United States District Court, E.D. Pennsylvania
MILTON J. MEDINA
ALLIANCEONE RECEIVABLES MANAGEMENT, INC.
Milton J. Medina has filed this putative class action under
the Fair Debt Collection Practices Act (“FDCPA”),
15 U.S.C. §§ 1692 et seq. Defendant AllianceOne
Receivables Management, Inc. has moved to dismiss the amended
complaint for lack of subject matter jurisdiction or in the
alternative for judgment on the pleadings.
alleges that defendant, a debt collector under 15 U.S.C.
§ 1692a(6), sent a letter to him in which it sought to
settle for $222.28 a debt of $341.97 owed by him to
Department Store National Bank on his Macy's credit card.
In the letter, defendant stated, among other things,
“Our client Department Store National Bank will report
forgiveness of debt as required by IRS regulations.”
Plaintiff claims that this statement is deceptive and
misleading because, contrary to the letter, the IRS reporting
requirement is not mandatory under all circumstances where a
debt or part of a debt is forgiven. According to the amended
complaint, there are a number of exceptions to the IRS
reporting requirement. One of those exceptions excludes the
need to report where the forgiveness does not exceed $600.00.
26 C.F.R. § 1.6050P-1(a). That appears to be the
support of its motion to dismiss for lack of subject matter
jurisdiction, defendant first argues that plaintiff does not
have standing under Article III of the Constitution. In
Spokeo, Inc. v. Robins, a case involving the Fair
Credit Reporting Act, the Supreme Court reiterated the
Our cases have established that the “irreducible
constitutional minimum” of standing consists of three
elements. Lujan, 504 U.S. at 560, 112 S.Ct. 2130.
The plaintiff must have (1) suffered an injury in fact, (2)
that is fairly traceable to the challenged conduct of the
defendant, and (3) that is likely to be redressed by a
favorable judicial decision.
. . .
To establish injury in fact, a plaintiff must show that he or
she suffered “an invasion of a legally protected
interest” that is “concrete and
particularized” and “actual or imminent, not
conjectural or hypothetical.” Lujan, 504 U.S.
at 560, 112 S.Ct. 2130 (internal quotation marks omitted).
136 S.Ct. 1540, 1547-48 (2016).
concrete, the injury must be “de facto, ” that is
it must actually exist. Id. at 1548. “The risk
of real harm” can also satisfy the concreteness test.
Id. at 1549.
overriding purpose of the FDCPA is “to eliminate
abusive debt collection practices by debt collectors.”
15 U.S.C. § 1692. Those abusive debt collection
practices included the use of “any false, deceptive, or
misleading representation or means in connection with the
collection of any debt.” 15 U.S.C. § 1692e. The
FDCPA gives a consumer the right to sue for damages for any
violation. 15 U.S.C. § 1692k.
injury to the consumer alleged here is the false and
misleading statement made by the debt collector in an effort
to collect or settle the consumer's debt obligation. The
FDCPA is designed to protect the consumer from the inherent
harm caused when a debt collector, in seeking to collect a
debt, is not straight with the consumer but instead makes a
false or deceptive statement to achieve its purpose. The
deceptive declaration in the letter about a requirement to
report the consumer's resolution of the debt to the IRS
creates a particularized and concrete injury, at the very
least unnecessary fear and anxiety on the part of the
consumer. While the harm may be intangible, it involves a de
facto injury nonetheless. The FDCPA was enacted to provide
redress for such a result. See In re Nichelodeon Consumer
Privacy Litig., 827 F.3d 262, 273-74 (3d Cir. 2016).
Defendant's argument to the contrary would gut the
salutary purpose of the FDCPA. Plaintiff has standing to
bring this action.
further maintains that even if plaintiff has standing, the
letter that it sent to plaintiff was not false or misleading
as a matter of law. Defendant seeks judgment on the pleadings
under Rule 12(c) of the Federal Rules of Civil
Procedure. For this purpose, we accept as true all
well-pleaded facts in the amended complaint. Caprio v.
Healthcare Revenue Recovery Group, 709 F.3d 142, 146-47
(3d Cir. 2013); Fowler v. UPMC Shadyside, 578 F.3d
203, 210 (3d Cir. 2009).
relevant language of the letter in issue, as noted above,
reads “Our client Department Store National Bank will
report forgiveness of debt as required by IRS
regulation.” The defendant concedes that it would not
have to notify the IRS of any debt forgiveness here. Instead,
defendant argues that the plain meaning of the letter's
use of the words as required is that the forgiveness
of the debt will be reported to the IRS only if or to the
extent required by the IRS regulations. Of course, the words
only if or to the extent do not appear in
the letter. Plaintiff counters that as required
means because required. Under this reading, the
sentence in the letter is clearly false. Thus, the pivotal
question is what the definition of as is. The
dictionary tells us that as can mean when
and can also mean because. Webster's III New
Int'l Dictionary 125 (1986).
Court of Appeals has explained in Brown v. CardServ. Cent. that the least sophisticated debtor or
consumer standard must be applied in determining ...