Brown v. Smith, Rouchin & Assocs.

COLIN BROWN, individually, and on behalf of all other similarly situated consumers, Plaintiff, v. SMITH, ROUCHIN & ASSOCIATES, INC., Defendant.

Case No.: 2:19-cv-705-MHH

UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

June 29, 2020

MEMORANDUM OPINION AND ORDER

On behalf of himself and a purported class of similarly situated consumers, plaintiff Colin Brown asserts a claim against defendant Smith, Rouchon & Associates, Inc. under the Fair Debt Collection Practices Act. Smith Rouchon has asked the Court to dismiss Mr. Brown's FDCPA claim. (Doc. 8).¹ For the reasons below, the Court will deny the motion.

I. MOTION TO DISMISS STANDARD

Rule 12(b)(6) enables a defendant to move to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). Pursuant to Rule 8(a)(2), a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Generally, to survive a Rule 12(b)(6) motion to dismiss and meet the requirement of Fed. R. Civ. P. 8(a)(2), "a complaint does not need detailed factual allegations, but the allegations must be enough to raise a right to relief above the speculative level." Speaker v. U.S. Dep't of Health & Human Servs. Centers for Disease Control & Prevention, 623 F.3d 1371, 1380 (11th Cir. 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). "Specific facts are not necessary; the statement need only 'give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.'" Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Twombly, 550 U.S. at 555). In deciding a Rule 12(b)(6) motion to dismiss, a district court must view the allegations in a complaint in the light most favorable to the non-moving party. Sun Life Assurance Co. v. Imperial Premium Fin., LLC, 904 F.3d 1197, 1207 (11th Cir. 2018). A district court must accept well-pleaded facts as true. Little v. CRSA, 744 Fed. Appx. 679, 681 (11th Cir. 2018).

II. MR. BROWN'S FACTUAL ALLEGATIONS

Mr. Brown alleges that on October 3, 2018, Smith Rouchon sent him a letter that stated:

The purpose of this notice is to give you an opportunity to respond to the described debt claim and make arrangements to either pay it or state your reasons why it may be incorrect.

* * *

Unless you notice [sic] this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request in writing within 30 days after receiving this notice this office will provide you with the name and address of the original creditor, if different from the current creditor.

(Doc. 1, p. 2, ¶¶ 9-10). Mr. Brown contends that the letter violates sections 1692e, 1692e(10), and 1692g(b) of the FDCPA because the letter requires him to "state [his] reasons why [the debt] may be incorrect," a requirement inconsistent with the FDCPA's notice provision that enables a debtor initially to question the validity of a debt without explaining why the debtor believes the debt, or part of the debt, is invalid. (Doc. 1, pp. 2, 3, 6, ¶¶ 12, 13, 32).

III. ANALYSIS

A district court must "construe consumer protection statutes" like the FDCPA "broadly in favor of consumers." Agrelo v. Affinity Mgmt. Servs., LLC, 841 F.3d944, 950 (11th Cir. 2016). Congress enacted the FDCPA to "eliminate abusive debt collection practices by debt collectors . . . [and] to protect consumers against debt collection abuses." 15 U.S.C. § 1692(e). To state a claim under the FDCPA, Mr. Brown must allege that (1) he was "the object of collection activity arising from a consumer debt," (2) Smith Rouchon "is a debt collector as defined by the statute," and (3) Smith Rouchon "has engaged in an act or omission prohibited by the FDCPA." Helman v. Bank of Am., 685 Fed. Appx. 723, 726 (11th Cir. 2017) (internal quotations omitted). When a plaintiff alleges a violation of a substantive provision of the FDCPA, the plaintiff does not have to plead a specific harm that he suffered because of the violation; the violation of a statutory provision that creates a substantive right belonging to the debtor constitutes a statutory injury that warrants a remedy. Church v. Accretive Health, Inc., 654 Fed. Appx. 990, 994-95 (11th Cir. 2016); see generally Havens Realty Corp. v. Coleman, 455 U.S. 363, 373-74 (1982). When a plaintiff alleges a violation of a procedural provision in the FDCPA, to properly assert a claim, the plaintiff may have to allege the actual, concrete harm that he purportedly suffered because "the violation of a procedural right granted by statute can be sufficient in some circumstances," but not all, "to constitute injury in fact." Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1549-50 (2016).²

As noted, Mr. Brown contends that Smith Rouchon violated three provisions of the FDCPA: §§ 1692e, 1692e(10), and 1692g. Section 1692e states generally that a debt collector may not use a "false, deceptive, or misleading representation or means in connection with the collection of any debt," and then identifies specific categories of fraudulent conduct, "[w]ithout limiting the general application of the foregoing," that violate the general prohibition against deception in debt collection. 15 U.S.C. § 1692e; see LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1193 (11th Cir. 2010) (stating that § 1692e's "list of potential violations" is "non-exhaustive"). Section 1692e(10) prohibits the "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). "When evaluating a communication under § 1692e," a district court must ask "whether the 'least sophisticated consumer' would be deceived or misled by the communication at issue." Bishop v. Ross Earle & Bonan, P.A., 817 F.3d 1268, 1274 (11th Cir. 2016)(citing Jeter v. Credit Bureau Inc., 760 F.2d 1168, 1177 (11th Cir. 1985)). Although it is not binding precedent, in Church v. Accretive Health, Inc., a panel of the Eleventh Circuit indicated that a violation of § 1692e is substantive such that a plaintiff does not have to allege a specific harm to state a claim for a violation of § 1692e. 654 Fed. Appx. 990, 994 (11th Cir. 2016) (stating § 1692e(11) is substantive).³

Section 1692g provides that, when attempting to collect a debt, a debt collector must send a consumer written notice stating, among other things, that if the consumer does not dispute the debt within 30 days, the debt collector will assume that the debt is valid, 15 U.S.C. § 1692g(a)(3), and that "collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor," 15 U.S.C. § 1692g(b). If a consumer "notifies the debt collector in writing within the thirty-day period described in subsection (a)that the debt, or any portion thereof, is disputed," then "the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment . . . and a copy of such verification or judgment . . . is mailed to the consumer by the debt collector." 15 U.S.C. § 1692g(b).⁴ Section 1692g does not require a consumer to explain in the written notice that suspends debt collection (at least temporarily) why the consumer believes the debt is invalid.

In Church, a panel of the Eleventh Circuit stated that a violation of § 1692g(a) is substantive such that a plaintiff does not have to allege a specific harm to state a claim for a violation of § 1692g(a). 654 Fed. Appx. at 994. The Court has not found an Eleventh Circuit decision that states whether a violation of § 1692g(b)'s requirement that "collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer's right to dispute the debt" is substantive or procedural, and other courts are not in agreement on the issue. Gause, 424 F. Supp. 3d at 1200-01 (finding that portion of § 1692g(b) that prohibits the contents of a validation notice that are not mandated by § 1692g(a) "from overshadowing or contradicting" the information required in § 1692g(a) is procedural, not substantive, and that "a plaintiff asserting a violation ofsection 1692g(b) cannot simply assert a bare violation of the statute to invoke the jurisdiction of a federal court; rather, he must 'clearly allege' he suffered some harm or appreciable risk of harm from the violation"); Beane v. RPW Legal Servs., PLLC, 378 F. Supp. 3d 948, 958 (W.D. Wash. 2019) (dismissing "overshadowing" claim under § 1692g(b) where no cognizable harm alleged); Macy v. GC Servs. Ltd. P'ship, 897 F.3d 747, 757 (6th Cir. 2018) (reviewing several FDCPA provisions, including § 1692g(b), and holding that plaintiffs "demonstrated a sufficient 'risk of real harm' to the underlying interest to establish concrete injury without the 'need [to] allege any additional harm beyond the one Congress has identified'") (quoting Spokeo, 136 S. Ct. at 1549)); Pollard v. Law Office of Mandy L. Spaulding, 766 F.3d 98, 103 (1st Cir. 2014) (plaintiff had standing to bring overshadowing claim under §1692g(b) merely by alleging that she had a right not to receive communications that overshadow or are inconsistent with the validation notice). Given the holding in Church that §1692g(a) is substantive, the holding in Spokeo that "the violation of a procedural right granted by statute can be sufficient in some circumstances to...