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Bazile v. Finance System of Green Bay, Inc.

United States District Court, E.D. Wisconsin

February 15, 2019

SANDRA BAZILE, individually and on behalf of all others similarly situated, Plaintiff,



         Plaintiff Sandra Bazile, individually and on behalf of all others similarly situated, filed this action on September 11, 2018, alleging that Finance System of Green Bay, Inc. and several John Does (collectively, FSGB) violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. §§ 1692, et seq., when FSGB sent a letter to Bazile seeking to collect a debt she owed to Baycare Healthcare Systems, LLC (Baycare). Bazile alleges that FSGB's letter failed to disclose that the amount of the debt may increase due to the accrual of interest in violation of § 1692e and failed to state the amount of the debt in violation of § 1692g. Presently before the court is FSGB's motion to dismiss for lack of standing and for failure to state a claim. For the reasons that follow, FSGB's motion will be granted.


         A Rule 12(b)(6) motion to dismiss tests the sufficiency of the complaint by claiming that it fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6); Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). To survive a motion to dismiss under Rule 12(b)(6), the plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “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. Iqbal, 556 U.S. 662, 678 (2009). When reviewing a Rule 12(b)(6) motion to dismiss, a court must accept all well-pleaded facts as true and view them in a light most favorable to the plaintiff, Doe v. Village of Arlington Heights, 782 F.3d 911, 914-15 (7th Cir. 2015), but this obligation is inapplicable to legal conclusions. Iqbal, 556 U.S. at 678. Although, as a general matter, the confusing nature of a dunning letter is a factual question that, if well-pleaded, avoids dismissal under Rule 12(b)(6), dismissal is appropriate when it is “apparent from a reading of the letter that not even a significant fraction of the population would be misled by it.” Zemeckis v. Global Credit & Collection Corp., 679 F.3d 632, 635 (7th Cir. 2012) (citing Taylor v. Cavalry Inv., L.L.C., 365 F.3d 572, 574 (7th Cir. 2004)).


         Bazile received a letter dated September 19, 2017, from FSGB, a debt collector, who sought to collect a debt she owed to Baycare. The letter was the first written communication to Bazile in connection with the collection of her Baycare debt. Bazile's debt arose out of one or more transactions entered into primarily for personal, family, or household purposes-specifically medical services. The top-right corner of the letter lists the date, “9/19/2017, ” and a “Total Bal.” of $92.23. ECF No. 1-1. The letter lists five entries that comprise the total balance listed and next to each entry under the heading “Creditor Name” lists “Baycare Health Systems, Llc.” Id. The letter informs Bazile of several payment options, including payment over the phone via check or credit card or payment online via FSGB's website. The body of the letter begins: “Your creditor has placed your bill for collection.” Id. The bottom of the letter states that the letter is from a debt collector and is an attempt to collect a debt. It explains that unless the recipient notifies FSGB within 30 days after receiving the notice that he or she disputes the validity of the debt or any portion thereof, FSGB will assume the debt is valid. If the recipient does dispute the validity or any portion of the debt, FSGB states it will obtain verification of the debt or obtain a copy of a judgment and mail the verification or judgment to the recipient. Id.

         Bazile claims that the letter violates the FDCPA because it “does not disclose that the amount of the debt may increase due to the accrual of interest” and “fails to disclose the amount of the debt as required by the FDCPA.” Compl., ECF No. 1, at ¶¶ 33-34. Such failures, Bazile claims, violate §§ 1692e(2), (5), and (10) and 1692g(a)(1) of the FDCPA. Id. at ¶ 53. Bazile seeks relief in the form of actual damages, statutory damages of up to $1, 000, and, should she prevail, reasonable attorneys' fees and costs. Bazile also seeks to represent a class consisting of all consumers to whom FSGB mailed an initial written communication in the form of Bazile's letter to an address in Wisconsin between September 11, 2017 and October 2, 2018. Id. at ¶ 37. Should the class prevail, each named plaintiff would be entitled to statutory damages, and the class damages would be capped at the lesser of $500, 000 or 1% of FSGB's net worth. § 1692k(a).


         A. Standing

         FSGB first seeks to dismiss Bazile's complaint for lack of standing. Whether a plaintiff has standing is an issue of subject matter jurisdiction, as Article III of the United States Constitution “confines federal courts to adjudicating actual ‘cases' and ‘controversies.'” U.S. Const., art. III, § 2; Lujan v. Defenders of Wildlife, 504 U.S. 555, 559 (1991). The plaintiff bears the burden of showing that he or she is entitled to have the court decide the case. Allen v. Wright, 468 U.S. 737, 750-51 (1984). That is, the plaintiff must present the court with a justiciable case or controversy. Id. The first requirement of standing, and the focus of FSGB's motion to dismiss, is that the plaintiff must have suffered an injury-in-fact. Lujan, 504 U.S. at 560-61. When discussing this requirement, the Court in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016), noted that “Congress cannot erase Article III's standing requirements by statutorily granting the right to sue a plaintiff who would not otherwise have standing.” Id. at 1547-48 (citations omitted). However, the Court also recognized that intangible harm can constitute an injury-in-fact and that “Congress is well positioned to identify intangible harms that meet minimum Article III requirements.” Id. at 1549. The Court further explained that “Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” Id. (quoting Lujan, 504 U.S. at 580 (Kennedy, J., concurring in part and concurring in the judgment)). “[T]he violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact, ” such as where a “risk of real harm” exists. Id.; Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337, 344 (7th Cir. 2018). In such a case, the plaintiff “need not allege any additional harm beyond the one Congress has identified.” Spokeo, 136 S.Ct. at 1549.

         Bazile notes that this case was stayed pending this court's decision on a motion to dismiss in Larkin v. Finance System of Green Bay, Inc., No. 18-C-496, 2018 WL 5840769 (E.D. Wis. Nov. 8, 2018), and she argues that the resolution of the standing issue in that case controls here. The court agrees that the reasoning in Larkin applies equally in this case, as the facts here are not materially different from those in Larkin. Here, Bazile alleges that FSGB's letter was false, deceptive, and misleading and failed to state the amount of the debt in violation of §§ 1692e and 1692g. As this court articulated in Larkin, these allegations, if true, create a risk of causing Bazile the type of harm the FDCPA seeks to prevent. Bazile's injury may be intangible, but the injury is both concrete and particularized because Bazile is a direct recipient of the letter and a risk of real harm exists where the letter is false, deceptive, and misleading about Bazile's debt. Because Bazile need not allege any “additional harm, ” she has standing. See Spokeo, 136 S.Ct. at 1549.

         B. FDCPA Claims

         The FDCPA “is designed to protect consumers from abusive and unfair debt collection practices.” 15 U.S.C. § 1692(e); Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317, 320 (7th Cir. 2016). To help accomplish that goal, § 1692e prevents the use of false, deceptive, or misleading representations or means in connection with the collection of a debt and “§ 1692g(a) provides that in either the initial communication with a consumer in connection with the collection of a debt or another written notice sent within five days of the first, a debt collector must provide specific information to the consumer, ” including “the amount of the debt.” Janetos, 825 F.3d at 320-21. Bazile alleges that FSGB's letter's listing of the “Total Bal.” as $92.23, without disclosing that the debt may increase due the accrual of interest, violates multiple sections of § 1692e as well as § 1692g(a)(1). See Boucher v. Fin. Sys. of Green Bay, Inc., 880 F.3d 362, 371 (7th Cir. 2018) (“[W]hether the statement was misleading under § 1692e goes hand-in-hand with whether the amount of the debt has been accurately disclosed under § 1692g(a)(1).” (internal quotation marks omitted)).

         In this circuit, “[c]laims brought under the Fair Debt Collection Practices Act are evaluated under the objective ‘unsophisticated consumer' standard.” Gruber v. Creditors' Protection Serv.,Inc., 742 F.3d 271, 273 (7th Cir. 2014) (citations omitted). Although the unsophisticated consumer may be “uninformed, naive, [and] trusting, ” Veach v. Sheeks, 316 F.3d 690, 693 (7th Cir. 2003), “she has ‘rudimentary knowledge about the financial world' and is ‘capable of making basic logical deductions and inferences.'” Wahl v. Midland Credit Mgmt., Inc., 556 F.3d 643, 645 (7th Cir. 2009) (quoting Pettit v. Retrieval Masters Creditors Bureau, Inc., 211 F.3d 1057, 1060 (7th Cir. 2000)). This circuit's unsophisticated consumer standard “is not the same as the rejected least-sophisticated-debtor standard” that other courts use. Durkin v. Equifax Check Servs., Inc., 406 F.3d 410, 414 (7th Cir. 2005). The Seventh Circuit accordingly “disregard[s] unrealistic, peculiar, bizarre, and idiosyncratic interpretations of collection letters.” Id.; Gruber, 742 F.3d at 274. The unsophisticated consumer “is not a dimwit” and is “reasonable, ...

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