United States District Court, D. New Jersey
MCNULTY, UNITED STATES DISTRICT JUDGE.
Amended Complaint filed by plaintiff Carla Diaz in this
removed case alleges defendant Midland Funding, LLC
("Midland") violated the Fair Debt Collection
Practices Act (the "FDCPA"), 15 U.S.C. § 1692
et seq. in two ways: via an unlawful demand
for attorney's fees and an unauthorized disclosure of
Diaz's Social Security number ("SSN"). Midland
moves pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss the
Complaint for failure to state a claim upon which relief may
be granted (ECF no. 7), and for sanctions (ECF no. 8). For
the reasons stated herein, the motion to dismiss is granted,
but the motion for sanctions is denied.
allegations of the Amended Complaint assumed to be true for
purposes of the motion to dismiss, may be summarized as
Diaz allegedly owed a past-due obligation on a Citibank/Sears
credit card account. (AC ¶ 14 & Ex. A (Collection
Midland, a debt collector (AC ¶¶ 9-10), acquired
the debt by assignment.
approximately December 18, 2015, Midland filed a collection
action against Diaz in New Jersey Superior Court, Law
Division, Special Civil Part, Bergen County. (AC ¶¶
17-18 & Ex. A (Collection Cplt.)) The Collection Complaint
asserted causes of action for breach of contract, unjust
enrichment, and account stated. The prayer for relief reads
WHEREFORE, Plaintiff demands judgment
against Defendant in the sum of $1, 196.05 together with
costs and disbursements of this action, attorneys' fees,
and such otfier further relief as this Court may deem just
Cplt., text following ¶ 19)
This language is alleged to be "materially false,
deceptive, and misleading." Specifically, "it
falsely states that Midland is legally and/or contractually
allowed to charge attorney's fees." (AC ¶ 28)
In fact, the Complaint alleges, the collection of
attorney's fees is unlawful; in addition, Midland does
not incur reimbursable attorney's fees when it uses
in-house counsel. (AC ¶¶ 31. 32)
The Complaint next alleges that the Collection Complaint
incompletely redacted Ms. Diaz's SSN. Specifically, it
redacted the first five digits, thus publicly disclosing the
final four digits of the SSN. (AC ¶¶ 34-36) This,
alleges Diaz, violated N.J. Ct. R. l:38-7(b)
("Confidential Personal Identifiers"), which
requires that only three digits be revealed. (See AC
¶¶ 40-41) More precisely, it seems that the body of
die Collection Complaint permissibly disclosed only three
digits of the SSN (see Collection Cplt. p. 1); an exhibit to
the complaint, a printout of credit information, seems to be
the source of the "four digit" allegation
(Collection Cplt. Ex. Al, ECF no. 1-1 at 23). Because the
entire SSN is masked by Diaz in her federal court submission,
however, it is difficult to tell.
action, originally filed in State court, was removed to
federal court on March 23, 2017. (ECF no. 1) Earlier the same
day, Diaz had amended her complaint to add allegations
relating to incomplete redaction of her Social Security
number. Diaz's Amended Complaint alleges a single cause
of action under FDCPA, 15 U.S.C. §§ 1692e and
1692f, as well as various subsections thereunder. (AC
¶¶ 46-52) It seeks damages, attorney's fees,
Fed.R.Civ.P. 12(b)(6), the defendant, as the moving party,
bears the burden of showing that no claim has been stated.
Animal Science Products, Inc. v. China Minmetals
Corp., 654 F.3d 462, 469 n. 9 (3d Cir. 2011). For the
purposes of a motion to dismiss, the facts alleged in the
complaint are accepted as true and all reasonable inferences
are drawn in favor of the plaintiff. New Jersey
Carpenters & the Trustees Thereof v. Tishman Const. Corp. of
New Jersey, 760 F.3d 297, 302 (3d Cir.
Rule of Procedure 8(a) does not require that a complaint
contain detailed factual allegations. Nevertheless, "a
plaintiffs obligation to provide the 'grounds' of his
'entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do." Bell Ml. Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Thus, the
complaint's factual allegations must be sufficient to
raise a plaintiffs right to relief above a speculative level,
so that a claim is "plausible on its face."
Id. at 570; see also West Run Student Housing
Assocs., LLC v. Huntington Nat. Bank, 712 F.3d 165, 169
(3d Cir. 2013). That facial-plausibility standard is met
"when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged." Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556). While "[t]he
plausibility standard is not akin to a 'probability
requirement'. . . it asks for more than a sheer
possibility." Iqbal, 556 U.S. at 678.
FDCPA Claim Based on Prayer for Attorney's Fees
consider the claim that the Collection Complaint's prayer
for attorney's fees violated the FDCPA.
state a claim under the FDCPA, a plaintiff must allege that
"(1) she is a consumer, (2) the defendant is a debt
collector, (3) the defendant's challenged practice
involves an attempt to collect a 'debt' as the Act
defines it, and (4) the defendant has violated a provision of
the FDCPA in attempting to collect the debt."
Douglass v. Convergent Outsourcing, 765 F.3d 299,
303 (3d Cir. 2014); see also Piper v. PortnoffLaw
Assocs., Ltd., 396 F.3d 227, 232 (3d Cir. 2005);
Johns v. Northland Grp., Inc., 76 F.Supp.3d 590, 597
(E.D. Pa. 2014).
element 4-a violation of a provision of the FDCPA-the
Complaint cites numerous sections and subsections. Most
pertinent to the attorney's-fees allegation would be the
following: 15 U.S.C. § 1692e (blanket prohibition on use
of a "false, deceptive, or misleading representation or
means in connection with the collection of any debt.");
id. § 1692e(10) ("The use of any false
representation or deceptive means to collect or attempt to
collect any debt or to obtain information concerning a
consumer."); id. § 1692f(1) (prohibiting
"collection of any amount. . . unless such amount is
expressly authorized by the agreement creating the debt or
permitted by law.").
plaintiff stresses that in misleading-representation cases,
courts routinely apply the "least sophisticated
debtor" standard when "analyzing] the communication
giving rise to the FDCPA claim." Kaymark v. Bank of
Am., N.A., 783 F.3d 168, 174 (3d Cir. 2015) (quoting
Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir.
2008)). The Third Circuit explained that standard in
Jensen v. Pressler & Pressler.
Although the least sophisticated debtor standard is
"lower than the standard of a reasonable debtor, "
it "preserv[es] a quotient of reasonableness and
presum[es] a basic level of understanding and willingness to
read with care." Id. (quoting Wilson v.
Quadramed Corp., 225 F.3d 350, 354-55 (3d Cir.2000)). In
so doing, it "give[s] effect to the Act's intent to
'protect[ ] the gullible as well as the shrewd, '
" Campuzano-Burgos v. Midland Credit Mgmt,
Inc., 550 F.3d 294, 298 (3d Cir.2008) (second alteration
in original) (quoting Brown, 464 F.3d at 453).
The standard is an objective one, meaning that the specific
plaintiff need not prove that she was actually
confused or misled, only that the objective least
sophisticated debtor would be. See Pollard v. Law Office
of Mandy L. Spaulding, 766 F.3d 98, 103 (1st Cir.2014)
f[T]he FDCPA does not require that a plaintiff actually be
confused."); Bentley v. Great Lakes Collection
Bureau, 6 F.3d 60, 62 (2d Cir. 1993) ("We apply an
objective test based on the understanding of the least
sophisticated consumer' in determining whether a
collection letter violates section 1692e."). Thus,
"the FDCPA enlists the efforts of sophisticated
consumers ... as 'private attorneys general' to aid
their less sophisticated counterparts, who are unlikely
themselves to bring suit under the Act, but who are assumed
by the Act to benefit from the deterrent effect of civil
actions brought by others." Jacobson v. Healthcare
Fin. Servs., Inc., 516 F.3d 85, 91 (2d Cir. 2008).
F.3d 413, 418-19 (3d Cir. 2015). See also Brown v. Card
Serv. Ctr., 464 F.3d 450, 454 (3d Cir. 2006)
("[A]ny lender-debtor communications potentially giving
rise to claims under the FDCPA . . . should be analyzed from
the perspective of the least sophisticated
misleading or wrongful communication in the Collection
Complaint is alleged to be this:
Plaintiff demands judgment against Defendant in the sum of
$1, 196.05 together with costs and disbursements of this
action, attorneys'fees, and such other further
relief as this Court may deem just and proper.
Cplt., text following ¶ 19; italic emphasis
persuasively contends that this cannot be regarded as
"misleading" or as an attempt to collect amounts
not "permitted by law." See 15 U.S.C.
§§ 1692e, 1692f. This Collection Complaint was
filed in New Jersey Superior Court, Special Civil
Special Civil Part, an award of fees is not only permitted,
but required, as part of the taxation of costs in
favor of a prevailing plaintiff:
There shall be taxed by the clerk of the Superior Court, Law
Division, Special Civil Part in the costs against the
judgment debtor, a fee to the attorney of the prevailing
party, of five per centum (5%) of the first five hundred
dollars ($500.00) of the judgment, and two per centum (2%) of
any excess thereof.
Stat. Ann. § 22A:2-42. See also Chase Bank USA, N.A.
v. Staffenberg, 419 N.J.Super. 386, 398, 17 A.3d 239
for this reason that courts in this District have dismissed
similar FDCPA claims-in one case, brought by this very
attorney against this very defendant. See Garcia v.
Midland Funding LLC, No. 16-5248, 2017 WL 215971, at *1
(D.N.J. Jan. 7, 2017) (dismissing similar complaint against
Midland) (Linares, J.); Scioli v. Goldman & Warshaw