Jang v. A.M. Miller and Associates

Decision Date27 August 1997
Docket NumberNos. 96-3173,96-3174,s. 96-3173
PartiesBetty Y. JANG, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. A.M. MILLER AND ASSOCIATES, a Minnesota Corporation, Defendant-Appellee. Jeffrey L. GAMMON, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. GREAT LAKES COLLECTION BUREAU, INCORPORATED and Novus Credit Card Services, a Delaware Corporation, doing business as Discover Card Services, Defendants-Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

James Shedden (argued), David J. Philipps, Catherine Lee Gemrich, Michael S. Hilicki, Beeler, Schad & Diamond, Chicago, IL, for Plaintiffs-Appellants.

Melissa A. Murphy-Petros (argued), Clausen Miller, P.C., Chicago, IL, Lawrence T. Hofmann, Zelle & Larson, Minneapolis, MN, Scott C. Frost, Alan I. Ehrenberg, Blatt, Hasenmiller, Leibsker, Moore & Pellettieri, Chicago, IL, for defendant-appellee A.M. Miller and Associates.

Melissa A. Murphy-Petros (argued), Edward M. Kay, James T. Ferrini, Susan Condon, Clausen Miller, P.C., Chicago, IL, for defendant-appellee Great Lakes Collection Bureau, Inc.

Paul B. Uhlenhop, Charles J. Risch, Paul M. Weltlich, Lawrence, Kamin, Saunders & Uhlenhop, Chicago, IL, for defendant-appellee Novus Credit Card Services.

Before COFFEY, KANNE and ROVNER, Circuit Judges.


Betty Jang and Jeffrey Gammon filed nearly identical class action complaints against two collection agencies that sent them dunning letters on behalf of Discover Card for alleged outstanding credit card debts. Jang and Gammon complained that although the dunning letters technically complied with the Fair Debt Collection Practices Act, they were misleading because the collection agencies never intended to fully comply with the statutory notices set forth in the letters. We agree with the district court that Jang and Miller failed to state a claim against the collection agencies because the agencies did all they were required to do under the FDCPA.


Discover Card hired A.M. Miller and Associates and Great Lakes Collection Bureau (the "Agencies") to collect credit card debts allegedly due from Jang and Miller respectively. Each of the Agencies initiated their efforts by mailing a dunning letter to their respective targets. The letter Jang received stated in relevant part:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice, this office will obtain verification of the debt or obtain a copy of a judgement and mail you a copy of such judgement or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

With some slight variations in spelling, punctuation and type face, Gammon received an identical statement. Both Jang and Gammon, through their attorneys, disputed the validity of the debts and requested verification. A.M. Miller never responded to Jang's request for verification, but it did cease all collection activity. Eventually, Discover Card provided the requested verification, and Jang paid her bill. Great Lakes notified Gammon's attorney that "following instructions from the Credit Grantor, Discover Card, we closed our files and returned the above notated account." Great Lakes also ceased all collection activity. Again, Discover Card eventually provided the requested verification, but in Gammon's case, only after he filed suit.

Jang and Gammon alleged in their complaints that the Agencies knew when they sent out the dunning letters that they would never provide verification. Jang claimed that A.M. Miller had a policy of returning all Discover Card accounts to Discover Card upon receiving a validation request. Gammon alleged that Discover Card required its collection agencies to return accounts for which validation is requested. Both alleged that the Agencies returned their accounts to Discover Card pursuant to these policies. Jang alleged that because of the policy, the dunning letter she received was false, misleading and deceptive, and therefore violated section 1692e of the FDCPA. Gammon similarly charged that the letter was false, deceptive and misleading in violation of section 1692e, and also alleged that this same conduct violated section 1692f of the FDCPA, which prohibits the use of any unfair or unconscionable means to collect a debt.

The district court dismissed with prejudice both complaints because the Agencies had complied with the FDCPA. The dunning letters sent by the Agencies mirrored the language required by section 1692g(a). The district court noted that the statute leaves no room for deviation in the language of the validation notice, and that the Agencies would have violated the statute if they had made any lesser promises than those required by section 1692g. Further, the Agencies ceased collection activities immediately upon receiving the requests for validation, in compliance with section 1692g(b). The court also noted that the statute does not require debt collectors to actually provide validation. Rather, it requires that the debt collector cease all collection activity until it provides the requested validation to the debtor. The court concluded that the Agencies' prior knowledge of Discover Card's verification procedure was irrelevant, and that strict compliance with section 1692g could never result in violation of sections 1692e or 1692f. The court therefore dismissed with prejudice both complaints.

On appeal, Jang and Gammon argue that the promise to provide validation when the Agencies knew that they would instead return the accounts to Discover Card constitutes a false, misleading and deceptive practice under the FDCPA. They also contend that this "false promise" violates the FDCPA provisions against unfair collection practices because it undermines the protections and purpose of the validation requirement.


We review de novo the district court's dismissal of the complaints for failure to state a claim. Boland v. Engle, 113 F.3d 706, 708 n. 1 (7th Cir.1997). A complaint is properly dismissed pursuant to Fed.R.Civ.P. 12(b)(6) when the plaintiff can prove no set of facts in support of his or her claim that would entitle the plaintiff to relief. Doherty v. City of Chicago, 75 F.3d 318, 322 (7th Cir.1996). At this stage of the proceedings, we accept as true all well-pleaded facts contained in the complaints, and we construe all reasonable inferences in favor of the plaintiffs. Boland, 113 F.3d at 708 n. 1. We accept as true, therefore, the plaintiffs' allegations that the Agencies knew when they sent the letters that they had no intention of ever providing verification, because each had agreed in advance with Discover Card to return any file where the debtor requested verification. Because the statute requires only that a debt collector cease all collection activity until verification of the debt is provided to the debtor, and because the plaintiffs admitted that the Agencies ceased all collection activities after plaintiffs requested verification, we find that complaints were properly dismissed for failure to state a claim.

Section 1692g(a) requires that within five days of communicating with a consumer in relation to debt collection, the debt collector must provide certain...

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