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Gause v. Medical Business Consultants, Inc.

United States District Court, M.D. Florida, Tampa Division

December 9, 2019




         Plaintiff Brandon Gause, on behalf of himself and a putative class of approximately 1,000 other individuals, sues Defendant Medical Business Consultants, Inc. ("MBC") for alleged violations of the Florida Consumer Collection Practices Act ("FCCPA"), Fla. Stat. §§ 559.55, et seq., and the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. §§ 1692 et seq. (Doc. 1). He also seeks declaratory and injunctive relief pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201, et seq. Id. MBC moves to dismiss or, alternatively, for judgment on the pleadings. (Doc. 23). Gause opposes. (Doc. 27). The Court will grant in part and deny in part the motion.


         Gause is a natural person and a Florida resident. (Doc. 1 at ¶10). MBC is a Florida corporation that provides debt collection services to physicians and other medical service providers in Florida. Id. at ¶¶ 2, 11.

         On January 3, 2018, MBC sent Gause a one-page collection letter (the "Letter") in an attempt to collect a $1,610.55 debt Gause incurred after receiving personal medical services from Florida Cardiology Associates. (Doc. 1-1). The Letter is from MBC's "Settlement Division" and is addressed to Gause at a Port Richey, Florida address. Id. The Letter reads:

We have been retained by [Florida Cardiology Associates] to settle this account. Please send payment in full in the enclosed envelope.
If you feel that this is not a valid debt CONTACT US IMMEDIATELY AT (***) ******* if you fail to contact us we will have no choice but to assume that this is a VALID and JUST DEBT.
Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice, this office will: obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you the name and address of the original creditor, if different from the current creditor.

Id. (capitalization in original, redaction added). The Letter is signed by "Your Representative, LISA SMITH" and lists the same telephone number provided in the body of the Letter. Id, (capitalization in original). In the bottom left corner of the Letter is a space for Gause to provide his debit or credit card payment information. Id. In the bottom right corner of the Letter are two text boxes stacked atop one another. Id. The first text box reads:

We report to multiple Credit Bureaus biweekly. This delinquent balance could prevent you from obtaining credit when you need it in the future.

Id. (holding in original). The second reads:

What to Do When You Receive a Collection Notice
Don't Get Angry Let Us Help
Your account was referred to us by someone that values your business. Our staff is experienced in credit and collections. They are ready to assist you if you will let them.
This is not intended to be legal advice

Id. (holding and italics in original). The Letter concludes, "THIS IS A COMMUNICATION FROM A DEBT COLLECTOR" Id. (capitalization and holding in original).

         The complaint alleges MBC sent nearly identical collection letters to approximately 1,000 other individuals in the state of Florida during the putative class period. (Doc. 1 at ¶16).


         Gause initiated this litigation by filing a three-count, class action complaint with the Court on July 18, 2018. (Doc. 1). Count I alleges MBC violated section 559.72 of the FCCPA because MBC, through the Letter, asserted the existence of a legal right it knew it didn't have by (i) stating it would assume the debt was "valid" and "just" if Gause didn't contact MBC "immediately" and (ii) implicitly threatening to report the debt to multiple credit bureaus bi-weekly. Id. at ¶¶ 37-46. Count II alleges MBC violated the FDCPA in three distinct respects: first, that MBC violated section 1692g because the Letter's demand for immediate action and implicit threat to report the debt overshadowed Gause's statutory right to dispute and verify the debt within thirty days; second, that MBC violated section l692e because the Letter's implicit threats to report the debt were false; and third, that, alternatively, MBC violated section 1692f because the Letter, as a whole, amounted to an unfair and unconscionable means to collect a debt. Id. at ¶¶ 47-55. Count III alleges Gause is entitled to (i) a declaratory judgment declaring that MBC's conduct violated the FCCPA and the FDCPA and (ii) an injunction enjoining MBC from collecting or attempting to collect debts using communications like those contained in the Letter. Id. at ¶¶ 56-66.

         MBC answered the complaint on August 13, 2018. (Doc. 9). MBC admits it's engaged in the business of collecting debts for physicians and other medical service providers in Florida, and that it's a "debt collector" as that term is defined by both the FCCPA and the FDCPA. Id. at ¶l 1. MBC also admits it sent Gause the Letter in an attempt to collect the debt he owed to Florida Cardiology Associates, and that the debt qualifies as a "consumer debt" under both the FCCPA and the FDCPA. Id at ¶¶26, 28. MBC denies the remainder of Gause's allegations and asserts a single affirmative defense (failure to state a claim). See generally id.

         MBC filed the instant motion on April 19, 2019. (Doc. 23). MBC moves pursuant to Rule 12(b)(1), Fed. R. Civ. P., for the entry of an order dismissing the action for lack of subject matter jurisdiction. Id. at 4-7. As grounds, MBC argues Gause cannot establish he suffered a "concrete injury" as required by the Supreme Court in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), and that Gause therefore lacks standing to sue. Id. Alternatively, MBC moves pursuant to Rule 12(c), Fed. R. Civ. P., for the entry of an order granting judgment on the pleadings in MBC's favor and against Gause on each of his claims. Id. at 7-16. As grounds, MBC argues the complaint, as a matter of law, fails to plausibly allege violations of either the FCCPA or the FDCPA. Id. at 7-15. And because the complaint fails to plausibly allege violations of either statute, says MBC, there's likewise no legal basis for the entry of a declaratory judgment in Gause's favor. Id. at 15-16.

         Gause responded in opposition to the motion on June 3, 2019. (Doc. 27). With respect to standing, Gause contends MBC's violations of the FCCPA and the FDCPA did, in fact, result in "concrete" injuries to Gause because the violations posed "a real risk of harm" to Gause's "statutorily recognized interests." Id. at 7-12. With respect to MBC's alternative request for judgment on the pleadings, Gause contends the complaint plausibly alleges violations of the FCCPA and the FDCPA, as well as Gause's entitlement to the entry of a declaratory judgment in his favor and against MBC. Id. at 12-20.

         The motion is fully briefed and ripe for the Court's determination.


         First, the Court will provide pertinent background on the FCCPA and the FDCPA. Next, the Court will address whether Gause has standing to sue. Finally, the Court will address whether MBC is entitled to judgment on the pleadings.


         As a result of increased abuse by consumer debt collectors and the lack of any meaningful common law tort remedies, in the late-1960s and early-1970s, state legislatures began to recognize the need for consumer protection legislation in the area of debt collection. And by the late-1970s, most states had enacted consumer protection laws aimed at preventing abusive debt collection practices. See H.R. Rep. No. 95-131 at 3 (1977) (noting that thirty-seven states and the District of Columbia had laws regulating debt collectors.) For its part, Florida enacted the FCCPA in 1972 "as a means of regulating the activities of consumer collection agencies within the state." LeBlane v. Unifund CCR Partners, 601 F.3d 1185, 1190 (11th Cir. 2010) (per curiam). The purpose of the FCCPA "is to deter bad collection practices," and "to protect Florida consumers from illegal [and] unscrupulous practices of debt collectors and other persons." Brook v. Chase Bank USA, N.A., 566 F. App'x 787, 790 (11th Cir. 2014) (per curiam) (citation omitted). See also Harris v. Beneficial Fin. Co. of Jacksonville, 338 So.2d 196, 200-01 (Fla. 1976) (describing the FCCPA as "a laudable legislative attempt to curb what the Legislature evidently found to be a series of abuses in the area of debtor-creditor relations"). Relevant here, section 559.72 of the FCCPA prohibits a debt collector, in attempting to collect a debt, from "asserting the existence of [a] legal right when such person knows that the right does not exist." Fla. Stat. § 559.72(9).

         But abusive debt collection wasn't just a state issue. In the late-1970s, Congress began to recognize abusive debt collection as "a widespread and serious national problem" as well. S. Rep. No. 95-382, at 2 (1977), reprinted in 1977 U.S.C.C.A.N 1695, 1696. Congress found:

There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. 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.
Existing laws and procedures for redressing these injuries are inadequate to protect consumers.

15 U.S.C. § 1692(a)-(b). As a result, Congress enacted the FDCPA in 1978. Like the FCCPA and other states' laws regulating consumer debt collection practices, the purpose of the FDCPA "is to protect consumers from a host of unfair, harassing, and deceptive debt collection practices," S. Rep. No. 95-382, at 1 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1696, and "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). Relevant here, sections 1692e and 1692f of the FDCPA, respectively, prohibit debt collectors from using "any false, deceptive, or misleading representation or means in connection with the collection of any debt," as well as the use of any "unfair or unconscionable" means of collection. 15 U.S.C. §§ l692e, I692f.

         In addition, the FDCPA requires debt collectors to inform consumers in writing of their statutory right to dispute and verify the debt. This written notice is commonly referred to as a "validation notice." Section l692g of the FDCPA prescribes the mandatory contents of the validation notice. Specifically, section l692g(a) requires that

[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing:
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

15 U.S.C. § l692g(a)(1)-(5). A debt collector violates the FDCPA where it undertakes "any collection activities" or "communication" during the thirty-day period that "overshadow or [are] inconsistent with the disclosure of the consumer's right to dispute the debt or request the name and address of the original creditor." 15 U.S.C. § l692g(b).

         In accordance with their stated purpose, both the FCCPA and the FDCPA permit individuals to sue debt collectors who fail to comply with the statutes' provisions. See Fla. Stat. § 559.77(2) ("A debtor may bring a civil action against a person violating the provisions of [section 559.72]."); 15 U.S.C. § l692k(a) (permitting institution of a civil action for damages against "any debt collector who fails to comply with any provision of this subchapter"). And although both statutes are remedial in nature and prohibit similar, abusive debt collection practices, the FDCPA doesn't preempt the FCCPA, so long as the FCCPA's provisions aren't inconsistent with those of the FDCPA. See 15 U.S.C. § l692n. Plaintiffs may therefore be entitled to recover under both the FCCPA and the FDCPA in a single action for the same conduct. Available remedies under the FCCPA and the FDCPA include actual damages, statutory damages up to $1,000 subject to the Court's discretion, and reasonable costs and attorney's fees.[1] See Fla. Stat. § 559.77(2); 15 U.S.C. § l692k(a)(1)-(3). The FCCPA also provides for the recovery of punitive damages. See Fla. Stat. § 559.77(2).

         With that background in mind, the Court turns to the merits of MBC's motion.


         MBC moves to dismiss the complaint in its entirety on grounds that Gause lacks standing to sue. "[A] dismissal for lack of standing has the same effect as a dismissal for lack of subject matter jurisdiction under Rule 12(b)(1)." Stalley ex rel United States v. Orlando Reg'l Healthcare Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (per curiam). Challenges to a district court's subject matter jurisdiction come in two forms: "facial attacks" and "factual attacks." Morrison v. Amway Corp., 323 F.3d 920, 924 n.5 (11th Cir. 2003). "Facial attacks challenge subject matter jurisdiction based on the allegations in the complaint, and the district court takes the allegations as true in deciding whether to grant the motion." Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (per curiam). Factual attacks, on the other hand, "challenge subject matter jurisdiction in fact, irrespective of the pleadings." Id.

         MBC styles its motion to dismiss as a "factual attack," as the motion relies on Cause's responses to certain of MBC's discovery interrogatories (i.e., matters outside the four corners of the complaint). (Doc. 23 at 4). But the distinction is of no moment, here, as a district court resolves the question of its subject matter jurisdiction independent of any disputed issues of fact, so long as the inquiry doesn't implicate the merits of the plaintiffs claim. Morrison, 323 F.3d at 924-25. And because "standing in no way depends on the merits of [a] plaintiffs contention that particular conduct is illegal," Worth v. Seldin, 422 U.S. 490, 500 (1975), the Court is free to independently consider Gause's allegations and to weigh the evidence in order to satisfy itself of its power to hear the case, see Morrison, 323 F.3d at 925 (citation omitted). See also Butler v. Morgan, 562 F. App'x 832, 834 (11th Cir. 2014) (per curiam) ("A district court may dismiss a complaint for lack of subject-matter jurisdiction based on: (1) the complaint alone; (2) the complaint plus undisputed facts evidenced in the record; or (3) the complaint plus undisputed facts plus the court's resolution of disputed facts.") (citation omitted).


         The Constitution limits the power of the federal judiciary to "Cases" and "Controversies." U.S. Const, art. III, § 2. To satisfy the case-or-controversy requirement, a plaintiff must have standing to sue. Spokeo, 136 S. Ct. at 1547. The standing doctrine "developed in our case law to ensure that federal courts do not exceed their authority as it has been traditionally understood." Id. The doctrine "limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong." Id.

         "[A] plaintiff must demonstrate standing for each claim he seeks to press." Davis v. Fed Election Comm'n 554 U.S. 724, 734 (2008). And "[i]t is well-settled that 'if none of the named plaintiffs purporting to represent a class establishes the requisite of a case or controversy with the defendants, none may seek relief on behalf of himself or any other member of the class.'" A&M Gerber Chiropractic LLC v. GEICO Gen. Ins. Co., 925 F.3d 1205, 1211 (11th Cir. 2019) (quoting O'Shea v. Littleton, 414 U.S. 488,494(1974)). Thus, as the named plaintiff and putative class representative, Gause must demonstrate standing for each of his claims.

         Standing consists of three elements: "[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, 136 S. Ct. at 1547 (citation omitted). "Where, as here, a case is at the pleading stage, the plaintiff must. . . clearly allege facts demonstrating each element." Id. (internal quotations and citation omitted). Where any element is missing, the plaintiff lacks standing to sue, and the district court, as a result, lacks ...

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