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Henley v. Trustmark Recovery Services

United States District Court, N.D. Illinois, Eastern Division

October 11, 2016

MELVIN HENLEY, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
v.
TRUSTMARK RECOVERY SERVICES, And JOHN DOES, Defendants.

          MEMORANDUM OPINION AND ORDER

          Harry D. Leinenweber, Judge.

         Before the Court is Defendant Trustmark Recovery Services' Motion to Dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(6) [ECF No. 14]. For the reasons stated herein, the Motion is granted.

         I. BACKGROUND

         The following facts are contained in Plaintiff's Complaint and the attached exhibit, and are presumed true for purposes of deciding the motion to dismiss. Gillman v. Burlington N. R.R. Co., 878 F.2d 1020, 1022 (7th Cir. 1989).

         In April of this year, Plaintiff Melvin Henley received from Defendant Trustmark Recovery Services a debt collection letter. Plaintiff alleges that the letter violates the Fair Collection Practices Act and files this lawsuit on behalf of Illinois consumers who received similar letters from Defendant. The portion from the letter that Plaintiff complains of reads as follows:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days after receiving this notice that you dispute the validity of this debt this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification.

(ECF No. 1, Ex. A (hereafter, the “Collection Letter”) (emphasis added).)

         Plaintiff claims that by omitting the words “or any portion thereof” from the second sentence of the Collection Letter, Defendant had failed to “provide an accurate and correct validation notice” as required by 15 U.S.C. §1692g(a)(4). This is because by “omitting this statutorily required language, ” Defendant misled Plaintiff, and those like him, into believing that he must “dispute the entire debt” when in fact the law allows a purported debtor to dispute any part of the debt and thereby trigger the verification obligation of the debt collector. (Pl's Memo. Opp. Def's Mot. Dismiss, ECF. No. 15 (emphasis in original).) Defendant, on the other hand, contends that when the two sentences are read in conjunction with each other, no consumer - even if unsophisticated - could be objectively misled or confused.

         II. LEGAL STANDARD

         A motion to dismiss under Fed.R.Civ.P. 12(b)(6) requires the Court to analyze the legal sufficiency of the complaint, not the factual merits of the case. Autry v. Nw. Premium Servs., Inc., 144 F.3d 1037, 1039 (7th Cir. 1998). Because “[h]ow a particular notice affects its audience is a question of fact . . . not of law, ” district courts regularly allow plaintiffs alleging consumer confusion to proceed past 12(b)(6) motions. See, Walker v. National Recovery, Inc., 200 F.3d 500, 501, 503 (7th Cir. 1999). However, the Seventh Circuit has cautioned that in some cases, courts should reject plaintiffs' claims “without requiring evidence beyond the letter itself.” See, Taylor v. Cavalry Inv., L.L.C., 365 F.3d 572, 574-75 (7th Cir. 2004). In particular, “[i]f not even ‘a significant fraction of the population would be misled' by the debt collector's letter, then dismissal is required.” Gruber v. Creditors' Prot. Serv., 742 F.3d 271, 274 (7th Cir. 2014).

         III. ANALYSIS

         The Fair Collection Practices Act (“the Act”) protects the interests of “unsophisticated consumers” who are often the target of debt collectors. Walker, 200 F.3d at 501. The Act does this by, among other things, requiring that debt collectors provide consumers with written notices containing certain information. See, 15 U.S.C. §1692g(a). Of particular relevance to this case, the Act requires a debt collector to send the consumer

(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 ...

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