Maleh v. United Collection Bureau, Inc.

287 F.Supp.3d 265

Barouk MALEH, individually and on behalf of all others similarly situated, Plaintiff,

v.UNITED COLLECTION BUREAU, INC., Defendant.

16–CV–5873 (MKB)

United States District Court, E.D. New York.

Signed January 26, 2018

Joseph H. Mizrahi, Cohen & Mizrahi LLP, Alan J. Sasson, Law Office of Alan J. Sasson, P.C., Brooklyn, NY, for Plaintiff.

Devika Persaud, Troutman Sanders LLP, Richmond, VA, Amanda Lyn Genovese, Troutman Sanders LLP, New York, NY, Ethan G. Ostroff, Pro Hac Vice, Troutman Sanders LLP, Virginia Beach, VA, for Defendant.

MEMORANDUM & ORDER

MARGO K. BRODIE, United States District Judge

Plaintiff Barouk Maleh commenced the above-captioned putative class action against Defendant United Collection Bureau, Inc. ("UCB"), alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. ("FDCPA"). (Compl., Docket Entry No. 1.) Defendant moves to dismiss the Complaint for failure to state a claim upon which relief may be granted pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. (Def. Mot. to Dismiss ("Def. Mot."), Docket Entry No. 15; Def. Mem. in Supp. of Def. Mot. ("Def. Mem."), Docket Entry No. 15–1.) For the reasons discussed below, the Court grants Defendant's motion.

I. Background

The Court assumes the truth of the factual allegations in the Complaint for the purpose of deciding Defendant's motion. At some time prior to August 31, 2016, Plaintiff allegedly incurred an obligation to Citibank, N.A. ("Citibank"). (Compl. ¶ 15.) According to Plaintiff, "[t]he ...obligation arose out of a transaction in which money, property, insurance or services, which are the subject of the transaction, are primarily for personal, family or household purposes." (Id. ¶ 16.) At an unspecified time thereafter, Citibank contracted with Defendant to collect the debt. (Id. ¶ 21.) Defendant then sent Plaintiff a written letter dated August 31, 2016, seeking payment in satisfaction of the debt. (Id. ¶ 22; Def. Collection Letter dated Aug. 31, 2016 ("Collection Letter"), annexed to Compl. as Ex. A.) The bottom of the letter listed the creditor as Citibank, N.A., stated that the letter was regarding a "Citi Mastercard," and listed Plaintiff's "Current Account Balance" as $26,658.34. (Collection Letter.) The top of the letter stated, in relevant part, the following:

The below is an itemized accounting of the debt as required by state statute:

(Collection Letter.) Plaintiff filed suit on October 21, 2016 on behalf of himself and all other New York residents who received a collection letter from Defendant in substantially the same form. (Compl. ¶ 12.) Plaintiff argues that Defendant's attempt to collect "post charge-off interest"¹ violates sections 1692e and 1692f of the FDCPA, (id. ¶¶ 31–47), and that the Collection Letter, in "fail[ing] to disclose whether the balance may further increase due to interest and fees," (id. ¶ 60), fails to "clearly, explicitly and unambiguously convey the amount of debt" in violation of section 1692g, (id. ¶ 61). Plaintiff seeks damages, as well as declaratory and injunctive relief. (Id. ¶¶ 7, 72.)

II. Discussion

a. Standard of review

In reviewing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must construe the complaint liberally, "accepting all factual allegations in the complaint as true and drawing all reasonable inferences in the plaintiff's favor." Concord Assocs., L.P. v. Entm't Prop. Trust , 817 F.3d 46, 52 (2d Cir. 2016) (quoting Chambers v. Time Warner Inc. , 282 F.3d 147, 152 (2d Cir. 2002) ); see also Tsirelman v. Daines , 794 F.3d 310, 313 (2d Cir. 2015) (quoting Jaghory v. N.Y. State Dep't of Educ. , 131 F.3d 326, 329 (2d Cir. 1997) ). A complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Matson v. Bd. of Educ. , 631 F.3d 57, 63 (2d Cir. 2011) (quoting Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) ); see also Pension Ben. Guar. Corp. ex rel. St. Vincent Catholic Med. Ctrs. Ret. Plan v. Morgan Stanley Inv. Mgmt. Inc. , 712 F.3d 705, 717–18 (2d Cir. 2013). Although all allegations contained in the complaint are assumed true, this principle is "inapplicable to legal conclusions" or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

b. Statutory framework

"Congress enacted the FDCPA 'to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.' " Vincent v. The Money Store , 736 F.3d 88, 96 (2d Cir. 2013) (quoting 15 U.S.C. § 1692e ); see also Carlin v. Davidson Fink LLP , 852 F.3d 207, 214 (2d Cir. 2017) ("We have ...recognized that the 'FDCPA was passed to protect consumers from deceptive or harassing actions taken by debt collectors.' " (emphasis omitted) (quoting Kropelnicki v. Siegel , 290 F.3d 118, 127 (2d Cir. 2002) ) ). "To accomplish these goals, the FDCPA creates a private right of action for debtors who have been harmed by abusive debt collection practices." Benzemann v. Citibank, N.A. , 806 F.3d 98, 100 (2d Cir. 2015) (citing 15 U.S.C. § 1692k ).

To establish a violation under the FDCPA, "(1) the plaintiff must be a 'consumer' who allegedly owes the debt or a person who has been the object of efforts to collect a consumer debt, (2) the defendant collecting the debt [must be] considered a 'debt collector,' and (3) the defendant [must] ha[ve] engaged in an[ ] act or omission in violation of FDCPA requirements."² Polanco v. NCO Portfolio Mgmt., Inc. (Polanco II) , 132 F.Supp.3d 567, 578 (S.D.N.Y. 2015) (quoting Plummer v. Atl. Credit & Fin., Inc. , 66 F.Supp.3d 484, 488 (S.D.N.Y. 2014) ).

c. Failure to adequately allege a debt under the FDCPA

Defendant argues that Plaintiff has not adequately alleged that the debt at issue is covered by the FDCPA. (Def. Mem. 9–10.)

The FDCPA protects debtors in connection with the collection of certain debts, but not others. The Act "defines a 'debt' as 'any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.' " Beauvoir v. Israel , 794 F.3d 244, 247 (2d Cir. 2015) (quoting 15 U.S.C. § 1692a(5) ); see Eades v. Kennedy, PC Law Offices , 799 F.3d 161, 170 (2d Cir. 2015) (quoting same); Scarola Malone & Zubatov LLP v. McCarthy, Burgess & Wolff , 638 Fed.Appx. 100, 102 (2d Cir. 2016) ("While the FDCPA protects consumers from abusive debt collection practices ...it applies only in instances where a debt collector attempts to collect a 'debt' within the meaning of the Act." (citations omitted) ).

Plaintiff has failed to plead facts establishing that the debt at issue falls within the scope of the FDCPA's protection. Plaintiff's only allegation regarding the nature of the debt is that it "arose out of a transaction in which money, property, insurance or services, which are the subject of the transaction, are primarily for personal, family or household purposes." (Compl. ¶ 16.) This allegation does not provide the necessary factual support to sustain Plaintiff's claim.³ See Scarola Malone & Zubatov LLP , 638 Fed.Appx. at 102. In Scarola , the Second Circuit affirmed the district court's dismissal of the plaintiff's FDCPA claims where the complaint stated that the "alleged debt arose from purported transactions related to a business telephone account," and was thus a commercial debt that did not fall within the FDCPA's definition of "debt." Id. The Second Circuit also addressed an additional statement in the plaintiff's complaint, which alleged that the debt was "primarily for personal, family or household purposes." Id. The Second Circuit rejected the argument that this allegation brought the debt within the ambit of the FDCPA, finding it to be a "mere conclusory statement[ ] not supported by facts from which the inference could be reasonably drawn that collection efforts arose from a consumer transaction." Id. at 102–03. The Court recognizes that, unlike the plaintiff in Scarola , Plaintiff has not pled facts affirmatively suggesting that the debt at issue is commercial in nature or otherwise outside the FDCPA's reach. However, the Second Circuit's view of the additional allegations in Scarola is nonetheless instructive. Like the plaintiff in Scarola , Plaintiff's allegation that the debt at issue "arose out of a transaction in which money, property, insurance or services, which are the subject of the transaction, are primarily for personal, family or household purposes" are mere conclusory statements that regurgitate the statutory definition of "debt" without pleading any facts from which the Court could ascertain or even infer "the asserted basis for the obligation to pay,"⁴ id. at 102 (quoting Beauvoir , 794 F.3d at 248 ).

Numerous courts have concluded that plaintiffs who recite the statutory definition of "debt" rather than plead facts regarding the debt's nature have not adequately pled an FDCPA claim. See Garcia v. Primary Fin. Servs. , 605 Fed.Appx. 418, 418–19 (5th Cir. 2015) (affirming dismissal of claims based on identical language, and reiterating prior holding that "recitation of a key statutory phrase, without any accompanying factual content, was merely a threadbare recital of a cause of action" (alteration, internal citation and quotation marks omitted) (quoting ...