ON PETITION FOR REHEARING
(Opinion March 4, 1985, 11 Cir., 1985, 754 F.2d 907).
R. LANIER ANDERSON, III, Circuit Judge:
No member of this panel nor other Judge in regular active service on the Court having requested that the Court be polled on rehearing en banc (Rule 35, Fed.R.App.P.; Eleventh Circuit Rule 26), the Suggestion for Rehearing En Banc is DENIED.
Appellant Jeter appeals the district court's grant of summary judgment in favor of appellee Credit Bureau, Inc. ("Credit Bureau"), in Jeter's suit under the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C.A. § 1692. 584 F.Supp. 973. With regard to Jeter's claims under 15 U.S.C.A. § 1692e ("False or misleading representations"), we hold that the district court applied an improper legal standard and erred in granting summary judgment to Credit Bureau. We agree with the district court's grant of summary judgment in favor of Credit Bureau with regard to Jeter's claim under 15 U.S.C.A. § 1692d ("Harassment or abuse"). Thus, we affirm in part, reverse in part, and remand for proceedings not inconsistent with this opinion.
I. FACTS AND PROCEDURAL BACKGROUND
Credit Bureau operates a debt collection agency subject to the FDCPA. Credit Bureau attempts to collect money on behalf of creditors who refer accounts (i.e., alleged debts) to Credit Bureau for collection. One of Credit Bureau's clients during the time period preceding this lawsuit was Associated Consumers Club ("Associated Consumers"). Sometime prior to October 25, 1983, Jeter incurred what Associated Consumers believed was a valid legal debt with Associated Consumers. On October 25, 1983, Jeter's account was referred by Associated Consumers to Credit Bureau for collection. On March 4, 1983, Credit Bureau sent Jeter a letter which reads as follows:
After March 4, and prior to April 7, 1983, neither Credit Bureau nor Associated Consumers took any further action with regard to Jeter's account. Jeter did not respond to the letter during this time period. On April 7, 1983, Credit Bureau sent Jeter another letter which reads as follows:
Neither Credit Bureau nor Associated Consumers took any action with regard to Jeter's account subsequent to the April 7, 1983, letter.
Sometime prior to May 11, 1983, Jeter hired a lawyer, Elizabeth Leonard. On May 11, 1983, Ms. Leonard sent a letter on Jeter's behalf to Credit Bureau stating Jeter's position that she owed no money to Associated Consumers. A copy of the letter was sent to Associated Consumers. Thereafter, Credit Bureau determined that the collection of Jeter's account was impractical, closed its files, and made no further contact with Jeter.
On June 16, 1983, Jeter sued Credit Bureau in the federal district court for the Northern District of Georgia claiming violations of the FDCPA.
After limited discovery,
In Part II, we discuss the legal standard applicable generally to claims of false, deceptive, or misleading representations under 15 U.S.C.A. § 1692e. In Part III.A., we consider Jeter's claims under § 1692e(5), and reverse the district court's grant of summary judgment in favor of Credit Bureau. In Part III.B., we consider Jeter's § 1692e(10) claim, apply the standard enunciated in Part II, and reverse the district court's grant of summary judgment in favor of Credit Bureau. Finally, in Part IV, we consider Jeter's claim of harassment or abuse under § 1692d, apply the legal standard developed in Part II as modified for the purpose of evaluating claims of harassment or abuse, and affirm the district court's grant of summary judgment on this issue.
II. APPLICABLE LEGAL STANDARD
The district court held that in determining whether the FDCPA has been violated the court was obligated to "decide whether a `reasonable consumer' would be deceived, mislead [sic], or harassed by the letters at issue in this case." Relevant administrative adjudications and case law under the Federal Trade Commission Act ("FTC Act"), 15 U.S.C.A. § 41, et seq., upon which we rely by analogy, and persuasive authority under the FDCPA lead us to the conclusion that the district court applied an improper standard.
Section 5 of the FTC Act declares unlawful all "unfair or deceptive acts or practices in commerce." 15 U.S.C.A. § 45(a)(1). An act or practice is deceptive or unfair under § 5 if it has the tendency or capacity to deceive. The FTC Act was enacted to protect unsophisticated consumers, not only "reasonable consumers" who could otherwise protect themselves in the market place. The leading case of Charles of the Ritz Distributors Corp. v. FTC, 143 F.2d 676 (2d Cir.1944), is instructive. In Charles of the Ritz, the petitioner was charged by the FTC with falsely advertising its cosmetic preparation "Charles of the Ritz Rejuvenescence Cream" because the name "rejuvenescence" and the accompanying advertisement "represent[ed], directly or by inference, that [the] cosmetic preparation [would] rejuvenate the skin of the user thereof or restore youth or the appearance of youth to the skin of the user." Id. at 678. In affirming the FTC's finding of deception, the Second Circuit defined "capacity to deceive" as follows:
Id. at 679; see also FTC v. Raladam Co., 316 U.S. 149, 151-52, 62 S.Ct. 966, 968-69, 86 L.Ed. 1336 (1942); Exposition Press, Inc. v. FTC, 295 F.2d 869 (2d Cir.1961), cert. denied, 370 U.S. 917, 82 S.Ct. 1554, 8 L.Ed.2d 497 (1962). The standard enunciated by Charles of the Ritz, supra, has been followed in an enormous number of federal court and FTC decisions, and controlling precedent in this circuit is in accord. Gulf Oil Corp. v. FTC, 150 F.2d 106 (5th Cir.1945)
In 1967, the FTC issued regulations entitled "Guidelines Against Debt Collection Deception," 16 C.F.R. § 237.0-.6, which under the authority of § 5 of the FTC Act bans debt collection agencies from using "any deceptive representation or deceptive means to collect or attempt to collect debts or to obtain information concerning debtors." 16 C.F.R. § 237.1.
The above discussion indicates that, prior to the passage of the FDCPA, the FTC had protected unsophisticated consumers from debt collection practices which have a tendency or capacity to deceive. Credit Bureau argues that the FTC jurisprudence under § 5 is irrelevant to litigation under the FDCPA. Our review of the authorities leads us to precisely the opposite conclusion. In its "findings and declaration of purpose" incorporated in the FDCPA, Congress found that despite prior FTC enforcement in the area "[t]here is abundant evidence of abusive, deceptive and unfair debt collection practices by many debt collectors.... Existing laws and procedures for redressing these injuries are inadequate to protect consumers." 15 U.S.C.A. § 1692(a), (b). The legislative history echoes these purposes and concerns. S.Rep. No. 95-382, 95th Cong., 1st Sess., reprinted in 1977 U.S.Code Cong. & Ad.News 1695, 1697 ("The committee believes that the serious and widespread abuses in this area and the inadequacy of existing State and Federal laws make this legislation necessary and appropriate"). It would be anomalous for the Congress, in light of its belief that existing state and federal law was inadequate
State v. O'Neill Investigations, Inc., 609 P.2d 520, 530 (emphasis in original).
In light of the purposes of the FDCPA, the general FTC jurisprudence under § 5, and the prior FTC enforcement in the debt collection area, we conclude that the district court erred in judging Credit Bureau's actions by reference to the "reasonable consumer." Our position is supported by a majority of the federal courts to address this question. Baker v. G.C. Services Corp., 677 F.2d 775, 778 (9th Cir.1982); Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591, 599 (N.D.Ga.1982), reconsidered, 555 F.Supp. 1005 (N.D.Ga.1983);
Id. at 872.
Because we believe that Congress intended the standard under the FDCPA to be the same as that enunciated in the relevant FTC cases, see supra note 5, and because we believe that "[t]he FDCPA's purpose of protecting [consumers] ... is best served by a definition of `deceive' that looks to the tendency of language to mislead the least sophisticated recipients of a debt collector's letters and telephone calls," Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. at 599, we adopt the Exposition Press standard of "least sophisticated consumer" as previously followed by the federal courts in Baker, supra and Bingham, supra.
III. FALSE OR MISLEADING REPRESENTATIONS?
Jeter claims that the letter sent by Credit Bureau violated 15 U.S.C.A. §§ 1692e(5) and (10). These subsections provide:
Jeter has presented two theories for relief under subsection (5). First, Jeter claims that Credit Bureau's letters indicate that it would recommend legal action upon the expiration of the five-day period referred to in the letters or shortly thereafter and, as such, amounted to threats to take actions which were not intended to be taken. Second, Jeter claims that Credit Bureau never intended to recommend legal action. Jeter also maintains that the letters, individually and/or collectively, were deceptive within the meaning of subsection (10). We will discuss in turn Jeter's two theories for relief under subsection (5), and then her claim under subsection (10).
A. Claim Under Subsection (5)
Subsection (5) of § 1692e does not require application of the legal standard developed in Part II, supra. The subsection (5) issue is simply whether or not Credit Bureau intended to take the action threatened. Thus, subsection (5) requires proof of a fact which amounts to a per se violation of § 1692e. The sophistication, or lack thereof, of the consumer is irrelevant to whether Credit Bureau "threat[ened] to take any action ... that [was] not intended to be taken."
First, we consider Jeter's claim that Credit Bureau falsely threatened to take legal action in the immediate or near future. It is undisputed in the record that
Thus, the jury has two tasks. First, it must ascertain the meaning of Credit Bureau's letters to determine just what was threatened. As indicated above, a reasonable jury may find that the letters evidence a threat to recommend legal action immediately upon expiration of the five-day period or shortly thereafter. If the jury so finds, it must then decide whether Credit Bureau intended to take such threatened action in this case. In this regard, the jury may consider Credit Bureau's assertion that at the times the letters were sent Credit Bureau intended to recommend legal action. Of course, the jury will have to consider the contrary evidence that legal action was not recommended shortly after the expiration of the five-day periods, and, in fact, was never recommended at all.
We turn now to Jeter's second claim under subsection (5): whether Credit Bureau ever intended to recommend legal action in Jeter's case. Credit Bureau relies on the affidavit of its regional manager, Mel Center, which states the following three relevant facts:
In addition, Credit Bureau's partial responses to Jeter's interrogatories indicate that it does take legal action in cases like Jeter's involving small debts. On the other hand, Jeter presents the deposition of Michael Rogers, president of Associated Consumers. He testified that:
We conclude that there is a genuine issue of fact as to whether Credit Bureau ever intended to recommend legal action against Jeter. Credit Bureau's conclusory affidavit that there was such an intent is not dispositive, especially in light of the apparently small percentage of Associated Consumers' debts that did result in suit, and in light of the obvious conflict in the evidence as to which entity, Credit Bureau or Associated Consumers, was responsible for instituting lawsuits.
B. Claim Under Subsection (10)
We turn now to Jeter's subsection (10) claim. Here, the legal consequences of Credit Bureau's failure to recommend legal action within five days does require the application of the legal standard enunciated in Part II, supra.
We conclude that the district court erred in granting summary judgment to Credit Bureau. As we have indicated in Part III.A., supra, a reasonable jury could well have interpreted Credit Bureau's letters as threatening to take legal action immediately upon expiration of the five-day periods or shortly thereafter, if the debtor had not yet paid the alleged debt. Under subsection (10), we must consider whether the "least sophisticated consumer" would be deceived by Credit Bureau's letters, i.e., whether the letters were a "deceptive means" to collect alleged debts, valid or invalid, by the use of false or deliberately ambiguous threats to recommend legal action. It may be, although we doubt it, that a "reasonable consumer" would have taken Credit Bureau's letters as empty threats to recommend legal action at some undisclosed time in the distant future; however, the fact that Jeter hired a lawyer and responded to the second letter seems to support the opposite view.
IV. HARASSMENT OR ABUSE?
Jeter argues that the district court erred in granting summary judgment in favor of Credit Bureau on her claim under § 1692d. Section 1692d reads as follows:
15 U.S.C.A. § 1692d. Subsections (1)-(6) do not proscribe Credit Bureau's conduct or the content of the two letters sent to Jeter. Focusing on subsection (2), Jeter claims that the letters involve "[t]he use of ... language the natural consequence of which is to abuse the ... reader." 15 U.S.C.A. § 1692d(2). However, it is clear that, when read in context, subsection (2) was meant to deter offensive language which is at least akin to profanity or obscenity. Such offensive language might encompass name-calling, racial or ethnic slurs, and other derogatory remarks which are similar in their offensiveness to obscene or profane remarks. This is in keeping with one of the purposes of the FDCPA "[t]hat every individual, whether or not he owes the debt, has a right to be treated in a reasonable or civil manner." 123 Cong.Rec. 10241 (1977) (statement of Representative Annuzio, Chairperson of Subcommittee which sponsored the legislation). The language of Credit Bureau's letters is not remotely offensive. The letters contained no personal comments directed towards Jeter. Thus, subsection (2) does not encompass Jeter's claim.
However, § 1692d is explicitly not limited to the conduct proscribed by subsections (1)-(6). "This will enable the courts, where appropriate, to proscribe other improper conduct which is not specifically addressed." S.Rep. No. 95-832, 95th Cong., 1st Sess., reprinted in 1977 U.S.Code Cong. & Ad.News 1695, 1698. The district court decided, however, that it was inappropriate to characterize Credit Bureau's conduct as violative of § 1692d:
We note that the district court applied a "reasonable consumer" standard to Jeter's claim under § 1692d, a standard which we have rejected with respect to claims of misrepresentation and deception under § 1692e. However, we cannot simply apply a "least sophisticated consumer" standard. Whether a consumer is more or less likely to be harassed, oppressed, or abused by certain debt collection practices does not relate solely to the consumer's relative sophistication; rather, such susceptibility might be affected by other circumstances of the consumer or by the relationship between the consumer and the debt collection agency. For example, a very intelligent and sophisticated consumer might well be susceptible to harassment, oppression, or abuse because he is poor (i.e., has limited access to the legal system), is on probation, or is otherwise at the mercy of a power relationship. Although the standard enunciated in Part II, supra, is not precisely applicable here, we believe that the consumer protective purposes of the FDCPA require us to adopt an analogous standard for violations of § 1692d. Thus, we hold that claims under § 1692d should be viewed from the perspective of a consumer whose circumstances makes him relatively more susceptible to harassment, oppression, or abuse.
That a lawsuit might cause a consumer "embarrassment, inconvenience, and further expense" is a true statement. Such consequences of a debt collection (or any other) lawsuit are so commonplace that even a consumer susceptible to harassment, oppression, or abuse would not have been harassed, oppressed, or abused by the statement in and of itself. A simple warning of "embarrassment, inconvenience, and further expense" does not create a "tone ... of intimidation ...." Rutyna v. Collection Accounts Terminal, Inc., 478 F.Supp. 980, 982 (N.D.Ill.1979). Of course, Credit Bureau's statement was part and parcel of general representations which a reasonable jury could find to be violative of §§ 1692e(5) and (10), i.e., potentially deceptive or false use of threats to recommend legal action. See supra Part III. Deception or falsehood alone, however, is wholly different from the conduct condemned in subsections (1) through (6) of § 1692d. Thus, we believe that Congress did not contemplate the prohibition of deceptive conduct per se within the confines of § 1692d.
Ordinarily, whether conduct harasses, oppresses, or abuses will be a question for the jury. Nevertheless, Congress has indicated its desire for the courts to structure the confines of § 1692d. S.Rep. No. 95-832, 95th Cong., 1st Sess., reprinted in 1977 U.S.Code Cong. & Ad.News 1695, 1698 (courts will proscribe "other improper conduct which is not specifically addressed"). The above discussion and a review of the case law, see, e.g., Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591 (N.D.Ga.1982); Harvey v. United Adjusters, 509 F.Supp. 1218 (D.Ore.1981); In re Scrimpsher, 17 B.R. 999 (Bankr.N.D.N.Y.1982), lead us to the conclusion that, even when judged by the consumer protective standard we adopt today, § 1692d does not as a matter of law proscribe Credit Bureau's conduct in this
For the foregoing reasons, we affirm in part, reverse in part, and remand to the district court for proceedings not inconsistent with this opinion.
AFFIRMED in part, REVERSED in part, and REMANDED.
Although the FDCPA provides a private right of action, it also provides for administrative enforcement by the FTC. 15 U.S.C.A. § 1692l. The FDCPA further provides that "[f]or the purpose of the exercise by the Commission of its functions and powers under the Federal Trade Commission Act, a violation of this subchapter shall be deemed an unfair or deceptive act or practice in violation of that Act." Id. In treating all violations of the FDCPA as violations of the FTC Act for purposes of administrative enforcement, Congress implicitly incorporated FTC Act jurisprudence. Congress would not have at the same time intended to create two legal standards, one for private enforcement and one for agency enforcement, while enacting one set of substantive rights to protect consumers from unfair, deceptive or abusive debt collectors.
Wright v. Credit Bureau of Georgia, Inc., 548 F.Supp. 591, 599-600 (N.D.Ga.1982). Upon reconsideration, the Wright court made the following statement:
Wright v. Credit Bureau of Georgia, Inc., 555 F.Supp. 1005, 1007 (N.D.Ga.1983).
We agree with the Wright court that the FDCPA was intended to protect "unsophisticated consumers," and we note its adoption of the standard enunciated in Exposition Press, the standard which we adopt here. See discussion in text infra. Nevertheless, we find the court's discussion of "reasonable consumer," especially in the court's second opinion, to be confusing. We find no need to decide whether the notion of "reasonable consumer" encompasses "unsophisticated consumers." To the extent that the standard set out in the Wright opinions is interpreted as inconsistent with the standard set out today, that standard is hereby effectively modified.