Opinion ID: 50580
Heading Depth: 3
Heading Rank: 3

Heading: Alleged violation of the Fair Debt Collection Practices Act

Text: 26 The third ground for a declaratory judgment was a claim under the FDCPA, and the Lozanos also sought damages for the alleged violation this statute. The FDCPA provides in pertinent part: 27 If the consumer notifies the debt collector in writing within . . . [thirty days] that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. 28 15 U.S.C. § 1692g(b). 29 The Lozanos alleged that they timely requested proof of the validity of the debt from Ocwen and that Ocwen failed to provide that information before foreclosing. However, Ocwen did not mention the FDCPA claim in its motion for summary judgment. The district court dismissed the claim sua sponte finding that, to the extent the Lozanos based this claim on their prepayments, it was barred. Alternatively, the court found this claim was not accurately pled to allow the court to analyze it. 7 In particular, the court noted the Lozanos did not allege that Ocwen was a debt collector as required by § 1692g(b). 30 The Lozanos argue that the court erred in dismissing this claim sua sponte because the court did not give prior notice. See Baker, 364 F.3d at 632; see also Washington v. Resolution Trust Corp., 68 F.3d 935, 939 (5th Cir.1995) (allowing a district court to grant summary judgment sua sponte, but only after giving ten days notice). For the same reasons we reversed the sua sponte dismissal of the Texas Property Code claim, see supra Part II(A)(2), we reverse the dismissal of the FDCPA claim. 31 Even if we characterized this action as a sua sponte dismissal for failure to state a claim under Rule 12(b)(6), as Ocwen argues, we would reach the same result. We have held that a district court is authorized to consider the sufficiency of the complaint on its own initiative. Guthrie v. Tifco Indus., 941 F.2d 374, 379 (5th Cir. 1991). And if the court finds the complaint fails to state a claim, it may dismiss `as long as the procedure employed is fair.' Bazrowx v. Scott, 136 F.3d 1053, 1054 (5th Cir.1998) (quoting 5A WRIGHT & MILLER, FEDERAL PRACTICE AND PROCEDURE § 1357, at 301 (2d ed.1990)). We have recently held that a district court's failure to give notice prior to sua sponte dismissal for failure to state a claim was unfair under the circumstances. See Carroll v. Fort James Corp., 470 F.3d 1171, 1177 (5th Cir.2006). In Carroll, we observed that other circuits have held district courts should not dismiss claims sua sponte without prior notice and opportunity to respond. Id. (citing Fredyma v. AT&T Network Sys., Inc., 935 F.2d 368 (1st Cir. 1991); Thomas v. Scully, 943 F.2d 259 (2d Cir.1991); Smith v. Boyd, 945 F.2d 1041 (8th Cir.1991)). While stopping short of adopting a bright line rule, Carroll noted that our prior case law has suggested that fairness in this context requires both notice of the court's intention and an opportunity to respond. Id. (internal quotation marks omitted). 32 We do not always require notice prior to sua sponte dismissal for failure to state a claim, as long as the plaintiff has alleged his best case. See Bazrowx, 136 F.3d at 1054 (citing Jacquez v. Procunier, 801 F.2d 789, 792-93 (5th Cir.1986)). In Jacquez we held, in the context of a § 1983 action, that [a]t some point a court must decide that a plaintiff has had fair opportunity to make his case; if, after that time, a cause of action has not been established, the court should finally dismiss the suit. Jacquez, 801 F.2d at 792. The Court in Jacquez dismissed a claim after the plaintiff filed a deficient complaint and repeatedly declared the adequacy of that complaint in a lengthy response to defendant's motion to dismiss. Id. Thus, Jacquez is readily distinguishable because there the plaintiff repeatedly represented that his complaint adequately stated the cause of action and refused to file a supplemental complaint even in the face of a motion to dismiss. See id. 33 In the case at bar, the Lozanos had no notice that their complaint was deficient. Notice would have allowed the Lozanos an opportunity to seek leave to amend their complaint to allege that cause of action properly. Based on our de novo review, we hold that the district court erred in dismissing the FDCPA claim sua sponte without notice. See Carroll, 470 F.3d at 1177.