E.D.N.Y. Calls Out Disagreement Between Second and Third Circuit, Finds Letter Does Not Limit Disputes Options

The clash between the Third Circuit and just about every other jurisdiction regarding whether or not there is a written requirement for all disputes made under section 1692g of the Fair Debt Collection Practices Act (FDCPA) continues.

In Goodman v. Mercantile Adjustment Bureau, LLC, No. 18-cv-04488 (E.D.N.Y. Feb. 19, 2019), plaintiff argued that the debt collector’s letter would lead a least sophisticated consumer to believe that disputes must be in writing. In other words, the exact opposite of what is being argued within the Third Circuit. Read on to see how this one played out.

Background

Mercantile Adjustment Bureau, LLC, the defendant in this case, sent a collection letter to plaintiff Mindy Goodman that mirrored the validation notice language of the FDCPA. In the top right corner, the letter listed an address block that looked like this:

165 Lawrence Bell Drive, Suite 100
Williamsville, NY 14421-7900
1-866-513-9461
Please send payment or correspondence to:
Mercantile Adjustment Bureau, LLC
PO Box 9055
Williamsville NY 14231-9055

The letter again lists Mercantile’s phone number in the body of the letter and repeats its street address and phone number at the end of the letter.

Plaintiff filed an FDCPA lawsuit against Mercantile alleging that the letter’s instructions to “sent payment and correspondence” to an address leads a least sophisticated consumer to believe that he can only dispute the debt in writing. Mercantile filed a motion to dismiss the case.

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The Court’s Decision

The court, thoroughly unpersuaded by plaintiff’s arguments, granted Mercantile’s motion to dismiss. According to the court, the etter “contains a validation notice that accurately conveys the information required by the statute and does not ‘overshadow or contradict’ that notice simply by providing consumers an address for them to send ‘payments and correspondence.’”

Plaintiff fell flat with her argument that the limitation in the address box leads to confusion. Reviewing the letter, the court read the limitation simply as a means to communicate Mercantile’s preference that written correspondence be mailed to the P.O. Box rather than the street address.

Plaintiff argued that the phone number provided refers only to payments, but the court found that this is not so. Specifically, the court stated that the phone number was provided in several prominent locations on the letter without limitation or commentary.

The court distinguished the letter from court cases cited by plaintiff. In the cited cases, the court noticed that the request for written correspondence was found in the same section as the validation notice, which could lead the a consumer to think that all disputes must be in writing mailed to that address. However, the validation notice in Mercantile's letter is in a completely different section than the address box. The body of the letter also contains two references to mercantile's phone number. Because of this, the court found that the letter more closely resembles cases that found no overshadowing.

Plaintiff attempted to change her position midway through her opposition brief, which did not impress the court. Instead, the court ponders that this might have been due to “recognizing the weakness of her argument.” In the opposition brief, plaintiff attempts to argue that the letter overemphasizes the consumer’s rights to dispute the debt by phone, thus making the least sophisticated consumer believe that they can obtain validation of debt by lodging an oral dispute. The court dismissed this argument since the validation notice language explicitly states that to receive validation of debt, the consumer must send the request in writing to the debt collector.

The court went on to address the circuit split on the issue. Even though the Eastern District of New York falls into the Second Circuit, plaintiff attempted to cite several Third Circuit cases. The court responded:

[T]hose cases are entirely irrelevant, as the Third Circuit disagrees with [the Second Circuit case] Hooks and has read a ‘writing’ requirement into all dispute-related provisions of section 1692g.

insideARM Perspective

The case law on this issue is all over the place. The Third Circuit requires that all disputes under 1692g be in writing. As illustrated above, other circuits disagree. Within the Third Circuit, the Eastern District of Pennsylvania and the District of New Jersey cannot seem to agree about whether or not an almost identical letter confuses a consumer about dispute procedure. 

Thankfully there is currently a pending petition for the United States Supreme Court to review the issue and hopefully provide uniformity to validation notice requirements.