Summary
finding that section 1692g should not be interpreted to require disputes of debt to be in writing
Summary of this case from Chung v. National Check Bureau, Inc. (S.D.Ind. 2005)Opinion
Civil Action No. 02-CV-1550 (DGT) (KAM).
March 29, 2005
MEMORANDUM AND ORDER
Plaintiff Judith Vega ("Vega") filed this action against defendant Credit Bureau Enterprises ("Credit Bureau") on March 12, 2002, alleging that the language on its form debt collection letter violated various provisions of the Fair Debt Collection Practices Act (the "FDCPA"), 15 U.S.C. § 1692 et seq.
Presently pending are: (1) plaintiff's motion for class certification pursuant to Rule 23 of the Federal Rules of Civil Procedure ("Fed.R.Civ.P."); (2) plaintiff's motion for judgment on the pleadings pursuant to Rule 12(c)of the Fed.R.Civ.P. or, alternatively, a motion for summary judgment pursuant to Rule 56(c) of the Fed.R.Civ.P.; and (3) defendant's cross-motion for summary judgment pursuant to Rule 56(c) of the Fed.R.Civ.P.
Background
The following facts are taken from the plaintiff's complaint and are not in dispute. On or about October 8, 2001, defendant mailed a debt collection letter to the plaintiff which stated, in part:
This account has been forwarded to this office by CITGO to collect the balance in full unless disputed in writing within 30 days from this notice.
Only you can decide if you would like to take advantage of the payment options below to pay this debt:
Pay by AUTOPAY Check (See reverse side for details)
Pay by CREDIT OR DEBIT CARD (See reverse side for details)
SEND YOUR CHECK OR MONEY ORDER (Insert in enclosed envelope with bottom of letter)
Pay by check or credit card ON-LINE at www.paycbe.com (Secure internet access)
Unless you notify this office within thirty (30) days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within thirty (30) days from receiving this notice, this office will: obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within thirty (30) days after receiving this notice, this office will provide you with the name and address of the original creditor if different from the current creditor. This is an attempt to collect a debt; any information obtained will be used for that purpose. This communication is from a debt collector.
Debt Collection Notice, Ex. A to Class Action Complaint, dated March 8, 2002 (statutory language bolded in original).
The above language appeared on the front of the form debt collection letter. Defendant mailed 1,682,996 of these letters containing the above language to consumers located throughout the United States. Defendant's Local Civil Rule 56.1 Statement of Undisputed Facts, dated January, 27, 2004 ("Def.'s Rule 56.1 Statement") ¶ 2.
Plaintiff claims that defendant's form debt collection letter violated her right and the rights of others similarly situated to dispute the debt pursuant to 15 U.S.C. § 1692g(a)(3). Specifically, although the letter contained the statutorily mandated disclosures at the bottom of the letter, the first sentence, requiring the debtor to dispute the debt "in writing within 30 days from this notice," overshadowed and contradicted these disclosures. Thus, the letter violated the FDCPA because the statutory language was rendered ineffective. Plaintiff also argues that defendant's debt collection letter violated 15 U.S.C. §§ 1692e(8) and 1692e(16).
A determination whether defendant's use of the trade name "Credit Bureau Enterprises" on its form debt collection letters falsely implies that it operates a credit bureau in violation of 15 U.S.C. § 1692e(16) is reserved until the resolution of the current issues. See Order by Magistrate Judge Robert Levy, dated 10/14/03, entered 10/23/03.
Discussion
I. Motion for class certificationPlaintiff moves for certification of a class defined as:
all persons to whom Defendant and its agents sent initial communications in the form of the October 8, 2001 letter mailed to plaintiff Judith Vega, or otherwise containing the identical subject language, in an attempt to collect a consumer debt, as reflected by Defendant's records, on or after March 8, 2001.
Notice of Motion for Judgement on the Pleadings and Class Certification, dated Dec. 29, 2003 at 1.
In order to certify a class, a litigant must meet the four requirements of Rule 23(a) of the Fed.R.Civ.P. and demonstrate that the proposed class action fits into one of the three categories described in Rule 23(b) of the Fed.R.Civ.P. See Green v. Wolf Corp., 406 F.2d 291, 298 (2d Cir. 1968). Although the plaintiff has the burden of proving that its proposed class is appropriate for certification, Harrison v. Great Springwaters of America, No. 96-CV-5110, 1997 WL 469996, at *3 (E.D.N.Y. June 18, 1997), the plaintiff is not obliged to make an extensive evidentiary showing in support of its motion. See Follette v. Vitanza, 658 F. Supp. 492, 505 (N.D.N.Y. 1987), vac'd in part on other grounds, 671 F. Supp. 1362 (N.D.N.Y. 1987). Moreover, in considering a motion for class certification, a court must assume the truth of the plaintiff's allegations. In re AMF Bowling Sec. Litig., No. 99-3023, 2002 WL 461513, at *3 (S.D.N.Y. Mar. 25, 2002) ("Although a court must conduct a rigorous inquiry in determining whether the requirements of Rule 23 have been satisfied, it must accept plaintiffs' allegations as true and refrain from conducting an examination of the merits when determining the propriety of class certification."); see also, Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 291 (2d Cir. 1999); Shelter Realty Corp. v. Allied Maintenance Corp., 574 F.2d 656, 661 n. 15 (2d Cir. 1978); Ventura v. New York City Health and Hosps. Corp., 125 F.R.D. 595, 598 (S.D.N.Y. 1989); DeAllaume v. Perales, 110 F.R.D. 299, 305 (S.D.N.Y. 1986).
A. The Requirements of Rule 23(a)
In pertinent part, Rule 23(a) of the Fed.R.Civ.P. provides that:
One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claim or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class.
Fed.R.Civ.P. 23(a). Each of these requirements will be addressed in turn.
1. Numerosity Requirement — Rule 23(a)(1)
The numerosity requirement is satisfied when the class is large enough to make ordinary joinder of all members impractical. Fed.R.Civ.P. 23(a)(1). The plaintiff is not obligated to identify the exact number of class plaintiffs, see Robidoux v. Celani, 987 F.2d 931, 935 (2d Cir. 1993), and "courts may `make common sense assumptions' to support a finding of numerosity." Weissman v. ABC Fin. Servs., Inc., 203 F.R.D. 81, 84 (E.D.N.Y. 2001) (quoting Pecere v. Empire Blue Cross and Blue Shield, 194 F.R.D. 66, 69 (E.D.N.Y. 2000)). However, a plaintiff seeking class certification bears the burden to show some evidence of the number of class members or, at least, a reasonable estimate.See id. Generally, numerosity is presumed when a class comprises of forty members or more. See id. (quotingRobidoux v. Celani, 987 F.2d 931, 936 (2d Cir. 1993)).
Here, defendant conceded that it mailed debt collection letters containing identical or similar language to the letter received by plaintiff to 1,682,996 consumers located throughout the United States. Def.'s Rule 56.1 Statement ¶ 2. Where a class is this large, common sense dictates that joinder will be impracticable. The numerosity requirement is therefore met.
2. Commonality Requirement — Rule 23(a)(2)
To meet the commonality requirement, the plaintiff must demonstrate that common questions of law or fact are at the core of the cause of action. Fed.R.Civ.P. 23(a)(2). "In cases like this one `where FDCPA plaintiffs have received similar debt collection letters from the defendant['s] mailing as the basis of the lawsuit, courts have found common questions of law or fact sufficient to certify the class.'" Harrison, 1997 WL 469996, at *3 (quoting D'Alauro v. GC Servs. Ltd., 168 F.R.D. 451, 456 (E.D.N.Y. 1996)). Whether the contents of the defendant's debt collection letter received by members of the prospective class violated provisions of the FDCPA is the overriding legal question in this case. Thus, the commonality requirement is met.
3. Typicality Requirement — Rule 23(a)(3)
The typicality requirement "is satisfied when each class member's claim arises from the same course of events, and each class member makes similar legal arguments to prove the defendant's liability." In re Drexel Burnham Lambert, 960 F.2d 285, 291 (2d Cir. 1992). Here, each of the potential class members received virtually identical form debt collection letters, their claims arise from the contents of such letters and these claims raise the same legal argument — that the contents violated various provisions of the FDCPA. Accordingly, the typicality requirement is met.
4. Fair and Adequate Protection of the Interests of the Class — Rule 23(a)(4)
Finally, to satisfy the fourth requirement of Rule 23(a), plaintiff must demonstrate that "the representative parties will fairly and adequately protect the interests of the class." Fed.R.Civ.P. 23(a)(4). "Adequate representation" is a two-pronged inquiry: "[f]irst, class counsel must be qualified, experienced and generally able to conduct the litigation. Second, the class members must not have interests that are antagonistic to one another." Harrison, 1997 WL 469996, at *5 (quoting D'Alauro, 168 F.R.D. at 457).
Plaintiff has met the first prong of the inquiry. Plaintiff's counsel, the firm Robert I. Lax Associates, submitted a firm resumé demonstrating that counsel are sufficiently experienced in consumer class action litigation and have represented plaintiffs in class actions brought under the FDCPA. Firm Resume, Ex. D., attached to Aff. of Robert I. Lax, Esq., dated Dec. 29, 2003. Thus, it appears that plaintiff's counsel will adequately represent the interests of the class.D'Alauro, 168 F.R.D. at 457 (citing Avila v. VanRu Credit Corp., No. 94-C-3234, 1995 WL 41425, at *9 (N.D.Ill. Jan 31, 1995)).
Plaintiff has also met the second prong of the inquiry. Plaintiff claims that there is no conflict or antagonism between plaintiff and the potential class members. "A number of courts that have considered . . . FDCPA class actions challenging form collection letters have found named plaintiffs who received versions of the challenged collection letters to be adequate class representatives for purposes of Rule 23(a)(4)." Harrison, 1997 WL 469996, at *6 (citing Colbert v. Trans Union Corp., Civ. A. No. 93-6106, 1995 WL 20821 (E.D. Pa. Jan. 12, 1995);Carr v. Trans Union Corp., Civ. A. No. 94-0022, 1995 WL 20865 (E.D. Pa. Jan. 12, 1995); Beasley v. Blatt, No. 93 C 4978, 1994 WL 362185, at *4 (N.D. Ill. July 11, 1994)). As defendant has not raised any issue concerning the adequacy of either the class representative or of class counsel, there is no reason to question plaintiff's assertions. Accordingly, the adequacy of representation requirement is met.
B. The Requirements of Rule 23(b)(3)
Once it is determined that a potential class satisfies the requirements of Rule 23(a), the class must be certified under one of the categories set forth in Rule 23(b). Defendant argues that the class should be certified pursuant to Rule 23(b)(2) instead of Rule 23(b)(3). Plaintiff "does not dispute that this matter qualifies for certification under either branch of Rule 23," but prefers certification pursuant to Rule 23(b)(3). Plaintiff's Reply Memorandum of Law in Further Support of Motion for Judgement on the Pleadings and Class Certification and in Opposition to Defendant's Motion for Summary Judgment, dated March 15, 2004 at 8.
A class may be certified pursuant to Rule 23(b)(2) if "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole." Fed.R.Civ.P. 23(b)(2). Thus, certification under Rule 23(b)(2) is appropriate when injunctive or declaratory relief is sought, but not where the "appropriate final relief relates exclusively or predominantly to money damages." Id. Rule 23(b)(2) does not require notice to the class and does not allow class members the choice to "opt out" in order to bring individual suits. Robinson v. Metro-North Commuter R.R. Co., 267 F.3d 147, 166-67 (2d Cir. 2001).
A class can be certified pursuant to Rule 23(b)(3) if "the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Fed.R.Civ.P. 23(b)(3). Factors relevant to the superiority of a class action under Rule 23(b)(3) include:
(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.
Fed.R.Civ.P. 23(b)(3). Rule 23(b)(3) requires individual notice to class members and allows a class member to "opt out" of the class.
Defendant requests that the class be certified pursuant to Rule 23(b)(2) in order for it to avoid the "crippling" expense of providing notice of the class action to each individual class member. Defendant claims that certification under Rule 23(b)(2) is appropriate because the plaintiff's predominant claim is for declaratory relief. Defendant argues that plaintiff's claim for statutory damages flows from the entry of a declaration that defendant's debt collection letter is in violation of FDCPA. Defendant also contends that injunctive and declaratory relief predominate because any statutory damages plaintiff would receive would be nominal.
None of these reasons are sufficient to support certification under Rule 23(b)(2). Plaintiff's complaint clearly seeks statutory damages, costs and reasonable attorney's fees in addition to a preliminary and permanent injunction and a declaratory order requiring defendant to make corrective disclosures. The relief requested is predominately the money damages provided for in the FDCPA. Moreover, although plaintiff additionally seeks declaratory and injunctive relief, plaintiff's eligibility for statutory damages comes directly from the FDCPA and not merely from a declaration that the letter violated the FDCPA. Thus, the class should not be certified under Rule 23(b)(2), but instead will be certified under Rule 23(b)(3).
Plaintiff has demonstrated that the proposed class meets the requirements of Rule 23(b)(3). First, as discussed above, it is clear that questions of law and fact common to the members of the class predominate over any questions affecting only individual members. It has been recognized in this district that "`common questions of law and fact surrounding the contents and mailing of [standardized form debt collection] letters predominate over individual issues.'" Harrison, 1997 WL 469996, at *9 (quotingD'Alauro, 168 F.R.D. at 458). Here, the issue of defendant's liability is common to all members of the proposed class and clearly predominates. Consequently, the first prong of Rule 23(b)(3) is satisfied. Furthermore, the class action is superior to other available methods for the fair and efficient adjudication of the controversy. "Suits brought under the FDCPA . . . regularly satisfy the superiority requirement." In re Risk Management Alternatives, Inc., 208 F.R.D. at 507. Therefore, plaintiff has satisfied both prongs of Rule 23(b)(3).
Having met the Rule 23(a) requirements of numerosity, commonality, typicality and adequate representation and having qualified under the Rule 23(b)(3) category, plaintiff class is certified, and the following class definition is adopted:
all persons to whom defendant and its agents sent initial communications in the form of the October 8, 2001 letter mailed to plaintiff Judith Vega, or otherwise containing the identical subject language, in an attempt to collect a consumer debt, as reflected by defendant's records, on or after March 8, 2001.
II. Plaintiff's Motion for Judgment on the Pleadings or for Summary Judgment
A. The Legal Standard
Plaintiff moves for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) or, alternatively, for summary judgment pursuant to Fed.R.Civ.P. 56(c). Defendant cross moves for summary judgment pursuant to Fed.R.Civ.P. 56(c).
A judgment on the pleadings is appropriate when, considering all facts not in dispute in a light most favorable to the non-moving party, a court can reach a judgment on the merits.Sellers v. M.C. Floor Crafters, Inc., 842 F.2d 639, 642 (2d Cir. 1988). A court cannot grant the motion "`unless it appears beyond doubt that the [non-moving party] can prove no set of facts in support of his claim which would entitle him to relief.'" George C. Frey Ready-Mixed Concrete, Inc. v. Pine Hill Concrete Mix Corp., 554 F.2d 551, 553 (2d Cir. 1977) (quotingConley v. Gibson, 355 U.S. 41, 45-46 (1957)).
When deciding a motion for judgment on the pleadings, a court may only look to the contents of the pleadings. If, however, a court chooses to look to matters outside the pleadings, the court has discretion to convert the motion to one for summary judgment upon notice to the parties. See Sellers, 842 F.2d at 642. Plaintiff's motion will initially be considered under Rule 12(c).
B. The FDCPA and standards for determining whether there is a violation
Congress enacted the FDCPA to "eliminate abusive debt collection practices by debt collectors." 15 U.S.C. § 1692(e). Section 1692g of the FDCPA states that a debt collector soliciting payment from a consumer must provide the consumer with a validation notice containing the following:
(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing . . .
(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 . . .
Failure to include any of these items in the validation notice will constitute a violation of the act. DeSantis v. Computer Credit, Inc., 269 F.3d 159, 161 (2d Cir. 2001).
Courts in the Second Circuit have used the "least sophisticated consumer" standard in assessing violations of section 1692g of the FDCPA. DeSantis, 269 F.3d at 161; Russell v. Equifax A.R.S., and CBI Collections, 74 F.3d 30, 34 (2d Cir. 1996). The standard is an objective one that focuses on "how the least sophisticated consumer — one not having the astuteness of a `Philadelphia lawyer' or even the sophistication of the average, everyday, common consumer — understands the notice he or she receives." Russell, 74 F.2d at 34.
Simply including the mandated validation notice in a debt collection letter is not enough to ensure compliance with the FDCPA. Id. at 35. The validation notice must be "clearly conveyed." Id. Therefore, if the debt collector includes other language that "overshadows or contradicts" the validation notice to the extent that it renders the notice ineffective, the debt collector violates § 1692g as a matter of law. Id. "A notice is overshadowing or contradictory if it would make the least sophisticated consumer uncertain as to her rights." Id.
C. Plaintiff's Claims under the FDCPA
The first sentence of the debt collection letter sent to plaintiff reads: "This account has been forwarded to this office by CITGO to collect the balance in full unless disputed in writing within 30 days from this notice" ("the contested language") (emphasis added). Plaintiff does not dispute the sufficiency of the validation notice, highlighted in bold, at the bottom of the debt collection letter. However, plaintiff asserts that the contested language overshadows or contradicts the validation notice, rendering the validation notice ineffective. Specifically, plaintiff contends that the language "unless disputed in writing" and "within 30 days from this notice" each violated the requirements of 1692g(a)(3) of the FDCPA. As the FDCPA is a strict liability statute, a single violation may be the basis for liability. Cavallaro v. Law Office of Shapiro Kreisman, 933 F.Supp. 1148, 1153 (E.D.N.Y. 1996).
1. Interpretation of § 1692g(a)(3)
Plaintiff argues that § 1692g(a)(3) does not require a consumer to dispute a debt in writing. Subsection (a)(3) states that the validation notice must contain "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." 15 U.S.C. § 1692g(a)(3). This subsection does not state that a consumer must dispute the validity of the debt in writing. However, subsections (a)(4) and (a)(5), as well as section (b), specify that only a written communication will trigger the protections specified in those subsections.
The FDCPA states:
(a) Notice of debt; contents
Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —
(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.
(b) Disputed debts
If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section 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.15 U.S.C. § 1692g(a)(4)-(b).
Plaintiff contends that the plain language of section 1692g(a)(3) allows the consumer to dispute the validity of a debt "by any means at their disposal, including those which require less diligence, time, expense, language skills, than are required in drafting and mailing a letter." Plaintiff's Memorandum of Law in Support of Judgment on the Pleadings and Class Certification, dated December 29, 2003("Pl.'s Mem.") at 3. As a result, by instructing the consumer to dispute the validity of the debt "in writing," the defendant "misinform[ed] and misl[ed] consumers of the full extent of their rights . . .," thereby contradicting and overshadowing the standard statutory language and violating the FDCPA. Id. at 2. Defendant, on the other hand, argues that Congress intended subsection 1692g(a)(3) — like subsections (a)(4) and (a)(5) — to require consumers to dispute their debt in writing and that the contested language therefore complies with the statutory mandate. Defendant relies on Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991), to support its position that although (a)(3) does not expressly require the debtor to dispute the validity of a debt in writing, it must be read into the statute to effectuate Congress's intent and to make the statute cohesive.
Courts are split as to whether Congress intentionally or inadvertently omitted the words "in writing" from 1692g(a)(3). The Graziano court is the only circuit court to specifically address whether a writing requirement should be read into subsection (a)(3). Id. at 112. The court reasoned that since all other protections afforded to consumers in section 1692g(a) could only be triggered by a writing, the protection afforded by (a)(3) must also require writing. Id. Refusing "to attribute to Congress an intent to create so incoherent a system," theGraziano court concluded that "subsection (a)(3), like subsections (a)(4) and (a)(5), contemplates that any dispute, to be effective, must be in writing." Id. It also cited policy reasons for preferring a written record of the dispute. However, Brady v. Credit Recovery Co. Inc., 160 F.3d. 64 (1st Cir. 1998), although dealing with another section of the FDCPA, undertook the same type of statutory analysis to arrive at the opposite result. Id. at 66-7 ("The fact that other sections of the FDCPA — like § 1692g(b) — explicitly impose a writing requirement suggests that Congress's omission of such a requirement in § 1692e(8) was not inadvertent.").
"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." Graziano, 950 F.2d at 112.
The Second Circuit has not yet decided whether § 1692g(a)(3) requires consumers to dispute the validity of debts in writing. However, all district courts within the Second Circuit that have considered the issue concluded that subsection (a)(3) does not require a consumer to write to the collection agency in order to dispute the validity of the debt. See, e.g., In re Risk Mgmt. Alternatives, Inc., Fair Debt Collection Practices Act Litig., 208 F.R.D. 493, 502 (S.D.N.Y. 2002) (McMahon, J.);Nasca v. GC Servs. Ltd. P'ship, No. 01-CIV-10127, 2002 WL 31040647, at *6 (S.D.N.Y. Sept. 12, 2002) (Cote, J.); Castro v. ARS Nat'l Servs., Inc., No. 99-CIV-4596, 2000 WL 264310, at *3 n. 2 (S.D.N.Y. Mar. 8, 2000) (Baer, J.); Ong v. American Collection Enterprise, Inc., No. 98-CV-5117, 1999 WL 51816, at *3 (E.D.N.Y. Jan. 15, 1999) (Gleeson, J.); Young v. Credit Bureau of Lockport, Inc., No. CIV-86-1121E, 1989 WL 79054, at *1-2 (W.D.N.Y. July 17, 1989), amended on other grounds, 729 F. Supp. 1421 (W.D.N.Y. 1989) (Elfvin, J.).
For example, in Young v. Credit Bureau of Lockport, Inc., the district court, looking to the plain language of (a)(3), held that the "omission of the `in writing' requirement in subsection (a)(3) appears to be intentional . . . and, without any indication of a Congressional intent to require a written communication in the first instance to dispute the debt, this Court cannot graft such a requirement onto the statute." Young, 1989 WL 79054 at *2. It found that:
a writing from the consumer [pursuant to (a)(4), (a)(5) or (b)] places an affirmative duty on the part of the debt collector to do something, either to cease collection or to verify the debt, whereas a notification pursuant to subsection (a)(3), written or not, places no duty on the debt collector to act but merely removes what appears to be a presumption that the debt is valid.Id.
Furthermore, in Ong v. American Collection Enterprise, Inc., the district court evaluated the plain language of subsection (a)(3) as well as its relation to (a)(4), (a)(5) and (b) in a similar manner. It concluded:
The language and structure of these subsections indicate that the omission of the "in writing" requirement in subsection (a)(3) was intentional. Congress demonstrated (in the subsections immediately following subsection (a)(3)) its ability to impose a writing requirement on debtors; its failure to do so in subsection (a)(3) is thus less likely to be the result of inadvertence.Ong, 1999 WL 51816 at *2. The district court then consideredGraziano's countervailing structural argument. Acknowledging that requiring all disputes be made in writing would help with problems of proof, the district court ultimately disagreed with the Graziano court's reasoning that failure to do so would create an "incoherent system." Id. at *3. The district court found that:
[i]t is not unreasonable to believe that some consumers who wish to dispute an alleged debt may lack the ability or wherewithal to do so in writing, and that Congress chose to accord these oral debt — disputers some, but not all, of the protections accorded those who dispute their debts in writing. Specifically, although oral debt disputers are not entitled to receive verification of the debt by mail — and not entitled to a halt in debt collection activities in the meantime — they are entitled to relief from the presumptive validity of the debt.Id. at *3. Relief from the presumptive validity of the debt, in turn, triggers the protections of 1692e(8), which prohibits debt collectors from communicating a consumer's credit information when it knows or should know that a debt is disputed. 15 U.S.C. § 1692e(8). Thus, the Ong opinion rejected "the assertion that the only means of disputing a debt is in writing" and found that the debt collector violated 1692g(a)(3) by requiring the consumer to dispute the validity of the debt in writing. Id. at *4; see also, Castro, 2000 WL 264310 at *3 n. 2 (agreeing with "the thorough opinion by Judge Gleeson in the Eastern District of New York, where in Ong v. American Collections Enterprise, Inc. he concluded that `oral debt-disputers . . . are entitled to relief from the presumptive validity of the debt.'" (quoting Ong, 1999 WL 51816 at *3)).
Additionally, the court in In re Risk Management Alternatives concluded that "the Second Circuit would not accept theGraziano rule, and would permit disputes to be raised otherwise than in writing." In re Risk Management Alternatives, 208 F.R.D. at 502. Although the Risk Management Alternatives district court expressed a need for "legislative clarification of this discrepancy," it, nonetheless, followed the lead of the other district courts in the Second Circuit. Id.
For the reasons set forth in Ong, subsection (a)(3) does not impose a requirement that a consumer dispute the validity of a debt in writing and no such requirement will be read into the subsection absent clear legislative intent.
2. Overshadowing of § 1692g(a)(3)
The next issue is whether the contested language in the first sentence of the debt collection letter that debtor must dispute the debt in writing overshadowed the validation notice, making "the least sophisticated consumer uncertain as to her rights."Russell, 74 F.3d at 35.
The Second Circuit has found that "it is appropriate for district courts to treat judgments about the way in which the least sophisticated consumer would interpret a particular debt collection notice as questions of law" for purposes of Rule 12(c) analysis because the standard is an objective one. Franzos v. Pinnacle Credit Servs. LLC, 332 F. Supp. 2d 682, 685 (S.D.N.Y. 2004) (citing Schweizer v. Trans Union Corp., 136 F.3d. 233, 237-38 (2d Cir. 1998), Bentley v. Great Lakes Collection Bureau, 6 F.3d 60, 62-63 (2d Cir. 1993)). Thus, how the least sophisticated consumer would interpret the defendant's form debt collection letter can be determined without the aid of expert testimony at trial.
In McStay v. I.C. System, Inc., 308 F.3d 188 (2d Cir. 2002), the Second Circuit considered the question of whether the contested language in a debt collection letter overshadowed the validation notice. There, plaintiff argued that the language "after 30 days" made it unclear whether the thirty day time period for disputing the debt ran from the date the consumer received the letter or from the date of the letter. Id. at 189-90. The debt collection letter at issue in McStay contained a statutorily correct validation notice instructing the consumer that she had to contact the debt collector "within thirty days after receipt of this notice" and a bolded instruction in all capital letters directing the consumer to see the reverse side for important information. Id. at 189. Looking at the letter as a whole, the Second Circuit found the contested language to be ambiguous, but that "any confusion created by the ambiguity on the front of the letter dissipates when read in conjunction with the [the validation notice] on the back." Id. at 191.
Unlike the situation in McStay the contested language here explicitly restricts the method of communication to be "in writing" and the validation notice does nothing to undo that limitation. Although the required terms appeared in the letter, they are so generalized that when juxtaposed with the explicit statement that the debt must be disputed "in writing" confusion as to what the debtor's rights were could easily occur. This is true even though the validation notice was on the same page as the contested language and bolded. Thus, the defendant's explicit instruction to the consumer that she must dispute the validity of the debt in writing clearly overshadows the validation notice and violates § 1692g(a)(3) of the FDCPA when the letter is read as a whole.
As the defendant violated FDCPA because the words "in writing" in its form debt collection letter overshadowed or contradicted the validation notice, there is no need to reach plaintiff's second claim that the language "within 30 days" overshadowed the validation notice in violation of § 1692g(a)(3) by making it unclear whether the thirty day time period for disputing the debt began running from the date the consumer received the letter or from the date of the letter. Further, there is no need to consider plaintiff's claim under § 1692(e)(8) that the letter is a threat to communicate a disputed debt if the consumer disputes the debt other than in writing.
As the debt collection letter sent by defendant to plaintiff alone is sufficient to assess whether the language of the letter violated the FDCPA, there is no need to look beyond the contents of the pleading and consider whether the motion should be converted to one for summary judgment.
Conclusion
For the reasons stated above, plaintiff's motion for class certification is granted and plaintiff's motion for judgment on the pleadings is granted. Defendant's motion for summary judgment is denied.
SO ORDERED.