United States District Court, D. New Jersey
ADRIANE GENOVA, on behalf of herself and others similarly situated, Plaintiff,
IC SYSTEM, INC. and JOHN DOES 1-25, Defendants.
MADELINE COX ARLEO, UNITED STATES DISTRICT JUDGE
MATTER comes before the Court on Defendant IC System,
Inc.'s (“Defendant”) motion to dismiss
Plaintiff Adriane Genova's (“Plaintiff”)
Amended Complaint. Dkt. No. 10. For the reasons set forth
below, the motion is GRANTED in part and DENIED in part.
putative class action lawsuit, Plaintiff alleges that
Defendant used unfair and unconscionable means to attempt to
collect a debt, in violation of the Fair Debt Collections
Practices Act (“FDCPA”), 15 U.S.C. § 1692,
time prior to September 29, 2015, Plaintiff incurred a debt
to Preventive Healthcare Association (“PHA”). Am.
Compl. ¶ 17. Subsequently, PHA hired Defendant to
collect the debt, which it alleged was past due. Id.
¶¶ 21, 23. On September 29, 2015, Defendant sent a
letter to Plaintiff in an attempt to collect on the debt.
Id. ¶ 24. Among other things, the front of the
letter included the following information:
Principal Due: $326.83
Collection Charge Due: $55.56
BALANCE DUE: $382.39
Id. ¶ 27 (emphasis in original).
$55.56 Collection Charge (“Collection Charge”)
was a 17% contingent fee, which represented Defendant's
anticipated compensation if it successfully collected on the
debt. Id. ¶¶ 28-32. Because Defendant had
not yet recovered any funds from Plaintiff at the time the
letter was sent, it was not then entitled to any contingent
fee and Plaintiff was not liable for any such fee.
Id. ¶¶ 33-24. In addition, the collection
charge purportedly bears no relation to and is substantially
greater than costs actually incurred by Defendant or PHA in
their attempts to collect the debt. Id. ¶ 35.
Plaintiff contends that Defendant has transmitted thousands
of similar letters to consumers. Id. ¶ 36.
September 15, 2016, Plaintiff filed a Complaint against
Defendant. Dkt. No. 1. On October 25, 2016, Defendant filed a
motion to dismiss the Complaint. Dkt. No. 10. On November 7,
2016, Plaintiff filed an Amended Complaint. Dkt. No. 7. The
Amended Complaint alleges that Defendant's representation
that Plaintiff owed the Collection Charge violated 15 U.S.C.
§§ 1692e, 1692e(2)(A), 1692e(5), 1692e(10), 1692f,
and 1692f(1) because the fee was not yet incurred and was not
expressly authorized by the contract underlying the debt. Am.
Compl. ¶¶ 38-40, 44-48, 49-53. In other words,
Defendant's letter misled consumers by creating the false
impression that it had incurred a collection fee, when in
fact it had not. Id. ¶ 37.
November 21, 2016, Defendant filed a motion to dismiss the
Amended Complaint. Dkt. No. 10. In its motion to dismiss,
Defendant makes five primary arguments: (1) that Plaintiff
does not have Article III standing to maintain this action;
(2) that Plaintiff's claims fail because the Collection
Charge was expressly authorized by the contract underlying
her debt; (3) that Plaintiff's claims fail because
Defendant's alleged misstatement was not
“material”; (4) that Plaintiff's claims under
Section 1692f must be dismissed as duplicative of her claims
under Section 1692e; and (5) that Plaintiff's class
allegations must be struck because she cannot satisfy Rule
23's numerosity and ascertainability requirements. Each
of these will be addressed in turn.
Article III Standing
first argues that the Amended Complaint must be dismissed
because Plaintiff's alleged statutory harm under the
FDCPA is insufficient to demonstrate an injury-in-fact. The
III of the United States Constitution limits the jurisdiction
of federal courts to actual “cases” or
“controversies.” U.S. Const., art. III, § 2.
To establish Article III standing, a plaintiff must
demonstrate: (1) an “injury in fact”; (2) a
“causal connection between the injury and the conduct
complained of”; and (3) a likelihood “that the
injury will be redressed by a favorable decision.”
Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61
(1992) (quotations omitted). To establish an injury-in-fact,
a plaintiff must show that “he or she suffered
‘an invasion of a legally protected interest' that
is ‘concrete and particularized' and ‘actual
or imminent, not conjectural or hypothetical.'”
Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1548 (2016)
(quoting Lujan, 504 U.S., at 560). To be
“particularized, ” an injury “must affect
the plaintiff in a personal and individual way.”
Id. (quotation omitted). A “concrete”
injury is “de facto; that is, it must actually
exist.” Id. (quotations omitted).
Supreme Court recently declared in Spokeo, Inc. v.
Robins that “Congress' role in identifying and
elevating intangible harms does not mean that a plaintiff
automatically satisfies the injury-in-fact requirement
whenever a statute grants a person a statutory right and
purports to authorize that person to sue to vindicate that
right.” Id. at 1549. In this way, a
“bare procedural violation, divorced from any concrete
harm, ” cannot satisfy Article III's injury-in-fact
requirement. Id. Relying on these pronouncements,
Defendant contends that Spokeo “changed the
landscape for class action litigation based on technical
violations of federal statutes.” Def.'s Br. at 8,
Dkt. No. 10-1. So the argument goes, because Plaintiff merely
received a letter containing a misstatement of a debt-but did
not actually pay it-her alleged harm only amounts to a
“bare procedural violation” of the FDCPA and is
insufficiently concrete to confer Article III standing.
the Third Circuit has repeatedly observed, Spokeo
did not transform the requirements for standing. See In
re Horizon Healthcare Servs. Inc. Data Breach Litig.,
846 F.3d 625, 637-38 (3d Cir. 2017) (“[W]e do not
believe that the Court so intended to change the traditional
standard for the establishment of standing . . . .”);
In re Nickelodeon Consumer Privacy Litig., 827 F.3d
262, 273 (3d Cir. 2016), cert. denied sub nom. C. A. F.
v. Viacom Inc., 137 S.Ct. 624 (2017) (“The Supreme
Court's recent decision in Spokeo, Inc. v.
Robins does not alter our prior analysis . . .
.”). In fact, Spokeo itself reaffirmed that
Congress “‘has the power to define injuries'
. . . ‘that were previously inadequate in law,
'” and thus may pass “‘statutes
creating legal rights, the invasion of which creates
standing, ' even absent evidence of actual monetary
loss.” In re Horizon, 846 F.3d at 636, 638
(quoting Spokeo, 136 S.Ct. at 1549 and In re
Google Inc. Cookie Placement Consumer Privacy
Litigation, 806 F.3d 125, 134 (3d Cir. 2015)) (emphasis
removed). In such cases-where the plaintiff alleges a
statutory violation-the Court must determine whether Congress
has “elevat[ed]” the harm “to the status of
legally cognizable injur[y].” Spokeo, 136
S.Ct. at 1549 (quotations omitted).
Spokeo, numerous courts have considered whether a
violation of the FDCPA can give rise to a concrete injury
under Article III. These courts have noted that Congress
enacted the FDCPA to “eliminate abusive debt collection
practices by debt collectors” and promote further
action to “protect consumers against debt collection
abuses.” 15 U.S.C. § 1692. It follows that
“[t]he right congress sought to protect in enacting
this legislation was . . . not merely procedural, but
substantive and of great importance.” Blaha v.
First National Collection Bureau, No. 16-2291 (D.N.J.
Nov. 10, 2016), Slip Op., at *16. Accordingly, the vast
majority of courts have concluded that violations of the
FDCPA give rise to injuries that are sufficiently concrete to
confer standing under Article III. See, e.g.,
Fuentes v. AR Res., Inc., No. 15-7988, 2017 WL
1197814, at *5 (D.N.J. Mar. 31, 2017) (“[T]his Court
joins the overwhelming majority of courts that have
determined that FDCPA violations under §§ 1692e and
1692f give rise to concrete, substantive injuries sufficient
to establish Article III standing.”) (quotation
omitted); Pisarz v. GC Servs. Ltd. P'ship, No.
16-4552, 2017 WL 1102636, at *5 (D.N.J. Mar. 24, 2017)
(noting that “[s]ince Spokeo was decided, the
overwhelming majority of courts that have faced Article III
standing challenges in FDCPA cases . . . have determined that
a violation of the FDCPA produces a ‘concrete
injury'”) (quotation omitted).
fact, a number of courts have specifically held that where,
as here, a debt collector demands collection costs or other
fees before they are incurred and if not authorized by the
contract, the alleged FDCPA violation constitutes an
injury-in-fact under Article III. As recently explained by a
court in this district:
Plaintiff has a substantive, statutory right under the FDCPA
to be free from false or deceptive information in connection
with the collection of a debt, which is alleged to have been
infringed by Defendant's representation that it was
entitled to charge a fee that is alleged to be neither
authorized by law nor permitted by the contractual terms of
Plaintiff's underlying debt instrument. Plaintiff was
thus placed at risk of economic injury by potentially being
deceived into paying a fee that was legally barred. . . .
Accordingly, even after Spokeo, because Congress has
defined statutory injuries under the FDCPA that do not
require actual, pecuniary injury, where, as in the case of
the receipt of a ...