United States District Court, E.D. New York
OPINION & ORDER
R. Ross United States District Judge.
Julian Ceban brings this action against defendant Capital
Management Services, L.P. (“CMS”), alleging
violations of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. § 1692 et seq.
Specifically, plaintiff claims that the statement,
“[t]his settlement may have tax consequences” in
the debt collection letter that he received was deceptive and
misleading and constituted an unfair debt collection
practice. Defendant has moved to dismiss plaintiff's
complaint for lack of standing and failure to state a claim
upon which relief can be granted, pursuant to Federal Rules
of Civil Procedure 12(b)(1) and 12(b)(6), respectively.
Although I conclude that plaintiff has standing, I dismiss
plaintiff's complaint for the reasons explained below.
is a consumer who allegedly incurred a personal debt to
Barclays Bank Delaware for $1, 999.87. Compl. ¶ 9, ECF
No. 1; see Pl.'s Mem. of Law in Opp'n to
Def.'s Mot. to Dismiss (“Pl.'s
Opp'n”) Ex. A, ECF No. 13-8. On or around August 6,
2016, plaintiff received a collection letter from CMS, a debt
collector, concerning his outstanding debt. See
Compl. ¶ 10. The letter stated, in relevant part, that
CMS was “authorized to accept less than the full
balance due as settlement on the above-mentioned
account” and invited plaintiff to “[p]lease
contact [CMS's] representatives to discuss a potential
settlement . . . .” Pl.'s Opp'n Ex. A. The
letter concluded as follows: “This settlement may have
tax consequences. If you are uncertain of the tax
consequences, consult a tax advisor.” Pl.'s
Opp'n Ex. A; Compl. ¶ 11.
initiated this action on August 2, 2017, alleging that the
inclusion of the tax consequences language in the collection
letter rendered the letter false, deceptive, and misleading
in violation of 15 U.S.C. § 1692e and its subsections.
See Compl. ¶ 19. Plaintiff also alleged
violations of 15 U.S.C. § 1692d, which prohibits
harassing conduct in connection with collecting a debt, and
15 U.S.C. § 1692f, which prohibits the use of unfair or
unconscionable means to collect a debt. Id.
Specifically, plaintiff claims that the tax statement
“implies that every settlement has tax
implications” and “misleads the consumer as to
the impact of attempting to settle the matter for less than
what the Defendant claims is owed.” Id.
¶¶ 12, 14. Plaintiff further argues that the letter
“fails to disclose to consumers that there is a
distinction between forgiveness of principal and interest in
regards to IRS reporting requirements.” Id.
¶ 15. Because of these alleged violations, plaintiff
says that he has been damaged and is entitled to relief under
15 U.S.C. § 1692k. Id. ¶¶ 17, 20.
now moves to dismiss plaintiff's complaint for lack of
standing under Federal Rule of Civil Procedure 12(b)(1) and
for failure to state a claim upon which relief may be granted
under Federal Rule of Civil Procedure 12(b)(6).
Federal Rule of Civil Procedure 12(b)(1) Standard
Rule of Civil Procedure 12(b)(1) provides for dismissal when
a federal court lacks jurisdiction over the subject matter of
a claim. Fed.R.Civ.P. 12(b)(1). An objection to a
plaintiff's standing “is properly made on a Rule
12(b)(1) motion.” Zirogiannis v. Seterus,
Inc., 221 F.Supp.3d 292, 297 (E.D.N.Y. 2016) (quoting
Tasini v. N.Y. Times Co., Inc., 184 F.Supp.2d 350,
354 (S.D.N.Y. 2002)), aff'd, No. 17-140-CV, 2017
WL 4005008 (2d Cir. Sept. 12, 2017); see also City of New
York v. Milhelm Attea & Bros., Inc., 550
F.Supp.2d 332, 340 (E.D.N.Y. 2008) (“As standing is
‘a limitation on the authority of a federal court to
exercise jurisdiction, ' it is properly addressed within
the context of a Rule 12(b)(1) motion.” (quoting
All. for Envtl. Renewal, Inc. v. Pyramid Crossgates
Co., 436 F.3d 82, 89 n.6 (2d Cir. 2006))). To survive a
motion to dismiss under 12(b)(1), a plaintiff “must
allege facts that affirmatively and plausibly suggest that it
has standing to sue.” Amidax Trading Grp. v.
S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011). The
plaintiff bears the burden of doing so by a preponderance of
the evidence. See Zirogiannis, 221 F.Supp.3d at 298.
In deciding a Rule 12(b)(1) motion, the court “must
take all facts alleged in the complaint as true and draw all
reasonable inferences in favor of plaintiff.” Raila
v. United States, 355 F.3d 118, 119 (2d Cir. 2004).
Federal Rule of Civil Procedure 12(b)(6) Standard
Rule 12(b)(6), a party may move to dismiss a claim that does
not state a claim to relief. Fed.R.Civ.P. 12(b)(6). To
survive a motion to dismiss under 12(b)(6), a complaint
“must contain sufficient factual matter . . . to state
a claim to relief that is plausible on its face.”
Cty. of Erie v. Colgan Air, Inc., 711 F.3d 147, 149
(2d Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009)). The complaint's allegations “must
be enough to raise a right to relief above the speculative
level.” Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555 (2007). In considering a motion to dismiss made
pursuant to Rule 12(b)(6), the court must construe a
complaint liberally, “accepting all factual allegations
. . . as true, and drawing all reasonable inferences in the
plaintiff's favor.” Lundy v. Catholic Health
Sys. of Long Island Inc., 711 F.3d 106, 113 (2d Cir.
2013) (quoting Holmes v. Grubman, 568 F.3d 329, 335
(2d Cir. 2009)). However, the court is “not bound to
accept as true a legal conclusion couched as a factual
allegation, ” Iqbal, 556 U.S. at 678 (quoting
Twombly, 550 U.S. at 555), and “[t]hreadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice, ”
enacted the FDCPA “to eliminate abusive debt collection
practices by debt collectors, to insure that those debt
collectors who refrain from using abusive debt collection
practices are not competitively disadvantaged, and to promote
consistent State action to protect consumers against debt
collection abuses.” 15 U.S.C. § 1692(e). Among
other provisions of the statute, the FDCPA broadly provides
that a debt collector may not “engage in any
[harassing] conduct . . . in connection with the collection
of a debt, ” id. § 1692d, “use any
false, deceptive, or misleading representation or means in
connection with the collection of any debt, ”
id. § 1692e, or “use unfair or
unconscionable means to collect or attempt to collect any
debt, ” id. § 1692f.
Second Circuit has set forth two principles that guide
interpretation of the FDCPA. First, “[b]ecause the
FDCPA is remedial in nature, ” courts must construe its
terms “in liberal fashion if the underlying
Congressional purpose is to be effectuated.” Arias
v. Gutman, Mintz, Baker & Sonnenfeldt LLP, 875 F.3d
128, 134 (2d Cir. 2017) (quoting Vincent v. Money
Store, 736 F.3d 88, 98 (2d Cir. 2013)). Second, courts
must evaluate debt collection practices from the perspective
of the “least sophisticated consumer.” Avila
v. Riexinger & Assocs., LLC, 817 F.3d 72, 75 (2d
Cir. 2016) (quoting Clomon v. Jackson, 988 F.2d
1314, 1318 (2d Cir. 1993)). This hypothetical consumer is a
“naïve” and “credulous” person.
Altman v. J.C. Christensen & Assocs., Inc., 786
F.3d 191, 193 (2d Cir. 2015) (quoting Greco v. Trauner,
Cohen & Thomas, L.L.P., 412 F.3d 360, 363 (2d Cir.
2005)). She does not have “the astuteness of a
‘Philadelphia lawyer' or even the sophistication of
the average, everyday, common consumer.”
Avila, 817 F.3d at 75 (quoting Russell v.
Equifax A.R.S., 74 F.3d 30, 34 (2d Cir. 1996)). However,
she is “neither irrational nor a dolt.” Ellis
v. Solomon & Solomon, P.C., 591 F.3d 130, 135 (2d
Cir. 2010) (citing Russell, 74 F.3d at 34); see
also Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643,
645 (7th Cir. 2009) (“The unsophisticated consumer
isn't a dimwit. ...