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Miller v. Midland Credit Management

March 10, 2009

MARCIA K. MILLER, ET AL. PLAINTIFFS,
v.
MIDLAND CREDIT MANAGEMENT, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Judge Coar

Magistrate Judge Ashman

MEMORANDUM OPINION AND ORDER

Plaintiffs Marcia K. Miller, William Miller, Charlane Yoways-Dawson, and William Anderson ("Plaintiffs"), on behalf a class*fn1 of Cook County residents who received a privacy notice in conjunction with a debt collection letter sent by Defendants Midland Credit Management, Inc. ("MCM"), Midland Funding LLC ("MFL"), and Encore Capital Group, Inc. ("Encore"), formerly MCM Capital Group, Inc. (collectively, "Defendants"), bring this cause of action against alleging a violation of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq. Both parties have moved for summary judgment. For the reasons explained below, Plaintiffs' motion is granted in part and denied in part, and Defendants' motion is granted in part and denied in part.

I. FACTS

The core of this dispute is simple: Plaintiffs received dunning letters from Defendants that included a "Privacy Notice" that allegedly violated the FDCPA. MFL is a Delaware corporation in the business of taking title to charged-off debts allegedly owed by consumers and originally owed to others. Pls.' SOF*fn2 ¶ 3; Defs.' SOF ¶ 3. MCM is a Kansas corporation that acts as a debt collector for the debts purchased by MFL. Pls.' SOF ¶ 6; Defs.' SOF ¶ 1. MCM is the parent corporation and holding corporation for MFL; Encore is the parent corporation and holding corporation for MCM. Pls.' SOF ¶ 11. Encore raises capital for MFL by securing funds from investors for the purpose of purchasing the debts to which MFL takes title. Id. at ¶ 12. In their filings, Defendants do not dispute that MFL and MCM are "debt collectors" within the meaning of the FDCPA, but do dispute that Encore is. See e.g., Ds.' Mem. in Opposition to Pls.' Mot. for Summ. J. 13.

In 2007, MCM, acting on behalf of MFL, sent Plaintiffs correspondences, each consisting of two pages, a debt collection letter and a document entitled "Privacy Notice" ("Form MCM-109" or the "privacy notice"). Pls.' SOF ¶ 23. The letters sought to collect past-due receivables purchased by MFL. Id. at ¶ 24. There are five different debt collection letters, but they all contain similar language. Id. at ¶ 35-36. For all five, the front of the letter stated that "Midland Credit Management, Inc. ('MCM'), a debt collection company," is "the servicer of this obligation." Id. at ¶ 26, 36; Pls.' SOF Appendix 1, Exs. A-D. On the back of the letters sent to Plaintiffs, highlighted in a border and bold print, was printed:

Please understand that this is a communication from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose. Id. (emphasis in original).

The privacy notices were delivered as the second sheet of the two page correspondences and were enclosed in the same envelope as the debt collection letters. Pls.' SOF ¶ 35. At the top, the privacy notice stated, "[MCM] is delivering this Privacy Notice to you to generally describe the nonpublic personal and financial information we gather about you as the servicer of your account, and our privacy practices relating to such information and how those policies relate to the protection, use, and disclosure of your non public personal information. Please carefully read this Privacy Notice and Opt Out Notice." Id. (emphasis in original).Under this statement, the privacy notice read:

What Information Do We Collect?

We collect nonpublic personal information about you from the following sources:

* Information we receive from you on applications or other forms. This information may include: o Your name o Address o Social security number o Telephone number o Other relevant information that you provide

* Information we receive about your account transactions with us, our affiliates, or others including the original creditor. This information may include: o Account balance o Payment history o Account activity o Other customer information

* Information we receive from consumer reporting agencies (such as credit scores and history) and other information relating to your creditworthiness.

To Whom Do We Disclose Information?

We may disclose nonpublic personal information about our current and former customers to the following types of third parties:

* Non-financial companies, such as direct marketers or retailers of consumer products and services

* Financial service providers, such as companies engaged in banking, consumer finance, debt purchasing and credit card insurance

* Others, such as our affiliated debt purchases and our parent company

* The customer's spouse, if such disclosure is otherwise permitted by law

We may also disclose nonpublic personal information about our current and former customers to nonaffiliated third parties as required or permitted by law.

We may disclose all of the information that we collect about our current and former customers, as described to the left under "What Information Do We Collect?", to companies that perform marketing services on our behalf or to other financial institutions with whom we have joint marketing agreements.

What Information Do We Disclose?

As permitted by law, we may disclose all information that we collect about you, as described above under "What Information Do We Collect?" . . . .

Id. The privacy notice then states: "If you prefer that we not disclose nonpublic personal information about you to nonaffiliated third parties (other than disclosures permitted by law), please detach and complete the Opt ...


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