Dykes v. Portfolio Recovery Associates, LLC
Filing
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MEMORANDUM OPINION re Motion to Dismiss. Signed by District Judge James C. Cacheris on 6/30/15. (klau, )
IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division
CAROLYN DYKES,
on behalf of herself and all
others similarly situated,
Plaintiff,
v.
PORTFOLIO RECOVERY ASSOCIATES,
LLC,
Defendant.
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M E M O R A N D U M
1:15cv110 (JCC/MSN)
O P I N I O N
This matter is before the Court on Defendant Portfolio
Recovery Associates, LLC’s Motion to Dismiss the Amended
Complaint.
[Dkt. 18.]
For the following reasons, the Court
will deny the motion.
I. Background
At the motion to dismiss stage, the Court must read
the complaint as a whole, construe the complaint in a light most
favorable to the plaintiff, and accept the facts alleged in the
complaint as true.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
On January 28, 2015, Plaintiff Carolyn Dykes
(“Plaintiff”), a consumer, filed this putative class action
against Portfolio Recovery Associates, LLC (“PRA”), a debt
collector, pursuant to the Fair Debt Collection Practices Act
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(“FDCPA”), 15 U.S.C. § 1692, et seq.
(Compl. [Dkt. 1].)
Plaintiff amended her complaint once as a matter of right.
(Am.
Compl. [Dkt. 16].)
PRA allegedly purchased a debt in the amount of
$3,886.67 that arose from Plaintiff’s consumer credit card
issued by non-party Capital One Bank (USA), N.A.
7, 10.)
(Am. Compl. ¶¶
Nowhere in the amended complaint does Plaintiff dispute
the validity of this debt.
Instead, Plaintiff alleges that PRA
sent her three collection letters, also known as “dunning”
letters: the first, on January 29, 2014 (Am. Compl. Ex. A), the
second, on May 1, 2014 (id. Ex. B), and the third, on November
12, 2014 (id. Ex. C).
(Id. at ¶¶ 6, 13, 16.)
written almost entirely in Spanish.
Each letter was
(Id. at Exs. A, B, C.)
PRA’s logo, positioned at the top-center of each letter, was in
English and read: “Portfolio Recovery Associates, LLC: We’re
giving debt collection a good name.”
(Id. at Exs. A, B, C.)
Plaintiff does not speak or read Spanish.
(Id. at ¶ 8.)
Plaintiff never requested that any communications be made in
Spanish.
(Id. at ¶ 9.)
The following language appeared in bold at the bottom
of the first collection letter: “Esta carta proviene de una
agencia de cobranza y su intencion es cobrar una deuda.
Cualquiera informacion que se obtenga sera utilizada para ese
proposito.”
(Id. at ¶ 11.)
According to Plaintiff, this
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translates in English to: “This letter comes from a collection
agency and its intention is to collect a debt.
Any information
that is obtained will be used for that purpose.”1
(Id. at ¶ 12.)
In the amended complaint, Plaintiff claims that PRA’s
collection letters are false, deceptive, or misleading in
violation of sections 1692e and 1692e(11) of the FDCPA, mainly
because they are written almost entirely in Spanish.
Compl. ¶¶ 20-21, 29, 32.)
(Am.
Plaintiff asks for statutory damages,
actual damages, costs, and declaratory relief.
(Id. at 7.)
This matter is now before the Court on PRA’s motion to
dismiss the complaint in its entirety for failure to state a
claim.
(Def.’s Mot. to Dismiss [Dkt. 18]; Def.’s Mem. in Supp.
[Dkt. 19].)
In short, PRA contends that the FDCPA does not
mandate the English disclosures that Plaintiff seeks.
Mem. at 1.)
(Def.’s
Plaintiff filed a brief in opposition [Dkt. 23], to
which PRA replied [Dkt. 24].
Accordingly, the motion is ripe
for disposition.
II. Legal Standard
Rule 12(b)(6) of the Federal Rules of Civil Procedure
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The second and third collection letters contained slightly
different bolded language that conveyed the same message: “Esta
comincacion proviene de una agencia de cobranza y su intencion
es cobrar una deuda. Cualquiera informacion que se obtenga sera
utilizada para ese proposito.” (Am. Compl. ¶¶ 14-15, 17-18.)
According to Plaintiff, this translates in English to: “This
communication comes from a collection agency and its intention
is to collect a debt. Any information that is obtained will be
used for that purpose.” (Id. at ¶¶ 15, 18.)
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allows a court to dismiss those allegations which fail “to state
a claim upon which relief can be granted.”
12(b)(6).
Fed. R. Civ. P.
In deciding a 12(b)(6) motion, a court must be
mindful of the liberal pleading standards under Rule 8, which
require only “a short and plain statement of the claim showing
that the pleader is entitled to relief.”
Fed. R. Civ. P. 8.
While Rule 8 does not require “detailed factual allegations,” a
plaintiff must still provide “more than labels and conclusions”
because “a formulaic recitation of the elements of a cause of
action will not do.”
Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555–56 (2007) (citation omitted).
III. Analysis
Plaintiff’s amended complaint contains one count under
the FDCPA.
(Am. Compl. ¶¶ 26-33.)
Plaintiff contends that the
three collection letters are false, deceptive, or misleading, in
violation of section 1692e’s general prohibition against false,
deceptive, or misleading representations.
(Am. Compl. ¶ 29.)
Stated differently, Plaintiff claims that PRA violated section
1692e(11) by failing to provide an English disclosure in the
collection letters that stated PRA was a debt collector who was
attempting to collect a debt, and that information obtained
would be used for that purpose.
(Am. Compl. ¶¶ 20-21, 32.)
“The PDCPA seeks to protect consumers from abusive,
deceptive and unfair debt collection practices by establishing,
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in part, guidelines for communications by debt collectors.”
Creighton v. Emporia Credit Serv., Inc., 981 F. Supp. 411, 414
(E.D. Va. 1997).
The FDCPA provides a private right of action
to consumers where “(1) the plaintiff has been the object of
collection activity arising from consumer debt; (2) the
defendant is a debt collector as defined by the FDCPA; and (3)
the defendant has engaged in an act or omission prohibited by
the FDCPA.”
Penn v. Cumberland, 883 F. Supp. 2d 581, 586-87
(E.D. Va. 2012) (quoting Ruggia v. Washington Mut., 719 F. Supp.
2d 642, 647 (E.D. Va. 2010)).
Here, the only issue is whether
Plaintiff has failed to sufficiently plead facts that show
Defendant violated section 1692e or 1692e(11) by act or
omission.2
Plaintiff claims that “[b]y sending the First
Collection Letter, [PRA] violated numerous provisions of the
FDCPA, including 15 U.S.C. § 1692e . . . .”
(Am. Compl. ¶ 31.)
Plaintiff contends that the “failure to provide . . .
disclosures in English” constitutes false and misleading
representations.
There is no allegation, however, that the
substance of the Spanish collection letters contained false
statements or information; quite simply, they were just written
in Spanish, a language she could not read.
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Section 1692e of the
It is not contested that Plaintiff was the object of collection
activity arising from consumer debt and that PRA is a debt
collector.
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FDCPA generally prohibits debt collectors from using “any false,
deceptive, or misleading representation or means in connection
with the collection of any debt.”
15 U.S.C. § 1692e.
To rise
to the level of a statutory violation, the representation must
be material.
Elyazidi v. SunTrust Bank, 780 F.3d 227, 234 (4th
Cir. 2015); see also Penn, 883 F. Supp. 2d at 589.
To make the
materiality determination, “courts typically ask whether it
would mislead or deceive the least sophisticated consumer with
respect to the alleged debt.”
Id. (citations omitted).
Stated
differently, courts “consider how a ‘naïve’ consumer would
interpret the statement.”
Elyazidi, 780 F.3d at 234 (citing
United States v. Nat’l Fin. Servs., Inc., 98 F.3d 131, 136 (4th
Cir. 1996)).
“While protecting naïve consumers, the standard also
prevents liability for bizarre and idiosyncratic interpretations
of collection notices by preserving a quotient of reasonableness
and presuming a basic level of understanding and willingness to
read with care.”
Nat’l Fin. Servs., Inc., 98 F.3d at 135-36.
In other words, it is an objective standard.
The Fourth Circuit
has “never directly addressed whether application of the
objective least-sophisticated-consumer test to the language of a
dunning letter is a question of law, [but has] assumed that to
be the case.”
Russell v. Absolute Collection Servs., Inc., 763
F.3d 385, 395 (4th Cir. 2014).
Ultimately, the Court is “not
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concerned with mere technical falsehoods that mislead no one,”
but instead guards against “misstatements that are important in
the sense that they could objectively affect the least
sophisticated consumer’s decisionmaking.”
Powell v. Palisades
Acquisition XVI, LLC, 782 F.3d 119, 126-27 (4th Cir. 2014)
(citations omitted).
Here, in short, even though there is nothing
substantively false about the representations made by PRA in the
Spanish collection letters, the Court finds that “they could
objectively affect the least sophisticated consumer’s
decisionmaking.”
Powell, 782 F.3d at 126-27.
The Court makes
this finding at the motion to dismiss stage ever mindful that
dismissal pursuant to Rule 12(b)(6) is disfavored.
Fayetteville
v. Investors v. Commercial Builders, Inc., 936 F.2d 1462, 1471
(4th Cir. 1991) (citing 2A Moore’s Federal Practice, ¶ 12.07, p.
12-63).
“As always . . . we must view the allegedly false or
misleading representations in context.”
234.
Elyazidi, 780 F.3d at
Even though there is no official language requirement
under the FDCPA, Courts have been suspicious when debt
collectors use both English and Spanish in collection letters.
See, e.g., Ehrich v. I.C. Sys., Inc., 681 F. Supp. 2d 265, 27374 (E.D.N.Y. 2010) (“The inclusion of the Spanish sentence
indicates the defendant’s awareness that the recipients of the
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debt collection letter included Spanish-speaking consumers who
did not speak English (and perhaps even indicates that Spanishspeaking consumers were actually being targeted by defendant). .
. . [B]y including the Spanish sentence, defendant might deceive
or mislead the least sophisticated Spanish-speaking consumer
into calling the phone number, thereby potentially waiving his
or her rights.”).
Similarly, here, the collection letters were
written almost entirely in Spanish, but also contained portions
in English, including PRA’s own logo: “Portfolio Recovery
Associates, LLC: We’re giving debt collection a good name.”
(Am. Compl. Ex. A (emphasis added).)
The inclusion of the
English portions indicates PRA’s awareness that the recipients
of the debt collection letters include English-speaking
consumers who did not speak Spanish.
And perhaps PRA was
targeting English-speaking debtors with Spanish-only letters in
an attempt to deceive or mislead, as Plaintiff alleges.
At this
stage, and based on the reasoning in Ehrich, the Court must
accept this allegation as true--the least sophisticated consumer
would find the collection letters deceptive or misleading.
Moreover, Plaintiff claims the collection letters
“violate 15 U.S.C. § 1692e(11) by failing to disclose in the
English language that Defendant is a debt collector who was
attempting to collect a debt, and that information obtained
would be used for that purpose.”
(Am. Compl. ¶ 32.)
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For
similar reasons discussed above, reading Plaintiff’s amended
complaint in a light most favorable to her, this claim also must
survive.
15 U.S.C. § 1692e(11) prohibits:
The failure to disclose in the initial
written communication with the consumer and,
in addition, if the initial communication
with the consumer is oral, in that initial
oral communication, that the debt collector
is attempting to collect a debt and that any
information obtained will be used for that
purpose, and the failure to disclose in
subsequent
communications
that
the
communication is from a debt collector,
except that this paragraph shall not apply
to a formal pleading made in connection with
a legal action.
This is colloquially known as the “Mini-Miranda” requirement.
See Ehrich v. I.C. Sys., Inc., 681 F. Supp. 2d 265, 273-74
(E.D.N.Y. 2010).
The plain statutory language of 15 U.S.C. §
1692e(11) does not require English-only disclosures.
However,
here, it is alleged that PRA failed to disclose the necessary
warnings stated above because Plaintiff could not read Spanish.
Thus, she did not actually receive the statutory disclosures.
In other words, as to this Plaintiff, it is alleged that PRA
violated section 1692e(11).
Again, at this stage of the
proceeding, this claim must survive because the allegations are
assumed to be true and read in a light most favorable to the
Plaintiff.
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Ultimately, the Court could not find any authority
that requires debt collectors to predict the consumer’s native
language when sending out collection letters.
This is because
such authority would undoubtedly cause a slippery slope.
Indeed, there is no explicit language requirement at all in the
statue.
Instead, the Court must assess the reasonableness of
the debt collector’s communication, and determine whether the
form and substance “could objectively affect the least
sophisticated consumer’s decisionmaking.”
Powell v. Palisades
Acquisition XVI, LLC, 782 F.3d 119, 126-27 (4th Cir. 2014)
(citations omitted).
And while an all-Spanish collection letter
certainly does not entitle PRA to any best-practice awards, at
this stage in the proceeding, Plaintiff has alleged that PRA’s
collection letters were also objectively unreasonable and
deceptive from the viewpoint of the least sophisticated
consumer.
For purposes of this motion, the Court accepts
Plaintiff’s allegations.
Accordingly, the Court will deny PRA’s
motion to dismiss.
IV. Conclusion
For the foregoing reasons, the Court will deny PRA’s
motion to dismiss.
June 30, 2015
Alexandria, Virginia
An appropriate Order shall issue.
/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE
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