Knoll v. Allied Interstate, Inc., CV-06-1211 PAM/JSM.

• Decision Date: 21 June 2007
• Docket Number: No. CV-06-1211 PAM/JSM.,CV-06-1211 PAM/JSM.
• Citation: 502 F.Supp.2d 943
• Parties: Joseph KNOLL on behalf of himself and all others similarly situated, Plaintiff, v. ALLIED INTERSTATE, INC., Defendant.
• Court: U.S. District Court — District of Minnesota

502 F.Supp.2d 943

Joseph KNOLL on behalf of himself and all others similarly situated, Plaintiff, v. ALLIED INTERSTATE, INC., Defendant.

No. CV-06-1211 PAM/JSM.

United States District Court, D. Minnesota.

June 21, 2007.

Thomas J. Lyons, Jr., Vadnais Heights, MN, for Plaintiff.

Kelly Ann Putney, Michael A. Klutho, Bassford Remele, Minneapolis, MN, for Defendant.

MEMORANDUM AND ORDER

PAUL A. MAGNUSON, District Judge.

This matter was before the Court on Defendant's Motion to Dismiss.¹ For the reasons that follow, the Court denies the Motion.

BACKGROUND

Plaintiff Joseph Knoll previously incurred and failed to pay a consumer debt with ITT Financial. (Compl. ¶¶ 6-7.) Thereafter, ITT Financial transferred the debt to Defendant Allied Interstate, Inc., a debt collector as defined by 15 U.S.C. § 1692a(6). (Id. ¶¶ 4-5, 9.)

Plaintiff alleges that on or about December 29, 2005, Defendant called Knoll at his home residence and left a message to return the call to 877-350-8713. (Id. ¶ 10.) Knoll returned the call to Defendant on December 30, 2005, and learned that Defendant was attempting to collect on the ITT Financial debt. (Id. ¶ 11.) Knoll informed Defendant that the debt was beyond the statute of limitations and instructed Defendant not to call him anymore. Defendant told Knoll that he needed to "pay $1,500 or else." (Id. ¶¶ 12-13.)

Despite the instructions for Defendant not to contact him, Defendant persisted in telephoning Knoll between January 17, 2006 and January 20, 2006. (Id. ¶ 14.) These calls were made from the telephone number 425-256-3786, which appeared on Knoll's caller identification device as "Jennifer Smith." (Id. ¶ 15.) Knoll did not answer the calls, but later called the telephone number. (Id.) When he did so, the person answering identified himself as working for Allied Interstate. (Id.) When Knoll requested to speak with Jennifer Smith, he was told that no one by that name worked there. (Id.)

Knoll alleges that Defendant's practice of transmitting the false name "Jennifer Smith" via a caller identification device to consumers to lure them into answering the phone or returning Defendant's calls violates the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692d, 1692e, and 1692f. He brings a class claim based on the alleged violations and seeks to rep resent:

a class consisting of (i) all persons/consumers nationwide (ii) to whom telephone calls have been made from telephone number 425-256-3786 or some other telephone number that appears on caller ID as someone or some entity other than Defendants, (iii) for the purpose of an attempt to collect a debt incurred for personal, family, or household purposes, (iv) which were received (v) during the one year period prior to the filing of the complaint in this action.

(Compl. ¶ 19.)

DISCUSSION

A. Standard of Review

For the purpose of a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the Court accepts all factual allegations as true and grants every reasonable inference arising from the complaint favorably to the Plaintiff. See Strand v. Diversified Collection Serv., 380 F.3d 316, 317 (8th Cir.2004). The Court will grant a motion to dismiss "only in the unusual case in which a plaintiff includes allegations that show, on the face of the complaint, that there is some insuperable bar to relief." Id. (citations omitted). "At the very least, however, the complaint must contain facts which state a claim as a matter of law and must not be conclusory." Id. (citation omitted).

B. FDCPA

When enacting the FDCPA, Congress found "abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors." 15 U.S.C. § 1692(a). Accordingly, the purpose of the FDCPA is "to eliminate abusive debt collection practices by debt collectors, [and] to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged." Id. § 1692(e).

1. Section 1692d

Section 1692d prohibits a debt collector from engaging "in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." Id. § 1692d. It includes examples of conduct considered abusive or harassing and specifically prohibits "the placement of telephone calls without meaningful disclosure of the caller's identity." Id. § 1692d(6).

Meaningful disclosure requires a debt collector to "disclose enough information so as not to mislead the recipient as to the purpose of the call." Hosseinzadeh v. M.R.S. Assocs., Inc., 387 F.Supp.2d 1104, 1112 (C.D.Cal.2005). Accordingly, § 1692d(6) does not prohibit a debt collection agency employee from using an alias during a telephone call, as long as the employee accurately discloses the name of the debt collection agency and explains the nature of its business. Wright v. Credit Bureau of Ga., Inc., 548 F.Supp. 591, 597 (N.D.Ga.1982). However, a debt collector violates § 1692d(6) if the collector leaves an answering machine message under an alias and fails to disclose that the call is related to debt collection. See, e.g., Hosseinzadeh, 387 F.Supp.2d at 1112; Joseph v. J.J. Mac Intyre Cos., 281 F.Supp.2d 1156, 1163 (N.D.Cal.2003); Leyse v. Corporate Collection Servs., Inc., No. 03-8491, 2006 WL 2708451, at *3-*5 (S.D.N.Y. Sept. 18, 2006).

No court has addressed whether § 1692d(6) applies to caller identification devices. Noting that § 1692d(6) applies when a debt collector places a call, Knoll argues that a debt collector must meaningfully disclose itself on a caller identification device. Defendant refutes this argument on several grounds. First, it maintains that Knoll's position is impracticable because the text available on a caller identification devise is insufficient to make a full "meaningful disclosure" under § 1692d(6). This argument is baseless. To meet the "meaningful disclosure" requirement, the call identification device need only display the true name, alias or entity placing the call.

Second, Defendant contends that Knoll's position would create an anomaly, since debt collectors would violate the "meaningful disclosure" requirement if they called an individual who had neither an answering machine nor a caller identification device. However, under the circumstance, a debt collector would not engage in any harassing, oppressive, or abusive tactics because the individual would not know that he or she even received a telephone call. That is not the case when an individual has either an answering machine or a caller identification device.

Finally, Defendant submits that Knoll received a "meaningful disclosure" when he returned the call and spoke with an Allied Interstate employee. Such disclosure was too late. Although Allied Interstate disclosed its identity when Knoll returned the calls, Defendant did not make any attempt to identify itself when it placed the telephone calls to Knoll. Indeed, Knoll claims that Defendant purposefully hid its identity and misled him as to the purpose of the call.

The Court finds that Knoll sufficiently alleges that Defendant failed to meaningfully disclose its identity when placing the calls between January 17, 2006 and January 20, 2006. It therefore denies the Motion on the § 1692d claim.

2. 15 U.S.C. § 1692e

Section 1692e describes various false and deceptive misrepresentations that are actionable. See 15 U.S.C. § 1692e. Knoll claims that Defendant violated two specific provisions of § 1692e:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt ..., [including]

(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.

. . .

(14) The use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization.

Id.

No court has addressed whether a debt collector violates § 1692e by displaying an alias on a caller identification devise. However, several courts have held that an employee of a debt collection agency may use a pseudonym in debt collection letters. For example, in Johnson v. NCB Collection Servs., 799 F.Supp. 1298 (D.Conn. 1992), a debt collection agency's demand letter was written on company letter head, but concluded with the printed name of "Althea Thomas, Account Supervisor." Id. at 1300. The name "Althea Thomas" was an alias assigned to an NCB employee. When debtors called the telephone number listed on demand letters, the call was not necessarily directed to the employee using that alias but to the next available representative. Id.

When analyzing whether the use of the alias violated § 1692e, the Johnson court first noted that the FDCPA does not explicitly prohibit the use of aliases in communications with debtors. Id. at 1303. The court then noted that "the use of an assigned alias or office name, even when considered from the standpoint of the least sophisticated debtor, does not misrepresent the amount of a debt, the consequences of its nonpayment, nor the rights of the contacted debtor." Id. at 1304. Additionally, the court observed that the use of aliases and office names was well-established to protect collection agency employees, concluding that the "burden to an ethical debt collector that would result from prohibiting the use of assigned aliases by designated employees clearly outweighs any abstract benefit to a debtor that such a prohibition might yield." Id. Ultimately, the court held that the use of the alias did not violate § 1692e because the source of the disputed letter clearly was the collection agency, and thus the use of an alias in that context irrelevant. Id. at 1307.

Similarly, in Youngblood v. GC Services Limited Partnership, 186 F.Supp.2d 695 (W.D.Tex.2002), the court rejected § 1692e claims based on the use of pseudonyms by collection agency employees. The...