Cuenca v. Harris & Harris, Ltd.
MEMORANDUM Opinion and Order: For the reasons stated in the accompanying Memorandum Opinion and Order, Defendant's motion to dismiss 18 is denied. This case is referred to Magistrate Judge Valdez for discovery scheduling and supervision. The referral also includes the authority to conduct any settlement conference the parties may desire. Signed by the Honorable John J. Tharp, Jr on 3/31/2017. Mailed notice(air, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
HARRIS & HARRIS, LTD,
Judge John J. Tharp, Jr.
MEMORANDUM OPINION AND ORDER
Plaintiff Lorena Cuenca received a collection letter from a debt collector stating that if
her debt was not paid, the debt holder “may exercise their various options to enforce collection.”
Cuenca sued under the Fair Debt Collection Practice Act (“FDCPA”), asserting that this
statement constituted a threat of litigation that the debt holder did not intend to take. The debt
collector moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). Because the
statement could plausibly be understood, by an unsophisticated consumer, to be a threat of
litigation and because it is alleged that the debt holder had no intention of taking such action, the
motion to dismiss must be denied.
For purposes of this motion, the court assumes the facts alleged in the complaint are true.
Plaintiff Lorena Cuenca is a resident of Illinois who allegedly owed money to Northwestern
Medicine and Northwestern Memorial (“Northwestern”) for unpaid medical bills. Compl. ¶ 5.
After Cuenca’s debt went into default, Northwestern assigned the debt to defendant Harris &
Harris Ltd., a debt collector (“Harris”). On November 16, 2015, Harris sent a letter to Cuenca
which stated, in part: “If this debt is not paid, our client(s) may exercise their various options to
enforce collection. At this point, the choice is still yours… please respond accordingly.” Id. at
¶¶ 13, 17. Cuenca believed that Northwestern (Harris’s client) intended to sue her. Id. at ¶ 19.
Northwestern, however, does not sue consumers for medical debts. Id. at ¶ 20. On May 19, 2016,
Cuenca filed this lawsuit alleging that Harris’s letter violated the Fair Debt Collection Practices
Act (“FDCPA”) by falsely threatening to sue her. See 15 U.S.C. § 1692e. Harris has moved to
dismiss on the ground that the statement was not a threat to sue (and therefore could not be
To survive a motion to dismiss, a complaint must state a plausible claim, with sufficient
factual content that the Court can infer the defendant is liable for the alleged conduct. Adams v.
City of Indianapolis, 742 F.3d 720, 728 (7th Cir. 2014). The FDCPA prohibits a debt collector
from making 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). FDCPA claims are judged by the “objective unsophisticated
consumer standard.” Gruber v. Creditors' Prot. Serv., 742 F.3d 271, 273 (7th Cir. 2014). An
unsophisticated consumer “may tend to read collection letters literally, [but] he does not interpret
them in a bizarre or idiosyncratic fashion.” Id. at 274. Whether a collection letter is confusing is
generally a question of fact; dismissal as a matter of law is appropriate only where “it is apparent
from a reading of the letter that not even a significant fraction of the population would be misled
by it.” Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632, 636 (7th Cir. 2012).
Harris argues that the language in its letter was not a threat of litigation, and thus the fact
that Northwestern (allegedly) would never have sued does not matter. The courts of this circuit
are quite divided on how to understand what constitutes a threat of litigation. This Court, for
example, has found that a letter stating that “our client may consider additional remedies to
recover the balance due” was not false or misleading. Aker v. Bureaus Inv. Grp. Portfolio No. 15
LLC, No. 12 C 03633, 2014 WL 4815366, at *1 (N.D. Ill. Sept. 29, 2014). However, other courts
have found that a statement that a collector would “consider” legal action to be a threat of
litigation. See Bloodworth v. United Credit Serv., Inc., No. 15-CV-0502, 2016 WL 1453520, at
*2 (E.D. Wis. Apr. 12, 2016).
It is not, however, necessary to resolve the question of whether the dunning letter sent to
Cuenca constitutes a “threat” of litigation.1 That frames the inquiry too narrowly. Rather, the
relevant issue is whether, threat or not, Harris’s statement would likely mislead an objective
unsophisticated consumer about the possibility that Northwestern would sue her to collect the
debt. See 15 U.S.C. § 1692e (banning “any false, deceptive, or misleading representation”
including, but not limited to, the types of listed conduct).
Cuenca argues that she reasonably interpreted the “enforce collection” language to imply
that one “option” was litigation. She cites to Black’s Law Dictionary for the proposition that to
“enforce” means to compel a person to pay damages or give force to a law, but it doesn’t take a
legal dictionary to understand that one of the means by which a creditor may “enforce” an
obligation to pay a debt is through a lawsuit. Plausibility is all that is required at the motion to
dismiss stage, Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007), and a statement that a
creditor will consider exercising its enforcement options regarding a debt could easily be
understood by an unsophisticated consumer (or a sophisticated consumer, for that matter) as a
statement that litigation would be considered.
Regardless of whether it is formally a threat, a statement that implies a debt holder will
take an action it has no intention of taking violates the FDCPA. For example, the Seventh Circuit
Of course, if the statement is a threat of litigation, Cuenca has sufficiently alleged that
Northwestern did not intend to take that action (and thus the statement would violate the
FDCPA). See United States v. National Fin. Servs., 98 F.3d 131, 138 (4th Cir. 1996).
has recently found that “carefully crafted language” which is “chosen to obscure” a debt
collector’s rights is “the sort of misleading tactic the FDCPA prohibits.” Pantoja v. Portfolio
Recovery Assocs., LLC, No. 15-1567, 2017 WL 1160902, at *6 (7th Cir. Mar. 29, 2017). In
Pantoja, the dunning letter specifically stated the debt collector would not sue the debtor, but
used vague language that implied the collector had chosen not to sue rather than being timebarred from doing so. Id. at *6. The Seventh Circuit found this was misleading because “[t]he
only reason to use such carefully ambiguous language is the expectation that at least some
unsophisticated debtors will misunderstand and will choose to pay on the ancient, time-barred
debts because they fear the consequences of not doing so.” Id.
The logic of Pantoja would also seem to apply to a debt collector’s intentions (after all,
the point of Pantoja was that it was unclear whether a statement reflected a debt collector’s
present intention or legal incapacity to sue). See id. at *3 (“Even without an express threat of
litigation, such collection efforts offer opportunities for mischief and deception, as we explain
below.”) In some ways this case is more clear-cut than Pantoja, because the threat of potential
litigation hangs in the air without any representation it will not be used. Furthermore, “whether
an unsophisticated consumer would find certain debt collection language misleading [is] a
question of fact.” Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012). The force behind the
reference to “enforce collection” surely stems from litigation as one of the “options.” Cuenca has
alleged that Northwestern had no intention of ever following through on that implication, which
at least renders the statement potentially misleading. Whether that implication was in fact
misleading is a factual question and thus inappropriate to decide on a motion to dismiss.
At this stage of the litigation, Cuenca need only state a plausible claim. The Court finds
that the statement that a debt holder “may exercise their various options to enforce collection”
could plausibly be interpreted by an unsophisticated consumer as a threat of potential litigation.
Given that Cuenca has also alleged Northwestern does not sue to collect on its debts, the
complaint states a claim under the FDCPA. The motion to dismiss is therefore denied.
Dated: March 31, 2017
John J. Tharp, Jr.
United States District Judge
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