Dealing with Progressive Insurance and Receivable Management Services for Debt Collection

This matter is before the Court on Defendants Motion to Dismiss (ECF No. 5). According to Rules 12(b)(1) and (6) of the Federal Rules of Civil Procedure, the defendant wants the plaintiff’s complaint to be thrown out because it doesn’t belong in this court and the plaintiff hasn’t made out a claim. Since the motion has been fully briefed, the Court does not need to hear oral arguments. This is because the facts and legal arguments are sufficiently set out in the materials before the Court, and hearing oral arguments would not help the decision-making process. E. D. Va. Loc. Civ. R. 7(J). For the reasons stated below, the Motion to Dismiss will be granted without prejudice.

It’s said to be a class action brought under the Fair Debt Collection Practices Act (FDCPA or “Act”) and Rule 23 of the Federal Rules of Civil Procedure. Defendant The Receivable Management Services, LLC (“Defendant” or “RMS”) and twenty-five “John Doe” Defendants were sued by Plaintiff Sanchez Blaise (“Blaise” or “Plaintiff”). The lawsuit was filed on January 4, 2021. (Compl. , ECF No. 1. ) Blaise brings three claims against RMS under the FDCPA: violations of 15 U. S. C. §§ 1692e (Count One), 1692f (Count Two), and 1692g (Count Three). (Id. ¶¶ 41-55. ).

While the plaintiff hasn’t named these defendants directly, he or she says that they are “individuals and businesses alleged for the purpose of substituting names of Defendants whose identities will be disclosed in discovery and should be made parties to this action.” ” (Compl. , ECF No. 1 ¶ 10. ).

According to the plaintiff, the defendant is a debt collector and must follow the Fair Debt Collection Practices Act. The defendant does not appear to disagree. (Compl. ¶¶ 8-9. ).

Blaise supposedly owed Progressive Garden State Insurance Company (“Progressive”) money from a few different transactions with customers, and Progressive hired Defendant to collect the debt. (Id. ¶¶ 21-25. Defendant sent Plaintiff a collection letter (the “Letter”) on January 18, 2020. The Letter is attached as Exhibit A to the complaint. (Id. ¶ 27; Compl. Ex. A, ECF No. 1-2. ) Plaintiff concedes that “[T]he letter contains the requisite G-Notice” required by 15 U. S. C. § 1692g. (Compl. ¶¶ 28-29. Plaintiff, on the other hand, says that two sentences at the end of the Letter are more important than the G-Notice because they are allegedly false, misleading, and deceptive, which is against the FDCPA. (Id. ¶¶ 29-34. ) These sentences read:

The court can look at Exhibit A in this Motion to Dismiss because it is important to the plaintiff’s claim and was referenced in the complaint. See Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U. S. 308, 322 (2007) (citing 5B Wright & Miller § 1357 (3d ed. 2004 and Supp. 2007)).

Plaintiff says these two sentences were more important than the notice required by the FDCPA and “harmed Plaintiff’s informational rights” because he wasn’t able to fully understand his legal rights. ” (Id. ¶ 39. He says he was in “imminent risk of harm” because he was given false information about the alleged debt, which kept him from making a smart choice about whether to pay it or not. ” (Id. ¶ 35. ) Plaintiff claims he was “damaged” by the foregoing. (Id. ¶ 40. ) Plaintiff makes no further allegations about the Letters impact. In particular, he doesn’t say that the Letter caused him any real physical or financial harm. He also doesn’t say that he disputed the obligation or that the language in the Letter changed how he handled the obligation.

Plaintiff is bringing this case as a “supposed class action” under Rule 23, and he wants to certify the following class:

The defendant filed a Motion to Dismiss on February 3, 2021. It asks that the whole complaint be thrown out in line with Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. (ECF No. 5. Defendant says Plaintiff hasn’t made enough claims under Article III to give the Court the power to hear the case, and Plaintiff’s FDCPA claims are legally barred. (Id. ) Plaintiff filed a response in opposition to Defendants Motion to Dismiss on February 17, 2021. (Mem. Oppn, ECF No. 10. ) Defendant filed a Reply on February 23, 2021. (Reply, ECF No. 11. ).

According to Rules 12(b)(1) and (6) of the Federal Rules of Civil Procedure, the defendant wants the plaintiff’s complaint to be thrown out in its entirety. (ECF No. 5. ) Defendants Motion raises two separate rationales. First, the defendant says that the plaintiff did not say enough about an “injury in fact” for Article III of the Constitution to give the court the power to hear the case. (Mem. Supp. , at 2, 4-6, ECF No. 6. Defendant also says that even if Plaintiff has standing, Defendant did not break the FDCPA because the letter followed all of its rules. (Id. at 12-16. Defendant says that the Letter had all the required notices according to 1692g, that the language that followed did not hide this notice, and that the language in the Letter could not reasonably be seen as misleading. (Id. ) Defendant also argues that Count Two, violation of 15 U. S. C. 1692f, doesn’t work legally because it’s not based on facts that are different from those in Count One. (Id. at 15-16. ) Plaintiff opposes the motion. (Mem. Oppn, ECF No. 10. ).

But, “for a complaint to survive a motion to dismiss, it must contain enough factual matter that is taken to be true to state a claim to relief that is plausible on its face.” ” Iqbal, 556 U. S. at 678 (quoting Twombly, 550 U. S. at 570). “A claim has facial plausibility when the plaintiff alleges facts that make it reasonable for the court to think that the defendant is responsible for the wrongdoing.” ” Id. (citing Twombly, 550 U. S. at 556). The plausibility standard is not the same as the probability standard, but it does require more than a mere possibility that a defendant did something wrong. ” Id. “Labels and conclusions,” a “formulaic recitation of the elements,” and “naked assertions” without factual enhancement are insufficient. Id.

Article III of the Constitution says that you must have the right to sue in order to keep an action going in federal court. This is because the Constitution only lets federal courts decide “cases” and “controversies.” ” Lujan, 504 U. S. at 559-60 (citations omitted). Article III says that a plaintiff must show: (1) an “injury in fact” that is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical”; (2) “a causal connection between the injury and the conduct complained of [that is] fairly traceable to the challenged action . “, and (3) that it is “likely” and not “just speculative” that a favorable decision will fix the harm. Id. at 560-61 (citations and internal quotation marks omitted). “The party invoking federal jurisdiction bears the burden of establishing these elements. ” Id. at 561.

Often at issue when determining standing is whether the purported injury is sufficiently “concrete. ” In Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), the Supreme Court sent back a Fair Credit Reporting Act (“FCRA”) claim so that it could be looked at again to see if the injury in fact requirement was met. This gave the Court a chance to explain in more detail what is needed to show a concrete injury in fact for standing purposes. In discussing whether an intangible harm can be an injury in fact, the Court said that history and the decision of Congress are both important factors in figuring out whether an intangible harm is an injury in fact. ” Spokeo, 136 S. Ct. at 1549. “It is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been seen as a basis for a lawsuit in English or American courts,” the Court said. ” Id. (citation omitted). It went on to say, “Congress is in a good position to find intangible harms that meet the minimum requirements of Article III. As a result, its decision is also instructive and important.” ” Id.

But Congress is limited in its ability to make laws about “injuries in fact” that meet the Article III standing requirement. The Spokeo Court said, “Congress’s job of finding and highlighting intangible harms does not mean that a plaintiff automatically meets the injury-in-fact requirement whenever a law gives someone a statutory right and says they can sue to defend that right.” ” Id. This means that a plaintiff can’t just say that there was a procedural violation without mentioning any actual harm. This would not meet the injury-in-fact requirement of Article III. ” Id. (citations omitted). “However, the violation of a procedural right given by law can be enough in some cases to constitute injury in fact,” ” Id.

The Supreme Court of the United States talked more about Spokeo and the concreteness requirement in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021). That case was also about the Fair Credit Reporting Act (FCRA). The Court said that class action plaintiffs whose names were wrongly put on a Department of Treasury watch list by credit reporting agencies but whose information was never shared did not have standing because the violation did not directly hurt them. Ramirez, 141 S. Ct. at 2200. The Court also said that the class plaintiffs had not shown a real injury caused by mistakes in formatting in letters they got from credit reporting agencies. Id. The Court asked the same question that Spokeo did: there must be a “concrete harm” for there to be an injury. This can come from a tangible harm or some intangible harms. Id. (citing Spokeo, 136 S. Ct. at 1540).

The Court said once more that the first thing that should be done to see if an intangible harm is concrete enough is to see if the plaintiffs can find a close historical or common-law example of their alleged injury. ” Id. at 2204. The courts should then go to Congress if there isn’t a similar case. They “must afford due respect to Congress’s decision to imposes a statutory prohibition or obligation.” and to grant plaintiff a cause of action . ” Id. (citing Spokeo, 136 S. Ct. at 1540). But Congress “may not simply enact an injury into existence by using its lawmaking power to turn something that isn’t even remotely harmful into something that is.” ” Id. at 2205 (citations omitted). As a concrete example of an intangible injury, the Court looked at the risk of future harm. It said, “plaintiffs did not factually establish a sufficient risk of future harm to support Article III standing.” ” Id. at 2211-12. Finally, the Court said no to an argument that said informational injuries were enough. They said the case didn’t involve a public-disclosure law that would make the injury worse, and the plaintiffs hadn’t shown any “downstream consequences from failing to receive the required information.” ” Id. at 2214 (internal citation and quotation marks omitted). Ultimately, the Court explained, “[a]n asserted informational injury that causes no adverse effects cannot satisfy Article III. ” Id. (internal citation and quotation marks omitted).

This is why the Ramirez Court went into more detail about Spokeo to say that the requirement of a real injury cannot be ignored. It was emphasized by the Court that “federal courts do not have a roving commission to publicly opine on every legal question.” ” Id. at 2203. Rather, “a federal court may resolve only a real controversy with real impact on real persons. ” Id. (quoting Am. Legion v. Am. Humanist Assn. , 139 S. Ct. 2067, 2103 (2019)). And in Ramirez, even though Congress passed a law with a remedy, the plaintiffs didn’t have the right to use it because they couldn’t show a similar case from common law or “a sufficient risk of future harm” in their case. See Id. at 2211-12.

In Fourth Circuit decisions before Ramírez, the question of which intangible injuries are “concrete” was looked at using a similar analytical framework. However, courts varied on how much weight to give to Congress. In Dreher v. Experian Information Solutions, Inc. There was a supposed informational injury that the Fourth Circuit looked into and said, “a constitutionally cognizable informational injury requires that a person lack access to information to which he is legally entitled and that the denial of that information creates a real harm with an adverse effect.” ” 856 F. 3d 337, 345 (4th Cir. 2017) (citations omitted). The court said that the plaintiff had not presented a common law example and that his alleged harm was not related to “the kind of harm Congress sought to prevent by requiring disclosure.” ” Id. at 345-46 (quoting Friends of Animals v. Jewell, 828 F. 3d 989, 992 (D. C. Cir. 2016)). In the Eastern District of Virginia, courts have had different ideas about how to decide if the alleged harm and Congress’s intent are enough to create a concrete inquiry in fact. Some courts only look at the injury that was claimed in the complaint and decide if it poses a substantial risk of harm. See, e. g. , Brown v. Glasser & Glasser, P. L. C, No. 3:17cv703, 2017 WL 5195869, at *3-*5 (E. D. Va. Nov. 9, 2017); Fulp v. Sykes, Bourdon, Ahern, & Levy, PC, No. 3:20cv53, 2020 WL 4926176, at *2-*3 (E. D. Va. Aug. 21, 2020). Others follow Congress more closely and look at the law’s main purpose and whether it’s meant to protect a substantive right. They also check to see if that right is “at risk of real harm” when the procedural right is violated. See Brown v. R&B Corp. of Va. , 267 F. Supp. 3d 691, 698, 700-02 (E. D. Va. 2017); Yergovich v. Small Cmty. Specialists LLC, 337 F. Supp. 3d 635, 642 (E. D. Va. 2018).

As a way to protect people “from abusive debt collection practices by debt collectors,” the FDCPA gives people a number of rights and options. ” R&B Corp. of Va. , 267 F. Supp. 3d at 698 (citing 15 U. S. C. § 1692(e); United States v. Natl Fin. Servs. , Inc. , 98 F. 3d 131, 135 (4th Cir. 1996)). The Act’s Section 1692e says that a debt collector can’t use “any false, deceptive, or misleading representation or means in connection with the collection of any debt.” ” 15 U. S. C. § 1692e. According to Section 1692f, debt collectors can’t use “unfair or unconscionable means to collect or attempt to collect any debt.” ” § 1692f. Section 1692g lays out the steps debt collectors must take when they send a notice of debt to a consumer and when they get information about disputed debts. This includes the rule that the debt collector must send a written notice that includes the following within five days of the first contact with the customer:

§ 1692g(a). Even if these parts are in a notice, it may still be illegal if it is presented in a way that hides or contradicts them in a way that leaves even the most basic consumer confused about her rights. Russell v. Equifax A. R. S. , 74 F. 3d 30, 35 (2d Cir. 1996).

Plaintiffs don’t have Article III standing, and they haven’t made out a claim for FDCPA violation. This is why the defendant wants to throw out all counts.

The Defendant says that the Plaintiff does not have the right to sue because she has only said that she was wronged in a procedural or informational way and not actually been hurt. (Mem. Supp. , at 2, ECF No. 6 (citing Spokeo, 136 S. Ct. at 1549; five recent opinions from the 7th Circuit (citations omitted)). Defendant says that Plaintiff’s alleged harm—getting a letter saying that Defendant would not report him negatively to credit bureaus if he filed a dispute—is at most a simple procedural violation and not enough to establish standing without some other “concrete” harm as required by Article III. (Id. at 4-6. ) The Defendant says that this supposed “informational injury” is not enough without some other “real” harm as well, citing Supreme Court and Fourth Circuit decisions. (Id. at 5-6 (citations omitted). ).

RMS says that Plaintiff hasn’t said that the Letter kept information from him that he was legally entitled to, nor has he said that it caused him any other harm. (Id. at 6-11. The defendant says that the FDCPA doesn’t give people a legal right to know if a debt collector will report a customer’s debt to credit bureaus. Instead, it says that debt collectors have to give people information about the debt they are collecting. (Id. at 6-7. RMS says that Plaintiff doesn’t have a sufficient “informational injury” because he doesn’t have a legal or common law right to this information. (Id. Defendant also points out that Plaintiff doesn’t say anything about how he reacted to or was hurt by the disputed sentences in the Letter. All he says is that “he was at imminent risk of making an unreasonable decision regarding whether to pay the subject debt.” ” (Id. at 7-8 (citing Compl. ¶ 35)).

Defendant points to decisions from the Eastern District of Virginia and the District of Maryland to show that a plaintiff claiming an intangible injury must show that there is a real risk of harm. (Id. at 8-9 (citations omitted). Defendant then points to a recent set of opinions from the Seventh Circuit that say a person who has been hurt by informational harm must say that the harm they suffered was real in order to have standing, and that an intangible injury is not enough. (Id. at 9-10. ) Defendant argues that Plaintiffs purported “risk” of injury is speculative and insufficient. (Id. at 11. ).

Alternatively, the defendant says that even if the plaintiff has the right to sue, he has not made enough claims that the letter violates the FDCPA. (Id. at 12. The defendant says that the last two sentences of the letter clearly did not overshadow the § 1692g notices when looking at it as a whole from the point of view of the least knowledgeable consumer. (Id. at 12-13. Defendant says that Plaintiff agreed that the Letter had the right language for § 1692g. They also say that § 1692g can be broken if the notice is hidden or contradicted, but the disputed sentences do not have the information that § 1692g requires. (Id. at 13. ) Therefore, nothing is contradicted or overshadowed because the disputed sentences address a different issue-credit reporting. (Id. ).

Regarding the plaintiff’s claim under § 1692e, the defendant says the plaintiff doesn’t say enough about how the representation was “material” or how the letter is an attempt to trick or mislead the plaintiff. (Id. at 14-15. Lastly, the defendant says that the plaintiff hasn’t made a case under § 1692f because case law says that a § 1692f claim can’t be based on the same misconduct as a § 1692e claim, and the plaintiff hasn’t mentioned any other misconduct related to the § 1692f claim. (Id. at 15-16. ).

Plaintiff says that he was hurt because his right to be free from unfair and bothersome debt collection practices under § 1692e and 1692f of the Fair Debt Collection Practices Act was violated. (Mem. Oppn, at 8-9, ECF No. 10. Plaintiff uses three decisions from district courts in the Eastern and Western Districts of Virginia to support the idea that violations of § 1692e and 1692f are enough to show a real injury for standing purposes. (Id. at 8-10 (citing Henderson v. Gen. Revenue Corp. , No. 7:17CV00292, 2019 U. S. Dist. LEXIS 148403 (W. D. Va. Aug. 30, 2019); Drew v. Valley Credit Serv. , No. 3:17CV00083, 2018 U. S. Dist. LEXIS 42321 (W. D. Va. Mar. 14, 2018); Yergovich v. Small Cmty. Specialists LLC, 337 F. Supp. 3d 635 (E. D. Va. 2018)). Plaintiff also says that even if his rights under the law are only procedural, he has been hurt enough because he “was at risk of being subject to abusive debt collection practices simply by being deceived into thinking that by disputing the debt, he would forever be free of credit reporting from the debt collector on this particular debt.” ” (Id. at 16-17. ).

Plaintiff says that the disputed language in the Letter “tricks the [least sophisticated consumer] into believing that he has a pass on any further debt collection activities after a debt validation request has been made.” This is in response to the FDCPA claims. ” (Id. at 18. ) Plaintiff argues that this implication was false, and thus constitutes a “plausible violation” of 15 U. S. C. §§ 1692e, 1692f, and 1692g. (Id. at 21-22. Finally, the plaintiff points to a decision from the District of Maryland to support the idea that “in some circumstances,” the same behavior can be enough to break both § 1692e and 1692f. (Id. at 22 n. 1 (citing Cooke v. Carrington Mortg. Servs. , No. TDC-18-0205, 2019 U. S. Dist. LEXIS 120248, at *17 (D. Md. July 17, 2019)). ).

Because the Plaintiff hasn’t made a plausible case for a concrete injury in fact that is enough to establish standing, the Court will throw out the complaint. Because Plaintiff could theoretically plead facts sufficient to establish a concrete harm, the dismissal will be without prejudice. The Court will not hear the Defendants’ arguments about the FDCPA because it does not have the power to hear the Plaintiffs’ claims.

Plaintiff’s claim is based on two sentences at the end of a notice letter that the Plaintiff agrees has all the parts needed by § 1692g. (Compl. ¶¶ 28-29. ) The disputed language says:

Plaintiff only says that he was “injured informationally” because he wasn’t able to fully understand his legal rights. ” (Id. ¶ 39. He doesn’t give any proof of any real harm and doesn’t say how the disputed language in the Letter changed his behavior, if it did. Instead, he says he was in “imminent risk of harm” because he was given false information about the alleged debt, which kept him from making a smart choice about whether to pay it or not. ” (Id. ¶ 35. ).

Plaintiff has not alleged a tangible harm, only an intangible informational injury. (Id. ¶ 39. Based on what the Supreme Court said in Spokeo and Ramirez, the plaintiff only has a few ways to show a concrete injury. Plaintiff must show one of three things: (1) that the intangible harm is similar to a traditional common law claim; (2) that Congress’s grant of a procedural right, along with the facts, is enough to give Article III standing; or (3) that the intangible harm creates a sufficient risk of future harm. See Ramirez, 141 S. Ct. at 2204, 2211-12, 2214; Spokeo, 136 S. Ct. at 1549.

First, the Court checks to see if there was a similar common law claim to fix the alleged intangible harm. In the context of the FDCPA, Judge Daviss opinion in Brown v. R&B Corp. of Virginia talks about the history of debt collection under common law and makes a strong case for why there was no similar common law right of action. 267 F. Supp. 3d at 699-700. Thus, Plaintiff must establish an alternative basis to demonstrate a concrete injury in fact. If you read Spokeo and Ramirez together, this suggests that the court should respect Congress’s choice to give someone the right to sue, along with whether the facts presented show a harm or a high enough risk of harm. See Ramirez, 141 S. Ct. at 2204, 2211-12, 2214; Spokeo, 136 S. Ct. at 1549.

The Ramirez court made it clear that “an alleged informational injury that causes no adverse effects cannot satisfy Article III.” This is what they meant by “informational injuries.” ” 141 S. Ct. at 2214. The Fourth Circuit said in Dreher that a person must be legally entitled to information and not be able to get it must cause them real harm with a bad outcome in order for it to be considered an informational injury under the Constitution. ” 856 F. 3d at 337, 345. Only the fact that Congress created a cause of action is not enough to give someone Article III standing.

Plaintiff doesn’t say that the disputed sentences in the letter caused him any harm other than an “informational injury” because he wasn’t able to fully understand his legal rights. ” (Compl. ¶ 39. He says that he wasn’t able to make a smart choice about whether to pay, but he doesn’t show how this vague injury is a real injury. (See Id. ¶ 35. ) The Court doesn’t have to accept conclusory claims that Plaintiff was hurt, even in a motion to dismiss. Based on the facts presented, the Court doesn’t believe that the Plaintiff was seriously hurt by the language in the letter that said RMS “will not submit [a negative credit report] if we receive notice that you dispute the obligation.” ” (Compl. Ex. A. Plaintiff doesn’t say that this changed how he behaved; he only says that “he was not able to fully ascertain his statutory rights.” ” (Compl. ¶ 39. ) The consequences of this, however, are necessary to determine whether Plaintiff suffered an injury in fact.

Based on what was said, it doesn’t seem likely that this statement would cause a real and immediate risk of harm. In fact, the letter itself makes it look like the most likely thing that would happen is that the customer would dispute the debt. From the pleadings, it’s not clear how this could possibly be bad; in fact, it may be good. In any case, Plaintiff’s complaint doesn’t say that this is the path he took or, if it wasn’t, that reading this Letter hurt him in any way. This supposed violation of procedure doesn’t come with any real harm or a high risk of harm, so Plaintiff has failed to establish standing. Just because Congress made the FDCPA’s causes of action isn’t enough to give judges the power to hear cases under Article III. As the Supreme Court explained,.

In the recent case of Ramirez, the Supreme Court said, “Federal courts do not have a roving commission to publicly opine on every legal question.” ” 141 S. Ct. at 2203. The plaintiff in this case wants the court to read a letter he (and likely others) got from a debt collector and decide if it breaks any of the FDCPA’s rules. Other than conclusory statements, however, he does not plausibly allege that he was injured by the Letter. The plaintiff does not have Article III standing because he has not shown a specific injury. The court cannot hear his case. Accordingly, Defendants Motion to Dismiss will be granted.

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