Stover v. Fingerhut Direct Mktg. Inc

Decision Date26 August 2009
Docket NumberCivil Action No. 5:09-cv-00152.
Citation709 F.Supp.2d 473
PartiesCarter M. STOVER and Brenda L. Stover, Plaintiffs,v.FINGERHUT DIRECT MARKETING, INC. and CIT Bank, Defendants.
CourtU.S. District Court — Southern District of West Virginia

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Christopher B. Frost, Ralph C. Young, Hamilton Burgess Young & Pollard, Fayetteville, WV, for Plaintiffs.

Bryant J. Spann, Peter G. Markham, Allen Guthrie McHugh & Thomas, Charleston, WV, for Defendants.

MEMORANDUM OPINION AND ORDER

THOMAS E. JOHNSTON, District Judge.

Before the Court is Defendants Fingerhut Direct Marketing, Inc. and CIT Bank's Motion to Dismiss Count I of the Complaint [Docket 7]. For the reasons set forth below, this motion is DENIED. Also pending is Defendants' Motion to Accept Filing of Reply Brief [Docket 13]. This unopposed motion is GRANTED.

I. BACKGROUND

This action arises from the allegedly unlawful efforts of Defendants Fingerhut Direct Marketing, Inc. (Fingerhut) and CIT Bank (CIT) to collect consumer debts from Plaintiffs Carter and Brenda Stover.1 Fingerhut is a direct retail marketing business that sells consumer goods. CIT is engaged in a business relationship with Fingerhut whereby CIT issues consumer credit to customers purchasing goods from Fingerhut. Plaintiffs, both residents of Raleigh County, West Virginia, purchased consumer goods from Fingerhut with the aid of financing from CIT. Plaintiffs eventually fell into arrears on their indebtedness to Defendants, at which time Defendants began efforts to collect the outstanding debts by placing telephone calls and sending mail to Plaintiffs.

On an unspecified date in August of 2008, Plaintiffs retained counsel to represent them with respect to the debts owed to Defendants. Shortly thereafter, a representative of Defendants placed a telephone call to Plaintiffs' residence. During that call, Plaintiffs advised the representative that they had hired an attorney and provided the representative with their attorney's name and telephone number. Despite being aware that Plaintiffs were represented by an attorney, Defendants placed eighty-nine telephone calls to Plaintiffs' residence between October 3, 2008, and January 21, 2009.

On January 22, 2009, Plaintiffs filed this action in the Circuit Court of Raleigh County, West Virginia. Plaintiffs aver that Defendants' alleged debt collection activities, namely the eighty-nine telephone calls placed to Plaintiffs' residence, were in violation of several provisions of the West Virginia Consumer Credit and Protection Act (WVCCPA), W. Va.Code § 46A-1-101 et seq. Specifically, Plaintiffs contend that the repetitiveness and timing of the telephone calls constituted unreasonably oppressive or abusive conduct in violation of W. Va.Code § 46A-2-125(d).2 Plaintiffs also maintain that Defendants employed unfair or unconscionable means to collect the debts by continuing to call Plaintiffs' residence after being made aware that Plaintiffs were represented by an attorney in violation of W. Va.Code § 46A-2-128(e) (hereinafter referred to as the Representation Provision).3

Count I of Plaintiffs' complaint asserts a cause of action under the WVCCPA. The eighty-nine telephone calls also serve as the basis for Plaintiffs' common law claims of negligence, intentional infliction of emotional distress, and invasion of privacy, which are raised respectively in Counts II, III, and IV of the complaint. Plaintiffs seek to avail themselves of the various remedies provided for in the WVCCPA, including actual damages, W. Va.Code § 46A-1-101(1), statutory damages in the maximum amount authorized by WVCCPA, § 46A-5-106, attorneys' fees, expenses, and costs, § 46A-5-104, and cancellation of their debt to Defendants, § 46A-5-105. Plaintiffs also seek general and punitive damages on their common law claims.

Defendants removed the matter to this Court on February 20, 2009, pursuant to 28 U.S.C. §§ 1332(a) and 1441(a). Defendants filed the pending motion to dismiss Plaintiffs' WVCCPA claims on March 30, 2009. Defendants highlight two purported constitutional infirmities in the provisions of the WVCCPA relied on by Plaintiffs. First, Defendants argue that the Representation Provision in W. Va.Code § 46A-2-128(e) is “so vague and indefinite that it violates the due process rights of debts collectors.” (Docket 8 at 7.) Second, Defendants claim that “the WVCCPA impermissibly restricts [Defendants'] right to engage in commercial speech under the First Amendment to the Constitution of the United States.” ( Id. at 7-8.)

The Attorney General of West Virginia was notified of the challenge to the WVCCPA in accordance with 28 U.S.C. § 2403(b) and Rule 5.1 of the Federal Rules of Civil Procedure. The Attorney General intervened in this matter on June 2, 2009, and filed a memorandum in support of the constitutionality of the WVCCPA on July 1, 2009.

This matter has been fully briefed and is ripe for the Court's consideration.

II. DISCUSSION
A. Debt Collection's Status under the First Amendment

Defendants attack W. Va.Code § 46A-2-128(e) as unconstitutionally vague under the Due Process Clause and the WVCCPA's penalty provisions, W. Va.Code §§ 46A-5-101(1), -105, as unduly burdensome of their First Amendment right to free speech. The success of Defendants' arguments turns in large measure on the degree of constitutional protection afforded to their choice of debt collection practices. Under the respective vagueness and First Amendment analyses, the degree of scrutiny applied by the Court is directly linked to the nature and importance of the rights at stake. See Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498-99, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982); cf. Dun & Bradstreet v. Greenmoss Builders, 472 U.S. 749, 758, 105 S.Ct. 2939, 86 L.Ed.2d 593 (1985) ([N]ot all speech is of equal First Amendment importance.”). The debt collection practice at issue in this case-calling a consumer debtor at home to attempt to collect a debt-has elements of speech falling within the purview of the First Amendment. That much is undisputed. However, numerous First Amendment decisions have whittled away at the degree of practical protection this activity enjoys. As will be discussed below, Defendants' debt collection practice of calling debtors at home to discuss debts is entitled to only a modicum of First Amendment protection because it (1) involves commercial speech; (2) pertains to a matter of purely private, rather than public, concern; (3) includes non-communicative conduct; and (4) implicates Plaintiffs' right to privacy in their home.

The debt collection practices at issue here are a form of commercial speech, which is defined as “expression related solely to the economic interests of the speaker and its audience,” Cent. Hudson Gas & Elec. Corp. v. Public Serv. Comm'n, 447 U.S. 557, 561, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980). Courts have long recognized a “common-sense distinction” between commercial speech and other forms of expression. Ohralik v. Ohio State Bar Ass'n, 436 U.S. 447, 455-56, 98 S.Ct. 1912, 56 L.Ed.2d 444 (1978). Although the “free flow of commercial information” is important First Nat'l Bank v. Bellotti, 435 U.S. 765, 783, 98 S.Ct. 1407, 55 L.Ed.2d 707 (1978), such speech nonetheless occupies a “subordinate position in the scale of First Amendment values,” Ohralik, 436 U.S. at 456, 98 S.Ct. 1912. Accordingly, greater restrictions on commercial speech are tolerated than would be permitted with respect to other forms of speech. See Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, 425 U.S. 748, 772 n. 24, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). Likewise, courts apply a lesser level of scrutiny to restrictions on commercial speech. W. Va. Ass'n of Club Owners & Fraternal Servs. v. Musgrave, 553 F.3d 292, 301 (4th Cir.2009) (citing Central Hudson, 447 U.S. at 566, 100 S.Ct. 2343).

At stake in this case is Defendants' right to communicate information to Plaintiffs regarding debts they owe to Defendants. This is solely a matter of private concern between the parties. Cf. Connick v. Myers, 461 U.S. 138, 147-48, 103 S.Ct. 1684, 75 L.Ed.2d 708 (1983) ( “Whether ... speech addresses a matter of public concern must be determined by the content, form, and context of a given statement....”.). Indeed, public disclosure of the information would be prohibited in most instances. See W. Va.Code § 46A-2-126 (“No debt collector shall unreasonably publicize information relating to any alleged indebtedness or consumer.”). As a matter of private concern, the speech at issue here is afforded less First Amendment protection than speech touching on public issues. See Greenmoss Builders, 472 U.S. at 759, 105 S.Ct. 2939; Snyder v. Phelps, 533 F.Supp.2d 567, 576-77 (D.Md.2008).

Defendants' debt collection activities involve commercial speech and non-communicative conduct, i.e. causing Plaintiffs' home telephone to ring. The WVCCPA, by forcing creditors to direct their debt collection activities through represented consumers' attorneys, is clearly targeting the non-communicative conduct aspect of this particular debt collection practice. Where, as here, ‘speech’ and ‘nonspeech’ elements are combined in the same course of conduct, a sufficiently important governmental interest in regulating the nonspeech element can justify incidental limitations on First Amendment freedoms.” United States v. O'Brien, 391 U.S. 367, 376, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968). More specifically, the WVCCPA designates the type of telephone calls allegedly at issue here as abusive or harassing conduct, W. Va.Code § 46-2-125, and as an unconscionable means to collect a debt, § 46A-2-128. It is well-established that wrongful conduct of the kind targeted by the WVCCPA may be restricted without violating the First Amendment even though the conduct involves communicative elements. See Tantilla v. In re Stonegate Sec. Servs., Ltd. (In re Stonegate Sec. Servs., Ltd.), 56...

To continue reading

Request your trial
5 cases
  • United States v. Topouzian
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • December 13, 2021
    ......790, 792 (7th Cir. 1922); see also. Sevugan v. Direct Energy Services, LLC , 931 F.3d 610. (7 th Cir. 2019)(where the ...Bowker , 372 F.3d 365. (6 th Cir 2004); Stover v Fingerhut Direct. Marketing, Inc. , 709 F.Supp.2d 473 (S.D.W.Va. ......
  • Commonwealth v. Credit Acceptance Corp.
    • United States
    • Superior Court of Massachusetts
    • March 15, 2021
    ...commercial speech. See, e.g., ACA Int'l v. Healey, 457 F. Supp. 3d 17, 26 (D.Mass. 2020) (Stearns, J.); Stover v. Fingerhut Direct Mktg., Inc., 709 F.Supp.2d 473, 479 (S.D. W.Va. 2009). Although “[t]he First Amendment, as applied to the States through the Fourteenth Amendment, protects comm......
  • Rabel v. Huntington Nat'l Bank, CIVIL ACTION NO. 2:14-cv-25818
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • June 4, 2015
    ...or act that would suggest to a reasonable person that the debtor is represented by an attorney." Stover v. Fingerhut Direct Mktg., Inc., 709 F. Supp. 2d 473, 484 (S.D. W. Va. 2009); see also Bourne, 998 F. Supp. 2d at 504 (stating that the language of Section 46A-2-128(e) "indicates somethi......
  • Shaffer v. HSBC Bank Nev., Nat'l Ass'n
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • January 17, 2013
    ...the statute plainly commands that debt collectors attempt to ascertain the missing information." Stover v. Fingerhut Direct Marketing, Inc., 709 F.Supp.2d 473, 484 (S.D.W. Va. Aug. 26, 2009)(Johnston, T.). However,"[t]his is no heavy burden, as the statute requires that the attorney's name ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT