Masson v. Pioneer Credit Recovery, Inc. et al

Filing 94

ORDER AND REASONS: IT IS ORDERED that the Plaintiff's 73 Motion for Partial Summary Judgment is GRANTED and IT IS FURTHER ORDERED that Defendant's 79 Cross Motion for Summary Judgment is DENIED. Signed by Judge Ivan L.R. Lemelle on 3/1/2017. (mmv)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
SCOTT N. MASSON

CIVIL ACTION

VERSUS

NO. 16-1887

PIONEER CREDIT RECOVERY,
INC., ET AL.

SECTION “B”(1)
ORDER AND REASONS

I.

NATURE OF MOTION AND RELIEF SOUGHT
Before the court is Plaintiff’s “Motion for Partial Summary

Judgment” (Rec. Doc. 73), Defendant’s, Coast Professional,
Inc.’s “Opposition to Plaintiff’s Motion for Partial Summary
Judgment” (Rec. Doc. 74) and Defendant’s, “Cross Motion for
Summary Judgment” (Rec. Doc. 79) and Plaintiff’s “Opposition to
Defendant’s Cross Motion for Summary Judgment” (Rec. Doc. 84),
IT IS ORDERED that the Plaintiff’s Motion for Partial Summary
Judgment is GRANTED and IT IS FURTHER ORDERED that Defendant’s
Cross Motion for Summary Judgment is DENIED.
II.

FACTS AND PROCEDURAL HISTORY
Plaintiff, Scott N. Masson, filed this case as a class

action against Defendant Coast Professional Inc. alleging that
the sending, or causing to be sent, of collection letters
stating, “collection costs are assessed to student loan debt 60
days after the default claim purchase” violated the Fair Debt
Collection Practices Act, 15 § U.S.C. 1962 et seq (“FDCPA”).

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Plaintiff alleges that this language is false and misleading and
that there is a notice requirement that must be met before costs
can be assessed after the default claim purchase.
This Court granted the Plaintiff’s motion for Class
Certification (Rec. Doc. 86) and currently before this Court are
the parties Cross Motions for Summary Judgment.
III. PARTIES CONTENTIONS
Plaintiff in his Motion for Partial Summary Judgment
contends that the letters the Defendant sent to consumers are
false and misleading in violation of the FDCPA. Plaintiff argues
that collection costs cannot be assessed until sixty days after
the student loan debtor has received notice that the guaranty
agency purchased the default claim, not sixty days after the
default claim is purchased.
Defendant argues in its Cross Motion for Summary Judgment
that the language in their debt collection letters comply with
the FDCPA and that the letters are not false or misleading under
federal law and regulations.
IV.

FACTUAL AND LEGAL FINDINGS
Summary judgment is proper if the pleadings, depositions,

interrogatory

answers,

and

admissions,

together

with

any

affidavits, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter
of law.

Fed. R. Civ. P. 56; see also Celotex Corp. v. Catrett,
2

477 U.S. 317, 327 (1986).
would

allow

nonmovant.
(1986).

a

A genuine issue exists if the evidence

reasonable

jury

to

return

a

verdict

for

the

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

Although the Court must consider the evidence with all

reasonable inferences in the light most favorable to the nonmoving
party, the nonmovant must produce specific facts to demonstrate
that a genuine issue exists for trial.

Webb v. Cardiothoracic

Surgery Assocs. of N. Texas, 139 F.3d 532, 536 (5th Cir. 1998).
The

moving

party

bears

the

initial

responsibility

of

informing the district court of the basis for its motion. Celotex,
477 U.S. at 323. The movant must point to “portions of ‘the
pleadings, depositions, answers to interrogatories, and admissions
on file, together with affidavits’ which it believes demonstrate
the absence of a genuine issue of material fact.” Id. (citing Fed.
R. Civ. P. 56). If and when the movant carries this burden, the
nonmovant must then go beyond the pleadings and use affidavits,
depositions,

interrogatory

responses,

evidence to establish a genuine issue.

admissions,

or

other

Matsushita Elec. Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
“[W]here the non-movant bears the burden of proof at trial,
the movant may merely point to an absence of evidence, thus
shifting to the non-movant the burden of demonstrating by competent
summary judgment proof that there is an issue of material fact
warranting trial. . . . Only when ‘there is sufficient evidence
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favoring the nonmoving party for a jury to return a verdict for
that party’ is a full trial on the merits warranted.” Lindsey v.
Sears Roebuck and Co., 16 F.3d 616, 618 (5th Cir. 1994) (citations
omitted). Accordingly, conclusory rebuttals of the pleadings are
insufficient to avoid summary judgment.

Travelers Ins. Co. v.

Liljeberg Enter., Inc., 7 F.3d 1203, 1207 (5th Cir. 1993).
A. Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act was enacted “to eliminate
abusive debt collection practices by debt collectors, to insure
that those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged, and to
promote consistent State action to protect consumers against debt
collection abuses.” 15 U.S.C. § 1692(e). Under the Fair Debt
Collection and Practices Act, 15 U.S.C. §1692 et seq (“FDCPA”), “a
debt collector may not use any false, deceptive, or misleading
representation or means in connection with the collection of any
debt.” Furthermore, “the FDCPA does not ordinarily require proof
of intentional violation and, as a result, is described by some as
a strict liability statute.” LeBlanc v. Unifund CCR Partners, 601
F.3d 1185, 1190, (11th Cir. 2010).
B. Coast Professional Inc.’s Debt Collection Letter
It is undisputed that the Defendant sent Plaintiff a letter
regarding

collection

of

debt

containing

the

aforementioned

language (Rec. Docs. 73-2 and 79-2). Plaintiff contends that the
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Defendant’s letters violate 15 U.S.C. §§ 1692e, e(5), e(10), and
f(1) because they state “costs are assessed on your account 60
days after the default claim purchase” (Rec. Doc. 17-5). Plaintiff
argues that according to the regulation collection costs cannot be
assessed until

sixty days after the student loan debtor has

received notice that the guaranty agency has purchased the default
claim. According to the Plaintiff, the Defendant’s letters are
false and misleading because they start the 60 day time period as
soon as the default claim is purchased, leaving the consumer
without the required statutory notice.
Plaintiff
involving

a

relies

borrower,

heavily

on

alleging

a

Seventh

violations

of

Circuit
the

opinion

FDCPA,

and

disputing the propriety of collection costs sought by a guaranty
agency. Bible v. United Student Aid Funds, Inc., 799 F.3d 633, 641
(7th Cir.), reh'g denied, 807 F.3d 839 (7th Cir. 2015), cert.
denied, 136 S. Ct. 1607 (2016). In Bible the Court explained, “when
a borrower is first notified that a guaranty agency has paid a
default claim on her loan, she has a 60-day window to request
administrative review of the debt or to enter into a repayment
agreement with the agency. If she does not take either action, the
guaranty agency can then take collection actions against her,
report her default to a consumer reporting agency, and assess
collection

costs

against

her

in

the

amount

specified

by

§

682.410(b)(2).” Bible v. United Student Aid Funds, Inc., 799 F.3d
5

633, 647. The Department of Education through an amicus brief filed
in Bible further explained,
The guarantor is required to “engage in reasonable and
documented collection activities” on a loan for which it has
paid a default claim. 34 C.F.R. § 682.410(b)(6)(i). Within
forty-five days after paying a lender’s default claim, id. §
682.410(b)(6)(ii), “but before it reports the default to a
consumer reporting agency or assesses collection costs
against a borrower,” § 682.410(b)(5)(ii), the guarantor must,
inter alia, provide the borrower with written notice that it
has paid the default claim and inform the borrower of her
rights to: request access to the guarantor’s records; seek
administrative review of the legal enforceability or pastdue status of the loan; and an “opportunity enter into a
repayment agreement on terms satisfactory to the agency.” Id.
§§
682.410(b)(5)(ii)(A)-(D);
682.410(b)(5)(iv)(B);
682.410(b)(5)(vi). The guarantor must allow the borrower at
least sixty days to exercise these options. Id. §
682.410(b)(5)(iv)(B).
Case

No.

14-1806

(Rec.

Doc.

33

at

9-10).

The

Department

of

Education after the Bible decision issued a guideline letter
further emphasizing the notice requirement that guaranty agencies
must follow.1 Despite this evidence the Defendant argues that “the
bible court incorrectly paraphrases the federal regulations” and
that “an erroneous recitation of the law by a non-controlling Court
of Appeals has no precedential value to the Court and must be
disregarded” (Rec. Doc. 74). The Defendant argues that the Seventh
Circuit incorrectly interpreted the regulations and that costs are
measured after 60 days from the date that the notice is sent and
not received. Regardless of whether the 60 day period is measured

1

https://ifap.ed.gov/dpcletters/attachments/GEN1514.pdf
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from the date the notice was sent or received, Coast’s statement
that “costs are assessed on your account 60 days after the default
claim

purchase”

is

false

and

misleading

under

Bible

because

collection costs can only begin 60 days after the notice was sent,
not

60

days

after

the

default

claim

purchase

as

the

letter

provides. Furthermore, the Defendant fails to proffer any case law
or evidence regarding why their interpretation is more credible
than that of the Seventh Circuit Court of Appeals. In addition,
this Court find’s the Defendant’s interpretation unpersuasive
given that a member of the executive branch, the Department of
Education, has weighed in

on this topic and adds additional

credibility the Seventh Circuit’s reasoning. The Defendant also
argues that the facts of the Bible case are distinguishable from
the present matter. Nonetheless, the instant case hinges upon the
law and not the facts. There is no issue of disputed material fact
regarding whether or not the Defendant sent the Plaintiff a letter
with the previously mentioned language regarding debt collection.
The dispute is whether or not that language legally violates the
FDCPA. This Court finds that the Seventh Circuit’s opinion on that
matter is instructive.
Defendant argues that even if the letter violates the FDCPA,
Plaintiff cannot show that the letter caused concrete injury. This
court disagrees. As the United States Supreme Court has explained,

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“concrete is not, however, necessarily synonymous with tangible.
Although tangible injuries are perhaps easier to recognize, we
have confirmed in many of our previous cases that intangible
injuries can nevertheless be concrete.” Spokeo, Inc. v. Robins,
136 S. Ct. 1540, 1549 (2016) (internal quotations omitted). In
particular, the Ninth Circuit has found there to be standing when
a Plaintiff received collection letters allegedly in violation of
the FDCPA. Tourgeman v. Collins Fin. Servs., 755 F.3d 1109, 1116
(9th Cir. 2014). This Court does not find Defendant’s Opposition
to the Plaintiff’s Motion for Partial Summary Judgment or their
Cross Motion for Summary Judgment to be legally persuasive and
find that the Plaintiff’s Motion for Partial Summary Judgement is
compelling.
V.

CONCLUSION
For the reasons set forth above, IT IS ORDERED that the

Plaintiff’s Motion for Partial Summary Judgment is GRANTED and
IT IS FURTHER ORDERED that Defendant’s Cross Motion for Summary
Judgment is DENIED.

New Orleans, Louisiana, this 1st day of March 2017.

___________________________________
SENIOR UNITED STATES DISTRICT JUDGE

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