(Pleadings in FDCPA actions rarely dismissed for not meeting the Twombly standard.)
Since the United States Supreme Court set forth the “plausible on its face” pleading standard,courts (and defendants) have refocused their attention on whether plaintiffs have pled sufficient facts to support their claims, including claims based on the Fair Debt Collection Practices Act (FDCPA).
The District of Massachusetts is the most recent court to examine the sufficiency of pleadings in an FDCPA case in deciding Krasnor v. Spaulding Law Office. In Krasnor, the plaintiff pled the following allegations:
- Plaintiff . . . is an adult individual residing [in] Chicopee, Massachusetts . . . .
- Defendant . . . is a domestic limited liability company . . ., operating as a collection agency . . . .
- Plaintiff incurred a financial obligation that was primarily for family, personal or household purposes . . . .
- Thereafter, the debt was purchased, assigned or transferred to Defendant for collection from Plaintiff.
- The Defendant then began attempts to collect this debt from the Plaintiff . . . .
- The Defendant [also] threatened to sue the Plaintiff without any intention of actually doing so.
- The Defendant asked the Plaintiff the location of his employment and threatened to garnish his wages.
- The Defendant failed to provide the Plaintiff with validation of debt within five business days of contacting him.
- The Defendant used abusive language in the communications with the Plaintiff.
- The Plaintiff has suffered actual damages as a result . . ., as well as suffering from unjustified and abusive invasions of personal privacy at the Plaintiff’s home and workplace.
Based on these allegations, the consumer alleged violations of §§ 1692e(4) and (5), and 1692g(a) and (b) of the FDCPA.
The court held the plaintiff had sufficiently pled the alleged violations, which were often stated as: Defendant failed to send a validation letter in violation of section 1692g(a). The court concluded the statements were not generic examples of violations as argued by the collection agency, but rather specifically referenced conduct alleged against the Defendant.
Many courts have followed the same analysis, declining to dismiss the FDCPA case. In Stinson v. GC Services, L.P., the defendant argued allegations regarding telephone communications with the consumer’s human resource department regarding wage garnishment left uncertain whether the consumer alleged the collection agency had garnished improperly or had threatened to garnish when the collection agency could not garnish. The court found the plaintiff had sufficiently pled an FDCPA claim, and any uncertainty could be cleared up by reviewing the defendant’s records.
In another example, a district court held the plaintiff had sufficiently pled individual liability against a shareholder of a collection agency by pleading he formulated, implemented, and/or ratified the allegedly wrongful collection conduct. Likewise, a claim the collection agency asserted a right to attorneys’ fees on a contingent fee basis was sufficient to plead violations of §§ 1692e and 1692f, as well as various subsections.
In Edwards v. Zigler, however, the plaintiff’s allegations were found to be insufficient. The consumer alleged a collection attorney violated the FDCPA by filing a lawsuit prior to a demand, in violation of §§ 1692e, 1692f, and 1692g. The consumer also failed to allege the debt at issue fell within the definition of a debt under the FDCPA. Although the court referenced the insufficiency of the pleadings, the real issue was the consumer’s claim did not constitute an FDCPA violation. The “debt” was damages suffered because of malicious prosecution. The attorney did not fall within the definition of a “debt collector.” As a result, the actions did not violate the FDCPA sections alleged. Thus, the heightened “plausibility” standard had little to do with the dismissal of the plaintiff’s complaint.
The gist of these cases boils down to this: It is particularly difficult to obtain a dismissal based on a lack of sufficient information in the complaint. So, for instance, a typical Krohn & Moss complaint alleging violations of §§ 1692d, 1692d(5) and (6) as well as 1692e(10) and (11) has more information contained in its allegations than some of the cases listed above. A typical Krohn & Moss complaint will contain a variation of the following allegations of wrongful actions:
- Defendant constantly and continuously places phone calls to plaintiff demanding payment.
- Defendant hangs up without leaving a message.
- Defendant leaves messages that fail to state that the call is from a debt collector.
Based on the cases above, such a complaint would probably pass the heightened “plausibility” standard. Not only will a court typically permit leave to amend, but the court would probably hold a conclusory statement that specific language is misleading or false, as an example, are sufficient to plausibly state a claim. However, if the argument is the alleged language cannot, as a matter of law, be false or deceptive, a collection agency might be able to prevail on a motion to dismiss.
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