Argued May 22, 2013
On Appeal from the United States District Court for the District of New Jersey (D. C. No. 3-12-cv-518) District Judge: Honorable Joel A. Pisano
Andy Winchell, Esq. (Argued) Law Offices of Andy Winchell Counsel for Appellants
Kenneth S. Jannette, Esq. Susan Power Johnston, Esq. (Argued) Counsel for Appellees
Before: RENDELL and GREENAWAY, JR., Circuit Judges and ROSENTHAL, District Judge [*]
ROSENTHAL, District Judge:
This appeal arises out of the intersection of the Bankruptcy Code and the Fair Debt Collection Practices Act. The issue is whether a debt collector's letter and notice requesting an examination under Federal Rule of Bankruptcy Procedure 2004 and offering to settle a debt, sent in a pending bankruptcy in contemplation of an adversary proceeding to challenge dischargeability, can be the basis for liability under the FDCPA.
A law firm, Weinstein & Riley, P.S., sent the letter and attached notice at issue on behalf of FIA Card Services, N.A., to both appellants, bankruptcy debtors Stacey Helene and Robert Maxwell Simon, through their bankruptcy counsel. The District Court dismissed the Simons' FDCPA suit arising from the letter and notice under Federal Rule of Civil Procedure 12(b)(6). The District Court held that the Bankruptcy Code provided the exclusive remedy for the alleged violations and precluded the FDCPA claims. The District Court also held that even if the FDCPA claims were not precluded, the Simons' complaint did not allege sufficient facts to state a claim. The Simons appealed. We will affirm in part, reverse in part, and remand.
On December 30, 2010, the Simons filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code, 11 U.S.C. §§ 701–84, in the United States Bankruptcy Court for the District of New Jersey. In re Simon, No. 10-50052 (Bankr. D.N.J. filed Dec. 30, 2010). The schedules submitted to the Bankruptcy Court identified an unsecured, nonpriority claim credit-card debt owed to Bank of America (now FIA). FIA retained Weinstein & Riley to represent it in the Simons' bankruptcy proceeding.
On January 28, 2011, Weinstein & Riley sent the letter and attached notice to both Mr. and Mrs. Simon through their bankruptcy counsel. The letter stated that FIA was considering filing an adversary proceeding under 11 U.S.C. § 523 to challenge the dischargeability of the credit-card debt. The letter included an offer to forego an adversary proceeding if the Simons stipulated that the credit-card debt was nondischargeable or if they agreed to pay a reduced amount to settle the debt. The letter stated that a Rule 2004 examination to gather information for filing an adversary proceeding had been scheduled for February 28, 2011, but that Weinstein & Riley was open to "discuss[ing] with your client whether the matter can be resolved without conducting the examination and/or to reschedule it for an informal telephone conference at a mutually agreeable time prior to the bar date." The bottom of the letter set out additional information about how to challenge the debt "[i]n the event that this letter is governed by the FDCPA."
Attached to the letter was a document entitled "NOTICE OF EXAMINATION IN ACCORDANCE WITH F.R.B.P. 2004 AND LOCAL RULE 2004-1." The notice identified the date and time for the Rule 2004 examinations and the place as Weinstein & Riley's offices in New York City or "upon written request, at an alternate location to be agreed upon by the parties." The notice included a statement that the Simons were to bring specified documents to the Rule 2004 examinations. The notice stated that "[p]ursuant to Local Rule 16, no order shall be necessary." The Simons alleged, and the appellees acknowledged at oral argument, that the notice was subject to the requirements for a subpoena under Federal Rule of Bankruptcy Procedure 9016 and Federal Rule of Civil Procedure 45.
At the bottom of the subpoena was a certificate signed by a Weinstein & Riley attorney. The certificate stated that "a true and correct copy of the foregoing has been mailed on January 28, 2011 to the above address." Two addresses were listed: the Simons' home in New Jersey and their bankruptcy counsel's office. The Simons allege that they did not receive a copy at their home address and that Weinstein & Riley did not in fact send a copy there. The Simons' bankruptcy counsel received the copies sent to his office.
The Simons filed a motion in the Bankruptcy Court to quash the Rule 2004 examination notices on the ground that they failed to comply with the Bankruptcy Rule 9016 and Civil Rule 45 subpoena requirements. On February 23, 2011, the Simons filed an adversary proceeding asserting FDCPA claims against FIA and Weinstein & Riley. The Bankruptcy Court quashed the Rule 2004 examination notices. The Bankruptcy Court later ruled that it lacked subject-matter jurisdiction over the FDCPA claims and dismissed them without prejudice.
The Simons then sued FIA and Weinstein & Riley in the Federal District Court for the District of New Jersey. They alleged that the letters and subpoenas violated the FDCPA prohibition on false, deceptive, and misleading debt-collection practices under 15 U.S.C. § 1692e(5), (11), and (13). The appellees moved to dismiss on three grounds: (1) the FDCPA claim was precluded by the Bankruptcy Court's earlier dismissal of the adversary proceeding the Simons had filed; (2) the complaint did not state a claim; and (3) the allegations from which the FDCPA claims arose were governed exclusively by the Bankruptcy Code.
On July 16, 2012, the District Court dismissed the FDCPA suit, with prejudice, stating that the "FDCPA claims [were] precluded by the Bankruptcy Code" and that the complaint "does not appear to set forth sufficient factual allegations to state a claim" under the FDCPA. Simon v. FIA Card Servs., N.A., Civ. No. 12-518, 2012 WL 2891080, at *4 (D.N.J. 2012).
The Simons timely appealed from the dismissal order.
II. The Standard of Review
Under Rule 12(b)(6), a motion to dismiss may be granted only if, accepting the well-pleaded allegations in the complaint as true and viewing them in the light most favorable to the plaintiff, a court concludes that those allegations "could not raise a claim of entitlement to relief." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007). We review de novo an order granting a Rule 12(b)(6) motion. Mariotti v. Mariotti Bldg. Prods., Inc., 714 F.3d 761, 765 (3d Cir. 2013).
A. Whether the Complaint Stated Claims Under the FDCPA
Section 1692e of the FDCPA prohibits debt collectors from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt." The Simons alleged that the letter and notice violated § 1692e(5), (11), and (13). Section 1692e(5) states that a debt collector may not make a "threat to take any action that cannot legally be taken or that is not intended to be taken." Section 1692e(13) prohibits a debt collector from making a "false representation or implication that documents are legal process."
The Simons alleged that by sending the letter and attached notice, Weinstein & Reilly and FIA violated § 1692e(5) and (13) in four ways:
• By intentionally failing to send the letter and subpoena to the Simons and instead sending the documents to their attorney, violating Civil Rule 45(b)(1)'s requirement that subpoenas be served directly on the individuals subpoenaed.
• By specifying the location for the Rule 2004 examinations as the Weinstein & Riley office in New York, rather than in New Jersey. The Simons alleged that this violated Civil Rule 45(a)(2)(B)'s requirement that a subpoena be issued "from the court for ...