O'Boyle v. GC Services Limited Partnership
Filing
26
DECISION AND ORDER signed by Judge Lynn Adelman on 5/17/18. IT IS ORDERED that the defendant's motions to dismiss for lack of subject-matter jurisdiction and failure to state a claim upon which relief can be granted 9 are DENIED. IT IS FURTHER ORDERED that the plaintiff's motion to compel discovery 12 is GRANTED in part and DENIED in part. (cc: all counsel) (jad)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
BARBARA O’BOYLE,
Plaintiff,
v.
Case No. 16-C-1384
GC SERVICES LIMITED PARTNERSHIP,
Defendant.
DECISION AND ORDER
Barbara O’Boyle brings this putative class action against GC Services Limited
Partnership alleging violations of the Fair Debt Collection Practices Act, which provides,
in relevant part, that “[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. According to O’Boyle, GC, in an attempt to collect a credit card debt, sent her
a letter indicating that it would assume the validity of the debt unless she disputed it in
writing within 30 days. She argues that, although a debt collector can assume that a
debt is valid if the debtor does not dispute it within 30 days after receiving written notice
of the debt, the debtor need not dispute the debt in writing. See 15 U.S.C.
§ 1692g(a)(3). GC moves to dismiss for lack of subject-matter jurisdiction and failure to
state a claim upon which relief can be granted. O’Boyle moves to compel discovery.
I. SUBJECT-MATTER JURISDICTION
GC moves to dismiss for lack of subject-matter jurisdiction arguing that O’Boyle
lacks standing to sue because she has not alleged that she suffered a concrete injury.
“Federal courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of
Am., 511 U.S. 375, 377 (1994). One limitation on federal jurisdiction, rooted in Article III
of the U.S. Constitution, is that a plaintiff must have standing to sue in order to “maintain
a lawsuit in federal court.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1546–47 (2016).
The first element of standing, and the only element at issue here, is that the
plaintiff must have “suffered an injury in fact.” Id. at 1547. “To establish injury in fact, a
plaintiff must show that . . . she suffered ‘an invasion of a legally protected interest’ that
is,” among other things, “concrete.” Id. at 1548 (quoting Lujan v. Defs. of Wildlife, 504
U.S. 555, 560 (1992)). A “concrete” injury is one that “actually exist[s]”—i.e., an injury
that is “‘real,’ and not ‘abstract’”—though an injury need not be “tangible” to be concrete.
Id. at 1548–49 (quoting Webster’s Third New International Dictionary 472 (1971)).
GC argues that O’Boyle has alleged a “bare procedural violation, divorced from
any concrete harm,” which is insufficient to satisfy the injury-in-fact requirement of
standing. See id. at 1549 (citing Summers v. Earth Island Inst., 555 U.S. 488, 496
(2009); Lujan, 504 U.S. at 572). A “procedural violation” occurs where a “person . . . has
been accorded,” but denied, “a procedural right,” such as the right to “a hearing prior to
denial of [a] license application.” See Lujan, 504 U.S. at 572 & n.7. Ordinarily, a plaintiff
has standing to sue “to enforce a procedural requirement the disregard of which could
impair a separate concrete interest of [hers].” Id. at 572. “But deprivation of a procedural
right without some concrete interest that is affected by the deprivation—a procedural
right in vacuo—is insufficient to create Article III standing.” Summers, 555 U.S. at 496.
According to GC, O’Boyle’s claims arise from its alleged violation of § 1692g(a),
which requires a debt collector to provide a consumer with written notice of a debt in
collection containing certain disclosures, including “a statement that unless the
consumer, within thirty days after receipt of the notice, disputes the validity of the debt,
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or any portion thereof, the debt will be assumed to be valid by the debt collector.”
§ 1692g(a)(3). GC argues that, even if, as alleged, it failed to provide an accurate
version of this disclosure, O’Boyle does not seek to enforce the procedural requirement
at issue—that is, she does not demand that she receive an accurate disclosure—and
she does not allege any resulting harm to her concrete interests, so she lacks standing.
O’Boyle’s claims as alleged undoubtedly arise from a procedural violation, but
she alleges more than a bare procedural violation. Indeed, she alleges that, rather than
simply failing to provide a disclosure required by the FDCPA, GC affirmatively, or at
least impliedly, misrepresented her right to dispute a debt in collection other than in
writing and thereby suggested an artificially high barrier to raising such a dispute. As
she notes, the FDCPA expressly prohibits debt collectors from using “any false
representation or deceptive means to collect or attempt to collect any debt.”
§ 1692e(10). She argues that she “need not allege any additional harm” beyond that
which the FDCPA proscribes. See Spokeo, 136 S. Ct. at 1549.
“In determining whether an intangible harm constitutes injury in fact, both history
and the judgment of Congress play important roles.” Id. Misrepresentation (or “deceit”)
“has traditionally been regarded as providing a basis for a lawsuit in English or
American courts,” id.; see, e.g., Restatement (First) of Torts §§ 525, 552 (1938), but
common-law liability for misrepresentation required proof of harm caused by “justifiable
reliance upon the misrepresentation,” see id. § 525. In enacting the FDCPA, Congress
identified the use of misrepresentation as an “abusive debt collection practice” and
categorically barred its use by debt collectors. See 15 U.S.C. §§ 1692, 1692e. In other
words, Congress identified the use of misrepresentation for debt collection purposes as
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a concrete harm in itself and elevated it to “the status of [a] legally cognizable injur[y].”
Spokeo, 136 S. Ct. at 1549 (quoting Lujan, 504 U.S. at 578).
“Congress is well positioned to identify [and elevate] intangible harms that” are
“concrete” and “de facto” but “that were previously inadequate in law,” as it did in
enacting the FDCPA. Id. (quoting Lujan, 504 U.S. at 578). As such, “its judgment is . . .
instructive and important.” Id. I see no reasonable basis for deviating from its judgment
here, and GC does not provide one. Thus, because O’Boyle alleges a concrete injury
identified and rendered actionable by Congress in the FDCPA, she has standing to sue.
I will, therefore, deny GC’s motion to dismiss for lack of subject-matter jurisdiction.
II. FAILURE TO STATE A COGNIZABLE CLAIM
GC moves to dismiss for failure to state a claim upon which relief can be granted.
GC argues that, even accepting the truth of O’Boyle’s factual allegations, her complaint
does not plausibly suggest that it violated the FDCPA by misrepresenting her right to
dispute the validity of her debt. To the contrary, GC says, § 1692g(a)(3) impliedly
requires that consumers dispute the validity of debts in writing, so its letter suggesting
as much was accurate, not false, deceptive, or misleading.
Unlike § 1692g(a)(3), which permits a debt collector to assume the validity of a
debt unless the consumer “disputes” it, other provisions of § 1692g expressly require
that a consumer dispute a debt in writing. For example, § 1692g(a)(5) provides that,
“upon the consumer’s written request . . . , the debt collector will provide the consumer
with the name and address of the original creditor.” Similarly, § 1692g(b) states that “the
debt collector shall cease collection of the debt” pending verification if “the consumer
notifies the debt collector in writing . . . that the debt . . . is disputed.”
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Despite this difference in language, the Third Circuit, in Graziano v. Harrison, 950
F.2d 107 (3d Cir. 1991), held that, “given the entire structure of section 1692g,
subsection (a)(3) must be read to require that a dispute, to be effective, must be in
writing.” Id. at 112. According to the court, to read the statute otherwise
would . . . create a situation in which, upon the debtor’s non-written
dispute, the debt collector would be without any statutory ground for
assuming that the debt was valid, but nevertheless would not be required
to verify the debt or to advise the debtor of the identity of the original
creditor and would be permitted to continue debt collection efforts.
Id. The court would not “attribute to Congress an intent to create so incoherent a
system.” Id.
The Ninth Circuit, in Camacho v. Bridgeport Financial Inc., 430 F.3d 1078 (9th
Cir. 2005), disagreed: “The plain meaning of § 1692g is that debtors can trigger the
rights under subsection (a)(3) by either an oral or written ‘dispute,’ while debtors can
trigger the rights under [other] subsections . . . only through written dispute.” Id. at 1081.
The court concluded that the FDCPA simply “assigns lesser rights to debtors who orally
dispute a debt” than to those who dispute one in writing. Id. at 1082. For instance, an
oral dispute does not require that collection efforts cease, but it “precludes the debt
collector from communicating the debtor’s credit information to others without including
the fact that the debt is in dispute.” Id. (citing § 1692e(8)). As this result “is not absurd,”
the court was “not at liberty to insert any additional language” into the statute. Id.
Two other federal circuit courts of appeals have since agreed with the Ninth
Circuit. The Second Circuit held that Ҥ 1692g(a)(3) does not incorporate the writing
requirement included specifically in other sections of the same statute” and “giving
effect to [this] difference creates a sensible bifurcated scheme.” Hooks v. Forman, Holt,
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Eliades & Ravin, LLC, 717 F.3d 282, 286 (2d Cir. 2013). The Fourth Circuit, noting that
some provisions of § 1692g “explicitly require written communication, whereas
[§] 1692g(a)(3) plainly does not,” declined to “read into [the statutory text] words that are
not there.” Clark v. Absolute Collection Service, Inc., 741 F.3d 487, 490 (4th Cir. 2014).
The Seventh Circuit has not addressed whether a dispute under § 1692g(a)(3)
must be in writing. But it recently noted, in a case concerning § 1692e(8)—an FDCPA
provision that, like § 1692g(a)(3), applies where a debtor disputes a debt but does not
expressly require that the dispute be in writing—that “the ordinary meaning of ‘dispute’”
is “to call into question or cast doubt upon,” which does not require that “the debtor . . .
put the dispute in writing.” Evans v. Portfolio Recovery Assocs., LLC, No. 17-1773, 2018
WL 2035315, at *5, *6 n.6 (7th Cir. May 2, 2018) (quoting Dispute, Merriam–Webster
Dictionary, http://www.merriam-webster.com/dictionary/dispute (last visited April 23,
2018)). This language suggests that the Seventh Circuit would agree with the Second,
Fourth, and Ninth Circuits that a dispute under § 1692g(a)(3) need not be in writing.
The reasoning of the Second, Fourth, and Ninth Circuits is more persuasive than
that of the Third Circuit, particularly in light of Evans. In general, “courts must presume
that a legislature says in a statute what it means and means in a statute what it says
there.” Connecticut Nat. Bank v. Germain, 503 U.S. 249, 253–54 (1992). Moreover, “it is
generally presumed that Congress acts intentionally and purposely” when it “includes
particular language in one section of a statute but omits it in another.” Russello v. United
States, 464 U.S. 16, 23 (1983) (quoting United States v. Wong Kim Bo, 472 F.2d 720,
722 (5th Cir. 1972) (per curiam)). Thus, I must presume that Congress meant what it
said in the FDCPA when it referred to disputes “in writing” in some provisions but to
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mere “disputes” in others and give effect to this difference in statutory language. As
GC’s motion to dismiss for failure to state a claim upon which relief can be granted
depends on the Third Circuit’s contrary reasoning, I will deny that motion.
III. O’BOYLE’S MOTION TO COMPEL DISCOVERY
O’Boyle moves to compel responses to numerous interrogatories and requests
for production to which GC objected for various reasons. O’Boyle seeks the names,
mailing addresses, telephone numbers, and email addresses of 588 individuals in
Wisconsin to whom GC sent a letter like the one she received. GC objects that it cannot
comply with this request without violating the FDCPA, which forbids certain
communications with third parties by debt collectors, 15 U.S.C. § 1692c(b), and
prohibits “[t]he publication of a list of consumers who allegedly refuse to pay debts,” id.
§ 1692d(3); see also 2 Consumer Law Sales Practices and Credit Regulation § 647,
Westlaw (updated Sept. 2017) (discussing harassment by publication of debts). As
O’Boyle notes, however, these provisions only bar communication and conduct “in
connection with the collection of a debt.” See §§ 1692c(b), 1692d. GC does not explain
how responding to O’Boyle’s discovery requests would constitute communication or
conduct in connection with the collection of a debt,1 so I will compel this discovery.
O’Boyle seeks the number and identities of and contact information for
individuals in the United States to whom GC sent debt collection letters like the one that
she received. GC objects that, to the extent this information is not duplicative, it is not
relevant to any claim or defense asserted in this case, so it is beyond the scope of
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GC also argues that, even if the FDCPA permits disclosure of the names of and
contact information for members of the putative class, that information is not relevant
prior to class certification, but its argument is “[p]erfunctory,” “undeveloped,” and
“unsupported by legal authority,” so I will not consider it. M.G. Skinner & Assocs. Ins.
Agency, Inc. v. Norman-Spencer Agency, Inc., 845 F.3d 313, 321 (7th Cir. 2017).
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discovery. See Fed. R. Civ. P. 26(b)(1). I agree with GC. O’Boyle’s alleged class
consists of “natural persons in the State of Wisconsin.” See Compl., ECF No. 1, ¶ 34.
Unless she amends her class allegations, she may not obtain discovery regarding
persons, natural or not, in any other state, as that information is not relevant to her
claims. Thus, I will not compel discovery of such information at this time.
O’Boyle seeks the identities of all companies that provided GC with insurance
coverage during the time period at issue here. GC objects that O’Boyle is not entitled to
any more information than it has already provided her, which is that it had no insurance
coverage applicable to her claims. In general, a party to federal litigation must disclose
to all other parties “any insurance agreement under which an insurance business may
be liable to satisfy all or part of a possible judgment in the action or to indemnify or
reimburse for payments made to satisfy the judgment.” Fed. R. Civ. P. 26(a)(1)(A)(iv).
O’Boyle does not argue that GC failed to make its required disclosures under Rule
26(a)(1), and she has not shown that she is otherwise entitled to discovery regarding
GC’s insurance providers. Thus, I will not compel any such discovery.
O’Boyle seeks the identities of GC’s potential pretrial and trial lay and expert
witnesses, the expected subjects of their testimony, and documents GC intends to use
in its defense. GC objects that O’Boyle is not entitled to discovery of such information,
the disclosure of which is governed by Rule 26(a). Rule 26(a) requires that each party
initially disclose to the others “each individual likely to have discoverable information,”
as well as “all documents, electronically stored information, and tangible things,” that the
party “may use to support its claims or defenses.” Fed. R. Civ. P. 26(a)(1)(A)(i), (ii). Rule
26(a) also provides for pretrial disclosure of expert witnesses, lay witnesses, and
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documents or other exhibits that each party may call or offer at trial. Fed. R. Civ. P.
26(a)(2), (3). O’Boyle does not argue that GC has failed to make any required
disclosures under Rule 26(a), and she has not shown that she is entitled to impose
earlier disclosure deadlines under the guise of discovery requests. Thus, I will not
compel discovery of information the disclosure of which is governed by Rule 26(a).
O’Boyle asks GC “whether information regarding [its] collection accounts is
retrievable by computer and, if so,” to identify “each field by which data is searchable or
retrievable.” See Blythin Decl. Ex. C, ECF No. 14-3, at 8. GC objects that the
information sought is not relevant to any claim or defense asserted in this case. O’Boyle
argues that her request is relevant to ascertainability of the alleged class.
“Ascertainability” refers to a requirement imposed by some federal courts that a class
action plaintiff “must demonstrate [that her] purported method for ascertaining class
members is reliable and administratively feasible.” See Carrera v. Bayer Corp., 727
F.3d 300, 308 (3d Cir. 2013). As the Seventh Circuit has expressly rejected this
“heightened ascertainability requirement,” Mullins v. Direct Digital, LLC, 795 F.3d 654,
658 (7th Cir. 2015), I will not compel discovery of information sought to satisfy it.
O’Boyle seeks a step-by-step description of the process by which GC generated
and transmitted the debt collection letter that she received. She argues that this
information is relevant because GC may assert a defense under 15 U.S.C. § 1692k(c),
which provides that a debt collector is not liable for violating the FDCPA if it proves “that
the violation was not intentional and resulted from a bona fide error notwithstanding the
maintenance of procedures reasonably adapted to avoid any such error.” GC has not
yet answered the complaint, so it has not pleaded any defenses. Until and unless it
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pleads a § 1692k(c) “bona fide error” defense, information regarding such a defense is
not relevant under Rule 26(b)(1). Thus, I will not compel this discovery at this time.
O’Boyle seeks “[a]ll documents relating to [her] alleged debt,” “the collection
thereof,” and “the account(s) that [GC] was attempting to collect from [her].” See Blythin
Decl. Ex. C, supra, at 12, 15. Yet, O’Boyle’s claims, as alleged in her complaint, do not
concern her debt, her account, or GC’s attempts to collect from her apart from its use of
the debt collection letter at issue, and GC has not yet pleaded any defenses, so I cannot
discern how these documents are “relevant to any party’s claim or defense.” Fed. R.
Civ. P. 26(b)(1). O’Boyle’s bald assertion that these documents are “plainly relevant” is
insufficient. Thus, I will not compel this discovery at this time.
O’Boyle seeks “[a]ll documents relating to [GC’s] activities to collect consumer
debts” and “[a]ll form letters, enclosures, envelopes, memoranda, etc., used by [GC] in
its debt collection activities.” See Blythin Decl. Ex. C, supra, at 12. These requests are
exceedingly broad and clearly call for production of documents and business materials
of little or no arguable relevance to this litigation. GC correctly objected to these
requests as seeking discovery that is not “proportional to the needs of the case.” Fed.
R. Civ. P. 26(b)(1). Thus, I will not compel this discovery.
O’Boyle seeks GC’s training materials “regarding the FDCPA,” see Blythin Decl.
Ex. C, supra, at 12, arguing that such materials are relevant to GC’s potential defense
of bona fide error. The materials O’Boyle requests may be relevant to whether GC
maintained “procedures reasonably adapted to avoid” unintentional FDCPA violations
resulting from bona fide errors. See § 1692k(c). Again, though, GC has not yet pleaded
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a bona fide error defense. Until and unless it does, discovery regarding such a defense
is not relevant. Thus, I will not compel this discovery.
O’Boyle seeks all documents exchanged between GC and her alleged creditor
about her debt or the collection of it. GC objects to this request as not proportional to
the needs of the case and as seeking materials that are not relevant to any claim or
defense. O’Boyle did not address GC’s objections to this request in her reply brief in
support of her motion to compel, which “implies concession.” See Midwest Generation
EME, LLC v. Continuum Chem. Corp., 768 F. Supp. 2d 939, 950 (N.D. Ill. 2010). Thus, I
will not compel this discovery.
O’Boyle seeks all documents concerning (1) GC’s policies, practices, and
procedures with respect to “the provisions of the FDCPA”; (2) “the adequacy of [GC’s]
policies, practices, and procedures [in] prevent[ing] violations of the FDCPA”; and (3)
general “compliance with the FDCPA.” See Blythin Decl. Ex. C, supra, at 13, 14.
Documents concerning GC’s policies, practices, procedures, and compliance with the
FDCPA may be relevant if GC pleads a bona fide error defense, but even then, this
case concerns only a handful of FDCPA provisions, so O’Boyle’s requests are
needlessly broad. As GC correctly objects to these requests as not proportional to the
needs of the case, I will not compel this discovery.
O’Boyle seeks documents that GC submitted to or received from “governmental
or law enforcement entit[ies] relating to the FDCPA or state collection laws or to [GC’s]
compliance therewith.” See id. at 14. GC objects that these documents are not relevant
to any claim or defense and that O’Boyle’s requests are not proportional to the needs of
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the case. As O’Boyle did not address these objections in her reply brief, which implies
concession, I will not compel this discovery.
O’Boyle seeks documents concerning “any and all claims or complaints . . . that
[GC] violated the FDCPA or similar state collection laws.” See id. Again, though, GC
raised objections to this request in its brief in opposition to O’Boyle’s motion to compel
that she did not address in her reply brief, which implies her concession to those
objections. Thus, I will not compel this discovery.
O’Boyle seeks documents concerning “the specific language disputed in this
case.” See id. at 16. As is the case with some of O’Boyle’s other discovery requests, the
documents she seeks here may be relevant to a defense of bona fide error, should GC
plead and assert such a defense, but they are not relevant to any of her claims. Thus, I
will not compel this discovery at this time.
Finally, O’Boyle seeks all documents (1) “relating to any affirmative defense” or
(2) “that [GC] may rely upon at trial or to support any dispositive motion.” See id. As
noted above, initial and pretrial disclosure of documents that a party “may use to
support its . . . defenses,” “expects to offer” at trial, or “may offer if the need arises” is
governed by Rule 26(a). O’Boyle does not argue that GC has failed to make any
required disclosures under Rule 26(a), and she has not shown that she is otherwise
entitled to discovery in response to these requests, so I will not compel this discovery.
IV. CONCLUSION
For the foregoing reasons, IT IS ORDERED that the defendant’s motions to
dismiss for lack of subject-matter jurisdiction and failure to state a claim upon which
relief can be granted (ECF No. 9) are DENIED.
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IT IS FURTHER ORDERED that the plaintiff’s motion to compel discovery (ECF
No. 12) is GRANTED in part and DENIED in part as discussed above.
Dated at Milwaukee, Wisconsin, this 17th day of May, 2018.
s/Lynn Adelman____________
LYNN ADELMAN
District Judge
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