Opinion ID: 200185
Heading Depth: 2
Heading Rank: 2

Heading: The FDCPA Claim.

Text: 38 The FDCPA is a landmark piece of consumer credit legislation designed to eliminate abusive, deceptive, and other unfair debt collection practices. 15 U.S.C. § 1692. The Kowals' amended complaint charges that the individual defendants (lawyers retained by Sears) violated this statute. 4 The FDCPA is detailed and prohibits many activities. The basic premise of the statutory scheme, however, is that its prophylaxis applies in connection with the collection of debts. See, e.g., id. § 1692e. At a minimum, therefore, a complaint must allege a scenario involving the collection (or attempted collection) of a debt. 39 The FDCPA defines debt, in pertinent part, to mean any obligation or alleged obligation of a consumer to pay money. Id. § 1692a(5). Although this language is broad, it is plain that the sine qua non of a debt is the existence of an obligation (actual or alleged). See Ernst v. Jesse L. Riddle, P.C., 964 F.Supp. 213, 215 (M.D.La.1997). We mine the Kowals' complaint in search of an allegation pertaining to this element. 40 The complaint avers that the individual defendants infracted the FDCPA by, inter alia, communicating to the appellants the option of retaining the collateral in exchange for the payment of money. The complaint further alleges that this offer was made for the purpose of coercing [the appellants] into paying money on discharged debts. Except for multiple references to discharged debts, the complaint is silent as to the debt element of the asserted FDCPA cause of action. 41 It is readily evident, therefore, that the complaint refers to the payment of money — but the FDCPA does not broadly forbid practices in connection with all payments of money. The practices that it proscribes are in connection with the collection of debts, and the complaint makes no reference to any obligation to pay money — the crux of debt as that term is defined by the FDCPA. Moreover, none of the facts set forth in the complaint support an inference that the Kowals were obligated to pay any money to Sears. Thus, to allow these allegations to trigger the FDCPA would require us to read the word obligation out of the statute. There is no principled way to indulge such a reading. See Lopez-Soto, 175 F.3d at 173 (explaining that all words in a statute must be given meaning and effect). 42 The complaint's references to discharged debts do not salvage the FDCPA claim. A discharge extinguishes ... `the personal liability of the debtor.' Home State Bank, 501 U.S. at 83, 111 S.Ct. 2150 (quoting 11 U.S.C. § 524(a)(1)). Once that liability has been extinguished in bankruptcy, the debtor no longer has a personal financial or pecuniary obligation for the debt. Black's Law Dictionary 925 (7th ed.1999). Hence, a discharged debt carries with it no personal obligation to pay money. 43 In sum, the FDCPA's definition of debt is broad, but it requires at least the existence or alleged existence of an obligation to pay money. To permit the mere mention of a discharged debt, for which the debtor has no personal financial obligation, to satisfy the FDCPA requirement would contradict the plain language of the statute. Although a court, faced with a Rule 12(b)(6) motion, must mine the factual terrain of the complaint and indulge every reasonable inference in the pleader's favor, it cannot uphold a complaint that fails to establish an essential nexus between the underlying events and the theory of relief. See Miranda v. Ponce Fed. Bank, 948 F.2d 41, 44 (1st Cir.1991). This is such a case: the complaint fails to link the Kowals' discharged personal liability with any obligation on their part to pay money. 44 Let us be perfectly clear. We recognize that a plaintiff may bring a claim under the FDCPA by pleading that a debt collector falsely alleged an obligation to pay money. But the complaint in this case fails to state a claim under that theory. The complaint never asserts that the lawyers told the Kowals that they were obligated to pay money on account of the discharged debts or otherwise, nor does it allege facts sufficient to support an inference that the lawyers acted so as to create this false impression. Indeed, the collection letters (attached to the complaint) conclusively refute any such illation. 45 Those letters presented the Kowals with the terms under which Sears was willing to abandon its right of repossession, no more and no less. The letters indicated the amount of money that Sears believe[d]... represent[ed] the fair market value of the items, and stated that if the Kowals did not agree with these values, [they had] the option of reopening the bankruptcy and seeking a valuation hearing. Given this correspondence, the most that can be said is that the Kowals faced an unhappy choice in these transactions, not an obligation to pay money.