McMillan v. Collection Professionals Inc., No. 05-2745.

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtRipple
Citation455 F.3d 754
Decision Date07 July 2006
Docket NumberNo. 05-2745.
PartiesApril McMILLAN, Plaintiff-Appellant, v. COLLECTION PROFESSIONALS, INCORPORATED, an Illinois corporation, Defendant-Appellee.
455 F.3d 754
April McMILLAN, Plaintiff-Appellant,
v.
COLLECTION PROFESSIONALS, INCORPORATED, an Illinois corporation, Defendant-Appellee.
No. 05-2745.
United States Court of Appeals, Seventh Circuit.
Argued January 10, 2006.
Decided July 7, 2006.

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David J. Philipps (argued), Gomolinski & Philipps, Palos Hills, IL, for Plaintiff-Appellant.

Joseph S. Messer (argued), Messer & Stilp, Chicago, IL, for Defendant-Appellee.

Before BAUER, RIPPLE and WOOD, Circuit Judges.

RIPPLE, Circuit Judge.


April McMillan brought this action against Collection Professionals, Inc. ("CPI"). She alleges that a collection letter that she received from CPI violates the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. The district court held that Ms. McMillan's claim failed to state a claim upon which relief could be granted. See Fed.R.Civ.P. 12(b)(6). Ms. McMillan now appeals the dismissal of her claim. For the reasons stated in the following opinion, we reverse the judgment of the district court and remand the case for further proceedings consistent with this opinion.

I
BACKGROUND

A. Facts

Ms. McMillan received a letter from CPI dated December 8, 2004; it demanded payment for a dishonored check that had been made payable to "Testa IGA" for $86.43 as well as payment of $146.05 for unspecified "Previous Debts." R.1, Ex.A. The letter stated in pertinent part:

YOU ARE EITHER HONEST OR DISHONEST YOU CANNOT BE BOTH

Your creditor believed you to be honest when credit was extended.

The injustice of permitting this account to become past due and then ignoring all requests for payment, casts a doubt of good intentions.

We would like to give you this final opportunity to prove your honesty and good intentions. Payment in full or satisfactory

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arrangements for payment must be made without further delay.

Collection Professionals, Inc., is a debt collection agency. This is an attempt to collect a debt and any information will be used for that purpose.

Id. (emphasis in original).

In her complaint, Ms. McMillan alleged that the letter used "false, deceptive, or misleading representation[s] or means" in violation of 15 U.S.C. § 1692e and that the letter was an attempt to disgrace her in violation of 15 U.S.C. § 1692e(7). She also alleged that the letter employed unfair or unconscionable means to collect a debt in violation of 15 U.S.C. § 1692f.

CPI filed an answer to Ms. McMillan's complaint, and then moved to dismiss under Federal Rule of Civil Procedure 12(b)(6).1 In its motion, CPI submitted that the language in the letter was true and accurate, and Ms. McMillan therefore did not state a claim under § 1692e. CPI also contended that the letter did not state or imply that Ms. McMillan had committed a crime or other fraud, so she had not stated a claim under § 1692e(7). CPI further submitted that, because the letter contained only true statements, it could not be considered "unfair or unconscionable" within the meaning of 15 U.S.C. § 1692f.

B. District Court Disposition

Initially, the district court recognized that the FDCPA should be construed broadly to protect the "unsophisticated consumer." R.17 at 2 (quoting Marshall-Mosby v. Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir.2000)). Nevertheless, the court determined that, in this case, "[Ms.] McMillan wrote a check to a third-party which was returned for insufficient funds and did not cure the bounced check." Id. The court therefore held that "[s]tating that the third-party `believed her to be honest when credit was extended' was not intended to disgrace McMillan and is not an unfair statement." Id. (original alterations omitted).

The district court then distinguished cases, relied upon by Ms. McMillan, in which we had held that an FDCPA complaint can survive a motion to dismiss under 12(b)(6) simply by alleging that a collection letter was confusing. Id. (citing Marshall-Mosby, 205 F.3d at 326; Johnson v. Revenue Mgmt. Corp., 169 F.3d 1057, 1059 (7th Cir.1999)). The district court stated that these cases involved claims brought under 15 U.S.C. § 1692g, which requires certain language in an initial debt collection letter. Id. Because no claim under § 1692g had been brought in this case, the district court held that those cases were inapplicable. Id.2

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II
DISCUSSION

We review a district court's grant of a dismissal under Rule 12(b)(6) de novo, accepting as true all well-pleaded factual allegations and drawing all reasonable inferences in favor of the plaintiff. Dawson v. Gen. Motors Corp., 977 F.2d 369, 372 (7th Cir.1992). The plaintiff's claims should survive dismissal if relief could be granted under any set of facts that could be proved consistent with the allegations. Id.

When assessing an FDCPA claim, we view the claim through the eyes of an "unsophisticated debtor."3 Gammon v. GC Servs. Ltd. P'ship, 27 F.3d 1254, 1257 (7th Cir.1994) (stating that such a standard "protects the consumer who is uninformed, naive, or trusting, yet it admits an objective element of reasonableness"). In the context of a § 1692g claim, we have stated that "[h]ow a particular notice affects its audience is a question of fact, which may be explored by testimony and devices such as consumer surveys." Walker v. Nat'l Recovery, Inc., 200 F.3d 500, 501 (7th Cir.1999).4 However, as a matter of law, we shall not entertain a plaintiff's bizarre, peculiar, or idiosyncratic interpretation of a collection letter. See Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 414 (7th Cir.2005); Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir.2000).

We believe that our court's treatment of claims brought under § 1692g will be helpful in our analysis of claims brought under §§ 1692e and 1692f. In several cases, we have focused on the requirements of a claim under 15 U.S.C. § 1692g, which sets forth mandatory information that a debt collector must provide in a written form to a debtor. If the required information is not communicated to the debtor, or if it is provided in a manner that is "confusing" to the consumer, § 1692g has been violated.5 A letter will not be considered to be a violation of § 1692g, however, unless "a significant fraction of the population would be . . . mislead" by the letter. Durkin, 406 F.3d at 415. We have held that, when a complaint alleges that a dunning letter is confusing, and thus a violation of § 1692g, the plaintiff has

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stated a recognizable legal claim; no more is necessary to survive a Rule 12(b)(6) motion. See Marshall-Mosby, 205 F.3d at 326-27 ("[A] FDCPA complaint survives a motion to dismiss under Rule 12(b)(6) simply by alleging that a dunning letter was confusing."); Walker, 200 F.3d at 503; Johnson, 169 F.3d at 1059. Because confusion is a fact-based question, dismissal is typically not available under 12(b)(6), which is appropriate only when there is no set of facts consistent with the pleadings under which the plaintiff could obtain relief. See Johnson, 169 F.3d at 1059-60.

We have cautioned that a district court must tread carefully before holding that a letter is not confusing as a matter of law when ruling on a Rule 12(b)(6) motion because "district judges are not good proxies for the `unsophisticated consumer' whose interest the statute protects." Walker, 200 F.3d at 501-03 (stating that, even if the lawyers and judge involved thought a letter was not confusing, it would be "possible to imagine facts" that still would support a conclusion that the letter was confusing, such as survey results suggesting that four out of five high school dropouts found it to be confusing). "[W]hat seems pellucid to a judge, a legally sophisticated reader, may be opaque" to the unsophisticated consumer. Johnson, 169 F.3d at 1060.

We cannot accept the district court's view that claims brought under § 1692e or § 1692f are different from claims brought under § 1692g for purposes of Rule 12(b)(6) analysis. Whether or not a letter is "false, deceptive, or misleading" (in violation of § 1692e) or "unfair or unconscionable" (in violation of § 1692f) are inquiries similar to whether a letter is confusing in violation of § 1692g. After all, as our cases reflect, the inquiry under §§ 1692e, 1692g and 1692f is basically the same: it requires a fact-bound determination of how an unsophisticated consumer would perceive the letter. See Fields v. Wilber Law Firm, 383 F.3d 562, 565-66 (7th Cir.2004) (applying the "unsophisticated consumer" standard to claims brought under §§ 1692e and 1692f); Turner v. J.V.D.B. & Assoc., Inc., 330 F.3d 991, 995, 997 (7th Cir.2003) (same); Jang v. A.M. Miller & Assocs., 122 F.3d 480, 483 (7th Cir.1997) (applying the "unsophisticated consumer" standard to § 1692e claim); Gammon, 27 F.3d at 1257-58 (same). Indeed, neither Marshall-Mosby, Johnson, nor Walker stated that their analysis was limited to only the § 1692g context.

CPI contends there are no facts imaginable that would support Ms. McMillan's claim; however, Ms. McMillan submits that she should be allowed to conduct a consumer survey to determine if consumers would find the letter she received to be false or misleading, in violation of § 1692e, or unfair or unconscionable, in violation of § 1692f.6 We have stated on several occasions

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that a "carefully designed and conducted consumer survey" is one way to create a triable issue of fact as to how an unsophisticated consumer would interpret a collection letter. Chuway v. Nat'l Action Fin. Servs., Inc., 362 F.3d 944, 948 (7th Cir.2004); see also, e.g., Walker, 200 F.3d at 501 ("How a particular notice affects its audience is a question . . . [that] may be explored by testimony and devices such as consumer surveys."); Johnson, 169 F.3d at 1060; Durkin, 406 F.3d at 415. CPI relies on Taylor v. Cavalry Investment, L.L.C., 365 F.3d 572 (7th Cir.2004), for the proposition that the court can determine from the face of a...

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    ...allegations of the complaint as true and draws all reasonable inferences in the plaintiff's favor. McMillan v. Collection Prof'ls, Inc., 455 F.3d 754, 758 (7th Cir.2006). Nevertheless, the complaint must plead sufficient facts to suggest plausibly that the plaintiff is entitled to relief. B......
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290 cases
  • In re Rust-Oleum Restore Mktg., Sales Practices & Prods. Liab. Litig., No. 15 C 1364
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • 7 Enero 2016
    ...accord Gonzalez v. FMS, Inc., No. 14 C 9424, 2015 WL 4100292, at *3 (N.D.Ill. July 6, 2015) (citing McMillan v. Collection Prof'ls Inc., 455 F.3d 754, 759–60 (7th Cir.2006) ) (explaining that whether a particular practice is unconscionable in the eyes of an unsophisticated consumer “is ofte......
  • Gillie v. Law Office of Eric A. Jones, LLC, No. 14–3836.
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    ...an attorney in private practice, rather than an officer or employee of the United States.”); see also McMillan v. Collection Profs., Inc., 455 F.3d 754, 761 (7th Cir.2006) (“[I]n some cases the literal truth may convey a misleading impression.”) (internal quotation marks omitted); Gradisher......
  • Freedom Mortgage Corp. v. Burnham Mortgage Inc., No. 03 C6508.
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • 14 Junio 2010
    ...allegations of the complaint as true and draws all reasonable inferences in the plaintiff's favor. McMillan v. Collection Prof'ls, Inc., 455 F.3d 754, 758 (7th Cir.2006). Nevertheless, the complaint must plead sufficient facts to suggest plausibly that the plaintiff is entitled to relief. B......
  • N.H. Ins. Co. v. Ace Ina Holdings Inc., Nos. 07 CV 2898, 09 CV 2026.
    • United States
    • U.S. District Court — Northern District of Illinois
    • 30 Junio 2010
    ...allegations of the complaint as true and draws all reasonable inferences in the plaintiff's favor. McMillan v. Collection Prof'ls, Inc., 455 F.3d 754, 758 (7th Cir.2006). Nevertheless, the complaint must plead sufficient facts to suggest plausibly that the plaintiff is entitled to relief. B......
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