Torres v. Midland Credit Mgmt., Inc.

NURIA TORRES, Individually and on behalf of all others similarly situated, Plaintiff, v. MIDLAND CREDIT MANAGEMENT, INC., Defendant.

17-cv-2794 (SJF)(ARL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

May 21, 2018

MEMORANDUM AND DECISION

FEUERSTEIN, District Judge:

I. INTRODUCTION

Plaintiff Nuria Torres ("Plaintiff") brings this putative class action against Defendant Midland Credit Management, Inc. ("Defendant") under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (the "FDCPA"). See generally Complaint ("Compl.") Docket Entry ["DE"] 1. Defendant has moved to dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) for failure to state a claim. See Notice of Motion to Dismiss [DE 14]. Plaintiff opposes the motion. For the reasons that follow, Defendant's motion is granted.

II. BACKGROUND

A. Factual Background

The following facts, which are assumed to be true for purposes of adjudicating the instant motion, are taken from the Complaint as well as the Collection Letter attached thereto.

Plaintiff, an individual residing in the State of New York, is a "consumer" as that term is defined by the FDCPA since she is "allegedly obligated to pay a debt." Compl. ¶¶ 5-6.¹ Defendant is a "debt collector" within the meaning of the FDCPA since it is primarily engaged in "the collection of debts allegedly owed by consumers." Id. ¶¶ 8-9.²

Plaintiff incurred a debt "on an account with Verizon New York, Inc." Id. ¶¶ 10-11. As part of its efforts to collect this debt, Defendant sent Plaintiff a letter on May 25, 2016, see id. Exhibit ("Ex.") 1 (the "Collection Letter"), which identifies "Verizon New York, Inc." as the entity to whom the debt is owed and sets forth a "Balance Due" of "$759.18." Id. The body of Collection Letter includes the following language:

Dear Nuria,

Congratulations! You have been pre-approved for a discount program designed to save you money. Act now to maximize your savings and put this debt behind you by calling (800) 282-2644. Pay online today at www.midlandcreditmanagementonline.com.³

Id. (emphasis in original). Notwithstanding the date of the Collection Letter, Plaintiff states that Plaintiff's "last payment on the account was [made] prior to 2011" and that "[t]he statute of limitations for the Debt, pursuant to 47 U.S.C. § 415(a), is two years" which, according to Plaintiff, "began to accrue prior to 2011." Id. ¶¶ 13-15. Because, in Plaintiff's view, the letterwas sent "after the statute of limitations expired," id. ¶ 17, the letter violates the FDCPA since it fails to provide any indication to Plaintiff that: (1) "no legal action could be undertaken to attempt to recover the debt;" (2) "any partial payment by Plaintiff may result in the revival of Plaintiff's otherwise time-barred debt;" and (3) "the Letter fails to provide the notifications required by 22 N.Y.C.R.R. § 1.3.⁴ Id. ¶¶ 22-24. Because of these "omissions . . . the Letter would mislead the least sophisticated consumer to believe that the time-barred debt is legally enforceable; and therefore, Defendant violated 15 U.S.C. §1692e(2)(A). Id. ¶ 27. In addition, "the Letter would mislead the least sophisticated consumer to believe that making a partial payment would not revive the otherwise time-barred debt; and therefore, Defendant violated 15 U.S.C. §1692e." Id. ¶ 28.

III. DEFENDANT'S MOTION TO DISMISS

A. Standard of Review

In deciding a motion to dismiss pursuant to Rule 12(b)(6), the Court must liberally construe the claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences in favor of the plaintiff. See Aegis Ins. Servs., Inc. v. 7 World Trade Co., L.P., 737 F.3d 166, 176 (2d Cir. 2013) (quotations and citation omitted); Grullon v. City of NewHaven, 720 F.3d 133, 139 (2d Cir. 2013). The plaintiff must satisfy "a flexible 'plausibility standard.'" Iqbal v. Hasty, 490 F.3d 143, 157 (2d Cir. 2007), rev'd on other grounds sub nom. Ashcroft v. Iqbal, 556 U.S. 662 (2009). "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 546 (2007). The Court, therefore, does not require "heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face." Id. at 570; see Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86, 91 (2d Cir. 2010) (holding that a complaint must set forth "a plausible set of facts sufficient 'to raise a right to relief above the speculative level.'") (quoting Twombly, 550 U.S. at 555).

The Supreme Court clarified the appropriate pleading standard in Ashcroft v. Iqbal, 556 U.S. 662 (2009), in which the court set forth a two-pronged approach to be utilized in analyzing a motion to dismiss. District courts are to first "identify [ ] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 679; see id. at 678 ("A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'") (quoting Twombly, 550 U.S. at 555)). Though "legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. Second, if a complaint contains "well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief." Id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a 'probability requirement,' but it asks for more than a sheerpossibility that a [d]efendant has acted unlawfully." Id. at 678 (citing Twombly, 550 U.S. at 556-57) (internal citations omitted).

In adjudicating a Rule 12(b)(6) motion to dismiss, the Court must limit itself to facts alleged in the complaint, which are accepted as true; to documents attached to the complaint as exhibits or incorporated in the complaint by reference; to matters of which judicial notice may be taken; or to documents whose terms and effect are relied heavily upon in the complaint and, thus, are rendered "integral" to the complaint. Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir. 2002); see also ASARCO LLC v. Goodwin, 756 F.3d 191, 198 (2d Cir. 2014).

B. The Parties' Arguments

The crux of Defendant's argument is that Plaintiff's reliance upon the two-year statute of limitations set forth in 47 U.S.C. § 415(a) is misplaced since this statute of limitations "does not apply to cellular telephone debts like the account at issue in this case." Midland's Memorandum of Law in Support of its Motion to Dismiss Plaintiff's Complaint ("Def.'s Mem.") at 3. Relying almost exclusively on the Fifth Circuit's decision in Castro v. Collecto Inc., 634 F.3d 779 (5th Cir. 2011), Defendant's position is that "§ 415(a) only applies to actions to collect on tariff charges filed with the Federal Communications Commission ("FCC") and does not apply to cellular telephone debt." Id. Thus, based upon the reasoning in Castro, Defendant concludes that because "Plaintiff's debt originated from 'a personal cellular telephone' that is not regulated by tariffs filed with the FCC . . . New York's six-year statute of limitations for collection of a contractual debt applies." Id. at 5 (citing N.Y.C.P.L.R. § 213). Accordingly, because the "Settlement Letter was [ ] sent prior to the expiration of the statute of limitations to collect on the Account . . . Plaintiff fails to state a claim under the FDCPA." Id. Alternatively, Defendant asserts that (1) even if the two-year statute of limitations was applicable, "23 N.Y.C.R.R. § 1.3does not provide for a private cause of action" and (2) because "a debt collector does not violate the FDCPA by simply requesting repayment, as long as there is no threat of litigation" no violation occurred here since "[t]he Settlement Letter makes no threats . . . related to litigation." Id. at 7-8. Thus, "even if the statute of limitations had expired before the Settlement Letter was sent, Plaintiff's FDCPA claim must still be dismissed." Id. at 8.

In opposition, Plaintiff states that "the term 'lawful charges' as [ ] used in 47 U.S.C. § 415(a) is plain and unambiguous and, therefore, should be accorded its ordinary meaning" and that upon "making such a finding . . . the Court's inquiry should end there." Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss ("Pl.'s Opp'n") at 9. Alternatively, Plaintiff "urges the Court to reject the Fifth Circuit's holding in Castro" since, "the Fifth Circuit violated the first rule of statutory construction, by searching for an ambiguity where none existed . . . [and by] interpreting the statute in such a way as to render it superfluous." Id. at 9, 11. In addition, Plaintiff clarifies that she is "not assert[ing] a cause of action alleging a violation of 23 NYCRR § 1.3" and that reference to this regulation "was intended to do nothing more than illustrate the ways in which Defendant could have articulated the requisite disclaimers so as to render the Letter neither false nor misleading to the least sophisticated consumer. . . ." Id. at 15.

In reply, Defendant reasserts that "Castro makes clear that [Defendant] did not violate the FDCPA when it sent the Settlement Letter because New York's six-year statute of limitations applies to [Plaintiff's] debt." Midland's Reply Memorandum of Law in Further Support of its Motion to Dismiss Plaintiff's Complaint ("Def.'s Reply") at 2. While Defendant concedes thatCastro is not binding upon this Court, it nevertheless asserts that Castro is "well-reasoned" and has not otherwise "been criticized or challenged by any other court." Id. at 4.⁵

C. Applicable Law

1. The Doctrine of Federal Preemption

"It is a familiar and...