Court Opinion

ID: 2968951
Source: CourtListenerOpinion
Date Created: 2015-09-22 08:42:26.829424+00
Date Added: 2024-06-11T11:43:22.416806
License: Public Domain

FILED: January 31, 2014

                 UNITED STATES COURT OF APPEALS
                     FOR THE FOURTH CIRCUIT

                       ___________________

                            No. 13-1151
                        (5:12-cv-00400-BO)
                       ___________________

DANA CLARK, on behalf of herself and all others similarly
situated; DAVID CLARK, on behalf of himself and all others
similarly situated

                     Plaintiffs - Appellants

v.

ABSOLUTE COLLECTION SERVICE, INCORPORATED

                     Defendant – Appellee

                       ___________________

                            O R D E R
                       ___________________

     The court amends its opinion filed January 31, 2014, as

follows:

     On the cover page, in the disposition section, "Reversed" is

corrected to read "Vacated."

     On page 10, line 10, "REVERSED" is corrected to read

"VACATED."

                               For the Court--By Direction

                               /s/ Patricia S. Connor, Clerk
                              PUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                             No. 13-1151

DANA CLARK, on behalf of herself and all others similarly
situated; DAVID CLARK, on behalf of himself and all others
similarly situated,

                Plaintiffs - Appellants,

           v.

ABSOLUTE COLLECTION SERVICE, INCORPORATED,

                Defendant - Appellee.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.   Terrence W. Boyle,
District Judge. (5:12-cv-00400-BO)

Argued:   October 30, 2013                 Decided:   January 31, 2014

Before DIAZ and FLOYD, Circuit Judges, and Joseph F. ANDERSON,
Jr., United States District Judge for the District of South
Carolina, sitting by designation.

Vacated and remanded by published per curiam opinion.

ARGUED: Deepak Gupta, GUPTA BECK, PLLC, Washington, D.C., for
Appellants.   Sean T. Partrick, YATES, MCLAMB & WEYHER, LLP,
Raleigh, North Carolina, for Appellee.     ON BRIEF: Craig M.
Shapiro, KEOGH LAW, LTD., Chicago, Illinois; Joseph A. Bledsoe,
THE BLEDSOE LAW FIRM, Fayetteville, North Carolina; Gregory A.
Beck, Jonathan E. Taylor, GUPTA BECK, PLLC, Washington, D.C.,
for Appellants. Jennifer D. Maldonado, William T. Kesler, Jr.,
YATES, MCLAMB   &   WEYHER,   LLP,       Raleigh,   North   Carolina,   for
Appellee.

                                     2
PER CURIAM:

       This case involves a putative class action under the Fair

Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et

seq.       Dana Clark and David Clark (“the Clarks”) sued Absolute

Collection Service, Inc. (“ACS”), 1 on behalf of themselves and

all others similarly situated, for its actions in attempting to

collect a debt.             The Clarks alleged that ACS’s collection notice

violated          section    1692g(a)(3)    of    the   FDCPA       by   stating    that

debtors          only   could   dispute    the    validity     of     their      debt   in

writing.          ACS moved to dismiss the Clarks’ lawsuit, contending

that       the    collection     notice    complied     with    the      FDCPA   because

section      1692g(a)(3)        contains   an    inherent    writing      requirement.

The district court granted the motion, and the Clarks appealed.

For the reasons set forth below, we vacate the district court's

judgment and remand the case for further consideration.

                                            I.

       The Clarks incurred two debts at a health care facility in

Raleigh, North Carolina.              When the Clarks were unable to pay,

the health care facility referred the debts to ACS, a third-

party collector.             In its efforts to collect, ACS sent separate

       1
       ACS changed its corporate name on June 29, 2012, after
this case was filed.      Although the defendant now is called
FKAACS, Inc., we refer to it as ACS throughout.

                                            3
collection notices to the Clarks at their home in Raleigh.                           In

both collection notices, a disclosure statement provided that:

       ALL PORTIONS OF THIS CLAIM SHALL BE ASSUMED VALID
       UNLESS DISPUTED IN WRITING WITHIN THIRTY (30) DAYS; IN
       WHICH CASE, VERIFICATION OF THE DEBT OR A COPY OF THE
       JUDGMENT WILL BE PROVIDED TO YOU. IF THE ORIGINAL
       CREDITOR IS DIFFERENT FROM THE ABOVE NAMED CREDITOR,
       THE NAME OF THE ORIGINAL CREDITOR WILL BE PROVIDED
       UPON REQUEST.

J.A. 11, 12.

       The Clarks sued ACS in the United States District Court for

the Eastern District of North Carolina, at Raleigh, alleging

that its collection notice failed to comply with the FDCPA.                          15

U.S.C. § 1692 et seq.            The Clarks asserted that ACS violated

their    right    to     challenge     their    debt    orally     under    section

1692g(a)(3) of the FDCPA because the collection notice stated

that    the   debt      would   be   “assumed    valid     unless    disputed        in

writing.”        They    also   contended      that    ACS’s    imposition      of    a

writing requirement amounted to the use of “false representation

or deceptive means to collect or attempt to collect any debt,”

in violation of section 1692e(10) of the FDCPA.

       ACS    moved     to   dismiss    the    complaint       pursuant    to   Rule

12(b)(6) of the Federal Rules of Civil Procedure, arguing that

section 1692g(a)(3) contains an inherent writing requirement and

that the Clarks, therefore, failed to state a claim upon which

relief could be granted.             The district court agreed, dismissing

                                         4
the complaint.      In its reasoning, the district court stated that

permitting     an   oral    dispute    of       the   validity    of   a   debt    under

section       1692g(a)(3)     would         leave       consumers      “with       fewer

protections and in a potentially far more confusing station than

if a writing is required.”         J.A. 26.

                                        II.

     We review de novo the district court’s decision to grant

the motion to dismiss.         Giarratano v. Johnson, 521 F.3d 298, 302

(4th Cir. 2008).       We also review de novo questions of statutory

construction.       Stone v. Instrumentation Lab. Co., 591 F.3d 239,

242-43 (4th Cir. 2009).

                                            A.

     As in all statutory construction cases, our inquiry begins

with the language of the statute.                     See Lamie v. U.S. Tr., 540

U.S. 526, 534 (2004).         “[W]hen the statute’s language is plain,

the sole function of the courts—at least where the disposition

required by the text is not absurd—is to enforce it according to

its terms.”     Id. (internal quotation marks omitted).

     Congress enacted the FDCPA with the goal of eliminating

abusive, deceptive, and unfair debt collection practices.                            15

U.S.C.    §    1692.       Among      its       safeguards    against      abuse    and

deception, the FDCPA requires a debt collector to send written

notice    to    consumer     debtors        with      whom   it   communicates       in

                                            5
connection with the collection of a debt.     15 U.S.C. § 1692g.

Section 1692g(a) provides that the written notice must contain:

     (1) the amount of the debt;

     (2) the name of the creditor to whom the debt is owed;

     (3) a statement that unless the consumer, within thirty
         days after receipt of the notice, disputes the
         validity of the debt, or any portion thereof, the
         debt will be assumed to be valid by the debt
         collector;

     (4) a statement that if the consumer notifies the debt
         collector in writing within the thirty-day period
         that the debt, or any portion thereof, is disputed,
         the debt collector will obtain verification of the
         debt or a copy of a judgment against the consumer
         and a copy of such verification or judgment will be
         mailed to the consumer by the debt collector; and

     (5) a statement that, upon the consumer’s written
         request within the thirty-day period, the debt
         collector will provide the consumer with the name
         and address of the original creditor, if different
         from the current creditor.

15 U.S.C. § 1692g(a)(1)–(5).

     Pursuant to section 1692g(b), if a consumer “notifies the

debt collector in writing” that the debt is disputed, the debt

collector must “cease collection of the debt, or any disputed

portion thereof, until the debt collector obtains verification

of the debt . . . and a copy of such verification . . . is

mailed to the consumer by the debt collector.”       15 U.S.C. §

1692g(b).

                                   6
       On     appeal,      the    Clarks      ask        whether        section    1692g(a)(3)

permits consumers to dispute the validity of a debt orally, or

whether it imposes a writing requirement.                               This is a matter of

first impression for this Court.                          The Third Circuit has held

that       section     1692g(a)(3)       must       be   read      to    include       a    writing

requirement, finding any other reading contrary to the purposes

of the FDCPA.            See Graziano v. Harrison, 950 F.2d 107 (3d Cir.

1991).        In contrast, the Second and Ninth Circuits have found

that       the    plain    text     of     section         1692g(a)(3)         permits            oral

disputes,        and     that    such     a     reading       results         in   a       logical,

bifurcated        scheme    of    consumer       rights.           See    Hooks    v.       Forman,

Holt, Eliades & Ravin, LLC, 717 F.3d 282 (2d Cir. 2013); Camacho

v. Bridgeport Fin. Inc., 430 F.3d 1078 (9th Cir. 2005).

       In line with the Second and Ninth Circuits, we find that

the    FDCPA          clearly    defines        communications             between         a   debt

collector and consumers.                Sections 1692g(a)(4), 1692g(a)(5), and

1692g(b)         explicitly       require       written         communication,             whereas

section       1692g(a)(3)        plainly      does        not. 2        ACS    asks        that     we

disregard the statutory text to read into it words that are not

there.           We    decline    to     do     so.      “[W]here        Congress          includes

       2
       We also note that the term “dispute,” as commonly used,
contemplates oral communication.      See, e.g., Random House
Webster’s Unabridged Dictionary 569 (2d ed. 2001) (“to argue or
debate about; discuss”).

                                                7
particular language in one section of a statute but omits it in

another section of the same Act, it is generally presumed that

Congress     acts    intentionally        and   purposely      in    the        disparate

inclusion or exclusion.”            Russello v. United States, 464 U.S.

16, 23 (1983) (internal quotation marks omitted).

                                          B.

       Accepting     that    section    1692g(a)(3)      does       not    contain     an

explicit writing requirement, ACS argues that it must be read as

imposing an inherent writing requirement or else the procedure

would be inconsistent with the other debt dispute mechanisms

under section       1692g.     In     ACS’s     view,   allowing         oral    disputes

under section 1692g(a)(3) serves only to confuse consumers.                           ACS

also points out that a writing requirement preserves the core

protections of sections 1692g(a)(3) through 1692g(b), and all

other rights consumers have under other sections of the FDCPA.

Without it, ACS argues, “consumers may be led to believe that an

oral    dispute     triggers    the    further     protections”           of    sections

1692g(a)(4),       1692g(a)(5),     and    1692g(b)     when,       in    fact,     those

protections are waived if not invoked in writing.                              Appellee’s

Br. at 21.

       We   find    ACS’s   arguments     unavailing     for    several          reasons.

First, like the Second and Ninth Circuits, we are not persuaded

that the plain language of section 1692g(a)(3) leads to absurd

results, which would have permitted a search for meaning beyond

                                           8
the statutory text.            See Lamie, 540 U.S. at 534.                     As written,

section 1692g(a)(3) triggers statutory protections for consumers

independent of the later sections 1692g(a)(4), 1692g(a)(5), and

1692g(b).       For one, once a consumer disputes a debt orally under

section 1692g(a)(3), a debt collector cannot communicate that

consumer’s credit information to others without disclosing the

dispute.        15 U.S.C. § 1692e(8); see Hooks, 717 F.3d at 285;

Camacho, 430 F.3d at 1082.               Also, if a consumer owes multiple

debts and makes a payment, a debt collector cannot apply that

payment to a debt that has been disputed orally.                              See 15 U.S.C.

§ 1692(h); Hooks, 717 F.3d at 285–86; Camacho, 430 F.3d at 1082.

Because     we    conclude      that      the         plain      language      of     section

1692g(a)(3)      does    not    lead    to     absurd        results,    we        decline   to

insert additional language.

      Second,     under     well-established               principles         of    statutory

construction,      this    Court       must    “give        effect,    if     possible,      to

every clause and word of a statute.”                       United States v. Menasche,

348 U.S. 528, 538-39 (1955) (internal quotation marks omitted).

If possible, a court should avoid an interpretation that renders

any   “clause,     sentence,      or    word      .    .    .   superfluous,         void,   or

insignificant.”        Duncan     v.    Walker,        533      U.S.   167,    174    (2001).

Relying    on    the    writing    requirements            in    sections      1692g(a)(4),

1692g(a)(5), and 1692g(b) to give effect to section 1692g(a)(3)

                                              9
would violate these principles, leaving section 1692g(a)(3) with

no independent meaning.

     As   a   result,   we   find   that   section   1692g(a)(3)   permits

consumers to dispute the validity of a debt orally, and it does

not impose a writing requirement.

                                    III.

     Accordingly, we vacate the judgment of the district court

that dismissed the plaintiff's complaint and remand for further

proceedings consistent with this opinion.

                                                     VACATED AND REMANDED

                                     10