Cooper v. Retrieval-Masters Creditors Bureau, Inc.

Filing 47

MEMORANDUM Opinion and Order written by the Honorable Gary Feinerman on 6/2/2017.Mailed notice.(jlj, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JACK WESLEY COOPER,
Plaintiff,
vs.
RETRIEVAL-MASTERS CREDITORS BUREAU,
INC.,
Defendant.

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16 C 2827
Judge Gary Feinerman

MEMORANDUM OPINION AND ORDER
Jack Cooper sued Retrieval-Masters Credit Bureau (“RMCB”), alleging violations of the
Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Doc. 1. Cooper now
moves for summary judgment as to liability and also as to RMCB’s bona fide error defense.
Doc. 35. The motion is granted.
Background
Cooper filed his summary judgment motion on February 10, 2017. Doc. 35. The court
set a generous response date of April 14. Doc. 38. On April 14, RMCB moved for an extension,
Doc. 39, which the court granted, extending the response date to April 25, Doc. 41. On April 25,
RMCB moved for another extension, Doc. 42, which the court granted, extending the response
date to May 9, Doc. 44. May 9 has long since come and gone, and RMCB still has not
responded to Cooper’s motion, making the motion ready for decision. See Flint v. City of
Belvidere, 791 F.3d 764, 768 (7th Cir. 2015) (“[C]ase management depends on enforceable
deadlines … . In managing their caseloads, district courts are entitled to—indeed they must—
enforce deadlines.”) (internal quotation marks omitted); Raymond v. Ameritech Corp., 442 F.3d
600, 605 (7th Cir. 2006) (“Rule 6(b) … clearly gives courts both the authority to establish

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deadlines and the discretion to enforce them.”); Reales v. Consol. Rail Corp., 84 F.3d 993, 996
(7th Cir. 1996) (“The district courts must manage a burgeoning caseload, and they are under
pressure to do so as efficiently and speedily as they can, while still accomplishing just outcomes
in every civil action … . Necessarily, they must have substantial discretion as they manage their
dockets.”); Shine v. Owens–Ill., Inc., 979 F.2d 93, 96 (7th Cir. 1992) (“[J]udges must be able to
enforce deadlines.”).
Consistent with the local rules, Cooper filed a Local Rule 56.1(a)(3) statement of
undisputed facts along with its summary judgment motion. Doc. 35-1. Each factual assertion in
the Local Rule 56.1(a)(3) statement cites evidentiary material in the record and is supported by
the cited material. See N.D. Ill. L.R. 56.1(a) (“The statement referred to in (3) shall consist of
short numbered paragraphs, including within each paragraph specific references to the affidavits,
parts of the record, and other supporting materials relied upon to support the facts set forth in that
paragraph.”). The Seventh Circuit “has consistently upheld district judges’ discretion to require
strict compliance with Local Rule 56.1.” Flint, 791 F.3d at 767 (citing cases); see also Stevo v.
Frasor, 662 F.3d 880, 886-87 (7th Cir. 2011) (“Because of the high volume of summary
judgment motions and the benefits of clear presentation of relevant evidence and law, we have
repeatedly held that district judges are entitled to insist on strict compliance with local rules
designed to promote the clarity of summary judgment filings.”); Cracco v. Vitran Express, Inc.,
559 F.3d 625, 632 (7th Cir. 2009) (“Because of the important function local rules like Rule 56.1
serve in organizing the evidence and identifying disputed facts, we have consistently upheld the
district court's discretion to require strict compliance with those rules.”). Here, the problem is
not that RMCB did not strictly comply with Local Rule 56.1, but rather that it did not comply at
all. It did not file any response materials—no brief, no Local Rule 56.1(b)(3)(B) response to

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Cooper’s Local Rule 56.1(a)(3) statement, and no Local Rule 56.1(b)(3)(C) statement of
additional facts. Accordingly, the court accepts as true the facts set forth in Cooper’s Local Rule
56.1(a)(3) statement. See Curtis v. Costco Wholesale Corp., 807 F.3d 215, 218 (7th Cir. 2015)
(“When a responding party’s statement fails to dispute the facts set forth in the moving party’s
statement in the manner dictated by the rule, those facts are deemed admitted for purposes of the
motion.”); Parra v. Neal, 614 F.3d 635, 636 (7th Cir. 2010); Rao v. BP Prods. N. Am., Inc., 589
F.3d 389, 393 (7th Cir. 2009); Cady v. Sheahan, 467 F.3d 1057, 1061 (7th Cir. 2006); Raymond,
442 F.3d at 608.
That said, the court is mindful that “a nonmovant’s failure to … comply with Local Rule
56.1 … does not … automatically result in judgment for the movant … . [The movant] must still
demonstrate that it is entitled to judgment as a matter of law.” Keeton v. Morningstar, Inc., 667
F.3d 877, 884 (7th Cir. 2012). The court therefore will recite the facts in Cooper’s Local Rule
56.1(a)(3) statement and then determine whether, on those facts, Cooper is entitled to summary
judgment. The court sets forth the following facts as favorably to RMCB, the non-movant, as
the record and Local Rule 56.1 allow. See Canen v. Chapman, 847 F.3d 407, 412 (7th Cir.
2017). In considering Cooper’s motion, the court must assume the truth of those facts, but does
not vouch for them. See Arroyo v. Volvo Grp. N. Am., 805 F.3d 278, 281 (7th Cir. 2015).
Cooper, a natural person, held an account with Swiss Colony, a catalogue retailer, which
he used to make personal purchases. Doc. 35-1 at ¶ 6. He was unable to pay an alleged debt on
the account and defaulted. Id. at ¶ 7. Swiss Colony retained RMCB, a business that regularly
collects defaulted consumer debts, to collect the alleged debt, and on February 8, 2016, RMCB
sent Cooper a letter stating, in part: “Enclose the bottom portion of this letter so that your
account can be properly credited and we can update the credit bureau.” Id. at ¶¶ 3, 8-11.

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However, it was not RMCB’s practice to update credit bureaus; rather, RMCB would update its
client on the status of a debt, and then the client, not RMCB, might or might not update the credit
bureau. Id. at ¶ 12. RMCB did not, in fact, report information to any credit bureau concerning
Cooper’s debt. Id. at ¶ 13. RMCB also received no confirmation from Swiss Colony as to
whether it had reported Cooper’s debt to a credit bureau, nor was it informed that Swiss Colony
failed to report information about the debt to a credit bureau. Id. at ¶¶ 14-15.
Cooper filed this suit against RMCB under the FDCPA. Doc. 1. He alleges that
RMCB’s implication that it had reported or would report his alleged debt to a credit bureau,
when in fact RMCB had no intent to do so and it was not RMCB’s practice to do so, violates 15
U.S.C. § 1692e, which prohibits the use of “false or misleading” representations in an attempt to
collect a debt. Id. at ¶¶ 25-26. In its answer, RMCB pleaded the affirmative defense that any
violation of law that may have occurred resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid such error. Doc. 11 at 9.
Discussion
The FDCPA prohibits a debt collector from using “any false, deceptive, or misleading
representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e; see
Ruth v. Triumph P’ships, 577 F.3d 790, 799-800 (7th Cir. 2009). This provision, essentially a
“rule against trickery,” Beler v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 480 F.3d 470, 473
(7th Cir. 2007), sets forth “a nonexclusive list of prohibited practices” in sixteen subsections,
McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1019 (7th Cir. 2014). Although a plaintiff
“need not allege a violation of a specific subsection in order to succeed in a § 1692e case,” Lox v.
CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012); see also Ruth, 577 F.3d at 794 n.2, Cooper
invokes subsections (5) and (10), which proscribe, respectively, “[t]he threat to take any action

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that cannot legally be taken or that is not intended to be taken,” 15 U.S.C. § 1692e(5), and “[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,” id. § 1692e(10).
Cooper has met the prerequisites for FDCPA liability. As a “natural person” obligated to
pay a debt, Cooper is a “consumer” under § 1692(a)(3). As an “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,” Cooper’s debt is covered by the FDCPA under § 1692a(5). As an entity that
“regularly collects … debts owed,” RMCB is a debt collector within the meaning of § 1692a(6).
Finally, RMCB’s letter is a “communication” under the FDCPA, which defines
“communication” as “the conveying of information regarding a debt directly or indirectly to any
person through any medium.” 15 U.S.C. § 1692a(2).
The core question here is whether RMCB’s letter violated § 1692(e)(5) or (10). The
answer is yes. As noted, § 1692e(5) prohibits debt collectors from threatening “to take any
action … that is not intended to be taken.” It is undisputed that RMCB does not have a practice
of reporting payments to credit bureaus, and it is likewise undisputed that it had no intention to
do so in Cooper’s case. Although the letter’s statement, “Enclose the bottom portion of this
letter so that your account can be properly credited and we can update the credit bureau,” might
not be an express threat, it certainly carries an implied one: that Cooper’s failure to respond to
the letter would result in the continued existence of a negative mark on his credit report or,
alternatively, that if Cooper did not respond, RMCB would alert credit bureaus to the debt and
his failure to pay. In fact, there is no evidence that RMCB ever communicated with credit
bureaus, either to remove a negative mark or to add one.

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Under the FDCPA, “a threat need not be express: it can be implied.” Gonzales v. Arrow
Fin. Servs., LLC, 660 F.3d 1055, 1064 (9th Cir. 2011). Cooper has identified an unlawful threat
under § 1692e(5), and accordingly prevails on the merits. In any event, having failed to respond
to Cooper’s motion, RMCB has forfeited any opposition to § 1692e(5) liability. See Nichols v.
Mich. City Plant Planning Dep’t, 755 F.3d 594, 600 (7th Cir. 2014) (“The non-moving party
waives any arguments that were not raised in [a] response … .”); G & S Holdings LLC v. Cont’l
Cas. Co., 697 F.3d 534, 538 (7th Cir. 2012) (“We have repeatedly held that a party waives an
argument by failing to make it before the district court.”); Witte v. Wis. Dep’t of Corr., 434 F.3d
1031, 1038 (7th Cir. 2006) (“By failing to raise [an argument] in his brief opposing summary
judgment, [the non-movant] lost the opportunity to urge it in … the district court … .”).
The same is true for liability under § 1692e(10). As an initial matter, RMCB’s failure to
respond to Cooper’s motion forfeits any argument that its letter did not violate § 1692e(10).
Forfeiture aside, Cooper is right on the merits. As noted, § 1692e(10) prohibits “[t]he use of any
false representation or deceptive means to collect or attempt to collect any debt … .” The
Seventh Circuit “has consistently held that with regard to ‘false, deceptive, or misleading
representations’ in violation of § 1692e of the FDCPA, the standard is … whether the debt
collector’s communication would deceive or mislead an unsophisticated, but reasonable,
consumer if the consumer is not represented by counsel.” Bravo v. Midland Credit Mgmt., Inc.,
812 F.3d 599, 603 (7th Cir. 2016); see also Gruber v. Creditors’ Prot. Serv., Inc., 742 F.3d 271,
273 (7th Cir. 2014) (noting that FDCPA claims “are evaluated under the objective
‘unsophisticated consumer’ standard”). That standard protects a consumer who “may be
uninformed, naïve, or trusting,” but who nonetheless “possess[es] rudimentary knowledge about
the financial world.” Gruber, 742 F.3d at 273 (internal quotation marks omitted). Although

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unsophisticated, the reasonable consumer is “not a dimwit” and “is capable of making basic
logical deductions and inferences.” Lox, 689 F.3d at 822 (internal quotation marks omitted).
For the reasons stated above regarding § 1692e(5), RMCB’s letter is deceptive. A
reasonable, yet unsophisticated consumer could easily read the letter as implying the RMCB
would take some action that would either damage or aid her credit report, based on whether she
responded to the letter by paying the debt. As noted, RMCB had no intention of taking any such
action, which renders the letter deceptive.
In its answer to Cooper’s complaint, RMCB raised a bona fide error defense under
§ 1692k(c), which provides that a debt collector may avoid liability “if the debt collector shows
by a preponderance of the evidence that the violation was not intentional and resulted from a
bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any
such error.” Because bona fide error is an affirmative defense, RMCB bears the burden of
establishing its validity. See Jenkins v. Heintz, 124 F.3d 824, 834-35 (7th Cir. 1997). “To
qualify for the bona fide error defense, [a defendant] … (1) must show that the presumed
FDCPA violation was not intentional; (2) it must show that the presumed FDCPA violation
resulted from a bona fide error … ; and (3) it must show that it maintained procedures reasonably
adapted to avoid any such error.” Kort v. Diversified Collection Servs., Inc., 394 F.3d 530, 537
(7th Cir. 2005).
RMCB’s bona fide error defense fails because RMCB does not support the defense in
response to Cooper’s summary judgment motion. Furthermore, Cooper argues, with record
support and without rebuttal, that RMCB in fact has no procedures in place to avoid the violation
here. Doc. 32-2 at 12-14. Accordingly, the affirmative defense fails.

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Conclusion
For the foregoing reasons, Cooper’s summary judgment motion is granted. Because
Cooper has proved a violation of § 1692e(5) and (10), and because RMCB’s bona fide error
affirmative defense fails, Cooper is entitled to summary judgment as to liability. This case will
proceed to an assessment of damages.

June 2, 2017
United States District Judge

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