Magdy v. I.C. Sys., Inc.

47 F.4th 884

Andrew MAGDY, Plaintiff - Appellant

v.I.C. SYSTEM, INC., Defendant - Appellee

No. 21-3010

United States Court of Appeals, Eighth Circuit.

Submitted: April 14, 2022

Filed: September 6, 2022

Counsel who presented argument on behalf of the appellant and appeared on the brief was Richard A. Voytas, of Saint Louis, MO.

Counsel who presented argument on behalf of the appellee was Eugene Xerxes Martin, IV, of Dallas, TX. The following attorney appeared on the appellee brief; Patrick A. Watts, of Saint Louis, MO.

Before SHEPHERD, ERICKSON, and STRAS, Circuit Judges.

SHEPHERD, Circuit Judge.

Appellant Andrew Magdy sued I.C. System, Inc. (ICS) under the Fair Debt Collection Practices Act (FDCPA) for violating 15 U.S.C. § 1692c(b), which prohibits a debt collector from contacting a third party about the collection of a debt without the prior consent of the consumer. The district court¹ granted ICS's motion for judgment on the pleadings, finding that Magdy, a non-consumer, lacked standing to bring a cause of action under § 1692c(b). Having jurisdiction under 28 U.S.C. § 1291, we join other circuits that have reviewed this issue and affirm.

I.

On July 27, 2020, ICS sent Magdy, a bankruptcy attorney, a debt collection letter identifying him as the attorney for a consumer named in the letter.² In fact, the consumer was not Magdy's client, the consumer had never identified Magdy as her attorney to anyone, and Magdy had never identified himself as the consumer's attorney. There is no indication that the consumer consented to ICS contacting attorneys not retained by her about her debt. Unable to recognize the consumer's name, Magdy engaged in an extensive search of his files and records to determine if he had ever represented the consumer. He found nothing to indicate that she was a past or present client. This search cost Magdy valuable time and resources that he could have spent working on matters for actual clients.

Magdy filed suit in Missouri state court, and ICS properly removed the action to the district court. Magdy asserted that ICS violated § 1692c(b) when it contacted him regarding the debt of a consumer whom he did not represent, without the consumer's consent, and that he suffered injury as a result. ICS timely moved for judgment on the pleadings, arguing that third-party attorneys lack standing to sue under § 1692c. The district court determined that ICS's letter to Magdy violated § 1692c(b) but nevertheless agreed that Magdy lacked standing to sue under § 1692c and, thus, entered judgment on the pleadings against Magdy. Though Magdy "ask[ed] for leave to replead his claims pursuant to Section 1692d" in his response to ICS's motion, he never filed a motion for leave to amend his pleadings or for remand.

II.

Magdy argues that the district court erred in finding that he lacks standing to sue under § 1692c(b).³ In a matter of first impression for this Court, Magdy's appeal presents a straightforward question of statutory interpretation: whether Magdy, a third-party attorney unaffiliated with the relevant consumer, falls within the class of plaintiffs that Congress has authorized to sue under § 1692c(b). Magdy asks us to read § 1692c(b) as giving him, a third party contacted about a consumer's debt without the consumer's consent, a cause of action. We review de novo the district court's grant of ICS's motion for judgment on the pleadings. Gallagher v. City of Clayton, 699 F.3d 1013, 1017 (8th Cir. 2012). "A grant of judgment on the pleadings is appropriate ‘where no material issue of fact remains to be resolved and the movant is entitled to judgment as a matter of law.’ " Poehl v. Countrywide Home Loans, Inc., 528 F.3d 1093, 1096 (8th Cir. 2008) (citation omitted).

Section 1692c(b) concerns third-party communications by debt collectors:

Except as provided in section 1692b⁴ of this title, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

We see no reason to disturb the district court's determination that ICS violated § 1692c(b). Without the consumer's prior consent, ICS contacted Magdy, who was unaffiliated with the consumer, about the collection of the consumer's debt. ICS's violation of § 1692c(b), however, does not guarantee Magdy statutory standing. Whether Magdy may bring a cause of action under § 1692c(b) requires a separate inquiry. Magdy interprets § 1692c(b) as giving a cause of action to anyone who is contacted by a debt collector in violation of the statute.

Magdy relies on the language in 15 U.S.C. § 1692k, the FDCPA's general civil liability provision, to support his interpretation. Section 1692k(a) provides: "Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this subchapter with respect to any person is liable to such person ...." Focusing on the language, "with respect to any person is liable to such person," Magdy argues that because ICS failed to comply with § 1692c(b) "with respect to" him by sending him the letter, ICS is liable to him. Section 1692k(a) ’s language clearly demonstrates that FDCPA protection extends beyond consumers. See, e.g., Todd v. Collecto, Inc., 731 F.3d 734, 737 (7th Cir. 2013). However, § 1692k ’s broad language alone does not end the inquiry. We must read § 1692k in the context of the entire statute, not in isolation. Cf. Does v. Gillespie, 867 F.3d 1034, 1043 (8th Cir. 2017) ("Congressional intent or meaning is not discerned by considering merely a portion of a statutory provision in isolation, but rather by reading the complete provision in the context of the statute as a whole."). Moreover, the plain language of § 1692k indicates that the substantive provisions of the statute must play some role in our statutory standing analysis. § 1692k does not simply allow "any person" to sue for a violation. Rather, it provides a cause of action against a debt collector who "fails to comply with any provision of this subchapter with respect to any person." This calls on us to analyze "each provision of the FDCPA ... individually to determine who falls within the scope of its protection." Todd, 731 F.3d at 738 ; cf. Wright v. Fin. Serv. of Norwalk, Inc., 22 F.3d 647, 649 (6th Cir. 1994) (en banc) (noting that § 1692k is subject to "limitation[s] in the substantive provisions" of the FDCPA). Thus, to determine whether Magdy has a statutory cause of action, we must turn our attention to § 1692c, the substantive "provision" that I.C. Systems has "fail[ed] to comply with."

"[W]e presume that a statutory cause of action extends only to plaintiffs whose interests ‘fall within the zone of interests protected by the law invoked.’ " Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 129, 134 S.Ct. 1377, 188 L.Ed.2d 392 (2014) (quoting Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984) ). The zone-of-interests test requires us to use "traditional tools of statutory interpretation" to determine "whether a legislatively conferred cause of action encompasses a particular plaintiff's claim." Lexmark, 572 U.S. at 127, 134 S.Ct. 1377. In "[i]dentifying the interests protected" by a statute, we analyze the statute's text to derive its "purposes." See id. at 131, 134 S.Ct. 1377 (identifying the interests protected by the Lanham Act by reviewing the statute's statement of purposes); Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 56 (2012) ("[T]he purpose must be derived from the text."). Here, Section 1692c(b) ’s plain language—"without the prior consent of the consumer"—indicates that Magdy is outside the scope of its protection. Any violation of § 1692c depends on the debt collector making contact without the consumer's prior consent. As long as the debt collector has the consumer's prior consent, it may send a relentless stream of letters to a third party without running afoul of § 1692c(b). We thus read the plain language of § 1692c(b) as making clear that the provision's purpose is to protect consumers, not third parties. Cf. Kuntz v. Rodenburg LLP, 838 F.3d 923, 925 n.2 (8th Cir. 2016) (reviewing § 1692b(3)’s plain language to determine its purpose). Because the purpose of § 1692c(b) is to protect consumers alone, we conclude that Magdy falls outside § 1692c(b) ’s "zone of interests" and thus cannot invoke the protection afforded by it.

Magdy emphasizes that § 1692c(b) limits communications with third parties, not consumers. He contrasts § 1692c(b) with its neighboring provision, § 1692c(a), which restricts debt collectors’ communications with consumers. Section 1692c(a) begins: "Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt ...." Magdy argues, "ICS conflates a third party's lack of standing under Section 1692c(a), which literally applies only to ‘communications with consumers,’ with a third party's standing under Section 1692c(b), which literally applies to ‘communications with third parties.’ " Appellant Reply Br. 14. The difference between communication recipients in subsections (a) and (b), however, is not determinative of the question of standing. Basing third-party standing on communication recipients would logically mean that consumers lack standing to sue debt collectors for § 1692c(b) violations because the communication was not directed toward them. Such a rigid limitation "would be inconsistent with § 1692c(b), a...