Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_05-cv-00842/USCOURTS-cand-3_05-cv-00842-2/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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1Plaintiff also filed a MotionforClassCertificationthat wasset for hearingonthe same date. However,

Plaintiff withdrew that Motion prior to the hearing. 

1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CARMENCITA S. HIPOLITO, on behalf

of herself and all others similarly situated,

Plaintiff,

v.

ALLIANCE RECEIVABLES

MANAGEMENT, INC., ET AL.,

Defendants.

________________________________/

Case No. C-05-0842 JCS

ORDER GRANTING MOTION TO DISMISS

FIRST AMENDED COMPLAINT PURSUANT

TO FEDERAL RULE OF CIVIL PROCEDURE

12(b)(6); 3) AND DENYING PLAINTIFF’S

MOTION TO STRIKE PURSUANT TO RULE

12(f) [Docket Nos. 18 and 20]

I. INTRODUCTION

Plaintiff in this purported class action alleges that a collection letter that was sent to her by

Defendants violated the Fair Debt Collection Practices Act. Defendants bring a Motion to Dismiss First

Amended Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(6) (“the Motion to Dismiss”). 

Plaintiff brings a Motion to Strike Pursuant to Rule 12(f) (“the Motion to Strike”). For the reasons stated

below, the Motion to Dismiss is GRANTED. The Motion to Strike is DENIED.1

II. BACKGROUND

A. Facts

Hipolito had an account with Retailer’s National Bank (“the Creditor”). First Amended Complaint,

¶ 7. In 2002 and 2003, Hipolito defaulted on her obligations to the Creditor. Id., ¶ 8. Sometime in early

2004, the Creditor referred the account to AllianceOne Receivables Management, Inc. and/or,

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AllianceOne Inc. Id., ¶ 10. AllianceOne Receivables Management is 100% owned by AllianceOne Inc.

(hereinafter, the Court refers to Defendants collectively as “AllianceOne”). Id., ¶ 4. AllianceOne sent

Hipolito an initial collection letter on March 15, 2004 (“the Collection Letter”). 

The Collection Letter, in its entirety, reads as follows:

Your account has been listed with our office for collection by the referenced client. If paid in full to

this office, all collection activity will be stopped.

This debt may remain open on your credit report for up to seven years. For your convenience, we

can arrange for automatic deductions from your checking account. Please feel free to call us if you

wish to discuss this matter.

This communication is from a debt collector. This is an attempt to collect a debt, and any

information obtained will be used for that purpose.

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of

the debt or any portion thereof, this office will assume this debt is valid. If you notify this office in

writing within 30 days from receipt of this notice, this office will: obtain verification of the debt or

obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request of

this office within 30 days after receiving this notice, this office will provide you with the name and

address of the original creditor, if different from the current creditor.

First Amended Complaint, Ex. A.

B. Procedural Background 

On February 28, 2005, Plaintiff initiated this action, alleging that the Collection Letter violated the

Fair Debt Collection Practices Act “(FDCPA”), 15 U.S.C. §§ 1692-1692o. In her First Amended

Complaint(“FAC”), Hipolito asserts that two statements in the Collection Letter violate the FDCPA. First,

she alleges that the statement “If paid in full to this office, all collection activity will be stopped” (hereinafter,

referred to as “the pay-in-full language”) violates the FDCPA because it is false, deceptive and misleading,

in violation of 15 U.S.C. § 1692e, and because it fails to convey effectively to Plaintiff her validation rights

under § 1692g. FAC ¶¶ 28-29. According to Hipolito, the pay-in-full language “assumes the validity of

the debt and contradicts Plaintiff’s right to dispute the debt and obtain verification.” FAC ¶ 14. Second,

Hipolito asserts that language stating that “[t]his debt may remain open on your credit report for up to seven

years” (hereinafter, referred to as the “seven-year language”) violates the FDCPA because it is false,

deceptive and misleading, in violation of § 1692e, and because it is prohibited as an “unfair or

unconscionable means to collect” under § 1692f. FAC ¶¶ 31-34. 

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C. The Motion to Dismiss

AllianceOne moves to dismiss the First Amended Complaint on the basis that as a matter of law,

neither of the statements of which Plaintiff complains violate the FDCPA. With respect to the pay-in-full

language, Defendants cite to cases in which courts have held that similar language did not violate the

FDCPA. Similarly, AllianceOne argues that the statement that negative credit information “may remain

open” on Plaintiff’s credit report is an accurate statement of the law and is in no way misleading or unfair.

In her Opposition, Plaintiff argues that the pay-in-full language is misleading and contradicts that

validation notice because in using this language, “Defendants falsely state that the only way to stop

collection is by payment in full.” Opposition at 5. In support of this assertion, Plaintiff cites to cases in

which courts have found that collection letters containing statements that contradict the validation notice

violate the FDCPA. Plaintiff argues further that the statement that the debt may remain open for seven

years is a misstatement of the law and constitutes an implicit threat to report Plaintiff to a credit bureau if she

does not respond when, in fact, the information has already been conveyed to a credit bureau. 

D. Plaintiff’s Motion to Strike

In response to Defendants’ Motion to Dismiss, Plaintiff brings a motion to strike under Rule 12(f) of

the Federal Rules of Civil Procedure, asking the Court to strike three sentences from the Motion to Dismiss

on the basis that they are “immaterial, impertinent, and scandalous.” 

III. ANALYSIS

A. The Motion to Strike

Pursuant to Rule 12(f), the court may strike “from any pleading any insufficient defense or any

redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12(f). Rule 7 defines the word

“pleading” as “a complaint and an answer; a reply to a counterclaim denominated as such; an answer to a

cross-claim, if the answer contains a cross-claim; a third-party complaint, if a person who was not an

original party is summoned under the provisions of Rule 14; and a third-party answer, if a third-party

complaint is served.” Motions and supporting declarations are not “pleadings” and therefore are not

subject to rule 12(f). See ” Sidney-Vinstein v. A. H. Robins Co., 697 F.2d 880, 885 (9th Cir. 1983)

(holding that district court erred in striking motion under Rule 12(f) on the basis that a motion is not a

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pleading). Because Plaintiff objects to statements that are contained in a motion rather than in a pleading,

her Motion to Strike is DENIED.

B. The Motion to Dismiss

1. Ruling on the Merits Prior to Addressing Class Certification

Pursuant to Rule 23(c)(1), the district court must rule on the issue of class certification “[a]s soon as

practicable after the commencement of an action brought as a class action.” Fed. R. Civ. P. 23(c)(1). 

Some circuits have held that this provision requires that the court address class certification before making

any rulings on the merits of the case. See, e.g., Horn v. Associated Wholesale Grocers, Inc., 555 F.2d

270, 273-75 (10th Cir. 1977); Peritz v. Liberty Loan Corp., 523 F.2d 349, 352-54 (7th Cir. 1975). 

The Ninth Circuit, however, has held that the use of the word “practicable” in Rule 23(c) “leaves much

room for discretion.” Wright v. Schock, 742 F.2d 541, 543 (9th Cir. 1984) (citation omitted). Thus,

“[u]nder the proper circumstances – where it is more practicable to do so and where the parties will not

suffer significant prejudices – the district court has discretion” to rule on the merits before reaching the class

certification question. Id. For example, in Wright, the Court of Appeals held that it was not an abuse of

discretion for the district court to rule on the defendants’ summary judgment motion prior to addressing

class certification because the defendants “consented to the chosen procedure.” Id. at 544. Under such

circumstances, the court concluded the defendants had waived “the protection afforded by an early ruling

on class certification.” Id

At oral argument, Defendants expressly waived the protection of an early ruling on class

certification, requesting that the Court rule on their Motion to Dismiss even though Plaintiff has now

withdrawn her motion for class certification. Under these circumstances, the Court concludes that it may

rule on Defendant’s Motion to Dismiss at this time.

2. Legal Standard 

A complaint should not be dismissed for failure to state a claim under Fed. R. Civ. P. 12(b)(6)

“unless it appears beyond doubt that a plaintiff could prove no set of facts in support of his claim which

would entitle him to relief.” During v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987) (quoting

Conley v. Gibson, 355 U.S. 41 (1957)). In ruling on a motion to dismiss, all allegations of material fact

are taken as true and construed in the light most favorable to the non-moving party. Id. Exhibits attached

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to the complaint may be considered as part of the complaint for the purposes of a Rule 12(b)(6) motion. 

Hal Roach Studios v. Richard Feiner & Co., 896 F.2d 1542, 1555 (9th Cir. 1990).

 “In the 9th Circuit, the court – and not the jury – determines whether a particular collection letter

violates the FDCPA.” Anderson v. Credit Collection Services, Inc., 322 F.Supp. 2d 1094, 1096 (S.D.

Cal. 2004) (citing Swanson v. Southern Oregon Credit Services, Inc., 869 F.2d 1222, 1225-26 (9th

Cir. 1988) and Terran v. Kaplan, 109 F.3d 1428, 1432 (9th Cir. 1997)). In determining whether a

violation has occurred, the Court views the letter from the perspective of a hypothetical “least sophisticated

debtor.” See Terran, 109 F.3d at 1431.

3. Pay-in-Full Language

Hipolito argues that the pay-in-full language in the Collection Letter violates the FDCPA because it

would be read by the least sophisticated debtor as stating that the only way to stop collection is by payment

in full when in fact, collection activity must also be discontinued if a debtor demands verification of the debt

or directs the debtor to cease contacts. Therefore, Plaintiff asserts, the letter fails to satisfy the

requirements of 15 U.S.C. § 1692g. The Court disagrees.

Under 15 U.S.C. § 1692g(a), “debt collectors must send consumers written notice containing

certain information regarding the alleged debt.” Swanson, 869 F.2d at 1224. The section reads as follows:

(a) Notice of debt; contents 

Within five days after the initial communication with a consumer in connection with the collection of

any debt, a debt collector shall, unless the following information is contained in the initial

communication or the consumer has paid the debt, send the consumer a written notice containing--

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement 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;

(4) 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 verification of the

debt or a copy of a judgment against the consumer and a copy of such verification or judgment will

be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt

collector will provide the consumer with the name and address of the original creditor, if different

from the current creditor.

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15 U.S.C. § 1692g(a). The requirements of 1692g(a) are “not satisfied merely by the inclusion of the

required debt validation notice; the notice Congress required must be conveyed effectively to the debtor.” 

Swanson, 869 F.2d at 1225. The court in Swanson explained, “[i]t must be large enough to be easily read

and sufficiently prominent to be noticed – even by the least sophisticated debtor. . . . Furthermore, to be

effective, the notice must not be overshadowed or contradicted by other messages or notices appearing in

the initial communication from the collection agency.” Id.

In Swanson, a collection agency sent the plaintiff a notice that contained, the following message:

IF THIS ACCOUNT IS PAID WITHIN THE NEXT 10 DAYS IT WILL NOT BE

RECORDED IN OUR MASTER FILE AS AN UNPAID COLLECTION ITEM. A GOOD

CREDIT RATING – IS YOUR MOST VALUABLE ASSET.

Id. at 1225. Below this notice, in much smaller type, the notice contained the language required by §

1692g (“the validation notice”). The debtor alleged that the communication violated the FDCPA because

the language in the validation notice was overshadowed and contradicted by the language in the larger type. 

The court agreed, concluding that:

The prominence and message of the “master file” and “most valuable asset” language, lead the least

sophisticated consumer, and quite probably even the average debtor, only to one conclusion: he

must ignore his right to take 30 days to verify his debt and act immediately or he will be

remembered as a deadbeat in the “master file” of his local collection agency and will, accordingly,

lost his “most valuable asset,” his good credit rating. 

Id. at 1226.

Applying the rules announced in Swanson, the Ninth Circuit reached the opposite result in Terran

v. Kaplan, 109 F.3d 1428 (9th Cir. 1997). In that case, the collection agency sent the plaintiff the

following letter, in a uniform typeface:

Please be advised that this office represents MONTGOMERY WARD CREDIT CORP with

whom you have an outstanding balance of $546.63. Unless an immediate telephone call is made to

J SCOTT, a collection assistant of our office at (602) 258-8433, we may find it necessary to

recommend to our client that they proceed with legal action. 

Unless you notify us in writing within thirty (30) days after receipt of our initial notice that you

dispute the validity of this debt, or any portion thereof, we will assume the debt to be valid. Upon

such notification, we will obtain verification of the debt or a copy of the judgment against you and a

copy of such verification or judgment will be mailed to you. Upon your written request within the

thirty (30) day period described above we will provide you with the name and address of the

original creditor if different from the current creditor.

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Id. at 1430. The plaintiff alleged the letter violated § 1692g because the second sentence of the letter

overshadowed and contradicted the language in the validation notice. The court rejected the plaintiff’s

argument. 

The court in Terran began by reviewing cases in other circuits in which courts had held that a

written communication violated § 1692g. The court concluded, “In each of these cases, payment was

demanded within a time period less than the statutory thirty days granted to dispute the debt and this

demand was communicated in a format that emphasized the duty to make payment, and obscured the fact

that the debtor had thirty days to dispute the debt.” Id. at 1433. In contrast, the communication in Terran

did not overshadow the validation notice because it did not demand immediate payment but rather, only

requested an immediate telephone call. Id. at 1434. Moreover, “[t]he text of the letter [was] uniformly

presented in ordinary, same-size font [and] [n]o emphasis [was] placed on any particular statement . . . .” 

On this basis, the court held that the communication did not violate § 1692g.

In Renick v. Dun & Bradstreet Receivable Management Services, 290 F.3d 1055 (9th Cir.

2002), on which Defendants also rely, the Ninth Circuit again found that § 1692g was not violated. There,

the collection agent, Dun & Bradstreet, sent two collection letters to the plaintiff, who had defaulted on his

telephone bill. Id. at 1057. The first letter included the notice required under § 1692g(a) that the plaintiff

had the right to dispute the validity of the debt within 30 days and that the debt collector would then

provide verification of the debt. Id. Twenty days later, a second notice was sent. Id. The front of the

second notice carried the words “[u]se the tear-off portion of this letter . . . to send your payment today.” 

Id. The back of the notice carried the required validation information and the words “PROMPT

PAYMENT IS REQUESTED.” Id. The plaintiff asserted that the request for “PROMPT PAYMENT”

and payment “today” was misleading and contradicted the information in the validation notice that he had

30 days to dispute the debt. Id. The court disagreed. The court held:

Dun & Bradstreet’s second collection notice did not violate the validation of debts provision of the

FDCPA, 15 U.S.C. § 1692g(a). The instruction that Renick "[u]se the tear-off portion of this letter

... to send your payment today" was in the same font as the surrounding text; was not emphasized in

any other way; was in the nature of a request rather than a demand; and carried no sense of

urgency. The request therefore "d[id] not overshadow the language in the notice that the alleged

debtor has thirty days in which to dispute the debt." Terran v. Kaplan, 109 F.3d 1428, 1434 (9th

Cir.1997). Similarly, the statement on the reverse that "PROMPT PAYMENT IS REQUESTED"

was in the same font as the accompanying validation notice; was followed by a statement informing

Renick that he had 30 days to challenge the debt's validity; and did not convey a threat that could

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induce Renick to "ignore his right to take 30 days to verify his debt and act immediately." Swanson

v. S. Or. Credit Serv., Inc., 869 F.2d 1222, 1226 (9th Cir.1988). The request for a prompt

payment therefore "d[id] not contradict the admonition that the debtor has thirty days to contest the

validity of the debt" and "d[id] not threaten or encourage the least sophisticated debtor to waive his

statutory right to challenge the validity of the debt." Terran, 109 F.3d at 1434.

Id.

Here, the pay-in-full language does not require payment within a specific time period that is less

than the thirty-day period specified in the validation notice. See Terran, 109 F.3d at 1433. In addition,

the pay-in-full language does not state that payment is the only means to end Defendants’ collection

activities, contrary to the assertion in Plaintiff’s Opposition brief. Rather, it would be evident even to the

least sophisticated debtor that the debtor also had the alternative of challenging the debt within 30 days, as

stated in the verification information that follows the pay-in-full language, in the same font. Under these

circumstances, the Court concludes, as a matter of law, that the pay-in-full language is not misleading and

does not violate § 1692g.

This result is supported by a Fifth Circuit case addressing language that is very similar to the

language at issue here, Peter v. G.C. Services LP, 310 F.3d 344 (5th Cir. 2002). In Peter, a collection

agency sent the plaintiff a notice that included on the front of the notice the following language: “FULL

COLLECTION ACTIVITY WILL CONTINUE UNTIL THIS ACCOUNT IS PAID IN FULL . . . TO

AVOID FURTHER COLLECTION ACTIVITY, YOUR STUDENT LOAN MUST BE PAID IN

FULL.” Id. at 347. The back of the notice carried the required validation notice informing the debtor that

she had 30 days to dispute the debt. Id. The plaintiff asserted that language on the front of the notice

(quoted above) was misleading and obscured her right to dispute the debt within thirty days, thus violating §

1692g. Id. at 350. The court held that it was not. Id. 

 The court in Peter reviewed the case law addressing § 1692g and concluded that courts –

including the Ninth Circuit – have generally found violations of § 1692g where “payment is demanded in a

concrete period shorter than the 30-day statutory contest period,” Id. It noted that courts have also found

that demands for “immediate payment” or “payment now” may contradict the validation notice, “at least

where their relationship to the 30-day window is not explained.” Id. (citing Savino v. Computer Credit

Inc., 164 F.3d 81, 86 (2d Cir. 1998)). The court concluded that “[b]ecause the challenged language here

did not demand payment in a specific time period shorter than 30 days,” the letter did not violate § 1692g.

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Citing Peter, this Court in Kalinina found that language almost identical to the language in the

Collect Letter here did not violate § 1692g. 2004 WL 3187150 (N.D. Cal.). In Kalinina, the collection

letter included, in addition to the required validation information, a statement that once payment was

received, the defendant would “[i]mmediately stop all recovery activity on this account.” Id. at * 1. Like

Hipolito, the plaintiff asserted this language was misleading because it obscured the fact that she could also

stop recovery activity by disputing the debt. Id. at *3. The court held that the language was not

misleading. The court stated:

This argument fails as a matter of law. While the letter does promise that Midland will stop

recovery activity if payment is made, the letter does not state that the only way to stop recovery

activity on the account is to make prompt payment. The letter also does not threaten legal action,

and as a matter of law, cannot be read even by an unsophisticated debtor to so imply.

Id. (citing Peter, 310 F.3d at 349-350).

The cases on which Plaintiff relies in her Opposition do not support a contrary result. All but one of

these involve language that demanded either immediate payment or payment within a specified period that

was less than 30 days. See Bartlett v. Heibel, 128 F.3d 479, 499 (7th Cir. 1997) (holding that § 1692g

was violated where collection letter stated that if the debtor did not pay or make arrangements for payment

within one week, the defendant would be entitled to sue); Russell v. Equifax A.R.S., 74 F.3d 30, 32-33

(2d Cir. 1996) (holding that § 1692g was violated where collection letter stated that “IF YOU DO NOT

DISPUTE THIS CLAIM (SEE REVERSE SIDE) AND WISH TO PAY IT WITHIN THE NEXT 10

DAYS WE WILL NOT POST THIS COLLECTION TO OUR FILE” and second notice stated

“PAYMENT IN FULL WITHIN 5 DAYS IS NOW DEMANDED”); Savino v. Computer Credit. Inc.,

164 F.3d 81, 84 (2d Cir. 1998) (holding that § 1692g was violated where collection letter stated that “the

hospital insists on immediate payment”); Graziano v. Harrison, 950 F.2d 107, 109 (3rd Cir. 1991)

(holding that § 1692g was violated where collection letter threatened legal action if debt was not paid within

ten days). 

Plaintiff’s reliance on Loughlin v. Collectcorp Corporation, 2005 WL 326975 (N.D. Ill.) also is

misplaced. In that case, the language in the collection letter was almost identical to the language here: “As

soon as we receive your payment in full on the above-noted account all collection activity will be stopped.” 

Id. at *1. The plaintiff alleged the language violated the FDCPA and the defendant brought a motion to

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dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court denied the motion on

the basis that in the Seventh Circuit, the question of whether a letter would be misleading to an

“unsophisticated consumer” (the standard applied in the Seventh Circuit) is a question of fact for the jury. 

Id. The court explained:

The Seventh Circuit has repeatedly held that neither § 1692g claims for letters which confuse

debtors as to their rights, nor § 1692e claims, should be dismissed pursuant to a 12(b)(6) motion

where the complaint alleges that a collection letter is confusing or misleading, because judges "are

not good proxies for the 'unsophisticated consumers' whose interests the statute protects," and

because plaintiffs are allowed to provide evidence as to how the letter is understood by the

unsophisticated consumer.

Id. As discussed above, that is not the standard in the Ninth Circuit, where these questions are considered

questions of law to be resolved by the court. Therefore, Loughlin is not on point.

4. Seven-Year Language

Hipolito asserts that the seven-year language violates the FDCPA because it is a misstatement of

the law and constitutes an implicit threat Defendant will report Hipolito to a credit bureau. Defendants

assert that Plaintiff’s position is unsupported by any authority. The Court agrees.

First, there is no authority that suggests the seven-year language misstates the law in any way. 

Rather, it is consistent with the Fair Credit Reporting Act (“FCRA”), which provides that “no consumer

reporting agency may make any consumer report containing . . . [a]ccounts placed for collection or charged

to profit and loss which antedate the report by more than seven years.” 15 U.S.C. § 1681c(a)(4). 

Second, the mere reference to credit reporting is not, by itself, a violation of the FDCPA. See

Harvey v. United Adjusters, 509 F. Supp. 1218, 1221 (D. Or. 1981) (holding that FDCPA was not

violated where notice said, “[y]our credit is a valuable asset. Pay your bills and retain good credit”); Spira

v. Ashwood Financial, Inc., 358 F. Supp. 2d 150, 160 (E.D.N.Y. 2005) (holding that FDCPA was not

violated where collection letter stated that it was the defendant’s policy “to report all unpaid accounts to a

major credit bureau after 30 days of this notice” and noting that “[t]he letter states that it is a collection letter

and to the extent that it threatens action, it merely reflects Defendant's policy, unrelated to Plaintiff's

response, and reinforces the widely known fact that failure to pay debts that are owed might adversely

affect one's credit rating and ability to obtain credit”); Wright v. Credit Bureau of Georgia, Inc., 555 F.

Supp. 1005, 1007 (N.D. Ga. 1983) (holding that there was no violation of the FDCPA where name of

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collection bureau included the words “credit bureau,” reasoning that “the text of each letter sent by the

defendants and the appearance of the name ‘CBI COLLECTIONS’ at the bottom of each letter and on

the return envelope sufficiently inform the consumer that he has received only a dunning letter and not a

threat to relay credit information to a credit reporting agency. If the defendants' letters contain any threat to

a consumer's credit rating, the threat is at most a statement that the results of the defendants' collection

efforts may some day affect the debtor's credit rating. Thus the letters convey no specific threat greater than

the well-known fact, recognized by all consumers, regardless of the degree of their sophistication, that a

failure to pay one's bills will affect his ability to obtain credit in the future”). Therefore, Plaintiff’s complaint

fails to the extent it is based on the seven-year language.

IV. CONCLUSION

For the reasons stated above, Defendants’ Motion to Dismiss is GRANTED. Plaintiff’s Motion to

Strike is DENIED. Because the Court concludes, based on the representations of Plaintiff’s counsel at oral

argument, that amendment would be futile, this action is dismissed, in its entirety, with prejudice.

DATED: July 15, 2005

 /s/ Joseph C. Spero 

JOSEPH C. SPERO

United States Magistrate Judge

Case 3:05-cv-00842-JCS Document 44 Filed 07/15/05 Page 11 of 11