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Denise Harlan v. Nra Group

February 9, 2011


The opinion of the court was delivered by: Rufe, J.


Before the Court is a motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure by Plaintiff Denise Harlan [doc no. 10], a motion for summary judgment by Defendants NRA Group d/b/a National Recovery Agency and Business Office Solutions, a division of the National Recovery Agency ("Defendants") [doc. no. 16], and Plaintiff's Cross-Motion for Summary Judgment [doc. no. 18]. For the reasons that follow, the Court will grant Plaintiff's Motion for Judgment on the Pleadings, and dismiss both Defendant's Motion for Summary Judgment and Plaintiff's Cross-motion for Summary Judgment as moot.


Harlan alleges that Defendants *fn1 violated Sections 1692g and 1692e, and subsection 1692e(10), of the Fair Debt Collection Practices Act *fn2 when, on November 4, 2009, they sent her a collection notice for an account Defendants asserted was delinquent. Section 1692g(a) of the Act requires that debt collectors send a consumer a written "validation notice," either in an initial collection notice or within five days of that notice, that informs the consumer of her right to dispute the validity of the debt, the time frame for doing so, and the debt collector's obligations to verify the debt if it is disputed." *fn3 Among the required disclosures in the validation notice is "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." *fn4 The validation notice that Harlan received departed from that statutory language by stating: "Unless you dispute this debt or any part thereof within 30 days after receiving this notice, the debt will be presumed to be valid." *fn5

Harlan alleges that the use of "presumed" instead of "assumed" in the validation notice, and the omission of "by the debt collector" at the end of that sentence violated not only Section 1692g, which requires effective notice of her validation rights, but also Section 1692e and 1692e(10), which provide that:

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt [including] . . . . (10) [t]he use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer. *fn6 Based on the language in her validation notice, Harlan moved for judgment on the pleadings.


On a motion for judgment on the pleadings, judgment may be granted only if "the movant clearly establishes that no material issue of fact remains to be resolved and that [the movant] is entitled to judgment as a matter of law." *fn7 A court must view all facts and inferences drawn from them in the light most favorable to the non-movant. *fn8

Defendants argue that judgment on the pleadings is inappropriate because whether the terms and omissions in the November 4 notice would render it ineffective or confuse, mislead, or deceive the least sophisticated debtor (the test for liability under the Act) is a question of fact for the jury rather than a question of law for this Court to resolve on the pleadings. *fn9 The Court disagrees. The Third Circuit has held that whether Section 1692g disclosures would confuse the least sophisticated debtor is a question of law. *fn10 Other courts have likewise found that application of the least sophisticated debtor test to Section 1692e is a question of law. *fn11
Defendants do not dispute that they sent the November 4 letter to Harlan or that it contained the text she alleges. *fn12 Nor have Defendants asserted the sole permissible affirmative defense provided for under the Act-the "bona fide error" defense-that might, if raised, present questions of material fact for a jury to resolve. *fn13 In fact, other than the defense of failure to state a claim, Defendants' asserted affirmative defenses are inapplicable to this case; nearly all of them are boilerplate defenses relating uniquely to the Fair Credit Reporting Act, which is not the statute at issue here. *fn14 Accordingly, if the Court finds the Defendants' notice would confuse, mislead or deceive the least sophisticated consumer, Defendants are strictly liable. *fn15 And with no material facts in dispute, *fn16 resolution on a 12(c) motion is appropriate.


a. The Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act *fn17 is a remedial statute, the purpose of which is to "eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses." *fn18 To carry out the Act's remedial purposes, courts are to broadly construe its terms. *fn19 As a result, whether a validation notice complies with Section 1692g or is false, misleading or deceptive under Section 1692e is evaluated from the perspective of "the least sophisticated debtor" rather than from that of a reasonable debtor. *fn20 That standard protects both the "gullible and the shrewd" without permitting "bizarre and idiosyncratic" interpretations of the notice *fn21 or relieving the "willfully blind or non-observant" of their responsibilities to carefully review collection notices. *fn22
Though use of the exact statutory language under Section 1692g will ordinarily result in a finding that the communication is not false, misleading or deceptive, *fn23 validation notices need not necessarily track the statutory language verbatim to be compliant. Instead, to comply with Section 1692g, a communication must effectively communicate-both in form and substance-the statutory validation notice. *fn24 This requires inter alia that the mandated notice of the debtor's rights "must not be overshadowed or contradicted by accompanying messages from the debt collector" *fn25 or otherwise be deceptive. *fn26 Language that "would make the least sophisticated consumer uncertain as to her rights" does not meet the standard ...

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