BRODERICK v. VIKING CLIENT SERVICES, INC.
2:17-cv-01827
D.N.J.Sep 26, 2017Background
- Plaintiff Margaret Broderick sued on behalf of a putative class under the FDCPA, alleging a March 17, 2016 debt-collection letter from Viking Client Services regarding a PNC debt was deceptive.
- The letter included IRS-reporting language stating that creditors must report discharges of debt $600 or greater on Form 1099-C and said the creditor “may be required” to report if the “Settlement amount that you agreed to pay results in a discharge of $600 or more.”
- Broderick claims this language is confusing to the least sophisticated consumer because (1) it is internally inconsistent (definitive vs. permissive language) and (2) it fails to explain whether interest is included in the reportable amount or only principal, and it implies reporting depends on the amount agreed to be paid rather than the amount actually paid.
- Defendant moved to dismiss under Rule 12(b)(6), arguing the suit was time-barred by the FDCPA’s one-year limitations period and that the complaint failed to state an FDCPA claim.
- The district court accepted the complaint’s factual allegations as true at the motion-to-dismiss stage, found the suit timely (filed on the one-year anniversary), and concluded the allegedly confusing IRS language plausibly violated the FDCPA when viewed from the perspective of the least sophisticated consumer.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness under 15 U.S.C. § 1692k(d) | Broderick filed within one year (suit filed on the anniversary date) so it is timely | Viking argued filing on the anniversary day is too late and the action is time-barred | Court held filing on the anniversary date is timely; plaintiff met the one-year limit |
| Sufficiency of FDCPA claim (deceptive language) | The IRS-reporting language is deceptive/confusing to the least sophisticated consumer (inconsistent phrasing; unclear whether interest is reportable; misstates triggering event) | Viking argued the letter did not violate the FDCPA and plaintiff failed to plead a prima facie case | Court held plaintiff plausibly alleged an FDCPA violation under the least-sophisticated-consumer standard and denied dismissal |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard for plausibility)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard and plausibility framework)
- Kaymark v. Bank of Am., N.A., 783 F.3d 168 (3d Cir. 2015) (apply least-sophisticated-consumer standard to FDCPA communications)
- Douglass v. Convergent Outsourcing, 765 F.3d 299 (3d Cir. 2014) (elements required for an FDCPA claim)
- Johnson v. Riddle, 305 F.3d 1107 (10th Cir. 2002) (interpreting "within one year" to include the anniversary date)