Ryan Boucher v. Finance System of Green Bay, I
880 F.3d 362
| 7th Cir. | 2018Background
- Plaintiffs are Wisconsin residents with defaulted medical debts assigned to Finance System of Green Bay, Inc. (FSGB); FSGB sent form dunning letters stating a principal, interest, and a total balance.
- The letters included language: “Because of interest, late charges, and other charges that may vary from day to day, the amount due on the day you pay may be greater…”
- Plaintiffs sued as a class under the FDCPA, claiming the letters were false/misleading under § 1692e and that § 1692g(a)(1) (amount of debt) was not properly stated because FSGB cannot lawfully impose “late charges and other charges” under Wisconsin law.
- FSGB moved to dismiss, arguing its letter tracked the Seventh Circuit’s Miller safe-harbor language for variable debts and was therefore lawful; the district court granted dismissal.
- The Seventh Circuit reversed, holding the statement was materially false/misleading because it implied legally-impossible charges and Miller’s safe harbor does not protect inaccurate or misleading use of its template language.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FSGB's letter violated § 1692e by falsely implying legally-imposable "late charges and other charges" | The letter falsely implies charges FSGB cannot lawfully impose; an unsophisticated consumer would be misled | The language mirrors Miller safe-harbor and simply notifies that the debt is variable; reference to other charges is immaterial because interest can vary | Held for plaintiffs: statement is materially false/misleading because it suggests outcomes that cannot legally occur and would influence a consumer's payment decision |
| Whether Miller safe-harbor language immunizes FSGB under § 1692e | Miller should not shield false or inaccurate uses of its template; accuracy is required | Miller safe-harbor permits use of the language to avoid liability for variable debts | Held for plaintiffs: Miller does not protect a debt collector who uses the safe-harbor language inaccurately or in a way that misleads; safe harbor requires the information be accurate and not obscured |
| Whether the alleged misstatement is material (would influence an unsophisticated consumer) | Fear of unspecified "late charges and other charges" would affect scarce-resource decisions and is therefore material | Any variability warning suffices; source of variance is immaterial because debtors will pay sooner for any variance | Held for plaintiffs: the unspecified charges are material because they could affect payment decisions, especially where interest is negligible |
| Whether plaintiffs forfeited their § 1692g(a)(1) claim on appeal | § 1692e and § 1692g(a)(1) overlap here; plaintiffs preserved the argument | FSGB contends plaintiffs abandoned the § 1692g(a)(1) claim by limited briefing | Held for plaintiffs: claim not forfeited; the § 1692g and § 1692e contentions overlap and were adequately raised |
Key Cases Cited
- Miller v. McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, LLC, 214 F.3d 872 (7th Cir. 2000) (provides safe-harbor template for notifying consumers of variable debts, conditioned on accuracy)
- Lox v. CDA, Ltd., 689 F.3d 818 (7th Cir. 2012) (dunning language that implies legally impossible outcomes is false and misleading to the unsophisticated consumer)
- Chuway v. Natl’s Action Fin. Servs., Inc., 362 F.3d 944 (7th Cir. 2004) (advises collectors of language to avoid for fixed debts and suggests using Miller language when collecting additional accruing charges; treated as dicta here)