In Maclean v. Collection Bureau of Am., Ltd., No. 3:20-cv-00426-JLS-DEB, 2020 U.S. Dist. LEXIS 233508 (S.D. Cal. Dec. 11, 2020), Judge Sammartino dismissed an FDCPA claim based on language in a validation letter regarding fee accrual.
Defendant contends that the language included in the collection letter is appropriate and is nearly identical to the language relied on by multiple circuits as “safe harbor” language that a debt collector should use in a collection letter. Mot. at 5. Defendant argues Hutton v. Law Offices of Collins & Lamore is instructive. 668 F. Supp. 2d 1251 (S.D. Cal. 2009); Reply at 3. The Court agrees. In Hutton, the court dismissed the plaintiff’s Fair Debt Collections Act claims when the collection letter informed the plaintiff of his outstanding balance and that the outstanding balance “may not include accruing interest.” Id. at 1253. The court stated that “there is no way in a dunning letter to specify an amount of interest that may accrue in the future, given that the collector has no idea when, if at all, the debtor will pay up.” Id. at 1258. The Court believes the instant case presents an even stronger case for dismissal than in Hutton. Here, the language in the collection letter was almost identical to the safe harbor language articulated by Judge Posner in Miller. 214 F.3d at 876 (finding the safe harbor applies when the debt collector states: “As of the date of this letter, you owe $ [the exact amount due]. Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater.”). Plaintiff alleges that because the fees were itemized as $0.00 with the safe harbor statement following, Plaintiff believed that the itemized fees stating “$0.00” would fall within “other charges” and could increase if the debt was not timely paid. Opp’n at 10. Plaintiff contends that a consumer could, and would, equate the itemized “fees” as falling into the extremely broad category of “other charges. ” Id. at 12. The Court does not find the language to be misleading to the least sophisticated consumer. The statement that “other charges may vary from day to day,” being separate from the itemized section where fees are indicated as “$0.00,” would not cause a the least sophisticated consumer to believe that if the debt was not paid that these “fees” would then accrue as “other charges.” If so, Defendant would have used the terminology “fees” in the safe harbor statement as it did for “interest,” which was a term present in both the itemized section and the statement that followed. Plaintiff asserts that providing “N/A” instead of “$0.00” or leaving “fees” off entirely would not be misleading. Opp’n at 5. The Court disagrees and finds that “N/A” could be misleading because Defendant does have the legal ability to collect fees in the future. See Reply at 5. While Defendant could have provided additional language to clarify that “fees” were not included within “other charges,” the Court does not believe this rises to the level of misleading or deceptive. See Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015, 1027 (9th Cir. 2012) (affirming dismissal of FDCPA claim under 15 U.S.C. § 1692e based on the content of the letter, stating that “[w]hile the letter could have included additional clarifying language, we do not believe that the language of the letter goes so far as to be considered false, deceptive, or misleading”). Plaintiff also contends that Defendant never intended to collect additional fees at the time it sent the collection letter. Opp’n at 6. Plaintiff relies on Hoffman to argue that a representation that other charges and interest could “vary day to day” is misleading when these charges could only come about in the event that a debt was reduced to a judgment. Hoffman, 2019 U.S. Dist. LEXIS 66112, 2019 WL 1746353 at *3. Hoffman relies on Wisconsin law where only postjudgment interest and fees can be collected. See id. (“In this context, the debt collector misleads by implying that it could, as of the date of the letter, add ‘interest and other charges that may vary from day to day.'”). In contrast, under California law, prejudgment interest can be collected in a collection letter. See Diaz v. Kubler Corp., 785 F.3d 1326 (9th Cir. 2015) (“[P]rejudgment interest under section 3287(a) becomes available as of the day the amount at issue becomes calculable . . . mechanically, on the basis of uncontested and conceded evidence, and it is available as a matter of right.” (citation omitted)). Defendant was also lawfully able to collect late charges in the agreement. Therefore, the Court finds Hoffman inapplicable and unpersuasive. Defendant contends that Plaintiff’s claims “draw[] an arbitrary line” and even if found to be a misrepresentation, it is non-material and therefore not a violation under FDCPA. Reply at 4-7. The Court agrees. Even if the least sophisticated consumer would be misled to believe that the itemized fees could accrue, the Court does not find this alleged misrepresentation to be material. Plaintiff was informed that interest, late charges, and other charges could increase if the debt was not timely paid. The Court cannot reasonably believe that even if the least sophisticated consumer assumed that “fees” could accrue, such a perceived misrepresentation would cause the debtor to take a disadvantageous course of action. See Tourgeman v. Collins Fin. Servs., Inc., 755 F.3d 1109, 1121 (9th Cir. 2014) (holding material statements are those that could “cause the least sophisticated debtor to suffer a disadvantage in charting a course of action in response to the collection effort”). In sum, the Court finds that no part of the collection letter, standing alone or “read as a whole,” violates § 1692(e). See Gonzales, 660 F.3d at 1064. Plaintiff therefore fails to state a plausible claim that Defendant violated § 1692(e), § 1692(e)(2), § 1692(e)(5), and § 1692(e)(10) of the FDCPA. Accordingly, the Court GRANTS this portion of Defendant’s Motion.