GRANDOVSKY v. HAYT, HAYT & LANDAU, LLC
OPINION filed. Signed by Judge Anne E. Thompson on 11/19/2015. (kas, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BENYAMIN GRANDOVSKY, on behalf of
himself and all others similarly situated,
Civ. No. 15-6451
HAYT, HAYT & LANDAU, LLC,
This matter is before the Court upon Defendant Hayt, Hayt & Landau LLC’s Motion to
Dismiss. (ECF No. 8). Plaintiff Benyamin Grandovsky opposes this Motion. (ECF No. 9). The
Court has decided the Motion based on the written submissions of the parties and without oral
argument pursuant to Federal Rule of Civil Procedure 78(b). For the reasons stated below,
Defendant’s Motion is granted, and Plaintiff’s Complaint is dismissed with prejudice.
Plaintiff’s allegations are as follows: Plaintiff allegedly owes a personal credit card debt
to Capital One Bank USA, N.A. (Pl.’s Compl. ¶¶ 14-15, ECF No. 1). The debt is comprised of
$998.11 of a previous balance, and $17.09 in interest and other charges, for a total of $1,015.20.
(Id. ¶ 27). Plaintiff does not admit or deny owing the debt. Capital One contracted with
Defendant to collect the debt. (Id. ¶ 20). Defendant is a “debt collector” as defined by 15 U.S.C.
§ 1692a(6), part of the Fair Debt Collection Practices Act (“FDCPA”). (Id. ¶ 23). Defendant
sent Plaintiff a “communication” to collect the debt that is subject to the FDCPA. (Id. ¶ 23).
This “communication” is a letter dated August 28, 2014. (Id.) The letter breaks down
Plaintiff’s debt as follows:
(Id. ¶ 26). Plaintiff states that this presentation of the debt would confuse, deceive, or mislead
the typical least sophisticated consumer, because the “Unpaid Balance” line includes both the
principal and previously accrued interest, but a consumer might think there is no interest
included, since there is a separate “Interest” line just below the “Unpaid Balance” line. (Id. ¶
32). Plaintiff does not allege that any interest has been added since Defendant acquired the debt
that should be displayed on the “Interest” line.
Plaintiff filed a Complaint on August 27, 2015, alleging that Defendant violated § 1692e
of the FDCPA, as well as §§ 1692f and 1692g. (ECF No. 1). Defendant moved to dismiss
Plaintiff’s Complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim
upon which relief could be granted. (ECF No. 8).
When considering a Rule 12(b)(6) motion, a district court must conduct a three-part
analysis: “First, the court must ‘take note of the elements a plaintiff must plead to state a claim.’”
Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011) (quoting Ashcroft v. Iqbal, 556 U.S. 662,
675 (2009)). Second, the court must accept all of the plaintiff’s well-pleaded factual allegations
as true and construe the complaint in the light most favorable to the plaintiff, though the court
should disregard legally conclusory allegations. Fowler v. UPMC Shadyside, 578 F.3d 203,
210–11 (3d Cir. 2009). Finally, the court must determine whether the “facts alleged in the
complaint are sufficient to show the plaintiff has a ‘plausible claim for relief.’” Id. at 211. It is
not enough for a pleading to offer “only ‘labels and conclusions’ or a ‘formulaic recitation of the
elements of a cause of action’” to survive a motion to dismiss; the plaintiff’s allegations, taken
together, must support a plausible claim under each cause of action. Id. at 210.
Congress passed the FDCPA in order to eliminate abusive debt collection practices.
Jensen v. Pressler & Pressler, 791 F.3d 413, 418 (3d Cir. 2015). The Act was “designed to give
debtors reliable information so that they can make informed decisions about how to address
debts.” Id. at 421. Section 1692e of the Act prohibits debt collectors from using “any false,
deceptive, or misleading representation or means in connection with the collection of any debt.”
Since the FDCPA is a remedial statute, the Third Circuit construes the language of the FDCPA
broadly. Brown v. Card Serv. Ctr., 464 F.3d 450, 453 (3d Cir. 2006).
When deciding if a debt collection practice violates the FDCPA, the Third Circuit and
other courts use “the least sophisticated debtor” standard. This standard is lower than that of a
“reasonable debtor,” but it still presumes that the debtor reads collection notices with care.
Jensen, 557 F.3d at 418. The standard is objective, meaning that a plaintiff does not need to
prove he or she was actually mislead or deceived, but rather that the least sophisticated debtor
could be misled or deceived by a collection practice. Id. at 419.
The Third Circuit has stated that a collection letter is deceptive in violation of § 1692e
“when it can reasonably be read to have two or more different meanings, one of which is
inaccurate.” Brown, 464 F.3d at 455 (citation omitted). Plaintiff relies heavily on this language
in his brief, arguing that the “Interest $.00” line could be inaccurately read to mean that no
interest has ever been charged to Plaintiff’s account, and therefore the letter is deceptive. (Pl.’s
Mem. in Opp’n 6-8, ECF No. 9). However, the Third Circuit recently clarified that letters with
at least two different meanings are only deceptive if the ambiguous language in the letters is
material. In Jensen v. Pressler & Pressler, 791 F.3d 413 (3d Cir. 2015), the Third Circuit
implicitly adopted this materiality requirement from a Seventh Circuit case called Hahn v.
Triumph Partnerships LLC, 557 F.3d 755 (7th Cir. 2009). Judge Easterbrook stated in Hahn that
“[a] statement cannot mislead unless it is material, so a false but non-material statement is not
actionable.” 557 F.3d at 758. Judge Easterbrook concluded specifically that “reporting
[previously accrued] interest in one line item rather than another” in a collection letter was not a
material fact, and therefore could not be a basis for any federal claim. Id. at 757.
In Jensen, the Third Circuit described the materiality requirement laid out in Hahn, and
then stated “[i]t is therefore clear that the materiality requirement is simply another way of
phrasing the legal standard we already employ when analyzing claims under § 1692e.” 791 F.3d
at 421. The Court went on to conclude that adopting a materiality requirement for claims under
§ 1692e was consistent with Congress’ intent, since “[a] debtor simply cannot be confused,
deceived, or misled by an incorrect statement unless it is material.” Id. Lastly, the Court
explained that a statement in a collection letter is only material “if it is capable of influencing the
decision of the least sophisticated debtor.” Id.
Plaintiff has not pled any facts to show that including the previously accrued interest on
the “Unpaid Balance” line was material. 1 Plaintiff does not allege that placing the previously
accrued interest on the “Unpaid Balance” line affected his decision-making process, or that it
Plaintiff points to Mushinsky v. Nelson, Watson & Assoc., LLC, 642 F. Supp. 2d 470 (E.D. Pa.
2009) to support his position. In Mushinsky, a factually analogous case, the Court denied the
defendant’s motion for judgment on the pleadings because the “principal” line (which included
previously accrued interest) could be read incorrectly to exclude such interest. 642 F. Supp. 2d
at 473. The Court did not do a materiality analysis, noting “no court in our Circuit has relied on”
Hahn. Id. at 472 n.2. However, Mushinsky was decided over six years ago, before Jensen held
that Hahn’s materiality requirement was part of the Third Circuit’s existing “least sophisticated
debtor” standard. See Jensen, 791 F.3d at 421.
could affect the decisions of the least sophisticated debtor. Nor is it apparent how Plaintiff could
allege any such facts. What previous charges make up the underlying debt is not of any apparent
relevance given that the total due and currently accruing interest ($.00) are accurately reported in
the letter. See Hahn, 557 F.3d at 757 (noting that “[a] dollar due is a dollar due” and listing
previously accrued interest in this way “harms no one and . . . may well assist some people.”).
Therefore, Plaintiff’s Complaint fails to state a claim under § 1692e of the FDCPA, and this
Court will not grant leave to amend.
Plaintiff does not specifically respond to Defendant’s arguments to dismiss Plaintiff’s
claims under §§ 1692f and 1692g. 15 U.S.C. § 1692f prohibits debt collectors from using
“unfair or unconscionable means” in debt collection attempts. Examples of prohibited practices
are soliciting postdated checks, or getting a debtor to accept collect calls by concealing the true
purpose of the debt collector’s call. 15 U.S.C. § 1692f(3); id. § 1692f(6). Plaintiff does not
allege that Defendant’s conduct was “unfair or unconscionable” along the lines of the examples
in the statute. Plaintiff simply makes a conclusory statement that Defendant violated § 1692f by
having an “Interest” line that read “$.00” and including Plaintiff’s previously accrued interest in
an “Unpaid Balance” line. (Pl.’s Compl. ¶ 38, ECF No. 1). Such conclusory statements may not
survive a motion to dismiss under Rule 12(b)(6). Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
15 U.S.C. § 1692g requires debt collectors to send debtors a letter stating the amount of
their debt. Plaintiff alleges that Defendant inaccurately stated the amount Plaintiff’s debt by
including the previously accrued interest on the “Unpaid Balance” line. (Pl.’s Compl. ¶¶ 45-46,
ECF No. 1). Plaintiff does not allege that Defendant misstated the amount Plaintiff owes. An
allegation that “the least sophisticated consumer [would] be confused and misled that there was
no interest included in the amount sought, when in fact there was such interest included in the
Unpaid Balance,” (Pl.’s Compl. ¶ 48), is not an allegation that the “amount of the debt,” clearly
stated in the “Unpaid Balance” line is incorrect. Therefore, Plaintiff’s claim under 15 U.S.C. §
1692g must be dismissed for failure to state a claim upon which relief can be granted.
For the foregoing reasons, Defendant’s Motion to Dismiss will be granted. An
appropriate order will follow.
/s/ Anne E. Thompson
ANNE E. THOMPSON, U.S.D.J.
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