Debtor need not Pay Debt to have Standing to Prosecute Federal Fair Debt Collection Practices Class Action and Debtor Entitled to Summary Judgment on § 1692g Claim because Collection Letter did not Track Statute but Triable Issues of Fact Existed as to Alleged Violations of § 1692e(5) and (10) as the Language in Collection Letters was Subject to Reasonable and Different Interpretations Florida Court Holds
Plaintiff filed a putative class action against a debt collector, Amalgamated Debt Collection Services, for violations of the federal Fair Debt Collection Practices Act (FDCPA) and various state laws arising out of its efforts to collect $39.32. Rivera v. Amalgamated Debt Collection Services, Inc., 462 F.Supp.2d 1223, 1225-26 (S.D. Fla. 2006). Plaintiff moved for partial summary judgment as to defendant’s liability for violating the FDCPA, id., at 1225; defense attorneys argued that triable issues of fact exist, and that plaintiff lacked standing, id., at 1227. The district court granted the motion in part, but agreed with defense attorneys that triable issues of fact existed as to interpretation of certain language in debt collection letters.
The facts are straight-forward: In an effort to collect a debt, Amalgamated sent plaintiff two letters, each of which stated in pertinent part, “unless this matter can be resolved within 30 days of the above date, it will be necessary to consider the institution of legal procedures against you” and that she had 30 days from the date of the letters to dispute the validity of the debt, Rivera, at 1225-26; it was undisputed, however, that Amalgamated had never commenced legal proceedings in an effort to collect a debt, id., at 1226. Amalgamated also sent plaintiff a letter stating “that her failure to remit payment within 15 days would result in the ‘nationwide reporting’ of her debt as a ‘bad debt.’” Id. Plaintiff moved for partial summary judgment.
The district court addressed first the FDCPA claim. Rivera, at 1227. The court observed that because the FDCPA is a “strict liability statute,” plaintiff need only show that Amalgamated was a debt collector and that it violated a provision of the FDCPA in its effort to collect a debt, id. With respect to the first prong, the district court easily concluded that Amalgamated was a debt collector within the meaning of the FDCPA, id., at 1227-28. With respect to the second prong, the court generally views the debt collector’s conduct from the perspective of “the least sophisticated consumer,” id., at 1227 (citation omitted). Defense attorneys conceded that Amalgamated violated the FDCPA in that 15 U.S.C. § 1692g requires debt collectors inform debtors that they have 30 days from receipt of the notice to dispute the validity of a debt, but Amalgamated’s letters told plaintiff that she had 30 days from the date of the letters to raise such a challenge. Id., at 1228. As the point was conceded by the defense, the district court granted partial summary judgment on this point.
However, the district court agreed with defense attorneys that a genuine issue of fact existed as to whether Amalgamated made “idle threats” in its collection letters in violation of § 1692e(5). Rivera, at 1230. The defense argued that stating Amalgamated would “consider” legal action is not an imminent threat; plaintiff countered with Amalgamated’s deposition testimony that it never pursued legal action against a debtor. Id. The court held that because the parties reasonably disagreed as to the proper interpretation of the language in the letters, “the trier of fact must resolve the disagreement rather than the court through summary judgment.” Id. (citation omitted). The district court also cited cases holding that similar language did not threaten legal action but rather “only indicated that legal action was an option available to the creditor,” id., (citation omitted), and cases that interpreted the collection letters in favor of the debt collector, id., at 1230-31. The district court also denied plaintiff’s motion with respect to her claim that Amalgamated’s letters “violated § 1692e(10) by implying that the debtors had less than the full thirty-day validation period to resolve their debts.” Rivera, at 1231. The question was whether the “least sophisticated consumer” would be misled by the collection letters, and the court held that such a determination must be made by the trier of fact. Id. (citation omitted).
Plaintiff’s final argument was that Amalgamated violated § 1692e(5) and (10) “by threatening to report Plaintiff’s alleged debt of $39.32 as a bad debt when Defendant has a policy of only reporting debts that exceed $50.00 to credit reporting agencies.” Rivera, at 1231. Because the underlying claims were matters to be resolved by the jury, the court held that this claim, too, raised issues of fact that could not be resolved on summary judgment. Id. The court stressed, however, that the class could not include debtors that owed more than $50. Id.
NOTE: One of the “predominant defenses” raised in opposition to plaintiff’s motion was that plaintiff lacked standing because she never paid the debt. Rivera, at 1231. The district court rejected the argument because “numerous courts, including the Eleventh Circuit, have held that the FDCPA does not require a plaintiff to have suffered actual damages in order to bring a claim,” id., at 1232.
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