Baye v. Midland Credit Management, Inc. et al

Filing 25

ORDER AND REASONS granting 10 Motion to Dismiss for Failure to State a Claim. The plaintiff's claims are dismissed with prejudice. Signed by Judge Martin L.C. Feldman on 8/9/2017. (clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
JOAN BAYE

CIVIL ACTION

V.

NO. 17-4789

MIDLAND CREDIT
MANAGEMENT, INC., ET AL

SECTION "F"
ORDER AND REASONS

Before the Court is Midland Credit Management, Inc. and
Midland

Funding,

LLC’s

Federal

Rule

of

Civil

Procedure

Rule

12(b)(6) motion to dismiss. For the following reasons, the motion
is GRANTED.
Background
This lawsuit arises out of alleged violations of the Fair
Debt Collection Practices Act (FDCPA).
Joan Baye alleges that Midland Funding and Midland Credit
Management (MCM) buy expired debts from creditors and then attempt
to

collect

payments

on

these

expired

debts

from

debtors.

Specifically, Baye alleges that MCM and Midland sent her three
collection letters on expired debts it purchased from creditors.
Baye contends that the letters are in violation of the FDCPA
standards. The letters included language to entice a debtor into
paying these time-barred, or old, debts. For example, the letters
include “offers” for 40% off debt and other payment options. In a
letter sent to Baye for an old Target debt, the letter also stated:

1

Benefits of Paying Your Debt
- Save $1,366.54 if you pay by 03-05-2017-Put this debt behind you –
-No more communication on this account –
-Peace of Mind –
Importantly,

each

of

the

letters

Baye

received

included

the

following language:
The law limits how long you can be sued
how long a debt can appear on your credit
the age of this debt, we will not sue
report payment or non-payment of it to a

on a debt and
report. Due to
you for it or
credit bureau.

This language appeared below the signature block of the debt
collector in normal-sized font.
In response to these letters, Baye files this lawsuit against
MCM and Midland Funding for alleged violations of the FDCPA. Baye
alleges that MCM and Midland Funding violated 15 U.S.C. §§ 1692d,
1692e, 1692f. Baye alleges that the letters were deceptive because
the letters sought to have debtors pay on old debts without warning
debtors that payment would “revive” the old, time-barred debts.
Baye also contends that the letters were harassing because MCM and
Midland sent three different letters, all pertaining to timebarred debts.
In response to Baye’s complaint, 1 MCM and Midland file this
motion to dismiss, contending that Baye fails to state a claim
upon which relief can be granted.

1

Joan Baye’s complaint also asserts class allegations, but at this
stage the plaintiff has not moved for a determination of class
certification.
2

I.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted.

Such a motion is rarely

granted because it is viewed with disfavor.

See Lowrey v. Tex. A

& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure,
a pleading must contain a "short and plain statement of the claim
showing that the pleader is entitled to relief."

Ashcroft v.

Iqbal, 556 U.S. 662, 678-79 (2009) (citing Fed. R. Civ. P. 8).
"[T]he

pleading

'detailed

factual

standard

Rule

8

allegations,'

announces

but

it

does

demands

not
more

require
than

an

unadorned, the-defendant-unlawfully-harmed-me accusation." Id. at
678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
Thus,

in

considering

a

Rule

12(b)(6)

motion,

the

Court

"accepts 'all well-pleaded facts as true, viewing them in the light
most favorable to the plaintiff.'"

See Martin K. Eby Constr. Co.

v. Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir. 2004) (quoting
Jones v. Greninger, 188 F.3d 322, 324 (5th Cir. 1999)).

But, in

deciding whether dismissal is warranted, the Court will not accept
conclusory allegations in the complaint as true.
at 1050.

Kaiser, 677 F.2d

Indeed, the Court must first identify allegations that
3

are conclusory and thus not entitled to the assumption of truth.
Iqbal, 556 U.S. at 678-79.

A corollary: legal conclusions "must

be supported by factual allegations." Id. at 678.

Assuming the

veracity of the well-pleaded factual allegations, the Court must
then determine "whether they plausibly give rise to an entitlement
to relief." Id. at 679.
complaints

are

held

It is well established that "pro se

to

less

pleadings drafted by lawyers.

stringent

standards

than

formal

However, regardless of whether the

plaintiff is proceeding pro se or is represented by counsel,
conclusory
factual

allegations

conclusions

dismiss."

or

will

legal
not

conclusions

suffice

to

masquerading

prevent

a

motion

as
to

Taylor v. Books A Million, Inc., 296 F.3d 376, 378 (5th

Cir. 2002) (internal quotations and citations omitted).
"'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.'"

Gonzalez v. Kay, 577 F.3d

600, 603 (5th Cir. 2009) (quoting Iqbal, 556 U.S. at 678) (internal
quotation marks omitted).

"Factual allegations must be enough to

raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true (even
if doubtful in fact)."
footnote omitted).

Twombly, 550 U.S. at 555 (citations and

"A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the
reasonable

inference

that

the

defendant
4

is

liable

for

the

misconduct alleged."

Iqbal, 556 U.S. at 678 ("The plausibility

standard is not akin to a 'probability requirement,' but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.").

This is a "context-specific task that requires the

reviewing court to draw on its judicial experience and common
sense."

Id. at 679.

"Where a complaint pleads facts that are

merely consistent with a defendant's liability, it stops short of
the line between possibility and plausibility of entitlement to
relief." Id. at 678 (internal quotations omitted) (citing Twombly,
550 U.S. at 557).

"[A] plaintiff's obligation to provide the

'grounds' of his 'entitle[ment] to relief'" thus "requires more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do."

Twombly, 550 U.S. at

555 (alteration in original) (citation omitted).
In deciding a motion to dismiss, the Court may consider
documents that are essentially "part of the pleadings."

That is,

any documents attached to or incorporated in the plaintiff's
complaint that are central to the plaintiff's claim for relief.
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th
Cir. 2004) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d
496, 498-99 (5th Cir. 2000)).

Also, the Court is permitted to

consider matters of public record and other matters subject to
judicial notice without converting a motion to dismiss into one

5

for summary judgment.

See United States ex rel. Willard v. Humana

Health Plan of Tex. Inc.,

336 F.3d 375, 379 (5th Cir. 2003).
II.

The plaintiff alleges that the defendants violated the FDCPA
by sending collection letters that were deceptive and coercive.
These actions, according to the plaintiff, violated 15 U.S.C. §§
1692d, 1692e, 1692f. In response, the defendants contend that the
plaintiff has not alleged sufficient facts to state a viable FDCPA
claim.
“The FDCPA seeks to eliminate ‘abusive, deceptive, and unfair
debt collection practices’ by regulating the type and number of
contacts a ‘debt collector’ can make with a debtor.” Brooks v.
Flagstar Bank, FSB, No. 11-67, 2011 WL 2710026, at *5 (E.D. La.
July 12, 2011) (Vance, J.); 15 U.S.C. § 1692(a). The FDCPA defines
“debt collector” as:
any person who uses any instrumentality of interstate
commerce or the mails in any business the principal
purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or
indirectly, debts owed or due or asserted to be owed or
due another. . . . For the purpose of section 1692f(6)
of this title, such term also includes any person who
uses any instrumentality of interstate commerce or the
mails in any business the principal purpose of which is
the enforcement of security interests.
15 U.S.C. § 1692a(6). The FDCPA regulates debt collectors by
prohibiting harassment or abuse in connection with the collection
of a debt, prohibiting false or misleading representations in

6

connection with the collection of a debt, and prohibiting unfair
or unconscionable means to collect a debt. Id. at §§ 1692d, 1692e,
1692f.
A.
Baye first alleges in Counts I and II of her complaint that
MCM and Midland violated 15 U.S.C. § 1692d, which prohibits debt
collectors from engaging “in any conduct the natural consequence
of which is to harass, oppress, or abuse any person in connection
with the collection of a debt.” Id. § 1692d. “Congress adopted
this general language to enable the courts, where appropriate, to
proscribe … improper conduct which is not specifically addressed
[in § 1692d(1)-(6)].” Masuda v. Thomas Richards & Co., 759 F. Supp.
1456,

1465

(C.D.

Cal.

1991)

(internal

citations

omitted)

(alteration in original). “The statute also sets out examples of
harassment or abuse, including ‘[t]he use of obscene or profane
language,’ and ‘[c]ausing a telephone to ring . . . repeatedly or
continuously with intent to annoy, abuse, or harass any person at
the called number.’” Brooks, 2011 WL 2710026, at *7 (quoting 15
U.S.C.

§§

1692d(2),

1692d(5))

(internal

citation

omitted).

Notably, “[t]he FDCPA does not prohibit a debt collector from
contacting a debtor multiple times in an attempt to collect a
legitimate debt.” Brooks, 2011 WL 2710026, at *7 (citing McVey v.
Bay Area Credit Serv., No. 10-359, 2010 WL 2927388, at *2-3 (N.D.

7

Tex. July 26, 2010) (holding multiple phone calls per week seeking
payment of debt did not constitute harassment or abuse)).
Here, the only thing the plaintiff alleges that the defendants
did was to send “collection letters on multiple occasions about
the same time-barred debt.” In total, the plaintiff received three
collection

letters

from

the

defendants.

However,

the

FDCPA,

implemented through the courts, makes clear that “[t]he FDCPA does
not prohibit a debt collector from contacting a debtor multiple
times in an attempt to collect a legitimate debt.” Brooks, 2011 WL
2710026, at *7. Moreover, letters “represent the least intrusive
means of communicating with debtors.” Masuda, 759 F. Supp. at 165
(holding that forty-eight letters referring to the same debt would
not constitute harassment). Congress’ intent with the FDCPA was to
create a balance “between the interests of consumers in freedom
from harassment and the interests of ethical debt collectors in
freedom from unnecessary restrictions.” Pipiles v. Credit Bureau
of Lockport, Inc., 886 F.2d 22, 26 (2d Cir. 1989); see also Masuda,
759 F. Supp. at 1466. Based on Congress’ objective, “[t]he statute
should not foreclose the most innocuous means of collecting debts
from delinquent debtors.” Masuda, 866 F. Supp. at 1466.
Accordingly, the plaintiff does not, and cannot under the
record before the Court, state a viable claim under 15 U.S.C. §
1692d.

8

B.
The plaintiff next alleges that MCM and Midland violated 15
U.S.C. § 1692e, which prohibits the use of “any false, deceptive,
or misleading representation or means in connection with the
collection of any debt.” In her specific counts alleging violation
of § 1692e, the plaintiff claims the defendants generally violated
§

1692,

but

the

Court

must

turn

to

the

plaintiff’s

factual

allegations to consider under which subsections she attempts to
state a claim for relief. The plaintiff factually alleges that the
“letters are also false and deceptive, because they describe the
benefits

of

partial

payment

without

disclosing

the

legal

consequences of such payment in Louisiana.” The plaintiff further
alleges that the letters are misleading and deceptive because the
letters imply that the defendants are “choosing not to sue, when
in fact [they are] prohibited from doing so.”
Section 1692e(2)(A) provides for a claim if the collectors
make a false representation about “the character, amount, or legal
status of any debt[.]” The plaintiff does not make any factual
allegations that the defendants falsely represented the character
or amount of the debt; therefore, any attempt to make a claim on
that premise is without merit.
Without

plaintiff’s

clarity,

the

Court

assumes

that

the

plaintiff makes a claim based on false representation of the legal
status of the debts. Moreover, the plaintiff’s mention that the
9

defendants

were

deceptive

because

the

letters

implied

the

defendants chose not to take legal action when they were prohibited
from doing so might be an attempt to make a claim under § 1692e(5).
See 15 U.S.C. § 1692e(5) (“The threat to take any action that
cannot legally be taken or that is not intended to be taken.”).
Finally,

the

plaintiff

broadly

alleges

that

the

defendants’

correspondence: “fail[s] to disclose the revivable nature of a
time-barred debt in Louisiana;” and “describe[s] the benefits of
partial payment without disclosing the legal consequences of such
a payment in Louisiana.”
“No case has determined that a debt collector must warn of a
potential

revival

of

a

time-barred

claim,

and

the

relevant

administrative agency has explicitly declined to require such a
warning, precisely because of the danger of consumer confusion.”
Boedicker v. Midland Credit Mgmt., Inc., No. 16-2213, 2016 WL
7492465, at *5 (D. Kan. Dec. 30, 2016).

Instead, the FTC has

approved certain language that collectors can include in its
communications when attempting to collect time-barred debts. See
id. For example, such language provides:
If the debt may still be included in a consumer credit
report, the debt collector should include the statement:
The Law limits how long you can be sued on a debt and
how long a debt can appear on your credit report. Due to
the age of this debt, we will not sue you for it or
report payment or non payment to a credit bureau. If the
debt is both time-barred and no longer reportable, the
debt collector should state: The Law limits how long you

10

can be sued on a debt. Because of the age of your debt,
we will not sue you for it.
Id.

(internal

quotations

and

citation

omitted).

Here,

the

defendants’ language in its collection letters exactly matches
this FTC-approved language.
Furthermore,

“Louisiana

courts

repeatedly

have

held

that

debtors’ partial payments on prescribed debts do not operate as a
renunciation of prescription.” In re Robertson, No. 11-10354, 2014
WL 6967935, at *2 (M.D. La. Bkcy. Dec. 8, 2014) (citing Succession
of Aurianne, 53 So. 2d 901 (La. 1951); Succession of Slaughter, 32
So. 379 (La. 1902)). Renunciation requires a new promise to pay an
old debt, and “[t]he promise to pay must be a declaration which
gives the person to whom it is made the right to expect or claim
the performance of a specific act.” In re Roberston, 2014 WL
6967935, at *2 (internal quotations and citation omitted). Given
Louisiana’s

law

pertaining

to

the

renunciation

of

debt,

the

plaintiff “could not have been misled or deceived into reviving
the statute of limitations by making a partial payment because
[renunciation] was only possible [with] . . . a signed writing .
. . .” Tatis v. Allied Interstate, LLC, No. 16-107, 2016 WL
5660431, at *9 (D.N.J. Sept. 29, 2016). The Court observes that
the defendants did not deceive the plaintiff because any enticement
to pay back the debt did not, and could not under these facts,
amount to a revival of a time-barred debt under Louisiana law.

11

For the foregoing reasons, any attempt the plaintiff makes to
state a claim for violation of § 1692e must fail.
C.
The plaintiff also alleges that MCM and Midland violated 15
U.S.C. § 1692f, which prohibits “unfair or unconscionable means to
collect or attempt to collect any debt.” “Whether conduct qualifies
as unfair or unconscionable is assessed objectively from the point
of view of the ‘least sophisticated consumer.’” Miljkovic v.
Shafritz & Dinkin, P.A., 791 F.3d 1291, 1308 (11th Cir. 2015). To
state a valid claim under § 1692f, the plaintiff must allege that
the debt collector’s conduct was unfair or unconscionable “in
addition

to

being

abusive,

deceptive,

or

misleading.”

Id.

(emphasis in original). Section 1692f’s catch-all nature is not a
free-for-all. Id.
Here, Baye’s only factual allegation that relates to § 1692f
reads: Sending collection letters on multiple occasions about the
same time-barred debt is also an unfair and/or unconscionable
collection practice. In Counts V and VI, the specific counts
related to the alleged violation of § 1692f, the plaintiff only
expounds by stating: [the defendants] violated 15 U.S.C. § 1692f
by attempting to lure Plaintiff into renouncing the prescription
on the Target and Chase Debts, while failing to disclose the legal
consequences of renunciation. Thus, the plaintiff’s allegations
for a violation of § 1692f must fail because she does not state a
12

new basis for a § 1692f claim that is separate and apart from other
FDCPA

alleged

Bureau,

Inc.,

violations.
697

F.

See

Supp.

Winberry

2d

1279,

v.

United

1292

(M.D.

Collection
Ala.

2010)

(explaining that there is “a growing consensus, at least among
district courts, that a claim under § 1692f must be based on
conduct either within the listed provisions, or be based on conduct
which falls outside of those provisions, but which does not violate
another provision of the FDCPA”); see also Baker v. Allstate Fin.
Serv. Inc., 554 F. Supp. 2d 945, 953 (D. Minn. 2008); Foti v. NCO
Fin. Sys., Inc., 424 F. Supp. 2d 643 (S.D.N.Y. 2006).
Not only does Baye fail to allege unconscionable or unfair
means

for

an

additional

claim

under

§

1692f,

her

factual

allegations she does allege as violations of § 1692f have already
been addressed in this Court’s assessment of the validity of her
other

FDCPA

claims.

Therefore,

even

if

her

allegations

did

constitute possible § 1692f violations, for the reasons already
discussed, the claim must fail because the defendants’ letters did
not give rise to a possibility of renunciation under Louisiana
law. See Miljkovic, 791 F.3d at 1803 (“Looking at the conduct that
is alleged, we fail to see how the sworn statement . . . was either
deceitful or an affront to justice.”). Again, here the defendants
do not include any deceitful or unconscionable language in the
letters sent to Baye. The language included in the letters does
not elicit a payment that would revive a time-barred debt, and
13

more

importantly,

the

letters

explicitly

include

FTC-approved

language that there can be no legal action taken on the timebarred debt. Even the least sophisticated consumer cannot be
deceived by language that pointedly states no legal action can be
taken. The plaintiff’s contention that this language regarding no
legal action can be taken was hidden or buried in the letters is
meritless. A cursory review of the letters shows that the language
appears directly below the collector’s signature in normal-sized
font. See Langley v. Weinstein & Riley, P.S., No. 12-1562, 2013 WL
2951057, at *3 (S.D. Tex. June 14, 2013) (“An unsophisticated
consumer is not illiterate and can be expected to read the entire
collection
citation

letter

with

omitted).

some

care.”)

Accordingly,

(internal

without

quotation

any

basis

and
for

unconscionable actions, the plaintiff also fails to state a claim
for a § 1962f violation.
IT IS ORDERED: that the defendants’ motion to dismiss is
hereby

GRANTED.

The

plaintiff’s

claims

are

dismissed

with

prejudice.

New Orleans, Louisiana, August 9, 2017

______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

14