Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-03401/USCOURTS-cand-3_05-cv-03401-1/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

LARRY DONNELL RAMSIRE, on behalf of

himself and all others similarly situated,

Plaintiff,

 v.

COLLECTCORP, INC.,

Defendant. /

No. C 05-03401 WHA

ORDER GRANTING 

MOTION TO DISMISS AND

VACATING HEARING

INTRODUCTION

In this purported class action alleging a violation of the Fair Debt Collection Practices

Act (“FDCPA”) under 15 U.S.C. 1692 et seq., defendant Collectcorp, Inc. now moves to

dismiss the complaint. As discussed below, this order finds that the complaint did not

sufficiently allege any “false, deceptive or misleading representation in connection with the

collection of any debt” in violation of 15 U.S.C. 1692e. Defendant’s motion is GRANTED.

STATEMENT

Plaintiff Larry Donnell Ramsire does not dispute that he owes a debt to Citicorp

Bankcards in the amount of $3,006.18 (Compl. ¶ 6). In connection with this debt, he received

defendant’s initial collection letter dated April 9, 2005, which contained the following language

(Compl. ¶ 8, Exh. A):

As soon as we receive your payment in full on the above-noted account all

collection activity will be stopped. If payment is not made, collection

efforts as well as interest will continue on this account.

Case 3:05-cv-03401-WHA Document 13 Filed 11/17/05 Page 1 of 4
United States District Court

For the Northern District of California

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A second letter was subsequently sent to plaintiff on May 24, 2005, which contained the

following settlement offer (id. ¶ 9, Exh. B):

You currently owe $3,006.18. We can settle your account today for only

$2,254.64. Please call our office if you want to take advantage of these

savings.

The complaint, filed on August 22, 2005, alleges that the first letter was false, deceptive

and misleading in violation of 15 U.S.C. 1692e(5) because defendant did not intend to carry out

its threat to continue collection efforts until payment in full was received, as evidenced by the

fact that it later offered to settle the debt at a discount (id. ¶¶ 10, 15). Plaintiff further argues

that defendant’s representation “that all collection activity will be stopped as soon as [it]

receives full payment on the account” was in violation of §§ 1692e and 1692e(10) (id. ¶ 14).

ANALYSIS

1. LEGAL STANDARDS.

A. FRCP 12(b)(6).

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) tests for legal

sufficiency of the claims alleged in the complaint. Parks Sch. of Business v. Symington, 51 F.3d

1480, 1484 (9th Cir. 1995). Although materials outside of the pleading should not be

considered, a court may consider all materials properly submitted as part of the complaint, such

as exhibits. Hal Roach Studios, Inc. v. Richard Feiner and Co., 896 F.2d 1542, 1555 (9th Cir.

1990). All material allegations of the complaint are taken as true and construed in the light

most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 340 (9th

Cir. 1996). However, “conclusory allegations of law and unwarranted inferences are

insufficient to defeat a motion to dismiss for failure to state a claim.” Epstein v. Washington

Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996). If dismissal is granted, the Court may

“properly den[y] a party’s request for leave to amend if such leave would be futile.” Pink v.

Modoc Indian Health Project, Inc., 157 F.3d 1185, 1189 (9th Cir. 1998).

B. Fair Debt Collection Practices Act.

The purpose of the FDCPA “is to protect consumers from a host of unfair, harassing,

and deceptive debt collection practices without imposing unnecessary restrictions on ethical

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 In support of this contention, counsel submits materials regarding another debtor (Donna Karp) in a

completely unrelated matter pending in the Northern District of Illinois.

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debt collectors.” Pressley v. Capital Credit & Collection Serv., Inc., 760 F.2d 922, 925 (9th

Cir. 1985) (citing 123 Cong. Rec. S. 27,386 (daily ed. Aug. 5, 1977)). Whether a collection

letter violates the FDCPA is a question of law for the Court, not a jury; the analysis focuses on

“whether it is likely to deceive or mislead a hypothetical least sophisticated debtor.” Terran v.

Kaplan, 109 F.3d 1428, 1431–32 (9th Cir. 1997). This standard is “lower than simply

examining whether particular language would deceive or mislead a reasonable debtor.” 

Swanson v. Southern Oregon Credit Serv., Inc., 869 F.2d 1222, 1227 (9th Cir. 1989).

Section 1692e provides in relevant part that “[a] debt collector may not use any false,

deceptive, or misleading representation or means in connection with the collection of any debt.” 

Among the explicitly enumerated conduct, Section 1692e(5) provides that “[t]he threat to take

any action that cannot legally be taken or that is not intended to be taken” is a violation of this

section. Section 1692e(10) further 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.”

2. APPLICATION.

Plaintiff challenges the following language from defendant’s initial collection letter: 

As soon as we receive your payment in full on the above-noted account all

collection activity will be stopped. If payment is not made, collection

efforts as well as interest will continue on this account.

The issue is whether the alleged “threat” to continue collection efforts was a false, deceptive, or

misleading representation in violation of the FDCPA. The answer is no. 

Plaintiff alleges that the April 9 letter was misleading because it implies that only a full

payment of the debt will stop collection efforts when, in reality, defendant’s practice is to offer

a settlement whenever no payment is received after the initial collection letter (Compl. ¶ 10).*

Even assuming that this characterization of defendant’s collection strategy is accurate, however,

it would not be inconsistent with the statement that “collection efforts” would continue if

payment is not received. The settlement offer in defendant’s May 24 letter was a “collection

effort;” it was an attempt to collect payment, albeit a partial payment, on plaintiff’s debt.

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United States District Court

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Nor does defendant’s apparent willingness to later settle debts for less than the full

amount owed render the initial collection letter false, deceptive or misleading. Even the least

sophisticated debtor would understand the disputed language to mean that if a full payment is

made, all collection activity would be stopped. It might even be fair to say that the letter

implied that if no payment is made, collection activity would continue. Nothing more was

stated or implied about what would happen (or not happen) if plaintiff made a partial payment. 

Plaintiff’s strained interpretation to the contrary is not persuasive.

Plaintiff further argues that the letter violated 15 U.S.C. 1692e(5) because “the

continuation of dunning letters, telephone calls and possible court action demanding to take all

available cash” was “a very serious threat” that defendant never intended to carry out (Opp. 3). 

Yet, the April 9 letter did not threaten any such activity. It merely stated that “collection

efforts” would continue. As explained above, when no payment was received, defendant’s

“collection efforts” did continue — a second letter was sent.

Even assuming all the factual allegations to be true and construing them in the light most

favorable to plaintiff, the alleged “threat” to continue collection efforts was not false, deceptive

or misleading. Oddly enough, the best argument in plaintiff’s brief — that the April 9 letter

falsely represented that “interest will continue on this account” if payment was not made, as the

May 24 letter reflected no increase in the amount owed — was not alleged in the complaint.

CONCLUSION

For these reasons, defendant’s motion to dismiss is GRANTED. Any motion for leave to

amend must be filed by NOVEMBER 28, 2005, appending thereto any proposed new pleadings. 

The hearing on this motion, currently scheduled for DECEMBER 1, 2005 AT 8:00 A.M., is

VACATED.

IT IS SO ORDERED.

Dated: November 17, 2005 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

Case 3:05-cv-03401-WHA Document 13 Filed 11/17/05 Page 4 of 4