May v. Consumer Adjustment Company, Inc. et al
OPINION, MEMORANDUM AND ORDER - IT IS HEREBY ORDERED that Defendants Motion to Dismiss [Doc. No. 10] is GRANTED. IT IS FURTHER ORDERED that Plaintiff is given 14 days from the date of this Opinion, Memorandum and Order to file an amended complaint.( Amended/Supplemental Pleadings due by 2/19/2015.) Signed by District Judge Henry Edward Autrey on 2/5/15. (KJS)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
COMPANY, INC., et al.,
No. 4:14CV166 HEA
OPINION, MEMORANDUM AND ORDER
This litigation is before the Court having been removed to this Court pursuant to 28
U.S.C. § 1446(a), based on the Court’s federal question jurisdiction, 28 U.S.C. § 1331.
It is now before the Court on Defendants’ Motion to Dismiss. [Doc. No. 10]. Plaintiff has
filed a response in opposition to the motion. [Doc. No. 12]. Defendants have filed a Reply. [Doc.
No. 13]. Plaintiff further filed a supplement to her response. [Doc. No. 17]. For the reasons set
forth below, the Motion is granted.
Facts and Background 1
Plaintiff Donna May filed this putative class action in the Circuit Court of Jefferson
County, alleging that Defendants Consumer Adjustment Company, Inc. and Roger Weiss
violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) by sending
Plaintiff a collection letter for her overdue utility bill that stated the full amount of the debt
without informing her that the amount owed included interest, and that the interest would
continue to accrue until the debt was paid. Plaintiff alleges that Defendants, who are “debt
collectors,” as defined by the FDCPA, attempted to collect a debt that arose from utilities
The recitation of facts is taken from Plaintiffs’ First Amended Complaint and are taken as true for the purposes of
this motion. Such recitation in no way relieves any party from the necessary proof thereof in later proceedings.
provided by Ameren Missouri. Neither party has filed the collection letter in question with the
A defendant may file a motion to dismiss for failure to state a claim upon which relief
can be granted. Fed.R.Civ.P. 12(b)(6). “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.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 570 (2007)). In other words, a plaintiff must plead facts from which the court can draw a
“reasonable inference” of liability. Iqbal, 556 U.S. at 678. The complaint need not contain
“detailed factual allegations” but must contain more than mere “labels and conclusions, and a
formulaic recitation of the elements” or “naked assertion[s]” devoid of “further factual
enhancement.” Twombly, 550 U.S. at 555, 557. An “unadorned, the-defendant-unlawfullyharmed-me accusation” will not suffice. Iqbal, 556 U.S. at 678. “While legal conclusions can
provide the framework of a complaint, they must be supported by factual allegations,” id. at 679,
which “raise a right to relief above the speculative level,” Twombly, 550 U.S. at 555.
In evaluating a motion to dismiss, the court can “choose to begin by identifying pleadings
that, because they are no more than conclusions, are not entitled to the assumption of truth.”
Iqbal, 556 U.S. at 679. Turning to any “well-pleaded factual allegations,” the court should
“assume their veracity and then determine whether they plausibly give rise to an entitlement to
relief.” Id. The court may only consider the initial pleadings. Brooks v. Midwest Heart Grp., 655
F.3d 796, 799 (8th Cir. 2011).
Plaintiff’s sole claim in this action is that Defendants violated § 1692g(a)(1) of the
FDCPA, which requires debt collectors to state the amount of debt in collection letters. Plaintiff
predicates this claim on her interpretation of a line of Seventh Circuit cases. See, e.g., Chuway v.
Nat. Action Fin. Servs., 362 F.3d 944 (7th Cir. 2004); Miller v. McCalla, Raymer, Padrick,
Cobb, Nichols, and Clark, LLC, 214 F.3d 872 (7th Cir. 2000). Under this Court’s interpretation
of the relevant Seventh Circuit cases and, more importantly, the FDCPA, Plaintiff has failed to
state a claim under the FDCPA. Accordingly, the Court will grant Defendants’ Motion and
Plaintiff will be given leave to amend.
“The FDCPA was enacted ‘to eliminate abusive debt collection practices by debt
collectors [and] to insure that those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged.’” McIvor v. Credit Control Servs., 773
F.3d 909, 913 (8th Cir. 2014) (alteration in original) (quoting 15 U.S.C. § 1692(e)). Alleged
violations of the FDCPA are “reviewed utilizing the unsophisticated-consumer standard which is
‘designed to protect consumers of below average sophistication or intelligence without having
the standard tied to the very last rung on the sophistication ladder.’” Strand v. Diversified
Collection Serv., Inc., 380 F.3d 316, 317 (8th Cir. 2004) (quoting Duffy v. Landberg, 215 F.3d
871, 874 (8th Cir. 2000)). This standard is intended to “protect the uninformed or naive
consumer,” while maintaining “an objective element of reasonableness to protect debt collectors
from liability for peculiar interpretations of collection letters.” Id. at 317–18.
Under the FCDPA, debt collectors must send a written validation notice to consumer
debtors within five days of initial communication with the consumer regarding the collection of a
debt. 15 U.S.C. § 1692g(a). The FDCPA requires the written notice to include information such
as: the amount of the debt, 15 U.S.C. § 1692g(a)(1); the name of the creditor, 15 U.S.C. §
1692g(a)(2); “a statement that unless the consumer, within thirty days after receipt of the notice,
disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by
the debt collector[,]” 15 U.S.C. § 1692g(a)(3); “a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed,”
the debt collector will provide verification of the debt, 15 U.S.C. § 1692g(a)(4); and “a statement
that, upon the consumer’s written request within the thirty-day period, the debt collector will
provide the name and address of the original creditor, if different from the current creditor,” 15
U.S.C. § 1692g(a)(5).
The Amount of the Debt
Subsection 1692g(a)(1) of the FDCPA is at issue here. That provision requires debt
collectors to convey to consumers the “amount of the debt.” 15 U.S.C. 1692g(a)(1). The FDCPA
defines “debt” as “any obligation or alleged 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, whether or not such
obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5).
Relying primarily on Miller, Plaintiff alleges that Defendants’ collection letter violated
1692g(a)(1) because the letter listed the full amount of the debt without informing Plaitniff that
the amount owed included interest, and that the interest would continue to accrue until the debt
was paid. The collection letter in Miller listed the unpaid principal balance of the loan and stated:
[T]his amount does not include accrued but unpaid interest, unpaid late charges,
escrow advances or other charges for preservation and protection of the lender’s
interest in the property, as authorized by your loan agreement. The amount to
reinstate or pay off your loan changes daily. You may call our office for complete
reinstatement and payoff figures.
214 F.3d at 875.
The Seventh Circuit found that the letter violated the FDCPA because “[t]he unpaid
principal balance is not the debt; it is only a part of the debt; the [FDCPA] requires; statement of
the debt.” Id. The Seventh Circuit held that the FDCPA requires the letter “to state the total
amount due—interest and other charges as well as principal—on the date the . . . letter was sent.”
Id. The Court agrees that this is a requirement of the FDCPA. The parties do not appear to
dispute that the letter at issue here stated the total amount of debt due on the date the letter was
sent and, thus, met this requirement.
However, Plaintiff bases her claim on a suggestion the Miller court made to debt
collectors. “[I]n an effort to minimize litigation under the [FDCPA],” the Miller court, in the
Seventh Circuit, stated the following “safe harbor” language will be sufficient to satisfy a debt
collector’s duty to state the “amount of the debt” in its collection letters:
“As of the date of this letter, you owe $ [the exact amount due]. Because of
interest, late charges, and other charges that may vary from day to day, the
amount due on the day you pay may be greater. Hence, if you pay the amount
shown above, an adjustment may be necessary after we receive your check, in
which event we will inform you before depositing the check for collection. For
further information, write the undersigned or call 1-800-[phone number].”
Id. at 876. The Miller court noted, “[o]f course we do not hold that a debt collector must use this
form of words to avoid violating the statute; but if he does, and . . . does not add other words that
confuse the message, he will as a matter of law have discharged his duty to state clearly the
amount due.” Id.
Some district courts have interpreted Miller as requiring “safe harbor” language like that
quoted above in order to satisfy § 1692g(a)(1)’s requirement that a debt collection letter state the
“amount of the debt.” See, e.g, Marucci v. Cawley & Bergmann, LLP, 2014 U.S. Dist. LEXIS
172852, at *17 (D.N.J. Dec. 15, 2014) (holding that “debt collectors must disclose the accrual of
interest to satisfy the obligation to ‘state the amount of the debt,’” and collecting cases); Jones v.
Midland Funding, LLC, 755 F. Supp. 2d 393, 397 (D. Conn. 2010) (“[W]hen a debt is accruing
interest, a validation notice fails to correctly state the amount of the debt as required by § 1692g
unless it discloses the fact that interest is accruing and informs the consumer of the applicable
interest rate.”). 2 Other district courts have found that Miller merely offered helpful, though not
required, language. See, e.g., Leffler v. Miller & Steeno, P.C., 2014 U.S. Dist. LEXIS 55297, at *
12 (E.D. Mo. Apr. 22, 2014) (“Miller does not require that a collection letter include ‘safe
harbor’ language advising a consumer that interest may be accruing on a debt. Instead, the
language was suggested as a way to minimize debt collection litigation—a suggestion whose
validity is supported by the present litigation.”); Adlam v. FMS, Inc., 2010 U.S. Dist. LEXIS
33433, at *8 (E.D.N.Y. Apr. 5, 2010) (“The FDCPA does not require that a debt collection letter
warn a consumer that the debt may increase.”).
In Chuway, the Seventh Circuit clarified that, in its view, when the full amount of debt
that is due on the date of the collection letter is listed on the letter, and represents the entire debt
which the debt collector is trying to collect, § 1692g(a)(1) is satisfied. 362 F.3d at 949. However,
the Chuway court further explained that when “the debt collector is trying to collect the listed
balance plus the interest running on it or other charges, he should use the safe-harbor language of
Miller.” Id. (emphasis added). There was no dispute in Chuway that the “entire debt,” which the
debt collector was hired to collect was the amount listed in the letter. Id. at 946. The collection
letter listed the balance due as of the date of the letter and stated, in pertinent part:
[Capital One Services, Inc.] has assigned your delinquent account to our agency
for collection. Please remit the balance listed above in the return envelope
provided. To obtain your most current balance information, please call 1-800-9169006. Our friendly and experienced representatives will be glad to assist you and
answer any questions you may have.
Id. at 947.
Plaintiff submitted with her supplement an opinion from the Jefferson County Circuit Court holding that Miller
requires a collection letter to use “safe harbor” language in order to satisfy § 1692g(a)(1) of the FDCPA. [Doc. No.
17-3]. Plaintiff also submitted with her original response an order from another Judge in the Jefferson County
Circuit Court, denying, without a reasoned opinion, a motion to dismiss a FDCPA case predicated on the same
grounds. This Court has given these state trial court interpretations of the FDCPA, a federal statute, respectful
consideration. See Honeywell, Inc. v. Minnesota Life & Health Ins. Guar. Ass’n, 110 F.3d 547, 552 (8th Cir. 1997)
(noting that, while “federal courts ‘accord respectful consideration and great weight to the views of the State’s
highest court,’” federal courts “‘cannot surrender the duty to exercise [their] own judgment’” when considering a
federal question) (emphasis added) (quoting General Motors Corp. v. Romein, 503 U.S. 181, 187 (1992)).
The Chuway court noted that if the collection letter had stopped after the sentence “Please
remit the balance listed above in the return envelope provided,” it would have been compliant
with § 1692g(a)(1), notwithstanding the fact that the letter did not contain the “safe harbor”
language from Miller, or any reference to interest whatsoever. Id.; see also Exhibits A and B to
Complaint, Chuway v. Nat’l Action Fin. Servs., No. 02-cv-1247 (N.D. Ill. Feb. 21, 2002) (ECF
No. 1 at 6–7) (collection letter at issue in Chuway). The court in Chuway distinguished Miller on
the grounds that the letter in Miller violated the FDCPA by listing only the “unpaid principal
balance,” in contrast to the letter in Chuway, which appropriately listed the “entire debt that the
[debt collector] was hired to collect.” Id. at 947. The court explained:
The credit card company, which is to say the creditor, not the debt collector, may
charge the plaintiff interest on the $367.42 between when that debt accrued and
when the plaintiff finally pays and may add the interest accruing in the interim to
the plaintiff’s current balance. But that would not be a part of “the amount of the
debt” for which the defendant was dunning her, and hence it would not precipitate
a violation by the defendant. It would be as if between when the $367.42 debt was
turned over to the defendant for collection and when the plaintiff received the
dunning letter, the plaintiff had defaulted on a separate debt that she owed the
credit card company. The fact that the defendant didn’t add that to the debt for
which it had been retained to dun the plaintiff would not result in a violation of
the statute. Quite the contrary, for a debt collector has no authority to collect debts
that it has not been authorized by a creditor to collect; nor was the defendant
trying to do that.
Thus, under the Seventh Circuit case law upon which Plaintiff relies, a debt collector
does not violate § 1692g(a)(1) of the FDCPA by listing the total amount due as of the date of the
letter and failing to identify some of it as interest that has accrued on the original principal.
Further, even assuming, arguendo, that the Court were to find that § 1692g(a)(1) requires the
“safe harbor” language from Miller when the debt collector seeks both the amount listed on the
letter and the interest accruing on that amount from the date the letter is sent, 3 Plaintiff’s
The Court makes no holding with regard to this issue at this stage of the proceedings.
Complaint would fail to state a claim. Although Plaintiff alleges that she “discovered after
review of her final bill from Ameren that the amount Defendants attempted to collect was higher
than the amount of the final bill,” [Doc. No. 1-1 at ¶ 14], and that “Defendants[’] June 19 letter
was thus false and misleading because it did not disclose that interest was accruing and would
continue to accrue on Plaintiff’s balance,” [id. at ¶ 15], Plaintiff does not allege that Defendants
were attempting to collect interest beyond what was factored into the amount due as listed in the
collection letter. For example, Plaintiff alleges that “Defendants’ collection letter did not contain
any safe harbor language that explained to Plaintiff that due to interest, late charges, and other
charges that may vary from day to day, the amount due on the day Plaintiff would pay might be
greater than the amount due contained in the collection letter.” [Id. at ¶ 16]. However, Plaintiff
does not allege that Defendants (the debt collectors), as opposed to Ameren (the creditor), were
seeking to collect this additional amount of interest and/or charges that Plaintiff might have to
pay. See Chuway, 362 F.3d at 947.
Accordingly, even under the interpretation of the Seventh Circuit standard upon which
Plaintiff relies, Plaintiff has failed to state a claim for relief for a violation of § 1692g(a)(1) of the
Based on the foregoing, the Court grants Defendants’ Motion to Dismiss. Plaintiff will be
given leave to file an amended complaint.
IT IS HEREBY ORDERED that Defendants Motion to Dismiss [Doc. No. 10] is
IT IS FURTHER ORDERED that Plaintiff is given 14 days from the date of this
Opinion, Memorandum and Order to file an amended complaint.
Dated this 5th day of February, 2015.
HENRY EDWARD AUTREY
UNITED STATES DISTRICT JUDGE
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