Bryan v. I.C. System, Inc.

Filing 33

ORDER ADOPTING REPORT AND RECOMMENDATIONS - For the reasons set forth herein, Magistrate Judge Brown's 8/28/2017 Report and Recommendation in its entirety, and: (i) Defendant's motion for judgment on the pleadings pursuant to Fed R. Civ. P. 12(c) is granted, and (ii) Plaintiff's motion seeking leave to file an amended complaint pursuant to Fed. R. Civ. P. 15 is denied. The Clerk of the Court is directed to enter judgment in favor of Defendant and to close this case. SO Ordered by Judge Sandra J. Feuerstein on 9/28/2017. (Tirado, Chelsea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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ELIZABETH BRYAN, on behalf of herself
FILED 
and a class,
ORDER
CLERK 
15-cv-6984 (SJF)(GRB)
Plaintiff,

3:08 pm, Sep 28, 2017

-againstU.S. DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
LONG ISLAND OFFICE 

I.C. SYSTEM, INC.,
Defendant.
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FEUERSTEIN, District Judge:

Plaintiff Elizabeth Bryan (“Plaintiff” or “Bryan”) commenced this action against
Defendant I.C. System, Inc. (“Defendant” or “I.C. System”), on behalf of herself and a class,
seeking to recover for Defendant’s alleged violation of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq. See Docket Entry (“DE”) [1]. On August 19, 2016, Plaintiff
filed a motion seeking leave to file an amended complaint pursuant to Fed. R. Civ. P. 15, and on
September 19, 2016, Defendant filed a motion for judgment on the pleadings pursuant to Fed. R.
Civ. P. 12(c). DE [18], [22]. The Court referred the parties’ motions to Magistrate Judge Gary R.
Brown for a Report and Recommendation as to whether they should be granted, and, in an August
28, 2017 Report and Recommendation (the “Report”), Magistrate Judge Brown recommended: (i)
that Defendant’s motion for judgment on the pleadings be granted; and (ii) that Plaintiff’s motion
seeking leave to file an amended complaint be denied. DE [30]. On September 11, 2017, Plaintiff
filed a timely objection to Magistrate Judge Brown’s Report, to which Defendant replied on
September 25, 2017. DE [31], [32]. For the reasons set forth herein, Magistrate Judge Brown’s
Report is adopted in its entirety, and: (i) Defendant’s motion for judgment on the pleadings is
granted; and (ii) Plaintiff’s motion seeking leave to file an amended complaint is denied.

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I.

LEGAL STANDARD
A. Review of a Magistrate Judge’s Report
Pursuant to Fed. R. Civ. P. 72, a magistrate judge may conduct proceedings on dispositive

pretrial matters without the consent of the parties. See Fed. R. Civ. P. 72(b); Marcella v. Capital
Dist. Physicians’ Health Plan, Inc., 293 F.3d 42, 46 (2d Cir. 2002) (“A district court may refer,
without the parties’ consent, both nondispositive and dispositive motions to a magistrate judge for
decision or recommendation, respectively.”).

In reviewing a magistrate judge’s report and

recommendation, the district court may accept, reject, or modify, in whole or in part, the magistrate
judge’s findings and recommendations. DeLuca v. Lord, 858 F. Supp. 1330, 1345 (S.D.N.Y.
1994); see also 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3). Any portion of a report and
recommendation on a dispositive matter to which a timely objection has been made is reviewed de
novo. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). However, “[o]bjections to a report must be
specific and clearly aimed at particular findings in the magistrate’s proposal.” Frankel v. City of
New York, No. 06-CV-5450, 2009 WL 465645, at *2 (S.D.N.Y. Feb. 25, 2009). Therefore,
“[w]hen a party makes only conclusory or general objections, or simply reiterates the original
arguments, the Court will review the report strictly for clear error.” Id. Similarly, where there are
no specific written objections to a magistrate judge’s report and recommendation, the district court
may accept the findings contained therein as long as the factual and legal bases supporting the
findings are not clearly erroneous. Thomas v. Arn, 474 U.S. 140, 150, 106 S. Ct. 466, 472 (1985).
B.

Fed. R. Civ. P. 12(c) Legal Standard

Pursuant to Fed. R. Civ. P. 12(c), “[a]fter the pleadings are closed—but early enough not
to delay trial—a party may move for judgment on the pleadings.” Fed. R. Civ. P. 12(c). In
deciding a motion for judgment on the pleadings, “a court applies the familiar standard applicable

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to a Rule 12(b)(6) motion.” Polanco v. NCO Portfolio Mgmt., Inc., 930 F. Supp. 2d 547, 549
(S.D.N.Y. 2013) (citing Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir. 2010)). Therefore, to
survive a motion pursuant to Rule 12(c), 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, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570, 127 S. Ct. 1955, 1974 (2007)). A claim is considered plausible on its face “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, 556 U.S. at 678, 129 S. Ct. at 1949. The court must
“accept as true all factual allegations set forth in the complaint and draw all reasonable inferences
in favor of the plaintiff.” Polanco, 930 F. Supp. 2d at 550 (citing Swierkiewicz v. Sorema N.A.,
534 U.S. 506, 508 n.1, 122 S. Ct. 992, 995 (2002)). In deciding a motion for judgment on the
pleadings, “the court considers the complaint, the answer, any written documents attached to them,
and any matter of which the court can take judicial notice for the factual background of the case.”
L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 422 (2d Cir. 2011) (internal quotation omitted).
C. Fed. R. Civ. P. 15 Legal Standard
Motions to amend pleadings are governed by Fed. R. Civ. P. 15, which provides that “[t]he
court should freely give leave [to amend] when justice so requires.” Fed. R. Civ. P. 15(a)(2); see
also Amaya v. Roadhouse Brick Oven Pizza, Inc., 285 F.R.D. 251, 253 (E.D.N.Y. 2012) (“A court
should freely give leave [to amend] when justice so requires and such leave is in the court’s
discretion.”) (internal quotation omitted). Courts interpret Fed. R. Civ. P. 15 liberally. See Assam
v. Deer Park Spring Water, Inc., 163 F.R.D. 400, 404 (E.D.N.Y. 1995) (“Federal Rule of Civil
Procedure 15(a) dictates that motions to amend complaints be liberally granted absent a good
reason to the contrary . . . .”). Generally, leave to amend a complaint should only be denied “if

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there is delay, bad faith, futility, or prejudice to the non-moving party.” Hosking v. New World
Mortg., Inc., 602 F. Supp. 2d 441, 445 (E.D.N.Y. 2009) (citing Foman v. Davis, 371 U.S. 178,
182, 83 S. Ct. 227, 230 (1962)). An amendment is futile if “the proposed claim could not withstand
a Fed. R. Civ. P 12(b)(6) motion to dismiss.” Salazar v. Browne Realty Assocs., L.L.C., 796 F.
Supp. 2d 378, 383 (E.D.N.Y. 2011) (citing Lucente v. IBM Corp., 310 F.3d 243, 258 (2d Cir.
2002)); see also Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006) (“The Court . . .
reviews proposed amendments for futility pursuant to Rule 12(b) . . . .”). Therefore, a proposed
amended complaint must “contain enough allegations of fact to state a claim for relief that is
‘plausible on its face.’” Mendez v. U.S. Nonwovens Corp., 2 F. Supp. 3d 442, 451 (E.D.N.Y. 2014)
(quoting Bell Atl. Corp., 550 U.S. at 570, 127 S. Ct. at 1974).
II.

OBJECTIONS
In her objection to the Report, Plaintiff argues that Magistrate Judge Brown “erred in

holding that defendant’s misrepresentation that it held an A+ [Better Business Bureau] rating was
not actionable under the FDCPA as a matter of law.” See Plaintiff’s Objection to Magistrate
Judge’s Report and Recommendation (“Pl.’s Obj.”), DE [31], at 6. According to Plaintiff, “[t]he
BBB rating is material because if the consumer settles a debt with the collector, an A+ rating
indicates that the collector is not going to take the consumer’s money and send the debt back to its
principal without noting that the consumer’s payment was in full satisfaction of the debt.” Id. at
2-3. Bryan further argues that “the amended complaint did explain the importance of the debt
collector’s BBB rating.” Id. at 3. Applying the standards outlined above, and for the reasons set
forth herein, Magistrate Judge Brown’s Report is adopted in its entirety.

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A. FDCPA Standard
Congress enacted the FDCPA “with the aim of eliminating abusive practices in the debt
collection industry, and also sought to ensure that ‘those debt collectors who refrain from using
abusive debt collection practices are not competitively disadvantaged.’” Jacobson v. Healthcare
Fin. Servs., Inc., 516 F.3d 85, 90 (2d Cir. 2008) (quoting 15 U.S.C. § 1692(e)). The FDCPA
prohibits, inter alia, the use of “any false, deceptive, or misleading representation[s] or means in
connection with the collection of any debt.” 15 U.S.C. § 1692e. In analyzing whether a
communication violates the FDCPA, “courts apply an objective standard based on the ‘least
sophisticated consumer.’” Dewees v. Legal Servicing, LLC, 506 F. Supp. 2d 128, 132 (E.D.N.Y.
2007) (quoting Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir. 1993)). The “least sophisticated
consumer” standard is “measured by how the ‘least sophisticated consumer’ would interpret the
notice received from the debt collector.” DeSantis v. Comp. Credit, Inc., 269 F.3d 159, 161 (2d
Cir. 2001) (quoting Russell v. Equifax A.R.S., 74 F.3d 30, 34 (2d Cir. 1996)). Therefore, courts
“must analyze ‘collection letters from the perspective of a debtor who is uninformed, naïve, or
trusting, but is making basic, reasonable and logical deductions and inferences.” Dewees, 506 F.
Supp. 2d at 132 (quoting Spira v. Ashwood Fin., Inc., 358 F. Supp. 2d 150, 156 (E.D.N.Y. 2005)).
Ultimately, whether a communication violates the FDCPA depends upon “whether the notice fails
to convey the required information clearly and effectively and thereby makes the least
sophisticated consumer uncertain as to the meaning of the message.” Weiss v. Zwicker & Assocs.,
P.C., 664 F. Supp. 2d 214, 216 (E.D.N.Y. 2009) (internal quotation omitted).
Pursuant to 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.” 15 U.S.C. §
1692e. Although 15 U.S.C. § 1692e identifies certain conduct that is considered “false, deceptive,

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or misleading,” the list is non-exhaustive. Id.; see also Tsenes v. Trans-Cont’l Credit & Collection
Corp., 892 F. Supp. 461, 464 (E.D.N.Y. 1995) (“The sixteen subsections of § 1692e set forth a
nonexhaustive list of practices that fall within this ban.”). Relevant here, one such example of
false, deceptive, or misleading conduct proscribed by the FDCPA is “[t]he use of any false
representation or deceptive means to collect or attempt to collect any debt or to obtain information
concerning a consumer.” 15 U.S.C. § 1692e(10). However, the Second Circuit has observed that,
“[a]lthough it is clear that Congress painted with a broad brush in the FDCPA, not every
technically false representation by a debt collector amounts to a violation of the FDCPA.”
Gabriele v. Am. Home Mortg. Servicing, Inc., 503 F. App’x 89, 94 (2d Cir. 2012) (internal citations
omitted). Therefore, “[m]any courts have read a materiality requirement into § 1692e.” Fritz v.
Resurgent Capital Servs., L.P., 955 F. Supp. 2d 163, 170 (E.D.N.Y. 2013). In analyzing whether
a misrepresentation is material, the Second Circuit has held that “communications and practices
that could mislead a putative-debtor as to the nature and legal status of the underlying debt, or that
could impede a consumer’s ability to respond to or dispute collection, violate the FDCPA.”
Gabriele, 503 F. App’x at 94; see also Lane v. Fein, Such & Crane, LLP, 767 F. Supp. 2d 382,
389 (E.D.N.Y. 2011) (collecting cases discussing the FDCPA’s materiality requirement).
Plaintiff’s allegations, accepted as true, are insufficient to state a claim arising under 15
U.S.C. § 1692e. According to Plaintiff, “Defendant falsely published an A+ rating to consumers,
when its rating was not an A+, and defendant knew or should have known what it was.” See
Proposed Amended Complaint (“PAC”), DE [18-1], ¶ 20. Plaintiff further alleges that “[t]he BBB
rating, particularly an A+ rating, is material to a least sophisticated consumer dealing with a debt
collector because debt collectors have a poor reputation and a high rating indicates that the
collector can be trusted.” Id. at ¶ 22. Specifically, Bryan alleges that “if the consumer settles a

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debt with the collector, an A+ rating indicates that the collector is not going to take the consumer’s
money and send the debt back without noting that the consumer’s payment was in full satisfaction
of the debt.” Id. at ¶ 24. However, contrary to Plaintiff’s argument, at least one court in this
district has held that a company’s Better Business Bureau rating “carries no connotation regarding
the character, amount, or legal status of any debt or Plaintiff’s rights regarding any such debt.” 1
Strobel v. RJM Acquisitions LLC, No. 13-CV-2467, 2014 WL 507510, at *3 (E.D.N.Y. Feb. 6,
2014). In Strobel, Judge Seybert wrote, “[t]he Court fails to see how a BBB accreditation and
rating suggests any relevant meaning whatsoever,” and, to the extent that it does, “it is not
material.” Id.; see also Walsh v. Law Offices of Howard Lee Schiff, P.C., No. 11-CV-1111, 2012
WL 4372251, at *3 (D. Conn. Sept. 24, 2012) (“[I]mmaterial statements, by definition, do not
affect a consumer’s ability to make intelligent decisions concerning an alleged debt.”) (internal
quotation omitted). As a misrepresentation must either be misleading with respect to “the nature
and legal status of the underlying debt” or “impede a consumer’s ability to respond to or dispute
collection,” see Gabriele, 503 F. App’x at 94, to be actionable under the FDCPA, Plaintiff’s
allegations do not support an inference that the debt collection letter at issue in this action would
be materially misleading to the least sophisticated consumer.
In her objection to the Report, Plaintiff argues, inter alia, that “[a] false statement that the
debt collector has been given the highest rating by a well-respected private organization such as
the Better Business Bureau, which exists for the purpose of rating the reliability and probity of
businesses, is very similar to a false statement that a debt collector is ‘vouched for’ by a
government agency.” Pl.’s Obj. at 4. However, Judge Seybert rejected a similar argument in

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The Court notes that, although the factual scenario in Strobel is distinguishable, as the debt collector
accurately stated its Better Business Bureau rating, see 2014 WL 507510, at *3, Judge Seybert’s comments regarding
the materiality of such a rating are still relevant and applicable here.

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Strobel, writing, “[n]or does a statement regarding the BBB indicate that Defendant is in any way
affiliated with any governmental entity.” 2014 WL 507510, at *3; see also Lane, 767 F. Supp. 2d
at 389 (“[R]eferences to the laws of the United States . . . merely explain [the debt collector’s]
place of incorporation and licensing . . . [they do] not suggest, even to an unsophisticated
consumer, that [the debt collector] is acting on behalf of the United States.”). To that end, similarly
misplaced is Plaintiff’s reliance upon Radaj v. ARS Nat’l Servs., Inc., No. 05-C-773, 2006 WL
2620394 (E.D. Wis. Sept. 12, 2006) in support of her argument that “[t]he representation at issue
is similar to one that a debt collector is licensed and regulated by the state,” see Pl.’s Obj. at 4, as
the debt collector in Radaj sent letters the plaintiff specifically “stating that [it] ‘is licensed by the
Office of the Administrator of the Division of Banking’ of the State of Wisconsin, which was an
allegedly false statement . . . .” 2006 WL 2620394, at *1. Therefore, Plaintiff’s reliance upon 15
U.S.C. § 1692e(1) in support of her allegations that Defendant violated the FDCPA is
unpersuasive.
Based upon the foregoing, and for the reasons set forth in Magistrate Judge Brown’s
Report, Plaintiff’s allegations do not support an inference that the debt collection letter at issue in
this action would be materially misleading to the least sophisticated consumer. Therefore,
Plaintiff’s objections to Magistrate Judge Brown’s Report and Recommendation are overruled.
B. Remainder of the Report and Recommendation
As discussed above, the Court must review those portions of a report and recommendation
to which no objections have been filed for clear error. See Frankel, 2009 WL 465645, at *2.
Having reviewed the remainder of Magistrate Judge Brown’s Report for clear error, and having
found none, the Court adopts Magistrate Judge Brown’s August 28, 2017 Report and

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Recommendation in its entirety. Therefore, Defendant’s motion for judgment on the pleadings is
granted, and Plaintiff’s motion seeking leave to file an amended complaint is denied.
III.

CONCLUSION
For the reasons set forth herein, Magistrate Judge Brown’s August 28, 2017 Report and

Recommendation in its entirety, and: (i) Defendant’s motion for judgment on the pleadings
pursuant to Fed. R. Civ. P. 12(c) is granted, and (ii) Plaintiff’s motion seeking leave to file an
amended complaint pursuant to Fed. R. Civ. P. 15 is denied. The Clerk of the Court is directed to
enter judgment in favor of Defendant and to close this case.
Dated: Central Islip, New York
September 28, 2017

SO ORDERED.
s/ Sandra J. Feuerstein
Sandra J. Feuerstein
United States District Judge

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