THOMAS E. ST. PIERRE, Appellant in No. 17-1731 v. RETRIEVAL-MASTERS CREDITORS BUREAU, INC., Appellant in No. 17-1941
Nos. 17-1731 & 17-1941
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
August 7, 2018
Before: GREENAWAY, JR., KRAUSE, Circuit Judges, and JONES, District Judge.
PRECEDENTIAL. Argued: January 23, 2018. On Appeal from the United States District Court for the District of New Jersey (D.N.J. Civil Action No. 3-15-cv-02596), Honorable Freda L. Wolfson, U.S. District Judge.
* The Honorable John E. Jones III, United States District Judge for the Middle District of Pennsylvania, sitting by designation.
(Opinion Filed: August 7, 2018)
Michael J. Quirk, Esq. [ARGUED]
Berezofsky Law Group
40 West Evergreen Avenue, Suite 104
Philadelphia, PA 19118-3324
Peter Colonna Romano, Esq.
Berezofsky Law Group
Woodland Falls Corporate Center
210 Lake Drive East, Suite 101
Cherry Hill, NJ 08002
Christopher Markos, Esq.
Williams Cedar
1515 Market Street, Suite 1300
Philadelphia, PA 19102
Attorneys for Plaintiff-Appellant Thomas E. St. Pierre
Joel D. Bertocchi, Esq. [ARGUED]
Carlos A. Ortiz, Esq.
Louis J. Manetti, Jr.
David M. Schultz, Esq.
Hinshaw & Culbertson LLP
151 North Franklin Street, Suite 2500
Chicago, IL 60606
Han Sheng Beh, Esq.
Hinshaw & Culbertson
800 Third Avenue, 13th Floor
New York, NY 10022
Attorneys for Defendant-Appellee Retrieval-Masters Creditors Bureau, Inc.
KRAUSE, Circuit Judge.
In this appeal following the District Court‘s dismissal of Appellant Thomas E. St. Pierre‘s class action complaint, we consider a matter of first impression among the Courts of Appeals: whether unpaid highway tolls constitute the type of “debt” that could support a consumer claim under the Fair Debt Collection Practices Act. Because we conclude they do not, we will affirm.
I. Background1
A. Factual Background
St. Pierre is a New Jersey resident and the registered owner of a car that he sometimes drives on New Jersey highways.
Like many car owners in New Jersey, St. Pierre chose to sign up for New Jersey E-ZPass (“E-ZPass“), an electronic toll payment program that facilitates toll collection. E-ZPass accountholders agree to certain terms and conditions (the “E-ZPass Contract“), including that they maintain a positive balance in a prepaid E-ZPass account from which the toll fare is automatically deducted when they pass through an E-ZPass lane and that their “failure to pay charges posted to [their] [a]ccount, including tolls, may result in additional penalties as provided by law.”2 JA 66. When St. Pierre‘s E-ZPass account fell into arrears because he failed to maintain a positive balance, E-ZPass assigned it to Appellee Retrieval-Masters Credit Bureau, Inc. (“RMCB“), a private debt collection agency, which, in turn, sent St. Pierre a collection letter “for outstanding violations owed for toll evasions in the amount of $1,200.75.”3 JA 70. At issue in this case, however, is not the letter itself but the envelope in which the letter was sent. Visible through the glassine window of that envelope was not only St. Pierre‘s name and address, but also a “quick response” code4 and St. Pierre‘s account number.
St. Pierre‘s amended class action complaint alleges that the disclosure of these
The District Court concluded the latter. Although it held as a threshold matter that St. Pierre had alleged an injury sufficiently “concrete” to confer Article III standing and, by extension, federal jurisdiction, St. Pierre v. Retrieval-Masters Creditors Bureau, Inc., No. 15-cv-2596, 2017 WL 1102635, at *6 (D.N.J. Mar. 24, 2017), it dismissed St. Pierre‘s complaint on the ground that unpaid highway tolls do not constitute “debt” and therefore failed to state a claim for a violation of the FDCPA, id. at *10.
St. Pierre filed this appeal challenging the District Court‘s characterization of the obligation to pay highway tolls, and RMCB cross-appealed, challenging the Court‘s ruling on standing.
II. Jurisdiction and Standard of Review
The District Court had jurisdiction pursuant to
III. Discussion
Because St. Pierre‘s standing to bring this case implicates the Court‘s jurisdiction, it must be resolved as a threshold matter. Hartig Drug Co. v. Senju Pharm. Co., 836 F.3d 261, 269 (3d Cir. 2016). We therefore will address RMCB‘s cross-appeal before turning to the merits of St. Pierre‘s FDCPA claim.5
A. Standing
To establish standing, St. Pierre must allege facts demonstrating that he suffered (1) an injury-in-fact; (2) that is fairly traceable to the defendant‘s challenged conduct; and (3) that is likely to be redressed by a favorable judicial decision. Lujan v. Defenders of Wildlife, 504 U.S. 555, 590 (1992). RMBC argues that St. Pierre failed to make that showing because he alleged only a de minimis procedural violation of
In Spokeo, the Supreme Court provided a lens through which to determine whether an intangible injury is sufficiently “concrete and particularized” and “actual or imminent” to qualify as an injury-in-fact. 136 S. Ct. at 1548. We first ask “whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American Courts.” Id. at 1549. If so, it is likely to satisfy the injury-in-fact element of standing; if not, we next ask whether Congress has expressed an intent to make an injury redressable by “elevat[ing] [it] to the status of [a] legally cognizable injur[y]” even if that injury was previously inadequate in law. Id. Here too, if Congress expressed such an intent, the injury is likely to satisfy Article III. Thus, while “a bare procedural violation, divorced from any concrete harm” will not suffice, “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.” Id.
As we recently observed in In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625 (3d Cir. 2017), however, Spokeo merely “reiterate[d] traditional notions of standing” and “reemphasize[d] that Congress has the power to define injuries that were previously inadequate at law,” rather than “erect[ing] any new barriers that might prevent Congress from identifying new causes of action though they may be based on intangible harms.” Id. at 638 (internal quotation marks omitted). For that reason, we concluded in Horizon that “the improper disclosure of one‘s personal data in violation of [the Fair Credit Reporting Act] is a cognizable injury for Article III standing purposes,” id. at 641, and that “the unauthorized dissemination of personal information . . . causes an injury in and of itself—whether or not the disclosure of that information increased the risk of identity theft or some other future harm,” id. at 639. We also cited approvingly to our prior precedent—In re Google Inc. Cookie Placement Consumer Privacy Litigation, 806 F.3d 125 (3d Cir. 2015), where we held that claims “that the defendants, in the course of serving advertisements to their personal web browsers, implanted tracking cookies on their personal computers” alleged “concrete, particularized, and actual” injuries, id. at 134-35, and In re Nickelodeon Consumer Privacy Litigation, 827 F.3d 262 (3d Cir. 2016), where we concluded that “the unlawful disclosure of legally protected information” constitutes “a clear de facto injury,” id. at 272-74—identifying those as other examples of intangible but concrete injuries that Congress had defined to protect consumers. Horizon, 846 F.3d at 636-39; id. at 642-43 (Shwartz, J., concurring).
Spokeo thus reinforces, rather than undermines, our holding in Douglass. And that holding squarely resolves the standing issue here. In Douglass, we observed that the exposure of a plaintiff‘s account number through a glassine window6 “implicates
As Douglass controls here, the District Court properly concluded that a violation of
B. Merits
Having satisfied ourselves of our jurisdiction, we turn to the substance of St. Pierre‘s claim under the FDCPA. The FDCPA, which is a remedial statute passed by Congress in 1977 and geared towards eliminating abusive practices by debt collectors, creates a private right of action against debt collectors who violate its provisions.
Here, the only disputed prong is the “threshold requirement” that the prohibited collection practices relate to a “debt,” Zimmerman v. HBO Affiliate Grp., 834 F.2d 1163, 1167 (3d Cir. 1987), which the FDCPA defines as “any obligation . . . of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes,”
1. Relevant Precedent Concerning FDCPA “Debt”
We have addressed the definition of FDCPA “debt” in only four cases. In Staub v. Harris, 626 F.2d 275 (3d Cir. 1980), we held that a delinquent per capita tax levied by a Pennsylvania taxing district against the plaintiffs was not “debt” encompassed by the FDCPA. Id. at 278. Without deciding whether the term “‘transaction’ as used in the FDCPA always connotes the existence of an underlying contractual relationship,” we concluded that, “at a minimum, the statute contemplates
Next, in Zimmerman v. HBO Affiliate Group, 834 F.2d 1163 (3d Cir. 1987), we held that the obligation that arose out of allegedly abusive collection letters sent by defendant cable television companies attempting to collect a sum of money to settle potential tort claims against plaintiffs for the “illegal reception of HBO signals” was not “debt” under the FDCPA because the source of the obligation was an “asserted tort liability” rather than a consensual transaction. Id. at 1165-68. While we recognized that “the concept of a ‘transaction’ is broader than that of a contract . . . nothing in the statute or the legislative history leads us to believe that Congress intended to equate asserted tort liability with asserted consumer debt” or, for that matter, that the FDCPA was intended to protect against “abusive practices in collecting tort settlements from alleged tortfeasors through threats of legal action.” Id. at 1168.
Over a decade later, in Pollice v. National Tax Funding, L.P., 225 F.3d 379 (3d Cir. 2000), we addressed whether homeowners’ obligations to pay their property taxes, as well as their water and sewer utilities, qualified as “debt” under the statute.8 Id. at 401. As for the property taxes, we held that ”Staub [wa]s controlling” because “[u]nlike a sales tax, for example, which arguably arises from the sale transaction, the property taxes . . . arose not from the purchase of property but from the fact of ownership.” Id. at 401-02. We rejected the plaintiff‘s attempt to distinguish Staub on the basis that “the tax obligations changed in character and became ‘debts‘” when they were assigned to a private entity that was in the business of purchasing such claims, explaining that even after that assignment, “there still had not been a ‘transaction’ involving the homeowners; their obligation to pay [the private entity] still arose from the levying of taxes.” Id. at 402. We also concluded that the fact that the homeowners could pay their delinquent property taxes pursuant to a payment plan did not distinguish the nature of the property taxes from the per capita tax in Staub. Id. at 403. In that context, we explained, the payment plan itself was not the obligation but rather was “simply [] one aspect of defendants’ course of conduct in attempting to collect the original . . . obligations which were owed to the government entities[.]” Id. at 402-03.
We had a different view, however, of the homeowners’ water and sewer utility obligations. Those obligations, we held, did
Finally, in Piper v. Portnoff Law Associates, Ltd., 396 F.3d 227 (3d Cir. 2005), we again held that transactions involving utility services gave rise to “debt” because “whenever a homeowner voluntarily elects to avail himself of municipal water/sewer services, in whatever manner, and thereby incurs an obligation to pay for such services, there is the kind of pro tanto exchange contemplated by the FDCPA.” Id. at 233 n.8. We also observed that “[t]he consensual nature of the transaction distinguishe[d] [Pennsylvania water and sewer service] from tax assessments which Pollice held to not be debts within the meaning of the FDCPA,” emphasizing that the consumer‘s usage “was metered in the normal fashion and . . . the amount of their obligation to pay was based on the amount of water they chose to use.” Id.
From these cases, we distill a three-part test to evaluate whether an obligation constitutes “debt” under the FDCPA. First, we consider whether the underlying obligation “aris[es] out of a transaction,”
2. The Obligation to Pay Highway Tolls
Applying this framework to the obligation to pay highway tolls, we conclude it does not satisfy the definition of “debt” under the FDCPA.
Step One: Arising out of a Transaction. At the first step, we consider the two arguments raised by St. Pierre as to why the obligation to pay highway tolls arises out of a “transaction.” His first, that the transaction out of which his obligation to pay highway tolls arises is the E-ZPass Contract, is a non-starter. We were clear in Pollice that the original source of the obligation—not the subsequent method of collection—determines whether an obligation constitutes “debt” under the FDCPA, 225 F.3d at 402, and, like the payment plan in Pollice, the contract with E-ZPass is merely “directed toward the collection of the original obligations, not any obligations which may have arisen from [the E-ZPass Contract],” id. at 403.
St. Pierre attempts to distinguish Pollice by arguing that the E-ZPass Contract imposes a $50 per violation fee even for “inadvertent violations” that are otherwise exempted by statute. Reply Br. 10-11. But this too is a false start. St. Pierre cites to no authority for that reading of the E-ZPass Contract, and the E-ZPass Contract expressly provides that drivers are required to pay penalties only “as required by law,” JA 66, and thus appears coextensive with the statutory requirement that “an owner that proves an inadvertent toll violation has occurred shall be required only to pay the toll and shall not incur the administrative fee.”11
St. Pierre makes more headway with his second argument in support of a “transaction,” i.e., that he did not have to drive on the toll roads and voluntarily chose to do so. Here, we find the analogy to the utilities in Piper compelling: Just as “a homeowner voluntarily elects to avail himself of municipal water/sewer services . . . and thereby incurs an obligation to pay for such services . . . based on the amount of water [the homeowner] chose to use,” 396 F.3d at 233 n.8, so too does St. Pierre, by electing to drive on toll roads (or authorizing another driver to do so in his vehicle), “voluntarily elects to avail himself” of the Authority‘s highway services in exchange for a per-use fee—a classic pro tanto exchange, id.
We acknowledge this presents a closer case than Piper in two respects. For one, the obligation to pay highway tolls is non-consensual in the sense that it involves a statutory requirement. But that is not dispositive: In Pollice, we recognized that water and sewer obligations were “debt,” notwithstanding the fact that “a City ordinance . . . provides for a twelve percent annual rate of interest on claims for unpaid sewer charges,” 225 F.3d at 386, and we observed in dictum that a sales tax—which is, of course, a statutorily-imposed obligation—might constitute “debt” because, unlike property tax, sales tax “arguably arises from the sale transaction” for goods or services rather than “from the fact of ownership,” id. at 402. In neither discussion did we indicate that the mere codification of an obligation precluded the exchange from constituting a transaction.
For another, highway tolls are, in a sense, a “tax for the use of highways,” Safeway Trails, Inc. v. Furman, 197 A.2d 366, 376 (N.J. 1964), and there is some facial appeal to the argument that highway tolls, like the property taxes in Pollice, derive “from the fact of ownership,” 225 F.3d at 402, because liability is assessed on the registered owner of the vehicle that made use of the “highway,”
In sum, St. Pierre‘s obligation to pay highway tolls does arise out of a “transaction” within the meaning of the FDCPA,
Step Two: The Subject of the Transaction. Before we can determine whether the subject of a transaction is “primarily for personal, family, or household purposes,” id., we must identify the subject of the transaction itself: what is being rendered in exchange for payment? Here is where the proverbial rubber meets the road, for while St. Pierre contends that what he receives is access to New Jersey highways and bridges, what is “payable from tolls” under the New Jersey statute is the Authority‘s mandate to “facilitate vehicular traffic and remove the present handicaps and hazards on the congested highways in [New Jersey],” and “to acquire, construct, maintain, improve, manage, repair and operate transportation projects.”
The toll booths dispersed throughout the roads, in other words, are merely the collection point for tolls, and access to the
Step Three: The Primary Purpose of the Subject of the Transaction. Having identified the services rendered in exchange for highway tolls, it is clear that what St. Pierre receives in exchange for the payment of highway tolls is not the private benefit of a “personal, family, or household” service or good but the very public benefit of highway maintenance and repair.
Moreover, the fact that highway tolls resemble taxes—while not a sufficient basis on which to conclude they do not arise out of a “transaction” at the first stage of our inquiry—does at this step reinforce the conclusion that the services rendered are not primarily for personal purposes. Like taxes, highway tolls are imposed for public benefit and “without reference to peculiar benefits to particular individuals or property.” Staub, 626 F.2d at 278 (quoting Black‘s Law Dictionary 1307 (5th ed. 1979)). While one component of the obligation to pay highway tolls is the distance traveled, it is also, like taxes, largely determined categorically by the type and class of vehicle being driven12 and thus is not simply “metered in the normal fashion . . . based on the amount [used].” Piper, 396 F.3d at 233 n.8. And just as the amount paid in taxes does not entitle an individual taxpayer to “better” parks, schools, or government systems, the amount paid in tolls does not entitle the payor to better maintenance or construction of highways. Rather, to the extent the services rendered by the Authority benefit an individual like St. Pierre, they do so only “secondarily.” Staub, 626 F.2d at 278 (internal quotation marks omitted).
Focusing on access to the roads, St. Pierre contends that the benefit is personal and protests that because “[t]he FDCPA defines covered consumer debt based on the alleged debtor‘s—not a creditor‘s—purposes,” his obligation to pay highway tolls should be considered “debt” because his purpose was to attain access not available to the general public and to serve the personal purpose of getting where he was going. Appellant‘s Br. 20-21. That argument, however, mistakenly conflates two distinct inquiries: whether, subjectively,
In sum, the FDCPA is not implicated where, as here, the bulk, if not all of the services rendered, are made “without reference to peculiar benefits to particular individuals or property.” Staub, 626 F.2d at 278 (quoting Black‘s Law Dictionary 1307 (5th ed. 1979)). St. Pierre‘s toll liability thus does not constitute “an[] obligation . . . primarily for personal, family, or household purposes,” and does not qualify as “debt” under the FDCPA.
IV. Conclusion
For the foregoing reasons, we will affirm the judgment of the District Court.