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In Oscar, the court emphasized that a "bald statement" that a debt collector's letter "disgraced" the plaintiff was a "recitation of language of the statute, which fails to satisfy the Iqbal/Twombly standard."
Summary of this case from Garcia v. Law Offices Howard Lee Schiff P.C.Opinion
CV11-5319 (SJF) (WDW)
06-01-2012
AGLAIDE OSCAR & NINA ROBINSON, Plaintiff(s), v. PROFESSIONAL CLAIMS BUREAU, INC., Defendant(s).
REPORT AND RECOMMENDATION WILLIAM D. WALL, United States Magistrate Judge :
Before the court, on referral from District Judge Feuerstein, is Defendant's motion to dismiss pursuant to Rule 12(b)(6). See Docket Entry ("DE") [13, 14, 16]. The motion is opposed by plaintiffs Aglaide Oscar and Nina Robinson (the "Plaintiffs"). DE [15]. I recommend that Defendant's motion to dismiss the amended complaint be GRANTED in part and DENIED in part, with all of Plaintiff Oscar's claims dismissed and all of Plaintiff Robinson's claims dismissed except her §1692c(b) and §1692d(6) claims.
BACKGROUND
Plaintiffs bring this class action against Defendant, alleging violations of sections 1692c(b), 1692d(6), 1692e(5), 1692e(7), 1692e(10), and 1692f of the Fair Debt Collection Practices Act ("FDCPA"). On February 23, 2011 and April 5, 2011 respectively, Plaintiffs Aglaide Oscar and Nina Robinson received an identical debt-collection letter (the "Collection Letter") from Defendant. Amended Complaint ("Am. Complaint") ¶¶ 21, 25. In pertinent part, the Collection Letter states, "Payment is expected within 10 Days of this notice. If this account is not resolved, we will assume that you have no intention of settling this outstanding debt and will notify our client of this." Defendant's Memorandum of Law in Support of Defendant's Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6) ("Def. Mem.") at Ex. A. Plaintiff Oscar contends that this language violates (1) 15 U.S.C. §1692f because "[i]t was unfair to assume that if the Plaintiff did not make payment in the 10 day period she had no intention to settle her debt"; (2) 15 U.S.C. §1692e(7) because Defendant's assumption that Plaintiff would not pay her debt disgraced the Plaintiff; and (3) 15 U.S.C. §1692e(5) and 15 U.S.C. §1692e(10) because Defendant made a false and misleading statement that if payment was not made within ten days it would report the status of the debt to the original creditor in order to collect the debt. Am. Complaint ¶¶ 22-24. Plaintiff Robinson contends that Defendant violated (1) the preface of 15 U.S.C. §1692e and 15 U.S.C. §1692e(10) because Defendant never informed its client after Plaintiff failed to pay the debt within the prescribed time period; (2) 15 U.S.C. §1692f because it was unfair and unconscionable to assume that, if Plaintiff had not settled the debt in ten days, she would not settle the debt and would notify Defendant's client of the status of the outstanding debt; (3) "15 U.S.C. §1692d(6) by calling the Plaintiff NINA ROBINSON to [sic] the cell phone of Paul Gibbon and leaving a message that failed to identify their [sic] company"; and (4) "15 U.S.C. §1692c(b) by disclosing to a third party that the Plaintiff was being contacted by a debt collector." Id. ¶¶ 26-28.
As Defendant notes, though Plaintiffs' claims are based on identical language contained in a collection letter sent by Defendant, the amended complaint fails to identify identical causes of action for each plaintiff. Def. Mem. at 6-7. Plaintiff Aglaide Oscar claims violations of FDCPA sections 1692e(5), 1692e(7), 1692e(10), and 1692f by Defendants, while Plaintiff Nina Robinson claims violations of 1692c(b), 1692d(6), 1692e(10), and 1692f.
Defendant contends that it was hired to collect the Plaintiffs' debts upon default. Def. Mem. at 5. Defendant states that it sent initial demand letters "[a]s required by law" to Plaintiffs after being assigned to collect the debts. Id. The letter at issue, Defendant contends, was sent as a second collection letter. Id. Defendant takes issue with various aspects of the amended complaint, which are discussed in detail below.
DISCUSSION
A. Standard on Motion to Dismiss:
Rule 8 requires that a pleading contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court set forth revised standards under which a complaint may withstand a motion to dismiss pursuant to Rule 12(b)(6), finding that a plaintiff must plead enough facts "to state a claim to relief that is plausible on its face." 550 U.S. at 570. The court must still assume that well-pleaded factual allegations set forth in a complaint are true and draw all inferences in favor of the non-moving party, see, e.g., Holmes v. Poskanzer, 342 F. App'x 651, 652 (2d Cir. 2009), but those factual allegations must be sufficient to "raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Williams v. Berkshire Fin. Group Inc., 491 F. Supp. 2d 320, 324 (E.D.N.Y. 2007) (quoting Twombly, 550 U.S. at 545); see also ATSI Comm., Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007).
Subsequent to Twombly, the Supreme Court suggested a two-pronged approach to analyze the sufficiency of a complaint. See Ashcroft v. Iqbal, 556 U.S. 662, 678-79 (2009). First, although for the purposes of a motion to dismiss the court must accept as true the factual allegations in the complaint, it is not "bound to accept as true a legal conclusion couched as a factual allegation." Id. at 678. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. Second, "a court should determine whether the 'well-pleaded factual allegations,' assumed to be true, 'plausibly give rise to an entitlement to relief.'" Hayden v. Paterson, 594 F.3d 150, 161 (2d Cir. 2010) (quoting Iqbal, 556 U.S. at 679). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (internal quotation marks and citations omitted). Determining whether a complaint states a plausible claim for relief is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679.
"Upon dismissal, 'the usual practice is to grant leave to amend,'" Baker v. Schriro, NO. 10-CV-4227, 2011 WL 6026237, at *5 (E.D.N.Y. Dec. 2, 2011) (citing Ronzani v. Sanofi S.A., 899 F.2d 195, 198 (2d Cir. 1990) (citation omitted); see also Fed. R. Civ. P. 15(a)(2) ("The court should freely give leave when justice so requires."). However, leave to amend "may be denied in the face of undue delay, bad faith, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice, or futility." Baker, 2011 WL 6026237, at *5; see also Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962); Burch v. Pioneer Credit Recovery, Inc., 551 F.3d 122, 126 (2d Cir. 2008). With these standards in mind, I turn to consideration of the amended complaint in this case.
B. Standard for the Fair Debt Collections Practices Act
The Second Circuit determines violations of the FDCPA "objectively from the viewpoint of the 'least sophisticated consumer.'" Gutierrez v. GC Servs. L.P., No. 09-CV-4606 (JBW), 2010 WL 3417842, at *2 (E.D.N.Y. Aug. 27, 2010) (quoting Savino v. Computer Credit, Inc., 164 F.3d 81, 85 (2d Cir. 1998)). This standard was enacted to protect "the gullible as well as the shrewd." Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 90 (2d Cir. 2008). Because this standard is objective, however, it also protects "debt collectors from unreasonable constructions of their communications." Id. Thus, "[e]ven in crafting a norm that protects the naive and the credulous, we have carefully preserved the concept of reasonableness." Id. (internal quotations omitted).
C. Defendant's Contentions
a. Threshold Requirements under the FDCPA
"Generally, in order for a plaintiff to recover under the FDCPA, a plaintiff must satisfy three threshold requirements: (1) the plaintiff must be a 'consumer,' (2) the defendant must be a 'debt collector,' and (3) the defendant must have committed some act or omission in violation of the FDCPA." Suquilanda v. Cohen & Slamowitz, LLP, No. 10 Civ. 5868, 2011 WL 4344044, at *3 (S.D.N.Y. Sept. 8, 2011). Additionally, the complaint must allege a "debt" as defined under the FDCPA. See Orenbuch v. Leopold, Gross & Sommers, P.C., 586 F. Supp. 2d 105, 107-08 (E.D.N.Y. 2008) (dismissing plaintiff's FDCPA claim because the obligation owed was not a "debt" as defined by the FDCPA). Defendant contends that Plaintiffs' amended complaint is insufficient because it is "devoid of any reference to plaintiffs being 'consumers' as defined by the FDCPA. . . [and] there is no averment that the plaintiffs' debts are 'debts' as defined by the FDCPA." Def. Mem. at 10.
Under the FDCPA, a "consumer" is defined as "any natural person obligated or allegedly obligated to pay any debt." 15 U.S.C. §1692a(3). A "debt" is defined as "any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family or household purposes, whether or not such obligation has been reduced to judgment." 15 U.S.C. §1692a(5). Here, Plaintiffs have failed to plead sufficient facts supporting the contention that they were "consumers" that owed a "debt" to Defendant, as required by the FDCPA. Though Plaintiff Oscar's claims are futile without regard to that deficiency, I find that permitting Plaintiff Robinson to amend her complaint to replead the threshold requirements of the FDCPA would not be futile or cause undue prejudice or delay. Therefore, I recommend that Plaintiff Robinson be granted leave to amend her complaint, for a second time, to add the threshold requirements.
b. §1692e(5) Claim
The FDCPA prohibits the use of "any false, deceptive, or misleading representation or means in connection with the collection of any debt." 15 U.S.C. §1692e. Plaintiff Oscar claims that the Collection Letter violated §1692e(5), which prohibits debt collectors from employing a "threat to take any action that cannot legally be taken or that is not intended to be taken." 15 U.S.C. §1692e(5). Plaintiff Oscar contends that "[w]hen Defendant stated that if payment wasn't made in 10 days then they would report Plaintiff's actions to the original creditor, that was a false and misleading statement." Am. Complaint ¶ 24. Defendant asserts that the amended complaint "essentially repeats the language of the letter at issue and attaches the self-serving conclusion that said statement was 'false and misleading' . . . without any supporting facts." Def. Mem. at 13. I agree with Defendant. Plaintiff Oscar's contentions are conclusory statements unsupported by facts, and thus, do not satisfy the Iqbal/Twombly standard. Iqbal, 556 U.S. at 678. Furthermore, "[a] false threat exists where the least sophisticated consumer 'would interpret the language to mean that legal action was authorized, likely, and imminent." Gutierrez, 2010 WL 3417842, at *2 (quoting Bentley v. Great Lakes Collection Bureau, 6 F. 3d 60, 62 (2d Cir. 1993). I find that the Collection Letter is devoid of any cognizable legal threat by Defendant against Plaintiffs, and thus, any amendment to the amended complaint as to §1692e(5) would be futile. Therefore, I recommend that Plaintiff Osacar's §1692e(5) claim be DISMISSED with prejudice.
c. §1692e(7) Claim
Plaintiff Oscar also claims that Defendant violated §1692e(7), which prohibits the use of a "false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer." 15 U.S.C. §1692e(7). According to the amended complaint, Defendant violated §1692e(7) by assuming that Plaintiff Oscar would not settle her debts if she did not pay within ten days of the issuance of the Collection Letter, which disgraced Plaintiff Oscar. Am. Complaint ¶ 23. Defendant asserts that the amended complaint merely repeats the language of the statute and the Collection Letter to form a conclusory statement that fails to meet the Iqbal/Twombly standard. Def. Mem. at 20. Again, I agree with Defendant. Plaintiff Oscar fails to plead facts as to how or why she was disgraced by the language of the Collection Letter. The bald statement that such language disgraced Plaintiff Oscar is a recitation of language of the statute, which fails to satisfy the Iqbal/Twombly standard. Furthermore, I fail to see how the language of the letter could be construed as a false representation or implication that Plaintiff Oscar committed any crime or other disgraceful conduct. Thus, I find that any amendment would be futile and recommend that Plaintiff Oscar's §1692e(7) claim be DISMISSED with prejudice.
d. §1692e(10) Claims
Section 1692e(10) is a catch-all provision that prohibits "[t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer." 15 U.S.C. §1692e(10). "A debt collector's written communication is deceptive, and thus violates section 1962e(10), if it can reasonably be read to have at least two different meanings, one of which is inaccurate." Gutierrez, 2010 WL 3417842, at *3. The amended complaint alleges separate violations of §1962e(10) for each Plaintiff. Plaintiff Oscar contends that Defendant's statement that it would report Plaintiff Oscar to her original creditors if payment was not made within ten days was false and misleading because Plaintiff Oscar paid the debt outside the ten-day period set forth in the Collection Letter. Am. Complaint ¶ 24; Plaintiffs' Memorandum of Law in Opposition to Defendant's Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(B)(6) ("Pl. Mem.") at 11. Plaintiff Robinson contends that, although Defendant claimed it would report Plaintiff Robinson to her original creditors if payment was not made, Defendant failed to do so, and as such, the statement was false and misleading. Id. ¶ 26. Together, Plaintiffs argue that the language of the Collection Letter can be read to have more than one meaning, stating, "[a] consumer may read this language and think that they must pay the debt within 10 days or they will not have another opportunity to pay it." Pl. Mem. at 11.
Defendant contends that the amended complaint fails to meet the Iqbal/Twombly standard because it does not "explain how the statement was 'misleading' or 'deceptive' or provide [a] basis for definitely claiming that PCB did not inform its client about the status of Robinson's account." Def. Mem. at 18 (alteration in original). Furthermore, Defendant argues that the language of the Collection Letter can have only one meaning: "that if the plaintiffs continued not to pay their respective debts, that it would be assumed that they were not going to and the creditors would be so informed." Id. at 18-19.
I find that both claims by Plaintiffs fail to meet the Iqbal/Twombly standard. Plaintiff Oscar's contention is nothing more than a "[t]hreadbare recital[] of the elements of a cause of action, supported by mere conclusory statements." Iqbal, 556 U.S. at 678. Additionally, I find that Plaintiff Robinson's contention is implausible based on the dearth of facts presented by Plaintiff Robinson to support her contention that Defendant failed to inform its client after it represented it would do so in the Collection Letter. Even assuming, for the purposes of this motion, that Plaintiff Robinson had pled a plausible violation of §1962e(10), I find that even if Defendant failed to inform its client that Plaintiff had not paid her debt, such failure would not be materially false or misleading, as required for a §1962e violation. See Lane v. Fein, Such, and Crane, LLP, 767 F. Supp. 2d. 382, 389-90 (E.D.N.Y. 2011) (holding that statements that were not materially false and misleading do not violate §1962e). Furthermore, I find the Plaintiffs' contention that the language of the Collection Letter can be read to foreclose their opportunity to repay their debts if they had not settled them within ten days of receiving the Collection Letter equally implausible. To find otherwise "would require bizarre or idiosyncratic interpretations" of the Collection Letter, which are unsupported by the FDCPA. Gutierrez, 2010 WL 3417842, at *3. Therefore, I find that any amendment would be futile, and thus, I recommend that Plaintiffs' §1962e(10) claims be DISMISSED with prejudice.
d. §1692f
Generally, §1962f prohibits debt collectors from using "unfair and unconscionable means to collect or attempt to collect any debt." 15 U.S.C. §1692f. Though eight subsections list specific practices that violate the section, "conduct that may be deemed 'unfair and unconscionable' is not limited to the acts enumerated in subsections (1) through (8)." Foti v. NCO Fin. Sys., Inc., 424 F. Supp. 2d 643, 667 (S.D.N.Y. 2006) (internal citations omitted). Rather, "§1692f allows the court to sanction improper conduct that the FDCPA fails to address specifically." Id. (internal citations omitted). Here, Plaintiffs do not allege misconduct by Defendant under one of the enumerated subsections of §1692f; instead, Plaintiffs contend that Defendant violated §1962f, arguing that it was unfair and unconscionable for Defendant to assume Plaintiffs would not pay their debts if they did not respond to the Collection Letter within ten days. Am. Complaint ¶¶ 22, 27.
Defendant argues that Plaintiffs are "prohibited from pleading the same conduct as the basis for other FDCPA violations as the basis for a [§]1962(f) claim." Def. Mem. at 23. I agree with Defendant. The amended complaint is deficient because it fails to "identify any misconduct beyond that which Plaintiffs assert violate other provisions of the FDCPA." Foti, 424 F. Supp. 2d at 667; see also Tsenes v. Trans-Cont'l Credit and Collection Corp., 892 F. Supp. 461, 466 (E.D.N.Y. 1995) ("[T]he Complaint is devoid of support for the contention that the defendant engaged in practices that were 'unfair' or 'unconscionable' within the meaning of the section; all the allegations in the Complaint support claims asserted under either §§1692e or §1692g."). Furthermore, I find that nothing in the amended complaint supports a §1692f claim beyond what Plaintiffs have asserted in their other claims. Therefore, I find that any amendment would be futile and recommend that Plaintiffs' §1692f cause of action be DISMISSED with prejudice.
e. §§ 1692c(b) & 1692d(6) Claims
Additionally, Plaintiff Robinson asserts that Defendant violated §1692c(b), which prohibits debt collectors from communicating with third parties, under certain circumstances, regarding the collection of a debt, and §1692d(6), which prohibits debt collectors from failing to identify themselves when placing phone calls, the "natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." I find that the facts pled by Plaintiff Robinson regarding the §1692c(b) and §1692d(6) claims fail to meet the Iqbal/Twombly standard as it is unclear what exactly Plaintiff Robinson is contending. In the amended complaint, Plaintiff Robinson states:
Though Defendant refers to Plaintiff Robinson's claims under §1692c(b) and §1692d(6) in the introduction to its memorandum in support of its Motion to Dismiss, it fails to address these claims in its legal argument.
Defendant further violated 15 U.S.C. §1692d(6) by calling the Plaintiff NINA ROBINSON to [sic] the cell phone of Paul Gibbon and leaving a message that failed to identify their [sic] company, and further violated 15 U.S.C. §1692c(b) by disclosing to a third party that the Plaintiff was being contacted by a debt collector.Am. Complaint ¶ 28. This statement does not explain the identity of Paul Gibbon, the manner in which he received a call from Defendant, or the substance of any call or message. Without further detail, I find that Plaintiff Robinson has failed to "raise a right to relief above the speculative level" for her §1692c(b) and §1692d(6) claims. Williams, 491 F. Supp. 2d at 324. However, since Defendant has not raised a legal objection to these claims and the deficiency in each claim is not substantive, I find that Plaintiff Robinson should have an opportunity to replead her §1692c(b) and §1692d(6) claims. Therefore, I recommend that Plaintiff Robinson's §1692c(b) and §1692d(6) claims be dismissed without prejudice, with leave to replead.
CONCLUSION
In sum, I recommend that all of Plaintiff Oscar's claims and Plaintiff Robinson's §1692e(10) and §1692f claims be dismissed. Additionally, I recommend that Plaintiff Robinson be granted leave to amend her complaint with regard to the threshold requirements of the FDCPA and her §1692c(b) and §1692d(6) claims.
OBJECTIONS
A copy of this Report and Recommendation is being sent to all counsel by electronic filing on the date below. Any objections to this Report and Recommendation must be filed with the Clerk of the Court within 14 days. See 28 U.S.C. §636 (b)(1); Fed. R. Civ. P. 72; Fed. R. Civ. P. 6(a) and 6(d). Failure to file objections within this period waives the right to appeal the District Court's Order. See Ferrer v. Woliver, 2008 WL 4951035, at *2 (2d Cir. Nov. 20, 2008); Beverly v. Walker, 118 F.3d 900, 902 (2d Cir. 1997); Savoie v. Merchants Bank, 84 F.3d 52, 60 (2d Cir. 1996). Dated: Central Islip, New York
June 1, 2012
/s/ William D. Wall
WILLIAM D. WALL
United States Magistrate Judge