414 F.Supp.3d 1198
S.D. Ind.2019Background
- Plaintiff September Webster incurred a consumer debt that went into default; the account was placed with Receivables Performance Management, LLC (RPM) for collection.
- Webster’s counsel faxed a dispute/cease-communication letter to RPM on September 27, 2018 to facsimile number 1-888-203-3641 and obtained a successful transmission receipt.
- RPM reported or verified Webster’s alleged debt to TransUnion in November 2018 without indicating the debt was disputed.
- RPM moved for judgment on the pleadings under Rule 12(c), arguing (a) it never received Webster’s fax because it removed that inbound fax line in January 2018, (b) Webster’s claims are moot due to a Rule 68 offer, and (c) Webster lacks standing because she suffered no injury-in-fact.
- Webster responded that RPM did receive the fax (the number remained listed on third-party consumer-facing sites), the Rule 68 offer did not fully satisfy her requested relief, and the failure to report a disputed debt is a cognizable injury under Seventh Circuit authority.
- The Court denied RPM’s Rule 12(c) motion, holding that on the pleadings it must accept Webster’s factual allegations, the Rule 68 offer did not moot the case, and Webster sufficiently alleged an injury-in-fact under FDCPA § 1692e(8).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RPM violated FDCPA §1692e(8) by reporting the debt without indicating it was disputed | Webster: counsel faxed a dispute to RPM and RPM still reported the debt to TransUnion without noting the dispute | RPM: it did not receive the fax (inbound fax line removed), so there was no notice and no violation | Court: on 12(c) must accept plaintiff’s allegations; factual dispute inappropriate now — claim survives |
| Whether RPM’s Rule 68 offer mooted Webster’s claims | Webster: the offer did not fully satisfy her requested relief (she sought actual and statutory damages); rejected offers do not moot a case | RPM: its offer of statutory damages plus fees removed any live controversy | Court: offer did not moot the case; Chapman and Campbell‑Ewald/Gomez principles control; motion denied |
| Whether Webster alleged injury‑in‑fact/standing | Webster: failure to report a disputed debt creates a real risk of financial harm and suffices as injury (citing Seventh Circuit precedent) | RPM: Complaint fails to identify any concrete injury caused by RPM | Court: Webster sufficiently pleaded injury-in-fact (Evans); RPM failed to rebut in reply and thus conceded the standing argument |
| Whether judgment on the pleadings is warranted under Rule 12(c) | Webster: Complaint plausibly states an FDCPA claim; disputes are factual and improper at pleading stage | RPM: beyond doubt plaintiff cannot prove facts to support relief | Court: 12(c) standard applied; because factual inferences favor Webster, judgment on the pleadings is not appropriate |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (application of Twombly plausibility standard)
- Evans v. Portfolio Recovery Assocs., 889 F.3d 337 (7th Cir. 2018) (failure to report a disputed debt as disputed causes a concrete risk of financial harm for standing)
- Chapman v. First Index, Inc., 796 F.3d 783 (7th Cir. 2015) (Rule 68 offer does not necessarily moot individual claims)
- Campbell‑Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) (rejected or expired offer of judgment leaves plaintiff’s claim live)
- Damasco v. Clearwire Corp., 662 F.3d 891 (7th Cir. 2011) (discussed and distinguished by later Seventh Circuit authority on offers)
- Pisciotta v. Old Nat’l Bancorp., 499 F.3d 629 (7th Cir. 2007) (Rule 12(c) standard same as Rule 12(b)(6))
- N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449 (7th Cir. 1998) (Rule 12(c) judgment appropriate only when plaintiff cannot prove any facts to support claim)
- Bonte v. U.S. Bank, N.A., 624 F.3d 461 (7th Cir. 2010) (failure to respond to an argument can constitute waiver)
- Sayles v. Advanced Recovery Sys., 865 F.3d 250 (7th Cir. 2017) (discussed in context of injury from inaccurate credit reporting)