KENNETH M. KARAS, District Judge:
Plaintiff Mureen Jones-Bartley ("Plaintiff") filed the instant Complaint on behalf of herself and a class of similarly situated individuals, alleging that Defendant McCabe, Weisberg & Conway, P.C. ("Defendant") violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq., when in early 2013 it sent a letter attempting to collect a debt. (See Compl. (Dkt. No. 1).) Before the Court is Defendant's Motion To Dismiss the Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for, respectively, lack of subject matter jurisdiction and failure to state a claim. (See Mot. To Dismiss Pl.'s Compl. Pursuant to Rules 12(b)(1) & 12(b)(6) ("Mot.") (Dkt. No. 24).) For the following reasons, the Court grants Defendant's Motion in part and denies it in part.
The Complaint alleges that Defendant "sent [P]laintiff [a] letter. . . . regarding [a] debt" that Defendant "has been attempting to collect from [P]laintiff" and that concerns "an alleged residential mortgage debt incurred for personal, family or household purposes," (Compl. ¶¶ 12-14). Plaintiff attached the letter to the Complaint. (See Compl. Ex. A ("MWC Letter").)
The letter, which Defendant appears to have sent to Plaintiff on behalf of a third-party mortgage company that is not named in this suit, comprises three pages. The first page, in relevant part, contains Plaintiff's name and a "Loan [Number]," informs the recipient that there has been a "failure to make . . . payments [on a loan] when due," notifies the recipient that "the mortgagee has elected to . . . declare the entire principal balance of the loan due and payable," and makes a "demand . . . for the amount due." (Id. at 1.) The letter then states that the "[t]otal principal due as of the date of this notice" is $462,634.03. (Id.) The second page, in relevant part,
(Id.) The bottom of the third page also contains the signature of Megan R. Sterback, along with Defendant's name, address, and telephone number. (See id.)
The Complaint alleges that Defendant sent this letter to Plaintiff "[o]n or about January 28, 2013." (Compl. ¶ 13.) It also alleges that this was "the first letter [P]laintiff received from [D]efendant regarding the debt described therein," and that this was "a form letter used by [D]efendant as the initial letter it sends to a consumer." (Id. ¶¶ 14, 16.)
The Complaint alleges that the letter "fails to comply" with the FDCPA in four ways. (Id. ¶ 18.) First, the Complaint alleges that the letter violates 15 U.S.C. § 1692g(a)(1) (requiring a debt collector to provide a consumer with "a written notice containing . . . the amount of the debt") because the letter provides notice only of the "total principal due as of the date of th[e] notice," whereas the "amount of the debt" owed would "include[] accrued but unpaid interest and other fees and charges," which "generally amount to thousands of dollars." (Id. ¶ 19.) Second, the Complaint alleges that the letter violates 15 U.S.C. § 1692g(a)(2) (requiring a debt collector to provide a consumer with "a written notice containing . . . the name of the creditor to whom the debt is owed") because the letter "completely fails to disclose who the current owner of the debt is." (Id. ¶ 20.) Third, the Complaint alleges that the letter violates 15 U.S.C. § 1692e (prohibiting "[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") because the letter does not "specify that the debtor has 30 days after receipt of the letter to dispute the debt," but rather states that the recipient has "30 days" to dispute the debt, "making the most logical interpretation 30 days from the date of the. . . letter." (Id. ¶ 21.) Finally, the Complaint alleges that the letter violates 15 U.S.C. § 1692g(a)(3) (requiring a debt collector to provide a consumer with "a written notice containing . . . a statement that
In addition to alleging claims on behalf of Plaintiff, the Complaint alleges the same claims "on behalf of a class" of individuals who received a similar letter. (Compl. ¶¶ 25-26.) The Complaint specifically defines a proposed class to include
(Id. ¶ 26.) The Complaint further alleges that, "[o]n information and belief, there are more than 50 members of the class." (Id. ¶ 27.)
Based on these allegations, the Complaint seeks a "judgment in favor of [P]laintiff and the class and against [D]efendant for: (1) [s]tatutory damages; (2) [a]ttorney's fees, litigation expenses[,] and costs of suit; [and] (3) [s]uch other and further relief as the Court deems proper." (Id. at 6-7.)
Plaintiff filed the Complaint on July 11, 2013, (see Dkt. No. 1), and served Defendant four days later, (see Dkt. No. 4 (Affidavit of Service)). Then, in a letter dated July 16, 2013 and filed pursuant to Rule II.A of the Court's Individual Rules of Practice, Plaintiff requested a pre-motion conference to discuss her "anticipated motion for class certification and motion to enter and continue [her] motion for class certification." (Letter from Tiffany N. Hardy to Court (July 16, 2013)) ("PMC Letter") 1 (Dkt. No. 5).)
Defendant submitted two responses on August 5. First, Defendant submitted a letter requesting a 20-day extension to respond to Plaintiff's letter, which request the Court granted, with Plaintiff's consent. (See Letter from Swartz Campbell LLC to Court (Aug. 5, 2013) (Dkt. No. 8).) Second, Defendant submitted a separate letter "agree[ing] to [Plaintiff's] request" for a pre-motion conference. (Letter from Edmund K. John to Court (Aug. 5, 2013) (Dkt. No. 9).) The Court endorsed this
On August 15, Defendant submitted a two-part response to Plaintiff's letter. First, Defendant filed a document entitled "Offer of Judgment Pursuant to [Fed. R.Civ.P.] 68." (See Offer of J. Pursuant to F.R.C.P. 68 ("Rule 68 Offer") (Dkt. No. 10).)
Shortly after August 15, Plaintiff sent a letter to the Court responding to Defendant's letter. (See Letter from Tiffany N. Hardy to Court (Dkt. No. 17).)
On September 18, approximately two weeks later, Defendant filed a Motion To Dismiss the Complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). (See Dkt. No. 15.) Because Defendant had failed to request a pre-motion conference before filing the motion, the Court, on September 25, summarily denied the motion "without prejudice for failure to follow the Court's Individual Practices." (See Dkt. No. 18.)
The Court then held the pre-motion conference on October 15, at which conference the Court neither granted nor denied Plaintiff's request to file a motion for class certification. (See Dkt. (minute entry for Oct. 15, 2013).) Instead, it granted Defendant permission to file a Motion To Dismiss the Complaint. (Id.) Pursuant to a scheduling order adopted at the conference, Defendant filed the instant Motion and accompanying Memorandum of Law on November 18, 2013, (see Mot. To Dismiss (Dkt. No 24); Mem. of Law in Supp. of the Mot. To Dismiss Pl.'s Compl. ("Def.'s Mem.") (Dkt. No. 25)), Plaintiff filed an Opposition Memorandum on December 16, 2013, (see Pl.'s Resp. to Def.'s Mot. To Dismiss ("Pl.'s Mem.") (Dkt. No. 26)), and Defendant filed a Reply Memorandum on January 3, 2014, (see Reply Brief in Further Supp. of the Mot. To Dismiss ("Def.'s Reply") (Dkt. No. 27)). The Court now turns to a discussion of Defendant's Motion.
Defendant moves to dismiss Plaintiff's Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). With regard to the 12(b)(1) motion, Defendant argues that "the Court no longer has subject-matter jurisdiction" over the Complaint "[b]ecause the offer of judgment provides compensation to plaintiff for the maximum statutory damages," and therefore "there is no longer a justiciable claim." (Def.'s Mem. 2.) In the alternative, Defendant argues that, "to the extent plaintiff's FDCPA claims are based on" two of the four FDCPA violations alleged in the Complaint, the Court should dismiss the FDCPA claims pursuant to Rule 12(b)(6) because "plaintiff has failed to state a claim upon which relief may be granted." (Id.)
"A case is properly dismissed for lack of subject matter jurisdiction under Rule 12(b)(1) when the district court lacks the statutory or constitutional power to adjudicate it." John Brady v. Int'l Bhd. of Teamsters, Theatrical Drivers & Helpers Local 817, 741 F.3d 387, 389 (2d Cir.2014) (internal quotation marks omitted). Dismissal under Rule 12(b)(1) is therefore proper when a case becomes moot. Doyle v. Midland Credit Mgmt., Inc., 722 F.3d 78, 80 (2d Cir.2013) (per curiam) ("Under Article III of the U.S. Constitution, when a case becomes moot, the federal courts lack subject matter jurisdiction over the action." (alterations and internal quotation marks omitted)). In making this determination, "the district court must take all uncontroverted facts in the complaint . . . as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Tandon v. Captain's Cove Marina of Bridgeport, Inc., 752 F.3d 239, 243 (2d Cir.2014). "But where jurisdictional facts are placed in dispute, the court has the
"To survive a motion to dismiss under Rule 12(b)(6), a complaint must allege sufficient facts which, taken as true, state a plausible claim for relief." Keiler v. Harlequin Enters. Ltd., 751 F.3d 64, 68 (2d Cir.2014). In reviewing the Complaint, the Court "accept[s] all factual allegations as true and draw[s] every reasonable inference from those facts in the plaintiff's favor." In re Adderall XR Antitrust Litig., 754 F.3d 128, 133 (2d Cir.2014) (internal quotation marks omitted). "But this indulgence does not relieve the plaintiff from alleging `enough facts to state a claim to relief that is plausible on its face.'" Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Moreover, along with the Complaint itself, the Court "may consider. . . any written instrument attached to the complaint as an exhibit, any statements or documents incorporated in it by reference, and any document upon which the complaint heavily relies." ASARCO LLC v. Goodwin, 756 F.3d 191, 198 (2d Cir.2014) (internal quotation marks omitted).
Defendant first moves to dismiss the Complaint in its entirety because, in its view, the Rule 68 Offer "provides compensation to plaintiff for the maximum statutory damages," and therefore "there is no longer a justiciable claim." (Def.'s Mem. 2.) Because the Complaint asserts claims on behalf of Plaintiff and, separately, on behalf of a potential class, the Court must decide (a) whether Plaintiff's individual claim is moot, and, if so, (b) whether the Court retains subject matter jurisdiction over the class claim after dismissing Plaintiff's individual claim but before certifying the class.
As discussed, Defendant submitted an "Offer of Judgment" pursuant to Rule 68 on August 15, 2013. (See Rule 68 Offer.)
Before addressing Defendant's argument, it is worth analyzing what the Second Circuit has to say about the interaction between Rule 68 offers and mootness. In Abrams v. Interco Inc., 719 F.2d 23 (2d Cir.1983), two named plaintiffs had brought a private antitrust action on behalf of themselves and a class, alleging that the defendant had engaged in an illegal price-fixing scheme, and that they had personally outlaid $408.10 in purchases related to this scheme. See id. at 25. They also sought treble damages. Id. at 25. The defendant thereafter "offered to allow that judgment be taken against it in the sum of $1,224.30, three times the amount of plaintiffs' purchases . . ., together with costs and reasonable attorneys' fees." Id. at 25-26. The district court then "granted the [defendant's 12(b)(1)] motion . . ., ordered the parties to settle a judgment, and provided that if they could not agree on the attorneys' fees, the court would fix them." Id. at 26. Approximately three months later, the district court entered judgment dismissing the complaint, "without agreement on the subject of attorneys' fees." Id. On appeal, the Second Circuit upheld the district court's judgment dismissing the case as moot under Rule 12(b)(1). Noting that "all that remain[ed] [in the case] [was] [the plaintiffs'] individual claims, for which [the defendant] admittedly ha[d] offered to pay much more than plaintiffs could obtain by suit," the court recognized that, "[i]n substance, what defendant did by its offer was no different (except in being more favorable to the plaintiffs) than if it had submitted to a default judgment on the individual claims." Id. at 32. It further recognized that, in the context of "a final judgment fully satisfying [the] named plaintiffs' private substantive claims, . . . there [was] no justification for taking the time of the court and the defendant in the pursuit of minuscule individual claims which defendant ha[d] more than satisfied." Id. (internal quotation marks omitted). It therefore upheld the district court's judgment dismissing the complaint based on the court's prior order that the parties settle a judgment. Id. at 34.
Next, in McCauley v. Trans Union, L.L.C., 402 F.3d 340 (2d Cir.2005), the plaintiff, litigating pro se, had filed a complaint seeking $240 in compensatory damages for alleged violations of the Fair Credit Reporting Act. Id. at 340. The defendant thereafter made a Rule 68 offer of judgment for $240 plus costs, but the offer specified that judgment would "not be construed as an admission of liability and that it [would] remain confidential and [be] filed under seal." Id. at 341. After the plaintiff rejected the offer, the defendant moved for summary judgment, arguing
On appeal, the plaintiff argued that the defendant's offer did not moot his case because he "ha[d] a legal and cognizable interest in obtaining a judgment that is not confidential and sealed, and thus [could] be used as precedent in future matters"; in the alternative, he argued that the district court erred in dismissing his claim without entering a judgment of $240 plus costs in his favor. Id. Addressing the plaintiff's first argument, the Second Circuit, citing Abrams, characterized as "clear" the proposition that the defendant's "unwillingness to admit liability is insufficient, standing alone, to make [the] case a live controversy." Id. (citing Abrams, 719 F.2d at 33 n. 9). It also cited, with approval, Chathas v. Local 134 IBEW, 233 F.3d 508 (7th Cir. 2000), wherein the Seventh Circuit held that "a party [cannot] force his opponent to confess to having violated the law, as it is always open to a defendant to default and suffer judgment to be entered against him without his admitting anything." Id. at 512; see also Abrams, 719 F.2d at 32 ("In substance, what defendant did by its offer was no different . . . than if it had submitted to a default judgment on the individual claims."). The Second Circuit thus agreed with the district court that the plaintiff "[was] not entitled to keep litigating his claim simply because [the defendant] ha[d] not admitted liability." Id. at 342.
However, addressing the plaintiff's second argument, the Second Circuit held that the district court improperly dismissed the case as moot as a result of the rejected offer:
Id. In other words, the Second Circuit held that neither the offer itself, either when it
Having found that the district court improperly dismissed the case, the Second Circuit then offered what it described as a "better resolution" of the case—namely, "entry of a default judgment against [defendant] for $240 plus reasonable costs." Id. "Such a judgment would remove any live controversy from this case and render it moot. Moreover, a default judgment would serve [the defendant's] desire to end the case, would award [the plaintiff] his damages and, like the Rule 68 settlement offer, would have no preclusive effect in other litigation." Id. The court then noted that, "[a]t oral argument, both parties agreed that entry of a default judgment would satisfactorily resolve th[e] case," and it therefore "vacate[d] the judgment entered in favor of [the defendant] and remand[ed] the case to the district court for the limited purpose of entering a default judgment in favor of [the plaintiff] for $240 plus such costs as the district court deems reasonable." Id.
McCauley left several issues unresolved, some of which the Second Circuit has confronted. In ABN Amro Verzekeringen BV v. Geologistics Americas, Inc., 485 F.3d 85 (2d Cir.2007), the plaintiff sought $500,000 in damages in a breach-of-contract claim, but the district court had held that the plaintiff was legally entitled to only $50 in damages from each defendant. Id. at 88. The defendants thereafter submitted offers of judgment for $50, the plaintiff rejected the offers, and the district court "entered judgment against defendants in the amount of $50 each and dismissed with prejudice [the plaintiff's] claims for damages in excess of $50. . . . solely on [the grounds of] . . . subject matter jurisdiction and the doctrine of mootness." Id. at 89 (internal quotation marks omitted) (alteration in original). On appeal, the Second Circuit held that the district court erred when it dismissed the case on mootness grounds. As it explained, "[t]he defendants' consent to judgment against them in the amount of $50 satisfied only a tiny portion of the $500,000 dispute between the parties. . . . The parties thus retained a practical stake in the dispute, and the court continued to be capable of rendering a judgment that would have a practical effect on the legal rights of the parties." Id. at 95. In dismissing the case as moot, the district court "confused the mootness of an issue with the mootness of a case or claim in the Constitutional sense." Id. at 94. "So long as the district court's ruling limiting the liability to $50 remained in force, all litigable issues pertaining to the defendants' liability ceased to have practical importance, because of the defendants' tender of that amount. The case, however, was not moot, and the court did not lose subject matter jurisdiction." Id. at 95. In other words, "[t]he defendants' tender of $50 did not moot the plaintiff's claim for $500,000." Id. at 96. Notably, the court specifically distinguished the case from Abrams on this ground, explaining that, "[i]n Abrams, . . . the defendant tendered every cent (and more) to which the plaintiff claimed entitlement," but in the case at bar, "the defendants tendered only a portion—indeed, only a small portion—of the damages plaintiff claimed." Id. "The district court's ruling that the plaintiff had no entitlement to any amount exceeding what the defendants had tendered resolved the dispute between the parties but did not negate its existence." Id. The court therefore "affirm[ed] the district court's . . . entry of judgment against each defendant for $50 . . ., and its dismissal of the claim for damages in excess
Next, in Doyle v. Midland Credit Management, 722 F.3d 78 (2d Cir.2013) (per curiam), the plaintiff had filed a complaint alleging multiple claims under the FDCPA and seeking both statutory and actual damages. Id. at 79-80. At a hearing on the defendant's motion to dismiss, the defendant orally "offered to pay [the plaintiff] $1,001, in addition to costs, disbursements, attorney's fees, and an additional $10 to cover actual damages." Id. at 80. The plaintiff's counsel "agreed that this offer provided for all of the relief that [the plaintiff] sought," but the plaintiff "nonetheless refused to settle the case for that amount." Id. The district court thereafter "held that the case was . . . moot, and it granted [the defendant's] motion to dismiss" but did not enter judgment in the plaintiff's favor. Id. On appeal, the plaintiff argued, with respect to the district court's ruling that the offer mooted the case, only that the defendant's oral offer "could [not] have rendered his action moot because [it did not] compl[y] with Rule 68," id. at 79, which the plaintiff argued does not allow oral offers, id. at 81. The Second Circuit easily rejected this argument, holding that "an offer need not comply with [Rule 68] in order to render a case moot under Article III." Id. at 81.
Finally, in Cabala v. Crowley, 736 F.3d 226 (2d Cir.2013) (per curiam), which postdated Doyle by almost four months, the plaintiff had filed a complaint under the FDCPA seeking statutory damages alone. Id. at 227. Shortly after the complaint was filed, the defendant's attorney contacted the plaintiff's attorney "and offered to settle [the case] for $1000, the maximum statutory damages mandated by the FDCPA, and also offered, as mandated by the statute, to pay [the plaintiff's] attorney's fees and costs, with the amount of such fees to be determined by the court." Id. Instead of rejecting the offer, the plaintiff
The defendant appealed the district court's award of post-offer attorney's fees, arguing, in part, that "his initial offer for the maximum recovery available under the FDCPA . . . rendered the underlying action moot," and, in the alternative, that any attorney's fees incurred after the offer were not "reasonable attorney's fees" because "[the plaintiff] and his attorney acted unreasonably in continuing to litigate after communication of the" offer. Id. at 228-29. The Second Circuit first rejected the defendant's argument that the settlement offer, by itself, rendered the case moot. Relying entirely on McCauley, the court described that case as "reject[ing] the argument that an unaccepted offer of settlement for the full amount of damages owed `moots' a case such that the case should be dismissed for lack of jurisdiction if the plaintiff desires to continue the action." Id. at 228. "Rather, [McCauley] held, the typically proper disposition in such a situation is for the district court to enter judgment against the defendant for the proffered amount and to direct payment to the plaintiff consistent with the offer. Only after such a disposition is the controversy resolved such that the court lacks further jurisdiction." Id. (emphasis added) (citing McCauley, 402 F.3d at 342). Applying those principles to the case at bar, the court held that the defendant's offer, which was an offer for settlement and which "specifically sought to avoid entry of judgment," was insufficient to moot the case:
Id. at 228-29.
Turning to the question of whether the plaintiff "acted unreasonably in continuing to litigate after communication of the . . . settlement offer," id. at 229, the court held that the plaintiff did not act unreasonably because, even where a defendant offers a settlement for complete relief, a plaintiff may reasonably insist on an offer of judgment. See id. ("It takes two to stage a useless litigation; [the plaintiff's] insistence on a judgment was no more rigid than [the defendant's] equally determined opposition to such a judgment."). Separately, the court also "reject[ed] [the defendant's]
Two clear principles emerge from this line of cases. First, to moot a plaintiff's claim, the defendant must make an offer of judgment; an offer of settlement is insufficient. See id. at 229 ("Because the parties continued to dispute the form and extent of the relief to which [the plaintiff] was entitled, the case never became moot."). Defendant need not make that offer in strict compliance with Rule 68; courts should focus on the substance of the offer, not the procedure employed. See Doyle, 722 F.3d at 81 ("[A]n offer need not comply with [Rule 68] in order to render a case moot under Article III."). Second, the offer of judgment must fully satisfy the plaintiff's claim; a genuine dispute over whether the offer satisfies the entirety of the claim may, by itself, constitute a live case or controversy. See ABN Amro, 485 F.3d at 96 ("The district court's ruling that the plaintiff had no entitlement to any amount exceeding what the defendants had tendered resolved the dispute between the parties but did not negate its existence. . . . There unquestionably was, and still is, a case and controversy for the court to adjudicate.").
In this case, there is no dispute with regard to the first issue—Defendant has made an offer of judgment under Rule 68, and thus the Court need not analyze the aforementioned issues present in Cabala and Doyle. Regarding the ABN Amro issue, Plaintiff does dispute whether Defendant's Rule 68 Offer provides complete relief, describing it in her Memorandum as "defective." (See Pl.'s Mem. 8-9.) However, Plaintiff's objection does not concern the offer of $1,000 for her FDCPA claim, but rather relates only to the scope of the offer's provision for attorney's fees and costs. (See id.) Because the Court denies Defendant's Motion on other grounds, it need not address whether the narrow dispute over the scope of the Court's determination of the costs and attorney's fees award is sufficient to preserve a live case or controversy at this stage in the case.
For multiple reasons, the Court finds McCauley to be controlling in this case. First, although the effect of Doyle was to affirm a district court's dismissal of case for lack of subject matter jurisdiction without entering judgment for the plaintiff, the decision did not directly address the issue of whether such a disposition was appropriate. True, the Doyle court was clear that the district court "properly dismissed" the case as moot. See 722 F.3d at 81 (holding that "the district court properly dismissed the entirety of [the plaintiff's]
Second, in light of the Second Circuit's procedures for overruling a prior panel decision, it is unlikely that the Doyle court intended to overrule McCauley's holding. "In general, a panel of [the Second Circuit Court of Appeals] is bound by the decisions of prior panels until such time as they are overruled either by an en banc panel of [that] Court or by the Supreme Court." Lotes Co., Ltd. v. Hon Hai Precision Indus. Co., 753 F.3d 395, 405 (2d Cir.2014) (internal quotation marks omitted); see also Fed. Grievance Comm. v. Williams, 743 F.3d 28, 29-30 (2d Cir.2014) ("Prior panels of this Court have held that [a certain standard] applies to [this case], and we are not free to revisit those holdings." (citations omitted)). Thus, "where there has been an intervening Supreme Court decision that casts doubt on [the Second Circuit's] controlling precedent, one panel of [the Second Circuit Court of Appeals] may overrule a prior decision of another panel." Lotes Co., 753 F.3d at 405 (internal quotation marks omitted). Or, in certain circumstances, the Second Circuit may engage in a "mini-en banc," where a panel "circulate[s] [an] opinion to all active members of [the] Court prior to filing" and overrules a prior panel decision when it "receive[s] no objection" to the circulated opinion. See Diebold Found., Inc. v. C.I.R., 736 F.3d 172, 183 n. 7 (2d Cir.2013). But here, there is no indication that either of these events occurred. Indeed, the Supreme Court explicitly declined to resolve this very issue in a recently decided case. See Genesis Healthcare Corp. v. Symczyk, ___ U.S. ___, 133 S.Ct. 1523, 1528-29, 185 L.Ed.2d 636 (2013) ("While the Courts of Appeals disagree whether an unaccepted offer that fully satisfies a plaintiff's claim is sufficient to render the claim moot, we do not reach this question, or resolve the split, because the issue is not properly before us." (footnote omitted)). And the four dissenting justices in that case who did address the issue adopted a position directly contrary to Doyle. See id. at 1533 (Kagan, J. dissenting) ("[A]n unaccepted offer of judgment cannot moot a case. When a plaintiff rejects such an offer—however good the terms—her interest in the lawsuit remains just what it was before. And so too does the court's ability to grant her relief. . . . As every first-year law student learns, the recipient's rejection of an offer leaves the matter as if no offer had ever been made." (internal quotation marks omitted)). Furthermore, it is unlikely the Doyle court engaged in a "mini-en banc" to overrule McCauley, as the
Third, the Second Circuit's treatment of Doyle in Cabala appears to suggest that the Court should follow McCauley instead of Doyle. As discussed, the Cabala court engaged in a separate analysis of, first, whether an offer, by itself, mooted the case, and, second, whether it was reasonable for the plaintiff to reject the offer for the purpose of awarding reasonable attorney's fees. See 736 F.3d at 228-29. To answer the former question, the court applied McCauley alone, noting that, under that case, where a plaintiff rejects an offer of judgment, "the typically proper disposition. . . is for the district court to enter judgment against the defendant for the proffered amount and to direct payment to the plaintiff consistent with the offer," and then further noting that "[o]nly after such a disposition is the controversy resolved such that the court lacks further jurisdiction." Id. at 228 (emphasis added) (citing McCauley, 402 F.3d at 342). Where the Cabala court cited Doyle, it did so only in the second part of the analysis, noting that Doyle was not inconsistent with its finding that there was no "precedent holding that [the defendant's] settlement proposals were equivalent to Rule 68 offers," and describing Doyle as holding that an offer of judgment need not comply with Rule 68 to moot a cause of action. Id. at 230 ("To hold that an offer of judgment that fails to meet the technical requirements of Rule 68 is nevertheless an offer of judgment is not equivalent to holding that an offer of an informal settlement without judgment is equivalent to a Rule 68 offer of judgment."). And although the Cabala court declined to "address whether [Doyle] is inconsistent with McCauley," it also noted that "McCauley . . . was not cited by the Doyle court," further confirming this Court's view that Doyle did not intend to overrule McCauley. Id. at 230 n. 4.
Fourth, if the Court were to interpret Doyle to hold that an offer of judgment, by itself, mooted a case, then it would follow that Doyle conflicts not only with McCauley, but also with ABN Amro. As discussed, in ABN Amro, the district court had held that "once the defendants tendered [the offer of judgment], . . . the case had become moot, and the court was compelled to dismiss it for lack of subject matter jurisdiction under Rule 12(b)(1)" and enter judgment in the plaintiff's favor. 485 F.3d at 94. Holding that this was error, the Second Circuit noted that "[i]f the case had truly become moot and the court had lacked subject matter jurisdiction, the court would have been without power to enter a judgment in plaintiff's favor. . . . It would have been compelled simply to dismiss, leaving the dispute unadjudicated." Id. The court then went on to explain that, where "parties . . . retain[] a practical stake in [a] dispute, and [a] court continue[s] to be capable of rendering a judgment that would have a practical effect on the legal rights of the parties[,] [t]here [is] no mootness of the sort that deprives the court of subject matter jurisdiction," even if "[c]ertain issues that would otherwise have been in dispute became moot." Id. at 95; see also Chafin v. Chafin, ___ U.S. ___, 133 S.Ct. 1017, 1023, 185 L.Ed.2d 1 (2013) ("[A] case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party." (internal quotation marks omitted)). ABN Amro is thus entirely consistent with McCauley's holding that a "rejected [Rule 68] offer, by itself, [does not] moot[] [a] case so as to warrant entry of judgment in favor of [a defendant]," see 402 F.3d at 342, even though ABN Amro, like Doyle, did not cite McCauley at all.
For all of these reasons, the Court believes that McCauley provides the appropriate legal standard to apply in this case, and it thus finds that Plaintiff's "refusal [of Defendant's offer] did not, in and of itself, moot the case." McCauley, 402 F.3d at 340. But see Franco v. Allied Interstate LLC, No. 13-CV-4053, 2014 WL 1329168, at *2, 5 (S.D.N.Y. Apr. 2, 2014) (citing Doyle for the proposition that "[a] valid offer of judgment that would satisfy a plaintiff's entire claim for relief . . . renders a plaintiff's claim moot, even if plaintiff refuses the offer of judgment"; dismissing the case as moot, and entering judgment in the defendant's favor); Foos v. Monroe-2 Orleans BOCES, No. 10-CV-6221, 2014 WL 122408, at *2-3 (W.D.N.Y.
Having determined the correct standard to apply, the Court now must decide whether to dismiss Plaintiff's claim as moot. Initially, the Court notes that, because the Rule 68 Offer itself did not moot Plaintiff's claim, and because the Court has not entered judgment in Plaintiff's favor, there is no doubt that the Plaintiff's claim is currently not moot. See Cabala, 736 F.3d at 228 ("Only after [entering judgment against defendant for the proffered amount and directing payment to the plaintiff consistent with the offer] is the controversy resolved such that the court lacks further jurisdiction."). But this observation does not resolve Defendant's Motion, because the Court is also mindful of the Second Circuit's oft-cited dicta in Abrams that "there is no justification for taking the time of the court and the defendant in the pursuit of miniscule individual claims which defendant has more than satisfied." 719 F.2d at 32; see also Doyle, 722 F.3d at 80 (citing this language from Abrams); ABN Amro, 485 F.3d at 93 (same). The Court therefore must decide whether this case warrants the "typically proper disposition" in this situation, which is "for the district court to enter judgment against the defendant for the proffered amount and to direct payment to the plaintiff consistent with the offer." Cabala, 736 F.3d at 228; see also McCauley, 402 F.3d at 342 (noting that "entry of a default judgment against [the defendant]" is a "better resolution" than dismissing the case on mootness grounds).
For the following reasons, the Court declines to follow that approach in this case. Initially, as a technical matter, it is unclear whether Defendant still consents to entry of default judgment in its favor. Defendant made its offer under Rule 68, and per the terms of that rule, an offer not accepted within 14 days "is considered withdrawn." Fed.R.Civ.P. 68(b). Defendant has not submitted a renewed offer, and no part of the record, including Defendant's letters to the Court and its Memoranda in support of its Motion, indicates that Defendant's offer remains viable. Furthermore, Defendant's Motion does not seek entry of judgment in Plaintiff's favor, but rather seeks "an order dismissing [P]laintiff's complaint" pursuant to Rules 12(b)(1) and 12(b)(6). (Mot.) See Cabala, 736 F.3d at 229 (noting that the defendant never "sought entry of judgment as authorized by McCauley, which under the terms of that case would have ended the litigation"). The Court cannot enter a default judgment absent a specific request from a party. See Fed.R.Civ.P. 55(b)(1)-(2) ("If the plaintiff's claim is for a sum certain or a sum that can be made certain by computation, the clerk—on the plaintiff's request . . . —must enter judgment for that amount and costs against a defendant who has been defaulted for not appearing and who is neither a minor nor an incompetent person. . . . In all other cases, the party must apply to the court for a default judgment." (emphasis added)). And the Court is aware of no other procedural mechanism by which it could enter judgment absent such a request. Indeed, in McCauley, the court remanded the case "for the limited purpose of entering a default judgment in favor of [the plaintiff]" only after "both parties agreed [at oral argument] that entry of a default judgment would satisfactorily resolve the case." 402 F.3d at 342. Here, however, Defendant's offer has expired, and Defendant has not moved for a judgment in Plaintiff's favor. Instead, Defendant appears to make the very argument the Court has rejected in this Opinion—i.e., that the offer
In doing so, the Court also notes that nothing in McCauley or any other case appears to require that the Court enter judgment in Plaintiff's favor and dismiss the case. As discussed, in McCauley, the parties, "[a]t oral argument, . . . agreed that entry of a default judgment would satisfactorily resolve th[e] case." 402 F.3d at 342. McCauley was thus not a case where the court entered judgment over a plaintiff's objection. The Cabala court confirmed this reading of McCauley, describing McCauley as outlining the "typically proper disposition," and characterizing McCauley as holding that "a court may in [the] circumstances [present in that case] enter a judgment for plaintiff and terminate the litigation." 736 F.3d at 228 & n. 2 (emphasis added). Even in Doyle, the court held that the facts of that case provided the district court "sufficient ground to dismiss th[e] case for lack of subject matter jurisdiction," but the court did not hold that the court necessarily had to do so. 722 F.3d at 81 (emphasis added). Finally, to the extent those cases and others base their holdings on the Abrams court's recognition that "there is no justification for taking the time of the court and the defendant in the pursuit of miniscule individual claims which defendant has more than satisfied," see Abrams, 719 F.2d at 32, here, there is such a justification because Defendant has thus far not satisfied Plaintiff's claim and, through this Motion, is not seeking to satisfy Plaintiff's claim. Therefore, to the extent the Court has discretion under McCauley over whether to enter judgment over Plaintiff's objection and moot her claim, the Court declines to do so at this time.
Having found that Plaintiff's individual claim is not moot, and having refused to enter judgment in Plaintiff's favor, the Court holds that Plaintiff's individual claim still presents a live case and controversy, and that the Court therefore has subject matter jurisdiction over Plaintiff's claim. See Chafin, 133 S.Ct. at 1023 ("[A] case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party." (internal quotation marks omitted)); ABN Amro, 485 F.3d at 94 ("Mootness, in the constitutional sense, occurs when the parties have no legally cognizable interest or practical personal stake in the dispute, and the
Even if the Court were to find that Plaintiff's individual claim were moot, Plaintiff has taken sufficient steps towards filing a motion for class certification, in accordance with this Court's individual rules, that her class claims would remain justiciable.
"[I]n general, if the claims of [a] named plaintiff[] become moot prior to class certification, the entire action becomes moot." Comer v. Cisneros, 37 F.3d 775, 798 (2d Cir.1994). Without certification, there can be no class under Rule 23, see Fed.R.Civ.P. (23)(c)(1), with the result being that the unnamed class members are not part of the action before the named plaintiff's claims are mooted by a Rule 68 judgment. See Bd. of Sch. Comm'rs of Indianapolis v. Jacobs, 420 U.S. 128, 129, 95 S.Ct. 848, 43 L.Ed.2d 74 (1975) (holding that action was moot when named plaintiffs challenging school rules graduated before class had been certified). But, neither the Supreme Court nor the Second Circuit has ruled on whether class claims "should be dismissed . . . when a Rule 68 offer of judgment for full relief is made. . . prior to the filing of a motion for class certification," Carlin v. Davidson Fink LLP, No. 13-CV-6062, 2014 WL 4826248, at *3 (E.D.N.Y. Sept. 23, 2014) (emphasis added), or "on the effect [on class claims] of a Rule 68 offer made prior to resolution of a Rule 23 . . . certification motion," Franco v. Allied Interstate LLC, No. 13-CV-4053, 2014 WL 1329168, at *3 (S.D.N.Y. Apr. 2, 2014). The district courts have filled the void by, naturally, splitting on these questions. "[W]here a motion for class certification is pending at the time that the defendant makes an offer of judgment under Rule 68," some courts "have held that the certification of the class `relates back' to the time of the filing of the [c]omplaint to. . . . prevent defendants from attempting to circumvent a class judgment by `picking off' . . . named plaintiffs through the mooting of individual claims." Bowens v. Atl. Maint. Corp., 546 F.Supp.2d 55, 76-77 (E.D.N.Y.2008); see also Novella v. Westchester Cnty., No. 02-CV-2192, 2004 WL 3035405, at *4 (S.D.N.Y. Dec. 29, 2004) (recognizing that "[c]ourts have applied the `relation back' doctrine" where "defendants are able to circumvent judgment by `picking off' of `buying off' named plaintiffs through the mooting of individual claims"); Nasca v. GC Servs. Ltd. P'ship, No. 01-CV-10127, 2002 WL 31040647, at *3 (S.D.N.Y. Sept. 12, 2002) (recognizing exception, and noting that it is "generally concerned with situations in which the named plaintiff has already filed a motion for class certification"); cf. Comer, 37 F.3d at 799 (noting "[w]here the claims of the named plaintiffs become moot prior to class certification, there are several ways in which mootness is not had," including certain cases where "the courts permit the class certification to relate back to the filing of the complaint and hold that the plaintiffs have properly preserved the merits of the case for judicial resolution"); Robidoux v. Celani, 987 F.2d 931, 939 (2d Cir.1993) ("Even where the class is not certified until after the claims of the individual class representatives have become moot, certification may be deemed to relate back to the filing of the complaint in order to avoid mooting the entire controversy."); White v. Mathews, 559 F.2d 852, 857 (2d Cir.1977) (holding that class certification related back to the date when the plaintiff filed its challenge
Additionally, some courts in the Second Circuit have broadened the exception. These courts have found class claims to not be mooted by the filing of a Rule 68 offer of judgment even when the plaintiff had not yet filed a motion for class certification at all, provided that the "Rule 68 offer of judgment was made so early in the action that the plaintiff had not had a reasonable opportunity to move for class certification." Bowens, 546 F.Supp.2d at 77. As this Court has recognized, "there is ample authority" for applying this broadened exception to FDCPA plaintiffs. Morgan v. Account Collection Tech., LLC, No. 05-CV-2131, 2006 WL 2597865, at *7-*8 (S.D.N.Y. Sept. 6, 2006) (denying defendant's motion to dismiss the complaint in the context of an unaccepted Rule 68 offer of judgment where the plaintiff had not yet had an "opportunity to compile a record necessary to support a motion for class certification" and did not engage in "undue delay"). The rationale is that "[t]aken to its absurd logical conclusion," finding class claims moot in these circumstances would "clearly hamper the sound administration of justice, by forcing a plaintiff to make a class certification motion before the record for such motion is complete," and by "allowing a defendant to avoid liability for class wide relief . . . by the mere service of a Rule 68 offer at the outset of the case." Schaake v. Risk Mgmt. Alternatives, Inc., 203 F.R.D. 108, 112 (S.D.N.Y.2001). "It would encourage a race to the courthouse between defendants armed with uninformed offers and plaintiffs with underresearched certification motions." McDowall v. Cogan, 216 F.R.D. 46, 51 (E.D.N.Y. 2003).
While the broad version of the exception is not widely accepted, the narrower view has more support. See Morgan, 2006 WL 2597865 at *4 (noting that the Fifth, Sixth, and Seventh Circuits have endorsed the narrow form of the exception). Indeed, while some courts in the Second Circuit have refused to apply the broad version of the exception, see, e.g., Ambalu v. Rosenblatt, 194 F.R.D. 451, 453 (E.D.N.Y.2000) (adopting this approach), those courts often suggest that they may have held differently had the plaintiff diligently filed its motion for class certification prior to receiving the Rule 68 offer of judgment. See, e.g., Greif v. Wilson, Elser, Moskowitz, Edelman & Dicker LLP, 258 F.Supp.2d 157, 160-61 (E.D.N.Y.2003) (finding class claims moot after Defendant filed Rule 68 offer because the plaintiff had not filed for class certification for 20 months after filing its complaint, noting that "[t]he cases the plaintiff primarily relies upon are distinguishable insofar as they concern the issue of mooting a named plaintiff's claims after the filing of a motion to certify, which Greif has not yet done," and commenting that the "plaintiff [did] not indicate that she was prevented from commencing discovery or moving for class certification"); Tratt v. Retreival Masters Creditors Bureau, Inc., No. 00-CV-4560,
Under the broad version of the exception, Defendant filed its Rule 68 offer of judgment so soon after Plaintiff filed her Complaint that Plaintiff did not have a "reasonable opportunity" to file a motion for class certification. Granted, there is "no precise definition of what constitutes either `reasonable opportunity' or `undue delay.'" Morgan, 2006 WL 2597865 at *7. As this Court has explained:
Id. at *4 (internal citations omitted). Courts in the Second Circuit have found that both Rule 68 offers of judgment filed only one day after the answer, White v. OSI Collection Servs., Inc., No. 01-CV-1343, 2001 WL 1590518, at *4 (E.D.N.Y. Nov. 5, 2001), and those filed nearly seven months after the complaint (and six months after the initial answer), Morgan, 2006 WL 2597865 at *7-*8, do not afford the plaintiff reasonable time to file a motion for class certification. See also Isaacs v. Malen & Assocs., P.C., No. 13-CV-2386, 2013 WL 4734904, at *1 (S.D.N.Y. Aug. 14, 2013) (holding that the plaintiff's class claims were not moot because "the offer of judgment was made very early in the litigation well before plaintiff could be reasonably expected to file its class certification motion" (internal quotation marks omitted); Thomas v. Am. Serv. Fin. Corp., 966 F.Supp.2d 82, 93-94 (E.D.N.Y.2013) (holding that the plaintiff's class claims were not moot when the offer was made two months after the complaint was filed); Nasca, 2002 WL 31040647 at *3 (holding that the plaintiff did not have a reasonable opportunity to file for class certification when the defendant filed its offer less than two months after it filed its answer and one month after the initial conference); Schaake, 203 F.R.D. at 112 (holding that the plaintiff's class claims were not moot when the defendant made its offer only 32 days after the plaintiff filed its complaint).
Plaintiff filed her request for a pre-motion conference on July 16, 2013, five days after she filed her Complaint.
Likewise, under the narrow view of the exception, although Defendant is correct that Plaintiff has no pending motion for class certification, Plaintiff does have a pending request to file a class certification motion. It is generally this Court's practice to treat a party's filing of a request for a pre-motion conference, and a related request to file a motion, to trigger many of the same procedural consequences as the filing of the motion itself. See Fed. Ins. Co. v. Tyco Int'l Ltd., 422 F.Supp.2d 357, 370 (S.D.N.Y.2006) (noting this Court's "uniform[] . . . practice" of tolling motion-filing deadlines "when either a pre-motion letter is filed or a motion is filed in contravention of the Court's individual practices," and declining to deem a motion "to be untimely simply by virtue of the Court's individual practices" where "the Court did not . . . explicitly" toll the deadline). Therefore, Plaintiff has, in effect, already filed a motion for class certification, meaning her class claims are not moot. See Tocco v. Real Time Resolutions, Inc., No. 14-CV-810, 48 F.Supp.3d 535, 541, 2014 WL 3964948, at *5 (S.D.N.Y. Aug. 13, 2014) (finding plaintiff's class claims not moot when plaintiff "requested permission to move for class certification before any Rule 68 offer was made," and noting that "[i]f a Rule 68 offer made before a plaintiff had a reasonable time to move for class certification could not moot a claim, then by extension a Rule 68 offer made after the plaintiff has moved for class certification should not do so"); cf. McDowall, 216 F.R.D. at 51 (disapprovingly citing authorities that require a plaintiff to file for class certification before an offer of judgment expires, and noting that while plaintiff had not yet filed for class certification, plaintiff
The Court now turns to Defendant's Motion To Dismiss the Complaint under Rule 12(b)(6). Plaintiff alleges four FDCPA violations, but Defendant objects to only two in this Motion. Defendant therefore moves to "dismiss [P]laintiff's FDCPA claim to the extent it is based on [D]efendant's request in the letter that [P]laintiff indicate `the nature of the dispute,' and on the contention that the letter did not clearly state [that] [P]laintiff had 30 days from receipt of the letter to dispute the debt." (Def.'s Mem. 9.)
"Whether a collection letter is false, deceptive, or misleading under the FDCPA is determined from the perspective of the objective least sophisticated consumer." Easterling v. Collecto, Inc., 692 F.3d 229, 233 (2d Cir.2012) (internal quotation marks omitted). "The least sophisticated consumer test is an objective inquiry directed toward ensuring that the FDCPA protects all consumers, the gullible as well as the shrewd." Id. at 234 (alterations and internal quotation marks omitted); see also Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d Cir.2010) ("The hypothetical least sophisticated consumer does not have the astuteness of a `Philadelphia lawyer' or even the sophistication of the average, everyday, common consumer, but is neither irrational nor a dolt." (some internal quotation marks omitted)). "Under this standard, collection notices can be deceptive if they are open to more than one reasonable interpretation, at least one of which is inaccurate." Easterling, 692 F.3d at 233 (internal quotation marks omitted). But "FDCPA protection does not extend to every bizarre or idiosyncratic interpretation of a collection notice and courts should apply the standard in a manner that protects debt collectors against liability for unreasonable misinterpretations of collection notices." Id. at 233-34 (internal quotation marks omitted). Finally, "because the least sophisticated consumer standard is objective, the determination of how the least sophisticated consumer would view language in a defendant's collection letter is a question of law" that the Court may resolve on a motion to dismiss. Quinteros v. MBI Assocs., Inc., 999 F.Supp.2d 434, 437 (E.D.N.Y.2014) (internal quotation marks omitted); see also Castro v. Green Tree Servicing LLC, 959 F.Supp.2d 698, 707 (S.D.N.Y.2013) (same); Beauchamp v. Fin. Recovery Servs., Inc., No. 10-CV-4864, 2011 WL 891320, at *2 n. 18 (S.D.N.Y. Mar. 14, 2011) ("Although courts are divided on whether breach of the least sophisticated consumer standard is a question of law or fact, the trend in the Second Circuit is to treat this question as a matter of law that can be resolved on a motion to dismiss.")
Defendant first objects to Plaintiff's claim that the collection letter is misleading with respect to § 1692g(a)(3)'s requirement that a debt collector notify the consumer "that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector." 15 U.S.C. § 1692g(a)(3). Plaintiff does not dispute that the letter contains the required notice on the third page. (See MWC Letter 3 (notifying the recipient that, "unless the consumer, within thirty (30) days after receipt of this notice, disputes the validity of the debt or any portion thereof, the debt will be assumed to be valid by the debt collector").) Instead, Plaintiff's claim arises out of language on the second page of the letter, informing
The Second Circuit has confronted this very issue in a case addressing an almost identical set of facts. In Jacobson v. Healthcare Financial Services, Inc., 516 F.3d 85 (2d Cir.2008), the defendant's collection letter contained language notifying the recipient of his or her obligation to dispute the debt "within 30 days," but it also contained a separate "validation notice" informing the recipient that he or she had "30 days from receiving th[e] notice" to dispute the debt. Id. at 92-93. The plaintiff claimed that "[a] recipient . . . would be uncertain as to whether the thirty-day period for submitting a notice began on the date of the letter . . . or instead started on the date [of receipt]." Id. at 92. Applying the least-sophisticated-consumer standard, the Second Circuit disagreed:
Id. at 93. The court therefore affirmed the district court's grant of summary judgment for the defendant on this claim. Id.
There is at least one difference between Defendant's letter and the letter in Jacobson that might affect the analysis in this case. In Jacobson, "the clarifying language was . . . just two inches further down on the same page as the arguably ambiguous original statement," id. at 93, whereas here, the clarifying language is on a separate page. However, in terms of the least-sophisticated-consumer test, this is a distinction without a difference. In McStay v. I.C. Sys., Inc., 308 F.3d 188 (2d Cir.2002), on which Jacobson relied, the Second Circuit affirmed a district court's grant of summary judgment on a claim similar to Plaintiff's, where the front side of a double-sided letter contained a 30-day-period notice without specifying the starting date, but the back side of the letter contained a 30-day-period notice specifying that the period began after receipt of the notice. Id. at 189. In this context, the court held, like the Jacobson court, that "any confusion created by the ambiguity on the front of the letter dissipates when read in conjunction with the language on the back." Id. at 191. Here, it is unclear, based on the Complaint, whether Defendant's letter was double- or single-sided. But even if the validation notice were on an entirely separate page, the logic of Jacobson and McStay applies with full force to this case. See Jacobson, 516 F.3d at 93 (evaluating a hypothetical
Defendant next objects to Plaintiff's claim that the collection letter is misleading because it informs the recipient that any notice of a dispute must "indicat[e] the nature of the dispute as to the amount due, or any part thereof," despite the lack of statutory language in § 1692g requiring the recipient to do so. Defendant does not dispute that the second page of the letter contains the following language:
(MWC Letter 2.) Plaintiff contends that this language violates the FDCPA because, under that statute, "[a] debt collector cannot require the consumer to articulate a reason for disputing the debt." (Pl.'s Mem. 14.) In other words, Plaintiff effectively contends that the letter's language is inconsistent with multiple subsections of § 1692g(a) requiring the debt collector to notify the consumer of his or her right to dispute the debt but not imposing any requirements on the substance of the consumer's notice of dispute. See 15 U.S.C. § 1692g(a)(3) (requiring "a written notice containing . . . a statement that unless the consumer, [within the aforementioned 30-day period], disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector"); id. § 1692g(a)(4) (requiring "a written notice containing . . . a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed," the debt collector will obtain and mail to the consumer a copy of the verification or judgment). Similarly, the language is allegedly a misleading statement with regard to a consumer's rights under § 1692g(b), which provides that "[i]f the consumer notifies the debt collector in writing with the thirty-day period. . . that the debt, or any portion thereof, is disputed, . . . the debt collector shall cease collection of the debt, or any disputed portion thereof. . . ." 15 U.S.C. § 1692g(b). Defendant contends that the FDCPA "do[es] not prohibit a debt collector from asking the debtor to provide the nature of the dispute." (Def.'s Mem. 8.) And it separately contends that the letter "does not require [the recipient to] dispute the debt for a valid reason," that there is "no confusion which would lead the `least
The Second Circuit addressed a similar claim in DeSantis v. Computer Credit, Inc., 269 F.3d 159 (2d Cir.2001). There, the defendant had sent the plaintiff a letter with the following relevant language:
Id. at 160 (some emphasis removed). The Second Circuit found this language to be inconsistent with the FDCPA's notice requirements:
Id. at 162. The court thus found that "[a] recipient, especially if unsophisticated, might well have understood that the collector's obligation to obtain verification would arise only if the consumer presented a valid reason for nonpayment," and that this understanding "would be inconsistent with the [statutorily] required message." Id. Accordingly, the court vacated the district court's order granting the defendant's motion to dismiss because it found that the letter "had sufficient capacity to confuse an unsophisticated consumer on a message required by the [FDCPA]," but it explicitly "[did] not reach the further question whether the letter violated the [FDCPA] as a matter of law." Id.
Initially, the Court notes that Defendant's letter is arguably more consistent with the FDCPA than the defendant's letter in DeSantis. In DeSantis, the letter specifically informed the recipient that he or she must provide a "valid reason" for disputing the debt. See id. at 160. Here, instead of asking the recipient to provide a "valid reason," Defendant's letter asks the recipient to "indicat[e] the nature of the dispute as to the amount due or any part thereof." (MWC Letter 2.) In other words, the letter appears to ask the recipient to provide a "reason," but not necessarily a "valid" one.
The Court's holding is also consistent with Russell v. Equifax A.R.S., 74 F.3d 30 (2d Cir.1996), where the Second Circuit reversed a grant of summary judgment for the defendant in a case involving a confusing and contradictory message regarding the plaintiff's right to dispute the debt. There, the letter notified the recipient that "if [he or she] [did] not dispute th[e] claim. . . and wish[ed] to pay it within the next 10 days[,] [the debt collector] [would] not post th[e] collection to [the recipient's] file." Id. at 32. Applying the least-sophisticated-consumer standard, the Second Circuit found that such a consumer reading that language "would fear that unless she decided not to dispute the claim and to pay it within 10 days, the debt she owed would be `posted' to her credit file." Id. at 34 (emphasis removed). This would lead a hypothetical least sophisticated consumer to "readily believe . . . that were she to take any course other than payment to [the debt collector] within 10 days, it would permanently affect her credit record." Id. But this understanding would be inconsistent with the notice required under the FDCPA, which is that a consumer "ha[s] 30 days to decide whether to contest the claim." Id. Accordingly, the court held that the objectionable language "overshadowed and contradicted" the statutorily required notice, thereby "violat[ing] § 1692g as a matter of law," and it held that the language was "reasonably susceptible to an inaccurate reading" and was thus "deceptive," thereby violating § 1692e(10). Id. at 35.
Here, Plaintiff alleges that Defendant's letter is inconsistent with the statutory language triggering a debt collector's obligations upon receipt of a dispute, regardless of the nature of the dispute, and that Defendant's letter is "false, deceptive, or misleading" with regard to the recipient's options following receipt of the letter. (See Pl.'s Mem. 14-15; Compl. ¶¶ 22-24.) In other words, where the statute requires the debt collector to notify a consumer of his or her right to dispute a debt, Plaintiff alleges that Defendant's letter fails to notify the consumer of this right, but instead notifies the consumer of a right to dispute the debt so long as the consumer also "indicat[es] the nature of the dispute." (MWC Letter 2.) Just as the Russell court vacated summary judgment for the defendant where the plaintiff alleged that the defendant's notice failed to notify the recipient that he or she "had 30 days to decide whether to contest the claim," 74 F.3d at 34, here the Court finds that Plaintiff has stated a claim for an FDCPA violation where Defendant's letter allegedly
In addition to arguing that the FDPCA "do[es] not prohibit a debt collector from asking the debtor to provide the nature of the dispute," Defendant also argues that "[t]he letter at issue does not require [the recipient] [to] dispute the debt for a valid reason." (Def.'s Mem. 8.) In Defendant's view,
(Id. at 8-9.) Even if the Court agreed with Defendant's interpretation of the letter, the interpretation helps, rather than hurts, Plaintiff's claim. Specifically, for reasons the Court has already explained, Defendant's admission that the letter "asks for a description" and "[a]sk[s] the borrower to verbalize the dispute" is consistent with Plaintiff's allegation that such a request is inconsistent with the statute, which does not require a consumer provide such a "description" or "verbalization" when disputing a debt.
Moreover, to the extent that Defendant also argues that a least sophisticated consumer would not read the letter to require him or her to provide such a description or verbalization, the Court finds that Plaintiff has stated a claim that a hypothetical least sophisticated consumer would understand the letter to contain such a requirement. The letter's language notifying the recipient that "if any portion of this claim is disputed, you are to notify this office within 30 days, indicating the nature of the dispute," could be understood to mean "if any portion of this claim is disputed, you are to . . . indicat[e] the nature of the dispute." (MWC Letter 2.) Similarly, the letter's language notifying the recipient that, "[a]bsent receipt of such notice[,] we will assume the debt to be valid," could be understood to mean "[a]bsent receipt of [notice indicating the nature of the dispute], we will assume the debt to be valid." (Id.) Both of these plausible readings would be inconsistent with § 1692g's notice requirements.
Therefore, because Defendant's letter "ha[s] sufficient capacity to confuse an unsophisticated consumer on a message required by [§ 1692g]," and because it would "arguably interfere[] with a correct understanding of the" required message, the Court holds that Plaintiff has stated a claim for an FDCPA violation on this theory. DeSantis, 269 F.3d at 162.
In light of the foregoing, the Court denies Defendant's Motion To Dismiss the Complaint pursuant to Rule 12(b)(1), and it grants in part and denies in part Defendant's Motion To Dismiss the Complaint pursuant to Rule 12(b)(6). Plaintiff may proceed in the case under the first, second,
SO ORDERED.
Hon. Kenneth M. Karas, Individual R. Practice II.A (Oct. 23, 2013). The rule has since been modified to exclude motions for class certification from the promotion conference requirement.
Id. at 92-93.
In Doyle, the court cited this language as an example of the Second Circuit "affirming [a] 12(b)(1) dismissal . . . not based on a formal Rule 68 Offer of Judgment." 722 F.3d at 81 (citing ABN Amro, 485 F.3d at 92-93). However, the Doyle court did not discuss the other sections of ABN Amro which explained that, although the decision effectively upheld a 12(b)(1) dismissal, it explicitly did not do so on 12(b)(1) grounds. See 485 F.3d at 94-96.
Moreover, while some courts in the Second Circuit have held that a cap on attorney's fees renders a Rule 68 offer insufficient to moot a plaintiff's claim, see, e.g., Edge v. C. Tech Collections, Inc., 203 F.R.D. 85, 88 (E.D.N.Y. 2001) ("Because [the defendant's] offer of judgment caps the costs and attorney's fees [at $2500], it is not offering the maximum amount [the plaintiff] could recovery under the statute. . . . [and] therefore [it] is not moot."); Weissman v. ABC Fin. Servs., Inc., 203 F.R.D. 81, 83 (E.D.N.Y.2001) (finding offer insufficient to moot the plaintiff's claims where the defendant offered $500 for attorney's fees and costs, because "an offer of judgment that caps those costs and fees[] does not represent more money than the plaintiff could have received under the statute"); Wilner v. OSI Collection Servs., Inc., 201 F.R.D. 321, 322-23 (S.D.N.Y.2001) (finding offer insufficient to moot the plaintiff's claims where defendant offered $3000, inclusive of attorney's fees), others have held that an offer limiting the recovery of attorney's fees to those incurred up to the date of the offer are sufficient to moot a plaintiff's claim, see, e.g., Thomas v. Am. Serv. Fin. Corp., 966 F.Supp.2d 82, 91-92 (E.D.N.Y.2013) (noting that "courts in this Circuit have accepted as sufficient offers of judgment in FDCPA cases that included . . . `to date' language" and finding an offer a judgment sufficient that limited the recovery of fees to "reasonable attorney's fees incurred by [the] [p]laintiff to date as determined by the court" (emphasis omitted) (first alteration in original) (some internal quotation marks omitted)); Ambalu v. Rosenblatt, 194 F.R.D. 451, 452-53 (E.D.N.Y.2000) (same); cf. Murphy v. Equifax Check Servs., Inc., 35 F.Supp.2d 200, 203-204 (D.Conn.1999) (dismissing the plaintiff's claims after a Rule 68 offer of judgment was made despite a dispute over the amount of attorney's fees because "[t]he only interest remaining is that of [the plaintiff's] attorney," and favorably citing Lee v. Thomas & Thomas, 109 F.3d 302, 305-307 (6th Cir.1997) for the proposition that "reasonable" attorney's fees do not include fees for work performed after a Rule 68 offer of judgment is made). Therefore, because Defendant's Rule 68 offer in this case does not set a specific cap on attorney's fees, but rather, according to Defendant's letter, only limits recovery to those fees incurred "to date," language that courts in the Second Circuit have found to be sufficient, Defendant's offer provides complete relief.
Although it is true that McCauley was not an FDCPA case—making the district court's statement that "[t]he Second Circuit has not specifically addressed whether a FDCPA case may be mooted by an offer of judgment" technically correct, see id.—there is no language in McCauley limiting it to certain contexts, or indicating that it would not apply in an FDCPA case. Indeed, the Second Circuit specifically applied McCauley to the plaintiff's FDCPA claims in Cabala. See 736 F.3d at 227.
