Riccio v. Sentry Credit, Inc.

• Decision Date: 30 March 2020
• Docket Number: No. 18-1463,18-1463
• Citation: 954 F.3d 582
• Parties: Maureen RICCIO, on behalf of herself and all others similarly situated, Appellant v. SENTRY CREDIT, INC.; John Does 1-25
• Court: U.S. Court of Appeals — Third Circuit

954 F.3d 582

Maureen RICCIO, on behalf of herself and all others similarly situated, Appellant

v.SENTRY CREDIT, INC.; John Does 1-25

No. 18-1463

United States Court of Appeals, Third Circuit.

Argued February 19, 2020

Filed: March 30, 2020

Joseph K. Jones [ARGUED], Benjamin J. Wolf, Jones Wolf & Kapasi, 375 Passaic Avenue, Suite 100, Fairfield, NJ 07004, Counsel for Appellant

Jacob C. Cohn [ARGUED], Gordon Reese Scully Mansukhani, Three Logan Square, 1717 Arch Street, Suite 610, Philadelphia, PA 19103, Peter G. Siachos, Gordon Reese Scully Mansukhani, 18 Columbia Turnpike, Suite 220, Florham Park, NJ 07932, Counsel for Appellee

Before: SMITH, Chief Judge, McKEE, AMBRO, CHAGARES, JORDAN, HARDIMAN, GREENAWAY, JR., SHWARTZ, KRAUSE, RESTREPO, BIBAS, PORTER, MATEY, and PHIPPS, Circuit Judges

OPINION OF THE COURT

SMITH, Chief Judge.

This case presents a question of statutory interpretation: does 15 U.S.C. § 1692g(a)(3) allow debtors to orally dispute a debt’s validity?

It also presents a question of stare decisis: should our en banc Court resolve a circuit conflict by overturning a three-decades-old panel decision which has been eroded by intervening Supreme Court authority?

Because we answer both questions affirmatively, we will overrule Graziano v. Harrison ’s contrary interpretation of § 1692g(a)(3) and affirm.

I

A

The statutory interpretation question arises from language which appears in the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 – 1692p (FDCPA). The FDCPA protects against abusive debt collection practices by imposing restrictions and obligations on third-party debt collectors. See §§ 1692b–1692j.

This case concerns one of those requirements: that debt collectors send debtors a letter notifying them of their right to dispute the debt. See § 1692g. Section 1692g(a) specifies five things the letter, often called a "validation notice," must include:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

The question presented is whether the letter must require all disputes to be in writing, or whether § 1692g(a)(3) permits oral disputes.

Before answering that question, it is instructive to examine other protections the FDCPA provides when debts are disputed. For instance, § 1692g(b) demands that:

If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

In addition, debt collectors are prohibited from reporting disputed debts to credit agencies without noting the fact of a dispute. See § 1692e(8) (prohibiting collectors from "[c]ommunicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed"). Finally, collectors seeking payments on multiple debts owed by the same debtor cannot apply a payment to any disputed debts. See § 1692h ("If any consumer owes multiple debts and makes any single payment to any debt collector with respect to such debts, such debt collector may not apply such payment to any debt which is disputed by the consumer and, where applicable, shall apply such payment in accordance with the consumer’s directions.").

B

We first considered the import of § 1692g(a)(3) in Graziano v. Harrison . See 950 F.2d 107 (3d Cir. 1991). There, a three-judge panel expressed "the view that, given the entire structure of section 1692g, subsection (a)(3) must be read to require that a dispute, to be effective, must be in writing":

Adopting [a contrary] reading of the statute would thus create a situation in which, upon the debtor’s non-written dispute, the debt collector would be without any statutory ground for assuming that the debt was valid, but nevertheless would not be required to verify the debt or to advise the debtor of the identity of the original creditor and would be permitted to continue debt collection efforts. We see no reason to attribute to Congress an intent to create so incoherent a system. We also note that there are strong reasons to prefer that a dispute of a debt collection be in writing: a writing creates a lasting record of the fact that the debt has been disputed, and thus avoids a source of potential conflicts.

Id. at 112 ; accord Caprio v. Healthcare Revenue Recovery Grp., LLC , 709 F.3d 142, 148 (3d Cir. 2013) ("In Graziano v. Harrison , we specifically concluded that ‘subsection (a)(3), like subsections (a)(4) and (a)(5), contemplates that any dispute, to be effective, must be in writing.’ " (citation omitted) (quoting Graziano , 950 F.2d at 112 )).

C

In the matter now before us, Maureen Riccio fell behind on payments to M-Shell Consumer Oils. Sentry Credit bought the debt and sought to collect on it. So it sent Riccio a letter containing the following notification:

Compl. Ex. A. Riccio sued,¹ alleging the letter violated § 1692g(a)(3) by providing a debtor with multiple options for contacting Sentry Credit rather than explicitly requiring any dispute be in writing. App. 53-54. Sentry Credit agreed that it had to require Riccio to dispute the debt in writing under Graziano , but the company viewed its letter as complying with that requirement. It therefore moved for judgment on the pleadings, and the District Court granted the motion. See Riccio v. Sentry Credit, Inc. , 2018 WL 638748, at *4-6 (D.N.J. Jan. 31, 2018).

Riccio timely appealed. The District Court exercised jurisdiction under 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291 and review statutory interpretation questions de novo. See United States v. Hodge , 948 F.3d 160, 162 (3d Cir. 2020).

II

As noted, a panel of this Court previously concluded § 1692g(a)(3) requires that "any dispute, to be effective, must be in writing." Graziano , 950 F.2d at 112. Yet reading the statutory text with fresh eyes—and more importantly, with the past three decades of Supreme Court statutory-interpretation caselaw—we think § 1692g(a)(3) permits oral disputes.

A

We begin by looking at § 1692g(a)(3) itself. That provision refers only to "disputes," without specifying oral or written. Used generally, the word fairly encompasses both forms of communication. See, e.g. , Dispute , Oxford English Dictionary (2d ed. 1989) ("To discuss, debate, or argue (a question); ... To argue against, contest, controvert; To call in question or contest the validity or accuracy of a statement, etc., or the existence of a thing.").

We must read § 1692g as a whole. Subsection (a)(3) merely calls for "the consumer" to "dispute[ ] the validity of the debt" in order to rebut the statutory presumption of validity. But (a)(4) requires "the consumer [to] notif[y] the debt collector in writing " before forcing the collector to mail documentation verifying the debt. (emphasis added). And (a)(5) similarly demands that the consumer make a "written request within the thirty-day period" to compel the collector to "provide the consumer with the name and address of the original creditor, if different from the current creditor." (emphasis added). Subsection (b) then echoes (a)(4) and (5), obliging collectors to "cease collection ... until ... obtain[ing] verification" if the debtor "notifie[d] the debt collector" of a dispute or requested the creditor’s identity "in writing ." (emphasis added). That intra-section variation strongly signals that § 1692g permits oral disputes. "We refrain from concluding here that the differing language in the [various] subsections has the same meaning in each." Russello v. United States , 464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983).

We must also consider the entirety of the FDCPA. Like § 1692g(a)(3) —but unlike (a)(4), (a)(5), and (b)—§§ 1692e(8) and 1692h also discuss "dispute[s]" without specifying a method of communication. That inter-section variation amplifies the variation within § 1692g and, in our view, refutes Riccio’s suggestion that Congress inadvertently omitted a writing requirement from § 1692g(a)(3). "[W]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Russello , 464 U.S. at 23, 104 S.Ct. 296 (alteration in original) (quoting United States v. Wong Kim Bo , 472 F.2d 720, 722 (5th Cir. 1972) ).

Finally, we consider one of the most venerable of our interpretive canons: the rule against surplusage. See Gustafson v. Alloyd Co. , 513 U.S. 561, 574, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995) ("[T]he Court will avoid a reading which renders some words altogether redundant."); see also Marbury v. Madison , 5 U.S. (1 Cranch) 137, 174, 2 L.Ed. 60 (1803) (using this canon to interpret U.S....