Opinion
Case No. 17-CV-440-JPS
01-22-2018
DANNEL RIEL, Plaintiff, v. IMMEDIATE CREDIT RECOVERY INC., Defendant.
ORDER
1. INTRODUCTION
Plaintiff obtained student loans through the Department of Education ("DOE"). When he defaulted on the loans, the DOE brought in Defendant to help collect what was owed. Defendant sent Plaintiff a letter in March 2016, which he alleges was intentionally and misleadingly designed to look like a letter from the DOE itself. Plaintiff maintains that this conduct violated the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692 et seq.
On December 1, 2017, Defendant filed a motion for summary judgment. (Docket #15). Plaintiff opposed the motion on December 29, 2017, and Defendant replied on January 12, 2018. (Response, Docket #21; Reply, Docket #23). For the reasons stated below, Defendant's motion must be granted.
2. STANDARD OF REVIEW
Federal Rule of Civil Procedure 56 states that the "court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see Boss v. Castro, 816 F.3d 910, 916 (7th Cir. 2016). A "genuine" dispute of material fact is created when "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The Court construes all facts and reasonable inferences in a light most favorable to the non-movant. Bridge v. New Holland Logansport, Inc., 815 F.3d 356, 360 (7th Cir. 2016).
3. FACTUAL BACKGROUND
Upon review of the parties' factual briefing, the Court finds that the following facts are material to Defendant's motion. Defendant collects student loans on behalf of the DOE. Plaintiff's student loan was placed with Defendant for collection on March 26, 2016. Three days later, Defendant sent him its initial collection letter (the "Letter"). It appears as follows, both front:
The facts are drawn from the parties' factual briefing, (Docket #22 and #24), unless otherwise indicated.
Image materials not available for display. and back:
Image materials not available for display. (Docket #17-4).
As noted above, Plaintiff alleges that the Letter violates the FDCPA by misleading its recipients in numerous ways. Plaintiff commissioned a survey, in accordance with Seventh Circuit precedent on such claims, to determine what proportion of borrowers might be fooled, or at least confused, by the Letter. The survey reveals that more than half of the respondents were confused by the Letter as a whole, as well as various specific portions of it.
Plaintiff includes a number of statements of fact about the survey. (Docket #24 at 2-5). In response to each, Defendant states: "[a]fter reasonable inquiry, Defendant lacks information sufficient to form a belief as to the truth of the allegations in Paragraph [X]." Id. This is not a valid response to a statement of fact. J.N. Moser Trucking, Inc. v. U.S. Dep't of Labor, 306 F. Supp. 2d 774, 778 (N.D. Ill. 2004); Wilhelm v. McAnn's W. 48th St. Rest. Corp., No. 01-C-7518, 2004 WL 2658066, at *1 (N.D. Ill. Oct. 14, 2004); Wright v. Baynton, No. 12-CV-870-BBC, 2014 WL 462364, at *1 (W.D. Wis. Feb. 5, 2014). Each fact is, then, admitted for purposes of Defendant's motion. Civ. L. R. 56(b)(3)(B), (4).
4. ANALYSIS
Defendant seeks summary judgment on each of Plaintiff's claims and requests dismissal of the entire lawsuit. Plaintiff's Complaint states one cause of action: a violation of the FDCPA. Plaintiff first asserts that the letter violates 15 U.S.C. § 1692e. That Section prohibits the use of false or misleading representations in the collection of a debt. 15 U.S.C. § 1692e. Section 1692e further contains a number of subparts providing specific examples of prohibited conduct. Id. These include sending a letter "which creates a false impression" that it was "authorized, issued, or approved by any . . . agency of the United States," id. § 1692e(9), and a collector's use of any name other than its true name, id. § 1692e(14). Plaintiff also alleges, in the alternative, a violation of Section 1692f. Even if the Court finds the Letter is not misleading, he says, a jury could nevertheless conclude that Defendant's Letter was somehow "unfair or unconscionable," conduct proscribed by Section 1692f. Id. § 1692f. This claim is, in reality, no different than the Section 1692e claim.
Section 1692f is viewed as a catch-all provision for improper collection activity not addressed by other FDCPA provisions, and its "prohibition on unfairness is as vague as they come." Todd v. Collecto, Inc., 731 F.3d 734, 739 (7th Cir. 2013). With that in mind, courts are reluctant to allow a Section 1692f claim to proceed on the same facts which underlie an alleged violation of a more specific provision. See Vanhuss v. Kohn Law Firm S.C., 127 F. Supp. 3d 980, 989 (W.D. Wis. 2015) (collecting cases).
Plaintiff's brief confirms that both the facts and legal theory of his Section 1692f stem from the Letter's confusing nature, which is the sole basis of the Section 1692e claim. Both claims arise from the Letter alone. As to his theory, Plaintiff notes that Section 1692d prohibits "the placement of telephone calls without meaningful disclosure of the caller's identity." 15 U.S.C. § 1692d(6). Because this provision says nothing about a lack of "meaningful disclosure" in a written communication, Plaintiff wishes to use Section 1692f to piggyback the "meaningful disclosure" rule into that context. (Docket #21 at 16).
It was Congress' prerogative to not include a "meaningful disclosure" provision directed at letters. Further, Plaintiff's desire for such a provision is already manifest, in power and spirit, in Section 1692e, which prohibits "deceptive" and "misleading" communications. It is clear, then, that Plaintiff's Section 1692f theory is entirely duplicative of the Section 1692e claim. Plaintiff's word choice concedes as much. Id. ("[T]he Court can find that the letter—even if it does not violate 1692e—is unfairly or unconscionably confusing and therefore violates 1692f.") (emphasis added).
Plaintiff's claims must be assessed from the viewpoint of an "unsophisticated consumer." An unsophisticated consumer "may be uninformed, naïve, [and] trusting, but is not a dimwit, has rudimentary knowledge about the financial world, and is capable of making basic logical deductions and inferences[.]" Lox v. CDA, Ltd., 689 F.3d 818, 822 (7th Cir. 2012) (citations and quotations omitted). In the case of alleged letter-based FDCPA violations, the subject letter "must be confusing to a significant fraction of the population." Id. (quotation omitted).
To prove a claim that a collection letter is misleading, the Seventh Circuit has established three categories of cases:
The first category includes cases in which the challenged language is "plainly and clearly not misleading." No extrinsic evidence is needed to show that the debt collector ought to prevail in such cases. Lox[, 689 F.3d at 822]. The second Lox category "includes debt collection language that is not misleading or confusing on its face, but has the potential to be misleading to the unsophisticated consumer." Id. In such cases, "plaintiffs may prevail only by producing extrinsic evidence, such as consumer surveys, to prove that unsophisticated consumers do in fact find the challenged statements misleading or deceptive." Id., quoting Ruth [v. Triumph P'ships, 577 F.3d 790, 800 (7th Cir. 2009)]. The third category is cases in which the challenged language is "plainly deceptive or misleading," such that no extrinsic evidence is required for the plaintiff to prevail. Id.Janetos v. Fulton Friedman & Gullace, LLP, 825 F.3d 317, 322-23 (7th Cir. 2016). Plaintiff does not assert that his claims fall within the third category. (Docket #21 at 3-4). He concedes that extrinsic evidence is required to prove his allegation of confusion. Id. ("To succeed on claims such as these a plaintiff must demonstrate that the language of the letters unacceptably increases the level of confusion. A letter meets that standard if a significant fraction of the population would be misled by the letter. . . . A survey which shows what actually happens in response to a letter helps courts determine what letters are confusing.") (citations and quotations omitted).
The problem for Plaintiff is that his only extrinsic evidence—the survey—is inadmissible. The Court of Appeals treats survey evidence as a form of expert testimony. DeKoven v. Plaza Assoc., 599 F.3d 578, 580 (7th Cir. 2010). It "emphasize[s] that survey evidence in debt-collection . . . cases must comply with the principles of professional survey research; if it does not, it is not even admissible, . . . let alone probative of deception." Evory v. RJM Acquisitions Funding L.L.C., 505 F.3d 769, 776 (7th Cir. 2007) (citations omitted).
Federal Rule of Evidence ("FRE") 702 provides that expert testimony may be admitted when the expert is sufficiently qualified to offer their opinion, and the opinion is the product of sound science. Fed. R. Evid. 702. Plaintiff, as the proponent of the expert testimony, bears the burden to establish its admissibility by a preponderance of the evidence. Lewis v. CITGO Petroleum Corp., 561 F.3d 698, 705 (7th Cir. 2009). With respect to surveys in particular, the Court of Appeals notes that "[a] properly designed control group" is "vital" to reveal whether a letter is unlawfully confusing. DeKoven, 599 F.3d at 581; Muha v. Encore Receivable Mgmt., Inc., 558 F.3d 623, 626 (7th Cir. 2009). As DeKoven observed,
[t]he debt collector can't be blamed if consumers don't understand his dunning letter unless he should have added or subtracted something to make it clearer. The plaintiff thus has "to show that the additional language of the letters unacceptably increases the level of confusion; many unsophisticated consumers would be confused even if the letters they received contained nothing more than a statement of the debt and the statutory notice." Johnson v. Revenue M[gmt.] Corp., [169 F.3d 1057,] 1060 [(7th Cir. 1999)] (emphasis in original).Id.
Plaintiff fails to carry his burden to show the admissibility of the survey under the principles of FRE 702 and the above-cited precedent. First, Plaintiff has not established that his expert has relevant qualifications. The survey was conducted by Mary Prisco ("Prisco") of The Martec Group. (Docket #21-1 at 1). Prisco says she has many years of experience in "marketing research" and "statistical analysis," and she holds a Ph.D. in mathematics. Id. Plaintiff does not explain how an expert in mathematics or statistics would be qualified to perform a consumer survey. It is also unclear what "marketing research" means; is this experience in crafting and administering consumer surveys? Plaintiff does not say.
Second, Prisco's statements on the reliability of the survey are utterly conclusory. FRE 702 requires an expert opinion to be based on "sufficient facts or data," and it must be "the product of reliable principles and methods." Fed. R. Civ. P. 702(b)-(c). Prisco avers that "[w]e had 100 respondents on the survey, which is a valid statistical sample for a survey of this sort." (Docket #21-1 at 2). Despite the fact that "[d]etermining the minimum sample size from which reliable extrapolations can be made to the sampled population is tricky," Prisco offers no support for her statement. DeKoven, 599 F.3d at 581. Further, Prisco states that "[t]he survey was conducted using standard methodology commonly accepted in the field for such surveys[.]"(Docket #21-1 at 2). Again, she does not describe what the "standard methodology" is, or provide any evidence that the methodology she employed is "commonly accepted in the field." The Court thus has nothing by which to determine that the facts and principles underlying the survey are indeed "sufficient" or "reliable."
Finally, there is no indication that the survey used a control group. See (Docket #21-2 at 2-3). Muha and DeKoven, decided almost eight years ago, make this requirement clear. Plaintiff himself implicitly acknowledged the necessity of a control group, yet still did not procure a survey that included one. (Docket #21 at 3-4) (citing Johnson for the proposition that a letter must "unacceptably increase[] the level of confusion"). Further, Plaintiff cannot claim an inability to produce a valid control letter. His brief notes numerous ways in which the Letter's language might be modified to reduce confusion. See, e.g., id. at 5, 11 (Defendant's name should be more prominent, as well as its identity as the sender), 6 (too many different addresses on the front of the Letter), 7-10 (the Letter too closely mirrors the DOE's letters), 12 (use of the name "Dept. 627" in the address block rather than Defendant's true name).
For all of these reasons, Plaintiff's survey is rendered inadmissible. Without the survey, Plaintiff's claims cannot withstand Defendant's motion. He has no evidence, not even his own say-so (Plaintiff did not offer affidavit testimony in conjunction with his response), that the Letter is confusing or misleading "to a significant fraction of the population" or that it "unacceptably increase[d] the level of confusion." Lox, 689 F.3d at 822 (quotation omitted); Johnson, 169 F.3d at 1060. As a result, the Court is constrained to find that Plaintiff has raised no triable issues of fact as to the Letter's alleged violations of the FDCPA.
5. CONCLUSION
As the Court earlier warned Plaintiff, summary judgment "is the put up or shut up moment in a lawsuit." (Docket #20 at 2) (quotation omitted). Nevertheless, when the time came, he failed to present any admissible evidence to support his claims. Defendant's motion must, therefore, be granted, and this matter dismissed with prejudice.
Accordingly,
IT IS ORDERED that Defendant's motion for summary judgment (Docket #15) be and the same is hereby GRANTED; and
IT IS FURTHER ORDERED that this action be and the same is hereby DISMISSED with prejudice.
The Clerk of the Court is directed to enter judgment accordingly.
Dated at Milwaukee, Wisconsin, this 22nd day of January, 2018.
BY THE COURT:
/s/_________
J. P. Stadtmueller
U.S. District Judge