Guerrero v. RJM ACQUISITIONS LLC

moral, HALL, important such Before: CYNTHIA HOLCOMB implicate cases that KLEINFELD, social, issues in either and KIM and constitutional ANDREW J. WARDLAW, court and to resolve Judges. the state or federal Circuit McLANE finally less than full care and them

attention. ORDER Attorney The court assumes Supreme to the mandate of the Pursuant also of the State of California General Court, vacated and the judgment our difficulty complexity understands is remanded to the District Court of case no rec- penalty of death cases. He doubt in light for further consideration Alaska may much more ognizes they require Frederick, -, v. 551 U.S. Morse cases, judicial time than other (2007). 2618, 168 L.Ed.2d 290 S.Ct. brief preparation single even the IT IS SO ORDERED. time than the court itself would take more be afforded to consider and decide the he decide on behalf of appeal

entire should expedited proce- into the opt

the state to circumstances, we have

dure. Under granting the California qualms

no about

Attorney extraordinary amount General prepare any

of time to his brief this or capital other case. GUERRERO, Kenneth Jon Plaintiff-Appellee, GRANTED MOTION

v. ACQUISITIONS LLC, Defendant-Appellant. No. 05-15121. Joseph FREDERICK, Plaintiff- Appellant, Appeals, United States Court Ninth Circuit. MORSE; Deborah Juneau School Argued Nov. 2006. Submitted Board, Defendants-Appellees. Aug. Filed 2007. No. 03-35701. Appeals, United States Court of

Ninth Circuit.

Aug. Mertz,

Douglas Esq., K. Law Office Mertz, Juneau, AK, K. Plain-

Douglas for

tiff-Appellant. Crosby, Crosby, Esq.,

David C. David C.

P.C., Juneau, AK, Defendants-Appel-

lees. Honolulu, Paer, HI, Harris for the

John plaintiff-appellee. McCorriston, Miller, Minkin,

David J. HI, Mukai, MacKinnon, LLP, Honolulu, & defendant-appellant. for the Kohn, Bell, Shapiro, Goldberg, Daniel P. Black, Ltd., Moritz, Rosenbloom & Chica- IL, go, Amicus Curiae for the National Attorneys Association of Retail Collection Association, Buyers’ Inc. and the Debt TROTT, Before: STEPHEN S. KIM WARDLAW, McLANE and W. FLETCHER, Judges. Circuit Opinion; Per Partial Curiam by Judge and Partial Dissent Concurrence WILLIAM A. FLETCHER.

PER CURIAM. Guerrero, consumer,

Kenneth Jon LLC, purchaser Acquisitions, sued RJM debt, in the of consumer United States Hawaii, District Court for the District gues, of the Fair Debt Collec- the district court’s conclusion that alleging violations Act, seq. 1692 et tion Practices U.S.C. protection RJM violated Hawaii consumer the dis- pretrial litigation, extensive After statutes is likewise incorrect. RJM claims orders. The first trict court issued two complaint also that Guerrero’s motion to dismiss Guerre- denied RJM’s harass, brought in bad faith and to complaint and ruled on first amended ro’s the district court therefore should have summary mo- judgment cross parties’ attorneys’ Finally, awarded RJM fees. tions, violated the concluding RJM challenges the district court’s award Act and was entitled therefore Guerrero $45,000 attorneys’ of over fees to damages and reason- statutory actual and Guerrero. attorneys’ fees. The second order able amici RJM and the National Association recom- special report a master’s adopted Attorneys of Retail Collection and the to of over mending an award Guerrero Buyers’ urge Debt Association us to con- $45,000 attorneys’ appeals fees. RJM sider also whether communications that orders, claiming the district from these at a violate the Act when directed consum- incorrectly interpreted the Act. We court at er do not violate the Act when directed jurisdiction to pursuant have 28 U.S.C. legal a consumer’s counsel. RJM and ami- carefully reviewing after argue ci for an affirmative answer to this and re- rulings, district court’s we reverse court, question. argued before the RJM mand. brief, argued in that the Act’s and amici its I purpose protect unsophisticated is to debt- collectors, and once ors from abusive debt court erroneous- RJM claims district by pro- a protection consumer obtains this dismiss, ly denied RJM’s motion counsel, protections curing legal the Act’s which RJM asserted that Guerrero’s first pro- did not relate back to its complaint superfluous amended become and therefore complaint, original the date he filed his agree. The longer apply. visions no We by the and therefore his action was barred underlying purposes language Act’s one-year Act’s statute of limitations. As a recognize a distinction between consum- summary rulings parties’ for the on the legal They a counsel. er and consumer’s motions, judgment RJM claims the district legal entities. therefore are distinct We incorrectly interpreted pro- the Act’s to the consum- hold that the letter directed col- they require visions and what of debt notice that the receiving er’s after Specifically, challenges lectors. RJM alleged an debt does disputed consumer district court’s conclusions that RJM vio- the Act. not violate (1) it lated the Act when sent Guerrero to correct urge RJM and amici us also slightly containing two collection letters that “even if the district court’s conclusion numbers, in an different account and file had ceased with its efforts to collect [RJM] debt, in violation of attempt to collect one still would have alleged [RJM] (2) 1692g(a); continued collection ef- respect- obligated verify” it. We been forts, § 1692g(b), in violation of after re- court, and fully disagree with the district ceiving disputed that notice Guerrero Act a collector requires hold that the debt providing debt and before verification who receives notice that consumer dis- (3) debt; misrepresented alleged debt to cease collection putes 1692e, counsel, Guerrero’s violation of provides it the consumer with efforts until agency was not The Act does not verification of the debt. subject In light and not to the Act. of these verify conclusions, obligation to allegedly impose independent RJM ar- erroneous RJM, offering the collector ceases all collec- laws settle a debt where arising at the consumer. claims from al- tion efforts directed Guerrero’s these leged days pay- violations within ten for a II $8,000.00. ment RJM of He threat- from ened also to sue RJM in federal court. May RJM sent Guerrero two subject ARE NEW CREDITOR” col- The line of Paer’s letter “WE YOUR letters, one to his home address lection went so far as to read: “Re: Guerrero v. office Each letter post and one his box. Acquisitions point LLC.” At this pur- that RJM had time, informed Guerrero only the RJM had sent to Guerrero owed originally chased a debt Guerrero May letters dated two contained the same Corp., Shell Oil each Paer, Attorney threatening to transform number, security redacted social partially simple debt collection matter into fed- and each indicated a balance of $1291.86. case, eral wrote: except The letters were identical repre- Please be that this office advised mailing address on each letter Guerrero’s Mr. Kenneth sents Jon Guerrero. different, and the last letter in both position your May It is his letters identifiers, and “RJM file” the “account” 20, 2002, and its other collection [sic] appeared top which and the bottom the Fair attempts comply do not letter, slightly of each were different. The Debt Collection Practices Act.... Mr. in the account and file numbers letter sent accept payment Guerrero will of office box each consist- post to Guerrero’s covering actual and statu- both $3000.00 by ed of a of numbers followed series attorneys tory damages as well as fees letter “A”. The account and file numbers in in full settlement of his claims. the letter sent to his street address were days for ten open This offer will remain in all identical to those the other letter which, today, from after Mr. Guerrero they with a “B”. respects but ended one— expects to file his action Federal Dis- print In small below the account infor- trict to obtain the sums due him. Court letter, in each the words “Please mation respond you Please within that time if important informa- see reverse side resolving are interested in this matter appeared. tion” On the reverse side of each litigation. without appeared language requires the Act addition, hereby In Mr. Guerrero indi- to include in initial debt collectors commu- formally disputes cates that he this al- regarding consumers collec- nications with requests you and leged debt send debts, informing of that if he tion Guerrero him verification of the debt.... Send writing thirty debt in disputed the within verification and other communication to letter, days receiving of RJM would Guerrero, and not to Mr. this office provide obtain and Guerrero with verifica- added). (emphasis a copy judgment tion of the debt or of a Act, against him. As mandated only can Attorney Paer’s letter be de- each letter concluded with the statement a hardball tactic aimed either at scribed as attempt is an to collect a debt.” “[t]his than the resolving his client’s debt at less owed, amount RJM believed Guerrero 10, May 20 and

Between June Guerrero RJM, generating against a lawsuit Paer, lawyer, regarding contacted his Mr. objec- both. The letter had as one of its Electing RJM’s debt collection effort. alleged from of RJM, tives the collection RJM attorney turn the on Paer tables attorneys’ damages and fees for violations asserting wrote RJM on June viola- claimed tions of the Act and related Hawaii state of the Act for which Paer fact, In month after he received from RJM the clearly point liable. RJM to the May, attempting was send a letter 2002 letters to collect this all RJM had done debtor, addresses, provided by the sequences two debt. The dates and of the relatively small debt. seeking to collect suggest inquiry by letters Guerrero to did not explain, the letters As we shall May, upon receipt Citibank RJM’s Act, attorney Paer’s claims violate the and letter, letters. In the June RJM return, contrary were baseless. to the process verify- in the stated it “was ten-day turnaround received a short RJM ing the account.” more than double the amount demand for We note that RJM’s June 2002 letter fees, including attorneys’ and a referenced both the account from number litigation. immediate federal threat of file Shell Oil and its own number without letter, receipt Paer’s Upon appearing the As and Bs the two earlier activity all RJM ceased direct letters to Guerrero. RJM asserted also in As instructed Guerre- from Guerrero. (correct) legal position the letter its own with the attorney, compliance ro’s “respectfully that it maintains that it has Act,1 attorney Paer on June RJM wrote laws,” (partially no its incor- violated 14, 2002, stating acquired that it had rect) position that it was “not a collection in the name of opened Oil account Shell therefore, agency subject Citibank, pro- Guerrero from Kenneth purchased RJM from [Act].” security social viding complete Guerrero’s Therefore, original Guerrero’s creditor. En- payment. and the date of last number agency” was not a “collection em- copy letter was a of a June closed with this ployed by the creditor to collect the credi- to Kenneth 2002 letter from Citibank J. Nevertheless, debts. delinquent tor’s reads, The letter Guerrero. subject does not follow that RJM was not Guerrero, Dear Mr. Act. further clarified that its RJM in inquiry we received reference to only attempt directly to communicate with account number Shell Oil Associates/ by Mr. Guerrero was letter before attor- 146240502should be directed to: ney Paer’s intervention. RJM reiterated Acquisitions, RJM LLC attor- requested the current balance and 575 Underhill Blvd ney to contact the office to discuss Paer Suite 224 the matter. Syosset, N.Y. 11791 taking every precaution to Apparently

800-541-0824 Act, RJM included in its comply with longer no owns this account. Citibank letter, in as it did its earlier letters March, account was sold to RJM in This Guerrero, “This is an at- statement concerning 2002. All communication tempt Any a debt. information to collect this account should be addressed to the purpose.” will for that obtained be used new owner. Act in all language required by This is Sincerely, consumer, initial -with a communications [signed] 1692e(ll) see 15 failure U.S.C. —the Analyst Portfolio it a violation. While it is true include 1692e(ll) in requires subsequent responding inquiry pre- This letter to an that the only communications a statement to him sumably by Guerrero was sent collector,” from a debt approximately at his address one “communication is Citibank 1692c(a)(2) ("a the consumer debt collec- ... if the debt collector knows See 15 U.S.C. ”). attorney.... represented tor not communicate with a consumer summary judgment. Two weeks later that RJM continued we cannot conclude merely summary of the Act filed a motion for collect a debt in violation cross comply with the attempting following because in In the these judgment. months in a letter to a debtor’s Act it included filings, parties both briefed the issues ex- generally Act re- a statement counsel tensively. briefing amount Moreover, “this,” the word in quires. case, throughout coupled this with com- disclosure, more, without does not RJM’s in what discovery process, bative resulted can necessarily mean “this letter.” “This” Gillmor, mo- Judge hearing at the on the initiative,” began “this which also mean tions, lawyer- referred to as an amount of No the earlier letters to Guerrero. ing disproportionate to the issues involved. communications between RJM further July In the district court en- attorney Paer oc- or RJM and Guerrero denying tered an order RJM’s motion to curred. in granting part denying dismiss and later, January Six months summary part parties’ judgment full having yet to receive verification of the Judgment was entered in De- motions. alleged complaint Guerrero filed his $2,545.00 cember, awarding Guerrero court, alleging in the that RJM district statutory damages plus actual and reason- pro- the Act and Hawaii consumer violated A attorneys’ able fees and costs. week year, law. Later that RJM filed tection later, filed a motion for award of Guerrero judgment pleadings, motion for on the attorneys’ sup- fees and a memorandum in summary judg- filed a motion for Guerrero filed a memoran- port of motion. RJM was on. protracted legal ment. The battle it. The court re- opposing dum district January after extensive brief- In magistrate judge the motion to a ferred unnecessarily on the motions and ing who, master, special prepared report discovery antagonistic process, the district fees, attorneys’ on the motion for which vacating hearing an order issued adopted the district court a June 2005 stating for the motions and date set $45,237.21in at- awarding order Guerrero decide the motions without a hear- would torneys’ fees. early February, ing. the district court summary motion for denied Guerrero’s Ill judgment granted RJM’s motion for pleading judgment pleadings, subject on the to a Whether amended to file an a grant original pleading of leave Guerrero relates back to an is law, A a week complaint. amended little over question of and is therefore reviewed later, Guerrero filed first amended com- Oja Army Corps de novo. v. U.S. plaint, stating general allegations (9th Cir.2006) the same 1122, Eng’rs, 440 F.3d 1127 original complaint alleging but addi- (“We ... review de novo district identifying specific provi- and tional facts application court’s of the Federal Rules of sions of the Act. 15(c)’s Procedure, including Rule re Civil doctrine.”). A lation back district court’s 2004,

In March of RJM filed its motion ruling on motion to dismiss reviewed Guerrero’s first amended com- dismiss Fund, Ltd., Advantage novo. Decker v. de plaint, arguing inter alia that Guerrero’s (9th Cir.2004). 593, 362 F.3d 595-96 We complaint claims in the amended did not interpre review de novo a district court’s original complaint, to his and relate back Act, tation of the and a district court’s claims were barred therefore his summary judg ruling In on cross motions one-year statute of limitations. Act’s Romine v. Collection mid-April, filed another motion ment. Guerrero Diversified

933 (9th Inc., Serv., complaint, the pleading 155 F.3d 1145 Cir. amended Sea- Inc., 1998); Sys., 236 Corp. Slenk v. Transworld board added new cause of action. (9th Cir.2001). 1074 added, F.3d It a pleading 677 F.2d Act, brought under the context of claims alleging illegal manipulation, market a district court’s denial of attor we review alleging illegal misrepresentation claim under two neys’ fees to a debt collector a document. Id. original Guerrero’s court’s standards of review. district complaints alleged first amended violations of bad faith and finding on the issue protection of the Act and Hawaii consumer error; clear harassment is reviewed for complaint law. the amended added While is re the district court’s ultimate denial 14 specific involving facts the June viewed for an abuse of discretion. Swan letter, specific orig- and was more than the Inc., Serv., Oregon son v. S. Credit 869 Act, identifying provisions inal in (9th Cir.1989). 1222, 1229 F.2d the claims it asserted out of arose conduct, transaction, same or occurrence A. identified; namely, the district court a pleading An amendment of relates attempt RJM’s to collect a debt from original pleading back to the date of Guerrero. in the when the claim or defense asserted argument is further undermined RJM’s arose out of the con- pleading amended policy governing the rules amend duct, transaction, or occurrence set forth pleadings ments to to effectuate. meant original set forth in the attempted be Trust, In Hurn v. Retirement Fund 15(c)(2). pleading. Fed.R.Civ.P. The dis- (9th Cir.1981), F.2d we noted trict court concluded that the claims as- Supreme “that Court has instructed complaints serted in both of Guerrero’s carefully the lower federal courts to heed underlying of the same transac- arose out 15(a), F.R.Civ.P., by the command of Rule tion; namely, attempt RJM’s to collect a freely granting jus leave to amend when allegedly owed. Guerrero (internal cita requires.” quotes tice so argues the claims Guerrero omitted). Nothing sug tions in the record complaint raised in his first amended did gests the district court’s decision to allow conduct, not arise from the same transac- complaint, to amend his Guerrero its tion, original forth in the or occurrence set complaint conclusion that the amended re contention, complaint. support To this injus original, lated back to the resulted Corp., RJM cites to SEC v. Seaboard argument tice to RJM. RJM’s rests on an (9th Cir.1982), F.2d which iden- interpretation of the rules of exaggerated inquiry tified the basic in a relation back prece Ninth procedure civil Circuit has opposing party issue as “whether the cor dent. The district concluded notice about the claim or put been on rectly complaint that Guerrero’s amended pleading.” defense the amended raised therefore original. related back to the We argues RJM that because the amended proceed evaluate merits dis complaint specifically, mentioned rulings. trict court’s time, the 14 letter RJM sent to first June counsel, origi- allegations the factual B. “absolutely no no- complaint provided

nal claims raised for the first tice of those agreed with The district court complaint. amended time” when that RJM violated the Act Guerrero supposedly confusing letters to it sent two Corp. on RJM’s reliance Seaboard collect one debt. The attempt him an misplaced. Unlike Guerrero’s amended itor, alleg- Corp. this claim as Shell Oil The account and file district court construed 1692d, 1692e, identical, §§ ing violations except identifiers were for the and/or prohib- of the Act provisions 1692f. These letter, designation “A” on the and “B” first from, respectively, using it collectors on the second. Each letter showed the methods, harassing or abusive collection Payment un- same “Last Date.” We find misleading representa- making false tenable Guerrero’s assertion the let- tions, employing practices. and unfair sufficiently confusing ters were so as to governing the Ninth Circuit’s principle sophisticated mislead the least debtor into provisions of claims under these evaluation believing attempting RJM was to collect Act is set forth in If the Swanson: attempting on two accounts. RJM was sophisticated “likely debtor would be least account, collect on one as the identical by a communication from a debt misled” amounts, original balance creditor identifi- collector, the debt collector has violated cation, payment, virtually date of last Act. at 1225. The 869 F.2d district identical account and file indicat- numbers court observed that neither letter con- addition, ed. the June 2002 letter indicating copy tained a statement it was a response from Citibank to Guerrero in original separate of an a notice sent to inquiry suggests recog- that Guerrero address, a sophisticat- and concluded least delinquent nized the account at issue. We likely ed debtor would have been confused doubt conclude with no that RJM did not being and would believe that he was § 1692g(a) violate under the sophis- “least dunned for two distinct accounts. re-We standard, ticated debtor” and therefore re- disagree. spectfully court on verse the district this issue. matter, an initial note that As we suggests incorrectly sophisti that the least application

cated debtor is lim standard’s C. arising 1692g §§ ited to claims under 1692g(b) Section of the Act re 1692e(5)of Act. The Ninth Circuit has collector, quires a debt who receives from applied the to other sections standard written disputing consumer notice See, e.g., Capital well. v. & Clark Credit debt, to cease collection of the debt direct Serv., (9th Collection 460 F.3d ly from the consumer until it has obtained Cir.2006) (applying the standard to section copy either verification of the debt or a 1692c); Regional see also Credit Wade judgment provided to the consum Ass’n, (9th 87 F.3d 1099-1100 Cir. 1996) prohibits er. Section 1692e a debt collec (applying the standard to sections false, 1692e(10) 1692f). using tor from deceptive, or mislead Nonetheless, we agree ing means to collect a debt. The district sending with RJM that the two let ters does not amount to a violation of the court concluded that the June 14 letter Act, sophisticated because even the least RJM faxed to Guerrero’s counsel was debtor would understand that this collec prohibited collection effort in violation of one, two, tion effort was aimed and not provisions. respectfully both these We delinquent accounts. disagree, and hold that communications di solely rected to a debtor’s are not foremost,

First and were the letters sent Therefore, actionable under the Act. we gave the two addresses that Guerrero counsel, responsive hold that the original creditor. The same social se- and not to his client—“the consumer”— curity appeared identifier on Each each. a prohibited was not collection effort and indicated a balance identical to the other, §§ original 1692g(b) each owed to the same cred- did not violate or 1692e.

935 overreaching practices debt collection from not one attorney are and his A consumer Act. of the purposes for debtors and their loved ones should and the same which entities, and the legally distinct They 1692c, instance, are protected. Section be them as such. treats consequently Act in connection “[c]ommunications covers who knows a debt collector example, For regulating debt collection.” In with counsel re- has retained that a consumer ability collectors to commence such of debt may contact subject debt garding the communications, plainly Act is con counsel, may generally not contact but harassment, deception, and cerned with attorney directly, unless the consumer Accordingly, Congress abuse.3 other 15 U.S.C. his consent.2 See gives just not them sought protect debtors 1692e(a)(2). Subject excep- to certain § communications, but illegal selves from tions, may not communi- a collector to the also others who would be vulnerable “any a debt with in connection with cate employed in the practices more sinister consumer, his attor- than the person other 1692c(d), industry. debt collection Section ..., agency reporting a consumer ney, above, explained thus defines “consum as creditor, creditor, of broadly range to include a of the debt- er” collector.” 15 attorney of the debt conspic or’s relatives and fiduciaries. added). 1692c(b) And (emphasis § U.S.C. attorney from uous absence of the debtor’s §in 1692c broadly “consumer” defined telling. It that otherwise extensive list is spouse, parent to include “the consumer’s col suggests approaching that in the debt minor), (if guardian, is a the consumer problem, Congress did not view lection executor, 15 U.S.C. or administrator.” attorneys susceptible to the abuses that as 1692e(d). Notably absent from this list § legislation need for the spurred the sharing com- of relatives and fiduciaries with, Congress and that built that begin identity “consumer” is a con- mon the of into the statute See differentiation itself. sumer’s Assocs., Ltd., Phillips & Cohen Zaborac v. a suggests a thus The statute as whole (N.D.Ill.2004). 962, 967 F.Supp.2d that, it understanding when congressional matters, lawyers debt collection comes to 1692c(a)(2) to the Analyzing leads be treated their debtor clients will a provision, Under that same conclusion. Nat’l Bank Or. v. differently. See U.S. a knows how to contact debt collector who Am., Inc., 508 U.S. Indep. Agents Ins. target all communi- debtor’s must 439, 455, 113 S.Ct. L.Ed.2d not to the attorney, to the cations (“In (1993) statute, we must expounding rationale behind this debtor himself. The guided by single sentence not be Unsophisticated consumers rule is clear. sentence, but look to the member of at- misled. Trained easily are bullied and law, and to its of the whole provisions torneys are not. (quoting States object policy.”) United here, at issue Turning provisions to the How.) (8 Boisdore, v. Heirs 49 U.S. language pale light sheds at best plain (1850)). Specifically, 12 L.Ed. 1009 June question of whether RJM’s on the attorneys viewed appears Congress letter, targeted solely at debtor’s of 2002 to bear the brunt intermediaries able the "abundant evidence 3. The Act notes Similarly, a debt collector when knows abusive, regard deceptive, and unfair debt a consumer has retained counsel use generally subject he by many practices debt collectors.” attorney to anyone than that contact other 1692(a). 15 U.S.C. whereabouts. determine the consumer’s 1692b(6). U.S.C. 936 1692g(b) prohibited representations Section such or means

attorney, is actionable. may take the form of a part: reads in communication. relevant But we hold that communications directed If the consumer noti- Disputed debts. only attorney,4 to a debtor’s and unaccom- writing within the debt collector fies debtor, by any panied threat to contact the thirty-day period sub- described are not under the Act. actionable (a) debt, any portion or section thereof, disputed, is or that the consum- D. requests er the name and address of the creditor, All but one original published collector shall federal decision to given have any cease collection of the or dis- reasoned consideration to the determined thereof, question puted portion until the debt col- has that communica attorney tions to a debtor’s are not action lector obtains verification of the debt or See, copy judgment, e.g., Kropelnicki of a or name and able under Act. v. (2d creditor, 118, Cir.2002); Siegel, 290 F.3d original address and a 127-28 1002, Shapiro, Diesi v. copy judgment, F.Supp.2d of such verification or 330 1004 (C.D.Ill.2004); Zaborac, F.Supp.2d 330 at original name and address of the credi- 966-67; Assocs., Inc., tor, Tromba v. M.R.S. is mailed to the consumer 424, (E.D.N.Y.2004); F.Supp.2d 428 debt collector. Abramson, but Sayyed Wolpoff see v. & charged with violating the com- (4th Cir.2007). 226, 485 F.3d 232-33 At mand that it “cease collection of the debt” unpublished least six opin district court when mailed its June 14 letter to Attor- ions have come to the same conclusion.5 Thus, ney verifying Paer before the debt. question the crucial In Kropelnicki, whether “collection debt collectors had al- of the debt” can include legedly misleading efforts directed made statements to exclusively attorney, when, ever, to a they debtor’s but not debtor’s about if at the debtor 1692g(b)’s might himself. Section file suit in state to collect on repeated emphasis “consumer,” on the the debt. 290 F.3d at 127. Plaintiffs ar- along with the gued misleading Act’s clear distinction be- that these statements vio- attorney, 1692e, tween consumer and compel provision lated 15 U.S.C. also at conclusion that a collection effort must be issue here. Id. The Second ulti- Circuit directly mately aimed to the consumer himself to dismissed the action for lack of prohibited by 1692g(b). subject jurisdiction, 129, be matter id. at but panel first addressed underlying prohibits Section 1692e debt collec plaintiffs merits of the claim. false, any “us[ing] deceptive, tors from misleading representation or means in con expressed “grave The court its reserva- any nection with the collection of concluding debt.” tions about this sort of disagree We do not with the claim dissent is actionable under the FDCPA.... 1005090, *2, holding applies 4. Our where the debtor is 2006 WL at 2006 U.S. Dist represented by 20080, (N.D.Ill.2006); and the communi- LEXIS at *6 Hill v. only attorney. cation is directed to that Service, A Inc., F.Supp.2d Hospital Mutual liability debt collector is not insulated from 779, (S.D.Ind.2005); Young Manley, v. merely under the Act because a debtor also 1280968, *1, 2000 WL at 2000 U.S. Dist. happens to be an 13035, (N.D.Ill.2000); Phillips LEXIS at *3 v. 299872, Capital Corp., N. Am. 1999 WL at *2- See, e.g., Captain Nat’l ARS Servs. N. 3, (N.D.Ill. 1999 U.S. Dist. LEXIS at *7 Am., *3-4, 2006 WL 2006 U.S. 1999); Bureau, Inc., Ringer v. Credit (S.D.Ind.2006); Dist. LEXIS at *9 (D.Or.1983). U.S. Dist. LEXIS at *3-*4 Mason, Silver, LLC, Mishkin, Lauer v. Wenk &

937 obtained, language its validation is attorneys quested misrepresentations [A]lleged enough to create certainly expansive is vio- cannot constitute debtors putative for (em- between a all communications a ban on at 127 Id. FDCPA.” of the lations collector.”) a lawyer and debt un- consumer’s Noting the Act’s original). in phasis court noted original). in (emphasis consumers “proteet[ing] derlying policy of solely of the con 1692g(b) “speak[s] § actions taken harassing deceptive from collector,” id., while the debt came to the sumer collectors,” panel the by debt single in the Act attorney provisions explicitly other when “an conclusion sensible at 967. attorney, id. a consumer’s intermediary a out between as an interposed And, Kropel- Circuit consumer, like the Second assume we a collector and debt nicki, court on the FDCPA, the Zaborac focused will the than attorney, rather the Act, by the underlying purposes served a debt collec- from the consumer protect by apply they ill-served finding would be harassing behavior.” fraudulent or tor’s to communications ing the Act’s strictures Id. at 127-28. Id. at 966-67.6 a debtor’s counsel. with have con- federal courts other Several and have squarely the issue fronted types cites The dissent two Zaborac, In the conclusion. reached same actu that do not support: for cases cases debt disputed a a consumer example, for decide, now ally analyze the issue we must verification, and the requested erroneously rely on those cases that an imme- by “placing] responded collector In assumptions. implicit their cases for pending efforts all collection diate hold” on Jenkins, Supreme Court was the Heintz at F.Supp.2d debt. 330 the verification “The single question: a concerned with con- then the consumer 965. Counsel term ‘debt us is whether the issue before the to alert it that tacted the debt collector lawyer to a applies the [Act] collector’ in at bankruptcy, file for might consumer tries to through litigation, regularly, who consumer’s counsel point the which 291, debts.” 514 U.S. collect consumer negotiate attempted debt collector the (1995) 1489, 131 292, L.Ed.2d 395 115 S.Ct. suit, consumer Id. The filed settlement. (internal emphasis marks and quotation negotiations settlement alleging omitted). offending communication violat- attorney before verification his to a debtor’s to be sent happened that case at 966. 1692g(b). § Id. ed counsel, 115 S.Ct. but at id. entirely differ on review was question opinion, the persuasive district engaged a law firm ent matter of whether to debt- made held that statements court collector for collecting a debt is a debt under not actionable attorney are or’s identity of the Act. The (“While purposes com the statute § Id. 1692g(b). nei passing; mentioned demanding recipient was to cease mands a debt collector parties7 nor the addressed until a re ther Court consumer from the payment § communica- reasoning brought 1692e because under that Zaborac's 6. The dissent's claim attorney actionable 1692g(b), are not § and irrelevant tions to debtor’s limited to 1692e, por- Act). The relevant is off mark. under the 1692g(b), but under tion of Zaborac arose that, reaching to reasoning than is broader its sought re- Petition for Certiorari 7. Heintz’s Indeed, cited Act as a whole. only question: "Is view of one which arose under favorably Kropelnicki, litigation against engaged solely prosecute 1692e, proposition that a for the consum- within a ‘debt collector' a consumer intermediary be- "an serves as er’s for Writ of meaning Petition [Act]?” consumer.” and the tween the debt collector Certiorari, Heintz, S.Ct. U.S. 115 514 Tromba, 5; also F.Supp.2d 967 n. see at L.Ed.2d 395. (dismissing claim F.Supp.2d 427-28 at before us. are not contemplates the issue now We strates that the Act different to, to follow what amounts required for, of, roles and different treatment attor- most, assumption, implicit because neys and their debtor clients. Section assumptions on non-liti unstated “[s]uch 1692c(a)(2) actually reinforces our view gated precedential holdings are not issues Congress that attorneys treated as inter- future decisions.” v. binding Sakamoto mediaries between debtors and debt collec- Ltd., 1285, Duty Shoppers, Free 764 F.2d tors, and that a attorney debtor’s does not (9th Cir.1985); see also Brecht v. 1288 require protections the same as a debtor Abrahamson, 619, 630-31, 507 U.S. 113 himself. (1993) 1710, 123 (holding S.Ct. L.Ed.2d 353 applicable not unless stare decisis is E.

the addressed” in a “squarely issue was Fall, decision); prior v. 266 U.S. Webster The purpose of the FDCPA is (1925) 507, 511, 148, 69 L.Ed. 411 45 S.Ct. protect vulnerable unsophisticated (“Questions merely lurk in the rec which abuse, harassment, debtors from and de ord, neither attention of the brought the ceptive practices. Rep. See S. upon, court nor ruled are not to be consid 95-389, 2, (1977), at 4 reprinted in 1977 having ered as been so decided as to con 1695, 1696, 1699; U.S.C.C.A.N. Clark v. precedents.”); Captain, stitute 2006 WL Servs., Capital Inc., Credit & Collection 1886177, *4, at 2006 Dist. U.S. LEXIS (9th 1162, Cir.2006) (“[T]he 460 F.3d (“The 47796, presented at *10 issue here consumers, protects FDCPA all gulli the did not arise Heintz [in ]. Neither[the ble as well ignorant, as the shrewd ... the Supreme nor the Seventh Circuit’s Court credulous.”) the unthinking and the (quot opinion Heintz should be treated as bind ] Jackson, ing Clomon v. 988 F.2d authority ing on an issue did not arise (2d Cir.1993)). 1318-19 addressed.”).8 was purposes The Act’s by are not served upon Sayyed, The dissent also relies applying its strictures communications which held that communications sent to a only sent attorney, particular- to a debtor’s attorney by debtor’s are covered the Act. ly in the context of settlement negotia- 485 F.3d at But the Fourth 232-33. Cir- Congress tions. Sayyed, cuit’s which concerned with dis- decision did not acknowledge great weight ruptive, threatening, even of au- and dishonest tactics. thority holding contrary, relied on Report The Senate accompanying the Act implicit assumption Supreme practices violence, cites such as “threats of Heintz, Court in find inappropri- which we telephone calls at unreasonable hours just ate for the reasons discussed. misrepresentation [and] of a consumer’s 95-389, legal rights.” Rep. S. Moreover, Sayyed support found for its words, U.S.C.C.A.N. at 1696. In other which, 1692c(a)(2), position in with limit- Congress contemplated seems to have ed exceptions, requires debt collector type of actions that would intimidate unso- represented by who that a debtor is knows phisticated which, individuals and attorney only to communicate with that Circuit, provision That cuts in words of the Seventh oppo- likely “would direction, however, site because it demon- disrupt a debtor’s life.” Pettit v. Retrieval Similarly, only in Dikeman v. National Edu- to a debtor's are actionable and cators, Inc., jumped another case the dissent relies instead to consider what an upon, bypassed might misleading. the Tenth Circuit the thresh- find 81 F.3d 953-54 (10th question 1996). old of whether communications sent Cir. Clark, 460 Bureau, Inc., of the FDCPA.” purpose 211 F.3d and Masters Creditors Cir.2000). (7th Lewis v. ACB Bus. (quoting F.3d at 1170 1057, 1059 (6th Cir.1998)). Servs., 389, 399 135 F.3d represented individual is When sought the Act Congress passing rele- all communications counsel who fields and amicable settle- encourage prompt collection, these concerns to the debt vant also, course, There is ment of debts. Attorneys ex- possess evaporate. quickly that favors “strong judicial policy set- legal sophistication actly degree general. Class disputes do not. tlements” of individual debtors wherewithal (when Seattle, F.3d at 127-28 955 F.2d Kropelnicki, City See Plaintiffs (9th Cir.1992).9 as an intermedi- interposed “an and a con- a collector ary between Here, Attorney Paer sent RJM an in- sumer, attorney, the rather assume we the cendiary alleging violations of letter FDCPA, the consum- protect than the will offering alleged to settle RJM’s Act and fraudulent or collector’s er from a debt of lump-sum payment for a violations behavior.”). harassing $3,000 The letter further to Guerrero. of our scope The dissent overstates days] within respond [ten “Please stated: example, that we asserting, for holding, resolving in this mat- you if are interested against protected hold that “a debtor litigation.... Send verification ter without false, misleading representa- deceptive, or to this office other communication retain an she does not only long tions so as (emphasis add- and not to Mr. Guerrero.” But under attorney.” Op. Diss. at 946. ed). that did RJM contact Only point at rule, to conduct aimed applies the Act our requested, restating Attorney Paer of whether regardless himself at a debtor allegedly amount owed Guerrero. merely hold counsel. We he has retained Moreover, copy enclosed a of ceases contact the debt collector when verifying the existence from Citibank debtor, and instead communicates with the Then, in- its sale to RJM. the debt and rep- hired to exclusively with an resolving a rather working toward stead matter, Act’s in the resent the debtor in morphing succeeded counsel small apply to those commu- longer no strictures royale complete it into a federal battle nications. far in excess of the attorneys’ fees controversy. amount F. way to frus- think of no better We can the Act is furthered purpose no While adopt than to attempts trate settlement prohi- of its

by the unwarranted extension Guerrero, which here urged by rule targeted exclu- communications bitions to pur- person attempting penalize would facts of attorney, the sively at a debtor’s did little outstanding debt who contrary sue an how a case illustrate well this a threat a debt- respond some of these than actively frustrate more rule would a lawsuit for violations objectives. attorney to file or’s perverse result damages. This is Act is to avoid of the purpose One intended, have could never Congress seeking a collectors “forcing] honest debt can be to make debt only and its effect to file suit of the debt peaceful resolution extremely reluc- circuit in this collectors something to resolve order debt — negotia- any settlement respond tant to language clearly at odds with that is dissent, objectives because the not, purposes and te Act's contrary hold that 9. We do statutory do not offer trump text and structure favoring policy arguments settlement Rather, answer. we look to clear provisions the Act. by attorneys collector, or offers made on behalf A that a tions notified debt is dis- clients, or, matter, for that puted, of their thus has a choice. As the Court unilaterally it, an offer of settlement Jang put extend “may provide the collector to a debtor’s requested validations and continue their activities, debt collection [sic] or [it]

G. cease all collection activities.” Id. Inc., hold that the district court (citing Systems, Because we Smith v. Transworld (6th Cir.1992)). concluding erred in RJM continued 953 F.2d It Act, collection efforts violation of the we would make little sense to impose inde- must the district court’s conclu- address pendent obligation verify alleged sion that if RJM had ceased collec- who, even debt on a example, collector de- efforts, required tion the Act nevertheless cides a disputed debt is not worth the verify alleged debt. effort and chooses to close or sell the Or, noted, account. as the in Jang Act, provision The relevant who, on a upon receiving collector a dis- states, “If 1692g(b), section the consumer notice, pute realizes the consumer does not in writing notifies the collector within the in fact owe the debt and so all abandons thirty-day ... that ... period the debt costly collection efforts. ... disputed the debt collector shall cease Here, once of the ... until Paer notified RJM collection debt the debt that disputed Guerrero the collector obtains verification of the RJM debt added). all ceased collection efforts directed at copy judgment[.]” (emphasis a of a Guerrero, responded and instead subject, plain language On this of the as re- quested to Paer’s demand disputed, statute is clear. a debt is letter. RJM When obligation was therefore under no stop verify collection efforts must until the to debt verified, alleged debt at that time. is verified. Once the debt is col may Nothing lection efforts continue. in H. provision suggests independent ob ligation verify disputed to debt where defending against When a claim all the collector abandons collection activi Act, under the a debt collector recov

ty respect with to the consumer. attorneys’ er upon fees and costs a district agree in finding

We with the Seventh Circuit’s court’s that brought the consumer terpretation provision Jang of this in in the action bad faith and for purposes of (7th Assocs., 1692k(a)(3). A.M. Miller & F.3d 480 harassment. See 15 U.S.C. Cir.1997). In Jang, plaintiffs consumer areWe inclined to find Guerrero’s coun defendants, claimed that aggressive two debt collec sel’s unworthy use of the Act agencies, commendation, tion violated the Act because skeptical are of his they alleged he, never verified the debts after experienced claim that even con plaintiffs disputed them. Id. at 482. The protection attorney, sumer found the two Circuit, affirming Seventh confusing district letters and misleading. Never grant theless, court’s of defendants’ motion to dis Guerrero’s argument that the let miss, correctly that noted the Act “does ters sophisticated would mislead the least not require actually pro debt collectors to minimally debtor is colorable. RJM offers Rather, evidence, requires vide validation. it eonelusory no other than its as the debt collector cease all collection activi sertion that Guerrero’s claims were frivo ty lous, until it provides requested vali support finding that Guerrero’s dation to necessarily the debtor.” Id. claims were in brought bad “Act”). I also dis- 1692e. 15 U.S.C. harassing purpose and with faith the letter of Ninth Circuit its conclusion agree of a lack with In view RJM. issues, case, the district in this authority on these collector by the debt sent finding Guerrero clearly (“RJM”), err did not to the LLC Acquisitions RJM faith, and did not good his suit brought attempt not an was debtor’s attor- denying RJM discretion abuse its § 1692g(b). id. a debt. See collect fees. neys’ are inconsistent conclusions majority’s statute, the dis- However, reverse language we with plain because violated RJM conclusion that trict court’s interpreting law lan- case appellate of attor- Act, its award we hold that policy of the and with the statute. guage, in error. neys’ fees Guerrero Background Factual I. IV background of this case is The factual debtors meant shield Act was majority in the in some recounted detail it practices, but abusive from dissent, only purposes For of this opinion. the balance intended to shift

was never be stated. following need creditors such between debtors and power 20, 2002, nearly sent two May RJM On work with collector cannot that a debt Guerrero, at letters to Kenneth identical without claims attorney to settle debtor’s Hawaii, at- separate addresses two liability proportion out of exposing itself an asserted debt of to collect tempting Nor was allegedly owed. contacted an at- then $1,291.86. Guerrero brandished a sword to be intended as on June torney, who wrote counsel—the have retained who debtors requested 10, attorney’s letter 2002. The Act’s of the least in need very debtors Guerrero, $3,000 threatened to not vi- of Acquisitions payment did RJM protections. Paer, paid to were not 14 letter if that amount litigation Act in its June the olate Con- requested letters Guerrero. verification original days, its to ten and in within and REMAND sequently, we REVERSE requested that the The letter debt. of the award of to instructions vacate with com- other send the verification RJM and to enter attorneys’ fees to Guerrero attorney rather than to to the munications I II10 in judgment on both Counts Guerrero. Acquisitions.11 of RJM favor a letter to Guerrero’s responded in RJM 14, entirety, 2002. In its attorney on June FLETCHER, A. Circuit WILLIAM body stated: of RJM’s letter dissenting in concurring part, in Judge, receipt in LLC is of Acquisitions RJM part: 10, you dated June a recent fax sent majority’s much agree I with of above referenced concerning the However, con- disagree I with its opinion. advised RJM account. Please be between that a communication clusion this purchased ac- LLC has Acquisitions attorney is and a debt collector debtor’s (SD), N.A. from Citibank count “false, deceptive, or actionable as not fax, please be your to response Fair under the representation” misleading A Shell Oil (“FDCPA” following. guided by Practices Act Debt Collection attorneys' II, request fees on for alleging 11. Guerrero’s violations of Count 10. The merits 480-2, depend § our resolution appeal of HRS on is denied. I, party for each of Count counsel merits damages having stipulated to the element by § 480-2. required HRS sustained opened August protections account was of the of the protect FDCPA Guerrero, the name of Kenneth J. false, social against misleading, debtor # security XXX-XX-XXXX. The last abusive communications the debt collec- payment posted October tor, so long as the communications are process complying are in the We majority’s directed The verify your request with above conclusion is inconsistent with the purpose referenced account. Same will be sent More point, FDCPA. its you upon receipt. conclusion is inconsistent plain with the Acquisitions respectfully

RJM LLC statutory text. maintains that it has violated no laws. statute, a multi-part FDCPA is Acquisitions RJM LLC is not a collec- provisions regulating a number of what a therefore, subject agency tion provisions debt collector do. Two the Fair Debt Practices Act. Collection debtors, specifically attorneys mention for only attempted contact we had with specifying that if a debtor retains attor- your May client is our letter dated ney a debt collector must communicate 18, 2002[sic]. with the rather than the debtor Additionally, please enclosed find rele- except narrowly defined circumstances. your in response vant information fax. 1692e(a)(2). 1692b(6), §§ 15 U.S.C. Other $1,291.86. The current balance is provisions prohibit abuse, harassment or Please contact office to discuss this this 1692d; false, § prohibit “any deceptive, or matter. misleading 1692e; representation,” pro- postage paid have re- We enclosed hibit “unfair or unconscionable means” of envelope your turn convenience. debts, 1692f; collecting require that the (Emphasis in At the original.) bottom disput- collector “cease collection of [a letter, signature its below the line and during requested debt” ed] verification of body typeface same as the of the letter debt, § 1692g(b); require that any suit itself, wrote, an attempt “This is venues, brought specified 1692i; be Any collect a information debt. obtained forms, prohibit deceptive the use of that purpose.” will be used for § 1692j. No other communications are at issue. provisions, impossible Given these it is My Disagreements Majority II. with the prohibited conclude that all otherwise permitted merely conduct is because it is Congress passed the FDCPA in 1978 to at attorney. directed a debtor’s For ex- respond “widespread to the and serious 1692d(l) ample, § prohibits use or “[t]he national problem” of “debt collection threat of use of violence or other criminal 95-382, (1977), at S.Rep. abuse.” No. physical person, repu- means to harm the reprinted as in 1977 U.S.C.C.A.N. tation, property any person.” or of Fur- Congress 1698. intended that the 1692i(a) ther, § requires legal FDCPA serve as a “remedial statute that a action curbing Congress aimed at what consid brought to enforce a debt be in the district industry-wide pattern ered to be an of and in which the consumer signed resides or propensity abusing towards debtors.” or, the contract sued in upon the case of a Capital Clark v. Credit & Collection secured interest in in property, real the Inc., (9th Servs., 1162, 1171 460 F.3d Cir. district in which property the is located. 2006). It simply cannot be the case that such things as of threats violence communicated According majority, whenever a represented by through attorney debtor is an none debtor’s and suits added). made may be A “representation” longer forbid- are no forums inconvenient See, e.g., of a “communication.” as the debtor means as soon by the den FDCPA “[cjommunicat- 1692e(8) (prohibiting § attorney. id. retains any threatening to communicate ing or FDCPA of the provisions are two There known which is credit information person 1692e, for- § which case— in this issue at 1692e(9) false”); (prohibit- §id. ... to be misleading false, deceptive, or “any bids any written of ing “use or distribution re- 1692g(b), § which representation,” or is simulates which the debt” communication “collection of cessation quires doc- official] to be falsely represented [an debt. disputed during verification 1692e(ll) rejects Guerre- majority ument”); (prohibiting § though the id. Even sections, analysis its ... under both initial com- ro’s claims the “failure to disclose 1692g(b) § exclusively on almost based ... that is the consumer with munication interpreting court case one district and on collect attempting to collector is debt the view, majority my In section. that debt”). is defined A “communication” provides § that 1692e concluding errs regard- of information “conveying false, or deceptive, against protection no any indirectly directly a debt or ing to a debtor’s misleading representations Id. any medium.” through person Indeed, majority I think the added). 1692a(2) (emphasis § its conclu- certainly abandon almost would that make provisions clear These protec- no provides § 1692e such that sion against §in contained 1692e prohibition that § 1692e on analyze if it were to tion repre- false, misleading or “any deceptive, view, ma- my own terms. section’s collec- ... in connection with sentation indirect concluding jority also errs repre- is not limited any debt” tion attor- at a debtor’s aimed efforts collection By directly to debtors. made sentations prohibition ney are not covered false, terms, “any § 1692e bars plain its verifica- pending efforts collection against representation,” misleading or deceptive, 1692g(b). under disputed tion to a to the consumer is made whether in turn. 1692g(b) §§ I 1692e discuss representation long as party, so third Misleading” “False, Deceptive, A. connection made “in under 1692e majority’s Statements assertion a debt.” The only to a debt- directed “communications Coverage of 1692e under ... are not actionable or’s reasons, com- I conclude For three Act,” impossible Maj. Op. a debt collector between munications on such prohibition Act’s with the square are cov- attorney representing debtor “directly or made when representations §by 1692e. ered any medi- any person through indirectly clearly First, of the FDCPA the text um.” 1692e Section requires that conclusion. the text of in the nothing There may not use “A collector provides, attorneys repre- that FDCPA to indicate repre- false, misleading or any deceptive, the from are excluded senting debtors the in with connection or means sentation col- a debt to whom third parties class of purposes For debt.” any false, deceptive, or make lector not “any FDCPA, “debt collector” the the con- To misleading representation. or at- collects regularly ... person who that, 1692c(a) specifically provides § trary, indirectly, collect, directly or tempts attor- by an represented a debtor is where owed be asserted owed due debts all direct 1692a(6) collector shall ney, the debt (emphasis § or due.” 15 U.S.C. 944 attorney,

“communication” the representation absent sent attorney to a debtor’s permission directly to communicate 1692e(2)(A). by § a debt collector violates proper A reading debtor. of the text Further, in Dikeman v. National Edu 1692e, § therefore dictates that reg which cators, Inc., (10th Cir.1996), 81 F.3d 949 categorically ulates the contents of com employee of a debt collector communicated collector, munications the debt covers attorney with an representing two debtors the “communication” to the debtor’s attor in an attempt to collect overdue rent and 1692c(a)(2). ney § described in See Gus charges. other Id. at 950. The debtors Co., Inc., 561, 115 v. Alloyd 513 U.S. tafson sued the debt collector and several of its (1995) (“[T]he 1061, S.Ct. 1 131 L.Ed.2d FDCPA, employees under claiming statutory normal rule of construction [is] “ that the communication was a ‘false or that identical words parts used different ” misleading misrepresentation’ in violation of the same act are intended to have the 1692e(ll). §of Id. at 951. The Tenth (internal meaning.”) quotation same marks Circuit a jury affirmed verdict in favor of omitted). and citation defendants, but not ground on the Second, Supreme United States a communication to a debtor’s attorney is Court and two courts of appeals have read Rather, § not covered 1692e. the court § applying 1692e as to communications to affirmed on ground that the communi attorneys representing debtors. cation was not misleading false or because Jenkins, Heintz 514 U.S. 115 S.Ct. the attorney, sophisticated as a profession (1995), debtor, 131 L.Ed.2d 395 al, would not have misunderstood it. Id. Jenkins, money Darlene borrowed from a at 953-54. bank and then defaulted on the loan. The Finally, in Sayyed v. Wolpoff & Abram bank sued Jenkins state court to recov son, (4th Cir.2007), 485 F.3d 226 the law er part the debt. As anof effort to settle (“W A”) firm of Wolpoff & Abramson & suit, attorney for the bank wrote a Sayyed sued Farid in state court to collect attorney. to Jenkins’s Jenkins then a debt. Id. at Sayyed, turn, sued brought against suit attorney bank’s FDCPA, W & A for violation of the alleg firm, alleging his law that the letter to “ alia, ing, inter AW & violated her representation ‘false ” 1692e(2)(A) § by falsely stating of ... the ... ... any amount debt’ amount of the debt. Id. at 229. W & A 1692e(2)(A). Heintz, violation of argued 1692e apply does not U.S. at 115 S.Ct. (quoting communications to a debtor’s 1692e(2)(A))(alterations U.S.C. in origi Id. at 232. nal). The Fourth squarely Circuit The defendants moved to dismiss rejected that argument. Noting that the under Federal Rule of Civil ‘Procedure 12(b)(6) FDCPA both contemplates claim, communica for failure to state a on the tions with debtors’ ground attorneys and that the FDCPA did defines apply to a lawyer expansively, attempts who “communication” the court collect a debt through concluded litigation. Id. at that a false statement to a debt- S.Ct. 1489. The or’s Supreme “plainly qualifies Court unanimously as an indi affirmed the rect Seventh Circuit’s reversal communication to the debtor.” Id. at the wrote, district court granting order the 232-33. It then mo “If the statute left dismiss, tion to holding any that Act room for issue, “[t]he doubt about this does apply lawyers to engaged in litiga Heintz resolved it. Heintz itself involved tion.” Id. In so doing, assumed, the Court a communication from a debt collection quite correctly my view, attorney a false to debtor Darlene coun- Jenkins’ debtors’ misleading representations to Thus, or plain- herself.... sel, not to Jenkins to a are left vulnerable attorneys, to debtors communications covers FDCPA ly, the in- 233. was attorney.” Id. at that the FDCPA very abuses the debtor’s assume example, For to tended redress. aside, these cases majority brushes The debtor’s sends to a a debt collector one court from on dictum relying instead purporting attorney false documents district several and on appeals case ease, attorney a the such verify a debt. Kropel case is appellate cases. The court the protect (2d truth Cir.2002), might discover the 290 F.3d Siegel, v. nicki if the debtor, might not. Even but she declined Circuit the Second which truth, she will on the the claim based does discover an FDCPA entertain money doing court not so. spent doctrine. have time likely Rooker-Feldman to either dictum, sending without citation false § not forbid ed 1692e does If Dikeman, attorney is “Where attorney, Heintz or the debtor’s documents intermediary between as an interposed attorney’s fees pay the will have debtor consumer, we assume and a collector debt pocket. his or her own out of expenses FDCPA, will than the attorney, the rather such hand, §if 1692e forbids the other On a debt collec from the consumer protect attorney, the debtor’s communications harassing behavior. or tor’s fraudulent damages recover be able to debtor will the we on which However, not an issue this is U.S.C. attorney’s fees. See 15 today.” Id. 128. to rule need (3). 1692k(a)(l), § discussed opinion court only district 1692e, reading of majority’s Under majori (as by the string-cited) opposed to false, decep- against protected debtor is Assocs., Phillips & Cohen ty is Zaborac only so tive, misleading representations or (N.D.Ill.2004). Ltd., F.Supp.2d attorney. not retain long as she does not whether in Zaborac was the issue But debtor soon as an As ato from a debt collector communications the debt collector picture, enters by the attorney were covered debtor’s false, and mislead- deceptive, to send free represen misleading “false, deceptive, and attor- the debtor’s ing communications Rather, the § 1692e. provision of tation” damage judgment any ney without fear negotiations settlement was issue whether is, as attorney’s fees. That award sides two attorneys for the between picture, attorney enters as the soon constituted being verified a debt while collector than the debt debtor rather meaning within the debt” “collection imposed the burden have to bear will The district Id. at 966. 1692g(b). §of misleading false, deceptive, any such that the settlement in Zaborac held collector. the debt from communications constitute that case did not negotiations contrary both manifestly a result is Such and were 1692g(b) “collection” under under- policy and to sense common verification while permitted thus lying the FDCPA. But Id. at 966-67. pending. debt was still “col meaning, of holding on the Zaborac’s §of 1692e Application not resolve 1692g(b) does under lection” from RJM to Letter collector whether question “false, § 1692e to make reasons, forbidden I hold would foregoing For the representation” misleading deceptive, or 14 letter to Guerrero’s RJM’s June a debtor’s However, §by 1692e. attorney is covered sophisticated the least apply I would 1692e debt Third, notwithstanding § if whether to determine false, standard deceptive, debtor to make are free collectors to representations RJM’s Guerrero’s attor- him or her easily to discern on facts false, ney deceptive, misleading. were such as these. Rather, following Tenth Circuit’s deci- Id. at 953. Dikeman, I sion would hold that agree I approach with the taken in Dike- “false, standard of what constitutes a de- man. It makes sense to read the statute ceptive, misleading representation” has practical in a way, asking not whether the a application different depending on false, communication is deceptive, or mis-

whether the communication is directed to abstract, leading but whether it sois attorney or the consumer. to the person to it whom is addressed. A Dikeman, a collector debt attempting false, communication that is deceptive, or collect debt the attorney misleading contacted to consumer not be toso representing two debtors. When the approach debt Such an both pro- provided collector verification of the tects debt debtors and remains true to the stat- attorney, utory debtors’ it did text. not state that it was attempting to collect a debt and passage RJM’s June any information obtained would be objects which Guerrero is the sentence used purpose. for that The debtors sued stating that RJM “is not a collection agen- collector, the debt alleging that the omis cy therefore, and subject not to the Fair sion of such a statement violated Debt Collection Practices Act.” RJM’s 1692e(ll) (as read) which it then re statement that it not a “collection agen- quired that a debt collector “disclose clear is, cy” sense, in one true. As the district ly in all communications made to collect a found, court RJM is “neither licensed nor debt ... that the collector is attempt registered agency collection in the ing any to collect a debt informa State of Hawaii.” But legal RJM’s conclu- tion obtained will be used for that pur sion it was “therefore” not a debt Dikeman, pose.” 81 F.3d at 951 (quoting collector covered hardly FDCPA 1692e(11)[1995]). 15 U.S.C. follows.

The Tenth Circuit held that the failure If RJM’s statement had been made to provide statement, such a in a communi- Guerrero, I have no would hesitation in cation attorney, to an did not violate concluding “false, that it was deceptive, or view, § 1692e. In the court’s “the fact of misleading” meaning within the debt and its content, verification § 1692e. But the statement was made context, viewed in adequate was to disclose attorney Guerrero’s rather than to him. to an attorney hired represent the debt- Given that RJM’s statement was made to a or that the debt collector was attempting debtor’s attorney,- specifically hired be- to collect a any debt and that information professional cause of his expertise in debt obtained would be purpose.” for that used matters, I would hold that the Id. at 954. The explained: statement —as attorney made —was legal implications of “false, communicating deceptive, or misleading.” It

with a debt would collector be especially was not a might statement that have taken professional within the competence of the attorney time and money to evaluate lawyer hired to represent a Rather, client’s in- and contest. legal was a conten- process, terests the collection tion that the was able to evaluate fact that a communication reject is made to quickly easily. I would collect a something debt is that the law- therefore hold that while RJM’s communi- yer’s professional expertise would cation to allow Guerrero’s covered

947 to Guerre- 14 letter in its June responded that sec- 1692e, not violate § it did under counsel, process in the of are “We ro’s tion. the verify your request with complying Debt Verify Obligation B. bewill account. Same referenced above 1692g § under also receipt.” RJM you upon sent $1,291.86. wrote, balance is “the current provides 1692g(a)(4) Section this commu- the initial this office to discuss days after contact five Please “[w]ithin paid postage in connection consumer have enclosed nication with We matter. debt, a debt any of envelope your the collection with convenience.” return “written the consumer give shall” collector the Finally, in original.) (Emphasis containing” wrote, notice letter, “This is RJM of the bottom notifies if the consumer Any informa- a statement a debt. attempt to collect the writing in within pur- debt the collector for that will be used obtained tion debt, any the or thirty-day period pose.” thereof, the debt disputed, is portion not that RJM had Guerrero contends the of verification will obtain collector it wrote the June the debt when verified the judgment against copy of a or a debt obliged letter, was therefore and that RJM of such verification copy consumer and of collection § to “cease 1692g(b) under to the con- will be mailed judgment or the further that He contends debt.” the collector[.] sumer the debt” of the was “collection June requires further 1692g(b) Section 1692g(b). meaning of the within collec- the debt notifies If the consumer Guerrero, but with court agreed district thirty-day peri- the writing within tor According to the majority reverses. the (a) of this in subsection od described not “col- attempt majority, a is settlement debt, any portion or section that meaning of within of debt” [a] lection debt collector thereof, ... disputed is represented if debtor is 1692g(b) debt, any or shall cease of However, according to the the debt thereof, until portion disputed is “collec- attempt a settlement majority, the debt collector obtains verification repre- debtor is not if the debt” of[a] tion copy ... and a judgment copy aor sented. ... is judgment such verification gen- sympathetic to I am somewhat debt col- by consumer mailed ma- by the expressed concerns policy eral commu- activities lector. Collection indeed, and, very sympathetic am jority, violate that do otherwise nications facts of they relate to the concerns its Debt [Subchapter V. subchapter this matter, may general there As a case. this dur- Practices] continue Collection attorneys— allowing two some sense be 30-day period referred ing and the the debt collector representing one (a) unless the of this section subsection enter the debtor —to representing other collector notified the debt has consumer á debt negotiations while settlement debt, any portion into that the writing case, particular In this being verified. still disputed aggressive like the stance hard to

it is hard to lawyer of Guerrero’s tactics added.) (Emphasis June by RJM’s harm see the caused letters, two initial receiving RJM’s After letter. the as- for verification asked Guerrero same not the concerns are policy But attorney’s 10 let- June his serted debt in plain language. statutory thing as 1692g(b). ter, in accordance meaning 1692g any enough addition, of is that “collection to follow it. In the Su- debt,” indirect, of direct Heintz, whether or is preme in surveying leg- Court prohibited until the debt has been verified. history statute, islative of the observed a debt collector receives a request When that Congress rejected had considered and debt, § 1692g(a) verify under it has language alternative that im- would have may verify two choices. It decide not to munized from liability FDCPA a debt col- “ any the debt and to abandon attempt lawyer’s lector’s attempts ‘to contact Jang collect the debt. v. A.M. Miller See parties third order to facilitate settle- ” (7th Assocs., Cir.1997) 480, 122 & F.3d 483 297, ments.’ 514 U.S. at 115 S.Ct. 1489 (debt collector gave up attempts all (quoting 99-405, H.R.Rep. No. at 11 actually contact debtor and returned debt- (1985), reprinted as in 1986 U.S.C.C.A.N. creditor). or’s file original may Or it 1760). explained Court that verify pursue decide to the debt in order to Congress had declined to draw a line if it collection activities. But decides to the ‘legal’ FDCPA “between activities and verify the it must cease collection ‘debt collection’ activities.” Id. activity during the verification process and Finally, good policy there are reasons activity resume only after the supporting the statute as written. There debt has been verified. 15 U.S.C. nothing is particularly onerous about re § 1692g(b). quiring a debt collector to cease debt col majority refuses to read the statute lection including attempts at activities— According as is written. to majority, settlement with the debtor’s —un activity indirect collection aimed at a debt- til the debt is verified. The standard for or’s permitted is under See, very verification is not demanding. § 1692g(b) being while a debt is verified. Clark, e.g., 1173-74; 460 Chaudhry F.3d at opinion Its upon receipt states that Gallerizzo, (4th 174 F.3d Cir. verification, request Guerrero’s for 1999). cases, waiting most period “ceased all activity direct collection from will not long. be In those cases where the Maj. Op. Guerrero.” at 931 (emphasis waiting period is extended because the added). The statute does not make such a debt is difficult verify, very difficul majority distinction. The deny does not ty is a reason to Requiring wait. all col engaged that RJM activity” “collection efforts, offers, lection including settlement in sending its June 14 letter to Guerrero’s prior to cease to verification helps to en attorney, approves but it such activity be- parties sure both have accurate infor cause it is indirect and aimed the attor- mation being about the claim settled. See ney rather than the debtor. But there is 95-382, S.Rep. (1977), No. at 4 reprint as nothing in the text 1692g(b) pro- (verifi ed in 1977 U.S.C.C.A.N. permits hibits “direct” collection but “indi- cation is intended to “eliminate the recur rect” collection. Nor is anything there ring problem of debt dunning collectors permits sending text that a “collection” wrong person attempting to collect attorney, letter to a debtor’s even while debts which the already consumer has forbidding sending equivalent “collec- paid”); Goswami v. Am. Collections En tion” directly unrepresented to an ter., Inc., (5th Cir.2004) 377 F.3d debtor. (public interest in settlement does not Although I policy can see for reasons trump provisions). FDCPA writing the differently, statute I would fol- low the statute as it is written. 1692g(b) provides simple The fact Section that the statute clearly bright-line is written is reason rule: All “collection of the dam- sustained,” additional “such damage verification cease pending debt” must allow, not ex- but court as the ages are sound stop. There Full debt. any $1,000,” and, “in case bright-line ceeding having such policy reasons foregoing distinguish to enforce necessity to action no successful rule. There is, action, together the debtor liability, in which the costs cases between no There is attorney’s counsel. fee deter- not, represented reasonable with a fide bona distinguish between necessity to The district court.” by the mined harassment, and negotiations concluded, of the above settlement “On the basis here injury de- tactics, of or threats hardball with findings particularly and findings, If verifica- settlement. coerce signed to and false mislead- Defendant’s respect to ac- all collection requested, has been tion is enti- ... Plaintiff representations, ing verification. pending cease must tivity $1,000.00 for of statutory damages to tled easy to and easy to understand rule is other dam- No violations.” the FDCPA follow. on Based to Guerrero. awarded ages were statutory winning that case, undisputed it is success

In this Guerrero’s verification requested also awarded properly the district Guerrero damages, In re- 1692g(a). § attorney’s under fees and $43,428.00 in of the debt him 14 in June a letter on sent sponse, RJM $1,809.21in costs. of process it was that it

which stated majority’s portion of I that concur making clear verification, thus obtaining otherwise the two holding that opinion letter, the obli- the date as that sent Guerre- that RJM letters identical applied. activities cease collection gation to addresses office box post and ro’s home letter, that the stated RJM In that same misleading false, deceptive, not were of the account balance” “current num- file and the account because simply in its given amount $1,291.86, the same “a” with an letter ended on one bers listed Guerrero; it dunning letters initial two awith “b.” other letter on the and those postage enclosing “a it was that stated debt- view, sophisticated least even the my envelope your conven- for paid return letters referred that these realize or would attempt stated, “This ience”; and agree I also due. single account only ato could letter RJM’s a debt.” to collect aon although based majority, trying It was hardly been clearer. have June rationale, that RJM’s different charac- can debt. One asserted collect the attorney did Guerrero’s communication attempt to settle as letter terize the In contrast § violate 1692e. not what debt, though even the district uphold I majority, would not matter. that does But says. to cease failed ruling that court’s for exception no 1692g(b) makes Section verification activity pending “settlement,” it forbids attempts 1692g(b). § required any disputed “collection verification. pending pre- portion thereof’ Guerrero I hold that would Because violated that RJM his claim on vailed sending hold that therefore I would he is also hold I 1692g(b), would Guerrero, RJM violat- 14 letter to its June attorney’s damages, statutory eligible 1692g(b). §ed 1692k(a). Howev- fees, costs under Attorney’s Fees III. exist- court’s the district er, I vacate would attorney’s damages, statutory ing award “any 1692k(a) provides Section for reconsider- fees, remand costs and any comply with who fails debt collector degree success with the ation consistent “any actual the debtor pay shall provision” See, ultimately May Guerrero achieved. e.g., Department Compa Stores Zagorski Servs., Inc., Billing ny; Midwest Nordstrom, Inc.; The Neiman- (7th Cir.1997) 128 F.3d 1166-67 (per Group, Inc., Marcus Defendants-Ap curiam); Abramson, Wolpoff Carroll v. & pellees. (4th Cir.1995).

53 F.3d Azizian; Soraya Farrah; Fatemah Eun Fey; Gonzales; ice Rose Kazuko Conclusion Y. Morgan; Nelson-Torres; Nicola Mo upon plain Based language of the nique Patrick; Pogran; Judith Pame FDCPA, the case law interpreting the Powell; Shirley la Powell; Rose Skill statute, Congress’s underlying policy, man on Behalf of Themselves and All I would hold that communications or col- Similarly Situated; Others Hannah lection activities directed at a debtor’s at- Feldman; Gibson, Nikki Hurst Plain torney §§ are actionable under 1692e and tiffs-Appellees, 1692g. case, On the facts this I would reverse the holding district court’s Wilkinson, Appellant, Kamela RJM violated 1692e but affirm its hold- ing that RJM 1692g(b). violated Casenza; Theng Susan Valerie

Matherne, Intervenors- Appellees, v. Department

Federated Stores, Inc.; (USA) Ltd.; Chanel, Inc.; Boucheron AZIZIAN; Soraya Fatemah Farrah; Givenchy, Inc.; Parfums Guerlain, Fey; Gonzales; Eunice Rose Kazuko Inc.; Perfumes, Inc.; Christian Dior Morgan; Y. Nelson-Torres; Nicola Conopco, Inc.; USA, Inc.; L’Oreal The Monique Patrick; Pogran; Judith Companies, Inc.; Estee Lauder Cla Powell; Shirley Powell; Pamela Rose Inc.; Inc.; rins U.S.A. Target Dillard’s Skillman on Behalf of Themselves Corporation; Gottschalks, Inc.; Saks Similarly and All Situated; Others Incorporated; May Department Feldman; Hannah Nikki Hurst Gib Company; Nordstrom, Stores Inc.; son, Plaintiffs-Appellees, Group, Inc., Neiman-Marcus De Wilkinson, Appellant, Kamela fendants-Appellees. 05-15847, Casenza; Nos. Susan Theng Valerie 05-16600. Matherne, Intervenors- United Appeals, States Court of Appellees, Ninth Circuit. Argued and Submitted March 2007. FEDERATED DEPARTMENT Aug. Filed STORES, (USA) INC.; Boucheron Ltd.; Chanel, Inc.; Parfums Giv

enchy, Inc.; Guerlain, Inc.; Christian Perfumes, Inc.;

Dior Conopco, Inc.; USA, Inc.;

L’Oreal The Estee Lauder

Companies, Inc.; Inc.; Clarins U.S.A. Inc.; Target Corporation;

Dillard’s

Gottschalks, Inc.; Incorporated; Saks

Case Details

Case Name: Guerrero v. RJM ACQUISITIONS LLC

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Aug 23, 2007

Citation: 499 F.3d 926

Docket Number: 05-15121

Court Abbreviation: 9th Cir.