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Smith v. Portfolio Recovery Associates, LLC

United States District Court, M.D. Georgia, Columbus Division

May 23, 2019




         Lakeasha Smith brought this putative class action alleging that Portfolio Recovery Associates, LLC (“PRA”) sent her a collection letter that violates the Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692, et seq. Presently pending before the Court is PRA's motion to dismiss (ECF No. 7). As discussed below, the motion is granted.[1]


         “To survive a motion to dismiss” under Federal Rule of Civil Procedure 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The complaint must include sufficient factual allegations “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. In other words, the factual allegations must “raise a reasonable expectation that discovery will reveal evidence of” the plaintiff's claims. Id. at 556. But “Rule 12(b)(6) does not permit dismissal of a well-pleaded complaint simply because ‘it strikes a savvy judge that actual proof of those facts is improbable.'” Watts v. Fla. Int'l Univ., 495 F.3d 1289, 1295 (11th Cir. 2007) (quoting Twombly, 550 U.S. at 556).


         Lakeasha Smith (also known as Lakeasha Brown) owes a debt to PRA based on her use of a credit card she got from Comenity Capital Bank. PRA, the debt servicer, sent a collection letter that contained the following details about the debt:

         (Image Omitted)

         Compl. Ex. A, Collection Letter (Feb. 13, 2018), ECF No. 1-1. The letter contained the following “account offers”:

         (Image Omitted) Id. At the time of the letter, Smith's debt was more than six years old, so a lawsuit to recover the debt was time-barred under Georgia law.[2]

         Smith does not allege that she selected any of the payment options. Smith does allege that if she were to make a partial payment, she “could unknowingly cause the statute of limitations to restart.” Compl. ¶ 32, ECF No. 1. Smith further alleges that PRA's letter is misleading and deceptive because it “fails to inform the consumer that making a partial payment with some form of written acknowledgement will restart the statute of limitations for a lawsuit to occur.” Id. ¶ 30. Smith does not allege facts to suggest that PRA would sue her following a partial payment. In fact, Smith alleged that PRA unequivocally stated that it will not sue her. See Id. ¶ 29.


         To prevail on her FDCPA claim, Smith must establish that: (1) she was the object of collection activity arising from consumer debt; (2) PRA is a debt collector under the FDCPA; and (3) PRA engaged in a practice prohibited by the FDCPA. See LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1193 (11th Cir. 2010) (per curiam) (explaining that a “debt collector” engaging in “collection activity” to recover an outstanding “consumer debt” “is subject to the FDCPA”). Here, PRA does not dispute that Smith was the object of collection activity arising from consumer debt or that it is a debt collector under the FDCPA. The dispositive question is whether Smith adequately alleged an FDCPA violation.

         The Court previously examined a debt collection letter that also sought to collect a time-barred debt, offered partial payment options, and contained a disclosure regarding the statute of limitations that is nearly identical to the one in the letter Smith received. See generally Cooper v. Midland Credit Mgmt., Inc., No. 4:18-CV-82 (CDL), 2018 WL 6517448 (M.D. Ga. Dec. 11, 2018), appeal docketed, No. 19-10120 (11th Cir. Jan. 10, 2019).[3] The Court concluded that the plaintiff in that action failed to state a claim under 15 U.S.C. § 1692e or 15 U.S.C. § 1692f because the plaintiff did not allege facts to suggest that the statute of limitations would be revived in the event of a partial payment, so he did not adequately allege that the letter he received was misleading. Cooper, 2018 WL 6517448, at *4. In reaching this conclusion, the Court noted that the defendant's collection letter contained a promise not to sue the plaintiff because of the age of his debt and that the plaintiff did not allege any facts to suggest that the defendant would disregard its promise not to sue. The Court also distinguished the cases Smith relies on in her response brief. See Id. at *3-*4 (distinguishing Pantoja v. Portfolio Recovery Assocs., LLC, 852 F.3d 679 (7th Cir. 2017), Buchanan v. Northland Grp., Inc., 776 F.3d 393 (6th Cir. 2015), and Daugherty v. Convergent Outsourcing, Inc., 836 F.3d 507 (5th Cir. 2016)).

         Here, the Court studied the letter Smith received in its entirety and considered the parties' arguments regarding the implications of the disclosure language. This case is indistinguishable from Cooper. And, the Court is not convinced that the Eleventh Circuit's recent decision Holzman v. Malcolm S. Gerald & Associates, Inc., 920 F.3d 1264 (11th Cir. 2019), requires a different conclusion than the one the Court reached in Cooper. In Holzman, the collection letter sought to collect a time-barred debt by making an “offer” to “resolve” the plaintiff's debt, but the letter did not disclose that the debt was time-barred. Id. at 1267. The Eleventh Circuit concluded that the letter could mislead an unsophisticated consumer as to the legal status of the debt. Id. at 1272. In addressing the defendant's argument that it would be required to give legal advice to debtors if its letter were found to be misleading, the Eleventh Circuit noted that if a debt collector was “unsure about the applicable statute of limitations, it would be easy to include general language about that possibility, correcting any possible misimpression by unsophisticated consumers without venturing into the realm of legal advice.” Id. at 1273 (quoting Buchanan, 776 F.3d at 400). The Eleventh Circuit further suggested that any misimpression could be cured by incorporating the following language into its collection letters: “The law limits how ...

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