United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION [1]
JOHN
H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE
Plaintiff
Erica Cooper (“Cooper”) brings this action
pursuant to the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692, et
seq., asserting that Defendants Atlantic Credit &
Finance, Inc. (“Atlantic”) and Midland Funding,
LLC (“Midland”) (collectively,
“Defendants”) violated 15 U.S.C. §§
1692g(b) and 1692f, when Defendants sent a “Second
Letter” that improperly “overshadowed”
and/or “contradicted” the statutorily-required
validation notice contained in the “First Letter”
and constituted the use of unfair and unconscionable means to
collect a debt. (Doc. 1). Defendants move to dismiss both
claims pursuant to Federal Rule of Civil Procedure 12(b)(6)
for failure to state a claim.[2] (Doc. 11 at 1). Plaintiff
explains her opposition to dismissal in a response brief
(doc. 17), and Defendants have filed a reply brief in support
of their motion to dismiss (doc. 18). The motion to dismiss
is therefore ripe for review. For the reasons explained
below, the motion to dismiss (doc. 11) is
GRANTED.
I.
Background
In
October 2017, Defendants sent Cooper two letters as part of
their efforts to collect a debt (or “Account”)
Cooper owed on a credit card issued by Synchrony Bank, which
she used to pay for dental services. (Doc. 1 at ¶¶
8-9). The “First Letter, ” dated October 3, 2017,
contained a “validation notice” that is required
to be included with a debt collector's “initial
communication” with a consumer. (Id. at ¶
8; doc. 1-2). The validation notice advised Cooper of her
statutory rights under 15 U.S.C. § 1692g(a), including
her right to dispute the debt in writing within thirty days,
which - if exercised - would require Defendants to suspend
their collection efforts pending a response to her request
for verification of the debt. (See doc. 1-2). The
First Letter contained other basic elements, including
informing Cooper that Midland had purchased or been assigned
her Account and that her Account had been placed with
Atlantic for collection. (Doc. 1-2). The First Letter further
informed Cooper that she was obligated to pay the defaulted
Account balance of $ 1, 140.99, and directed her how to
contact someone to discuss the debt. (Id.).
Before
the expiration of the thirty-day validation period,
Defendants sent Cooper a “Second Letter, ” dated
October 13, 2017. (Doc. 1 at ¶ 9; doc. 1-3). The Second
Letter states that its purpose was to inform Cooper that
Midland was considering “forwarding [her] account to an
attorney in [her] state for possible litigation.” (Doc.
1-3). The Second Letter urged Cooper to call to discuss her
options and presented two payment options “to resolve
the . . . account[, ]” specifically: (1) a one-time
reduced repayment due 10/31/2017; and (2) biweekly payments
as low as $ 25.00 until the balance was paid in full.
(Id.). The Second Letter then stated: “These
payment opportunities do not alter or amend your validation
rights as described in the previous letter to you.”
(Id.). These letters are attached to the complaint
as Exhibit B (doc. 1-2) and Exhibit C (doc. 1-3).
II.
Standard of Review
Under
Federal Rule of Civil Procedure 8(a)(2), a pleading must
contain “a short and plain statement of the claim
showing the pleader is entitled to relief. “[T]he
pleading standard Rule 8 announces does not require
'detailed factual allegations,' but it demands more
than an unadorned, the-defendant-unlawfully-harmed-me
accusation.” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009) (citing Bell Atlantic v. Twombly, 550
U.S. 544, 555 (2007)). Mere Alabels and conclusions' or A
a formulaic recitation of the elements of a cause of
action” are insufficient. Iqbal, 556 U.S. at
678. (citations and internal quotation marks omitted).
“Nor does a complaint suffice if it tenders 'naked
assertion[s]' devoid of 'further factual
enhancement.” Id. (citing Bell Atl.
Corp., 550 U.S. at 557).
Rule
12(b)(6), Fed. R. Civ. P., permits dismissal when a complaint
fails to state a claim upon which relief can be granted.
“To survive a motion to dismiss, a complaint must
contain sufficient factual matter, accepted as true, to state
a claim to relief that is plausible on its face.”
Iqbal, 556 U.S. at 678 (citations and internal
quotation marks omitted). A complaint states a facially
plausible claim for relief “when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged.” Id. (citation omitted). The
complaint must establish “more than a sheer possibility
that a defendant has acted unlawfully.” Id.;
see also Bell Atl. Corp., 550 U.S. at 555
(“Factual allegations must be enough to raise a right
to relief above the speculative level.”). Ultimately,
this inquiry is a “context-specific task that requires
the reviewing court to draw on its judicial experience and
common sense.” Iqbal, 556 U.S. at 679.
Because
Cooper attached the First Letter and the Second Letter as
exhibits to her complaint (docs. 1-2 & 1-3), the Court
may consider both letters in determining whether she has
stated a plausible claim for relief. See Moore v. Nottee
& Kreyling, P.C., No. 1:17-cv-1148, 2017 WL 8217642,
at *1 (N.D.Ga. Oct. 12, 2017) (citing Brooks v. Blue
Cross & Blue Shield of Fla., Inc., 116 F.3d 1364,
1368 (11th Cir. 1997)). Furthermore, “[w]hen exhibits
contradict allegations, the exhibits control.”
Boler v. Bank of Am., N.A., No. 2:17-cv-0303-JEO,
2017 WL 6555343, at *5 (N.D. Ala. Dec. 22, 2017).
III.
Analysis
A.
Section 1692g(b) - May Not Overshadow or Be Inconsistent with
Validation Notice
Defendants
argue that Cooper fails to state a claim under §
1692g(b) because nothing in the Second Letter
“overshadows” or “contradicts” the
notice of validation rights contained in the First Letter.
(Doc. 11 at 4-11; doc. 18 at 2-9). Section 1692g(a) of the
FDCPA requires a debt collector to send the consumer an
effective validation notice either in its initial
communication with the consumer or within five days after
that initial communication. This “validation notice,
” which Defendants included in their First Letter, must
inform the consumer that she has thirty days after receipt to
challenge the validity or amount of the debt and seek
verification of the debt. 15 U.S.C. § 1692g(a). After
the thirty-day validation period expires, the debt collector
may assume the debt is valid. 15 U.S.C. §1692g(a)(3). If
the consumer exercises her right to dispute the debt within
the thirty-day period, the debt collector must suspend its
collection efforts pending a response to her request. 15
U.S.C. § 1692g(b). If the consumer does not challenge
the validity of the debt during this time (or before she
challenges it), collection activities and communications that
do not otherwise violate the FDCPA may continue. Id.
In
cases such as here, where the consumer had not exercised her
validation rights, the validation period does not operate as
a grace period. See Durkin v. Equifax Check Servs.,
Inc., 406 F.3d 410, 416 (7th Cir. 2005). Because the
debtor's right to dispute the debt coexists with the debt
collector's right to collect, the FDCPA attempts to
strike a balance by enumerating certain limitations on a debt
collector's activities and communications during the
validation period. See Durkin, 406 F.3d at
416. One of these limitations is that such activities and
communications “may not overshadow or be inconsistent
with the disclosure of the consumer's rights to dispute
the debt or request the name and address of the original
creditor.” 15 U.S.C. § 1692g(b). The
court evaluates whether overshadowing or contradiction
occurred under the “least sophisticated consumer”
standard and looks at whether the debt collector's
language and tactics are being employed to mislead the least
sophisticated recipients of its debt collection letters.
See Leblanc v. Unifund CCR Partners, 601 F.3d 1185,
1193-94 (11th Cir. 2010).
Cooper
alleges that Defendants' Second Letter violated this
section of the FDCPA by demanding payment/action before the
end of the thirty-day validation period and by threatening
litigation. (Doc. 1 at ¶¶ 13-16). Defendants
contend these allegations are belied by the language of the
Second Letter. (Doc. 11 at 2-3). To determine whether
anything in the Second Letter “overshadowed” or
“contradicted” the ...