In the

United States Court of Appeals

For the Seventh Circuit

No. 09-2016

DORIS DEKOVEN, individually and on behalf

of all others similarly situated,

Plaintiff-Appellant,

v.

PLAZA ASSOCIATES,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 05 C 3462—David H. Coar, Judge.

No. 09-2249

KENT B. KUBERT, individually and on behalf

of all others similarly situated,

Plaintiff-Appellant,

v.

AID ASSOCIATES, doing business as PLAZA ASSOCIATES,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 05 C 5865—Charles P. Kocoras, Judge.

ARGUED JANUARY 12, 2010—DECIDED MARCH 17, 2010
2 Nos. 09-2016, 09-2249

Before POSNER, FLAUM, and WILLIAMS, Circuit Judges.

POSNER, Circuit Judge. In these two closely related class

action suits under the Fair Debt Collection Practices Act,

15 U.S.C. §§ 1692-1692p, which we have consolidated

for decision, the plaintiffs complain about dunning letters

sent them by the well-known Plaza Associates debtcollection agency. In both cases the district court entered

summary judgment in favor of Plaza after rejecting the

survey evidence prepared by the plaintiffs’ expert

witness, Howard L. Gordon.

Two identical letters sent to plaintiff DeKoven state

that “we have been authorized to offer you the opportunity to settle this account with a lump sum payment for

65% of the above balance due, which is equal to $2,459.22.

This offer will be valid for a period of thirty-five (35) days

from the date of this letter.” The letter to Kubert is similar

but includes a paragraph which states—after telling the

recipient that if he notifies the agency within 30 days that

he “dispute[s] the validity of this debt or any portion

thereof” the agency will “obtain verification of the debt or

obtain a copy of a judgment and mail you a copy of such

judgment or verification”—that “you may already have

satisfactory proof that this account is listed with us in

error. If so, please send this notice back along with a copy

of one of the following to support your claim: Bankruptcy

Notice from the court stating case number and filing date,

Satisfaction of Judgment, Proof of prior settlement, Letter

from the original Creditor clearing your account.” The

suits complain about the statement in the letters that

the offer of settlement is valid for only 35 days and the
Nos. 09-2016, 09-2249 3

additional statement in the Kubert letter concerning

“satisfactory proof” that the account is in error.

The plaintiffs say the first statement would be understood by many consumers to mean that this would be

their last chance to settle the claim and that the terms in

it would be the best they’d be offered—that in short it

was a final offer—when in fact Plaza Associates had

been authorized by DeKoven’s and Kubert’s creditors to

settle for less; thus the offers were just the opening bid

in a negotiation. Kubert complains in addition that the

reference to “satisfactory proof” of error is misleading

because it implies that to “dispute” a claim a debtor

must furnish “proof” to support his position.

As an original matter one might wonder why a debtor

who does not deny the validity of his debt would be

heard to complain that he had failed to understand that

if he turned down the debt collector’s initial offer he

might be able to settle the creditor’s valid claim for even

less later. But in many cases, including the ones before us,

the debtor is not simply a wise guy who could afford to

pay his debts in full but would prefer not to. He is

someone who cannot pay them in full because he has

been hit by unforeseen medical bills or lost his job unexpectedly or is otherwise under water, without wanting

to cheat anyone. He might be unable to pay 65 percent

of a given debt but able to pay 25 or 33 percent, and if

he did pay that lesser percentage he might be able to

preserve his credit standing and avoid bankruptcy. If

through poor wording of the debt collector’s letter the

debtor gets the impression that the initial offer is the
4 Nos. 09-2016, 09-2249

final one, he may pay it in full and default on other

debts, or decide that his position is hopeless and

declare bankruptcy.

And so while a debt collector can, if authorized by the

creditor whom he is representing, make his initial offer

a final one, he cannot pretend that it is final if it is not, in

the hope that the debtor will think it final. See 15 U.S.C.

§ 1692e(10); Campuzano-Burgos v. Midland Credit Management, Inc., 550 F.3d 294, 299 (3d Cir. 2008); Goswami v.

American Collections Enterprise, Inc., 377 F.3d 488, 495-96

(5th Cir. 2004).

The problem with implementing this rule, as we explained in Evory v. RJM Acquisitions Funding L.L.C., 505

F.3d 769, 775-76 (7th Cir. 2007), is that “the settlement

process would disintegrate if the debt collector had to

disclose the consequences of the consumer’s rejecting

his initial offer. If he says ‘We’ll give you 50 percent if

you pay us by May 14, but if you don’t, we’ll probably

offer you the same or even better deal later, and if you

refuse that, we’ll probably give up and you’ll never have

to pay a cent of the debt you owe,’ there will be no point

in making offers.” We added that this “concern can be

adequately addressed yet the unsophisticated consumer still be protected against receiving a false impression of his options by the debt collector’s including

with the offer the following language: ‘We are not obligated to renew this offer.’ The word ‘obligated’ is strong

and even the unsophisticated consumer will realize that

there is a renewal possibility but that it is not assured.”
Nos. 09-2016, 09-2249 5

Plaza has not included this safe-harbor language in its

dunning letters, but we had disclaimed in Evory any

suggestion “that in the absence of safe-harbor language

a debt collector is per se liable for violating [the Fair

Debt Collection Practices Act] if he makes the kind of

settlement offer that we quoted. We see a potential for

deception of the unsophisticated in those offers but we

have no way of determining whether a sufficiently

large segment of the unsophisticated are likely to be

deceived to enable us to conclude that the statute has

been violated. For that, evidence is required, the most

useful sort being the kind of consumer survey described

in Johnson v. Revenue Management Corp., 169 F.3d 1057, 1060-

61 (7th Cir. 1999).” 505 F.3d at 776; see also Hahn v.

Triumph Partnerships LLC, 557 F.3d 755, 757 (7th Cir. 2009);

Williams v. OSI Educational Services, Inc., 505 F.3d 675, 678

(7th Cir. 2007). (But see, for criticism of the use of survey

evidence, Judge Jolly’s dissenting opinion in Gonzalez

v. Kay, 577 F.3d 600, 609-11 (5th Cir. 2009).)

In the present cases the plaintiffs’ expert did conduct a

survey. But both judges considered it inadmissible

under the standards governing the admission of survey

evidence (a form of expert evidence) in federal court. See,

e.g., Muha v. Encore Receivable Management, Inc., 558 F.3d

623, 625-26 (7th Cir. 2009); Peaceable Planet, Inc. v. Ty, Inc.,

362 F.3d 986, 992 (7th Cir. 2004); United States v. Curtin, 588

F.3d 993, 997-98 (9th Cir. 2009); Vail Associates, Inc. v. VendTel-Co., Ltd., 516 F.3d 853, 864 n. 8 (10th Cir. 2008); see

generally Fed. R. Evid. 702.

The survey staff interviewed 160 shoppers at a mall in

a Chicago suburb. Half were shown the letter to Kubert;
6 Nos. 09-2016, 09-2249

the other half—the members of the control group—were

shown the letter minus the “valid for a period” and

“satisfactory proof” paragraphs. There was no need to

show either group the letters to DeKoven, since they

differed materially from the letter to Kubert only in

lacking the reference to “satisfactory proof.”

After the survey respondents read the letter (either the

survey letter or the control letter, depending on which

group a respondent had been placed in), they were first

asked questions about the letter orally, then given orally

two answers to choose between, and finally handed a

card with the answers printed on it and asked to pick

one of them. The cards also contained a third answer

option, which had not been presented orally: “DON’T

KNOW/NOT SURE.” The critical question, asked of the

respondents in both groups, was what the respondent

thought would happen if he or she didn’t accept the

offer in the letter—would it be renewed or extended, or

was this the last chance to get a discount off the

balance owed? 

Of the respondents in the survey group, 59 percent

thought the offer was final, 26 percent thought that it

would be renewed or extended, and 15 percent didn’t

know or weren’t sure. The corresponding percentages

in the control group were 24 percent, 10 percent, and

66 percent. These statistics may seem strongly to

support the hypothesis that the letter to Kubert was

misleading. And likewise if we treat the “don’t know/not

sure” respondents as having correctly interpreted the

letter to leave uncertain whether the offer was final or
Nos. 09-2016, 09-2249 7

would be renewed; for there was nothing misleading

about the letter if interpreted so because, as we said, a debt

collector is not required to reveal his negotiating strategy.

Then 76 percent of the respondents in the control group

(the 10 percent who thought the offer nonfinal and the

66 percent who didn’t know whether it would be renewed) correctly interpreted the letter they were given to

read, compared to only 41 percent of the respondents

who read the real letter to Kubert. 

But as the district judges found, the members of the

control group may well have been confused by the omission from the cropped letter of any reference to a deadline. How could an offer be extended if it had no deadline?

The survey should have included in the letter shown

the control group the safe-harbor language in Evory (“We

are not obligated to renew this offer”) or some variant

thereof. If the 66 percent of the respondents who

answered “don’t know/not sure” are excluded, on the

ground that they may well have been confused by the

cropped letter, then the results of the survey do not

support the plaintiffs’ claim. Of the 34 percent of the

respondents in the control group who either thought the

offer was final (24 percent) or thought it would be

renewed (10 percent), 71 percent (24 percent divided by

34 percent) thought the offer was final. In the survey

group, if the don’t know/not sure 15 percent is set aside,

a slightly lower percentage of respondents—69 percent

(59 percent, the total who thought it final, divided by

85 percent [59 percent plus 26 percent], the sum of those

who thought it final and those who thought it would be
8 Nos. 09-2016, 09-2249

renewed)—thought the offer final. The implication is

that the control letter was more confusing than the actual

survey letter—that by adding the “valid for a period”

paragraph that the plaintiffs claim confuses consumers,

Plaza Associates reduced consumer confusion!

We decline to draw this inference, however, because

the control letter was no good and may have confused

respondents besides those who answered “don’t know/not

sure.” Therefore the survey was no good, as the judges

found. It was no good for another reason: if the don’t

know/not sure respondents are eliminated, the control

group shrinks to 27 persons. Determining the minimum

sample size from which reliable extrapolations can be

made to the sampled population is tricky. Floyd J. Fowler,

Jr., Survey Research Methods 45 (4th ed. 2008). But 27 is too

small a sample, especially when one considers the mismatch between the population to be sampled—people

who receive dunning letters from debt collectors—and

the sample, which consisted of mall patrons none of

whom, for all one knows, may ever have received such

a letter. The sample drawn by the plaintiffs’ expert is

what is called a “convenience” sample—convenient to

the sampler—as distinct from a “representative” sample—representative of the population sampled.

The survey was bad for still another reason: the

omission of the “don’t know/not sure” option in the

oral questioning. The omission was likely to make respondents guess—though the control letter was so confusing that most of the respondents in the control group

may have grasped that option as a drowning man grasps
Nos. 09-2016, 09-2249 9

at a straw. Cf. Sir Thomas More, A Dialogue of Comfort

against Tribulation, ch. 3 (1534).

A properly designed control group is vital in a survey

intended to reveal whether a debt collector is confusing

debtors. Cf. Free v. Peters, 12 F.3d 700, 705-06 (7th Cir.

1993); Penney v. Praxair, Inc., 116 F.3d 330, 333-34 (8th Cir.

1997); United States v. Aguilar, 883 F.2d 662, 706-08 (9th Cir.

1989). The debt collector can’t be blamed if consumers

don’t understand his dunning letter unless he should

have added or subtracted something to make it clearer.

The plaintiff thus has “to show that the additional language of the letters unacceptably increases the level of

confusion; many unsophisticated consumers would be

confused even if the letters they received contained

nothing more than a statement of the debt and the statutory notice.” Johnson v. Revenue Management Corp., supra,

169 F.3d at 1060 (emphasis in original).

The plaintiffs contend that Plaza Associates should

have deleted the “valid for” paragraph. To prove this they

conducted a survey. The survey, if it proves anything

(we don’t think it proves anything), proves the opposite

of their claim.

Kubert’s challenge to the “satisfactory proof” paragraph

also produced confusion in the control group. Of the

respondents in the survey group, 66 percent opined that

the recipient of the letter could not dispute the debt

without proof and 26 percent that the recipient could;

only 8 percent opted for don’t know/not sure. But in the

control group, 20 percent said the recipient of the letter

could not dispute the debt without proof, 24 percent
10 Nos. 09-2016, 09-2249

that he could, and 56 percent didn’t know or weren’t

sure. The confusion probably stemmed from the omission of any clue in the control letter to how one “disputes”

a debt.

If we ignore don’t know/not sure, the survey results

favor Kubert: 72 percent of the survey group (66 percent

divided by 92 [66 plus 26] percent) thought the debtor

could not dispute the debt without satisfactory proofs,

compared to only 45 percent of the control group

(20 percent divided by 44 percent). But the results are

vitiated by the absence from the letter read by the

control group of any reference to “proof.” The members

of the control group were just asked whether the debtor

could dispute the debt “without proof.” Since the letter

they read did not contain the word “proof,” it was

natural for them to assume that the thing the word

denotes was not required.

The question asked the respondents in the survey

group was also misleading. They were asked whether

they could dispute the debt if they didn’t have “satisfactory proof.” To answer in the affirmative would imply

that one can dispute a debt with unsatisfactory proof.

What is unsatisfactory proof of not owing a debt? A

respondent would naturally and we think correctly

believe that if he does not have satisfactory proof of not

owing the debt, the debt collector will not accept his

denial of owing it.

Kubert argues that a consumer can dispute a debt for

“no reason at all,” and that is true, DeSantis v. Computer

Credit, Inc., 269 F.3d 159, 162 (2d Cir. 2001)—provided
Nos. 09-2016, 09-2249 11

one understands that “dispute” is a term of art in the

Fair Debt Collection Practices Act. It means that the

consumer can, without giving a reason, require that the

debt collector verify the existence of the debt before

making further efforts to collect it. 15 U.S.C. §§ 1692g(a)(4),

(b); see Bartlett v. Heibl, 128 F.3d 497, 498-99 (7th Cir. 1997).

This was not explained to the respondents. If after receiving verification of the debt, the consumer has no

grounds for contesting it, the fact that he “disputed” it

will not cancel his liability.

If Plaza Associates’ letter is misleading, it is misleading

in containing an incomplete list of satisfactory proofs.

But Kubert does not list additional proofs that he thinks

a debt collector would be required to accept. The “satisfactory proof” challenge fails also because of the inadequacy of the control letter and, as before, the omission

of the “don’t know/not sure” option from the oral questioning of the respondents.

Suits under the Fair Debt Collection Practices Act have

repeatedly come to grief because of flaws in the surveys

conducted by the plaintiffs’ experts (often Mr. Gordon).

Muha v. Encore Receivable Management, Inc., supra, 558

F.3d at 625-26; Jackson v. Midland Credit Management, Inc.,

445 F. Supp. 2d 1015, 1020-21 (N.D. Ill. 2006), affirmed

under the name Evory v. RJM Acquisitions Funding L.L.C.,

supra; Jackson v. National Action Financial Services, Inc., 441

F. Supp. 2d 877, 882 (N.D. Ill. 2006); Hernandez v. Attention,

LLC, 429 F. Supp. 2d 912, 916-18 (N.D. Ill. 2005). District

judges may want to consider exercising the clearly authorized but rarely exercised option of appointing their

own expert to conduct a survey in FDCPA cases. Fed. R.
12 Nos. 09-2016, 09-2249

Evid. 706(a); General Electric Co. v. Joiner, 522 U.S. 136, 149-

50 (1997) (Breyer, J., concurring); In re High Fructose Corn

Syrup Antitrust Litigation, 295 F.3d 651, 665 (7th Cir. 2002);

Indianapolis Colts, Inc. v. Metropolitan Baltimore Football

Club Ltd. Partnership, 34 F.3d 410, 414-15 (7th Cir. 1994);

Walker v. American Home Shield Long Term Disability Plan,

180 F.3d 1065, 1070-71 (9th Cir. 1999); United States v.

Microsoft Corp., 147 F.3d 935, 955 n. 22 (D.C. Cir. 1998).

Judges can assure themselves of the expert’s neutrality by

(as in arbitration) asking the parties’ own experts to

nominate a third expert to be the court-appointed expert.

In re High Fructose Corn Syrup Antitrust Litigation, supra, 295

F.3d at 665; Indianapolis Colts, Inc. v. Metropolitan Baltimore

Football Club Ltd. Partnership, supra, 34 F.3d at 414-15;

Manual for Complex Litigation § 11.51, pp. 112-13 (4th ed.

2004); Daniel L. Rubinfeld, “Econometrics in the Courtroom,” 85 Colum. L. Rev. 1048, 1095-97 (1985). A genuine

neutral should be easy to find in the field of survey research because few survey researchers have settled views

about debt collection.

The decision to appoint an expert is within the discretion of the trial judge, of course, and we merely invite

consideration of the possibility of using this procedural

device to improve judicial understanding of survey

methodology. Although the judge is authorized to

allocate the cost of the court-appointed expert between

the parties, Fed. R. Evid. 706(b), we do not suggest that

the defendant should be made to contribute to the cost

of a survey conducted by the neutral expert, for in cases

under the Fair Debt Collection Practices Act defendants

rarely conduct their own surveys but are content to point

out the deficiencies in plaintiffs’ surveys. A survey con-
Nos. 09-2016, 09-2249 13

ducted by a neutral is a possible alternative to the

often unedifying spectacle of a battle of party-appointed

experts.

The dismissal of the suits is

AFFIRMED.

3-17-10