Tschudin v. Brumbaugh & Quandahl, P.C., LLO

Filing 16

MEMORANDUM AND ORDER - IT IS ORDERED: Defendant's Motion to Dismiss (Filing 6 ) pursuant to Fed. R. Civ. P. 12(b)(6) is granted as to Plaintiffs claim under the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq., and su ch claim is dismissed with prejudice. Plaintiff's state-law invasion of privacy claim is dismissed without prejudice pursuant to 28 U.S.C. § 1367(c)(3). Defendant's Motion to Strike (Filing 11 ) exhibits (Filing 10 ) filed with Pla intiff's response to Defendants Motion to Dismiss is denied as moot, as the court did not consult or review such exhibits in disposing of Defendant's Motion to Dismiss. Judgment shall be entered by separate document. Ordered by Senior Judge Richard G. Kopf. (TCL)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
ARLEN TSCHUDIN,
Plaintiff,
v.
BRUMBAUGH & QUANDAHL,
P.C., LLO,
Defendant.

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8:14CV299

MEMORANDUM
AND ORDER

Plaintiff Arlen Tschudin alleges that after he defaulted on a student loan
obtained in 2005, the debt was transferred for collection to defendant Brumbaugh &
Quandahl, P.C., LLO (“B & Q”), a law firm. In October 2013, B & Q filed a
collection action against Plaintiff in the County Court of Madison County, Nebraska.
(Filing 1, Complaint ¶¶ 5, 7, 8, 10, 11.) Plaintiff alleges that attached to B & Q’s state
court complaint were exhibits that contained Plaintiff’s loan account number, his date
of birth, and his social security number. (Filing 1, Complaint ¶¶ 12, 13.) B & Q
admits that it “inadvertently failed to redact the loan number, [Plaintiff’s] social
security number, and/or date of birth.” (Filing 7, Def.’s Br. Supp. Mot. Dismiss at
CM/ECF p. 1.)
Plaintiff alleges that B & Q’s failure to redact this information from the state
court filings constituted a violation of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692 et seq., and invasion of privacy under Nebraska law.
B & Q has filed a motion to dismiss Plaintiff’s complaint pursuant to Fed. R. Civ. P.
12(b)(6). (Filing 6.)

Standard of Review
To survive a motion to dismiss based on Fed. R. Civ. P. 12(b)(6), “a complaint
must contain sufficient factual matter, accepted as true, to state a claim to relief that
is plausible on its face. A claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (internal citations and quotations omitted). This “plausibility standard” is not
one of probability, “but it asks for more than a sheer possibility that a defendant has
acted unlawfully. 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. (internal citations and quotations omitted).
FDCPA Claim
Plaintiff asserts that B & Q’s failure to redact his loan account number, date of
birth, and social security number in state-court pleadings violated 15 U.S.C. § 1692d
(“A debt collector1 may not engage in any conduct the natural consequence of which
is to harass, oppress, or abuse any person in connection with the collection of a
debt.”); 15 U.S.C. § 1692e (“A debt collector may not use any false, deceptive, or
misleading representation or means in connection with the collection of any debt.”);
and 15 U.S.C. § 1692f (“A debt collector may not use unfair or unconscionable means
to collect or attempt to collect any debt.”), as well as Rule of the Supreme Court/Court
of Appeals of the State of Nebraska § 6-1464 (2014), which governs the protection of
personal and financial information in civil county court records.
To support his claim, Plaintiff primarily relies upon a seven-page list of
examples illustrating that “every branch of government [and] a broad spectrum of the
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The parties do not dispute that B & Q, a law firm, qualifies as a “debt
collector” within the meaning of the FDCPA.
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private sector[] uniformly agree[] that highly sensitive personal identifiers must not
be publicly disclosed.” (Filing 9, Pl.’s Mem. Opp’n Def.’s Mot. Dismiss at CM/ECF
p. 8-16.) Plaintiff asserts that not finding a violation of the FDCPA in this case would
“fl[y] in the face of regulatory, legal, and social realities facing a country that has been
flooded with identity theft.” (Id. at CM/ECF p. 20.)2 However, the fact that many
people, entities, and organizations abhor disclosure of personal information without
permission does not mean the FDCPA creates a cause of action for such disclosure.
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.” 15 U.S.C. § 1692(e). Congress sought to prevent
abusive practices including “threats of violence; . . . the publishing of
‘shame lists’; harassing or anonymous telephone calls; impersonating a
government official or attorney; . . . obtaining information under false
pretenses; [and] collecting more than is legally owing.” S. Rep. No.
95–382, reprinted in 1977 U.S.C.C.A.N. 1695, 1698 (1977).
McIvor v. Credit Control Svs., Inc., No. 14-1164, ___ F.3d ___, 2014 WL 6805380
(8th Cir. Dec. 4, 2014).
What B & Q claims was its inadvertent failure to redact certain information
from court pleadings in a state debt-collection action against Plaintiff simply cannot
be construed as a “false, deceptive, or misleading representation” or “unfair or

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Plaintiff cites one case to support his argument, Douglass v. Convergent
Outsourcing, 765 F.3d 299 (3rd Cir. 2014), which held that a debt collector’s
disclosure of a debtor’s account number through the transparent window of an
envelope that contained a collection letter violated § 1692f(8) of the FDCPA, which
limits the language and symbols a debt collector may place on envelopes it sends to
consumers. Douglass is distinguishable because the conduct at issue here is not
“unfair” or “unconscionable” direct communication with the debtor, but rather, the
defendant’s filing of relevant, necessary—but mistakenly unredacted—documents
attached to a complaint in a legitimate lawsuit against the debtor.
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unconscionable means” in connection with the collection of a debt, nor is it
“conduct[,] the natural consequence of which is to harass, oppress, or abuse” the
plaintiff. See 15 U.S.C. §§ 1692d, 1692e, 1692f. The few courts addressing similar
claims in FDCPA lawsuits agree. See Feltman v. Blatt, Hasenmiller, Leibsker &
Moore, LLC, No. 06C2379, 2008 WL 5211024 (N.D. Ill. Dec. 11, 2008) (dismissing
as time-barred plaintiff’s claim that defendants violated § 1692d of FDCPA by
including plaintiff’s social security number in exhibits in state-court debt-collection
lawsuit, but “question[ing]” whether § 1692d contemplated such a claim, stating:
“[U]nder § 1692d, we do not think that filing an exhibit in a lawsuit is conduct, the
natural consequence of which is to harass, abuse or oppress. The document containing
[plaintiff’s] social security number was a copy of the application for credit at issue in
the case, was relevant to the case, and was legitimately filed. . . . [T]his is simply not
the type of behavior contemplated by § 1692d.”); Pittenger v. John Soliday Financial
Group, LLC, No. 1:09-CV-00563, 2010 WL 1856224 (N.D. Ohio May 10, 2010)
(defendants did not violate FDCPA by disclosing plaintiff-debtor’s social security
number, birth date, and other personal information in attachment to complaint filed
in state court collection action, stating that defendants “filed a relevant exhibit in a
legitimate lawsuit that happened to contain personal information. This does not
constitute conduct, the natural consequence of which is to harass, abuse or oppress,
within the meaning of the FDCPA.”); Elyazidi v. Suntrust Bank, No. DKC 13-2204,
2014 WL 824129 (D. Md. Feb. 28, 2014) (failure to redact social security number
from documents attached to bill of particulars in state debt-collection action did not
constitute “unfair and unconscionable” debt-collection practice under 15 U.S.C. §
1692f; citing Pittenger and Feltman and noting that “the disclosure was likely an
oversight that was cured by redaction of the relevant documents”).
Therefore, the defendant’s Rule 12(b)(6) motion to dismiss Plaintiff’s FDCPA
claim will be granted. Further, the FDCPA claim will be dismissed with prejudice
because amendment of the complaint cannot create a cause of action under the
FDCPA where none exists.

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State-Law Invasion of Privacy Claim
“When a district court dismisses federal claims over which it has original
jurisdiction, the balance of interests usually ‘will point toward declining to exercise
jurisdiction over the remaining state law claims.’” In re Canadian Import Antitrust
Litigation, 470 F.3d 785, 792 (8th Cir. 2006) (quoting Carnegie-Mellon Univ. v.
Cohill, 484 U.S. 343, 350 n.7 (1988)). See also Gibson v. Weber, 433 F.3d 642, 647
(8th Cir. 2006) (“Congress unambiguously gave district courts discretion in 28 U.S.C.
§ 1367(c) to dismiss supplemental state law claims when all federal claims have been
dismissed . . . .”). Indeed, the Court of Appeals has “stress[ed] the need to exercise
judicial restraint and avoid state law issues wherever possible.” Gregoire v. Class,
236 F.3d 413, 420 (8th Cir. 2000) (quoting Condor Corp. v. City of St. Paul, 912 F.2d
215, 220 (8th Cir. 1990)).
Therefore, I shall dismiss Plaintiffs’s state-law invasion of privacy claim
without prejudice. See Labickas v. Arkansas State Univ., 78 F.3d 333, 334-35 (8th
Cir. 1996) (per curiam) (while district court had discretion to dismiss state-law claims,
such claims should have been dismissed without prejudice).
IT IS ORDERED:
1.
Defendant’s Motion to Dismiss (Filing 6) pursuant to Fed. R. Civ. P.
12(b)(6) is granted as to Plaintiff’s claim under the Fair Debt Collection Practices Act,
15 U.S.C. §§ 1692 et seq., and such claim is dismissed with prejudice;
2.
Plaintiff’s state-law invasion of privacy claim is dismissed without
prejudice pursuant to 28 U.S.C. § 1367(c)(3);
3.
Defendant’s Motion to Strike (Filing 11) exhibits (Filing 10) filed with
Plaintiff’s response to Defendant’s Motion to Dismiss is denied as moot, as the court

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did not consult or review such exhibits in disposing of Defendant’s Motion to
Dismiss;
4.

Judgment shall be entered by separate document.

DATED this 18th day of December, 2014.
BY THE COURT:
Richard G. Kopf
Senior United States District Judge

*This opinion may contain hyperlinks to other documents or Web sites. The
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