William Brown, III v. Van Ru Credit Corporation

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit I.O.P. 32.1(b)

File Name: 15a0252p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

WILLIAM BROWN III, ┐

Plaintiff-Appellant, │

│

│ No. 15-1323

v. │

>

│

VAN RU CREDIT CORPORATION, │

Defendant-Appellee. │

┘

Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 2:14-cv-12136—Victoria A. Roberts, District Judge.

Decided and Filed: October 22, 2015

Before: ROGERS and DONALD, Circuit Judges; ROSE, District Judge.*

_________________

COUNSEL

ON BRIEF: Gary D. Nitzkin, Travis Shackelford, MICHIGAN CONSUMER CREDIT

LAWYERS, Southfield, Michigan, for Appellant. Nicole M. Strickler, MESSER, STILP &

STRICKLER, LTD., Chicago, Illinois, for Appellee.

ROGERS, J., delivered the opinion of the court in which ROSE, D.J., joined. DONALD,

J. (pp. 9–10), delivered a separate dissenting opinion.

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OPINION

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ROGERS, Circuit Judge. Plaintiff Brown owed student loan debt, which he alleges Van

Ru Credit Corporation was retained to collect. A Van Ru employee left a voicemail at Brown’s

*

The Honorable Judge Thomas M. Rose, District Judge for the Southern District of Ohio, sitting by

designation.

1

No. 15-1323 Brown v. Van Ru Credit Corp. Page 2

business that stated the caller’s and Van Ru’s names, a return number, and a reference number.

The caller asked that someone from the business’s payroll department return her call. Brown

sued Van Ru for violations of the Fair Debt Collection Practices Act, alleging in part that the

voicemail was a communication “in connection with the collection of any debt” with a third

party in violation of 15 U.S.C. § 1692c(b). The district court granted Van Ru’s motion for

judgment on the pleadings. Brown appeals, arguing that he sufficiently pled a violation of

§ 1692c(b). The district court properly granted Van Ru’s motion. The voicemail left at Brown’s

business was not a “communication” as that term is defined in the Fair Debt Collection Practices

Act. A communication must “convey[] . . . information regarding a debt directly or indirectly to

any person through any medium,” 15 U.S.C. § 1692a(2), and the voicemail message did not

convey such information. As a result, there was no violation of § 1692c(b).

The following are the facts as alleged in Brown’s complaint. At all times relevant to this

suit, Brown owed debt on a student loan. Van Ru Credit Corporation, a debt collection agency,

twice contacted the business that Brown owns. First, in late March or early April 2014, Van Ru

mailed a letter to Brown’s business seeking Brown’s payroll information. Brown does not allege

that this letter in any way violated the Fair Debt Collection Practices Act (FDCPA) or any other

law. Second, on April 14, 2014, a Van Ru employee called Brown’s business and left the

following voicemail in the business’s “general mail box”:

Good morning, my name is Kay and I’m calling from Van Ru Credit Corporation.

If someone from the payroll department can please return my phone call my

phone number is (877) 419-5627 and the reference number is *****488; again my

telephone number is (877) 419-5627 and reference number is *****488.

Brandon Harris, an employee at the business, heard the message and was aware that Van Ru is a

debt collector. Brown’s proposed amended complaint additionally alleges that Harris “is . . .

aware that any personal calls received at [Brown]’s business are intended solely for [Brown].”

Brown received no further communications from Van Ru, and he does not allege any further

communication to Brown’s business either.

Brown filed suit in federal court, alleging that Van Ru’s voicemail violated two

provisions of the FDCPA. First, Brown alleged that Van Ru violated 15 U.S.C. § 1692c(b) by

communicating with a third party regarding Brown’s debt. Second, Brown alleged that Van Ru

No. 15-1323 Brown v. Van Ru Credit Corp. Page 3

violated 15 U.S.C. § 1692g(a) by failing to provide required written notices after an “initial

communication with a consumer.” Brown also alleged claims under the Michigan Occupational

Code, MCL § 339.915, and the Michigan Collection Practices Act, MCL § 445.252. Van Ru

filed an answer and then, before the start of discovery, a motion for judgment on the pleadings.

Brown responded, and also filed a motion to amend his complaint with the additional allegation

that Harris knew that calls to Brown’s business were intended for Brown. The district court

granted Van Ru’s motion for judgment on the pleadings and denied Brown’s motion to amend

his complaint as futile. The district court reasoned that because the voicemail message did not

imply the existence of a debt, it was not a “communication” as defined by the FDCPA.

Therefore, Brown failed to state a claim under the FDCPA. The district court declined

jurisdiction over Brown’s state law claims. Brown filed a motion for reconsideration, which the

district court denied as not identifying a palpable defect or raising new issues.

On appeal, Brown argues that he stated a claim under 15 U.S.C. § 1692c(b), the

FDCPA’s prohibition on certain communications with third parties.1

The district court properly granted Van Ru’s motion for judgment on the pleadings,

because Brown failed to plead a communication by Van Ru under the FDCPA. In order to state

a claim under 15 U.S.C. § 1692c(b), a plaintiff must plausibly allege, in part, that the defendant

“communicate[d], in connection with the collection of any debt, with any person other than the

consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor,

the attorney of the creditor, or the attorney of the debt collector.” 15 U.S.C. § 1692c(b). The

FDCPA defines “communication” as “the conveying of information regarding a debt directly or

indirectly to any person through any medium.” 15 U.S.C. § 1692a(2). To convey information

regarding a debt, a communication must at a minimum imply the existence of a debt. Otherwise,

whatever information is conveyed cannot be understood as “regarding a debt.” Van Ru’s

voicemail message—which does little more than ask someone from Brown’s business’s payroll

department to call back—does not do so.

1

Brown also argues that the district court improperly considered allegations in and exhibits to Van Ru’s

answer. But we review the district court’s decision de novo. Tucker v. Middleburg-Legacy Place, 539 F.3d 545,

549 (6th Cir. 2008). Therefore, there is no need to consider this argument. Brown also half-heartedly attempts to

revive his § 1692g claim in his reply brief, but this is too late. See Thaddeus-X v. Blatter, 175 F.3d 378, 403 n.18

(6th Cir. 1999) (en banc); Bickel v. Korean Air Lines Co., Ltd., 96 F.3d 151, 153 (6th Cir. 1996).

No. 15-1323 Brown v. Van Ru Credit Corp. Page 4

Under the circumstances alleged in Brown’s complaint, Van Ru’s voicemail does not

convey information regarding Brown’s debt. An employee of Brown’s business who hears this

message would understand it to concern Brown’s debt only in the most exceptional of

circumstances. Nothing in the message even suggests that any kind of debt exists. Brown argues

that the presence of the word “Credit” in “Van Ru Credit Corporation” clearly refers to debt

collection. But the word “credit” refers to a category of financial activities far broader than debt

collection. The other pieces of information in the voicemail—the reference number and the toll-

free number to call back—only give the impression that Van Ru has some kind of business

relationship with Brown’s business or someone employed by Brown’s business, or perhaps that

Van Ru seeks to create some kind of business relationship. Finally, the fact that the voicemail

asks for someone from payroll to call back suggests only that Van Ru is seeking some sort of

payroll information, whether about an individual employee or the business as a whole. Taken

together, these data do not imply that Brown or anyone else at his business owes debt. It is easy

to see how the inquiry could instead relate to any number of other matters (such as, to take one

example, a credit check) unrelated to a personal debt covered by the FDCPA. Thus while the

voicemail clearly conveys information, it does not convey information regarding a debt; it does

not tend to make the listener better informed about the existence or state of Brown’s debt.

What information a message conveys depends partly on context, but Brown does not

plead circumstances in which Van Ru’s message would mean more than what the words say.

A message that would seem cryptic to a third party may have a clearer import when directed to

the debtor, and a message that is part of a series of communications may mean more because of

what has already been said. But here, Van Ru’s voicemail, which was not directed to Brown,

was preceded only by a single letter that, so far as Brown pleads, did no more than inquire after

Brown’s payroll information. Brown does not plead that Harris or anyone else saw the letter, so

it may not be appropriate to treat it as part of the context for the voicemail. Regardless, the letter

only indicates that the payroll information the voicemail seeks is likely to be Brown’s payroll

information. It still does not create a context in which the voicemail suggests anything about

Brown’s debt. Therefore, the voicemail does not convey information about a debt and is not a

“communication” under the FDCPA.

No. 15-1323 Brown v. Van Ru Credit Corp. Page 5

This application of the definition of “communication” under the FDCPA is consistent

with the FDCPA’s purposes, the Fair Trade Commission’s commentary, and the decision of the

Tenth Circuit in Marx v. General Revenue Corp., 668 F.3d 1174 (10th Cir. 2011). The FDCPA

aims “to eliminate abusive debt collection practices by debt collectors, to insure that those debt

collectors who refrain from using abusive debt collection practices are not competitively

disadvantaged, and to promote consistent State action to protect consumers against debt

collection abuses.” 15 U.S.C. § 1692(e). “Abusive debt collection practices contribute to the

number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of

individual privacy.” § 1692(a). “The ban on communicating with third parties like employers is

meant to protect debtors from harassment, embarrassment, loss of job, [and] denial of

promotion.” Marx, 668 F.3d at 1183. A communication to a third party poses little threat to a

debtor unless it inspires the third party to harass the debtor or else reveals potentially

embarrassing or harmful information to the third party. If a debt collection agency

communicates with a third party without either mentioning the debtor or revealing that the debtor

owes any debt, it is hard to see how the harms that the FDCPA seeks to avoid could occur. But

if the debt collector conveys information regarding the debt to a third party—informs the third

party that the debt exists or provides information about the details of the debt—then the debtor

may well be harmed by the spread of this information. Thus, the Senate Report on the FDCPA

paraphrases the prohibition on third-party contacts as “prohibit[ing] disclosing the consumer’s

personal affairs to third persons” in order to avoid “invasions of privacy” and “loss of jobs.”

S. Rep. 95-382, at 4 (1977). This suggests that the FDCPA does not cover communications that

do not refer to or imply the existence of a debt and thus do not reveal information about the

debtor’s debts.

The non-binding commentary of the Federal Trade Commission lends further support to

this approach. In rejecting an interpretation that would categorically exclude from the definition

of “communication” all communications that do not directly refer to the existence of a debt, the

Commission notes that Congress intended “a common sense approach” to the definition of

“communication.” Statements of General Policy or Interpretation Staff Commentary on the Fair

Debt Collection Practices Act, 53 Fed. Reg. 50097, 50099 (Dec. 13, 1988). Messages may

imply the existence of a debt in some situations, and they are “communications” in exactly those

No. 15-1323 Brown v. Van Ru Credit Corp. Page 6

situations. Thus, “communication” under the FDCPA “does not include situations in which the

debt collector does not convey information regarding the debt, such as . . . [a] request to a third

party for information about the consumer’s assets, if the debt collector does not reveal the

existence of a debt.” Id. at 50102. Here, the debt collector’s request concerned income rather

than assets, but it similarly did not directly or indirectly reveal the existence of Brown’s debt or

any information about his debt.

Finally, this approach is consistent with that adopted by the Tenth Circuit, the only other

circuit to consider the definition of “communication” in § 1692a(2) as applied to a third-party

communication. Marx, 668 F.3d at 1177–78.2 In Marx, the Tenth Circuit considered a

§ 1692c(b) claim very similar to the one here. Marx received a fax that contained the same

information as that provided by Van Ru’s voicemail, with only two differences. First, the fax

specifically requested employment verification and employment information, and presumably

(though the court does not state this explicitly) identified the plaintiff, Marx, by name. Id. at

1176. Second, the debt collector’s name was General Revenue Corporation (“GRC”), not Van

Ru Credit Corporation, and the fax provided GRC’s logo and address in addition to its name and

phone number. Id.

The Marx court reasoned that the fax was not a communication: “This fax cannot be

construed as ‘conveying’ information ‘regarding a debt.’ Nowhere does it expressly reference

debt; it speaks only of ‘verify[ing] [e]mployment.’ Nor could it reasonably be construed to

imply a debt.” Id. at 1177. The requirement that, at the very least, a communication imply a

debt arises from the statutory language:

[The] requirement is implicit in the word “convey.” To convey is to impart, to

make known. If one drafts a letter full of unlawful collection threats, but never

mails it, nothing is conveyed. So, too, if the “communication” is in Sanskrit. The

fax here never used the words “debt,” “collector,” “money,” “obligation,” or

“payment.”

Id. at 1182. This reasoning is directly applicable here. Van Ru’s voicemail provided less

information that could relate to a debt, as it did not even mention Brown by name, and the name

2

The Marx opinion was joined by Judge Gilman of our Circuit, sitting by designation.

No. 15-1323 Brown v. Van Ru Credit Corp. Page 7

“Van Ru Credit Corporation” is hardly more likely to imply the existence of a debt than “General

Revenue Corporation.”

While Marx was unable to show at summary judgment that the fax had actually informed

any third party of her debt, this fact provides little basis for distinguishing Marx.3 Brown’s

proposed amended complaint appears to imply that Harris believed Van Ru’s voicemail was for

Brown and concerned a debt. In contrast, the Marx court noted that “[n]o testimony shows that .

. . [Marx’s] employer was aware that the facsimile in any way concerned a default on a student

loan.” Id. at 1177. But this was relevant only because it bolstered the court’s argument that the

fax could not “reasonably be construed to imply a debt.” Id. (emphasis added). That Harris may

have guessed that Van Ru’s voicemail related to Brown’s debt does not mean that the voicemail

conveyed this information or that it could reasonably be construed to do so. The purposes of the

FDCPA are not served by taking into account conclusions drawn by third parties where debt

collectors could not reasonably expect those third parties to draw such conclusions.

Finally, requiring that a communication at a minimum imply or refer to the existence of a

debt is consistent with the text of the FDCPA as a whole. Some district courts and the dissent in

Marx—though, curiously, not Brown—have argued that a narrow interpretation of the

“communication” definition in § 1692a(2) would make § 1692b, or at least § 1692b(5),

redundant. See Marx, 668 F.3d at 1186–87 (Lucero, J., dissenting); Henderson v. Eaton, No. 01-

0138, 2001 WL 969105 at *2 (E.D. La. Aug. 23, 2001); West v. Nationwide Credit, Inc., 998 F.

Supp. 642, 645 (W.D.N.C. 1998); Miller v. Prompt Recovery Servs., No. 5:11CV2292, 2013 WL

3200659 at *11 (N.D. Ohio June 24, 2013). Section 1692b provides a safe harbor for third-party

consumer-location inquiries that, among other conditions, do not “state that [the debtor] owes

any debt” or “use any language or symbol on any envelope or in the contents of any

communication effected by the mails or telegram that indicates that the debt collector is in the

debt collection business or that the communication relates to the collection of the debt.”

§ 1692b(2), (5). The supposed anomaly is that the § 1692b exception to the limit on

3

Brown also attempts to distinguish Marx on the ground that that case involved a communication that was

“reasonably necessary to effectuate a postjudgment judicial remedy” and was thus permissible under § 1692c(b).

But nothing in the opinion supports this proposition.

No. 15-1323 Brown v. Van Ru Credit Corp. Page 8

communications itself has an exception in § 1692b(5) that includes some things that are not

communications in the first place.

The Marx majority’s response to this concern is compelling. The court reasoned that the

definition of “communication” in § 1692a(2) was unambiguous, and so it was better to assume

that in § 1692b Congress in an abundance of caution had “repeat[ed] language in order to

emphasize it.” Marx, 668 F.3d at 1183. This interpretation is bolstered by the Senate Report on

the legislation, which makes clear that § 1692b is designed to secure a particularly important

class of contacts: “[T]he committee . . . recognizes the debt collector’s legitimate need to seek

the whereabouts of missing debtors. Accordingly, this bill permits debt collectors to contact

third persons for the purpose of obtaining the consumer’s location.” S. Rep. 95-382, at 4 (1977).

Clear legislative guidelines provide valuable protection for debt collectors engaging in this

single, important activity. Absent this safe harbor, debt collectors might still be subject to suit

for inoffensive location inquiries when plaintiffs could allege that, because of unusual

circumstances, these inquiries conveyed information regarding debts. Even if a correct

interpretation of the FDCPA absent § 1692b would preclude all such suits, § 1692b still provides

certain and predictable protection from liability for an important activity that would otherwise be

protected only under general statutory terms that require “common sense” to interpret. See

Statements of General Policy or Interpretation Staff Commentary on the Fair Debt Collection

Practices Act, 53 Fed. Reg. 50097, 50,099 (Dec. 13, 1988).

The judgment of the district court is affirmed.

No. 15-1323 Brown v. Van Ru Credit Corp. Page 9

_________________

DISSENT

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BERNICE BOUIE DONALD, Circuit Judge, dissenting. The majority’s opinion

analyzes whether the voicemail message was a communication by contemplating how the

employee who heard the voicemail understood it. Conducting such an inquiry is not appropriate

in this case. The only question should have been whether the Van Ru representative conveyed

information about Brown’s loan to his employee. The reference number left in the voicemail

message could have been information regarding Brown’s debt, or it could also have been merely

the Van Ru representative’s employee number. However, due to the district court’s order,

Brown did not have an opportunity to, via discovery, identify the true nature of the reference

number.

The Fair Debt Collection Practices Act (“FDCPA”) defines a communication as a term

that means the “conveying of information regarding a debt directly or indirectly to any person

through any medium.” 15 U.S.C.A. § 1692a(2). The term “regarding” is not defined by the

FDCPA. Therefore, I consult the dictionary to ascertain its definition. See Appoloni v. United

States, 450 F.3d 185, 199 (6th Cir. 2006) (“Where, as here, no statutory definitions exist, courts

may refer to dictionary definitions for guidance in discerning the plain meaning of a

statute’s language”) (citations omitted). Merriam-Webster’s defines regarding as a word

that means “relating to something.” Merriam-Webster Online, http://www.merriam-

webster.com/dictionary/regarding (last visited October 13, 2015). Thus, the ultimate question

this case presents is whether the Van Ru representative conveyed information to Brown’s

employee that related to his loan.

Van Ru’s representative conveyed four pieces of information in the voicemail message:

(1) her name, (2) the name of the company for which she worked, Van Ru Credit Corporation,

(3) her work telephone number, and (4) a reference number. The only piece of information that

could relate to Brown’s loan is the reference number. See Brody v. Genpact Servs., LLC, 980 F.

Supp. 2d 817, 820 (E.D. Mich. 2013) (holding that the name of an employer and a phone number

are generic and do not refer to a debt).

No. 15-1323 Brown v. Van Ru Credit Corp. Page 10

Whether the reference number related to Brown’s loan depends on the nature of the

reference number. For example, if the reference number was Brown’s loan identification

number issued to him by the company that supplied his loan, then Van Ru’s representative would

have undoubtedly conveyed information regarding Brown’s loan. The district court dismissed

this case before discovery had begun. Consequently, Brown did not have the opportunity to

unearth the true identity of the reference number. Until the true identity of the reference number

is known, I cannot agree with the majority’s determination that the voicemail did not convey

“any information” regarding Brown’s loan.

The majority’s opinion suggests that courts should consider the knowledge of the receiver

of the message when deciding whether or not it constitutes a communication under 15 U.S.C.

§ 1692a. Thus, what could be a communication if received by one person may not be a

communication if heard by another. For example, the majority opinion proposes that the

voicemail message would constitute a “communication” if heard by Brown, but not a

“communication” when heard by another individual who had no reason to know of Brown’s

loan. Consequently, using the majority’s reasoning, a different outcome would result if Brown’s

brother, who knew about his loan, overheard the voicemail message, but not if his sister

overheard it but did not know about his loan.

In my view, either the Van Ru representative conveyed information regarding Brown’s

loan or she did not. Conducting that inquiry has nothing to do with evaluating what Brown’s

employee knew or did not know. Since the nature of the reference number has yet to be

disclosed, this case was dismissed prematurely. Accordingly, I would remand to the district

court to allow Brown an opportunity to conduct discovery.

For the foregoing reasons, I respectfully dissent.