Todd v. Collecto, Inc.

• Decision Date: 02 October 2013
• Docket Number: No. 12–3806.,12–3806.
• Citation: 731 F.3d 734
• Parties: Michael TODD, Plaintiff–Appellant, v. COLLECTO, INC. d/b/a Eso CCA, Defendant–Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

731 F.3d 734

Michael TODD, Plaintiff–Appellant,

v.COLLECTO, INC. d/b/a Eso CCA, Defendant–Appellee.

No. 12–3806.

United States Court of Appeals, Seventh Circuit.

Submitted May 22, 2013.^*

Decided Oct. 2, 2013.

Michael Todd, Palos Hills, IL, for Plaintiff–Appellant.

Kimberly A. Jansen, Hinshaw & Culbertson, Chicago, IL, for Defendant–Appellee.

Before ROVNER, WILLIAMS, and HAMILTON, Circuit Judges.

HAMILTON, Circuit Judge.

Plaintiff-appellant Michael Todd sued Collecto, Inc. for violating the Fair Debt Collection Practices Act. The claims are based on Todd's allegations that Collecto called him and told him that his mother owed money to AT & T. Todd speculates that the disclosure was meant to encourage him either to pay the debt himself or to convince her to pay.

The district court dismissed Todd's complaint for failure to state a claim for relief, finding that Todd lacks standing to bring these FDCPA claims because he is not the person who supposedly owed the debt. Todd argues on appeal that the FDCPA provisions in question protect not only debtors but also other persons harmed by a violation. We agree with the district court that 15 U.S.C. § 1692b(2), which prohibits debt collectors from disclosing a consumer's debt to third parties, protects only the person whose debt was disclosed. We agree with Todd that non-debtors can sue under § 1692f, which prohibits debt collectors from using “unfair or unconscionable” collection practices, but we conclude that his allegations do not state a claim for relief under that provision. We thus affirm the district court's judgment.

We begin with the allegations in the complaint. Todd alleges that in May 2012 he received a recorded telephone message from Collecto inviting him to call and help the company locate his mother, Terry. When he called the number, a Collecto representative told him that his mother owed money to AT & T for cell phone service. Todd told the representative that he is not Terry, but the representative “continued to discuss the alleged debt.” At no point did the representative ask how to reach Terry. Todd speculates that the representative disclosed Terry's debt in hopes that Todd would pay it or would get his mother to pay, though the representative did not ask Todd to pay the debt or to contact Terry. This interaction, Todd alleges, harmed him emotionally.

Todd claims that Collecto violated two provisions of the FDCPA during their conversation. The first is 15 U.S.C. § 1692b, which permits a debt collector to call a third party to request help in locating a “consumer”—defined as “any natural person obligated or allegedly obligated to pay any debt,” § 1692a(3)—but prohibits revealing the existence of the consumer's debt to the third party. The second provision is § 1692f, which more generally prohibits using “unfair or unconscionable means to collect or attempt to collect any debt.” This provision lists some specific practices that are unfair per se, but the list of prohibited practices does not “limit[ ] the general application” of § 1692f to other unfair or unconscionable practices. Todd says Collecto violated § 1692f by implicitly seeking to collect his mother's debt either from or through Todd.

Absent different indications from statutory text, only a person within a statutory provision's “zone of interest” has standing to sue under it. Harzewski v. Guidant Corp., 489 F.3d 799, 803 (7th Cir.2007); Kyles v. J.K. Guardian Sec. Services, Inc., 222 F.3d 289, 294 (7th Cir.2000). Relying on our decision in O'Rourke v. Palisades Acquisition XVI, LLC, 635 F.3d 938 (7th Cir.2011), the district court concluded that Todd does not have standing to sue under any provision of the FDCPA because he is not the person who was alleged to owe the debt in question. O'Rourke included some broad language to that effect, so the district court's reasoning is certainly understandable. We need to clarify, though, that O'Rourke should not be read so broadly.

In O'Rourke, a consumer sued a debt collector under § 1692e—a different sectionof the FDCPA that prohibits false or misleading communications from a debt collector—alleging that one of the debt collector's filings in ongoing litigation was misleading. We concluded that a potentially misleading communication to a judge is not actionable under § 1692e. In explaining that conclusion, we used broad language that, if taken out of context, could be read to say that only a “consumer” ( i.e., a debtor or alleged debtor) can have a claim for relief under § 1692e or any other section of the FDCPA. See id. at 943–44 (“[W]e read the Act's protections as extending to consumers and those who stand in the consumer's shoes and no others.”). Although the district court acknowledged that O'Rourke does not dictate the outcome in this case, the court relied upon that broad language and concluded that no communication between a debt collector and someone other than a consumer is actionable unless the recipient of the communication “stands in the shoes” of the consumer.

Todd argues that both § 1692b(2) and § 1692f permit claims by any aggrieved recipient of a communication from a debt collector. The parties do not cite, and we have not found, any published appellate decision deciding whether either provision applies to a plaintiff who is not a “consumer,” but we find sufficient guidance from the text of the two provisions, as well as decisions interpreting them and other sections of the FDCPA.

Before addressing sections 1692b(2) and 1692f specifically, we must clarify that O'Rourke should not be read to foreclose all FDCPA claims by persons other than consumers and their proxies. Such a broad reading would place that decision in tension with the text of several provisions of the FDCPA, as well as the act's legislative history and much appellate precedent interpreting it. In enacting the FDCPA, Congress specified that a “group of people who do not owe money, but who may be deliberately harassed are the family, employer and neighbors of the consumer. These people are also protected by this bill.” H.R.Rep. No. 95–131, at 8 (1977).

This intent to extend protection beyond consumers is clearly embodied in § 1692k(a), the liability provision, which specifies that “any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person.” (Emphasis added.) Similarly, § 1692d says that a “debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt.” (Emphasis added.) Behavior that violates § 1692d includes threats, violence, obscene language, and repeated calls intended to annoy. § 1692d(1)-(2), (5).

When the issue has arisen, therefore, courts have stressed that § 1692d is not a protection just for consumers but for any person mistreated by a debt collector. See Bridge v. Ocwen Fed. Bank, 681 F.3d 355, 363 (6th Cir.2012) (reversing dismissal of claim by debtor's spouse); Montgomery v. Huntington Bank, 346 F.3d 693, 696 (6th Cir.2003) (using section-by-section analysis to decide standing under the FDCPA); see also Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 773 (7th Cir.2007) (explaining that §§ 1692d, 1692e, and 1692f “do not designate any class of persons ... who can be abused, misled, etc., by debt collectors with impunity,” and emphasizing the words “any person” in § 1692d). In contrast to § 1692d, § 1692c restricts debt collectors' communications with and about consumers and is understood to protect only the consumer-debtors themselves. Montgomery, 346 F.3d at 696;Wright v. Finance Service of Norwalk, Inc., 22 F.3d 647, 649 n. 1 (6th Cir.1994) (en banc).

Accordingly, each provision of the FDCPA must be analyzed individually to determine who falls within the scope of its protection and thus to decide “with respect to” whom the provision can be violated. See Montgomery, 346 F.3d at 696–97 (explaining that someone who is not a consumer has standing under § 1692d but not under § 1692c). In O'Rourke, this court addressed only § 1692e, and we also did not consider claims under that provision by plaintiffs who are not consumers. The broad language in the opinion must be understood in that context.

We turn to the specific provisions that Todd invokes. The first is § 1692b, which provides debt collectors with procedures for requesting information from a third party about a consumer's location. Among other limitations, debt collectors are prohibited from disclosing to the third party that a consumer owes a debt, § 1692b(2), and it is this rule that Todd alleges Collecto violated. But the “zone of interest” requirement disallows suits by plaintiffs “whose interests are unrelated to the statutory prohibitions” in question. Thompson v. North American Stainless, LP, –––U.S. ––––, 131 S.Ct. 863, 870, 178 L.Ed.2d 694 (2011). We therefore agree with the district court that § 1692b(2) of the FDCPA is a privacy protection only for the consumer who supposedly owes the debt. The provision simply is not designed to protect third parties from hearing about another person's debts. Such a purpose would be inconsistent with § 1692c(b), a provision that places control over the disclosure of a consumer's information squarely in the hands of the consumer, not the third party who may receive the disclosure. See id. (“Except as provided in section 1692b of this title [for requesting location information], without the prior consent of the consumer given directly to the debt collector ... a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.”) (emphasis added). Todd thus is outside the provision's zone of interest and lacks standing to bring a claim for a violation of §...