In Pollard v. Law Office of Mandy L. Spaulding— F.3d —-, 2014 WL 4402213 (1st Cir. 2014), the 1st Circuit Court of Appeals found that an attorneys’ debt collection letter contained threats that overshadowed a consumer’s 30-day right to dispute under the FDCPA.
On October 23, 2012, the defendant sent the plaintiff a collection letter (a copy of which appears as an appendix to this opinion). This letter was typed on the defendant’s letterhead over the signature “Mandy L. Spaulding, Esq.” The letter explained that the defendant had been retained to collect the monies allegedly owed and was “not inclined to use further resources attempting to collect this debt before filing suit.” It further explained that the defendant planned to collect the debt “through whatever legal means are available and without [the plaintiff’s] cooperation.” It went on to inform the plaintiff that the defendant was “obligated to [ its] client to pursue the next logical course of action without delay” and described how the plaintiff could make payments. Below the signature block, in smaller print, were several paragraphs preceded by the caption “NOTICE OF IMPORTANT RIGHTS.” These paragraphs contained the statutorily mandated notice of consumer rights. See id. § 1692g(a)(3)-(5). Following her receipt of this collection letter, the plaintiff contacted the defendant to dispute ownership of the debt and request validation.
The First Circuit Court of Appeals found no Article III impediment to the plaintiff maintaining the cause of action despite having suffered no injury.
In cases in which a plaintiff’s injury stems solely from the violation of a statute, the nature of the right that the statute confers is of paramount concern. See Warth, 422 U.S. at 500; Merrimon, ––– F.3d at –––– [slip op. at 9]; Tourgeman v. Collins Fin. Servs., Inc., 755 F.3d 1109, –––– (9th Cir.2014) [slip op. at 8–9]. This principle is leavened by the corollary principle that Congress cannot confer standing beyond the boundaries of Article III, that is, upon individuals who have not suffered a concrete injury. See Summers v. Earth Island Inst., 555 U.S. 488, 497 (2009). As a result, a plaintiff always must be able to demonstrate that she suffered some “personal and tangible harm.” Hollingsworth, 133 S.Ct. at 2661. Section 1692g prohibits debt collectors from sending collection letters that overshadow or are otherwise inconsistent with the required validation notice. Debt collectors who transgress that prohibition are liable to consumers for actual and statutory damages. See 15 U.S.C. § 1692k. Refined to bare essence, the FDCPA bestows upon consumers a right not to receive communications that overshadow or are inconsistent with the validation notice. Cf. Tourgeman, 755 F.3d at –––– [slip op. at 6, 9, 12] (characterizing analogous right conferred by section 1692e as the right not to be the target of misleading communications). The invasion of a statutorily conferred right may, in and of itself, be a sufficient injury to undergird a plaintiff’s standing even in the absence of other harm. See Havens, 455 U.S. at 373–74 (holding that plaintiff suffered cognizable injury when defendant violated statutory right to truthful housing information, notwithstanding plaintiff’s lack of any intention to rent or purchase home). That is the case here: the FDCPA does not require that a plaintiff actually be confused. See Jacobson v. Healthcare Fin. Servs., Inc., 516 F.3d 85, 91 (2d Cir.2008). Seen in this light, the absence of confusion is irrelevant to the standing inquiry. The short of it is that the plaintiff adequately alleged that her personal right was violated when she received the collection letter. That comprised an injury attributable to the defendant’s actions—an injury that will be redressed by an award of damages. No more is exigible to confirm the plaintiff’s Article III standing.
The First Circuit Court of Appeals found that the attorney’s letter overshadowed the debtor’s validation rights.
We share the view of the Third Circuit that “[u]nder the [FDCPA], attorney debt collectors warrant closer scrutiny because their abusive collection practices are more egregious than those of lay collectors.” Campuzano–Burgos v. Midland Credit Mgmt., Inc., 550 F.3d 294, 301 (3d Cir.2008) (internal quotation marks omitted). Thus, “[a]n unsophisticated consumer, getting a letter from an attorney, knows the price of poker has just gone up.” Avila, 84 F.3d at 229 (internal quotation marks omitted). An attorney’s imprimatur conveys authority and induces a consumer to act more quickly. See id. With this in mind, it would be naive for a court to ignore the source of a collection letter. That the letter in this case was signed by an attorney reinforces the perception that it threatens immediate litigation. . . The defendant complains that the district court should not have faulted it for not including “transitional” language (that is, language explaining the interface between its threat of suit and the plaintiff’s rights) in its collection letter. It correctly points out that the FDCPA does not require any such language, and it laments that the court below gratuitously grafted this additional requirement onto the statute. This plaint contains more cry than wool. A debt collector is, of course, free to demand immediate payment or (sometimes) even to file suit during the thirty-day validation period. But pursuing such a multi-directional course can lead to confusion,FN7 and debt collectors remain firmly bound by the FDCPA’s command not to overshadow or be inconsistent with the validation notice. See Ellis v. Solomon & Solomon, P.C., 591 F.3d 130, 136–37 (2d Cir.2010). The simplest way for a debt collector to ensure that its payment demand does not create confusion is to provide a brief, lucid explanation of how collector and consumer rights interact during the validation period. Two courts of appeals have gone so far as to offer sample language. See Savino v. Computer Credit, Inc., 164 F.3d 81, 86 (2d Cir.1998); Bartlett, 128 F.3d at 501–02 Although the FDCPA does not require such an explanation, it does require that collection letters not be confusing. A debt collector who chooses to brandish threats of litigation must take pains to ensure that those threats do not obnubilate or undercut the required validation notice. In evaluating whether a collection letter breeds confusion, a district court thus acts well within its proper province in noting that a debt collector could easily have included explanatory language but chose not to do so. So it is here. Relatedly, the defendant argues that its collection letter contains language sufficient to dispel any confusion. To be specific, it argues that the second sentence of the second paragraph of its validation notice adequately explains the interaction between its right to initiate litigation and the plaintiff’s validation rights. But as we already have explained, the sentence itself is unintelligible and, thus, obfuscates more than it clarifies. Moreover, the sentence only reinforces the defendant’s intent to file suit forthwith, regardless of whether or not the plaintiff were to seek validation of the debt. That emphasis hardly advances the defendant’s argument.