1692k(a)(2)(A) of the FDCPA inapplicable, and requires the court to conduct a more thorough analysis of section 2605(f).
Defendants correctly note that Congress knows how to specifically authorize a statutory damage award for each violation of a statute. For example, the Cable Communications Policy Act, 47 U.S.C. § 605(e)(3)(C)(I)(II), authorizes statutory damages of at least $ 10,000 "for each violation" of the substantive terms of the statute, the Truth in Lending Act, 15 U.S.C. § 1640(a)(2)(A)(I), authorizes statutory damages that are to be computed on a per transaction basis, and the Clean Water Act, 33 U.S.C. § 1319(d) allows for a $ 25,000 "per day" fine for violations of the statute. The absence of similar specific language authorizing statutory damages for each incident is significant.
Unfortunately, there are no cases construing the damages provisions of section 2605 in this or any other federal circuit, nor is there much legislative history for these provisions. "When a statute speaks with clarity to an issue judicial inquiry into the statute's meaning, in all but the most extraordinary circumstance, is finished." Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 475, 120 L. Ed. 2d 379, 112 S. Ct. 2589 (1992) (citing Demarest v. Manspeaker, 498 U.S. 184, 190, 112 L. Ed. 2d 608, 111 S. Ct. 599 (1991). Upon careful reading of section 2605(f), the court finds that the statute unambiguously authorizes additional statutory damages of up to $ 1,000 only in those cases where the servicer of the mortgage has engaged in a pattern or practice of noncompliance. But in the context of this statute, what do the words "pattern or practice" mean? Are three violations sufficient? Must there be a violation against a number of individuals? Must the violation be over a period of time? And if so, how much time?
Plaintiff's recommended interpretation of section 2605(f) ignores the "pattern or practice of noncompliance" language in subsection (1)(B). "Without a clear congressional command otherwise, [a court must] not construe a statute in any way that makes some of its provisions surplusage." State of N.Y. v. Shore Realty Corp., 759 F.2d 1032, 1044 (2d Cir. 1985). One would think that if Congress had intended that statutory damages be available for single violations of the Act, it would have not inserted the phrase "in the case of a pattern or practice of noncompliance." Congress has used this "pattern or practice" language in numerous statutes. For example, the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. § 6104(a), authorizes a private cause of action by individuals "affected by any pattern or practice of telemarketing," and the Telephone Consumer Protection Act, 47 U.S.C. § 227(f)(1), authorizes civil actions brought by a state, or official agency designated by a state, for damages and injunctive relief against any person engaged in a pattern or practice of telephone calls or other transmissions to residents of the state in violation of the substantive sections of the statute. In any of these cases, if Congress had intended for a single violation to be sufficient for liability for the specified damages, then there would have been no reason to include the phrase "pattern or practice." That phrase must be read in the context of 12 U.S.C. § 2605(f) to reach its plain meaning.
Nevertheless, the phrase "for each such failure" also cannot be ignored. The general introductory language directs that a borrower who has suffered a violation of section 2605 is entitled to actual damages for each violation of the section. These damages are non-discretionary. Thus, if a plaintiff is able to prove both that there have been violations of section 2605 and that he has suffered actual damages as a result of such violations, then the plaintiff is entitled to recover the actual damages suffered due to each violation. The plaintiff is only entitled to additional damages under subsection (B) when he can establish that the defendant has engaged in a pattern or practice of noncompliance.
Neither party has addressed whether a pattern or practice of noncompliance in this context can be based on the actions of a defendant against a single individual or whether the plaintiff must first demonstrate that the defendant has violated the statute with respect to multiple individuals. Once again, there are no cases construing the damages provisions of section 2605 in this or any other federal circuit. In the context of civil rights statutes, courts regularly interpret the phrase "pattern or practice" in such a way that looks at the defendant's conduct with respect to many individuals. See, e.g., EEOC v. Shell Oil Company, 466 U.S. 54, 72, 80 L. Ed. 2d 41, 104 S. Ct. 1621 (1984) (in a Title VII employment discrimination case based on race, the EEOC should identify the groups of persons that he has reason to believe have been discriminated against). In First National Bank of Council Bluffs, Iowa v. Office of the Comptroller of the Currency, 956 F.2d 1456 (8th Cir, 1992), the court considered "pattern and practice of violations" language in the context of the Truth-in-Lending Act and held that the Bank's nondisclosure of the composite interest rate, which involved over 700 violations against numerous individuals over two years, constituted a pattern or practice of violations.
Since the parties have not addressed either problem in any of their briefs, the court directs each side to provide the court with a brief memorandum discussing their views pertaining to the interpretation of this section in the context of this case not later than January 20, 1998.
At oral argument, defendants suggested that they would be able to file a motion for summary judgment relating to the mortgage foreclosure action contained in the counterclaim. This should be done as soon as possible and not later than January 20, 1998. This case has been pending for some time and for the benefit of all it should be addressed and brought to a conclusion. Plaintiff shall be given until February 27, 1998, to respond. Applications for extension of this scheduling order will not be favored.
For the foregoing reasons, this court grants defendants' motion for partial summary judgment in part (Item 81), finding that plaintiff is not entitled to recover punitive damages, damages for personal injury, and damages for economic loss. The court will withhold decision on the $ 1,000 statutory damages problem until after the parties have filed their memoranda.
JOHN T. CURTIN
United States District Judge
Dated: December 19, 1997