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Author Topic: FDCPA does not require that a consumer's VOD be writtten  (Read 4827 times)
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« on: September 17, 2006, 08:40:48 AM »

Camacho v. Bridgeport Fin., No. 04-17126 [9th Cir. December 12, 2005]


The Fair Debt Collection Practices Act (FDCPA) does not require that a consumer's dispute of the validity of a debt be in writing.


Ladies and Gentleman, this is a MUST READ!!! "Spank you; spank you very much" is the theme song the appellate court trumpets as the smash down upon this debt collector swine.  :shock:

RITA CAMACHO, on behalf of
herself and all others similarly
Plaintiff-Appellee, No. 04-17126
Defendant-Appellant, OPINION
Defendants. þ
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted
November 14, 2005—San Francisco, California
Filed December 12, 2005
Before: Jerome Farris, A. Wallace Tashima, and
Consuelo M. Callahan, Circuit Judges.
Opinion by Judge Tashima
Mark E. Ellis, Murphy, Pearson, Bradley & Feeney, Sacramento,
California, for the defendant-appellant.
Richard J. Rubin, Santa Fe, New Mexico, for the plaintiffappellee.
TASHIMA, Circuit Judge:
Rita Camacho (“Camacho”), a debtor, sued Bridgeport
Financial, Inc. (“Bridgeport Financial”), a debt collector, for
violations of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692g and 1692e. Camacho alleges
that Bridgeport Financial’s initial collection notice, which
stated that Camacho could only dispute the validity of the
debt in writing, misrepresented Camacho’s rights. The district
court denied Bridgeport Financial’s motion to dismiss, concluding
that Camacho had stated a viable claim under the
plain meaning of the statute. The district court certified the
issue for interlocutory appeal and we granted the petition
under 28 U.S.C. § 1292(b). We affirm.
Camacho’s debt of $42.57 was assigned to Bridgeport
Financial by Into Video.1 In its initial collection communication,
Bridgeport Financial included the statement: “Unless
you notify this office in writing within 30 days after receiving
this notice that you dispute the validity of this debt or any portion
thereof, this office will assume this debt is valid.”
(Emphasis added.) Camacho sued under §§ 1692g and 1692e
of the FDCPA, alleging that this statement misrepresented the
rights of consumers because it required Camacho to dispute
the debt in writing. Bridgeport Financial filed a motion to dismiss
the action under Federal Rule of Civil Procedure
12(b)(6), arguing that § 1692g(a)(3) implicitly requires disputes
to be in writing because only written disputes can
invoke the other protections afforded by the FDCPA. The district
court rejected Bridgeport Financial’s arguments, holding
that the plain meaning of § 1692g(a)(3) did not require that
1This case was brought as a putative class action, but the district court
has not yet ruled on the class aspects of the case.
disputes be in writing and that this interpretation did not
undermine the purpose or destroy the coherence of the statute.
We review a district court’s decision to grant or deny a
motion to dismiss pursuant to Rule 12(b)(6) de novo. Fireman’s
Fund Ins. Co. v. City of Lodi, 302 F.3d 928, 939 (9th
Cir. 2002). We also review questions of statutory interpretation
de novo. Romine v. Diversified Collection Servs., Inc.,
155 F.3d 1142, 1145 (9th Cir. 1998).
[1] The issue before us is whether a collection notice that
requires disputes to be set forth in writing violates 15 U.S.C.
§ 1692g. Under § 1692g(a), a debt collector must send a consumer
debtor, within five days of its initial attempt to collect
any debt, a written notice containing:
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is
(3) a statement that unless the consumer, within
thirty-days after receipt of the notice, disputes the
validity of the debt, or any portion thereof, the debt
will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that
the debt, or any portion thereof, is disputed the debt
collector will obtain verification of the debt or a
copy of a judgment against the consumer and a copy
of such verification or judgment will be mailed to
the consumer by the debt collector; and
(5) a statement that upon the consumer’s written
request within the thirty-day period the debt collector
will provide the consumer with the name and
address of the original creditor, if different from the
current creditor.
15 U.S.C. § 1692g(a)(1)-(5) (emphasis added).
[2] Section 1692g(b) further provides that if the consumer
notifies the collector of a dispute in writing within the 30-day
period, the collector shall cease collection activities until he
obtains the verification or information required by 15 U.S.C.
§ 1692g(a)(4) and (5).
Bridgeport Financial argues that its collection notice meets
the notice requirements of § 1692g(a)(3) because the subsection
must be interpreted as requiring written notice in order
for the procedure in § 1692g(a)(3) to be consistent with the
debt validation mechanisms provided in the later subsections
of § 1692g. Camacho argues, however, that since
§ 1692g(a)(3) does not explicitly include a writing requirement,
Bridgeport Financial’s version of the collection notice
misrepresents the debtor’s rights.
[3] Whether a consumer’s dispute of the validity of a debt
under the FDCPA must be in writing is a question of first
impression in this circuit.2 The only other circuit to address
the issue has held that “given the entire structure of section
2This circuit has stated that, “If no written demand is made, the collector
may assume the debt to be valid.” Mahon v. Credit Bureau of Placer
County Inc., 171 F.3d 1197, 1202 (9th Cir. 1999) (internal quotation
marks and citation omitted). The statement in Mahon, however, was made
in the context of a discussion of § 1692g(b), which has an explicit writing
requirement, not in the context of discussing § 1692g(a)(3). See Sambor
v. Omnia Credit Servs., Inc., 183 F. Supp. 2d 1234, 1240 n.4 (D. Haw.
2002) (explaining why Mahon is inapplicable to analysis of subsection
(a)(3)). Additionally, the statement in Mahon was dicta and therefore is
not binding. See id.
1692g, subsection (a)(3) must be read to require that a dispute,
to be effective, must be in writing.” Graziano v. Harrison,
950 F.2d 107, 112 (3d Cir. 1991).3 Because we conclude
that we must give effect to the plain meaning of the statute,
we respectfully disagree with Graziano.
The Supreme Court’s approach to statutory interpretation in
Lamie v. United States Trustee, 540 U.S. 526 (2004), guides
our analysis. In Lamie, the Supreme Court addressed the
omission of the phrase “or to the debtor’s attorney” from 11
U.S.C. § 330(a)(1), which provides for the payment from the
bankruptcy estate of reasonable fees to “a trustee, an examiner,
a professional person employed under section 327 or
1103.” Id. at 530. Inclusion of the phrase “or to the debtor’s
attorney” would have made the language parallel with other
parts of the statute that referred to “attorney,” and more compatible
with the previous version of the statute. Id. at 530-31.
Further, the statute as it stood was ungrammatical, which
“strengthen[ed] the sense that error exist[ed].” Id. at 531.
Despite this evidence of legislative error, the Supreme Court
refused to insert the phrase. Id. at 535, 542. In reaching this
conclusion, the Court examined the statute’s plain meaning,
whether the plain meaning would lead to absurd or unreasonable
results, and legislative intent.
First, the Court looked to the text of the statute, which
omitted the reference to a debtor’s attorney. Id. at 534. The
Court found that since the plain meaning did not alter the
text’s substance or obscure its meaning, the plain meaning
was not inconsistent with the statute. Id. at 535. The Court
reasoned that absent sufficient indications to the contrary, it
should refrain from inserting language into a statute, even if
it suspected that Congress inadvertently omitted such lan-
3Two district courts in this circuit have held that a debt may be orally
disputed under § 1692g(a)(3). Sanchez v. Robert E. Weiss, Inc. (In re Sanchez),
173 F. Supp. 2d 1029, 1034 (N.D. Cal. 2001); Harvey v. United
Adjusters, 509 F. Supp. 1218 (D.Or. 1981).
guage. Id. at 537. The Court went on to find that the plain
meaning did not lead to an absurd result because even without
the omitted language, compensation for attorneys was still
available. Id. at 536-37.
[4] 6] The district court correctly denied Bridgeport Financial’s
motion to dismiss. The plain language of subsection
(a)(3) indicates that disputes need not be made in writing, and
the plain meaning is neither absurd in its results nor contrary
to legislative intent. Thus, there is no writing requirement
implicit in § 1692g(a)(3). Bridgeport Financial’s collection
notice violated § 1692g insofar as it stated that disputes must
be made in writing.
The order of the district court denying Bridgeport Financial’s
motion to dismiss is AFFIRMED and the case is
remanded to the district court for further proceedings.
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« Reply #1 on: December 24, 2006, 06:46:43 AM »

See also:

Baez v. Wagner & Hunt, P.A., 442 F.Supp.2d 1273, 1274 (S.D. Fla. 2006)



Class Action Defense Cases-Baez v. Wagner & Hunt: In Class Action Against Debt Collector Florida Federal Court Holds That Law Firm’s Collection Letter Violated Fair Debt Collection Practices Act (FDCPA)

In Case of First Impression Florida District Court Holds that Collection Letter Sent by Law Firm Violated Federal Fair Debt Collection Practices Act (FDCPA) Because it Told Debtor that Validity of Debt could be Disputed Only in Writing

Plaintiff opened an American Express Centurion credit card account. American Express retained a law firm to collect amounts owed on the account. The law firm sent a “Dunning letter” that stated, in pertinent part, that the debtor had to “notify this office in writing within thirty days after receiving this notice that you dispute the validity of the debt.” Baez v. Wagner & Hunt, P.A., 442 F.Supp.2d 1273, 1274 (S.D. Fla. 2006) (italics added by court). Plaintiff filed a class action against the law firm alleging that the collection letter violated Section 1692g of the federal Fair Debt Collection Practices Act (FDCPA) by requiring that the validity of the debt be disputed in writing, and defense attorneys moved to dismiss the complaint. Id., at 1274-75. The basis of the lawsuit is that Section 1692g(a)(3) requires that a debt collection letter notify the debtor that the debt will be assumed valid unless the debtor disputes the validity of the debt within 30 days. Sections 1692g(a)(4) and (a)(5), however, reference written notifications from the debtor disputing the debt. Defendant argued that its Dunning letter simply “provided [plaintiff] with additional guidance for disputing the debt and avoided confusion by reconciling the notification requirement in subsection (a)(3) with the writing requirement contained in subsections (a)(4) and (a)(5).” Baez, at 1275-76. The district court disagreed.

The federal court noted that “Whether a Dunning letter that requires a consumer to dispute a debt in writing violates the FDCPA is a question of first impression in this Circuit.” Baez, at 1276. The only circuits to address the issue - the Third Circuit and the Ninth Circuit - have reached different conclusions: the Third Circuit held that subsection (a)(3) requires written notice, see Graziano v. Harrison, 950 F.2d 107, 112 (3d Cir. 1991), while the Ninth Circuit held that written notice is not required, see Camacho v. Bridgeport Fin., Inc., 430 F.3d 1078, 1080-81 (9th Cir. 2005). In agreeing with the Ninth Circuit’s analysis, the district court concluded that the plain language of the statute does not require that the validity of the debt be disputed in writing, and refused to add that requirement to the statute. Baez, at 1277.

The district court also refused to give the law firm the benefit of a “good faith” defense based on the fact that Camacho issued after the firm sent the collection letter. The court explained at page 1277, “By including the phrase ‘in writing’ in its letter to [plaintiff], [the law firm] violated the plain meaning of the statute.” The fact that district courts disagreed on the proper interpretation of Section 1692g(a)(3) was not an excuse for the law firm to alter the language contained in the statute. Id.
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