumer. Id. § 1692g(b). The FDCPA gives consumers a private right of action to enforce its provisions against debt collectors. 15 U.S.C. § 1692k(a).
To determine whether conduct fits within the broad scope of the FDCPA, the conduct is viewed through the eyes of the “least sophisticated consumer.” Barany-Snyder v. Weiner, 539 F.3d 327, 333 (6th Cir. 2008). This objective standard recognizes that the FDCPA protects the gullible and the shrewd alike while simultaneously “‘prevent[ing] liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanding and willingness to read with care.'” Id. (quoting Kistner v. Law Offices of Michael P. Margelefsky, LLC, 518 F.3d 433, 438 (6th Cir. 2008)).
Defendant asserts that Plaintiff lacks standing to pursue her FDCPA claims. Article III, § 2 of the Constitution extends the judicial power of the United States “only to ‘Cases' and ‘Controversies.'” Spokeo, Inc. v. Robins, 578 U.S. 856, 136 S.Ct 1540, 1547 (2016) (“Spokeo II”) (quoting U.S. Const. Art. III, § 2). Standing “ensure[s] that federal courts do not exceed their authority” and “limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.” Id. Standing is a jurisdictional requirement. See Coal Operators & Assocs., Inc. v. Babbitt, 291 F.3d 912, 915 (6th Cir. 2002). Thus, if a plaintiff does not have standing, the court lacks...
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