232 F.Supp.3d 656
Britton THOMAS, on behalf of himself and those similarly situated, Plaintiff,
v.
JOHN A. YOUDERIAN JR., LLC ; John A. Youderian Jr. and John Does 1 to 10, Defendants.
Civ. No. 2:16–CV–01408–KM–MAH
United States District Court, D. New Jersey.
Signed February 3, 2017
Yongmoon Kim, Kim Law Firm LLC, Hackensack, NJ, for Plaintiff.
Meredith Kaplan Stoma, Morgan Melhuish Abrutyn, Livingston, NJ, for Defendants.
OPINION
KEVIN MCNULTY, United States District Judge
Plaintiff Britton Thomas ("Thomas") brings a putative class action based on a
statement in a debt collection letter he received (the "Letter") advising that if Thomas took the option of paying the reported debt by credit card, a $3.00 convenience fee (the "Convenience Fee") would be added. Thomas contends the Convenience Fee is neither authorized by contract nor permitted by law, and therefore the Letter contains false, deceptive, and misleading language, violating provisions of the Fair Debt Collections Practice Act (the "FDCPA"), 15 U.S.C. §§ 1692e, 1692f, and 1692g. The defendants, the alleged debt collectors who sent the Letter, move to dismiss Thomas's amended complaint for lack of standing and for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6).
Because I find that Thomas has standing and that he has adequately stated claims under 15 U.S.C. §§ 1692e, 1692e(2), 1692e(10), 1692f, and 1692f(1), I will deny the defendants' motion to dismiss as to those claims. I will grant the defendants' motion to dismiss, however, with respect to Thomas's claims alleging violations of 15 U.S.C. §§ 1692e(5) and 1692g(a)(1) for failure to state a claim, pursuant to Fed. R. Civ. P. 12(b)(6).
Background
Thomas alleges defendant John A. Youderian Jr., an attorney, and his debt collection business, defendant John A. Youderian Jr., LLC (collectively, "Youderian"), engage in debt collection for individuals' past-due or defaulted debts "incurred primarily for personal, family or household purposes." (AC ¶¶ 5–7, 10–11)1 According to Thomas, Youderian uses mail, telephone, the internet, and other means of interstate commerce for debt collection efforts. (Id. ¶ 13)
Thomas alleges the Letter, dated March 12, 2015, was the first written communication he received from Youderian. That Letter reports that Thomas owes $327.80 to Allergy Consultants PA—Thomas's original creditor, which assigned Thomas's past-due account to Youderian for collection. (Id. ¶¶ 17–27, Ex. A) Two payment options are offered. The first option is to pay by mailing a check or money order. The second option is to pay by credit card.
The Letter states, in part: "You may pay by credit card by filling out the bottom portion of this letter and sending it to our office or by calling us at (856)376–[XXXX].... If you pay by check or money order, your check or money order should be made out to ‘John A. Youderian Jr. Esq.’ and sent to the address at the top of this page." (Id. ¶ 28, Ex. A). The bottom portion of the Letter is essentially a removable coupon, which can be cut off and returned with payment. The Letter cautions: "PLEASE NOTE: WE WILL ADD $3.00 TO ALL CREDIT CARD CHARGES FOR THIS CONVENIENCE."2
Thomas alleges—counterintuitively—that because the only way to avoid the Convenience Fee according to the Letter is to mail a check or money order, "Defendants' collection letters ... are designed to drive least sophisticated consumers, such as Plaintiff, to make payments by credit card." (Id. ¶¶ 32–34) He also alleges that the Convenience Fee language is "intended to falsely convey that Defendants are legally and/or contractually permitted to charge a $3.00 ‘convenience fee’... when in fact such a fee/charge is neither authorized by contact nor permitted by law," and that the original creditor-Allergy Consultants PA—does not charge consumers a $3.00 convenience fee to pay by credit card. (Id. ¶¶ 35, 39). Further, alleges Thomas, the language concerning the Convenience Fee is materially false and intended to confuse letter recipients "about the exact amount of money they allegedly owed." (Id. ¶ 41) Thomas claims that Youderian, as a matter of policy and practice, makes false representations in debt collection letters concerning services rendered or compensation received and collects unauthorized amounts "incidental to the principal obligation." (Id. ¶ 48).
Seeking actual and statutory damages, attorney's fees, and costs for Youderian's violation of the FDCPA, as authorized by 15 U.S.C. § 1692k, (see generally Id. ¶¶ 64–73, VIII), Thomas seeks to join as a class of "consumers" (as defined by 15 U.S.C. § 1692a(3) ), all persons with an address in New Jersey who paid the Convenience Fee and/or to whom Youderian sent a letter containing a statement about the Convenience Fee. (Id. VIII, ¶ 52)
Thomas alleges Youderian has violated several provisions of the FDCPA, as follows:
(a) Defendants made false, deceptive or misleading representations or means in connection with the collection of a debt, in violation of 15 U.S.C. § 1692e ;
(b) Defendants made false representations of the character, amount, or legal status of a debt, in violation of 15 U.S.C. § 1692e(2)(A) ;
(c) Defendants made false representations that services rendered or compensation may be lawfully received, in violation of 15 U.S.C. § 1692e(2)(B) ;
(d) Defendants threatened to take any action that cannot legally be taken or that is not intended to be taken, in violation of 15 U.S.C. § 1692e(5) ;
(e) Defendants used false representations or deceptive means to collect or attempt to collection a debt, in violation of 15 U.S.C. § 1692e(10)
(f) Defendants used unfair or unconscionable means to collect or attempt to collect a debt, in violation of 15 U.S.C. § 1692f ;
(g) Defendants attempted to collect any amount (including any interest, fee, charge, or expense incidental to the principal obligation) not expressly authorized by the agreement creating the debt or permitted by law, in violation of 15 U.S.C. § 1692f(1) ; and
(h) Defendants failed to properly disclose the amount of the debt, in violation of 15 U.S.C. § 1692g(a)(1).
(AC ¶ 71(a)–(h))3
Legal Standard
Under Fed. R. Civ. P. 12(b)(6), the defendant, as the moving party, bears
the burden of showing that no claim has been stated. Animal Science Products, Inc. v. China Minmetals Corp. , 654 F.3d 462, 469 n. 9 (3d Cir. 2011). For the purposes of a motion to dismiss, the facts alleged in the complaint are accepted as true and all reasonable inferences are drawn in favor of the plaintiff. New Jersey Carpenters & the Trustees Thereof v. Tishman Const. Corp. of New Jersey , 760 F.3d 297, 302 (3d Cir. 2014).
Federal Rule of Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiff's obligation to provide the ‘grounds' of his ‘entitlement to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiff's right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570, 127 S.Ct. 1955 ; see also West Run Student Housing Assocs., LLC v. Huntington Nat. Bank , 712 F.3d 165, 169 (3d Cir. 2013). That facial-plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). While "[t]he plausibility standard is not akin to a ‘probability requirement’... it asks for more than a sheer possibility." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.
In addition to seeking to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), the defendants contend that Thomas lacks standing. Standing has a Constitutional aspect, which implicates the court's subject matter jurisdiction under Rule 12(b)(1).
Rule 12(b)(1) challenges may be either facial or factual attacks. See 2 Moore's Federal Practice § 12.30[4] (3d ed. 2007); Mortensen v. First Fed. Sav. & Loan Ass'n , 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge asserts that the complaint does not allege sufficient grounds to establish subject matter jurisdiction. Iwanowa v. Ford Motor Co. , 67 F.Supp.2d 424, 438 (D.N.J. 1999). A court considering such a facial challenge assumes that the allegations in the complaint are true, and may dismiss the complaint only if it nevertheless appears that the plaintiff will not be able to assert a colorable claim of subject matter jurisdiction. Cardio–Med. Assoc., Ltd. v. Crozer–Chester Med. Ctr. , 721 F.2d 68, 75 (3d Cir. 1983) ; Iwanowa , 67 F.Supp.2d at 438. A factual attack, on the other hand, permits the Court to consider evidence extrinsic to the pleadings. Gould Elecs. Inc. v....
