The Sixth Circuit recently held an Ohio district court erred by dismissing a debtor’s FDCPA complaint because the collection letter offered as an exhibit did not “utterly discredit” the factual allegations in the complaint.
In the underlying case, the plaintiff received two debt collection letters from a debt collector. The debtor alleged that “Collection Bureau” and other language was visible from outside the envelope containing the letters. The plaintiff sued under Section 1692f(8) of the FDCPA. Under this provision, a debt collector is prohibited from using “any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails” with some limited exceptions. The FDCPA explicitly allows the use of the Collector’s name, unless it indicates the collector is “in the debt collection business.” The plaintiff argued the defendant debt collector violated the FDCPA because the phrase “Collection Bureau” was part of the debt collector’s name and was allegedly visible through the glassine window of the envelopes. In support of the debtor’s claims, the debtor attached the letters as exhibits to the complaint.
The defendant responded to these allegations with a motion to dismiss. The defendant argued that the complaint should fail because the letters attached as exhibits showed that the language “Collection Bureau” was not clearly visible, contradicting the plaintiff’s allegations.
The district court found that the exhibits showed the language was not clearly visible and “barely legible.” Further, the district court explained that the least sophisticated consumer could not read the language without “unusual strain or effort” since the contested language was “printed on the opposite side of the Letters . . . upside-down and backwards.” Because the complaint alleged the prohibited language could be viewed “clearly . . . to the naked eye,” the district court found the complaint was insufficient to state a claim under the FDCPA.
The Sixth Circuit reversed the lower court for misapplying the standard applicable to a motion to dismiss. On a motion to dismiss, the court is directed to view allegations in the complaint “in the light most favorable” to the plaintiff. As the Sixth Circuit explains, exhibits attached to a complaint can defeat a claim on a motion to dismiss only if they “utterly discredit” the critical allegations, rendering the allegations implausible. Because the lower court did not properly apply this standard, the Sixth Circuit reversed the district court.
The Sixth Circuit first addressed whether the FDCPA’s prohibition applied to language visible through an envelope. Agreeing with a prior case by the Third Circuit, the Sixth Circuit held that the FDPCA prohibits language and symbols that are visible through a transparent or glassine window of an envelope. Considering the letters in this case, the Sixth Circuit disagreed with the lower court’s characterization of the letters. While the district court had referred to the language as “at best—barely legible,” the Sixth Circuit noted that the language was “at worst—barely legible.” Further, the court noted that even if the language was printed upside-down and backwards, a person could rotate the letter and read the language. Recalling that the FDCPA is intended to protect consumers from embarrassment and abusive debt collection practices, the court explained that the language “Collection Bureau” clearly signals a letter is in reference to the collection of debt and is “expressly barred” by the FDCPA. Thus, the Court of Appeals found that the exhibits did not “utterly discredit” the claim that the prohibited language could be viewed by an observer through the glassine window of the envelope without any unusual strain with normal lighting. Because the exhibits did not “utterly discredit” the plaintiff’s central complaint, the Sixth Circuit reversed the district court.