SARAH EVANS BARKER, District Judge.
This cause is before the Court on Defendant's Motion to Dismiss for Failure to State a Claim [Docket No. 9], filed on November 21, 2013 pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, the motion is DENIED.
We read the limited facts available to us at this stage in a light most favorable to Plaintiff as the non-moving party. Plaintiff Patrick Moran is an Indiana citizen residing in the Southern District of Indiana. Compl. ¶¶ 8. Defendant Greene & Cooper Attorneys, LLP ("Greene & Cooper") acts on behalf of a collection agency or debt purchaser, and this suit arises out of Defendant's attempt to collect a debt Plaintiff owed to a third party.
Moran was sued by Asset Acceptance, LLC in Marion County Superior Court, cause number 49D12-1211-CC-043219, on November 7, 2012.
Pl.'s Ex. 3.
Id. The letter closes with disclosures regarding Moran's right to request the cessation of communication and his ability to contact the Federal Trade Commission regarding the Fair Debt Collection Practices Act. Id. Plaintiff brought this suit alleging a violation of the FDCPA on October 4, 2013. Docket No. 1.
The Federal Rules of Civil Procedure authorize dismissal of claims for "failure to state a claim upon which relief may be granted." Fed.R.Civ.P. 12(b)(6). In determining the sufficiency of a claim, the court considers all allegations in the complaint to be true and draws such reasonable inferences as required in the plaintiff's favor. Jacobs v. City of Chi., 215 F.3d 758, 765 (7th Cir.2000). Federal Rule of Civil Procedure 8(a) applies, with several enumerated exceptions, to all civil claims, and it establishes a liberal pleading regime in which a plaintiff must provide only a "short and plain statement of the claim showing that [he] is entitled to relief," Fed. R. Civ. Pro. 8(a)(2); this reflects the modern policy judgment that claims should be "determined on their merits rather than through missteps in pleading." E.E.O.C. v. Concentra Health Servs., Inc., 496 F.3d 773, 779 (7th Cir.2007) (citing 2 James W. Moore, et al., Moore's Federal Practice § 8.04 (3d ed.2006)). A pleading satisfies the core requirement of fairness to the defendant so long as it provides "enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests." Tamayo v. Blagojevich, 526 F.3d 1074, 1083 (7th Cir.2008).
In its decisions in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), and Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the United States Supreme
Although Twombly and Iqbal represent a new gloss on the standards governing the sufficiency of pleadings, they do not overturn the fundamental principle of liberality embodied in Rule 8. As this Court has noted, "notice pleading is still all that is required, and `a plaintiff still must provide only enough detail to give the defendant fair notice of what the claim is and the grounds upon which it rests, and, through his allegations, show that it is plausible, rather than merely speculative, that he is entitled to relief.'" United States v. City of Evansville, 2011 WL 52467, at *1 (S.D.Ind. Jan. 8, 2011) (quoting Tamayo, 526 F.3d at 1083). On a motion to dismiss, "the plaintiff receives the benefit of imagination, so long as the hypotheses are consistent with the complaint." Sanjuan v. Am. Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir.1994).
Defendant advances two arguments for dismissal: one based on the Supreme Court's Rooker-Feldman justiciability doctrine and the other on the Complaint's failure to state a plausible claim that Defendant violated the FDCPA. Because the Rooker-Feldman doctrine raises the issue of the Court's subject matter jurisdiction over the case, we address it first, before considering the merits of the Complaint.
The Rooker-Feldman doctrine, named after the Supreme Court's decisions in Rooker v. Fidelity Trust Co.
Contending that Plaintiff's "FDCPA claims . . . require[ ] the Court to review and reject the state court judgment" entered against him, Defendant urges that we lack subject matter jurisdiction. It relies in large part on a previous decision of this Court, Bullock v. Credit Bureau of Greater Indianapolis, Inc., 272 F.Supp.2d 780 (S.D.Ind.2003), in which we held that Rooker-Feldman doctrine applied to bar an FDCPA complaint. Examination of the facts of Bullock, however, demonstrates Defendant's misunderstanding of the decision and its supporting precedent. In Bullock, the plaintiffs alleged that the defendant debt-collectors had violated the act in obtaining the state court judgment on a debt—namely, by seeking treble damages and suing under a false name. 272 F.Supp.2d at 782. By challenging the debt-collector's practices, the plaintiffs there were unavoidably asking the district court to rule the state judgment invalid, bringing their claim squarely within Rooker-Feldman. Id. at 783; see also Epps v. Creditnet, Inc., 320 F.3d 756, 760 (7th Cir. 2003) (declining jurisdiction over a claim that treble damages in state judgment violated Indiana law).
Here, by contrast, Plaintiff does not challenge the validity of the state court judgment against him—neither its amount nor the methods used by the creditor to obtain it. Rather, he argues that the dunning letter Defendant sent him following the adjudication by the state court in an attempt to collect the amount due violated the FDCPA; in essence, as we shall discuss further below, he argues the letter was confusing and misleading in its failure to disclose the identity of the creditor and its failure to explain the provenance of the total amount due in relation to the original judgment amount. Given these claims, we could find that Defendant violated the statute without "reviewing" the state court judgment, and Rooker-Feldman doctrine therefore presents no impediment to our exercise of jurisdiction. See Long v. Shorebank Dev. Corp., 182 F.3d 548, 555 (7th Cir.1999) (FDCPA suit not barred by Rooker-Feldman where challenged conduct is "independent" of the state court judgment rather than an attempt to set it aside); Gillard v. Michalakos, 365 Fed. Appx. 1, 3 (7th Cir.2010) (affirming the denial of a particular FDCPA claim but recognizing generally that lawyers' attempts to collect on judgments can violate the statute). The Rooker-Feldman defense is, thus, unavailing.
Plaintiff adequately states the foundational prerequisites for an FDCPA claim in his Complaint: he is a natural person and a "consumer," Compl. ¶¶ 10-11; his debt arose out of a transaction entered into "primarily for personal, family, or household purposes," id. at ¶ 18; and Greene & Cooper was a "debt collection agency." Id. at ¶ 13. Defendant disputes none of these assertions, but rather challenges only whether its conduct violated the provisions of the FDCPA. See Def.'s Br. 3-7.
The Fair Debt Collection Practices Act (FDCPA) aims at remedying the use of "abusive, deceptive, and unfair debt collection practices." 15 U.S.C. § 1692(a).
How a particular notice affects its intended audience "is a question of fact," and thus the question is often not amenable to disposition on a motion to dismiss. See Walker v. Nat'l Recovery, Inc., 200 F.3d 500, 501 (7th Cir.1999); Headen v. Asset Acceptance, LLC, 383 F.Supp.2d 1097, 1102 (S.D.Ind.2005). Where the text of a dunning letter is not unambiguously "confusing" on its face, a plaintiff will need to proffer additional evidence supplementing his own say-so—such as survey data—in order to survive summary judgment on his FDCPA claim. Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 415 (7th Cir.2005). At the pleading stage, however, a claim should survive so long as the plaintiff plausibly alleges a violation and the plaintiff is not precluded from recovery as a matter of law. Cf. Jang v. A.M. Miller & Assocs., 122 F.3d 480, 484 (7th Cir.1997) (affirming dismissal where the challenged communication used only language explicitly permitted under the statute).
Plaintiff alleges that the dunning letter Greene & Cooper sent him on February 14, 2013 ran afoul of the statute in two ways: it did not divulge the identity of the creditor, and it misleadingly implied that interest on the state court judgment was accruing at a greater rate than it really was. Pl.'s Resp. 10. We conclude that Plaintiff has plausibly alleged that the letter was confusing or misleading to an unsophisticated consumer in both respects.
Both the heading and the body of the letter state that Greene & Cooper is attempting to collect the judgment amount on behalf of "Unknown." Pl.'s Ex. 3. It seems to us clear that failing to name the creditor entirely—like falsely identifying the creditor—is liable to lead to the kind of patent confusion forbidden by the statute. See, e.g., Bode v. Encore Receivable Mgmt., Inc., 2007 WL 2493898, at *4 (E.D.Wis. Aug. 30, 2007) ("Accordingly, the failure to name the correct creditor could create liability ....") (citing Durkin, 406 F.3d at 415); Scheunemann v. J.C. Christensen & Assocs., Inc., 802 F.Supp.2d 981, 984-985 (E.D.Wis.2011) (denying summary judgment where dunning letter named creditor incorrectly). In arguing that failure to specify a creditor can violate the statute, Plaintiff relies in particular on the Northern District of Indiana's decision in Smith v. American Revenue Corp., 2005
Defendant objects that the letter listed the creditor as "Unknown" because of an "electronic merging error," and was not meant to "harass, oppress, or abuse." Def.'s Br. 5. A "bona fide error" affirmative defense to FDCPA liability exists, but Defendant has not asserted one, nor has it set forth the elements necessary to prevail on such a defense. See 15 U.S.C. § 1692k(c) (defining the "bona fide error" exception); Jenkins v. Heintz, 124 F.3d 824, 834 (7th Cir.1997). Defendant's passing mention of a clerical error in its brief is insufficient to avail itself of the defense, at least at the pleadings stage.
The FDCPA requires that communications to debtors not deceive them as to the "character" or "amount" of any debt due. "It is not enough that the dunning letter state the amount of the debt that is due. It must state it clearly enough that the recipient is likely to understand it." Chuway v. Nat'l Action Fin. Servs., Inc., 362 F.3d 944, 948 (7th Cir. 2004) (citing Bartlett v. Heibl, 128 F.3d 497, 500-01 (7th Cir.1997)) (additional citations omitted). A debt collector need not "itemize" the debt, so long as its statement of the total is clear and accurate. See Hahn, 557 F.3d at 756-757 ("[A] debt collector need not break out principal and interest; it is enough to tell the debtor the bottom line.... A dollar due is a dollar due."). However, a dunning letter may violate the FDCPA if its failure to clearly distinguish principal and interest can mislead the debtor into misunderstanding the size of the principal or the rate of interest. In Fields, the Seventh Circuit held that a letter seeking nearly $400 was misleading when the original debt had been only $122 and the letter never explained that the difference between the original and current
Id. (emphasis added). Cf. Singer v. Pierce & Assocs., P.C., 383 F.3d 596, 598-599 (7th Cir.2004) (distinguishing Fields and finding no FDCPA violation where debt collector itemized the attorneys' fees owed).
Here, Greene & Cooper's letter may have left the reader open to a similar threat of misapprehension. The letter stated that "[j]udgment was entered against you on January 2, 2013, for the sum of $7,213.57, plus Interest which is continuing to accrue. As of the date of this letter, the current balance of your account is $7,446.56." Pl.'s Ex. 3. Since it mentions only the principal and the interest which is "continuing to accrue," a reasonable reader could conclude from the letter that $233.99 in interest had accumulated in the short time since the state court judgment was entered—an alarming impression, and one driven home by the letter's exhortation that the "balance will continue to increase unless you pay your account today." See Pl.'s Ex. 3; Pl.'s Resp. 13. In fact, as both parties agree, a much smaller amount of interest
Plaintiff's principal contention is not that he does not owe the $7,446.56 quoted to him in Greene & Cooper's letter—nor could it be without running afoul of Rooker-Feldman abstention.
It is not for us to say, in acting on Defendant's motion to dismiss, whether Greene & Cooper's letter truly was misleading or confusing as a matter of fact. It is sufficient at this stage that Plaintiff has stated his allegations plausibly. Because we have concluded that he has, Defendant's motion to dismiss for failure to state a claim is DENIED.
IT IS SO ORDERED.