Paula St. John, Yvonne Owusumensah, et al., & Bryan Sirota, Plaintiffs-Appellants,
Cach, LLC; Cavalry Portfolio Services, LLC; & Unifund CCR Partners, Inc., Defendants-Appellees.
March 31, 2016
from the United States District Court for the Northern
District of Illinois, Eastern Division. Nos. 14-cv-00733;
14-cv-03640; 14-cv-04903; 14-cv-04442; 14-cv-04402;
14-cv-03408 - Amy J. St. Eve & Charles P. Kocoras,
Kanne and Manion, Circuit Judges, and Pepper, [*] District Judge.
MANION, Circuit Judge.
1692e(5) of the Fair Debt Collection Practices Act
("FDCPA" or "the Act") prohibits debt
collectors from threatening to take an action that they do
not intend to take in the course of collecting a debt. 15
U.S.C. § 1692e(5). The question before us is whether
this provision makes it unlawful for a debt collector to file
a collection lawsuit without intending to proceed to trial.
We conclude it does not.
defendants in this case are debt collectors who previously
filed suit in Illinois state court to recover on the
plaintiffs' delinquent credit card accounts. The debt
collectors later moved to voluntarily dismiss the actions
without prejudice, and the actions were dismissed prior to
trial. The plaintiffs then sued the debt collectors in
federal court for allegedly engaging in various deceptive
practices under the FDCPA during the state court litigation.
Of relevance to this appeal, the plaintiffs claimed that the
debt collectors violated § 1692e(5) of the Act by
initiating the state court proceedings with no intention of
going to trial. In the end, each of the plaintiffs'
federal actions was dismissed under Rule 12(b)(6) or Rule
12(c) for failure to state a plausible claim to relief.
Although the plaintiffs brought numerous claims in district
court, the only substantive issue they raise in this
consolidated appeal is whether they stated a plausible claim
under § 1692e(5) by alleging that the debt collectors
filed suit without intending to proceed to trial.
review the dismissal of a complaint under Rule 12(b)(6) or
Rule 12(c) de novo, accepting the well-pleaded allegations in
the complaint as true and drawing all reasonable inferences
in favor of the plaintiffs. Ball v. City of
Indianapolis, 760 F.3d 636, 642–43 (7th Cir.
2014); Appert v. Morgan Stanley Dean Witter, Inc.,
673 F.3d 609, 622 (7th Cir. 2012). Rule 12(b)(6) and Rule
12(c) "employ the same standard: the complaint must
state a claim that is plausible on its face." Vinson
v. Vermilion Cty., Ill., 776 F.3d 924, 928 (7th Cir.
2015). "A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged." Ashcroft v.
Iq-bal, 556 U.S. 662, 678 (2009).
issue here is whether the plaintiffs stated a plausible claim
under § 1692e(5) of the FDCPA. The FDCPA broadly
prohibits debt collectors from using "any false,
deceptive, or misleading representation or means in
connection with the collection of any debt." 15 U.S.C.
§ 1692e. Under § 1692e(5), this general prohibition
specifically includes making a "threat to take any
action that cannot legally be taken or that is not intended
to be taken." 15 U.S.C. § 1692e(5). We evaluate
claims under § 1692e by considering whether the debt
collector's communication "would deceive or mislead
an unsophisticated, but reasonable, consumer." Ruth
v. Triumph P'ships, 577 F.3d 790, 800 (7th Cir.
2009) (internal marks omitted); see also Lox v. CDA,
Ltd., 689 F.3d 818, 822 (7th Cir. 2012).
plaintiffs' principal argument on appeal is both novel
and straightforward. They begin by asserting that the act of
filing a lawsuit includes an implied representation, or
"threat, " that the case will go to trial. They
therefore propose that a debt collector that files a
collection lawsuit without intending to go to trial has
ipso facto violated § 1692e(5), for it has
"threatened" to take an
action––proceeding to trial––that it
does not intend to take. The plaintiffs further submit that
the relevant time at which to gauge the debt collector's
intent is the time it files its complaint, since that is the
time the apparent intention to proceed to trial is supposedly
on these suppositions, the plaintiffs allege that the
defendants violated § 1692e(5) because they did not
intend to proceed to trial when they filed their collection
complaints in state court. Instead, the plaintiffs assert,
the defendants im-permissibly filed suit hoping only for a
settlement or default judgment, as evidenced by their
decision to voluntarily dismiss the actions once the
plaintiffs became involved in defending the litigation. To be
clear, the plaintiffs do not allege that the defendants
represented anywhere in their state court complaints that
they intended to go to trial; rather, they allege that the
defendants implicitly communicated an intention to go to
trial simply by filing the complaints. Nor is there any
indication that the defendants did not file the complaints in
good faith, since the plaintiffs do not deny that they owed
the debts sued upon or otherwise contend that the debts were
not legally enforceable.
conclude that the plaintiffs have failed to state a viable
claim under § 1692e(5). For one thing, although it is
crucial to their theory of liability, the plaintiffs have not
sufficiently alleged that the defendants did not intend to
proceed to trial when they initially filed their collection
complaints in state court. In support of this allegation, the
plaintiffs emphasize that the defendants moved to voluntarily
dismiss their lawsuits prior to trial––but that
does not plausibly suggest that the defendants had no
intention of ever going to trial in the first place. There
are many reasons why a litigant may eventually want to
dismiss its own case. That it ultimately seeks to do so does
not provide an adequate basis to broadly discern its original
intentions at the time of filing, much less to specifically
infer that it did not intend to prove its case at trial.
Accordingly, the plaintiffs' assertion that the
defendants filed suit without intending to go to trial is
based on speculation; it is not a well-pleaded factual
allegation supporting a plausible claim to relief. See
Runnion ex rel. Runnion v. Girl Scouts of Greater Chi. &
Nw. Ind., 786 F.3d 510, 526 (7th Cir. 2015) ("A
claim for relief must be plausible rather than merely
conceivable or speculative.").
plaintiffs' claim also fails for a more fundamental
reason: not only have they failed to show that the defendants
did not intend keep their supposed threat of going to
trial–– they have failed to show that the
defendants ever threatened to go to trial at all. As the
plaintiffs acknowledge, a threat, in the broadest sense,
involves a declaration of an intention to take some
action. Contrary to the
plaintiffs' supposition, however, the mere filing of a
civil action does not include an implicit declaration that
the plaintiff intends to advance the action all the way
through trial. Litigation is inherently a process.
And recovery through that process may be achieved in many
ways, and at different stages, of which trial is often not
the most cost-effective or desirable. Indeed, the typical
plaintiff at the outset of litigation likely hopes to recover
through a less cumbersome avenue, such as a settlement or
default judgment, and would rather avoid the expense,
inconvenience, and uncertainty of trial. That is not "trickery, "
Beler v. Blatt, Hasenmiller, Leibsker & Moore,
LLC, 480 F.3d 470, 473 (7th Cir. 2007); it is the
legitimate exercise of the plaintiff's discretion in
determining how to efficiently manage litigation by obtaining
an optimal outcome with limited resources.
respect, debt collectors who sue to recover a debt are no
different from any other plaintiff. They too must weigh the
anticipated costs of trial against the potential benefits
when considering how far to advance the litigation. Yet,
under the plaintiffs' theory, a debt collector who
foresees that it would not be cost-effective to proceed to
trial on a particular debt (and who therefore has no
intention of doing so) would be liable just for filing a
complaint. The debt collector would thus effectively be
barred from recourse to the courts, even when its claim is
unquestionably legitimate, and even when no other recourse is
left. The FDCPA does not compel this incongruous result.
Section 1692e(5) does not punish debt collectors for ...