Baye v. Midland Credit Management, Inc. et al

MOTION to Dismiss for Failure to State a Claim

E.D. La.June 29, 2017

IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA Joan Baye, on behalf of herself and ) all others similarly situated, ) ) Plaintiff, ) ) v. ) Case No. 2:17-CV-4789 ) Midland Credit Management, Inc. ) Section: “F” (2) and Midland Funding, LLC, ) ) Defendant. ) MOTION TO DISMISS UNDER RULE 12(b)(6) Defendants Midland Credit Management, Inc. and Midland Funding, LLC (collectively, “Midland”) file this Motion to Dismiss under Rule 12(b)(6), requesting the Court dismiss Plaintiff Joan Baye’s complaint in its entirety, with prejudice. In support, Midland attaches hereto a Memorandum of Law in Support of Motion to Dismiss under Rule 12(b)(6) and further shows as follows: Baye alleges that Midland violated sections 1692d, 1692e, and 1692f of the Fair Debt Collection Practices Act (“FDCPA”) by sending three letters in an attempt to collect debts subject to a statute of limitations defense, which letters contained the following language: The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau. (Doc. 2, ¶ 34, Exs. A-C). Case 2:17-cv-04789-MLCF-JCW Document 10 Filed 06/29/17 Page 1 of 4 2 Counts I and II allege that Midland “violated 15 U.S.C. § 1692d by sending [her] collection letters on multiple occasions about the same time-barred debt.” (Doc. 2, ¶¶ 71, 73-74). However, these claims fail because seeking “voluntary payment . . . is permissible even when the statute of limitations has rendered the debt unenforceable,”1 and “[t]he FDCPA does not prohibit a debt collector from contacting a debtor multiple times in an attempt to collect a legitimate debt.”2 In Counts III and IV Baye claims Midland “violated 15 U.S.C. § 1692e by using false, deceptive, or misleading representations or means by sending the Letters on debts known to be time-barred in Louisiana.” (Doc. 2, ¶¶ 76, 78). In support, Baye variously alleges that Midland’s correspondence “fail[s] to disclose the revivable nature of a time-barred debt in Louisiana”; “describe[s] the benefits of a partial payment without disclosing the legal consequences of such a payment in Louisiana”; “impl[ies] that [Midland] is choosing not to sue, when in fact . . . it is prohibited from doing so”; and “implies that [Midland] is choosing not to report the Citi Debt, when it could not be legally reported under 15 U.S.C. § 1681c(a)(4).” (Doc. 2, ¶¶ 40, 41, 43, 45). Yet, “[n]o case has determined that a 1 Genova v. Total Card, Inc., 193 F. Supp. 3d 360, 366-67 (D.N.J. 2016) (quoting Huertas v. Galaxy Asset Management, 641 F.3d 28, 32 (3d Cir. 2011) (granting motion to dismiss). 2 (Doc. 2, ¶¶ 71, 73-74); Brooks v. Flagstar Bank, FSB, No. 11-67, 2011 WL 2710026, at *7 (E.D. La. July 12, 2011) (Vance, J.) (citing McVey v. Bay Area Credit Service, No. 4:10-CV- 359-A, 2010 WL 2927388, at *2-3 (N.D. Tex. July 26, 2010)). Case 2:17-cv-04789-MLCF-JCW Document 10 Filed 06/29/17 Page 2 of 4 3 debt collector must warn of a potential revival of a time-barred claim . . . .”3 And even if such a case exists, it would not apply here because Louisiana law on revival (renunciation) requires far more than partial payment to revive a debt.4 “Louisiana courts repeatedly have held that debtors’ partial payments on prescribed debts do not operate as a renunciation of prescription.”5 Lastly, Counts V and VI fail because Baye fails to “allege any conduct beyond that which [s]he asserts violates the other provisions of the FDCPA, and, in doing so, . . . fails to specifically identify how [the alleged] conduct here was either unfair or unconscionable in addition to being abusive, deceptive, or misleading.”6 Wherefore, premises considered, Midland respectfully requests, for the reason stated herein and the in the accompanying Memorandum of Law, that this Honorable Court dismiss Baye’s complaint with prejudice. 3 Boedicker v. Midland Credit Management, Inc., No. 16-2213, 2016 WL 7492465, at * 5 (D. Kan. Dec. 30, 2016). 4 See also In re Robertson, No. 11-10354, 2014 WL 6967935, at * 2 (Bankr. M.D. La. Dec. 8, 2014) (quoting Weeks v. Louisiana Patient’s Compensation Fund, 858 So.2d 851, 854 (La. App. 2003)) (“Indeed, renunciation ‘requires a new promise to pay the debt . . . .’”). 5 Id. 6 Miljkovic v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1308 (11th Cir. 2015) (granting motion to dismiss claims under § 1692f) (emphasis original). Case 2:17-cv-04789-MLCF-JCW Document 10 Filed 06/29/17 Page 3 of 4 4 Respectfully submitted, this the 29th day of June, 2017. s/ Mathew W. McDade Matthew W. McDade (LSB No. 32899) Balch & Bingham LLP 1310 Twenty Fifth Avenue Gulfport, MS 39501 Telephone: (228) 864-9900 Facsimile: (228) 864-8221 mmcdade@balch.com Attorney for Midland Credit Management, Inc. and Midland Funding, LLC CERTIFICATE OF SERVICE I hereby certify that on June 29, 2017, I electronically filed a copy of the foregoing via CM/ECF, which will provide service on the following: Katherine Z. Crouch Crouch Law, LLC 2372 St. Claude Ave. Suite 224 New Orleans, LA 70117 Katherin.crouch@gmail.com s/ Mathew W. McDade Of Counsel Case 2:17-cv-04789-MLCF-JCW Document 10 Filed 06/29/17 Page 4 of 4 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA Joan Baye, on behalf of herself and ) all others similarly situated, ) ) Plaintiff, ) ) v. ) Case No. 2:17-CV-4789 ) Midland Credit Management, Inc. ) Section: “F” (2) and Midland Funding, LLC, ) ) Defendant. ) MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS’ MOTION TO DISMISS UNDER RULE 12(b)(6) Plaintiff Joan Baye alleges that Midland Credit Management, Inc. and Midland Funding, LLC (collectively, “Midland”) violated the Fair Debt Collection Practices Act (“FDCPA”) by sending three letters in an attempt to collect debts subject to a statute of limitations defense. (Doc. 2). Baye points first to the simple act of attempting to collect a time-barred debt as violating section 1692d of the FDCPA. (Doc. 2, pp. 11-12 (Counts I and II)). However, seeking “voluntary payment . . . is permissible even when the statute of limitations has rendered the debt unenforceable.”1 Baye’s supplemental 1962d allegation that Midland made “multiple” collection attempts also fails to state a claim, because “[t]he FDCPA 1 Genova v. Total Card, Inc., 193 F. Supp. 3d 360, 366-67 (D.N.J. 2016) (quoting Huertas v. Galaxy Asset Management, 641 F.3d 28, 32 (3d Cir. 2011) (granting motion to dismiss). Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 1 of 17 2 does not prohibit a debt collector from contacting a debtor multiple times in an attempt to collect a legitimate debt.”2 Baye next finds troublesome a disclosure made by Midland in each of its communications, which informed her of the applicable statute of limitations: The law limits how long you can be sued on a debt and how long a debt can appear on your credit report. Due to the age of this debt, we will not sue you for it or report payment or non-payment of it to a credit bureau. (Doc. 2, ¶ 34, Exs. A-C). Baye claims this disclosure violates sections 1692e (Counts III and IV) and 1692f (Counts V and VI) of the FDCPA by intimating Midland chose not sue or report rather than the law prohibiting those activities. See (Doc. 2, ¶ 43).3 To bolster those claims, Baye also alleges that Midland’s failure to disclose that partial payment would revive the out-of-statute debts also causes problems under sections 1962e and 1692f. Yet, “[n]o case has determined that a 2 (Doc. 2, ¶¶ 71, 73-74); Brooks v. Flagstar Bank, FSB, No. 11-67, 2011 WL 2710026, at *7 (E.D. La. July 12, 2011) (Vance, J.) (citing McVey v. Bay Area Credit Service, No. 4:10-CV- 359-A, 2010 WL 2927388, at **2-3 (N.D. Tex. July 26, 2010)). 3 Primarily because of their conclusory nature, few, if any, of Baye’s allegations merit the deference afforded under Federal Rule of Civil Procedure 12(b)(6). See Foxx v. My Vintage Baby, Inc.¸624 F. App’x 318, 318 (5th Cir. 2015) (per curium) (“But a court need ‘not accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions.’” (quoting Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir. 2005))); see also Reed v. Receivable Recovery Servs., LLC, No. 16-12666, 2017 WL 1399597, at *4 (E.D. La. Apr. 19, 2017) (“In considering a Rule 12(b)(6) motion, the Court “accept[s] all well-pleaded facts as true and view[s] all facts in the light most favorable to the plaintiff.” (citing Thompson v. City of Waco, Texas, 764 F.3d 500, 502 (5th Cir. 2014)). This allegation-that the phrase “we will not sue” implies choice not prohibition-in particular contains a “unwarranted factual inference” that the Court need not assume as true. See Foxx, 624 F. App’x at 318. Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 2 of 17 3 debt collector must warn of a potential revival of a time-barred claim . . . .”4 And even if such a case exists, it would not apply here because Louisiana law on revival (renunciation) requires far more than partial payment to revive a debt.5 Indeed, “[p]ayments after prescription has accrued are not alone sufficient to tacitly renounce its benefit.”6 “Louisiana courts repeatedly have held that debtors’ partial payments on prescribed debts do not operate as a renunciation of prescription.”7 Stated differently, the “revival” disclosure Baye seeks would itself materially misstate Louisiana law because even if Baye blindly accepted all offers contained in Midland’s letters she would not revive (renounce) the statute of limitations of the debts she owed to Midland. As such, Baye’s allegations “accepted as true, [fail] to state a claim to relief [under the FDCPA] that is plausible on its face.”8 The Court should dismiss Baye’s complaint in its entirety, with prejudice. 4 Boedicker v. Midland Credit Management, Inc., No. 16-2213, 2016 WL 7492465, at *5 (D. Kan. Dec. 30, 2016). 5 See also In re Robertson, No. 11-10354, 2014 WL 6967935, at *2 (Bankr. M.D. La. Dec. 8, 2014) (quoting Weeks v. Louisiana Patient’s Compensation Fund, 858 So.2d 851, 854 (Ct. App. La. 2003)) (“Indeed, renunciation ‘requires a new promise to pay the debt . . . .’”). 6 Id. 7 Id. 8 Gonzalez v. Kay, 577 F.3d 600, 603 (5th Cir. 2009). Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 3 of 17 4 Argument and Citations of Authority I. Section 1692d permits multiple communications to collect on time- barred debts. Baye alleges that Midland “violated 15 U.S.C. § 1692d by sending [her] collection letters on multiple occasions about the same time-barred debt.” (Doc. 2, ¶¶ 71, 73-74). By “multiple,” Baye means three pieces of mail: two letters dated February 3, 2017 and one dated March 15, 2017. See (Doc. 2, ¶¶ 18, 20, 27, Exs. A-C).9 The first two letters relate to debts acquired by Midland from Target National Bank and Chase Bank. See (Doc. 2, ¶¶ 15, 18, 20). The third addressed the purchased Target and Chase debts, as well as a debt Midland acquired from Citibank. See (Doc. 2, ¶ 31). This third mailing included a cover letter, plus one letter for each debt.10 Based on these allegations, Baye concludes that “[s]ending collection letters on multiple occasions about the same time-barred debt has the 9 Baye references a May 2015 “collection letter about the Citi Debt.” (Doc. 2, ¶ 48). However, the complaint does not include that correspondence in the defined term “Letters” that forms the basis of the causes of action in the complaint. Even if Baye did contend that something wrongful exists regarding that 2015 letter, such contention would fail a matter of law because the FDCPA has a one-year statute of limitation which for the 2015 letter expired more than a year before Baye’s complaint was filed. See 15 U.S.C. § 1692k(d). 10 Courts must “view all [well-pleaded nonconclusory] facts in the light most favorable to the plaintiff.” See Thompson v. City of Waco, Texas, 764 F.3d 500, 502 (5th Cir. 2014). However, as shown herein, volume of communication is a legally insufficient ground to state a claim under the FDCPA. Whether Baye alleges Midland sent three or seven letters, she fails to state a claim under section 1692d. Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 4 of 17 5 natural consequence of harassing, oppressing, or abusing the recipient.” (Doc. 2, ¶ 49). However, “[t]he FDCPA does not prohibit a debt collector from contacting a debtor multiple times in an attempt to collect a legitimate debt.” Brooks, 2011 WL 2710026, at *7 (citing McVey, 2010 WL 2927388, at **2-3). Section 1692d “is not intended to shield even the least sophisticated recipients of debt collection activities from the inconvenience and embarrassment that are natural consequences of debt collection.” Beattie v. DM. Collections, Inc., 754 F. Supp. 383, 394 (D. Del. 1991) (citing Bieber v. Associated Collection Servs., Inc., 631 F. Supp. 1410, 1417 (D. Kan. 1986)). “It ‘does not preclude debt collectors from making non- abusive statements designed to encourage voluntary payment,’ but rather prohibits ‘only oppressive and outrageous conduct.’” Pollard v. Law Office of Mandy L. Spaulding, 967 F. Supp. 2d 470, 475 (D. Mass. 2013) (quoting Beattie, 754 F. Supp. at 394). Further, “[l]etters are among the least intrusive means of communicating with a debtor . . . .” Pollard, 967 F. Supp. 2d at 475; see also McDermott v. Marcus, Errico, Emmer & Brooks, P.C., 911 F. Supp. 2d 1, 77 (D. Mass. 2012) (“It is not harassing or coercive to the least sophisticated consumer to send, on a repeated basis, letters to a first mortgagee asking for payment.”). “Letters, so long as they comply with specific FDCPA requirements, represent the least intrusive Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 5 of 17 6 means of communicating with debtors.” Masuda v. Thomas Richards & Co., 759 F. Supp. 1456, 1465 (C.D. Cal. 1991). Notably, in Masuda the plaintiff alleged a debt collector violated section 1629d by sending forty-eight letters; the court disagreed: “Even if all of the alleged forty-eight letters referred to the same debt, it would not be appropriate to deem the mailing of six letters per month as ‘harassing.’” Masuda, 759 F. Supp. at 1465-66. “The statute should not foreclose the most innocuous means of collecting debts from delinquent debtors.” Id. at 1466.11 Nor does the fact that the debts were purportedly time-barred cause the letters to run afoul of 1692d. “[T]he law of many States[] provides that a creditor has the right to payment of a debt even after the limitations period has expired.” Midland Funding, LLC v. Johnson, 137 S. Ct. 1407, 1411 (2017). Louisiana is one of those states. See Reeder v. North, 701 So. 2d 1291, 1298 (La. 1997) (citing Hebert v. Doctors Memorial Hospital, 486 So. 2d 717, 723 (La. 1986); La. Civ. Code art. 1762(1)) (“Although prescription prevents the 11 Possibly because it is the “least intrusive means of communicating with a debtor,” the sending of a letter is not even enumerated or specifically contemplated by 15 U.S.C. §1692d. Pollard, 967 F. Supp. 2d at 475. Even for those categories listed by the statute, volume alone is simply insufficient absent extreme circumstances not alleged in the complaint. “Indeed, courts have noted that ‘[a] remarkable volume of telephone call is permissible under FDCPA jurisprudence.’” Reed, 2017 WL 1399597, at *13 (citing Karp v. Fin. Recovery Servs., Inc., No. 12-CA-985, 2013 WL 6734110, at *6 (W.D. Tex. Dec. 18, 2013) (collecting cases were the following volume of calls was held insufficient: 114 calls in four months, 149 calls in two months, 55 calls over three and a half months; 7 calls in one day)). “Moreover, putting aside the number of calls, there is no evidence of egregious conduct present in this case.” Id. Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 6 of 17 7 enforcement of a right by legal action, it does not terminate the natural obligation.”); see also Bernard, Cassia, Elliott and Davis v. Estate of Laporte, 113 So. 3d 397, 400 (Ct. App. La. 2013) (“[P]rescription prevents the enforcement of a right by legal action but does not terminate the natural obligation.”). In states like Louisiana where the debt is not extinguished, seeking “voluntary payment . . . is permissible even when the statute of limitations has rendered the debt unenforceable.” Genova., 193 F. Supp. 3d at 366-67 (quoting Huertas, 641 F.3d at 32). “Indeed, ‘the majority of courts have held that when the expiration of the statute of limitations does not invalidate a debt, but merely renders it unenforceable, the FDCPA permits a debt collector to seek voluntary repayment of the time-barred debt so long as the debt collector does not initiate or threaten legal action in connection with its debt collection efforts.” Erich v. Convergent Outsourcing, Inc., No. 1:15-cv-22796, 2015 WL 6470453, at *2 (S.D. Fla. Oct. 28, 2015).12 Accordingly, the Court should dismiss Counts I and II of the Complaint. See Pollard, 967 F. Supp. 2d at 475 (D. Mass. 2013).13 12 “[A] debt collector is not required to advise a consumer of any potential defenses to a legal action. That includes advising a consumer of the time-barred status of a particular debt.” Erich, 2015 WL 6470453, at *2 (internal citations omitted). 13 Baye further alleges that “[u]pon receiving the Letters, Plaintiff felt harassed, upset, and worried about the legal consequences of failing to make payment.” (Doc. 2, ¶ 46). Even assuming this allegation rises above “an unadorned, the-defendant-unlawfully-harmed-me accusation,” it still does not state a claim because the FDCPA simply does not prohibit attempts to collect time barred debts. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 7 of 17 8 II. Section 1692e does not require disclosures on the revival of a statute of limitations, particularly when acceptance of Midland’s invitation to pay the debt could not revive it under Louisiana law. Baye alleges that Midland “violated 15 U.S.C. § 1692e by using false, deceptive, or misleading representations or means by sending the Letters on debts known to be time-barred in Louisiana.” (Doc. 2, ¶¶ 76, 78). In support, Baye variously alleges that Midland’s correspondence “fail[s] to disclose the revivable nature of a time-barred debt in Louisiana”; “describe[s] the benefits of a partial payment without disclosing the legal consequences of such a payment in Louisiana”; “impl[ies] that [Midland] is choosing not to sue, when in fact . . . it is prohibited from doing so”; and “implies that [Midland] is choosing not to report the Citi Debt, when it could not be legally reported under 15 U.S.C. § 1681c(a)(4).” (Doc. 2, ¶¶ 40, 41, 43, 45) (emphasis original). “No case has determined that a debt collector must warn of a potential revival of a time-barred claim, and the relevant administrative agency has explicitly declined to require such a warning, precisely because of the danger of consumer confusion.” Boedicker v. Midland Credit Management, Inc., No. 16- 2213, 2016 WL 7492465, at *5 (D. Kan. Dec. 30, 2016). Notably, Baye “does not allege that Defendant made any [factual] misrepresentations about the Debt’s legal Twombly, 550 U.S. 544, 555 (2007); Fed. R. Civ. P. 8); Genova, 193 F. Supp. 3d at 366-67; Brooks, 2011 WL 2710026, at *7. Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 8 of 17 9 status at the time it sent the Letter[s]: Plaintiff does not claim the Letter stated that the []Debt[s] w[ere] “enforceable,” nor does [s]he allege that the Letter initiated or threatened any legal action in connection with Defendant’s debt collection efforts.” Genova, 193 F. Supp. 3d at 366. “To the contrary, the Letter[s] expressly stated that the “law limits how long you can be sued on a debt” and informed Plaintiff that, “[b]ecause of the age of your debt, [Midland] will not sue you for it.” Id.; see also (Doc. 2, Exs. A-C). Here, Midland “merely sought voluntary payment on [its debts], something that is permissible even when the statute of limitations has rendered the debt unenforceable.” Genova, 193 F. Supp. 3d at 366-67 (quoting Huertas, 641 F.3d at 32); see also Buchanan v. Northland Group, Inc., 776 F.3d 393, 399-400 (6th Cir. 2015) (noting that a disclaimer that “[t]he law limits how long you can be sued on a debt. Because of the age of your debt, [the debt owner] will not sue you for it, and [the debt owner] will not report it to any credit reporting agency” would not violate the FDCPA). In fact, when addressing this exact issue, the Consumer Finance Protection Bureau (“CFPB”) specifically declined to include the disclosures Baye alleges the FDCPA requires because they would be confusing: Consumers may revive a time-barred debt under state law if they make a payment on it or acknowledge that the debt is theirs. Consumers may believe that these actions would be beneficial to them. To try to correct this impression, collectors could attempt to disclose that these actions in fact could permit collectors to subsequently file a lawsuit because the debt has been Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 9 of 17 10 revived. However, the Bureau’s testing to date suggests that consumers may not fully understand such a disclosure, because it seems counterintuitive to them. Small Business Review Panel for Debt Collector and Debt Buyer Rulemaking, Outline of Proposals Under Consideration and Alternatives Considered, July 28, 2016, at 19. The language used by Midland was specifically endorsed by the FTC. See Asset Acceptance Consent Decree, https://www.ftc.gov/sites/default/files/ documents/cases/2012/01/120131assetconsent.pdf, at *13 (Jan. 31, 2012) (approving the use of the following language: “The law limits how long you can be sued on a debt. Because of the age of your debt, we will not sue you for it.”). Moreover, not only could Baye’s requested “revival” disclosure be confusing, but it would itself be a misstatement of Louisiana law. “Renunciation of accrued prescription [i.e., revival of a statute of limitations in Louisiana] must be ‘clear, direct and absolute,’ whether it is explicit or tacit.” In re Robertson, 2014 WL 6967935, at *2 (quoting Huckabee v. Sunshine Homes, 647 So. 2d 409, 413 (Ct. App. La. 1994). “Indeed, renunciation “‘requires a new promise to pay the debt . . . .’” Id. (quoting Weeks v. Louisiana Patient's Compensation Fund, 858 So. 2d 851, 854 (Ct. App. La. 2003)). Crucial here, “[p]ayments after prescription has accrued are not alone sufficient to tacitly renounce its benefit.” Id.; see also Neese v. Papa John’s Pizza, 44 So. 3d 321, 329 (Ct. App. La. 2010) (finding delivery of a post-prescription check delivered did not constitute renunciation absent proof of Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 10 of 17 11 intent to make a new promise to pay); Beatty v. Vining, 147 So.2d 37, 41-42 (Ct. App. La. 1962) (post-prescription partial payment insufficient without a new promise to pay). Indeed, “Louisiana courts repeatedly have held that debtors’ partial payments on prescribed debts do not operate as a renunciation of prescription.” In re Robertson, 2014 WL 6967935, at *2.14 In short, Baye “could not have been misled or deceived into reviving the statute of limitations by making a partial payment because revival was only possible [with] . . . a signed writing that she owed the full amount.” Tatis v. Allied Interstate, LLC, No. 16-00109, 2016 WL 5660431, at *9 (D.N.J. Sept. 29, 2016) (granting motion to dismiss and applying New Jersey law, which tracks Louisiana law); Genova, 193 F. Supp. 3d at 371(“The partial settlement payments Defendant solicited in the Letter would not revive the statute of limitations on MBC’s claim against Plaintiff, so Defendant did not make false, deceptive, or misleading representations concerning the potential legal status of the MBC Debt.”).15 14 Baye cites Smith v. McKeller, 638 So. 2d 1192, 1197 (Ct. App. La. 1994) for the proposition that “[i]f Plaintiff entered into a payment plan for any of the Debts, then such agreement would constitute a new, enforceable obligation under Louisiana law.” (Doc. 2, ¶ 39). Not so. Smith makes no mention of payment plans or whether a payment plan could renounce prescription. In fact, Smith does not even discuss the impact of a payment on prescription at all. Rather, Smith addressed the question of whether “the inclusion of [an]alleged indebtedness in the detailed descriptive list [the assets of an estate], despite the fact it was marked as a contested debt, created a binding obligation” via renouncement. Smith, 638 So. 2d at 1194. 15 Baye alleges that Midland “misrepresent[ed] the character and nature of the Debts by failing to disclose the revivable nature of a time-barred debt in Louisiana.” (Doc. 2, ¶ 40). Again, Baye misstates the law. No obligation to disclose whether a debt is time-barred exists. See Erich, 2015 WL 6470453, at * 2. The two federal agencies charged with interpreting the FDCPA Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 11 of 17 12 Nor was Midland’s statement that it “will not sue” misleading. “The[] FTC- approved communications exactly match what was contained in the letter sent by Midland.” Boedicker, 2016 WL 7492465, at *5. Baye’s claims go directly contrary to what “may constitute best practices.” Judah v. Total Card, Inc., No. 16-5881, 2017 WL 2345636, at *5 (D.N.J. May 30, 2017) (discussing FTC-approved language Midland used here). “For these reasons, the [C]ourt [should] find[] that the letter sent by Midland was not deceptive and is not actionable under the have, respectively, declined to require the disclosure Baye advocates, and endorsed the exact language used by Midland in the letters attached to Baye’s complaint. See Small Business Review Panel for Debt Collector and Debt Buyer Rulemaking, Outline of Proposals Under Consideration and Alternatives Considered, July 28, 2016, at 19 (emphasis added). The language used by Midland was specifically endorsed by the FTC. See Asset Acceptance Consent Decree, https://www.ftc.gov/sites/default/files/documents/cases/2012/01/120131assetconsent.pdf, at *13 (Jan. 31, 2012) Further, “[m]any circuit courts agree with this general reading, holding that only material misrepresentations are relevant under FDCPA.” Stewart v. Bureaus Inv. Grp., LLC, No. 3:10- CV-1019-WKW, 2015 WL 7572312, at *15 (M.D. Ala. Nov. 24, 2015) (citing Jensen v. Pressler & Pressler, 791 F.3d 413, 421 (3d Cir. 2015) (“A debtor simply cannot be confused, deceived, or misled by an incorrect statement unless it is material.”); Donohue v. Quick Collect, Inc., 592 F.3d 1027, 1034 (9th Cir. 2010) (“In assessing FDCPA liability, we are not concerned with mere technical falsehoods that mislead no one, but instead with genuinely misleading statements that may frustrate a consumer's ability to intelligently choose his or her response.”); Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645-46 (7th Cir. 2009) (“If a statement would not mislead the unsophisticated consumer, it does not violate the FDCPA-even if it is false in some technical sense. For purposes of § 1692e, then, a statement isn’t ‘false’ unless it would confuse the unsophisticated consumer.”)); see also Hahn v. Triumph Partnerships, LLC, 557 F.3d 755, 758 (7th Cir. 2009) (holding that “a statement cannot mislead unless it is material, so a false but nonmaterial statement is not actionable” under the FDCPA); Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 596 (6th Cir. 2009) (concluding that a false but non-material statement is not actionable under § 1692e). As such, even assuming that Midland misled Baye by misstating or failing to make clear just why it was not going to sue or report to credit bureaus, that misstatement fails to support an FDCPA claim because it was not material. Midland made clear no lawsuit or reporting would occur-whether due to inability or lack of desire is of no moment under the law. Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 12 of 17 13 FDCPA.” Boedicker v. Midland Credit Management, Inc., No. 16-2213, 2016 WL 7492465, at *5 (D. Kan. Dec. 30, 2016).16 Baye makes confusion where none exists. Midland plainly stated that the “law limits how long you can be sued” and that “[d]ue to the age of this debt, [it] will not sue.” In other words, the letter made clear that Midland “would not sue . . . because of the age of the debt.” Valle v. First Nat’l Collection Bureau, Inc., No. 16-62751, 2017 WL 2126830, at * 5 (S.D. Fla. May 16, 2017) (emphasis original). That disclosure neither misleads nor deceives and remains truthful. “[I]n light of this explicit disclaimer acknowledging that the debt is time-barred, even the least-sophisticated debtor would not believe that the Debt was legally enforceable.” Filgueiras v. Portfolio Recovery Assocs., LLC, No. 15-8144, 2016 WL 1626958, at *11 (D.N.J. Apr. 24, 2016). Accordingly, the Court should dismiss Counts III and IV. III. Baye fatally premises her section 1692f claims on the same allegations supporting her 1692d and 1692e claims, which, in any event, do not show unfair or unconscionable behavior. Baye alleges that Midland “violated 15 U.S.C. § 1692f by attempting to lure Plaintiff into renouncing the prescription of the Target and Chase Debts, while failing to disclose the legal consequences of renunciation.” (Doc. 2, ¶¶ 80, 81, 83). 16 Importantly, nowhere in her complaint does Baye “allege how [s]he-or anyone else- was ‘misled, deceived, or otherwise duped’ by” Midland’s letters. Miljkovic v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1307 (11th Cir. 2015) (granting motion to dismiss claims under § 1692e). Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 13 of 17 14 Baye flatly adds that “[s]ending collection letters on multiple occasions about the same time-barred debt is also an unfair and/or unconscionable collection practice.” (Doc. 2, ¶ 50). “At best, this claim appears to be redundant, considering that [Baye] does not identify any conduct not already addressed by [her allegations under] other sections of the FDCPA.” Reed, 2017 WL 1399597, at *10, n. 11. To be sure, Baye fails to “allege any conduct beyond that which [s]he asserts violates the other provisions of the FDCPA, and, in doing so, . . . fails to specifically identify how [the alleged] conduct here was either unfair or unconscionable in addition to being abusive, deceptive, or misleading.” Miljkovic, 791 F.3d at 1308 (emphasis original). As such, “§ 1692f’s catch-all prohibition on unfair and unconscionable conduct does not net” Baye’s claims. Id. Indeed, “[a] catch-all is not a free-for- all. In order to proceed under § 1692f, [a plaintiff] is still required to allege facts showing that the least sophisticated consumer would or could view [a defendant’s conduct] as partial and unjust or as unscrupulous and unethical.” Id. However, Baye “makes no such allegations.” Id. (internal citations omitted); Olsen v. Cavalry Portfolio Servs., LLC, No. 8:15-cv-2520, 2016 WL 4248009, at *2 (M.D. Fla. Aug. 11, 2016) (“To support the claim that Cavalry violated [1692f], Olsen alleges the facts underlying only Count II. Thus, Count III fails to state a separate claim under Section 1692f.”); Winberry v. United Collection Bureau, Inc., Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 14 of 17 15 697 F. Supp. 2d 1279, 1292 (M.D. Ala. 2010) (Albritton, J.) (stating that there is “a growing consensus, at least among district courts, that a claim under § 1692f must be based on conduct either within the listed provisions, or be based on conduct which falls outside of those provisions, but which does not violate another provision of the FDCPA”); see also Delia v. Ditech Fin., LLC, No. 6:16-cv-1901, 2017 WL 2379819, at *6 (M.D. Fla. June 1, 2017) (“A complaint will be deemed deficient under [§ 1692f] . . . if it does not identify any misconduct beyond that which [plaintiffs] assert violate other provisions of the FDCPA.” (quoting Taylor v. Heath W. Williams, LLC, 510 F. Supp. 2d 1206, 1217 (N.D. Ga. 2007))). Even assuming Baye properly presented her time-barred disclosure allegations, they still fail to state a claim under section 1692f. In Counts V and VI, Baye alleges Midland “violated 15 U.S.C. § 1692f by failing to disclose that the monthly payment option would reset the statute of limitations of the alleged debt. “For the reasons just discussed [in Section I and II above], this claim fails as a matter of law.” Genova, 193 F. Supp. 3d at 371 (internal citations and quotations omitted). Indeed, “[l]ooking to the conduct that is alleged, [it’s difficult] to see how [Midland’s letters] . . . w[ere] either deceitful or an affront to justice.” Miljkovic, 791 F.3d at 1308 (emphasis in original) (granting motion to dismiss claims under § 1692f). Midland’s “conduct, as alleged, is a ‘far cry’ from the types of behavior proscribed by § 1692f.” Id. at 1309 (citing Watkins v. Peterson Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 15 of 17 16 Enters., 57 F. Supp. 2d 1102, 1108-09 (E.D. Wash. 1999) (holding that serving writs of garnishment that overstated the debt was not an abusive practice because the types of behavior described in the statute “are a far cry from that at issue”)) (other citations omitted). In short, there is nothing “shockingly unfair or unjust” about sending three letters to collect time-barred debts with CFPB- and FTC- approved disclosures.17 As such, the Court should dismiss Counts V and VI of the compliant with prejudice. Conclusion Midland has the right to attempt to collect time-barred debts and doing so via a number of letter correspondence does not qualify as harassment under the FDCPA. No obligation to disclose either the existence of the statute of limitations or the effect of a partial payment on a time-barred debt exists either. Even if such duties did exist, they would not apply here because partial payment would not revive a debt under Louisiana law and Baye’s claims to the contrary are flat wrong as a matter of law. For these and the reasons stated herein, the Court should dismiss Baye’s complaint in its entirety with prejudice. 17 Cases of unfair or unconscionable behavior materially differ from the allegations here. See McMillan v. Collection Prof’ls Inc., 455 F.3d 754, 756, 763-65 (7th Cir. 2006) (finding letter stating “YOU ARE EITHER HONEST OR DISHONEST YOU CANNOT BE BOTH” unfair); see also Fox v. Citicorp Credit Servs., Inc., 15 F.3d 1507, 1517 (9th Cir. 1994) (pursuing writ of garnishment when debtor was current on account could violate § 1692f). Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 16 of 17 17 Respectfully submitted, this the 29th day of June, 2017. s/ Mathew W. McDade Matthew W. McDade (LSB No. 32899) Balch & Bingham LLP 1310 Twenty Fifth Avenue Gulfport, MS 39501 Telephone: (228) 864-9900 Facsimile: (228) 864-8221 mmcdade@balch.com Attorney for Midland Credit Management, Inc. and Midland Funding, LLC CERTIFICATE OF SERVICE I hereby certify that on June 29, 2017, I electronically filed a copy of the foregoing via CM/ECF, which will provide service on the following: Katherine Z. Crouch Crouch Law, LLC 2372 St. Claude Ave. Suite 224 New Orleans, LA 70117 Katherin.crouch@gmail.com s/ Mathew W. McDade Of Counsel Case 2:17-cv-04789-MLCF-JCW Document 10-1 Filed 06/29/17 Page 17 of 17 1537378.1 IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA Joan Baye, on behalf of herself and ) all others similarly situated, ) ) Plaintiff, ) ) v. ) Case No. 2:17-CV-4789 ) Midland Credit Management, Inc. ) Section: “F” (2) and Midland Funding, LLC, ) ) Defendants. ) NOTICE OF SUBMISSION OF DEFENDANTS’ MOTION TO DISMISS UNDER RULE 12(b)(6) PLEASE TAKE NOTICE that Defendants Midland Credit Management, Inc. and Midland Funding, LLC’s Motion to Dismiss under Rule 12(b)(6) will be submitted to the Court for decision and adjudication on Wednesday, July 26, 2017, at 10:00 a.m. You are invited to respond and participate as you may deem fit and proper. Respectfully submitted this 29th day of June, 2017 by: /s/ Matthew W. McDade Of Counsel Case 2:17-cv-04789-MLCF-JCW Document 10-2 Filed 06/29/17 Page 1 of 2 1537378.1 2 Matthew W. McDade (LSB No. 32899) Balch & Bingham LLP 1310 Twenty Fifth Avenue Gulfport, MS 39501 Telephone: (228) 864-9900 Facsimile: (228) 864-8221 mmcdade@balch.com Attorneys for Midland Credit Management, Inc. and Midland Funding, LLC CERTIFICATE OF SERVICE I do hereby certify that I have this day served a true and correct copy of the above and foregoing pleading by the Court’s electronic filing system which sent notification to the following counsel of record: Katherine Z. Crouch Crouch Law, LLC 2372 St. Claude Ave. Suite 224 New Orleans, LA 70117 Katherin.crouch@gmail.com This the 29th day of June, 2017. /s/ Matthew W. McDade Of Counsel Case 2:17-cv-04789-MLCF-JCW Document 10-2 Filed 06/29/17 Page 2 of 2