Opinion ID: 602804
Heading Depth: 2
Heading Rank: 1

Heading: Ruling on Cross-Motions for Summary Judgment

Text: 28 The FDCPA establishes a general prohibition against the use of false, deceptive, or misleading representation or means in connection with the collection of any debt. 15 U.S.C. § 1692e. The sixteen subsections of § 1692e set forth a non-exhaustive list of practices that fall within this ban. These subsections include: 29 (3) The false representation or implication that any individual is an attorney or that any communication is from an attorney. 30 .... 31 (10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer. 32 Id. Because the list in the sixteen subsections is non-exhaustive, a debt collection practice can be a false, deceptive, or misleading practice in violation of § 1692e even if it does not fall within any of the subsections of § 1692e. A single violation of § 1692e is sufficient to establish civil liability under the FDCPA. See 15 U.S.C. § 1692k (establishing civil liability for any debt collector who fails to comply with any provision of this subchapter). 33
34 The most widely accepted test for determining whether a collection letter violates § 1692e is an objective standard based on the least sophisticated consumer. This standard has been widely adopted by district courts in this circuit. See, e.g., Johnson v. NCB Collection Services, 799 F.Supp. 1298, 1306 (D.Conn.1992); Rabideau v. Management Adjustment Bureau, 805 F.Supp. 1086, 1094 (W.D.N.Y.1992); Britton v. Weiss, 1989 WL 148663, at , 1989 U.S.Dist. LEXIS 14610, at  6 (N.D.N.Y. Dec. 18, 1989); cf. Riveria v. MAB Collections, Inc., 682 F.Supp. 174, 178 (W.D.N.Y.1988) (using unsophisticated consumer standard). This standard has also been adopted by all federal appellate courts that have considered the issue. See Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1028 (6th Cir.1992); Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir.1991); Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1174-75 (11th Cir.1985); Baker v. G.C. Services Corp., 677 F.2d 775, 778 (9th Cir.1982). But see Blackwell v. Professional Business Services, of Georgia, Inc., 526 F.Supp. 535, 538 (N.D.Ga.1981) (applying reasonable consumer standard). We now adopt the least-sophisticated consumer standard for application in cases under § 1692e. In doing so, however, we examine in some detail the purposes served by this standard as well as the extent of the liability that it creates. 35 The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd. This standard is consistent with the norms that courts have traditionally applied in consumer-protection law. More than fifty years ago, the Supreme Court noted that 36 [t]he fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious. 37 Federal Trade Commission v. Standard Education Society, 302 U.S. 112, 116, 58 S.Ct. 113, 115, 82 L.Ed. 141 (1937) (finding encyclopedia-selling scheme in violation of Federal Trade Commission Act). We subsequently sounded the same theme in our consumer-protection cases, holding that the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 41 et seq., was not made  'for the protection of experts, but for the public--that vast multitude which includes the ignorant, the unthinking and the credulous.'  Charles of the Ritz Distributors Corp. v. Federal Trade Commission, 143 F.2d 676, 679 (2d Cir.1944), quoting Florence Manufacturing Co. v. J.C. Dowd & Co., 178 F. 73, 75 (2d Cir.1910). This basic principle of consumer-protection law took on its modern formulation several years later, when we held that [i]n evaluating the tendency of language to deceive, the [Federal Trade] Commission should look not to the most sophisticated readers but rather to the least. Exposition Press, Inc. v. Federal Trade Commission, 295 F.2d 869, 872 (2d Cir.1961). In recent years, as courts have incorporated the jurisprudence of the FTC Act into their interpretations of the FDCPA, the language of Exposition Press has gradually evolved into what we now know as the least-sophisticated-consumer standard. See, e.g., Jeter, 760 F.2d at 1174-75; Baker, 677 F.2d at 778. 38 To serve the purposes of the consumer-protection laws, courts have attempted to articulate a standard for evaluating deceptiveness that does not rely on assumptions about the average or normal consumer. This effort is grounded, quite sensibly, in the assumption that consumers of below-average sophistication or intelligence are especially vulnerable to fraudulent schemes. The least-sophisticated-consumer standard protects these consumers in a variety of ways. First, courts have held that collection notices violate the FDCPA if the notices contain language that overshadows or contradicts other language that informs consumers of their rights. See Graziano, 950 F.2d at 111 (notice of right to respond within thirty days is not effectively communicated when presented in conjunction with contradictory demand for payment within ten days); see also Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1225 (9th Cir.1988) (same). In addition, courts have found collection notices misleading where they employ formats or typefaces which tend to obscure important information that appears in the notice. See Baker, 677 F.2d at 778 (required information must be large enough to be easily read and sufficiently prominent to be noticed). Finally, courts have held that collection notices can be deceptive if they are open to more than one reasonable interpretation, at least one of which is inaccurate. See Dutton v. Wolhar, 809 F.Supp. 1130, 1141 (D.Del.1992) (least sophisticated debtor is not charged with gleaning the more subtle of the two interpretations of collection notice); Britton, 1989 WL 148663, at , at  6 (deceptiveness of collection notices should be assessed in terms of the impression likely to be left on the unsophisticated consumer). 39 It should be emphasized that in crafting a norm that protects the naive and the credulous the courts have carefully preserved the concept of reasonableness. See Rosa v. Gaynor, 784 F.Supp. 1, 3 (D.Conn.1989) (FDCPA does not extend to every bizarre or idiosyncratic interpretation of a collection notice but does reach a reasonable interpretation of a notice by even the least sophisticated). Indeed, courts have consistently applied the least-sophisticated-consumer standard in a manner that protects debt collectors against liability for unreasonable misinterpretations of collection notices. One court has held, for example, that collection notices are not deceptive simply because certain essential information is conveyed implicitly rather than explicitly. See Transworld Systems, 953 F.2d at 1028-29 (collection notice that does not expressly inform debtors of right to contest portion of debt is not misleading, because that right is implicit in right to challenge entire debt). Other courts have held that even the least sophisticated consumer can be presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care. See Johnson, 799 F.Supp. at 1306-07 (finding that even the least sophisticated debtor knows that a 'Revenue Department' may be part of a department store or other commercial creditor just as it may be a governmental body); Gaetano v. Payco of Wisconsin, Inc., 774 F.Supp. 1404, 1411 (D.Conn.1990) (approving collection notice even though required disclosures were printed only on the back of the notice, since language on the front directed consumers to read the reverse). 40 We do not, of course, have occasion here to adopt other courts' interpretations of the least-sophisticated-consumer standard. But the existence of this substantial body of law demonstrates that the least-sophisticated-consumer standard effectively serves its dual purpose: it (1) ensures the protection of all consumers, even the naive and the trusting, against deceptive debt collection practices, and (2) protects debt collectors against liability for bizarre or idiosyncratic interpretations of collection notices.
41 In the proceedings below, the district court based its decision to grant summary judgment on its determination that Jackson had violated subsection (3) of § 1692e. The court determined that Jackson violated subsection (3) when he approved collection letters which falsely implied that he had been retained for the purpose of collecting a particular person's debt. Jackson now contends that the court erred in holding that such conduct violated subsection (3). Specifically, Jackson insists that the letters at issue here complied with subsection (3) because they accurately state that he is an attorney and that the letters are from him. He also argues that the letters' overstatement of the degree of an attorney's involvement in individual debtors' cases does not violate subsection (3) or any other provision of § 1692e. We find these arguments unpersuasive. 42 At the outset, it should be emphasized that the use of any false, deceptive, or misleading representation in a collection letter violates § 1692e--regardless of whether the representation in question violates a particular subsection of that provision. See 15 U.S.C. § 1692e (specifying certain prohibited acts [w]ithout limiting the general application of the foregoing language). Given the broad sweep of this provision, it would be possible to uphold the district court's decision to grant summary judgment for the plaintiff even if the facts did not establish a violation of subsection (3). We find, however, that the district court properly concluded that the record establishes a violation of subsection (3). We note that the record also establishes a violation of subsection (10) and of the general ban in § 1692e. 43 First, the use of Jackson's letterhead and signature on the collection letters was sufficient to give the least sophisticated consumer the impression that the letters were communications from an attorney. This impression was false and misleading because in fact Jackson did not review each debtor's file; he did not determine when particular letters should be sent; he did not approve the sending of particular letters based upon the recommendations of others; and he did not see particular letters before they were sent--indeed, he did not even know the identities of the persons to whom the letters were issued. In short, the fact that Jackson played virtually no day-to-day role in the debt collection process supports the conclusion that the collection letters were not from Jackson in any meaningful sense of that word. Consequently, the facts of this case establish a violation of subsection (3) of § 1692e. See Masuda v. Thomas Richards & Co., 759 F.Supp. 1456, 1460-61 (C.D.Cal.1991) (finding violation of subsection (3) where collection letter falsely implied that attorney had personally reviewed debtor's file); cf. Anthes v. Transworld Systems, Inc., 765 F.Supp. 162, 166-67 (D.Del.1991) (finding no violation of subsection (3) where collection letter was sent directly from attorney's office and attorney reviewed information provided by debt collection agency to independently determine whether one of his letters should be sent). 44 We also note that the language used in the collection letters was sufficient to cause the least sophisticated consumer to believe that Jackson himself had considered individual debtors' files and had made judgments about how to collect individual debts. The letters stated that Jackson was suggesting certain measures be taken to further implement the collection of your seriously past due account; that Jackson had received instructions from his client to pursue this matter to the furthest extent we deem appropriate; that Jackson had told his client that it could lawfully undertake collection activity to collect your debt; and that Jackson had scheduled Clomon's debt for immediate review and/or further action as deemed appropriate. In short, the collection letters would have led many consumers, and certainly the least sophisticated consumer, to believe that an attorney had personally considered the debtor's case before the letters were sent. This language was false or misleading because, as noted above, Jackson played virtually no day-to-day role in the debt collection process--and certainly did not engage in any discussion with NCB or AFP about how to collect Clomon's debt. Consequently, the facts of this case establish a violation of subsection (10) of § 1692e. See Pipiles v. Credit Bureau of Lockport, Inc., 886 F.2d 22, 25-26 (2d Cir.1989) (finding violation of subsection (10) where collection letter falsely implied that some action would be taken); see also Gaetano, 774 F.Supp. at 1415 (finding violation of subsection (10) where defendant attempted to collect a debt when prohibited from doing so by state law). 45 In sum, the facts of this case provide ample grounds for the district court's conclusion that Jackson violated § 1692e. It is clear that Jackson's conduct constituted a violation of subsection (3), which prohibits the false representation that a collection letter is a communication ... from an attorney. The record also establishes that Jackson's conduct constituted a violation of subsection (10), which prohibits [t]he use of any false representation or deceptive means to collect a debt from a consumer. Finally, we note that the misrepresentations contained in these letters could also be characterized as violations of the general ban in § 1692e on the use of any false, deceptive, or misleading representation or means in connection with the collection of any debt. 1 46 In reaching this conclusion, we are mindful of the appellant's concern regarding the economic necessity of mass mailing in the debt collection industry. It is apparent that mass mailing may sometimes be the only feasible means of contacting a large number of delinquent debtors, particularly when many of those debtors owe relatively small sums. But it is also true that the FDCPA sets boundaries within which debt collectors must operate. No mass mailing technique is permissible--regardless of how effective it might be--if that technique constitutes a false, deceptive, or misleading communication. As we have found here, the use of an attorney's signature on a collection letter implies that the letter is from the attorney who signed it; it implies, in other words, that the attorney directly controlled or supervised the process through which the letter was sent. We have also found here that the use of an attorney's signature implies--at least in the absence of language to the contrary--that the attorney signing the letter formed an opinion about how to manage the case of the debtor to whom the letter was sent. In a mass mailing, these implications are frequently false: the attorney whose signature is used might play no role either in sending the letters or in determining who should receive them. For this reason, there will be few, if any, cases in which a mass-produced collection letter bearing the facsimile of an attorney's signature will comply with the restrictions imposed by § 1692e. 47