United States District Court, W.D. Michigan, Southern Division
ROBERT HOLMES BELL, Judge
brings an action under the Fair Debt Collection Practices Act
(“Act”), alleging false, deceptive, and
misleading statements in violation of 15 U.S.C. § 1692e.
Defendants are Midland Credit Management (“MCM”),
Plaintiff's debt servicer, Midland Funding,
Plaintiff's debt owner, and Encore Capital Group, their
parent company. Defendants have filed a motion to dismiss
under Federal Rule of Civil Procedure 12(b)(1) and 12(b)(6).
(ECF No. 31.) Plaintiff has filed a response (ECF No. 33) and
Defendants have filed a reply (ECF No. 34).
relevant facts are not in dispute. Plaintiff incurred credit
card debt totaling $1, 406.43. He failed to make his monthly
payments and defaulted. On February 24, 2016, MCM sent a
letter to Plaintiff, which stated that he had been
pre-approved for a discount program to pay off his debt and
provided him with three repayment options. (Am. Compl.
ECF No. 21-1, PageID.131.) The first option listed a discount
rate of 90% and required one payment of $140.64 due on March
25, 2016. (Id.) The second option listed a blank
discount rate percentage and a monthly payment of $0.00 due
on March 25, 2016. (Id.) The third option provided
monthly payments as low as $50 per month, but requested that
the recipient of the letter call for more details.
(Id.) At issue is Defendants' statement in the
second option. After receiving the letter, Plaintiff retained
counsel, who advised Plaintiff to call MCM and indicate that
he wanted to proceed with the second option.
followed counsel's advice, and on March 24, 2016, he
spoke with two MCM representatives. (ECF No. 21-2,
PageID.137, PageID.141.) During the calls, Plaintiff told
both representatives that he had spoken with his attorney,
who advised him to take the zero-dollar payment option. In
response, an MCM customer-service representative explained
that there was an error in the letter he received; the second
option had not populated correctly. (Id. at
PageID.142.) The representative also explained that the first
option was still available and offered to speak with
Plaintiff's attorney about it. (Id.) Plaintiff
rejected the first option and stated that he only wanted the
zero-dollar payment option. (Id.) Again, the
representative reminded Plaintiff that the second option was
an error, but the first option was still available.
(Id.) Plaintiff once more confirmed that the only
option was the 90-percent discount and ended the call.
amended complaint alleges that the second option in the
letter was false, misleading, or deceptive, in violation of
the Act's §§ 1692e(10) and 1692e. Defendants
filed a motion to dismiss for lack of subject matter
jurisdiction under Rule 12(b)(1) and for failure to state a
claim upon which relief can be granted under Rule 12(b)(6).
Defendants also argue that Plaintiff cannot plead facts to
support the requirements of a class action under Rules 23(a)
plaintiff invoking federal jurisdiction bears the burden of
establishing the “irreducible constitutional
minimum” of standing under Article III by demonstrating
(1) an injury in fact, (2) fairly traceable to the challenged
conduct of the defendant, and (3) likely to be redressed by a
favorable judicial decision. Lujan v. Defenders of
Wildlife, 504 U.S. 555, 560-61 (1992). “‘It
is settled that Congress cannot erase Article III's
standing requirements by statutorily granting the right to
sue to a plaintiff who would not otherwise have
standing.'” Spokeo, Inc. v. Robins, 136
S.Ct. 1540, 1547-48 (2016) (quoting Raines v. Byrd,
521 U.S. 811, 820 n.3 (1997)). “To establish injury in
fact, a plaintiff must show that he or she suffered ‘an
invasion of a legally protected interest' that is
‘concrete and particularized' and ‘actual or
imminent, not conjectural or hypothetical.'”
Spokeo, 136 S.Ct. at 1548. (quoting
Lujan, 504 U.S. at 560). A concrete injury must be
“de facto; that is, [it must] actually
exist.” Id. Simply alleging a “bare
procedural violation” does not satisfy the
concrete-harm requirement. Id. at 1550. Although
intangible injuries “can nevertheless be concrete,
” id. at 1549, Plaintiff must suffer
“real” and “not abstract” injury,
id. at 1556. Further, “not all inaccuracies
cause harm or present any material risk of harm.”
Id. at 1550.
Federal Rule of Civil Procedure 8(a), a complaint must
provide “a short and plain statement of the claim
showing that the pleader is entitled to relief.”
Detailed factual allegations are not required, but “a
plaintiff's obligation to provide the ‘grounds'
of his ‘entitle[ment] to relief' requires more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.” Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting
Conley v. Gibson, 355 U.S. 41, 47 (1957)). When
assessing a 12(b)(6) motion, the Court must accept all of
Plaintiff's factual allegations as true and construe the
complaint in the light most favorable to Plaintiff.
Gunasekera v. Irwin, 551 F.3d 461, 466 (6th Cir.
2009). The Court must determine whether the complaint
contains “enough facts to state a claim to relief that
is plausible on its face.” Twombly, 550 U.S.
on a motion under Rule 12(b)(6) or 12(c), matters outside the
pleadings are presented to and not excluded by the court, the
motion must be treated as one for summary judgment under Rule
56.” Fed.R.Civ.P. 12(d). Defendants attached
Plaintiff's Rule 26(a) disclosures as an exhibit to their
motion to dismiss, but only refer to the exhibit to support
their 12(b)(1) motion. Therefore, the Court will only
consider Defendants' exhibit for the 12(b)(1) motion, and
will assess both grounds for relief under the