Carter v. IC Systems Incorporated

1 WO [5] 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA [8] 9 Crystal Carter, No. CV-20-00930-PHX-JJT 10 Plaintiff, ORDER 11 v. 12 IC Systems Incorporated, et al., 13 Defendants. [14] 15 At issue is Defendant I.C. System, Inc.’s Motion to Dismiss (Doc. 12, MTD), to 16 which Plaintiff Crystal Carter filed a Response (Doc. 16, Resp.) and Defendant filed a 17 Reply (Doc. 18, Reply). No party requested oral argument on the Motion, and the Court 18 finds the Motion appropriate for resolution without oral argument. LRCiv 7.2(f). 19 I. BACKGROUND 20 On or around May 22, 2019, Defendant sent Plaintiff a letter demanding payment 21 of a $1,055.05 debt Plaintiff owed to Sprint, which engaged Defendant to collect the debt. 22 (Doc. 1, Compl. Ex. A, Dunning Letter.) The letter stated as follows: [23] Your delinquent account has been turned over to this collection agency. [24] Sprint is both the original and current creditor to whom this debt is owed. [25] The account information is scheduled to be reported to the national credit 26 reporting agencies in your creditor’s name. You have the right to inspect your 27 credit file in accordance with federal law. I.C. System will not submit the account information to the national credit reporting agencies until the 28 expiration of the time described in the notice below. 1 (Dunning Letter.) Plaintiff alleges this language implies that both Sprint and Defendant 2 may report Plaintiff’s delinquent account with Sprint to credit reporting agencies, and 3 based on that interpretation, Plaintiff brings a putative class action claim for deceptive 4 practices under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e et seq. 5 (“FDCPA”). Defendant now moves to dismiss Plaintiff’s claim under Federal Rule of Civil 6 Procedure 12(b)(6). 7 II. LEGAL STANDARD 8 A complaint must contain “‘a short and plain statement of the claim showing that the 9 pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the . . . claim 10 is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544 , 555 11 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)); see also Fed. R. Civ. P. 8(a). A 12 dismissal under Rule12(b)(6) for failure to state a claim can be based on either (1) the lack 13 of a cognizable legal theory or (2) insufficient facts to support a cognizable legal claim. 14 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). “While a complaint 15 attacked by a Rule 12(b)(6) motion does not need detailed factual allegations, a plaintiff’s 16 obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels 17 and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” 18 Twombly, 550 U.S. at 555 (citations omitted). The complaint must thus contain “sufficient 19 factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” 20 Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570 ). 21 III. ANALYSIS 22 The Court’s resolution of whether Plaintiff has stated an FDCPA claim begins and 23 ends with an examination of the dunning letter’s plain language. The FDCPA prohibits a 24 debt collector from using “any false, deceptive, or misleading representation or means in 25 connection with the collection” of a debt. 15 U.S.C. § 1692e. Plaintiff argues that the least 26 sophisticated consumer could interpret the language Defendant used in the dunning letter 27 to mean that Plaintiff’s delinquent account may be reported to credit reporting agencies by 28 both Sprint—by way of the phrase “account information is scheduled to be reported to the 1 national credit reporting agencies in your creditor’s name”—and Defendant—by way of 2 the phrase “[Defendant] will not submit the account information to the national credit 3 reporting agencies until the expiration of the time described in the notice below.” 4 The Court agrees with Defendant that Plaintiff’s asserted interpretation is 5 idiosyncratic and falls below an acceptable level of reasonableness. The plain language of 6 the dunning letter, when read in its entirety, provides that Sprint has turned over Plaintiff’s 7 delinquent account to Defendant, the author of the letter, and that Defendant may report 8 the delinquent account to the credit reporting agencies “in [Plaintiff’s] creditor’s name.” 9 An act in the name of one party is implicitly done by another party, and that is particularly 10 clear here where Defendant stated two sentences earlier that Sprint turned the delinquent 11 account over to Defendant. This interpretation is also entirely consistent with the rest of 12 the paragraph, which states Defendant will not submit the delinquent account to the credit 13 reporting agencies until the expiration of the prescribed time. Plaintiff’s convoluted stretch 14 of the language is beyond what the least sophisticated consumer could reasonably be 15 expected to understand from the letter. See Evon v. Law Offices of Sidney Mickell, 688 F.3d 16 1015, 1027 (9th Cir. 2012) (stating the FDCPA does not prohibit “bizarre or unreasonable” 17 interpretations of a collection notice). Plaintiff provides no legal authority interpreting the 18 same or similar language to the contrary. Because the plain language of the letter was not 19 false, deceptive, or misleading as a matter of law, Plaintiff fails to state a claim under 20 § 1692e of the FDCPA. Defendant makes further arguments in favor of dismissal— 21 including that even if Plaintiff’s interpretation of the dunning letter had merit, it would be 22 immaterial—but the Court need not resolve them because Plaintiff’s asserted interpretation 23 is not sufficiently reasonable to state a claim under the FDCPA. 24 IT IS THEREFORE ORDERED granting Defendant I.C. System, Inc.’s Motion to 25 Dismiss (Doc. 12) and dismissing Plaintiff’s claim. 26 … 27 … 28 … 1 IT IS FURTHER ORDERED directing the Clerk of Court to enter final judgment 2 || and close this matter. 3 Dated this 9th day of August, 2021. CN 4 “wok: Unie States#District Judge [28] -4-