Opinion
Civ. File No. 03-1018 (PAM/RLE)
June 25, 2003
MEMORANDUM AND ORDER
This matter is before the Court on Defendant's partial Motion to Dismiss under Rule 12(b)(6). For the reasons that follow, the Motion is granted in part and denied in part.
BACKGROUND
This putative class action is premised on the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Plaintiff Timothy Bishop brings two claims on behalf of himself and all others similarly situated. His wife, Plaintiff Nadine Bishop brings a separate individual claim.
The Bishops' claims arise out of a dishonored check in the amount of $10.71. According to the Bishops, outgoing mail was stolen from their mailbox, and the thief used information on the checks he stole to print new checks containing the Bishops' account and address information. The forged checks were subsequently dishonored by the Bishops' bank.
The creditor to whom the instant check was payable sent the dishonored check to Defendant Global Payment Check Recovery Services ("Global") for payment. Global does business as CheckRite. Global then sent a letter to Mr. Bishop requesting payment on the check. That letter forms the basis for Mr. Bishop's two claims. Global also allegedly telephoned Mrs. Bishop and verbally abused her, which is the basis for her individual claim. Global has not moved to dismiss Mrs. Bishop's claim.
The letter Global sent to Mr. Bishop has two parts. First, Global informed Mr. Bishop that if he did not pay the dishonored check within 30 days from the date the letter was mailed, he would face certain penalties under Minnesota law. Second, Global informed Mr. Bishop that, under the FDCPA, he had 30 days from the date that he received the letter to dispute the validity of the debt. Mr. Bishop contends that the information about potential penalties under Minnesota law overshadowed the information about his rights under the FDCPA in violation of 15 U.S.C. § 1692g. Global asks the Court to find as a matter of law that the letter it sent to Mr. Bishop does not violate § 1692g and to dismiss his two claims. Global alternatively contends that Mr. Bishop's declaratory judgment claim is not of sufficient immediacy to constitute an actual controversy within the meaning of Article III and must therefore be dismissed.
DISCUSSION A. Standard of Review
When analyzing a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, the Court must construe the allegations in the pleadings and make all reasonable inferences arising from the pleadings in favor of the non-moving party. Morton v. Becker, 793 F.2d 185, 187 (8th Cir. 1986). The Court should not, however, "blindly accept the legal conclusions drawn by the pleader from the facts." Id. A motion to dismiss will be granted only if "it appears beyond doubt that the [non-movants] can prove no set of facts which would entitle [them] to relief." Id.; see also Conley v. Gibson, 355 U.S. 41, 45-46 (1957).
B. Count I: Violation of FDCPA
In pertinent part, the FDCPA requires a debt collector to inform a consumer from whom the collector is attempting to collect a debt that
(3) . . . unless the consumer, within thirty days after receipt of the [collection] notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) . . . if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector. . . .15 U.S.C. § 1692g(a). Section 1692g(b) requires a debt collector to cease attempting to collect the debt if it receives notice from the consumer that the debt is disputed. If a debt collector violates the statute, the consumer is entitled to actual damages, statutory damages of $1000 per violation, and reasonable attorneys' fees. Id. § 1692k(a).
The parties do not dispute that, if a collection letter contains information that is inconsistent with or otherwise obscures a consumer's right to dispute or validate the debt under § 1692g, that letter violates § 1692g. See Avila v. Rubin, 84 F.3d 222, 226 (7th Cir. 1996). The parties also do not dispute that the Court must view the information provided through the eyes of the "unsophisticated" or "least sophisticated" consumer. See id.
The letter Global sent to Mr. Bishop is dated February 5, 2002. At the top of the letter, in bold type are the words, "STATUTORY NOTICE OF DISHONOR (pursuant to MSA Sec. 609.535) REQUEST FOR PAYMENT." (Compl. Ex. 1.) The letter then informs Mr. Bishop that he owes $40.71, which is the amount of the dishonored check plus a $30 service charge.
The letter goes on to provide that:
[i]f the original amount of the check is not paid within thirty (30) days of the date of this letter, you may be subject to the following penalties in addition to the face amount of the dishonored check and service charge(s) pursuant to Minnesota Statutes Annotated (Sec. 332. 50):
a) a civil penalty of up to $100 or the value of the check, whichever is greater;
b) statutory interest on the face amount of the check to accrue from the date of dishonor; and
c) reasonable attorney fees if the aggregate amount of the dishonored check issued by you to all payees within a six-month period exceeds $1,250.
Also, Minnesota statutes 1997, Section 609.535, provides for criminal penalties . . . in the event of a conviction for issuing a dishonored check. . . .
Your payment of the amount of the check within thirty (30) days of the date of this letter may prevent the assessment against you of the penalties set forth in a., b. and c. above. Please take this opportunity to pay the amount currently due.
(Id.) The letter then recites all of the required language from § 1692g discussed above. Finally, the letter informs Mr. Bishop that "[c]oded information indicating the return of the above referenced check has been entered into a database which is accessible by our member merchants and may affect your check writing privileges. The information will be removed from the database on receipt of the requested payment." (Id.)
Mr. Bishop filed suit, contending that Global's letter violates § 1692g because it threatens penalties unless the consumer pays the debt within 30 days from the date of the letter. Section 1692g allows consumers 30 days from receipt of the letter to notify the debt collector that there is a dispute regarding the debt. According to Mr. Bishop, an unsophisticated consumer would be confused by the difference in dates given in the letter. Global contends that under Minnesota law it is required to inform consumers of possible penalties if the debt is not paid. Thus, Global argues, it cannot be liable for providing that information. Moreover, Global contends that the information in the letter is not confusing and does not overshadow the required FDCPA language as a matter of law.
Minnesota law does not require Global to provide to a consumer information about possible penalties unless Global intends to pursue those penalties. Thus, Global could have refrained from including this potentially confusing information in the same letter as the FDCPA language. Global should also have made clear that the penalties provided under Minnesota law are separate and independent from Mr. Bishop's right to dispute the debt under the FDCPA, and that, if Global were to seek penalties and Mr. Bishop subsequently were to dispute the debt, Global would be obliged to suspend its efforts to secure the statutory penalties. "[I]t is possible to devise a form of words that will inform the debtor of the risk of [penalties] without detracting from the statement of his statutory rights." Bartlett v. Heibl, 128 F.3d 497, 501 (7th Cir. 1997).
Because Minnesota law does not mandate the choice Global made to include both the Minnesota law penalties and the FDCPA requirements with no explanation of how the two fit together, Global's first argument fails.
Courts construe the requirements of § 1692g strictly. Moreover, there is no requirement that the plaintiff consumer actually be misled by the letter at issue. Id. at 499 Global's letter tells Mr. Bishop that if he does not pay the debt within 30 days from the date of the letter he may face civil and criminal penalties. It also tells him that he can contest the validity of the debt within 30 days from receipt of the letter. As the Judge Posner stated in Bartlett, "[t]his leaves up in the air what happens if he is [penalized] on the [30th day after the date of the letter], say, and disputes the debt on the [30th day after he receives the letter]. He might well wonder what good it would do him to dispute the debt if he can't stave off [the penalties]." Id. at 501.
Although the difference in dates here is less dramatic that the difference noted in other cases brought under § 1692g, the FDCPA imposes strict liability for any violation of this provision. Because the difference in dates might confuse the unsophisticated consumer whom the FDCPA is meant to protect, Global cannot establish that its letter complies with § 1692g as a matter of law. The Motion to Dismiss Count I is denied.
C. Count II: Declaratory Judgment
In Count II of the Complaint, Mr. Bishop seeks a declaration that the letter in question violates the FDCPA. However, a declaratory judgment is not available for violations of the FDCPA. See Jones v. The CBE Group, Inc., ___ F. Supp.2d ___, Civ. No. 02-4202, 2003 WL 21312756, at *2 (D.Minn. Jun. 6, 2003) (Doty, J.). The FDCPA does not provide for equitable relief, and a declaratory judgment is undisputedly equitable relief. Id. Thus, Mr. Bishop cannot seek a declaratory judgment for violations of the FDCPA.
Jones also denied class certification in a matter very similar factually to the instant matter. Id. at *11. The court found that the class action mechanism was not the superior method of adjudicating the dispute in that case. Id.
CONCLUSION
Accordingly, based upon all of the files, records, and proceedings herein, IT IS HEREBY ORDERED that:
1. Defendant's Motion to Dismiss (Clerk Doc. No. 7) is GRANTED in part and DENIED in part; and
2. Count II of the Complaint is DISMISSED.