United States District Court, N.D. Illinois
March 31, 2004.
MICHAEL DURKJN and LORETTA REED, individually, and on behalf of all others similarly situated, Plaintiffs,
EQUIFAX CHECK SERVICES, INC., Defendant
The opinion of the court was delivered by: WILLIAM J. HIBBLER, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs, Loretta Reed and Michael Durkin, on behalf of themselves
and a class certified by this Court on February 12, 2001 (collectively,
"Plaintiffs"), brought suit against Defendant, Equifax Check Services,
Inc. ("Equifax"), for alleged violations of § 1692e, § 1692f, and
§ 1692g of the Fair Debt Collection Practices Act ("FDCPA"),
15 U.S.C. § 1692 et seq. Equifax now moves for summary
Equifax is a debt collector under the FDCPA. See Durkin v. Equifax
Check Serv.s, Inc., No. 00 C 4832, 2002 WL 31426397 (N.D. Ill. Oct.
28, 2002) ("Durkin 2002"). Equifax purchases dishonored checks
from merchants and contacts the check's maker through a series of
collection letters demanding full payment. The FDCPA requires debt
collectors to provide a written notice including the amount of the debt,
the creditor's name, and a statement mat the debtor has thirty days to
dispute the debt. 15 U.S.C. § 1692-1692o. In this case, Equifax sent
an initial letter on April
10, 2000, a "dunning letter" or "collection letter," notifying
class members of their outstanding debt and their right to challenge that
debt within thirty days. This letter stated, in pertinent part;
Federal law gives you thirty (30) days after you
receive this letter to dispute the validity of the
debt or any part of it. If you don't dispute it
within that period, we will assume that it is
valid. If you do dispute it, and you notify us in
writing to that effect, we will, as required by
law, obtain and mail to you proof of the debt. And
if within the same period, you request in writing
the name and address of the merchant to whom your
check was written, we will provide you with that
information too. . . . The law does not require us
to wait until the end of the 30-day period before
taking action to collect this debt. If, however,
you request proof of the debt or the name and
address of the merchant to whom you wrote your
check within the 30-day period that begins with
your receipt of this letter, the law requires us
to suspend our efforts to collect the debt until
we mail the requested information to you . . .
Equifax then sent two additional letters requesting payment in full on
the debt. These follow-up letters did not include information about the
debtors' thirty-day right to dispute the debt The first additional
letter, on April 24, 2000, stated, in relevant part:
Despite a previous written notice, you have failed
to make full restitution on your $217.45
dishonored check written to Funco, Inc. nearly 5
weeks ago. Your check was returned as a dishonored
item and has been assigned to our Collection
department to determine an appropriate action by
Equifax Check Services, Inc. ("ECS") that will
result in payment of this check.
Should you fail to pay for this dishonored check
or contact this office to make arrangements, steps
will be taken to determine if your check will be
assigned to an investigator or to a collection
You can stop this process by sending your payment
in full, including the service charge referenced
below, to ECS. . . .
CONTINUED REFUSAL TO HONOR THIS RETURNED CHECK
WILL RESULT IN YOUR CREDIT FILE BEING IMPACTED
WITH A NEGATIVE REFERENCE WHICH MAY IMPACT FUTURE
CREDIT GRANTING DECISIONS.
The third, and final, letter, sent May 8, 2000, stated:
Equifax Check Services, Inc. has previously sent
you letters requesting restitution for your
dishonored check that we purchased from Funco. Inc.
Despite repeated requests
and notifications regarding your unpaid check,
you have seemingly elected to ignore your original
obligation. Rather than continue to send requests
that go unanswered, we have elected to proceed
further with more extensive collection efforts.
Should you continue to refuse to honor your
obligation, we will furnish information on your
dishonored check to a national credit bureau. The
credit information maybe retained on your record
up to seven years . . . You may reach our offices
at the number below if you wish to discuss this
Section 1692g of the FDCPA requires the debt collector to provide
written notice to the debtor that he or she has thirty-days within which
to request, in writing, proof of the debt's validity. Plaintiffs claim
mat while the first letter met the FDCPA standards, the follow-up
letters, containing demands for payment without mentioning the thirty-day
period, overshadowed this information, in violation of the FDCPA.
Plaintiffs also claim that Equifax violated § 1692e of the FDCPA by
engaging in false, deceptive and misleading misrepresentations by
implying mat Plaintiffs' debts had not yet been referred to a debt
collector when it stated that the debts had not yet been referred to a
collection agency. Finally, § 1692f prohibits a debt collector from
using unfair or unconscionable means to attempt to collect a debt.
Plaintiffs claim that Equifax's practices of including language in the
second and third letters requesting that Plaintiffs contact it by
telephone, but not explaining that challenges to the debt's validity must
be in writing, constituted unfair collection practices.
Before the close of discovery, the Court considered and denied the
parties' cross motions for summary judgment. Durkin v. Equifax Check
Serv.s, Inc., No. 00 C 4832, 2001WL1155254 (N.D. Ill. Sept. 28,
2001) ("Durkin 2001"). In Durkin 2001, both parties
offered conflicting expert testimony regarding whether the letters could
confuse unsophisticated consumers such as Plaintiffs. The Court held mat
this factual dispute precluded entry of summary judgment in either
On January 21, 2003, however, the Court granted Equifax's motion to bar
Plaintiffs' sole expert witness. See Durkin v. Equifax Check Serv.s,
Inc., No. 00 C 4832 (N.D. Ill. Jan. 21, 2003)
(Unpublished Order). Nine months later, Equifax moved for judgment
on the pleadings pursuant to Federal Rule of Civil Procedure 12(c),
relying on Walker v. Nat'l Recovery, Inc., in which the Seventh
Circuit noted that if the plaintiff "decides to stand on her complaint
and forego factual development, then the case may come to an end by
judgment on the pleadings under Fed.R.Civ.P. 12(c)." 200 F.3d 500, 503
(7th Cir. 1999). The Court denied the motion because 12(c) is only
appropriate in the rare case where the plaintiff actually states that he
intends to base his entire argument on the pleadings alone. Durkin v.
Equifax Check Serv.s, Inc., No. 00 C 4832, 2003 WL 22078331 (N.D.
Ill, Sept. 8, 2003) ("Durkin 2003"). Plaintiffs made no such
affirmative statements and retained the ability to come up with new
evidence before trial. The Court held that, "once the plaintiff is able
to successfully state a claim, the Court must give the plaintiff the
opportunity to present evidence in support of that claim. If it turns out
that the evidence is wholly one-sided, then it is possible to end the
case by summary judgment under rule 56, but not under rule 12(c)."
Durkin 2003 at * 7.
Because the Court dismissed the motion on procedural grounds, the Court
did not reach the question of whether Plaintiffs could prevail by relying
on the collection letters alone, or, instead, whether they must provide
additional extrinsic evidence to survive summary judgment*fn1 At the end
of discovery, Plaintiffs have submitted no other evidence but the
collection letters and the testimony
of the two named plaintiffs. Equifax filed the instant motion for
summary judgment, asking the Court to dismiss Plaintiffs' claims for
their failure to provide evidence sufficient to create a genuine issue of
material fact under Federal Rule of Civil Procedure 56.
II. STANDARD OF REVIEW
Summary judgment is appropriate when the pleadings, depositions, and
other materials in the record show that there is no disputed issue of
material fact and that the moving party is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986). Summary judgment may be granted when the
record as a whole shows that a rational trier of fact could not find for
the non-moving party. Rogers v. City of Chi., 320 F.3d 748, 752
(7th Cir. 2003). The opposing party must "go beyond the pleadings" and
"designate specific facts showing that there is a genuine [material]
issue for trial." Andersen v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). The Court considers the evidence in the light most
favorable to the non-moving party and draws all reasonable inferences in
favor of that party. Schneiker v. Fortis Ins. Co.,
200 F.3d 1055, 1057 (7th Cir. 2000).
Under the FDCPA notice requirement, the debt collector is required to
inform debtors at the outset that they have thirty days to dispute the
validity of the debt and to make disclosures about the debtor's rights
and options. The Seventh Circuit has adopted an "unsophisticated
consumer" standard to determine whether there have been violations of the
FDCPA. See., e.g., Gammon v. GC Serv.s Ltd. P'ship,
27 F.3d 1254, 1257 (7th Cir. 1994) (standard applies to § 1692e claims);
Pettit v. Retrieval Masters Creditors Bureau, Inc.,
211 F.3d 1057, 1060 (7th Cir. 2000) (standard applies to § 1692g claims);
Turner v. J. V.D.B. &Assocs., Inc., 330 F.3d 991, 997 (7m
Cir. 2003) (standard
applies to § 1692f claims). The hypothetical unsophisticated
consumer is not "the very last rung on the sophistication ladder;"
rather, "the uneducated debtor possesses rudimentary knowledge about
the financial world, is wise enough to read collection notices with
added care, possesses reasonable intelligence, and is capable of making
basic logical deductions and inferences." Pettit, 211 F.3d at
1060. The standard of an unsophisticated debtor is an objective standard.
Id. at 1063. The Seventh Circuit selected the unsophisticated
debtor standard over the least sophisticated debtor standard in order to
preserve a quotient of reasonableness. Id. The standard is
designed to "shield complying debt collectors from liability for
unrealistic or peculiar interpretations of collection letters."
Gammon, 27 F.3d at 1257.
A. Evidentiary Standard for FDCPA Claims: Plaintiffs'
Lack of Extrinsic Evidence
In support of its motion for summary judgment, Equifax argues that the
Seventh Circuit requires FDCPA plaintiffs to substantiate their claims
with extrinsic evidence. Equifax claims that Plaintiffs have failed to
carry this evidentiary burden since their expert witness was barred, and
Plaintiffs have provided no additional evidence since then. Plaintiffs
dispute the contention that the Seventh Circuit always requires extrinsic
evidence and argues that such evidence is not required in this case.
While extrinsic evidence is not required in all cases, it is required
where the letters do not violate the FDCPA as a matter of law, but might
violate it as a matter of fact.
The Court's decision to bar Plaintiffs' expert witness left Plaintiffs
with no extrinsic evidence besides the collection letters themselves.
Plaintiffs had ample time to produce additional evidence, and the Court
gave them even more time when it denied Equifax's 12(c) motion.
Nevertheless, Plaintiffs chose not to provide any additional extrinsic
evidence. Plaintiffs claim they can fulfill their
evidentiary burden by relying on the testimony of Equifax's expert
witness, who acknowledged in his deposition the possibility that
Equifax's dunning letters might confuse. The Court disagrees. The mere
possibility that someone might be contused by the dunning letters does
not raise a genuine issue of material fact that the class of
unsophisticated consumers receiving Equifax's letters may be confused by
If a violation of the FDCPA does not exist on the face of Equifax's
letters, Plaintiffs cannot avoid the requirement of producing extrinsic
evidence to prove that Equifax violated the FDCPA. The Seventh Circuit
has held that if there is no violation on the face of the letters, the
plaintiff may; not rely solely on the letters and self-serving
testimony to prove confusion. Pettit, 211 F.3d at 1061-62
("Pettit cannot prevail because at the summary judgment stage of a case
she must do more than merely speculate about how a naive debtor would
interpret the letter. . . . the self-serving opinion of the plaintiff,
clearly not an expert or an objective observer, does not create a genuine
issue for trial.") See also Johnson v. Revenue Mgmt. Corp.,
169 F.3d 1057, 1060 (7th Cir. 1997) ("if all Plaintiffs have to go on is the
language of these letters, they must lose in the end.") To allow a
plaintiff to prevail based on testimony of her own subjective belief and
nothing more would counteract the objectively reasonably standard.
Pettit, 211 F.3d at 1062-63.
The Seventh Circuit has provided some guidance as to the level of
evidence sufficient to survive a motion for summary judgment. The court
in Walker made recommendations for how a plaintiff could
demonstrate that unsophisticated readers would be confused by the letter,
such as through the use of surveys of individuals that are representative
of unsophisticated consumers. 200 F.3d at 503. As surveys can be
expensive, other forms of extrinsic evidence may also be sufficient to
show confusion. Johnson, 169 F.3d at 1061. This evidence may
include specific and reliable
expert testimony or general statistical evidence. This minimum
evidentiary standard serves to protect debt collectors and courts from
frivolous lawsuits. Plaintiffs could have offered statistics of the
number of confusion-based calls Equifax received in response to the
letters, or expert testimony specifically regarding how the language in
the additional dunning letters increased Plaintiffs' confusion.
Plaintiffs, however, have offered no additional evidence other than the
B. Count I: Section 1692g of the FDCPA
The Seventh Circuit has interpreted § 1692g as prohibiting
confusing letters which might confuse debtors as to their thirty-day
right to dispute the validity of the debt. Bartlett v. Heibl,
128 F.3d 497, 500 (7th Cir. 1997). In Bartlett, the Seventh
Circuit held that: "The statute does not say in so many words that the
disclosures required by it must be in a non-confusing manner. But the
courts, our own included, have held, plausibly enough, that it is
implicit that the debt collector may not defeat the statute's purpose by
making the required disclosures in a form or within a context in which
they are unlikely to be understood by the unsophisticated debtors who are
the particular objects of the statute's solicitude." Id.
Plaintiffs, however, have not shown that Equifax's letters were confusing
as a matter of law. Nor have they provided any extrinsic evidence that
would enable them to survive summary judgment on this Count.
In Bartlett, the court also provided "safe harbor" language
which debt collectors could use to ensure that the letters they send
comply with the § 1692g of the FDCPA. The sample language provides
the debtor with an explanation of ho w his rights under the FDCPA fit
together with the debt collector's right to resort to legal action before
the thirty days expire. The court explained that "debt collectors who
want to avoid suits by disgruntled debtors standing on their statutory
rights would be well advised to stick close to the form that we have
drafted. It will be a safe haven for them, at least
in the Seventh Circuit." Bartlett, 128 F.3d at 502.
In Bartlett, the Seventh Circuit concluded that if a letter is
confusing to judges, then the letter must be "confusing on its face"
because a typical unsophisticated consumer will have a much poorer
understanding of financial matters than a judge. See Bartlett,
128 F.3d at 500-501 (the court could not doubt that the letter was
confusing because "we found it so, and do not like to think of ourselves
as your average unsophisticated consumer.") The court also listed other
possible elements of dunning letters that may lead the court to conclude
that the letters are confusing on their face, including: (1) internal
contradictions within the text of the letters; (2) overshadowing language
that contradicts or overshadows the statutory notice; or (3) the "failure
to explain an apparent though not actual contradiction." Id. at
501. Two Seventh Circuit decisions have relied on such factors to
conclude that the letters at issue were confusing as a matter of law.
See, e.g., Avila v. Rubin, 84 F.3d 222, 225 (7th Cir. 1996)
(holding that evidence of consumer confusion was not required because the
dunning letter contained internally "inconsistent and contradictory
language" that was "akin to a literally false statement"); Chauncey
v. JDR Recovery Corp., 118 F.3d 516, 519 (7th Cir. 1997) (holding
that "the contradictions in the letter, as in Avila, would leave
an unsophisticated consumer confused as to what his rights are and
therefore violate the FDCPA.") When a letter is "confusing on its face,"
the Seventh Circuit has deemed the letter confusing without requiring
extrinsic evidence. Id.
In an earlier opinion denying summary judgment to Plaintiffs, the Court
held that the letters at issue are not confusing as a matter of law.
See Durkin 2001. Plaintiffs again assert that while the initial
notification letter sent by Equifax did not violate the FDCPA and
followed the safe harbor provision in Bartlett, the second and
thud letters overshadowed the initial notification and thus were
confusing to the unsophisticated consumer as a matter of law, or at
least ambiguous enough to withstand summary judgment.*fn2 Plaintiffs
claim that the language in Equifax's second and third letters
overshadowed the rights spelled out in the first notice by: (1)
overshadowing the notice of the thirty-day statutory rights period by
mentioning Plaintiffs' "continued refusal to honor" the check; (2)
implying that the thirty-day time period in which to dispute the debt had
expired; and (3) failing to provide an explanation of how the thirty-day
time frame and the messages in the second and thud letter "fit together."
Although this Court does not condone Equifax's tactics, there is no
legal basis upon which to grant Plaintiffs judgment as a matter of law.
Most of the cases to which Plaintiffs cite are factually inapposite. For
example, although the court in Farley v. Diversified Collection
Serv.s. Inc., granted the plaintiffs' motion for summary judgment;
in that case, the debt collector's demand for immediate payment was
juxtaposed, in the same letter, with the thirty-day statutory notice
requirement, without further explanation of how the two statements fit
together. No. 98 C 2108, 1999 WL 965496, at *7 (N.D. Ill. Sept. 30,
1999). In addition, the letter urgently demanded "immediate payment,"
unlike the letters in the instant case which spoke of Plaintiffs'
"continued refusal" to pay, but did not convey the same sense of urgency
that a demand for immediate payment would. The Seventh Circuit cases in
which the court found the collection letters confusing as a matter of law
also involved specific demands for "immediate payment" or demands for
within a certain number of days before the thirty-day period
expired. These demands were also juxtaposed, in the same letter, with the
thirty-day statutory notice requirement. See Avila, 84 F.3d at
225 (letter confusing as a matter of law where it demanded payment within
ten days); Chauncey, 118 F.3d at 518 (letter confusing as a
matter of law where it demanded payment within thirty days). See also
Matthews v. First Revenue Assurance, L.L.C., No. 00 C 3711, 2001 WL
864272 (N.D. Ill. July 31, 2001) (letter requesting debtor arrange for
payment "today" held confusing as a matter of law).
The rest of Plaintiffs' cases are procedurally inapposite. While the
instant case arises on Equifax's motion for summary judgment, most of the
cases cited by Plaintiffs deal with motions to dismiss, where the
standard is "failure to state a claim," rather than summary judgment's
"no genuine issue of material fact." In Johnson and
Walker, the Seventh Circuit reversed the district court's grant
of the debt collectors' motions to dismiss, holding that the letters
which included urgent language demanding "prompt payment" and
"immediate collection" could possibly confuse the unsophisticated
consumer, but the court did not find the letters confusing as a matter of
law. Johnson, 169 F.3d at 1060; Walker, 200 F.3d at
502. In fact, in Johnson, the Seventh Circuit stated that "if
all Plaintiffs have to go on is the language of these letters, they must
lose in the end," indicating the court's opinion that the letters were
not confusing as a matter of law. Johnson, 169 F.3d at 1060.
Similarly, in Walker, the Seventh Circuit reversed the district
court's grant of the debt collectors' motion to dismiss and held that the
confusion issue was a matter of fact, despite the urgent language of the
letter. Walker, 200 F.3d at 502. See also Seplak v. IMBS,
Inc., No. 98 C 5973, 1999 WL 104730, at *3 (N.D. Ill. Feb. 23, 1999)
(denying debt collector's motion to dismiss because language in dunning
letters may confuse unsophisticated consumers, but not making
determination that letters were confusing as a matter of law).
Thus, these motion to dismiss cases do not help Plaintiffs' claim that
the letters at issue are contusing as a matter of law.
Moreover, Plaintiffs have not shown a violation of § 1692g through
their claim that Equifax implied that the thirty-day time period expired
by stating that the dishonored check was written "nearly five weeks ago."
Even though the Court previously held that this could potentially mislead
an unsophisticated consumer, Plaintiffs have not shown that it is
confusing as a matter of law, and they have not provided extrinsic
evidence of this. Furthermore, although Plaintiffs claim that Equifax
failed to explain how Plaintiffs' validation rights fit in with Equifax's
follow-up letters, Equifax did use the Bartlett safe harbor
language in its initial letter to Plaintiffs, in an apparent attempt to
avoid such confusion. Even if such safe harbor language did not provide
sufficient explanation to Plaintiffs, the Seventh Circuit has held that
when explanatory language is missing, a factual question remains.
Johnson, 169 F.3d at 1060. Therefore, Plaintiffs did not show
confusion as a matter of law on these grounds either, and without
extrinsic evidence, Plaintiffs cannot survive summary judgment on this
C. Count II: Section 1692e of the FDCPA
Plaintiffs also maintain that Equifax violated § 1692e by
misrepresenting the facts to imply that the debt had not yet been
referred to a debt collector by stating that the debt had not yet been
referred to a collection agency. The Seventh Circuit has held that the
"unsophisticated consumer" standard, which applies to § 1692g
"confusion" claims, also applies to § 1692e claims. Gammon,
27 F.3d at 1257. Plaintiffs argue that the lack of extrinsic evidence of
Equifax's alleged misrepresentation should not be fatal to their claim
because in Durkin 2001, the Court held that Plaintiffs'
assertion with regard to this alleged misrepresentation was "an issue
best left for the jury
to resolve." Durkin 2001 at *12. The Court's holding,
however, was premised on the assumption that Plaintiffs would present
evidence to show that an issue of fact indeed existed. At that time,
Plaintiffs were expected to at least present an expert witness. In 2003,
however, the Court barred Plaintiffs' expert for not meeting the
Daubert standards for expert testimony. Because Plaintiffs have
not proffered any extrinsic evidence to show that the class of
unsophisticated consumers would be misled, Plaintiffs' claims cannot
survive. See also discussion supra, at Section III. A.
D. Count III: Section 1692f of the FDCPA
Plaintiffs also argue that Equifax violated § 1692f of the FDCPA
when it included atoll-free number in its letter without explaining that
debtors must challenge the debt in writing. Plaintiffs assert that this
in an "unfair practice," and mat the evidentiary standard in "confusion"
claims, which requires extrinsic evidence, does not apply. The Seventh
Circuit disagrees with Plaintiffs. In Turner v. J. V.D.B. &
Assocs., Inc., the Seventh Circuit explicitly held that the
"unsophisticated consumer test applies to § 1692f as well."
330 F.3d 991, 997 (7th Cir. 2003) (citing Gammon, 27 F.3d at 1257 (holding
that unsophisticated consumer standard applied to claims under §
1692e)).*fn3 Therefore, Plaintiffs' attempts to couch this alleged
violation in § 1692f terms does not avoid the need for them to
provide extrinsic evidence, and Plaintiffs have provided no proof that
this claim could be confusing as a matter of law. See discussion
supra, at Section III. A. Accordingly, Plaintiffs' failure to
provide extrinsic evidence is fatal to their claims.
Thus, as the Court held in Durkin 2001, "it cannot be said
that a violation exists on the face of these collection letters," and,
unlike Bartlett, Chauncey, and Avila, Plaintiffs cannot
avoid the requirement of producing extrinsic evidence to prove that
Equifax violated the FDCPA. At the end of discovery, Plaintiffs have
provided no extrinsic evidence to support their claims for violations of
the FDCPA; rather, they have opted to rely solely on Equifax's letters
and Plaintiffs' own self-serving testimony. Therefore, Plaintiffs have
presented no genuine issue of material fact as a matter of law, and
Equifax's Motion for Summary Judgment is GRANTED.
IT IS SO ORDERED