The opinion of the court was delivered by: McMAHON, District Judge.
Plaintiff Guadalupe Barrientos brought a class action under the
Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692
(1994), against Defendants Law Offices of Mark L. Nichter (a/k/a
"Mark L. Nichter, P.C.") and Mark Nichter individually, for (1)
failing to provide proper notice of her right under the FDCPA to
challenge within 30 days a debt for which Defendant Nichter
sought payment, and (2) false or misleading representations in
connection with collection of the debt. Plaintiff has moved for
summary judgment on both claims. For the reasons that follow, her
motion is granted, and the case is referred back to the
Magistrate for a determination of her damages.
The Law Offices of Mark L. Nichter
The Law Offices of Mark L. Nichter
On April 6, 1999, Plaintiff filed the present class action. She
claims (1) that Defendants' May 1 letter contradicted the
language of the April 10 letter, thereby rendering inadequate the
required validation notice under § 1692g, and (2) that the May 1
letter constituted a "false representation or deceptive means" of
debt collection in violation of § 1692e(10) of the FDCPA. She now
moves for summary judgment on both claims.
Section 1692g(a) of the FDCPA requires that an independent debt
collector seeking payment provide the consumer with a detailed
validation notice, including the amount of the debt, the name of
the creditor, a statement that the debt's validity will be
assumed by the creditor unless disputed by the consumer within 30
days, and, relevant to this case, 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 the consumer. . . ."
Section 1692e prohibits the use of any "false, deceptive, or
misleading representation or means in connection with the
collection of any debt," which includes the "use of any false
representation or deceptive means to collect or attempt to
collect any debt or to obtain information concerning a consumer."
§ 1692e(10). Deceptiveness within the meaning of this subsection
includes ambiguity; a collection notice may be deceptive when it
can reasonably be read to have two or more different meanings,
one of which is inaccurate. See Russell v. Equifax A.R.S.,
74 F.3d 30, 35 (2d Cir. 1996). The fact that a notice's terminology
was vague or uncertain will not prevent it from being held
deceptive under § 1692e(10). See id.
The Second Circuit follows a "least sophisticated consumer"
standard in assessing violations of § 1692g and e(10) — that is,
whether these provisions have been violated is measured by the
interpretation that the least sophisticated consumer would give
the notice received from the debt collector. See Russell, 74
F.3d at 34 (citing Clomon v. Jackson, 988 F.2d 1314, 1318 (2d
Cir. 1993)). Moreover, because the FDCPA imposes strict
liability, a consumer need not show intentional conduct by the
debt collector to be entitled to damages. See id. at 33.
However, a debt collector may escape liability if it can
demonstrate by a preponderance of the evidence that its violation
of the Act "was not intentional and resulted from a bona fide
error notwithstanding the maintenance of procedures reasonably
adapted to avoid any such error." § 1692k(c). The burden of
making this showing rests upon the defendant. See id. at 36.
Even if a defendant provides the requisite validation notice
under 1692g, it may still be liable under § 1692g and § 1692e(10)
if it sends a subsequent communication within the validation
period that "overshadows or contradicts" such notice, as
Barrientos alleges in this case. See Russell, 74 F.3d at 34-35.
A notice is overshadowing or contradictory "if it would make the
least sophisticated consumer uncertain as to her rights." Id.
at 35. In Russell, the defendant sent the debtor a letter
captioned "Immediate Collection Notice," which stated in relevant
The back of the notice in turn provided the necessary
validation notice. However, 20 days later, the defendant sent a
notice, captioned "Contact This Office at Once," which read:
Further delay on your part could be costly. At this
point only your action will determine future
handling. We urge your cooperation for your own sake.
Payment in full within 5 days is now demanded. What
will your answer be?
Like Barrientos, the plaintiff in Russell brought claims
under § 1692g and § 1692e(10) of the FDCPA. The district court
granted summary judgment to the debt collector, reasoning that
the language of the notices did not rise to the level of a
"threatening contradiction" so as to give rise to FDCPA
liability. The Second Circuit reversed, finding as a matter of
law that the first notice, while providing sufficient validation
notice on the back, was confusing and contradictory in violation
of § 1692g in its statements that "[i]f you do not dispute this
claim . . . and wish to pay it within the next 10 days we will
not post this collection to your file" and "[i]t is our practice
to post unpaid collections in the amount of $25 or more to
individual records." If she believed the message on the back of
the notice, the court noted, she would understand that she had 30
days to decide whether to collect the claim. If she believed on
the other hand what was printed on the front of the notice, she
would fear that unless she decided not to dispute the claim and
pay it within 10 days, the debt she owed would be "posted" to her
credit file. The Court further determined that the letter
violated § 1692e(10), because the statements made on both of its
sides were susceptible to a reasonable but inaccurate
interpretation — i.e., that the only way for the plaintiff to
avoid having the debt posted to her file was to pay it within 10
days, rather than avail herself of the validation procedure
described on the reverse of the letter.
The Court also rejected the heightened standard adopted by the
district court in its ruling that the plaintiff needed to
demonstrate not merely a contradiction in the language used in
the notice, but a "threatening contradiction," as has been
required by a district court in Delaware. See Smith v. Financial
Collection Agencies, 770 F. Supp. 232, 237 (D.Del. 1991). The
proper inquiry, the Second Circuit stated, is "whether, from the
perspective of the least sophisticated consumer, language
contained in the notice overshadowed or contradicted the
mandatory validation notice. It is not necessary for the
plaintiff to prove the contradiction is threatening." Russell,
74 F.3d at 35.
Finally, the Court found that the second notice also violated §
1692g and e(10). Given the admonitions "further delay could be
costly" and "[w]e urge cooperation for your own sake," the Court
reasoned, no consumer could be expected to know that the
validation language on the back of the first notice took
precedence over the second notice when the two were read in
combination. "We think it plain that plaintiff would not realize
she had a statutory right to dispute the debt within 30 days in
the face of a second notice from the debt collector giving her
only 25 days." Id. at 36. The notice violated 1692e(10), the
Court concluded, because it advanced a message that was open to
an inaccurate yet reasonable interpretation by the consumer —
specifically, that payment within 5 days was the debtor's only
recourse — and was therefore deceptive as a matter of law.
Like the letters sent by the debt collector in Russell, the
letters sent by the Nichter Law Office to Barrientos, within the
30-day validation period, convey contradictory messages with
respect to what the debtor was entitled to do. While Barrientos
does not dispute that the first letter provided adequate
validation notice as required by the FDCPA, the May 1, 1998
letter which followed stated that the Nichter Law Office was
authorized "to take any lawful action we deem necessary to
collect this debt," and urged Plaintiff to "make payment today so
we can put this matter to rest." This language is at least
equally inconsistent with language of validation
notice as that found by the Second Circuit in Russell to be
violative of § 1692g.
The May 1 letter also violates § 1692e(10), as construed by the
Second Circuit: as with both communications in Russell, an
unsophisticated consumer could not be expected to grasp that the
validation notice in the first letter, to which the May 1 letter
makes no reference, took precedence over the more recent
communication. To the contrary, the language of the May 1 letter,
as perceived by the least sophisticated consumer, would most
likely be understood to suggest that the only course of action
open to Barrientos by which to avoid adverse "lawful action"
against her was to make payment immediately. If anything, the May
1 letter is even more misleading than those found to have
violated 1692e(10) in Russell: whereas the communications in
that case urged payment within 10 days and 5 days respectively,
the May 1 letter send by the Nichter Law Office called for
remittance by Plaintiff "today" in order to "put this matter to
rest," carrying an implication that only immediate payment
could avoid adverse action by Defendants. Summary judgment on the
issue of Defendants' violations of § 1692g and e(10) is therefore
Defendants make two arguments, both of which ignore or
misinterpret the governing case law. First, Defendants cite a
number of cases for the well-settled proposition that "a debt
collector may contact the debtor within the thirty-day validation
period so long as the communication does not `demand' or `urge'
immediate payment of the debt," arguing that the May 1 letter
constituted such a permissible communication. (Def. Brief at
3-4.) See Berrios v. Sprint Corp., No. CV-97-0081, 1997 WL
777945 (E.D.N.Y. Nov.13, 1997); Flowewrs v. Accelerated Bureau
of Collections, Inc., No. 96 C 4003, 1997 WL 224987 (N.D.Ill.
Apr.30, 1997); Severson v. Transworld Systems, Inc., No.
M3-C-682-S, 1994 WL 779763 (W.D.Wis. Apr.12, 1994); Smith v.
Financial Collection Agencies, 770 F. Supp. 232 (D.Del. 1991);
and Higgins v. Capitol Credit Services, Inc., 762 F. Supp. 1128
(D.Del. 1991). But demanding immediate payment is precisely what
Defendants did, as defined by Russell, a case that Defendants
do not address at all in their brief. The cases they cite are
thus inapposite to their contention that the May 1 letter did not
violate the FDCPA.
Defendants also cite the Court to two cases which have held
that a second notice sent to a debtor within the 30-day
validation period does not contradict or overshadow the initial
notice under § 1692g where the second communication does not
threaten adverse action against the debtor. See Swanson v.
Southern Oregon Credit Svc., Inc., 869 F.2d 1222 (9th Cir.
1988); Burns v. Accelerated Bureau of Collections of Virginia,
Inc., 828 F. Supp. 475 (E.D.Mich. 1993). These cases, however,
are not good law in this circuit. As Plaintiff correctly
responds, and as discussed above, the Second Circuit in Russell
expressly rejected the requirement, advanced by the defendant in
that case, that the contradiction be threatening. Rather, a
plaintiff need only demonstrate that as perceived by the least
sophisticated consumer, the language of the subsequent notice
overshadows or contradicts the mandatory validation notice. See
Russell, 74 F.3d at 35.
As outlined above, however, § 1692k(c) permits a debt collector
to avoid liability through the affirmative defense of bona fide
error notwithstanding the maintenance of procedures designed to
avoid such error. That subsection provides:
A debt collector may not be held liable in any action
brought under this subchapter if the debt collector
shows by a preponderance of evidence that the
violation was not intentional and resulted from a
bona fide error notwithstanding the maintenance of
procedures reasonably adapted to avoid any such
Unlike the defendant in Russell, Defendants in the present
case have made at least a partial showing in the form of an
affidavit from Defendant Nichter detailing the procedures in
place to ensure compliance with the FDCPA by his employees.
Specifically, the affidavit states that each employee hired by
his office is required to attend a seminar detailing the
requirements and obligations of the FDCPA and is given a pamphlet
containing the guidelines that his office follows in complying
with the Act, and that each debt collector is required to meet
with a supervisor who reviews debt collection procedures and
updates and discusses any changes in the law. Section 1692k(c),
however, requires in addition a showing that the violation was
unintentional and resulted a from a bona fide error. Defendants'
submission only raises a question of fact as to the third
element, i.e., the existence of procedures designed to prevent
violations of the Act. As to the first two elements, Defendants'
only showing is the barebones assertion in Nichter's affidavit
that any FDCPA violations "were merely the result of bona fide
error by Mark L. Nichter, P.C. because, as is detailed above, we
maintain adequate procedures to insure [sic] that we comply with
the FDCPA." (Nichter Aff, ¶ 8.) Of course, on a motion for
summary judgment, a non-movant "may not rest upon mere conclusory
allegations or denials." Schering Corp. v. Home Ins. Co.,
712 F.2d 4, 9 (2d Cir. 1983). For these reasons, summary judgment is
also granted with respect to Defendants' § 1692k(c) defense.
Plaintiff further argues that a finding of a violation of §
1692g and e(10) precludes application of the affirmative defense
of § 1692k(c). It cites for this contention Sokolski v. Trans
Union Corp., 53 F. Supp.2d 307, 314 (E.D.N.Y. 1999), which
focused on the Russell Court's conclusion that "[o]nce it is
shown that defendant sent the [improper notice] and that they
failed to fulfill the requirements of the Act, strict liability
is imposed." Id. (citing Russell, 74 F.3d at 36). The
Sokolski Court interpreted this language as implying that the
bona fide error defense cannot be invoked once a plaintiff has
proven the elements of a FDCPA claim. See id. I note, however,
that the Russell Court, in the very next sentence, which the
Sokolski Court did not quote, stated: "However, a debt
collector may escape liability if it can demonstrate by a
preponderance of the evidence [the elements of the § 1692k(c)
defense]," Russell, 74 F.3d at 33-34, which logically can only
mean that the defense remains available even after strict
liability has been established. Indeed, a contrary determination
would seem to fly in the face of the plain language of §
1692k(c), which provides that a debt collector "may not be held
liable" in an FDCPA action if it makes the required showing that
the violation was not intentional, resulted from a bona fide
error, and that procedures designed to prevent such error were in
place. However, it is not necessary to decide the issue here, as
Defendants' failure to make an adequate showing as to the
existence of a bona fide error or the lack of intentional conduct
provides an alternative ground for my finding that Defendants may
not rely upon the bona fide error defense.
For the foregoing reasons, Plaintiff's motion for summary
judgment is granted in its entirety. Plaintiff has only moved for
summary judgment on the issue of liability under the FDCPA,
however, and has made no showing with respect to her damages. I
therefore direct that this case be referred back to Magistrate
Judge Fox for the purpose of making that determination.
(2) Plaintiff's Class Action
Although Plaintiff brought this suit as a class action, there
has to date been no class certification as required by Federal
Rule of Civil Procedure 23(c)(1). District courts may rule on
class certification sua sponte, see McGowan v. Faulkner Concrete
Pipe Co., 659 F.2d 554, 559 (5th Cir. 1981); In re Diamond
Systems, Inc., No. C 96-2644, 1997 WL 773733, *2 (N.D.Cal.
Oct.14, 1997), and because Plaintiff has elected to pursue the
present motion solely as an individual, I deny class
certification in this action.
This constitutes the order and decision of the Court.