According to the original complaint filed with the Court on September 30, 1996, the plaintiff is a resident of Roosevelt, New York. NBD is a Delaware corporation with a principal place of business in Scranton, Pennsylvania. The principal purpose of NBD is the collection of debts due to others. NBD uses the mails in conducting this business. NEC is a Delaware corporation with a principal place of business in Irvine, California. The principal purpose of NEC is the operation of correspondence schools and providing other education services. NEC operates ICS and owns 100% of NBD.
The plaintiff received a letter from NBD dated May 21, 1996 (the "letter"), the purpose of which was to collect an alleged debt of $ 247.86 that the plaintiff incurred with ICS. The plaintiff contracted with ICS for a home study course. The demand stated that the plaintiff could receive a special discount of $ 86.75, for a discounted amount due of $ 161.11, if she paid by June 21, 1996. The plaintiff alleges that this overshadows or contradicts the validation notice as required by the FDCPA, 15 U.S.C. § 1692(g).
Second, the plaintiff alleges that the demand purports to come from NBD, an independent collection agency, by stating, "your account with ICS is severely delinquent and has been referred to us for collection." Complaint P 14. The plaintiff alleges that NEC is a "debt collector" subject to the FDCPA because it is uses NBD's name to collect a debt, conveying "the impression that a third-party collection agency is involved in collecting the debt, when this is not the case." Complaint P 22. NEC is alleged to have caused and approved such deception. The plaintiff maintains that this alleged act is in violation of 15 U.S.C. § 1692e(10).
Third, the plaintiff alleges that the amount of the debt is overstated in the letter. The plaintiff's total tuition fee for the course at ICS was $ 2,008.00. In December, 1994, the plaintiff paid a down payment of $ 29.00, leaving a balance of $ 1,979.00. The plaintiff completed 11.7% of the course. Multiplying the percent completed by the total tuition, the plaintiff calculated her liability at $ 253.68. However, the letter also lists $ 1,979.00 as the "balance due". The plaintiff acknowledges that if she "now elected to continue with the course, she would owe the $ 1,979.00 figure upon completion." Complaint P 16. The plaintiff alleges that the amount of the debt is overstated and misleading, in violation of 15 U.S.C. §§ 1692e(2), (10), because the letter deceptively states that the "balance due" is $ 1,979.00. In addition, the plaintiff alleges that she is acting on behalf of a class of similarly situated consumers whose rights have been violated.
With NBD and NEC's consent and the approval of this Court, the plaintiff filed an amended complaint on April 16, 1997. The only substantive difference between the original and amended complaint is the addition of ICS as a defendant. ICS is alleged to be "one of three operating entities of NEC, which offers distance education in vocational academic and professional studies to consumers and companies throughout the world." Amended Complaint P 7. ICS, in addition to NEC, is alleged to have caused and approved the deception by NBD of holding itself out as if it were an independent, third party collection agency, when, in fact, NEC and ICS are the debt collectors using NBD's name.
A. Standard of review
On a motion to dismiss for failure to state a claim, "the court should not dismiss the complaint pursuant to Rule 12(b)(6) unless it appears 'beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief'". Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir. 1985)(quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957)); see also IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052-53 (2d Cir. 1993), 513 U.S. 822, 115 S. Ct. 86, 130 L. Ed. 2d 38 (1994). The Second Circuit stated that in deciding a Rule 12(b)(6) motion, a court may consider "only the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the pleadings and matters of which judicial notice may be taken". Samuels v. Air Transport Local 504, 992 F.2d 12, 15 (2d Cir. 1993); see also Paulemon v. Tobin, 30 F.3d 307, 308-09 (2d Cir. 1994); Rent Stabilization Ass'n of the City of New York v. Dinkins, 5 F.3d 591, 593-94 (2d Cir. 1993) (citing Samuels, 992 F.2d at 15).
It is not the Court's function to weigh the evidence that might be presented at a trial, the Court must merely determine whether the complaint itself is legally sufficient, see Goldman, 754 F.2d at 1067, and in doing so, it is well settled that the Court must accept the allegations of the complaint as true, see LaBounty v. Adler, 933 F.2d 121, 123 (2d Cir. 1991); Procter & Gamble Co. v. Big Apple Indus. Bldgs, Inc., 879 F.2d 10, 14 (2d Cir. 1989), cert. denied, 493 U.S. 1022, 110 S. Ct. 723, 107 L. Ed. 2d 743 (1990), and construe all reasonable inferences in favor of the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236, 40 L. Ed. 2d 90, 94 S. Ct. 1683 (1974); Bankers Trust Co. v. Rhoades, 859 F.2d 1096, 1099 (2d Cir. 1988), cert. denied, 490 U.S. 1007, 109 S. Ct. 1642, 104 L. Ed. 2d 158 (1989).
The Court is mindful that under the modern rules of pleading, a plaintiff need only provide "a short and plain statement of the claim showing that the pleader is entitled to relief", Fed. R. Civ. P. 8(a)(2), and that "all pleadings shall be so construed as to do substantial justice", Fed. R. Civ. P. 8(f).
The issue before the Court on a Rule 12(b)(6) motion "is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claim." Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 378 (2d Cir. 1995) (citing Scheuer, supra, 416 U.S. at 235-36). Recovery may appear remote and unlikely on the face of the pleading, but that is not the test for dismissal. Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir. 1995) (citing Scheuer, supra, 416 U.S. at 236).
It is within this framework that the Court addresses the present motion to dismiss.
B. Applicability of the FDCPA to the defendants
As a threshold matter, before the Court determines whether the plaintiff has validly stated claims of violation the of FDCPA, the Court must determine whether the FDCPA is applicable to each of the defendants. The FDCPA prohibits abusive debt collection practices by "debt collectors". See 15 U.S.C. § 1692(e); Cavallaro v. Law Office of Shapiro & Kreisman, 933 F. Supp. 1148, 1152 (E.D.N.Y. 1996). "Debt collectors" include
any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.