Opinion ID: 795819
Heading Depth: 2
Heading Rank: 2

Heading: Applying the Least Sophisticated Debtor Standard to the CSC Letter

Text: 22 In its thorough analysis, the District Court determined that, even accepting all of Brown's factual allegations as true and drawing all reasonable inferences in her favor, no reasonable reading of her complaint could entitle her to relief. In reaching this conclusion, the District Court emphasized that the CSC Letter employed the conditional term could as opposed to the affirmative term will. 3 The District Court observed that the CSC Letter neither states nor implies that legal action is imminent, only that it is possible. Brown v. Card Serv. Ctr., No. 05-cv-0498 (E.D.Pa. Jun. 28, 2005), 2005 U.S. Dist. LEXIS 12810, at . As a result, the District Court concluded that the CSC Letter poses no `threat' pursuant to § 1692e(5), and because the letter simply advises plaintiff of options available to CSC, the letter is not `false, deceptive, or misleading' under § 1692e, even if action were not intended to be taken. Id. The District Court found the CSC Letter in compliance with the FDCPA because it merely stated what CSC could do, if it so chose. The District Court drew a sharp contrast between the CSC Letter and debt-collection letters that other courts have held to be in violation of the Act because those letters made false claims about what debt collectors would do if a given debtor failed to respond. See, e.g., Crossley v. Lieberman, 868 F.2d 566, 567 (3d Cir.1989) (finding an FDCPA violation where a letter falsely stated, Unless I receive payment in full within one week from the date of this letter, I will be compelled to proceed with suit against you.). Though we express no opinion as to whether the language of the CSC Letter constitutes a threat under § 1692e(5), we believe that the facts as alleged in Brown's complaint, if proven, could render the CSC Letter a deceptive or misleading communication, in violation of § 1692e. 23 We disagree with the District Court because we conclude that it would be deceptive under the FDCPA for CSC to assert that it could take an action that it had no intention of taking and has never or very rarely taken before. The CSC Letter highlights two possible outcomes for debtors failing to respond within five days: the commencement of a lawsuit or the referral of the debt to CSC's attorney. In her complaint, Brown alleges that CSC never intended to file a suit against her for collection, never had any intention of referring her case to its attorney, and that as a matter of course, CSC does not refer class member's [sic] alleged debts to their attorney for prosecution, but only refer[s] the alleged debt(s) to another collection agency. (Amend Compl. ¶ 17) In light of these allegations, Brown has stated a claim under § 1692e upon which relief can be granted. 24 Upon reading the CSC Letter, the least sophisticated debtor might get the impression that litigation or referral to a CSC lawyer would be imminent if he or she did not respond within five days. We do not believe that such a reading would be bizarre or idiosyncratic, see Quadramed, 225 F.3d at 354, and we thus conclude that further proceedings are warranted to determine if such a reading is reasonable in light of the facts of this case. A debt collection letter is deceptive where it can be reasonably read to have two or more different meanings, one of which is inaccurate. Id. (citation omitted). If Brown can prove, after discovery that CSC seldom litigated or referred debts such as Brown's and those of the putative class members to an attorney, a jury could conclude that the CSC Letter was deceptive or misleading vis-à-vis the least sophisticated debtor. 25 The Federal Trade Commission's commentary (the FTC Commentary) to the FDCPA further supports this conclusion. The FTC Commentary observes that a debt collector may state that a certain action is possible, if it is true that such action is legal and is frequently taken by the collector or creditor with respect to similar debts, but where the debt collector has reason to know there are facts that make the action unlikely in the particular case, a statement that the action was possible would be misleading. 53 Fed. Reg. 50097, 50106 (1988). In other words, were it proven that the CSC had reason to know that the legal action described in its letter to Brown was unlikely, its statement in the CSC Letter that it was possible could be deemed misleading. In this sense, the facts alleged by Brown fall squarely within the scope of the behavior proscribed by the FTC language. Though the FTC Commentary does not have the force of law and is not entitled to deference in FDCPA cases except perhaps to the extent [its] logic is persuasive, Dutton v. Wolpoff & Abramson, 5 F.3d 649, 654 (3d Cir.1993), in the context of this case we find it persuasive. 4 We are therefore satisfied that the facts pled by Brown, if proven, state a claim upon which a court might grant relief. 26 Accordingly, because a court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations, Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984), the District Court erred in dismissing Brown's complaint. We therefore vacate the judgment of the District Court and remand for further proceedings consistent with this opinion.