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PostPosted: Wed Jan 31, 2007 4:01 am 
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Michael Charles v. Credit Bureau Services, Civ Act. No. 99-1505 Section, E/3, United States District Court for the Eastern District of Louisiana, 1999 U.S. Dist. LEXIS 19577 (December 15, 1999)

Plaintiff sued Credit Bureau Services, a debt collection entity which was allegedly violating the Fair Debt Collection Practices Act by representing that it was a "credit bureau" and thereafter denying that it was a "credit bureau" and by alleging by sending deceptive letters to the plaintiff. The Court granted the defendants Motion for Summary Judgment. The Court found that it was permissible for an entity to operate both as a consumer reporting agency and as a debt collection agency. In essence, the company did not deceive or mislead consumers in violation of 1692(e) of the Fair Debt Collection Practices Act. In support of its ruling that an entity may use the name "credit bureau" and operate as both a credit reporting agency and a debt collection agency, the Court cited the following the following cases: Byes v. Credit Bureau Enterprises, Inc., 1996 U.S. Dist. LEXIS 2870, 1996 WL 99360 (Mentz, J.) (E.D. La. 1996); Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591, 598 (N.D. Ga. 1982), on reconsideration, 555 F.Supp. 1005 (N.D. Ga. 1983), overruled on other grounds, 760 F.2d 1168, 1174 n. 6 (11th Cir. 1985); Catherman v. Credit Bureau of Greater Harrisburg, 634 F.Supp. 693, 695 (E.D. Pa. 1986). The Court went on to recite that it is a "widely known fact that failure to pay debts that are owed might adversely affect ones credit rating and ability to obtain credit." The Court cited Wright, supra, at 1007; Harvey v. United Adjusters, 509 F.Supp. 1218, 1221 (U.S.D.C. Ore 1981). The Court found that the debt collection letters sent to plaintiff in this case did not threaten any action but merely stated the widely know fact that failing to pay ones debt would affect their credit rating and ability to obtain credit. The Court found that such a non-threatening statement was not abusive, deceptive or threatening. Further, the Court found that it would not mislead the "least sophisticated consumer."

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Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
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Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
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PostPosted: Sun Dec 16, 2012 8:03 pm 
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United States District Court, E.D. Louisiana.
Michael CHARLES
v.
CREDIT BUREAU SERVICES, et al


No. Civ.A. 99–1505.

Dec. 15, 1999.


ORDER AND REASONS

LIVAUDAIS, J.

*1 Defendant Credit Bureau Services, Inc. (“CBS”) has filed a motion for summary judgment, seeking to have the Court enter summary judgment dismissing the plaintiff's complaint with prejudice because the undisputed material facts establish that CBS did not violate 15 U.S.C. § 1692e of the Fair Debt Collection Practices Act (“FDCPA”). Plaintiff Michael Charles (“Charles”) opposes the motion.


Facts
CBS sent a notice dated October 26, 1998 to Charles, which provides as follows, in pertinent part:


HAVE YOU APPLIED FOR CREDIT?



Are you buying a home, new car, furniture, planning any major purchase or maybe just needing to borrow some extra cash?



Unfortunately, if you apply for credit, the following account(s) could be reported as unpaid: “CITY OF JOHNSON CITY” placed for collection on 11/04/97 with a balance of $ 54.88.



Credit grantors may choose not to extend credit o you if you have unpaid collection accounts. Please contact our office so we may help you resolve this matter.


Exhibit A to complaint.


Plaintiff called CBS and asked if it was a credit bureau or credit reporting agency. For purposes of this motion, the accepted facts are that on one occasion, the woman who answered the phone when asked, said that it was not a credit bureau, but transferred his call to another employee who might be able to help him. When he asked the person who ultimately assisted him how he could clear up the matter, she told him he could pay the debt and told him the address where the check could be mailed. Plaintiff Charles paid the debt. Over one month later, the debt continued to be listed as “unpaid” on plaintiff's Experian credit report. When he contacted Experian, the negative information was promptly removed.


CBS operates as both a debt collector and a consumer reporting agency. The affidavit of Nelson Beckham, a CBS employee, states that CBS has been operating as a credit reporting division since 1946. Its “Mortgage Reporting Services” division supplies credit reports to mortgage lenders who request reports on mortgage applicants. CBS–MRS is a member of Associated Credit Bureaus, Inc., a private organization of credit reporting agencies. CBS–MRS's ACB roster/member number is 1272. Each year, CBS–MRS supplies approximately 3,000 Residential Credit Mortgage Reports, and thus part of its business is consumer reporting activities.


Analysis
Plaintiff has asserted claims against the defendant under the FDCPA, alleging that CBS violated 15 U.S.C. § 1692e by representing that it is a “Credit Bureau”, and/or by representing that it is a credit bureau and then denying it, and by sending a “deceptive” letter to the plaintiff. These claims arise under 15 U.S.C. § 1692e of the FDCPA, which provides in relevant part:


A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:



*2 * * * *



(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.



* * * *



(16) The false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 1681a(f) of this title.



Section 1681a(f) of the FDCPA defines “consumer reporting agency” as “any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports.” Defendant CBS has attached, in support of its motion for summary judgment, affidavit testimony confirming that a part of its business is consumer reporting in that it furnishes approximately 3,000 mortgage consumer reports each year. Nothing in the plaintiff's response to this motion creates a valid dispute as to this fact.


In circumstances where a business using the name “credit bureau” operates as both a credit reporting agency and a collection agency, the company does not deceive or mislead consumers in violation of § 1692(e). Byes v. Credit Bureau Enterprises, Inc., 1996 WL 99360 (Mentz, J.) (E.D.La.1996); Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591, 598 (N.D.Ga.1982), on reconsideration, 555 F.Supp. 1005 (N.D.Ga.1983), overruled on other grounds, 760 F.2d 1168, 1174 n. 6 (11th Cir.1985); Catherman v. Credit Bureau of Greater Harrisburg, 634 F.Supp. 693, 695 (E.D.Pa.1986). The fact that the defendant obtains credit information it provides in the mortgage consumer reports from other national consumer reporting agencies does not materially effect the fact that it meets the FDCPA's definition of a consumer reporting agency.


Plaintiff argument that both Catherman and Wright were overruled by McKenzie v. E.A. Uffman and Associates, Inc., 119 F .3d 358 (5th Cir.1997) is belied by a simple reading of the case. The McKenzie court stated that “[a]ssuming those cases are correctly decided, both Catherman and Wright are distinguishable from the instant case. In each of those cases, the credit bureau itself indisputably operated a debt collection service. In this case, the relationship between the Credit Bureau and E.A. Uffman is far more tenuous.” 119 F.3d at 362. Thus, as to plaintiff's claim that, simply by operating as both a consumer reporting agency and debt collection agency, the defendant violated the statute, is without merit.


As to plaintiff's claim that the defendant violated the statute by representing that it is a credit bureau and denying it, that argument is also unavailing. Defendant has established that it is a consumer reporting agency in that it furnishes mortgage consumer reports and consequently at least part of its business is consumer reporting. However, part of its business is debt collection and if a CBS employee responding to an inquiry related to the letter sent to him said that CBS is not a credit bureau, in connection with the debt in question it did not operate as a credit bureau. Accepting plaintiff's version of the events that transpired in the telephone conversation with CBS' employees, no information was misrepresented.


*3 Defendant next argues that, as a matter of law, the collection letter it sent to the plaintiff is not deceptive. The letter states at the top in bold face “FEDERAL LAW 95–109 SECTION 897(11): THIS IS AN ATTEMPT TO COLLECT A DEBT, AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE.” The letter further provides that “if you apply for credit, the following account(s) could be reported as unpaid ... Credit grantors may chose not to extend credit to you if you have unpaid collection accounts.”


Viewing this letter from the “least sophisticated consumer” standard, which is required by the FDCPA, the test to be applied to determine if § 1692e has been violated is whether the least sophisticated consumer would be mislead or deceived. Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1175 (11th Cir.1985). The letter states that it is a collection letter. It does not threaten any action, but merely states the widely known fact that failure to pay debts that are owed might adversely affect one's credit rating and ability to obtain credit. See, Wright, 555 F.Supp. at 1007; Harvey v. United Adjusters, 509 F.Supp. 1218, 1221 (D.Ore.1981). It is not abusive, deceptive, or threatening. The least sophisticated consumer would be not be deceived or mislead by the letter. None of the authorities cited by the plaintiff support his position that this letter violated FDCPA 15 U.S.C. § 1692e.


Accordingly, for the above and foregoing reasons,


IT IS ORDERED that the motion of defendant Credit Bureau Services, Inc., for summary judgment be and is hereby GRANTED.


The only other defendant named is Illinois National Insurance Company, whom the complaint states is the insurer of CBS. There is no proof of service in the record and the insurance company has never filed an answer. Any claims against Illinois National Insurance Company are hereby DISMISSED WITHOUT PREJUDICE. Judgment will be entered in favor of defendant CBS.

E.D.La.,1999.
Charles v. Credit Bureau Services
Not Reported in F.Supp.2d, 1999 WL 1204839 (E.D.La.)

_________________
David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555


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PostPosted: Sun Dec 16, 2012 8:04 pm 
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Charles v. Credit Bureau Services,
Not Reported in F.Supp.2d, 1999 WL 1204839, E.D.La., December 15, 1999 (NO. CIV. A. 99-1505)

...reporting agency and a collection agency, the company does not deceive or mislead consumers in violation of § 1692(e). Byes v. Credit Bureau Enterprises, Inc., 1996 WL 99360 (Mentz, J.) (E.D.La.1996); Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591, 598 (N.D.Ga......


--------------------------------------------------------------------------------

Byes v. Telecheck Recovery Services, Inc.,
Not Reported in F.Supp., 1997 WL 736692, E.D.La., November 24, 1997 (NO. CIV.A. 94-3182)

...The other FDCPA claims Byes is asserting do not limit relief to consumers or any other category of person. See Byes v. Credit Bureau Enterprises. Inc., 1996 WL 99360 at * 2 (E.D.La.1996) (addressing § 1692f(1)); Wright v. Financial Service of Norwalk. Inc., 22...

...1997 WL 276096 (E.D.La. May 22, 1997) Byes v. Accelerated cash Flow, Inc., 1996 WL 292967 (E.D.La. May 29, 1996) Byes v. Credit Bureau Enterprises, Inc., 1996 WL 99360 (E.D.La. Mar.6, 1996) The evidence presented is insufficient to create a genuine issue of material...

...on her claim under the LUTPA.FN 4 [ FN4.] This ruling should not be viewed as contrary to the finding in Byes v. Credit Bureau Enterprises, Inc., 1996 WL 99360 (E.D.La. Mar.6, 1996) that an issue of fact existed in that case as to whether......


--------------------------------------------------------------------------------

Byes v. Credit Bureau Enterprises, Inc.,
Not Reported in F.Supp., 1996 WL 99360, E.D.La., March 06, 1996 (NO. CIV. A. 95-239)

... Only the Westlaw citation is currently available. United States District Court, E.D. Louisiana. Dawn P. BYES v......


--------------------------------------------------------------------------------

Byes v. Credit Bureau Enterprises, Inc.,
Not Reported in F.Supp., 1995 WL 540235, E.D.La., September 11, 1995 (NO. CIV. A. 95-239)

... Only the Westlaw citation is currently available. United States District Court, E.D. Louisiana. Dawn P. BYES v......

_________________
David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555


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PostPosted: Sun Dec 16, 2012 8:06 pm 
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My interpretation is also consistent with the purpose of the FDCPA. “In passing the FDCPA, Congress found ‘abundant evidence of the use of abusive, deceptive, and unfair debt collection practices.’ ” Id. at 1117 (quoting 15 U.S.C. § 1692(a)). The FDCPA's express purpose is 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.” Id. (quoting § 1692(e)). Indeed, its solicitude for consumers*1106 is such that it “protect[s] consumers who have been victimized by unscrupulous debt collectors, regardless of whether a valid debt actually exists.” Baker v. GC Serv. Corp., 677 F.2d 775, 777 (9th Cir.1982) (emphasis added); accord McCartney v. First City Bank, 970 F.2d 45, 47 (5th Cir.1992) (The FDCPA “makes debt collectors liable for various ‘abusive, deceptive, and unfair debt collection practices' regardless of whether the debt is valid”). Requiring the disclosure of the debt collection company's name mitigates the opportunity for abuse and deception that anonymity would wrought, thereby also eliminating any competitive advantage resulting therefrom. Such disclosure also helps the consumer “understand, make informed decisions about, and participate fully and meaningfully in the debt collection process.” See Clark v. Capital Credit & Collection Services, Inc., 460 F.3d 1162, 1171 (9th Cir.2006).


Additionally, case law buttresses my conclusion. While neither a circuit court, see Costa v. Nat'l Action Fin. Servs., 634 F.Supp.2d 1069, 1074 n. 5 (E.D.Cal.2007), nor this Court has addressed whether § 1692d(6) requires disclosure of a debt collector's company name, courts in other jurisdictions have. They “have uniformly held that it requires a debt collector to disclose the caller's name, the debt collection company's name, and the nature of the debt collector's business.” Baker v. Allstate Financial Services, Inc., 554 F.Supp.2d 945, 949 (D.Minn.2008) (emphasis added); accord Valencia v. Affiliated Group, Inc., 2008 WL 4372895, *3 (S.D.Fla. Sept. 24, 2008) (unpublished); Hosseinzadeh v. M.R.S. Assocs., Inc., 387 F.Supp.2d 1104, 1112 (C.D.Cal.2005); Gilmore v. Account Mgmt., Inc., 2009 WL 2848278, *5 (N.D.Ga.2009); Davis v. Bonewicz, 2011 WL 5827796, *2 (E.D.Mo.2011); Fry v. Berks Credit and Collections, Inc., 2011 WL 6057781 (N.D.Ohio 2011); Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591, 597 (N.D.Ga.1982); Frazier v. Absolute Collection Serv., Inc., 767 F.Supp.2d 1354, 1364 (N.D.Ga.2011); c.f. Beeders v. Gulf Coast Collection Bureau, 796 F.Supp.2d 1335, 1339 (M.D.Fla.2011) (“FDCPA Section 1692d(6) does not prohibit a debt collection agency employee from using an alias during a telephone call, as long as the employee accurately discloses the name of the debt collection agency and explains the nature of its business.”) (emphasis added) (quoting Knoll v. Allied Interstate, Inc., 502 F.Supp.2d 943, 946 (D.Minn.2007)). For example, in Savage v. NIC, Inc., 2009 WL 2259726, *3 (D.Ariz. July 28, 2009), a plaintiff sued a debt collector under § 1692d(6) when the debt collector's employee failed to identify his employer's name in a voicemail left for the plaintiff. Even though the employee had left his personal name, the court found that “no reasonable jury could find in favor of the Defendant” because the employee had not disclosed the debt collection company's name. Id.

Torres v. ProCollect, Inc.
865 F.Supp.2d 1103
D.Colo.,2012.
June 01, 2012

_________________
David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555


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PostPosted: Sun Dec 16, 2012 8:08 pm 
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McKenzie v. E.A. Uffman and Associates, Inc.
119 F.3d 358
C.A.5 (La.),1997.
August 14, 1997

Appeal from the United States District Court for the Middle District of Louisiana.
Before WISDOM, DUHÉ and BARKSDALE, Circuit Judges.


WISDOM, Circuit Judge:

In this case we review the district court's determination that a certain collection notice did not violate § 1692 of the Fair Debt Collection Practices Act. Because we disagree with the district court's conclusion, we reverse the district court's grant of the defendant's motion for summary judgment and remand the case for further proceedings.


BACKGROUND:
Bobby McKenzie, a Louisiana resident, filed a complaint against E.A. Uffman & Associates, Inc. (“E.A.Uffman”), under the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692. McKenzie alleged that in October 1994, E.A. Uffman mailed him a debt-collection notice (the “McKenzie notice”), which bore the name “Collections Department, Credit Bureau of Baton Rouge” and requested payment of a $244 medical debt allegedly owed to “Anesthesiology Group”. McKenzie asserted that, because E.A. Uffman neither “operated” nor “was employed by” a credit-reporting agency, the use of the name “Credit Bureau” was a misrepresentation in violation of § 1692e(16). McKenzie sought damages and attorney's fees.


*360 E.A. Uffman moved for summary judgment and submitted in support documentary evidence and a deposition of Glenn Uffman, E.A. Uffman's President. E.A. Uffman argued that it had been “affiliated” with the Credit Bureau of Baton Rouge (“Credit Bureau”) for decades and that its use of the name “Credit Bureau” on debt-collection notices was not deceptive or misleading. E.A. Uffman asserted that since 1948 it had an uninterrupted “relationship” with the Credit Bureau by which E.A. Uffman acted as the Credit Bureau's collection department.


The district court granted E.A. Uffman's summary-judgment motion and dismissed the case. The court found that E.A. Uffman's use of the name “Collections Department, Credit Bureau of Baton Rouge” on the McKenzie notice was “not deceptive or misleading because there is an affiliation between the two entities”. Adopting a standard from other courts, the district court ruled that even the “least sophisticated consumer” could discern from the McKenzie notice that E.A. Uffman did not represent itself to be a credit-reporting agency and that it was seeking only to collect a debt, not threaten McKenzie's credit rating. McKenzie timely filed a notice of appeal.


DISCUSSION:
This court reviews the district court's grant of summary judgment de novo. FN1 McKenzie argues that the district court's grant of the defendant's motion for summary judgment was error because the evidence showed that E.A. Uffman neither “operate[d]” nor was “employed by” a credit reporting agency. McKenzie asserts that E.A. Uffman's use of the name “Collections Department, Credit Bureau of Baton Rouge” is false and misleading as it clearly implies that such a relationship exists.


FN1. Topalian v. Ehrman, 954 F.2d 1125, 1131 (5th Cir.1992).



The FDCPA is designed “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”. FN2 The FDCPA applies primarily to “debt collectors,” defined as “any person who uses any instrumentality of interstate commerce or the mails in any business, the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another”.FN3 It is undisputed that E.A. Uffman is a “debt collector” within the meaning of the Act.


FN2. § 1692(e); Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1234 (5th Cir.1997).



FN3. § 1602a(6); Taylor, 103 F.3d at 1234.



[1] “The FDCPA prohibits debt collectors from, inter alia, using any false, deceptive, or misleading representation or means in connection with the collection of any debt.” FN4 “The false representation or implication that a debt collector operates or is employed by a consumer reporting agency” violates the FDCPA.FN5 A “consumer reporting agency” is “any person which, for monetary fees ... regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties....” FN6 It is undisputed that the Credit Bureau is a “consumer reporting agency” within the meaning of the Act.


FN4. Taylor, 103 F.3d at 1234; see § 1692e.



FN5. § 1692e(16) (emphasis added).



FN6. § 1681a(f).



[2] The relevant evidence adduced in support of the parties' summary-judgment motions may be summarized as follows: The McKenzie notice contained scant information. It indicated, in bold print at the top of the notice, that the debt collector was the “Collection Department, Credit Bureau of Baton Rouge” and stated:


THIS ACCOUNT HAS BEEN LISTED WITH THIS OFFICE FOR IMMEDIATE COLLECTION. THIS NOTICE HAS BEEN SENT TO YOU BY THIS COLLECTION AGENCY. THIS IS AN *361 ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. IF PAID IN FULL TO THIS OFFICE ALL COLLECTION ACTIVITY WILL BE STOPPED.



In his deposition, Glenn Uffman testified that in 1948 his father, Elmer Uffman, had signed an agreement with the Credit Bureau by which he would operate the Credit Bureau's collection department. Elmer Uffman had been hired as the Executive Vice President or General Manager of the Credit Bureau and had discovered that it had an inactive collection department. The Credit Bureau accepted Elmer Uffman's offer to run the department. Through the 1948 agreement, the Credit Bureau leased to Elmer Uffman the name “Credit Bureau of Baton Rouge” and assigned to him all of its collection business. In return, the Credit Bureau would provide Elmer Uffman credit reports free of charge.


In 1957, Glenn Uffman began working for Elmer Uffman, who was doing business as “the Collection Department, Credit Bureau of Baton Rouge” and operating as a sole proprietorship. In 1989, Glenn Uffman incorporated the business as E.A. Uffman; Glenn Uffman was President and Secretary/Treasurer. As of 1994, E.A. Uffman continued to lease and do business under the name “Collection Department, Credit Bureau of Baton Rouge” and it remained in the “debt collection business”. E.A. Uffman did not use the name E.A. Uffman for “trade purposes”. It had registered with the Louisiana Secretary of State under the trade name “Collection Department, Credit Bureau of Baton Rouge.” In the white pages of the telephone book, E.A. Uffman was listed as the Collection Department for the Credit Bureau.


The “shareholders” of the Credit Bureau were local merchants. The Credit Bureau was in the business of furnishing consumer credit reports. In return for the lease of the name “Credit Bureau”, E.A. Uffman paid the Credit Bureau five percent of its debt-collection commissions. E.A. Uffman was not involved in preparing consumer credit reports.


No one associated with the Credit Bureau supervised any of E.A. Uffman's 23 employees or had the power to discharge or discipline them. The Credit Bureau did not compensate or provide benefits to E.A. Uffman employees. There are no shared employees. Since E.A. Uffman's incorporation in 1989, the Credit Bureau had not referred any collection accounts to E.A. Uffman. E.A. Uffman's place of business was in the Credit Bureau's building, where it leased office space from the Credit Bureau.


Clearly, E.A. Uffman does not operate a credit reporting agency. E.A. Uffman argues that it has not violated § 1692e(16) because it is “employed by” the Credit Bureau as the Credit Bureau's “Collection Department”. E.A. Uffman relies on two district court cases to support its position.


In Catherman v. Credit Bureau of Greater Harrisburg,FN7 the court held that the defendant, a credit bureau with both reporting and collection divisions, had not violated § 1692f when its two collection notices to the plaintiff consumer suggested that she might endanger her credit rating if she did not immediately pay her debt.FN8 The court concluded that the defendant had not misrepresented itself as a credit reporting agency under § 1692e, because the defendant did operate a credit-reporting division.FN9 The court ruled that the effect of the collection notices was not “false, deceptive, unfair or unconscionable”, because the notices only reminded her-quite accurately-that “if the past debt is not paid there is likely to be an adverse effect upon a future ability to obtain credit”.FN10


FN7. 634 F.Supp. 693 (E.D.Pa.1986).



FN8. Id. at 694-95.



FN9. Id. at 695.



FN10. Id. at 695-96.



In Wright v. Credit Bureau of Georgia,FN11 the defendant was a credit bureau that also acted as a debt-collection service. The district court held that the defendant had not violated § 1692e through the “prominent *362 use” in its collection notices of its identity as a credit bureau. FN12 The court reasoned:


FN11. 555 F.Supp. 1005 (N.D.Ga.1983).



FN12. Id. at 1006.



Although the use of the term ‘credit bureau’ may indeed cause a consumer to conclude that CBI is a credit reporting agency capable of affecting the consumer's credit rating, the text of each letter sent by the defendants and the appearance of the name ‘CBI COLLECTIONS' at the bottom of each letter and on the return envelope sufficiently inform[ed] the consumer that he ha[d] received only a dunning letter and not a threat to relay credit information to a credit reporting agency.... [T]he letters convey no specific threat greater than the well-known fact ... that a failure to pay one's bills will affect his ability to obtain credit in the future.... FN13

FN13. Id. at 1007.



Assuming those cases are correctly decided, both Catherman and Wright are distinguishable from the instant case. In each of those cases, the credit bureau itself indisputably operated a debt collection service. In this case, the relationship between the Credit Bureau and E.A. Uffman is far more tenuous.


[3] In Taylor, this court observed that “the most widely accepted tests for determining whether a collection letter contains false, deceptive, or misleading representations are objective standards based on the concepts of the ‘least sophisticated consumer’ or the ‘unsophisticated consumer’ ”. FN14 “[T]he debt collector's representations, notices and communications to the consumer must be viewed objectively from the standpoint” of either the ‘least sophisticated consumer’ or an ‘unsophisticated consumer’.” FN15 In Taylor, this court declined to adopt a specific standard because the collection letter sent in that case was “deceptive and misleading under either standard”.FN16


FN14. Taylor, 103 F.3d at 1236.



FN15. Id.



FN16. Id.



Here, again, we decline to adopt a specific standard. Clearly, under either standard, the McKenzie notice represents or implies that the debt collector is employed by a credit reporting agency. In fact, the name does more than that, the name implies that the debt collector is a department within the Credit Bureau itself. Though the language of the notice refers to “this office” and “this collection agency”, neither an “unsophisticated consumer” nor the “least sophisticated consumer” would discern from this language that the debt collector is actually a wholly distinct entity from the Credit Bureau.


E.A. Uffman contends that the long-time “affiliation” between E.A. Uffman and the Credit Bureau legitimizes the McKenzie notice. Examination of the facts reveals, however, that their “affiliation” is far more tenuous than the relationships contemplated by Congress in § 1692e(16). E.A. Uffman does not operate the Credit Bureau and is not employed by the Credit Bureau. Essentially, E.A. Uffman has licensed the use of the name “COLLECTION DEPARTMENT, CREDIT BUREAU OF BATON ROUGE” for a five percent royalty on every collection. Undoubtedly, E.A. Uffman enjoys a competitive advantage over collection agencies with less imposing letterheads. In drafting the FDCPA, Congress intended “to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged”. FN17 We cannot permit the naked license of a credit bureau's name to circumvent the policies of the FDCPA and the specific prohibition of § 1692e(16). The district court's grant of the defendant's motion for summary judgment was error.


FN17. 15 U.S.C. § 1692; Taylor v. Perrin, Landry, deLaunay & Durand, 103 F.3d 1232, 1234 (5th Cir.1997).



Accordingly, the district court's order granting the defendant's motion for summary judgment is REVERSED and this case is REMANDED for further proceedings.

C.A.5 (La.),1997.
McKenzie v. E.A. Uffman and Associates, Inc.
119 F.3d 358

_________________
David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555


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PostPosted: Sun Dec 16, 2012 8:12 pm 
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Plaintiff further argues that he is entitled to summary judgment under subsection 1692e(16) of the FDCPA, which prohibits “[t]he false representation or implication that a debt collector operates or is employed by a consumer reporting agency ....“ 15 U.S.C. § 1692e(16). Plaintiff argues that, even assuming that Defendant is actually a member of all three credit bureaus, the letter violates subsection 1692e(16) because it falsely implies to the least sophisticated consumer that Defendant operates or is employed by the credit bureaus. Conversely, Defendant argues that simply denoting its membership does not convey that it is employed by or operated by such an agency. Defendant relies on several out-of-district cases that have addressed subsection 1692e(16): Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591 (D.C.Ga.1982) FN4, McKenzie v. E.A. Uffman and Assoc., Inc., 119 F.3d 358 (5th Cir.1997), and Catherman v. Credit Bureau of Greater Harrisburg, 634 F.Supp. 693 (E.D.Pa.1986).


FN4. For clarity's sake, the Court notes that this decision was amended on reconsideration. See Wright v. Credit Bureau of Georgia, Inc., 555 F.Supp. 1005 (D.C.Ga.1982). That amendment does not affect the Court's citation to the facts of the initial decision here.



Wright, McKenzie, and Catherman are factually distinguishable because the letters in those cases explicitly referred to the defendant as a credit bureau. In Wright, the defendant prominently used “credit bureau” in its letterhead. 548 F.Supp. at 598. Similarly, in McKenzie, the defendant referred to itself as “Collections Department, Credit Bureau of Baton Rouge.” 119 F.3d at 360. And, the defendant in Catherman referred to itself as “Credit Bureau of Greater Harrisburg.” 634 F.Supp. at 695.


Here, in contrast, the subject letter stated that Defendant is a “member” of the three credit bureaus—not that Defendant is a credit bureau. In my view, therefore, Wright, McKenzie, and Catherman do not assist the Court in discerning how the least sophisticated consumer would interpret the reference to membership in Defendant's letter.FN5 Furthermore, Plaintiff has not cited any cases applying subsection 1692e(16), and this Court's research has not revealed any cases that involve a collection agency's use of the term “member” in the context in which it was used here.


FN5. Moreover, Wright and Catherman are further distinguishable in that the defendants in those cases were comprised of two separate divisions—one a consumer reporting agency and the other a collection agency. The Wright court held that it was misleading for the defendant not to clarify that it was comprised of two separate divisions. 548 F.Supp. at 598. Catherman reached the opposite conclusion, holding that “there is no inherent misrepresentation in speaking of the Credit Bureau as one entity, encompassing both divisions.” 634 F.Supp. at 695.



There is one Seventh Circuit case that addressed a letter that referred to the defendant collection agency as a “creditors bureau.” In the letter at issue in that case, Pettit v. Retrieval Masters Creditors Bureau, 211 F.3d 1057 (7th Cir.2000), the defendant referred to itself as “RETRIEVAL MASTERS CREDITORS BUREAU, INC.” Rejecting the plaintiff's argument that the title “creditors bureau” would lead an unsophisticated debtor to infer that the defendant was employed or operated by a credit reporting agency, the circuit reasoned that the letter did


not suffer from the usual defects which result in FDCPA liability. For instance, it does not contain an explicit statement that [defendant] is a credit bureau. There are not inconsistent or contradictory assertions concerning [defendant's] status with respect to being a credit bureau or a collection agency, and the letter does not bury or overshadow its identification of [defendant] as a collection agency with a suggestion that it is a credit bureau.


*9 Id. at 1061. Arguably, this same rationale applies here, where Defendant stated only that it was a member of the three bureaus. Pettit is nonetheless factually distinguishable because the letter in that case, similar to those at issue in Wright, McKenzie, and Catherman, still included the term “bureau.”


With no cases for guidance, I could resort to the dictionary definition of “member” but that definition is unhelpful here. The standard dictionary definition of member is “one of the individuals composing a group.” Webster's Ninth New Collegiate Dictionary at 740 (1985). Applying that definition here could imply that Defendant is part of the three credit bureaus, which may suggest that Defendant is employed or operated by the bureaus. However, to say that one is a member of a group does not typically imply that one is an employee or operated by that same group. In other words, while a technical reading of the dictionary definition may support Plaintiff's interpretation of the letter, the connotation that member generally conveys does not.


Returning to the plain text of subsection 1692e(16), it is important to keep in mind that only the “[t]he false representation or implication that a debt collector operates or is employed by a consumer reporting agency ....“ is actionable. 15 U.S.C. § 1692e(16) (emphasis added). Indeed, “[t]he purpose of this provision is to prevent debt collectors from coercing payments from debtors by falsely leading them to believe that the failure to pay the debt will adversely affect the debtor's credit rating and ability to obtain credit.” Pettit, 211 F.3d at 1060 (emphasis added). Therefore, while Plaintiff argues that Defendant's letter is misleading even if actually true, I find no support for that argument in the plain text of the statute. Rather, the plain text of subsection 1692e(16) indicates that the letter must include a false representation or false implication. This leads me to conclude that Plaintiff is not entitled to summary judgment under subsection 1692e(16) because there remains a genuine issue of fact as to whether Defendant is actually a member of TransUnion.

Newton v. Savit Collection Agency
Slip Copy, 2011 WL 6724034
D.N.J.,2011.
December 21, 2011

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David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
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Newton v. Savit Collection Agency
Slip Copy, 2011 WL 6724034
D.N.J.,2011.
December 21, 2011

OPINION

WOLFSON, District Judge.

*1 This putative class action suit is brought by Plaintiff Norris Newton (“Plaintiff”) against Defendant Savit Collection Agency (“Defendant”) for allegedly violating the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”). Specifically, the one-count Complaint simply alleges that by placing the sentence—“MEMBER EXPERIAN, EQUIFAX AND TRANSUNION CREDIT BUREAUS”—in a debt collection letter to Plaintiff, Defendant falsely and deceptively misled Plaintiff in an unfair and unconscionable manner. In the present matter, Defendant moves for summary judgment and Plaintiff cross moves for summary judgment. For the reasons stated below, the Court denies both motions.


BACKGROUND
The facts of this case are not complex and they are relatively straightforward. This case centers on a collection letter sent by Defendant, a consumer debt collection agency, to Plaintiff on June 11, 2009 (the “Collection Letter”). See Collection Letter dated June 11, 2009. The letter sought to collect a debt in the amount of $1,000.00 that Plaintiff allegedly owned to Omni Eye Services of New Jersey. At issue is the phrase “MEMBER EXPERIAN, EQUIFAX AND TRANSUNION CREDIT BUREAUS”, located at the bottom of the Collection Letter. See id. The letter states, in full:


We sent you a first notice which included your rights under the Fair Debt Collection Practices Act. You still have time to exercise your rights.



This is a communication from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose.



MEMBER EXPERIAN, EQUIFAX AND TRANSUNION CREDIT BUREAUS


Id. (emphasis in original).


Plaintiff claims that Defendant's statement that it is a member of all three credit bureaus is false or misleading and thus, violates §§ 1962(e) and 1692f of the FDCPA. Conversely, in its motion for summary judgment, Defendant maintains that there is sufficient evidence to show that Defendant is indeed a member of the bureaus. In addition, Defendant contends that since Plaintiff had an ongoing bankruptcy claim at the time he filed this Complaint, Plaintiff has no standing to pursue this litigation. The Court first addresses whether Plaintiff has standing to bring suit.


DISCUSSION
I. Standard of Review
“Summary judgment is proper if there is no genuine issue of material fact and if, viewing the facts in the light most favorable to the non-moving party, the moving party is entitled to judgment as a matter of law.” Pearson v. Component Tech. Corp., 247 F.3d 471, 482 n. 1 (3d Cir.2001) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)); accord Fed.R.Civ.P. 56(c). For an issue to be genuine, there must be “a sufficient evidentiary basis on which a reasonable jury could find for the non-moving party.” Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir.2006); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). In determining whether a genuine issue of material fact exists, the court must view the facts and all reasonable inferences drawn from those facts in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Curley v. Klem, 298 F.3d 271, 276–77 (3d Cir.2002). For a fact to be material, it must have the ability to “affect the outcome of the suit under governing law.” Kaucher, 455 F.3d at 423. Disputes over irrelevant or unnecessary facts will not preclude a grant of summary judgment.


*2 Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp., 477 U.S. at 323. Once the moving party has met this burden, the nonmoving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id.; Maidenbaum v. Bally's Park Place, Inc., 870 F.Supp. 1254, 1258 (D.N.J.1994). Thus, to withstand a properly supported motion for summary judgment, the nonmoving party must identify specific facts and affirmative evidence that contradict those offered by the moving party. Anderson, 477 U.S. at 256–57. “A nonmoving party may not ‘rest upon mere allegations, general denials or ... vague statements ....‘ “ Trap Rock Indus., Inc. v. Local 825, Int'l Union of Operating Eng'rs, 982 F.2d 884, 890 (3d Cir.1992) (quoting Quiroga v. Hasbro, Inc., 934 F.2d 497, 500 (3d Cir.1991)). Moreover, the non-moving party must present “more than a scintilla of evidence showing that there is a genuine issue for trial.” Woloszyn v. County of Lawrence, 396 F.3d 314, 319 (3d Cir.2005). Indeed, the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. Celotex, 477 U.S. at 322.C


Moreover, in deciding the merits of a party's motion for summary judgment, the court's role is not to evaluate the evidence and decide the truth of the matter, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. Credibility determinations are the province of the fact finder. Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir.1992).


II. Standing
Defendant's argument regarding Plaintiff's lack of standing relates to Plaintiff's previously dismissed bankruptcy proceeding. The following facts relating to the bankruptcy proceeding are not in dispute. By way of a brief background, Plaintiff filed a Chapter 13 bankruptcy on November 10, 2008. Plaintiff did not explicitly disclose this suit in his bankruptcy petition. However, he disclosed a “Potential FDCPA/FCRA Adversary Complaint against listed creditor on Schedule F,” see Cipparulo Decl., Exh. K, and he expressly denoted Defendant as a creditor on Schedule F, albeit for a different debt. Id. The petition was confirmed on January 13, 2009.


Several months after Plaintiff filed his bankruptcy petition, Defendant mailed the letter which is the subject of the instant dispute. Plaintiff received that letter on June 11, 2009. Thereafter, on September 24, 2009, Plaintiff filed the instant suit. Approximately two months later, on November 25, 2009, his bankruptcy was dismissed. The Notice of Order Dismissing Case states that “[a]ny discharge which was granted as to the above mentioned debtor(s) in this case is vacated.” Id.


*3 Defendant argues that this suit should be dismissed for lack of standing because Plaintiff failed to disclose his claim in his bankruptcy petition. In support of this argument, Defendant cites to several non-binding cases that have dismissed claims a plaintiff failed to disclose in a bankruptcy proceeding and the plaintiff ultimately discharged liabilities through the bankruptcy. By way of example, Defendant cites to Tuttle v. Equifax Check Serv., Inc., No. 3–96–948, 1997 WL 835055 (D.Conn.1997), which held that a plaintiff, “having obtained judicial relief in his bankruptcy proceeding without disclosure of his FDCPA claims, can not now resurrect them and obtain relief on the opposite basis.” Id. at *3 (citation omitted). The rationale underlying Tuttle is that it would be unjust for a plaintiff to discharge his debts to his creditors in bankruptcy only to subsequently file suit against those creditors under the FDCPA. Here, that rationale does not apply because Plaintiff did not discharge any debts in bankruptcy; as noted, his bankruptcy petition was dismissed.


In addition, as Plaintiff correctly points out, Plaintiff's bankruptcy proceeding was a voluntary Chapter 13 proceeding whereas each of the cases cited by Defendant involve involuntary proceedings under Chapter 7. See e.g., Chartschlaa v. Nationwide Mut. Ins. Co. ., 538 F.3d 116 (2d Cir.2008); Correll v. Equifax Check Serv., Inc., 234 B.R. 8 (D.Conn.1997). This distinction is important because, while Defendant argues that it is the trustee who has standing to assert claims on behalf of the debtor, that practice applies only to involuntary proceedings—not to voluntary proceedings under Chapter 13. See 5–542 Collier on Bankruptcy at 542.06 (“Although the chapter 13 trustee has many of the same duties and responsibilities as the chapter 7 trustee, the chapter 13 trustee does not take control of the debtor's property, see 11 U.S.C. § 1306(c).”)


Lastly, while Defendant further argues that Plaintiff's claim should be barred by judicial estoppel, I disagree. Defendant cites cases from other jurisdictions in which courts have applied the doctrine to bar suits based on claims not disclosed in prior bankruptcy proceedings. As an initial matter, the Court notes that those cases involve Chapter 7 rather than Chapter 13 petitions. See e.g., Coffaro v. Crespo, 721 F.Supp.2d 141 (E.D.N.Y.2010). That issue aside, the Third Circuit has made clear that all three prongs of the judicial estoppel doctrine must be satisfied before the doctrine is applied. Those prongs are:


First, the party to be estopped must have taken two positions that are irreconcilably inconsistent. Second, judicial estoppel is unwarranted unless the party changed his or her position in bad faith—i.e., with intent to play fast and loose with the court. Finally, a district court may not employ judicial estoppel unless it is tailored to address the harm identified and no lesser sanction would adequately remedy the damage done by the litigant's misconduct.


*4 In re Kane, 628 F.3d 631, 638 (3d Cir.2010) (emphasis added). In a recent decision, the Circuit affirmed a district court's refusal to apply judicial estoppel where a litigant took a position in civil litigation that was irreconcilably inconsistent with a position she later took in a bankruptcy proceeding. The district court exercised its discretion not to apply judicial estoppel because “irreconcilable inconsistency is but the first of three prongs in a judicial estoppel analysis, and all three must be satisfied before a court opts to apply the doctrine.” Id. at 639.


Likewise, here, even assuming that Plaintiff's failure to update his bankruptcy petition to reflect that he filed the instant suit constitutes an irreconcilably inconsistent position, Defendant has not pointed to any evidence of bad faith here. Moreover, that Plaintiff dismissed his own bankruptcy petition two months after this suit was filed, and that he did not receive the benefit of discharge of his debts, further suggests that he did not possess an untoward motive in failing to update his petition. Accordingly, I will not exercise my discretion to apply the doctrine of judicial estoppel in this case. Having concluded that Plaintiff's claim is not barred due to a lack of standing or judicial estoppel, I now turn to the merits of his FDCPA claim.


III. FDCPA
The FDCPA was enacted 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.” 15 U.SC. § 1692(e). Specifically, the FDCPA prohibits the use of any conduct the natural consequences of which is to harass, oppress, or abuse any person, 15 U.S.C. § 1692d, any false, deceptive, or misleading representations or means, 15 U.S.C. § 1692e, and any unfair or unconscionable means, 15 U.S.C. § 1692f, to collect or attempt to collect any debt. The FDCPA creates a private cause of action against debt collectors who violate its provisions. Brown v. Card Service Center, 464 F.3d 450, 453 (3d Cir.2006) (citing 15 U.S.C. § 1692k).


In determining whether a communication from a debt collector violates the FDCPA, a court must analyze the debt collector's statements from the perspective of the “least sophisticated debtor,” id. at 454; Campuzano–Burgos v. Midland Credit Mgmt., 550 F.3d 294, 301 (3d Cir.2008), in order to protect “all consumers, the gullible as well as the shrewd.” Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir.2008) (quoting Brown, 464 F.3d at 454). Although the “least sophisticated consumer” standard is a low standard, it nonetheless “ ‘prevents liability for bizarre or idiosyncratic interpretations of collection notices by preserving a quotient of reasonableness and presuming a basic level of understanding and willingness to read with care.” Rosenau, 539 F.3d at 221 (quoting Wilson v. Quadramed Corp., 225 F.3d 350, 355 (3d Cir.2000)).


*5 The Third Circuit has held that the question of whether an unsophisticated consumer would be confused by collection letter language is one of law rather than fact. Quadramed, 225 F.3d at 353 n. 2. See also Campuzano–Burgos, 550 F.3d at 297–301 (treating question of whether it is misleading for a senior officer of a debt collector to sign a collection letter as a “question of law” and directing the district court to grant summary judgment on that question). However, where there exists a genuine issue about an underlying material fact related to the determination of whether a letter is misleading, summary judgment is inappropriate and the question may be submitted to a jury. See Dutton v. Wolpoff and Abramson, 5 F.3d 649, 658 (3d Cir.1993).FN1


FN1. In the Quadramed decision, which was decided in 2000, the Third Circuit noted that several circuits, excepting the Seventh Circuit, had held that application of the least sophisticated consumer standard to a debt collection letter is a question of law. See 225 F.3d at 353 n. 2 Since then, the Fifth Circuit has joined the Seventh Circuit in holding that application of the least sophisticated consumer standard to collection letter language is a question of fact, rather than a question of law. See Gonzalez v. Kay, 577 F.3d 600 (5th Cir.2009), cert. denied, ––– U.S. ––––, 130 S.Ct. 1505, 176 L.Ed.2d 110 (2010). In its most recent FDCPA ruling, the Third Circuit did not address whether it would revisit its Quadramed holding because “[t]he District Court assumed that whether a communication is false and misleading under the FDCPA is a question of law, and neither party challenge[d] [that] aspect of the District Court's decision on appeal.” Lesher v. Law Offices Of Mitchell N. Kay, PC, 650 F.3d 993, 996 n. 6 (3d Cir.2011).



Moreover, “[t]he FDCPA is a strict liability statute to the extent it imposes liability without proof of an intentional violation.” Allen ex rel. Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir.2011). Here, the parties agree that Defendant is a debt collector and that Plaintiff is a consumer-debtor, therefore, the FDCPA applies. Keeping these standards in mind, I now address the specific sections under which Plaintiff brings his FDCPA claim and rule separately on each party's motion.


1. Defendant's Motion for Summary Judgment
Section 1692e generally prohibits the use of false or misleading representations: “A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” That section lists several specific examples of such false or misleading representations, including section 1692e(10) which prohibits “... [t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer,” 15 U.S.C. § 1692e(10), and section 1692e(16) which prohibits “[t]he false representation or implication that a debt collector operates or is employed by a consumer reporting agency as defined by section 1681a(f) of this title.” 15 U.S.C. § 1692e(16). These specific subsections do not constitute an exhaustive list. See Lesher v. Law Offices Of Mitchell N. Kay, PC, 650 F.3d 993, 997 (3d Cir.2011).


Here, Defendant moves for summary judgment, arguing that Plaintiff has failed to demonstrate that the phrase “MEMBER EXPERIAN, EQUIFAX AND TRANSUNION CREDIT BUREAUS” is actually false. Defendant points to several pieces of record evidence in support of its contention that it is, in fact, a member of the three credit bureaus. In opposition to Defendant's motion, and also in support of his own cross-motion, Plaintiff challenges Defendant's evidence and points to further evidence suggesting that Defendant is not a member of TransUnion. According to Plaintiff, “the Court need not even reach the question of whether the [l]etter would deceive or mislead the least sophisticated debtor because the [l]etter is actually false.” Pl. Opp. and Cross–Mot. at 11 (emphasis in original).


*6 At the outset, I note that for the letter's statement to be true (or, not to be actually false), Defendant must be a member of all three bureaus. It is not enough for Defendant to a member of one or two bureaus. Hence I look to the evidence that both parties have submitted with respect to TransUnion, the one credit bureau for which Plaintiff has submitted seemingly countervailing evidence of Defendant's membership.


The only evidence that Defendant submits is a completed TransUnion Membership Application dated August 26, 1999. Cipparulo Decl., Exh. B. Defendant has not submitted any further documentation to demonstrate that the application was ever accepted or approved by TransUnion. It goes without saying that proof that an application has been completed does not demonstrate one's membership in an organization. This is particularly true when the application is almost ten years old; the application is dated August 26, 1999 and Defendant's letter stating that it is a member of TransUnion was received by Plaintiff on June 11, 2009. Without more concrete evidence of Defendant's membership, no reasonable jury could conclude from the TransUnion application alone that Defendant is a member of TransUnion. Because Plaintiff's claim is that Defendant falsely represented that it is a member of all three credit unions, that Defendant has failed to point to sufficient facts demonstrating that it is a member of Trans Union means that its motion for summary judgment, on this basis, must be denied.


With respect to section 1692f, that section forbids a debt collector from using unfair or unconscionable means to collect a debt. See Huertas v. Galaxy Asset Mgmt., 641 F.3d 28, 32 (3d Cir.2011). As with section 1692e, Defendant's argument in support of its motion rises or falls on whether Defendant falsely represented that it was a member of the three credit bureaus. Accordingly, because there is an open issue of fact as to Defendant's TransUnion membership status which makes summary judgment on Plaintiff's section 1692e claim inappropriate, summary judgment is likewise inappropriate under section 1692f.


Defendant further argues that it is entitled to summary judgment under subsections 1692e(10) and 1692e(16). As noted, those subsections are merely examples of the types of falsities and misrepresentations that are actionable under section 1692e generally. Because the Court has concluded that Defendant is not entitled to summary judgment on account of the open question of whether its letter was false, the Court need not address those two subsections in order to conclude that Plaintiff's FDCPA claim withstands summary judgment. Nevertheless, the Court addresses each of Defendant's arguments about those two subsections in the context of Plaintiff's cross-motion for summary judgment infra.


2 Plaintiff's Cross–Motion for Summary Judgment
As for Plaintiff's cross-motion for summary judgment on section 1692e, Plaintiff contends that Defendant's description of itself as a member of the three bureaus is actually false. In support of this argument, Plaintiff submits a declaration from Lynn Quinn, a Membership Manager for TransUnion. See Quinn Decl. at ¶ 1. As Membership Manager, her responsibilities include credentialing new customers, account set up, and imaging of membership documents and supporting service agreements. Id. at ¶ 2. Quinn states, in her declaration, that Plaintiff served her with a subpoena and that, in response to that subpoena, she searched TransUnion's business records “for documents responsive to the [plaintiff's] subpoena.” Id. at ¶ 4. According to Quinn's declaration, her search revealed the following about Defendant's “business relationship” with TransUnion:


*7 a. Prior to February 15, 2002, [Defendant] had the ability to purchase credit information services concerning customers directly from TransUnion;



b. TransUnion terminated [Defendant's] customer subscriber code on February 14, 2002;



c. [Defendant] has not purchased credit information services concerning customers directly from TransUnion since February 15, 2002.


Id. at ¶ 5.


Notably, Quinn makes no mention of “membership” in her discussion of Defendant's account. She states that Defendant previously had the ability to purchase credit information services but that, since February 2002, TransUnion terminated Defendant's “customer subscriber code” and that Defendant has not purchased credit information services. Arguably, one could infer that Quinn's reference to Defendant's “customer subscriber code” must relate directly to Defendant's membership status, and that TransUnion's terminating of Defendant's code in February of 2002 suggests that Defendant was not a member of TransUnion when it mailed the letter to Plaintiff in 2009. That Quinn is a “Membership Manager” and that she described records relating to TransUnion's “business relationship” with Defendant supports this inference. On the other hand, considering the precise wording of Quinn's declaration, she does not state that Defendant is no longer a member of TransUnion. Nor does she define the term “membership,” or explain how Defendant's customer subscriber code relates to membership.


On a cross-motion for summary judgment, all inferences are to be drawn in the favor of the non-moving party—here, the Defendant. J.S. ex rel. Snyder v. Blue Mountain School Dist., 650 F.3d 915, 925 (3d Cir.2011) (“[W]here ... the District Court considers cross-motions for summary judgment the court construes facts and draws inferences in favor of the party against whom the motion under consideration is made.”) (internal quotation marks omitted). Viewing Plaintiff's evidence in the light most favorable to Defendant, I cannot conclude as a matter of law that Defendant is not a member of TransUnion because Quinn's declaration does not explicitly state as much. Accordingly, Plaintiff's cross-motion for summary judgment must be denied as there remains a genuine issue of material fact as to Defendant's TransUnion membership status at the time the June 11, 2009 letter was sent. See id. at 925 (defining a material disputed fact as one that “would affect the outcome of the suit as determined by the substantive law”) (quoting Gray v. York Newspapers, Inc., 957 F.2d 1070, 1078 (3d Cir.1992)).FN2


FN2. While the parties also debate whether Defendant is a member of the Experian and Equifax credit bureaus, the Court need not rule upon Defendant's membership in these two bureaus because the open issue of material fact as to whether Defendant is a member of TransUnion alone precludes summary judgment.



In further support of its cross-motion, Plaintiff generally argues that the letter would mislead the least sophisticated consumer, which violates subsection 1692e(10) of the FDCPA. As noted, section 1692e(10) prohibits “... [t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.” 15 U.S.C. § 1692e(10). To the extent that Plaintiff's claim is that Defendant falsely represented its membership status, the Court has already concluded that there remains an issue of fact as to whether Defendant is a member of TransUnion. Moreover, Plaintiff does not explain how the letter is otherwise deceptive and fails to cite any case law holding that such language could be deceptive if actually true.FN3 Accordingly, Plaintiff is not entitled to judgment under subsection 1692e(10).


FN3. One could conceive of the argument that a collection agency that advertises itself as a member of a credit bureau might imply that the agency has a special status with the bureau that could expedite the agency's reporting of the debtor's account status. However, Plaintiff has not made that argument here. Furthermore, while Plaintiff cites to a footnote in Wilson, 225 F.3d at 353 n .2, that footnote addresses “whether language in a collection letter contradicts or overshadows the validation notice is a question of law.” Id. That footnote sheds no light on whether the letter at issue in this case is misleading.



*8 Plaintiff further argues that he is entitled to summary judgment under subsection 1692e(16) of the FDCPA, which prohibits “[t]he false representation or implication that a debt collector operates or is employed by a consumer reporting agency ....“ 15 U.S.C. § 1692e(16). Plaintiff argues that, even assuming that Defendant is actually a member of all three credit bureaus, the letter violates subsection 1692e(16) because it falsely implies to the least sophisticated consumer that Defendant operates or is employed by the credit bureaus. Conversely, Defendant argues that simply denoting its membership does not convey that it is employed by or operated by such an agency. Defendant relies on several out-of-district cases that have addressed subsection 1692e(16): Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591 (D.C.Ga.1982) FN4, McKenzie v. E.A. Uffman and Assoc., Inc., 119 F.3d 358 (5th Cir.1997), and Catherman v. Credit Bureau of Greater Harrisburg, 634 F.Supp. 693 (E.D.Pa.1986).


FN4. For clarity's sake, the Court notes that this decision was amended on reconsideration. See Wright v. Credit Bureau of Georgia, Inc., 555 F.Supp. 1005 (D.C.Ga.1982). That amendment does not affect the Court's citation to the facts of the initial decision here.



Wright, McKenzie, and Catherman are factually distinguishable because the letters in those cases explicitly referred to the defendant as a credit bureau. In Wright, the defendant prominently used “credit bureau” in its letterhead. 548 F.Supp. at 598. Similarly, in McKenzie, the defendant referred to itself as “Collections Department, Credit Bureau of Baton Rouge.” 119 F.3d at 360. And, the defendant in Catherman referred to itself as “Credit Bureau of Greater Harrisburg.” 634 F.Supp. at 695.


Here, in contrast, the subject letter stated that Defendant is a “member” of the three credit bureaus—not that Defendant is a credit bureau. In my view, therefore, Wright, McKenzie, and Catherman do not assist the Court in discerning how the least sophisticated consumer would interpret the reference to membership in Defendant's letter.FN5 Furthermore, Plaintiff has not cited any cases applying subsection 1692e(16), and this Court's research has not revealed any cases that involve a collection agency's use of the term “member” in the context in which it was used here.


FN5. Moreover, Wright and Catherman are further distinguishable in that the defendants in those cases were comprised of two separate divisions—one a consumer reporting agency and the other a collection agency. The Wright court held that it was misleading for the defendant not to clarify that it was comprised of two separate divisions. 548 F.Supp. at 598. Catherman reached the opposite conclusion, holding that “there is no inherent misrepresentation in speaking of the Credit Bureau as one entity, encompassing both divisions.” 634 F.Supp. at 695.



There is one Seventh Circuit case that addressed a letter that referred to the defendant collection agency as a “creditors bureau.” In the letter at issue in that case, Pettit v. Retrieval Masters Creditors Bureau, 211 F.3d 1057 (7th Cir.2000), the defendant referred to itself as “RETRIEVAL MASTERS CREDITORS BUREAU, INC.” Rejecting the plaintiff's argument that the title “creditors bureau” would lead an unsophisticated debtor to infer that the defendant was employed or operated by a credit reporting agency, the circuit reasoned that the letter did


not suffer from the usual defects which result in FDCPA liability. For instance, it does not contain an explicit statement that [defendant] is a credit bureau. There are not inconsistent or contradictory assertions concerning [defendant's] status with respect to being a credit bureau or a collection agency, and the letter does not bury or overshadow its identification of [defendant] as a collection agency with a suggestion that it is a credit bureau.


*9 Id. at 1061. Arguably, this same rationale applies here, where Defendant stated only that it was a member of the three bureaus. Pettit is nonetheless factually distinguishable because the letter in that case, similar to those at issue in Wright, McKenzie, and Catherman, still included the term “bureau.”


With no cases for guidance, I could resort to the dictionary definition of “member” but that definition is unhelpful here. The standard dictionary definition of member is “one of the individuals composing a group.” Webster's Ninth New Collegiate Dictionary at 740 (1985). Applying that definition here could imply that Defendant is part of the three credit bureaus, which may suggest that Defendant is employed or operated by the bureaus. However, to say that one is a member of a group does not typically imply that one is an employee or operated by that same group. In other words, while a technical reading of the dictionary definition may support Plaintiff's interpretation of the letter, the connotation that member generally conveys does not.


Returning to the plain text of subsection 1692e(16), it is important to keep in mind that only the “[t]he false representation or implication that a debt collector operates or is employed by a consumer reporting agency ....“ is actionable. 15 U.S.C. § 1692e(16) (emphasis added). Indeed, “[t]he purpose of this provision is to prevent debt collectors from coercing payments from debtors by falsely leading them to believe that the failure to pay the debt will adversely affect the debtor's credit rating and ability to obtain credit.” Pettit, 211 F.3d at 1060 (emphasis added). Therefore, while Plaintiff argues that Defendant's letter is misleading even if actually true, I find no support for that argument in the plain text of the statute. Rather, the plain text of subsection 1692e(16) indicates that the letter must include a false representation or false implication. This leads me to conclude that Plaintiff is not entitled to summary judgment under subsection 1692e(16) because there remains a genuine issue of fact as to whether Defendant is actually a member of TransUnion.


CONCLUSION
For the foregoing reasons, Defendant's motion for summary judgment is denied. In addition, Plaintiff's cross-motion for summary judgment is also denied.

D.N.J.,2011.
Newton v. Savit Collection Agency
Slip Copy, 2011 WL 6724034 (D.N.J.)

_________________
David Szwak
Chairman, Consumer Protection Section, Louisiana State Bar Association
Bodenheimer, Jones & Szwak
509 Market Street, 7th Floor
Mid South Tower
Shreveport, Louisiana 71101
318-221-6444
Fax 318-221-6555


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