July 9, 2019
from the United States District Court for the Eastern
District of Wisconsin. No. l:18-cv-01084-WCG - William C.
Griesbach, Chief Judge.
Kanne, Hamilton, and Scudder, Circuit Judges.
Hamilton, Circuit Judge.
Patricia Ann Koehn brought this suit against a collection
agency, alleging that its collection letter was misleading
and violated the Fair Debt Collection Practices Act, 15
U.S.C. § 1692 et seq. The district court granted the
collection agency's motion to dismiss for failure to
state a claim, concluding that no significant fraction of the
population would be misled by the letter. We agree and
letter to Koehn was from defendant Delta Outsource Group,
Inc. The letter said that the "current balance" of
Koehn's debt was $2, 034.03. Koehn contends the letter
was misleading because (a) the phrase "current
balance" implied that her balance could grow, even
though (b) her account was actually "static, "
meaning that additional interest and fees could no longer be
added to the balance. She contends the phrase "current
balance" thus violated 15 U.S.C. § 1692g(a)(1),
which requires a debt collector to state "the amount of
the debt, " and § 1692e, which prohibits more
generally "any false, deceptive, or misleading
representation or means in connection with the collection of
any debt." By falsely implying that the "current
balance" might increase, she contends, the debt
collector's choice of wording will mislead debtors to
give such static debts greater priority than they otherwise
moved to dismiss Koehn's complaint under Federal Rule of
Civil Procedure 12(b)(6) for failure to state a claim. Delta
argued that it is apparent from the face of the letter that
no significant fraction of the population would be misled by
it. See Zemeckis v. Global Credit & Collection
Corp., 679 F.3d 632, 636 (7th Cir. 2012), quoting
Taylor v. Cavalry Investment, L.L.C., 365 F.3d 572,
574 (7th Cir. 2004) (applying "significant
fraction" standard). In response, Koehn relied on
Chuway v. National Action Financial Services, Inc.
362 F.3d 944 (7th Cir. 2004), to argue that "current
balance" (as opposed to "balance") can mislead
debtors. Chief Judge Griesbach correctly read Chuway
more narrowly than Koehn does, and he granted the motion to
state a legally viable claim, Koehn needed to allege
plausibly that Delta's use of the "current
balance" phrase "would materially mislead or
confuse an unsophisticated consumer." Boucher v.
Finance System of Green Bay, Inc., 880 F.3d 362, 366
(7th Cir. 2018). An unsophisticated consumer is
"uninformed, naive, or trusting, " Veach v.
Sheeks, 316 F.3d 690, 693 (7th Cir. 2003), but
nonetheless possesses "reasonable intelligence, "
basic knowledge about the financial world, and "is wise
enough to read collection notices with added care."
Gruber v. Creditors' Protection Service, Inc.,
742 F.3d 271, 273 (7th Cir. 2014) (quotations omitted).
a dunning letter will mislead or confuse is often a question
of fact that cannot be resolved on a motion to dismiss.
Zemeckis, 679 F.3d at 636. In addition, the federal
judges who must decide such motions are not necessarily good
proxies for the "unsophisticated consumers"
protected by the FDCPA. See, e.g., McMahon v. LVNV
Funding, LLC, 744 F.3d 1010, 1020 (7th Cir. 2014);
Johnson v. Revenue Management Corp., 169 F.3d 1057,
1060 (7th Cir. 1999). Still, if it is apparent that "not
even a significant fraction of the population would be
misled" by a collection letter, then the complaint can
and should be dismissed. Zemeckis, 679 F.3d at 636.
We do not see anything inherently misleading in the phrase
district court read Chuway correctly as not
extending to this case. The dunning letter in Chuway
said that the debtor's "balance" was a
specified amount. It went on to request payment but added:
"To obtain your most current balance information, please
call" a toll-free telephone number. 362 F.3d at 947. We
said that if the letter had stopped after the request for
payment, "the defendant would be in the clear."
Id. That hypothetical assurance applies to this
case. But the further instruction in Chuway to call
to "obtain your most current balance information caused
the problem. That instruction implied to the debtor that the
amount he owed might actually be different from the
"current balance" set forth in the dunning letter.
The letter implied that the only way the debtor could obtain
the current balance was to call the debt collector (although
in fact the printed balance was not subject to change). That
was a reasonable interpretation of the letter, which was
sufficient to meet plaintiff's burden of proof of a
violation of the statute. Id. at 947-48 (noting also
that "the entire bench was confused about the meaning of
the letter until the defendant's lawyer explained it to
us at oral argument").
thus did not reach as far as the common and innocuous
language plaintiff challenges here. And in Barnes v.
Advanced Call Center Technologies, LLC, 493 F.3d 838
(7th Cir. 2007), we affirmed summary judgment for a debt
collector who used the phrase "Current Amount Due"
on the "tearoff" section of the collection letter.
"Absent some particularly ambiguous language in the rest
of the letter, we cannot see how an unsophisticated consumer
would interpret the tearoff to indicate that anything other
than the 'Current Amount Due' was 'the amount of
the debt.'" Id. at 841.
letter challenged here contains no directive to call for a
"current balance, " nor does it include any
language implying that "current balance" means
anything other than the balance owed. We have cautioned
before: "The Act is not violated by a dunning letter
that is susceptible of an ingenious misreading, for then
every dunning letter would violate it." White v.
Goodman, 200 F.3d 1016, 1020 (7th Cir. 2000), quoted in
Chuway, 362 F.3d at 948. It takes an ingenious
misreading of this letter to find it misleading. And that
same ingenuity would call into question the even simpler
phrase that "the balance is $." After all, the
simple present-tense verb "is" also implies
"current, " doesn't it?
letters can comply with the Fair Debt Collection Practices
Act without answering all possible questions about the
future. A lawyer's ability to identify a question that a
dunning letter does not expressly answer ("Is it
possible the balance might increase?") does not show the
letter is ...