Durkin, Michael v. Equifax Check Serv ( 2005 )


Menu:
  •                                 In the
    United States Court of Appeals
    For the Seventh Circuit
    ____________
    No. 04-2289
    MICHAEL DURKIN and LORETTA REED,
    individually and on behalf of all
    others similarly situated,
    Plaintiffs-Appellants,
    v.
    EQUIFAX CHECK SERVICES, INC.,
    a Delaware corporation,
    Defendant-Appellee.
    ____________
    Appeal from the United States District Court for
    the Northern District of Illinois, Eastern Division.
    No. 00 C 4832—William J. Hibbler, Judge.
    ____________
    ARGUED DECEMBER 2, 2004—DECIDED APRIL 18, 2005
    ____________
    Before COFFEY, RIPPLE, and MANION, Circuit Judges.
    1
    MANION, Circuit Judge. Equifax Check Services, Inc., uses
    a series of form letters to assist it in collecting debts from
    dishonored checks. Equifax mailed such a series of letters to
    1
    Equifax is now known as Certegy Check Services, Inc.
    2                                               No. 04-2289
    Michael Durkin and, separately, to Loretta Reed. Believing
    that certain letters were unacceptably confusing, Durkin,
    and later Reed, sued Equifax under the Fair Debt Collection
    Practices Act (“FDCPA”), 15 U.S.C. §§ 1692, et seq. The
    district court consolidated the two actions into one. After
    denying the plaintiffs summary judgment, the district court
    granted Equifax’s motion to exclude the plaintiffs’ only
    expert witness. This evidentiary ruling led Equifax to move
    for summary judgment, arguing that the plaintiffs failed to
    bring forth the necessary extrinsic evidence to support their
    case. The district court agreed and granted Equifax sum-
    mary judgment. The plaintiffs appealed. We affirm.
    I.
    Equifax, through its check authorization and warranty
    service, protects retailers from being stuck with bad checks.
    Under the service, when a customer presents a retailer with
    a check, the retailer contacts Equifax, and Equifax deter-
    mines whether it will stand behind the check and authorize
    it or whether it will deny acceptance of the check. Equifax
    makes this determination by reviewing its database of check
    writing information. If Equifax authorizes a check that is
    later dishonored, Equifax purchases the check from the
    retailer at face value, making the retailer whole, and then
    pursues collection efforts on its own behalf. Two retailers
    who have subscribed to this service are Funco, Inc., (also
    known as Funcoland) and Sears, Roebuck and Company.
    On March 15, 2000, Equifax authorized a $217.45 check in
    Michael Durkin’s name payable to Funco. Durkin’s checking
    account, however, was closed, and the check was dishon-
    ored. Funco submitted the dishonored check to Equifax, and
    Equifax purchased the check at face value. Equifax then
    began its collection efforts and sent Durkin a collection
    No. 04-2289                                                        3
    letter on April 12, 2000. This initial letter contained a notice
    of certain rights afforded to Durkin under the FDCPA.
    Specifically, Equifax informed Durkin—in accordance with
    15 U.S.C. § 1692g(a)-(b) and the corresponding safe-harbor
    language drafted by this court in Bartlett v. Heibl, 
    128 F.3d 497
    , 501-02 (7th Cir. 1997)—that he had thirty days from his
    receipt of the letter to dispute the validity of the debt and
    that disputes should be in writing. This thirty-day period is
    commonly called the “validation period,” and the afore-
    mentioned notice is routinely referred to as the “validation
    notice.” With no response from Durkin, Equifax sent a
    second letter on April 24, 2000, and likewise a third letter on
    May 8, 2000. Equifax also made a telephone call to Durkin
    during this period. The second and third collection letters
    did not discuss or reference the validation period, nor did
    they reiterate any of the rights and procedures spelled out
    in the initial letter’s validation notice. Each of the three
    2
    letters appears in the appendix to this opinion.
    2
    The upper right-hand corners of the first and second letters
    (and presumably the third as well) declare: “Please read infor-
    mation on reverse side.” The reverse side of each letter (including
    the third) states, in its entirety: “EQUIFAX CHECK SERVICES
    NOTICE[;] P.O. Box 30032[,] Tampa, Florida 33630-3032[;]
    TELEPHONE MONITORING CONSENT[:] We randomly moni-
    tor telephone conversations between callers and Equifax Check
    Services employees, solely to evaluate our employees’ performance
    and determine if additional employee training is necessary, and
    for no other purpose. Your consent to this practice will be as-
    sumed unless at the beginning of each call you instruct us not to
    monitor the conversation, in which case such monitoring, if any,
    will be discontinued for that call.” This information is not included
    in the appendix to this opinion to avoid needless repetition. We
    include it here to fully inform readers about the contents of each
    (continued...)
    4                                                      No. 04-2289
    Within a day or two of receiving the initial letter, Durkin
    forwarded it to his attorney, an experienced FDCPA practi-
    tioner. Durkin had retained the attorney to handle financial
    and legal matters arising from the theft of his checkbook in
    August 1999. The check presented to Funco in March 2000
    was among the checks stolen. Durkin’s signature on the
    Funco check was thus a forgery, and the checking account
    had been closed at the time the forged check was written.
    Durkin and his attorney were therefore aware of the problem
    with the checking account when the initial letter arrived in
    April. Nevertheless, the attorney did not lodge a written
    dispute with Equifax until May 8, 2000, after the second
    letter had arrived and the day that the third letter was sent.
    Equifax, once informed about the forgery, ceased all collec-
    tion activity and expunged Durkin’s check writing history
    of any negative references regarding the Funco check. Three
    months later, Durkin’s attorney filed a class action, with co-
    counsel, under the FDCPA against Equifax in the Northern
    District of Illinois using Durkin as the named plaintiff. The
    complaint alleged FDCPA violations on behalf of individu-
    als who had received the same form letters.
    Separately, a different set of attorneys brought a virtually
    identical FDCPA class action in the Northern District of
    Illinois against Equifax with Loretta Reed as their lead
    plaintiff. Reed wrote a $76.30 check to Sears. Equifax au-
    thorized the check. Nonetheless, the check was dishonored
    (...continued)
    letter. Separately, we note that, in the appendix, the right-hand
    margin of the first letter and the top margin of the third letter are
    less than perfect, cutting off small amounts of information. The
    copies used in the appendix were the best the record had to offer.
    Nevertheless, the letters are clearly understandable, and the
    imperfections are of no consequence.
    No. 04-2289                                                     5
    (purportedly because of a bank error). Equifax bought the
    check from Sears at face value and then sent Reed a collec-
    tion letter that was similar to the initial letter sent to Durkin,
    including the same safe-harbor validation notice. Later,
    Equifax sent a second letter to Reed, which contained the
    same form language used in the second letter to Durkin.
    Reed purportedly received the same third letter as well, but
    she has not produced that letter. Reed never disputed the
    debt with Equifax; rather, she paid Equifax $76.30 plus a
    $25.00 service charge.
    The district court consolidated the Durkin and Reed
    actions. The district court also granted class certification.
    The class was composed of Illinois residents from whom
    Equifax tried to collect a debt for a dishonored check written
    to Funco or Sears during a certain period by using the same
    or similar form letters received by Durkin and Reed. The
    class numbered approximately 4,800 individuals.
    The plaintiffs’ “amended consolidated class action com-
    plaint” contained three counts, each alleging a different
    FDCPA violation. Count one alleged that Equifax’s follow-
    up form letters, i.e., the second and third letters, contra-
    dicted and/or overshadowed the safe-harbor validation
    notice in the initial letter, causing confusion in violation of
    15 U.S.C. § 1692g. Count two claimed that a particular sen-
    tence in the second letter describing Equifax’s procedures
    for handling debts was misleading in violation of 15 U.S.C.
    § 1692e. Finally, count three alleged that Equifax’s follow-up
    letters, which contained a toll-free number, violated 15
    U.S.C. § 1692f by unfairly obscuring the requirement that
    certain debt disputes be made in writing.
    In arguing for summary judgment, the plaintiffs contended
    that alleged FDCPA violations were apparent on the face of
    the collection letters. The district court disagreed but ruled
    that the case should go to trial since the plaintiffs procured
    6                                                     No. 04-2289
    a linguistics expert, English professor Allan Metcalf, to
    support their claims of confusion. However, Equifax later
    filed a motion to bar Metcalf from testifying at trial, which
    the district court granted. Consequently, the plaintiffs were
    left with no evidence of confusion beyond the collection
    letters themselves and their (Durkin, Reed, and one rank-
    and-file class member) own assertions that the letters were
    confusing. This development led Equifax to move for
    3
    summary judgment, arguing that the plaintiffs’ evidence
    was insufficient to go to trial. The district court granted the
    motion, ruling that the plaintiffs could not proceed to trial
    relying solely on the letters and their own self-serving
    testimony. The plaintiffs moved for reconsideration, but the
    district court declined to alter its summary judgment ruling.
    The plaintiffs appealed.
    II.
    The plaintiffs first maintain that the district court erred in
    denying them summary judgment. They then alternatively
    argue for the case to go to trial, attacking the subsequent
    grant of summary judgment for Equifax. We review a dis-
    trict court’s summary judgment decisions de novo, constru-
    ing all facts in favor of the non-moving party. See Turner v.
    J.V.D.B. & Assocs., Inc., 
    330 F.3d 991
    , 994 (7th Cir. 2003).
    Summary judgment is appropriate when the “pleadings,
    depositions, answers to interrogatories, and admissions on
    file, together with the affidavits, if any, show that there is no
    genuine issue as to any material fact and that the moving
    party is entitled to a judgment as a matter of law.” Fed. R.
    3
    The district court denied Equifax’s prior summary judgment
    motion, declining, at that earlier juncture, to rule that the follow-
    up letters did not violate the FDCPA as a matter of law.
    No. 04-2289                                                       7
    Civ. P. 56(c). In short, “summary judgment is appropriate if,
    on the record as a whole, a rational trier of fact could not
    find for the non-moving party.” 
    Turner, 330 F.3d at 995
    .
    To determine if the collection letters at issue violate the
    FDCPA as alleged by the plaintiffs, we examine the letters
    from the standpoint of the so-called unsophisticated con-
    sumer or debtor. See Fields v. Wilber Law Firm, P.C., 
    383 F.3d 562
    , 564-66 (7th Cir. 2004) (reviewing § 1692e, § 1692f, and
    § 1692g claims under unsophisticated consumer/debtor
    standard). While the unsophisticated debtor is considered
    “uninformed, naive, or trusting,” he is nonetheless deemed
    to possess “rudimentary knowledge about the financial
    world and is capable of making basic logical deductions and
    inferences.” 
    Id. (internal quotations
    omitted). Further, the
    unsophisticated-debtor standard is an objective one and is
    not the same as the rejected least-sophisticated-debtor
    standard; accordingly, we disregard unrealistic, peculiar,
    bizarre, and idiosyncratic interpretations of collection
    letters. See Pettit v. Retrieval Masters Creditors Bureau, Inc., 
    211 F.3d 1057
    , 1060 (7th Cir. 2000); Gammon v. GC Servs., L.P., 
    27 F.3d 1254
    , 1257 (7th Cir. 1994). To that end, a mere claim of
    confusion is not enough: a plaintiff must show that the
    challenged “language of the letters unacceptably increases
    the level of confusion.” Johnson v. Revenue Mgmt. Corp., 
    169 F.3d 1057
    , 1060 (7th Cir. 1999) (emphasis omitted). Under
    this standard, a plaintiff’s anecdotal proclamations of being
    confused will not suffice: a collection letter cannot be
    confusing as a matter of law or fact “unless a significant
    fraction of the population would be similarly misled.” 
    Pettit, 211 F.3d at 1060
    ; see also Taylor v. Cavalry Inv., L.L.C., 
    365 F.3d 572
    , 574-75 (7th Cir. 2004).
    In some situations, when an FDCPA violation is so
    “clearly” evident on the face of a collection letter, a court
    may award summary judgment to the FDCPA plaintiff.
    Avila v. Rubin, 
    84 F.3d 222
    , 226-27 (7th Cir. 1996); see also
    8                                                  No. 04-2289
    
    Bartlett, 128 F.3d at 501-02
    ; Chauncey v. JDR Recovery Corp.,
    
    118 F.3d 516
    , 518-19 (7th Cir. 1997). On the other hand, mere
    speculation that a collection letter confuses the unsophis-
    ticated debtor is not enough for an FDCPA plaintiff to
    survive an opposing debt collector’s summary judgment
    motion. See 
    Pettit, 211 F.3d at 1061
    ; see also Jenkins v. Heintz,
    
    124 F.3d 824
    , 831 (7th Cir. 1997). Thus, when the letter itself
    does not plainly reveal that it would be confusing to a
    significant fraction of the population, the plaintiff must
    come forward with evidence beyond the letter and beyond
    his own self-serving assertions that the letter is confusing in
    order to create a genuine issue of material fact for trial. See
    
    Taylor, 365 F.3d at 574-75
    ; Chuway v. Nat’l Action Fin. Servs.,
    
    362 F.3d 944
    , 948-49 (7th Cir. 2004); 
    Pettit, 211 F.3d at 1061
    -
    62; see also Walker v. Nat’l Recovery, Inc., 
    200 F.3d 500
    , 503-04
    (7th Cir. 1999); 
    Johnson, 169 F.3d at 1060-61
    . We have
    repeatedly indicated that this need for additional evidence
    (frequently referred to as “extrinsic evidence”) might be met
    through the use of a carefully designed and conducted con-
    sumer survey. See 
    Taylor, 365 F.3d at 575
    ; 
    Chuway, 362 F.3d at 948
    ; 
    Pettit, 211 F.3d at 1062
    ; 
    Walker, 200 F.3d at 501
    , 503;
    
    Johnson, 169 F.3d at 1060-61
    . Also, we have suggested that
    an appropriate expert witness might suffice. See 
    Pettit, 211 F.3d at 1062
    .
    In this analysis section, we first will address the plaintiffs’
    arguments in favor of their motion for summary judgment.
    We then will turn to the plaintiffs’ arguments against the
    grant of summary judgment for Equifax.
    A. Whether the plaintiffs are entitled to summary judg-
    ment.
    In arguing in favor of summary judgment, the plaintiffs
    contend that the collection letters in question violate the
    FDCPA as matter of law in that the alleged FDCPA vio-
    No. 04-2289                                                       9
    lations are apparent on the face of the letters. With the
    principles articulated above in mind, we turn to the three
    alleged FDCPA violations.
    1.
    The FDCPA requires debt collectors to provide debtors
    with a written validation notice, informing debtors of their
    rights under § 1692g, including the right to dispute the
    validity of the debt within thirty days of receiving the no-
    4
    tice. See 
    Bartlett, 128 F.3d at 498-99
    . After this thirty-day
    4
    Subsections (a) and (b) of § 1692g provide:
    (a) Notice of debt; contents. Within 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 communica-
    tion 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 as-
    sumed 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 col-
    lector will obtain verification of the debt or a copy of a
    judgment against the consumer and a copy of such veri-
    fication 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
    (continued...)
    10                                                    No. 04-2289
    validation period expires, the debt collector may assume
    that the debt is valid. See 
    id. at 498;
    15 U.S.C. § 1692g(a)(3).
    This validation period, however, is not a grace period: a
    debt collector is “perfectly free” to demand payment and
    pursue collection efforts, including an appropriate lawsuit
    5
    against the debtor, within the validation period. 
    Bartlett, 128 F.3d at 500-01
    ; see also 
    Johnson, 169 F.3d at 1058-59
    . Thus,
    during the validation period, the debtor’s right to dispute
    coexists with the debt collector’s right to collect.
    This coexistence has created a breeding ground for claims
    of unsophisticated-debtor confusion because, on one hand,
    the debt collector is telling the debtor that the debtor has the
    right to dispute, and, on the other hand, the debt collector
    is telling the debtor to pay. To reduce litigation over such
    (...continued)
    will provide the consumer with the name and address of
    the original creditor, if different from the current credi-
    tor.
    (b) Disputed debts. If the consumer notifies the debt
    collector in writing within the thirty-day period described in
    subsection (a) that the debt, or any portion thereof, is dis-
    puted, or that the consumer requests the name and address
    of the original creditor, the debt collector shall cease col-
    lection of the debt, or any disputed portion thereof, until the
    debt collector obtains verification of the debt or a copy of a
    judgment, or the name and address of the original creditor,
    and a copy of such verification or judgment, or name and
    address of the original creditor, is mailed to the consumer by
    the debt collector.
    15 U.S.C. § 1692g(a)-(b).
    5
    Of course, a debt collector must suspend its collection efforts if
    the debtor disputes or otherwise contests the debt under
    § 1692g(a). See 15 U.S.C. § 1692g(b).
    No. 04-2289                                                   11
    confusion claims, this court, in Bartlett, offered debt collec-
    tors safe-harbor language for explaining the coexistence of
    the right to dispute and the right to collect during the
    validation 
    period. 128 F.3d at 501-02
    ; see also Miller v.
    McCalla, Raymer, Padrick, Cobb, Nichols, & Clark, L.L.C., 
    214 F.3d 872
    , 876 (7th Cir. 2000).
    Here, Equifax took advantage of our Bartlett safe-harbor
    6
    language by including it in the initial collection letter.
    Importantly, Equifax warned the plaintiffs, consistent with
    the Bartlett language: “The law does not require us to wait
    until the end of the 30-day period before taking action to
    collect this debt.” Appendix 1. Equifax thus placed the
    plaintiffs on notice that something such as the ensuing fol-
    low-up letters could be on the way before the validation
    period expired. Unsatisfied, the plaintiffs complain that
    Equifax’s follow-up letters are confusing to unsophisticated
    debtors because these letters contradict and/or overshadow
    the validation notice in the initial letter. See 
    Chauncey, 118 F.3d at 518
    . According to the plaintiffs, the follow-up letters
    confuse because Equifax sent these letters within the valid-
    ation period and the letters contained threatening demands
    for immediate payment without any reminder about or
    reiteration of the validation notice. This argument in favor
    of summary judgment comes up short for three reasons.
    First, the simple act of demanding payment in a collection
    letter during the validation period does not automatically
    create an unacceptable level of confusion so as to entitle the
    plaintiffs to summary judgment. To be clear, the validation
    period is not a grace period. See 
    Bartlett, 128 F.3d at 500-01
    .
    Nonetheless, the plaintiffs’ view is that virtually all de-
    6
    Equifax’s appellate counsel reported at oral argument that his
    client utilizes our Bartlett safe-harbor language nationwide.
    12                                                No. 04-2289
    mands for payment during the validation period confuse
    the unsophisticated debtor as a matter of law. (Presumably,
    the plaintiffs would like no collection letters sent during the
    validation period.) That view is unsupported by the FDCPA
    and runs contrary to our case law. If, as this court held in
    Bartlett, a debt collector can bring a lawsuit during the
    validation period in an effort to collect a debt, see 
    id., then certainly
    a debt collector can send follow-up collection
    letters (as well as place telephone calls) demanding payment
    during the validation period. Demanding payment for an
    uncontested, overdue debt is an entirely valid tool available
    to debt collectors, see 
    Johnson, 169 F.3d at 1059
    (“[B]ona fide
    debts that are overdue are, well, overdue, and payable
    pronto.”), and the fact that Equifax demanded payment
    during the validation period does not, in and of itself, justify
    an award of summary judgment to the plaintiffs.
    Second, pursuant to § 1692g(a), a debt collector must
    include a validation notice in its initial communication to
    the debtor or must send a validation notice within five days
    of its initial communication (unless the debtor has paid the
    debt by that juncture). See 15 U.S.C. § 1692g(a). Equifax
    complied with the language in its initial letter. Once that
    requirement is satisfied, § 1692g(a) does not mandate that
    further validation notices be sent. Nonetheless, the plaintiffs
    point out that a “debt collector may not overshadow or
    contradict [the validation notice] with other messages
    sent . . . within the validation period.” 
    Chauncey, 118 F.3d at 518
    . To avoid such overshadowing or contradiction, the
    plaintiffs argue that Equifax should have reiterated or
    referred to the validation notice in its follow-up collection
    letters. However, there is no need for such a blanket rule.
    While some follow-up letters may certainly go over the line,
    see, e.g., 
    id. at 518-19,
    in general, not every follow-up letter
    demanding payment during the validation period overshad-
    No. 04-2289                                                    13
    ows or contradicts a validation notice; thus, not every follow-
    up letter sent during the validation period must automati-
    cally reiterate the safe-harbor validation notice, refer back to
    that notice, or remind debtors about the validation period
    and the time remaining in that period. Therefore, the mere
    absence of any such reiterations and reminders in the
    follow-up collection letters does not alone generate an
    unacceptable level of confusion so as to warrant summary
    judgment for the plaintiffs. Rather, the matter turns on
    whether the specific text contains any impermissible
    overshadowing or contradiction with respect to the valida-
    tion notice. See 
    id. Third, the
    specific text in the follow-up letters at issue,
    contrary to the plaintiffs’ assertions, does not “clearly” over-
    shadow or contradict the validation notice from the initial
    letter so as to entitle the plaintiffs to summary judgment.
    
    Avila, 84 F.3d at 226-27
    ; see also 
    Chauncey, 118 F.3d at 518
    -19.
    For instance, these letters do not indicate that the time for
    disputing the debt has passed. Nor do they misrepresent or
    cloud the amount of time remaining to dispute the debt. The
    letters encourage debtors to pay their debts by informing
    them of the possible negative consequences of failing to
    7
    pay. The letters simply do not contain any overt misinfor-
    mation, apparent contradiction, or noticeable lack of clarity
    concerning the validation period or the debtor’s rights under
    § 1692g. The letters, in short, do not intrinsically prove the
    7
    Not only does this encouragement promote payment of valid
    debts, it also promotes disclosing genuine claims of invalid debts
    (such as Durkin demonstrating the debt resulted from a forgery).
    Undeniably, one way to encourage someone with a true dispute
    to come forward and resolve that dispute is to inform him of the
    possible negative consequences of his continued inaction.
    Promoting final resolution of such matters, either way, is
    inherently beneficial.
    14                                                No. 04-2289
    alleged FDCPA violation. Accordingly, summary judgment
    is unavailable to the plaintiffs on this claim. (Whether this
    claim should proceed to trial, however, is a separate matter
    as discussed below.)
    2.
    The plaintiffs next attack a particular sentence in Equifax’s
    second collection letter under § 1692e. Under this FDCPA
    provision, a debt collector is subject to civil liability if it
    “use[s] any false, deceptive, or misleading representation or
    means in connection with the collection of any debt.” 15
    U.S.C. § 1692e. The challenged sentence reads as follows:
    “Should you fail to pay for this dishonored check or contact
    this office to make arrangements, steps will be taken to deter-
    mine if your check will be assigned to an investigator or to a
    collection agency.” Appendix 2 (emphasis added). The
    plaintiffs assert that, as a matter of law, this sentence is
    misleading and confusing to the unsophisticated consumer
    in three respects. However, in construing all inferences in
    favor of Equifax, as we must in this situation, see Kort v.
    Diversified Collection Servs., Inc., 
    394 F.3d 530
    , 536 (7th Cir.
    2005), we reject the plaintiffs’ arguments for summary judg-
    ment.
    The plaintiffs first maintain that the “investigator” in
    question is not a private investigator but rather an in-house
    investigator. However, although the investigator is internal,
    the letter does not, contrary to the plaintiffs’ contention,
    plainly suggest otherwise. It does not indicate that Equifax
    may refer the matter to an investigator outside of Equifax;
    it only indicates that Equifax may refer the matter to an
    investigator, which is entirely true. Next, the plaintiffs com-
    plain that, since Equifax is itself a collection agency, the
    statement that the matter might be referred to a “collection
    No. 04-2289                                                  15
    agency” deceptively implies that the alleged debt has not
    yet been referred to a collection agency. Nevertheless, the
    letter does not plainly suggest that Equifax is not a collec-
    tion agency. Also, this statement is not misleading because,
    as Equifax indicates, since it purchases dishonored checks
    from vendors and collects the debts on behalf of itself, it
    may assign such debts to another collection agency if its
    own collection efforts prove unsuccessful. Finally, the
    plaintiffs contest the portion of the sentence stating: “steps
    will be taken to determine . . . .” The plaintiffs argue that no
    steps are taken to determine anything; it is all done auto-
    matically by computer. However, this statement is simply
    not deceptive: whether debt information (i.e., the amount of
    the debt and the amount of time the debt has gone unpaid) is
    sorted and evaluated by a computer or by a person or
    by some combination of the two, the assessment still com-
    prises “steps” being “taken.” Therefore, contrary to the
    plaintiffs’ contentions, the alleged violations are not so clear
    as to permit a grant of summary judgment for the plaintiffs.
    See 
    Avila, 84 F.3d at 226-27
    .
    3.
    Lastly, the plaintiffs accuse Equifax of violating § 1692f.
    Pursuant to this FDCPA section, a debt collector is subject
    to civil liability, if it “use[s] unfair or unconscionable means
    to collect or attempt to collect any debt.” 15 U.S.C. § 1692f.
    The plaintiffs claim that Equifax unfairly obscured the “in-
    writing” requirement for debt disputes brought under
    8
    § 1692g because the follow-up letters, which included a toll-
    free number, urge debtors to telephone Equifax. It is
    undisputed that, by using our Bartlett safe-harbor language,
    the initial letter, which also contained a toll-free number,
    8
    
    See supra
    footnote four.
    16                                                 No. 04-2289
    properly informed debtors of § 1692g’s in-writing require-
    ment. 
    See 128 F.3d at 502
    . Nonetheless, the plaintiffs main-
    tain that the second letter is unfair and confusing because,
    in addition to the presence of a toll-free number, the letter
    suggests that the debtor “contact this office.” Appendix 2.
    Similarly, they contend that the third letter is unfair and
    confusing because, along with the toll-free number, the let-
    ter states: “You may reach our offices at the number below
    if you wish to discuss this matter further.” Appendix 3. To
    avoid this alleged unfairness and confusion, the plaintiffs
    argue that Equifax should have reiterated the portion of the
    safe-harbor notice explaining the in-writing requirement in
    the follow-up collection letters.
    However, neither follow-up letter plainly indicates that
    disputes do not have to be in writing: contacting the office
    to discuss the matter does not necessarily equate to tele-
    phoning the office to raise a dispute. Further, in the second
    letter, the verb “contact” does not exclusively mean “call”
    or “telephone” in this context. One could understand the
    word “contact” in this situation to mean communicating with
    Equifax in writing. This understanding is bolstered by the
    fact that Equifax included its mailing address in the second
    letter as well as in the third letter. While the plaintiffs focus
    on the toll-free number, they neglect to pay the same level
    of attention to the inclusion of Equifax’s mailing address. In
    short, the challenged portions of the follow-up letters do not
    obviously nullify or undermine the initial letter’s explana-
    tion of the in-writing requirement. Therefore, in construing
    all inferences in favor of Equifax, the alleged unfairness and
    confusion about the “in-writing” requirement in the follow-
    up letters is not so clear as to justify the grant of summary
    judgment to the plaintiffs. See 
    Avila, 84 F.3d at 226-27
    .
    Whether these claims should proceed to trial is, in this case,
    a separate matter as discussed below.
    No. 04-2289                                                   17
    B. Whether Equifax is entitled to summary judgment.
    As stated above, mere speculation that a collection letter
    confuses the unsophisticated debtor is not enough for an
    FDCPA plaintiff to survive an opposing debt collector’s
    summary judgment motion. See 
    Pettit, 211 F.3d at 1061
    ; see
    also 
    Jenkins, 124 F.3d at 831
    . Therefore, when the text of the
    letter does not plainly reveal that it would be confusing to
    a significant fraction of the population, the plaintiff must
    come forward with extrinsic evidence, such as a consumer
    survey, to create a genuine issue of material fact for trial. See
    
    Taylor, 365 F.3d at 574-75
    ; 
    Chuway, 362 F.3d at 948
    -49; 
    Pettit, 211 F.3d at 1061
    -62; see also 
    Walker, 200 F.3d at 503-04
    ;
    
    Johnson, 169 F.3d at 1060-61
    .
    In order to satisfy the need for extrinsic evidence in this
    9
    case, the plaintiffs elected not to conduct a survey but
    instead secured a linguist to support their confusion claims
    against Equifax. Nevertheless, the district court barred their
    expert from testifying at trial, finding the expert’s testimony
    irrelevant and unreliable under Daubert v. Merrell Dow
    Pharmaceuticals, Inc., 
    509 U.S. 579
    (1993). The plaintiffs, as a
    result, were left with no evidence of confusion beyond the
    follow-up letters themselves and their (Durkin, Reed, and
    one rank-and-file class member) own affidavits claiming
    that they found the letters to be confusing. The district court
    ruled that this evidence was insufficient to create a triable
    issue and thus granted Equifax summary judgment.
    The plaintiffs attack this result on three levels. First, they
    argue that the district court erred in excluding their expert.
    Second, they contend that, even without their expert, they
    presented sufficient evidence to proceed to trial. Third, they
    9
    When pressed at oral argument to explain why they did not
    perform a survey, it was evident that the plaintiffs did not want
    to invest the resources necessary for conducting a survey.
    18                                                    No. 04-2289
    challenge the need for extrinsic evidence in certain FDCPA
    situations, arguing that the extrinsic evidence requirement
    conflicts with the unsophisticated-debtor standard. We will
    address each argument in that order.
    1.
    Turning to the district court’s decision to bar the plaintiffs’
    expert, English professor and linguist Allan Metcalf, our
    review has two steps. We first review, de novo, “whether
    the district court properly followed the framework set forth
    in Daubert.” Ammons v. Aramark Unif. Servs., Inc., 
    368 F.3d 809
    , 816 (7th Cir. 2004) (internal quotation omitted). The
    first step is satisfied here because, in accordance with the
    10
    Daubert framework, the district court measured both the
    reliability and the relevance of Metcalf’s proffered opinion
    testimony. See 
    Ammons, 368 F.3d at 816
    (“This framework
    requires the district court to determine whether (1) the pro-
    posed witness would testify to valid scientific, technical, or
    other specialized knowledge and (2) his testimony will
    assist the trier of fact.” (internal quotation omitted)); see also
    Fed. R. Evid. 702.
    Having determined that the district court properly applied
    Daubert, we next review the district court’s decision to bar
    10
    The plaintiffs’ appellate brief contests the applicability of
    Daubert, arguing that “Daubert’s criteria for evaluating scientific
    evidence should not be applied to the opinions of a linguist.”
    However, it is well-established that a court’s gatekeeping func-
    tion under Daubert, which is intended to prevent irrelevant and
    unreliable expert testimony from tainting a case, applies to all
    expert testimony, not just testimony based on science. See United
    States v. Conn, 
    297 F.3d 548
    , 555 (7th Cir. 2002) (citing Kumho Tire
    Co., Ltd. v. Carmichael, 
    526 U.S. 137
    , 147 (1999)).
    No. 04-2289                                                 19
    an expert for an abuse of discretion. See 
    Ammons, 368 F.3d at 816
    . Here, the district court excluded Metcalf’s testimony on
    two grounds: irrelevant and unreliable. In arriving at this
    decision, the district court scrutinized Metcalf’s affidavit
    describing his proposed testimony. In the affidavit, Metcalf
    concluded that, after reviewing the case law defining the
    unsophisticated debtor, Equifax’s three collection letters
    (including the Bartlett safe-harbor validation notice in the
    initial letter) were difficult to read and were thus confusing
    to the unsophisticated debtor.
    Metcalf based his conclusion in part upon certain read-
    ability tests. His test results showed that the letters were
    difficult to read on account of their long sentences and big
    words. The district court rejected the test results as irrele-
    vant, holding: “Readability tests analyze the overall letter,
    rather than the [specific] language [the plaintiffs] single out
    as increasing their confusion. As such, those results are not
    relevant here.” R.79 at 2. That ruling was not an abuse of
    discretion. Metcalf’s reliance on the overall readability of
    the letters is off the mark. The issue here is only whether the
    specifically challenged aspects of the follow-up letters are
    impermissibly confusing. See 
    Johnson, 169 F.3d at 1060
    .
    Metcalf’s test results are thus too broad for this context and,
    as a result, this portion of his proposed testimony would not
    assist the trier of fact.
    After discussing his conclusions from the readability tests
    in the affidavit, Metcalf separately continued on to discuss
    some of the challenged aspects in the follow-up letters. This
    latter portion of the affidavit thus does not suffer from the
    same irrelevance problem as the earlier portion. However,
    the district court determined that this latter portion—in
    which Metcalf claimed that the plaintiffs’ assertions of confu-
    sion were “neither bizarre or idiosyncratic”—was unreliable
    for purposes of Daubert:
    20                                                    No. 04-2289
    [A]though Dr. Metcalf avers that he reviewed the letters
    and found them confusing, he fails to explain how he
    reached that conclusion. The Court will not presume, as
    [the plaintiffs] appear to suggest, that Dr. Metcalf is
    qualified to offer such testimony simply because he is
    an English professor and [a] linguist. . . . Because
    Dr. Metcalf has not sufficiently articulated the manner
    and method by which he determined the [challenged]
    language was confusing, the Court finds his testimony
    unreliable.
    R.79 at 2. This assessment of Metcalf’s affidavit and pro-
    posed testimony is fair. In the pertinent portion of the
    affidavit, Metcalf recited the plaintiffs’ claims of confusion
    and then simply endorsed those claims. Under Daubert and
    11
    Federal Rule of Evidence 702, “[a]n expert must offer good
    reason to think that his approach produces an accurate es-
    timate using professional methods, and this estimate must
    be testable.” Zenith Elecs. Corp. v. WH-TV Broad. Corp., 
    395 F.3d 416
    , 419 (7th Cir. 2005). Accordingly, the district court
    did not abuse its discretion by excluding Metcalf’s untest-
    able say-so. See 
    id. Lastly, the
    plaintiffs argue that, even if Metcalf’s opinion
    is inadmissible as an expert opinion, it should still be ad-
    mitted as the “opinion of an objective observer.” In support
    11
    Fed. R. Evid. 702: “If scientific, technical, or other specialized
    knowledge will assist the trier of fact to understand the evidence
    or to determine a fact in issue, a witness qualified as an expert by
    knowledge, skill, experience, training, or education, may testify
    thereto in the form of an opinion or otherwise, if (1) the testimony
    is based upon sufficient facts or data, (2) the testimony is the
    product of reliable principles and methods, and (3) the witness
    has applied the principles and methods reliably to the facts of the
    case.”
    No. 04-2289                                                  21
    of this argument, the plaintiffs cite a sentence from Pettit v.
    Retrieval Masters Creditors Bureau in which we said: “The
    self-serving opinion of the plaintiff, clearly not an expert or
    an objective observer, does not create a genuine issue for
    
    trial.” 211 F.3d at 1062
    . The plaintiffs misinterpret this sen-
    tence. The words “objective observer” in that sentence only
    explain what the plaintiff in that case was not. More im-
    portant, contrary to the plaintiffs’ interpretation, the opinion
    of a single non-expert (i.e., lay) witness is not a sufficient
    basis for showing that a significant fraction of the population
    would agree with the plaintiffs’ claims of confusion. See
    
    Taylor, 365 F.3d at 574-75
    . Certainly, when a multitude of lay
    opinions about confusion are compiled in an appropriate
    consumer survey, that survey may be helpful. See 
    Taylor, 365 F.3d at 574-75
    ; 
    Chuway, 362 F.3d at 948
    ; 
    Walker, 200 F.3d at 501
    -04; 
    Johnson, 169 F.3d at 1060-61
    . A solitary lay witness’s
    opinion, however, does not cut it.
    2.
    Even with their expert barred, the plaintiffs maintain
    that they presented sufficient evidence to survive summary
    judgment and go to trial. Essentially, the plaintiffs are ar-
    guing that extrinsic evidence is not needed in this case to cre-
    ate a triable issue. To support this argument, they heavily
    rely upon the following passage from our recent decision in
    Chuway v. National Action Financial Services:
    If it is apparent just from reading the letter that it is
    unclear and the plaintiff testifies credibly that she was
    indeed confused and that . . . she is representative of the
    type of people who received that or a similar letter, no
    further evidence is necessary to create a triable 
    issue. 362 F.3d at 948
    (citations omitted). The flaw, however, in the
    plaintiffs’ argument is that—unlike the situation in Chuway
    22                                                 No. 04-2289
    when the letter at issue was confusing to each panel
    12
    member —it is not apparent from just reading the follow-
    up letters that they are unclear. Viewing the evidence in a
    light most favorable to the plaintiffs, there is no obvious
    contradiction or overshadowing or falsity or unfairness in
    these letters as they allege. Therefore, this language from
    Chuway is of no value to the plaintiffs. Rather, it is the next
    sentence in the Chuway opinion that governs in this case:
    But if it is unclear whether the letter would confuse in-
    tended recipients of it, then to make out a prima facie
    case the plaintiff has to go further and present evidence
    (beyond her own say-so) of confusion, for example in
    the form of a carefully designed and conducted con-
    sumer survey.
    
    Id. In short,
    “[w]hile there may be some merit to” the plain-
    tiffs’ claims that the follow-up letters are confusing, mis-
    leading, and unfair, the merit of these claims is not ap-
    parent, and the mere possibility of merit does not create a
    triable issue. 
    Pettit, 211 F.3d at 1061
    -62; see also 
    Taylor, 365 F.3d at 574-75
    ; 
    Jenkins, 124 F.3d at 831
    . To proceed to trial,
    the plaintiffs were thus required to submit evidence in addi-
    tion to the letters and their affidavits. See 
    Taylor, 365 F.3d at 574-75
    ; 
    Chuway, 362 F.3d at 948
    ; 
    Pettit, 211 F.3d at 1061
    -62; see
    also 
    Walker, 200 F.3d at 503-04
    ; 
    Johnson, 169 F.3d at 1060-61
    .
    Despite our line of cases on this issue, they chose not to con-
    duct a survey, and they also failed to bring forth a relevant
    and reliable expert. See 
    Taylor, 365 F.3d at 574-75
    ; 
    Chuway, 362 F.3d at 948
    ; 
    Pettit, 211 F.3d at 1061
    -62; Walker, 
    200 F.3d 12
       
    Chuway, 362 F.3d at 948
    (“the entire bench was confused about
    the meaning of the letter until the defendant’s lawyer explained
    it to us at the oral argument”).
    No. 04-2289                                                    23
    at 501-04; 
    Johnson, 169 F.3d at 1060-61
    . As a consequence, the
    plaintiffs are in the same disadvantageous evidentiary
    position as other plaintiffs that have gone before them: their
    FDCPA claims against Equifax are supported by nothing
    more than speculation and conjecture, which does not enable
    them to survive summary judgment. See 
    Taylor, 365 F.3d at 574-75
    ; 
    Pettit, 211 F.3d at 1061
    -62; see also 
    Jenkins, 124 F.3d at 831
    .
    3.
    Finally, in a last-ditch effort to salvage their case, the
    plaintiffs attack the extrinsic evidence requirement for cases,
    such as theirs, in which the claims of confusion are not ap-
    parent. The plaintiffs argue that the extrinsic evidence re-
    quirement is inconsistent with the unsophisticated-debtor
    standard because the unsophisticated debtor is a hypothetical
    person whose perceptions cannot be surveyed.
    The unsophisticated-debtor standard, however, is not as
    indistinct as the plaintiffs believe. As stated above, the
    unsophisticated debtor will not be deemed to be confused
    “unless a significant fraction of the population would be
    similarly misled.” 
    Pettit, 211 F.3d at 1060
    ; see also 
    Taylor, 365 F.3d at 574-75
    . Presenting evidence to make such a showing
    is the objective. Requiring extrinsic evidence in situations
    such as this is not inconsistent with the unsophisticated-
    debtor standard; rather, such evidence is an essential com-
    ponent of the standard. It ensures that unrealistic, peculiar,
    bizarre, and idiosyncratic interpretations of collection letters
    do not prevail. See 
    Pettit, 211 F.3d at 1060
    ; 
    Gammon, 27 F.3d at 1257
    . In other words, it protects against the repudiated
    least-sophisticated-debtor standard slipping in through the
    back door:
    24                                                No. 04-2289
    Because we have rejected the “least sophisticated con-
    sumer” approach, the plaintiff will have to show that a
    significant fraction of the letter’s addressees were de-
    ceived—for if showing a handful of misled debtors were
    enough, we would as a practical matter be using the
    “least sophisticated consumer” doctrine.
    
    Gammon, 27 F.3d at 1260
    (Easterbrook, J., concurring).
    Extrinsic evidence, moreover, can actually come to the aid
    of plaintiffs. For instance, in discussing why a district court
    prematurely terminated a case, we observed in Johnson v.
    Revenue Management Corporation:
    Unsophisticated readers may require more explanation
    than do federal judges; what seems pellucid to a judge,
    a legally sophisticated reader, may be opaque to some-
    one whose formal education ended after sixth grade. To
    learn how an unsophisticated reader reacts to a letter,
    the judge may need to receive 
    evidence. 169 F.3d at 1060
    . Furthermore, the plaintiffs have not pointed
    to any supervening developments that would necessitate
    changing our course. See Debs v. N.E. Ill. Univ., 
    153 F.3d 390
    ,
    394 (7th Cir. 1998). For all of these reasons, the plaintiffs
    have not offered a compelling reason to overturn our well-
    reasoned precedent, see 
    id., and we
    thus reject their challenge.
    III.
    The plaintiffs claim that two collection letters that fol-
    lowed an initial letter containing a safe-harbor validation
    notice are confusing, misleading, and unfair. The merits of
    their claims, however, are not apparent just from a reading
    of the follow-up letters, and they failed to bring forth admis-
    sible extrinsic evidence to support their claims. Accordingly,
    they cannot proceed to trial, and they are certainly not
    No. 04-2289                                            25
    entitled to summary judgment. The judgment of the district
    court in favor of Equifax is therefore AFFIRMED.
    26                                             No. 04-2289
    Appendix 1: Equifax’s First Letter to Durkin
    No. 04-2289                                     27
    Appendix 2: Equifax’s Second Letter to Durkin
    28                                         No. 04-2289
    Appendix 3: Equifax’s Third Letter to Durkin
    No. 04-2289                                            29
    A true Copy:
    Teste:
    _____________________________
    Clerk of the United States Court of
    Appeals for the Seventh Circuit
    USCA-02-C-0072—4-18-05
    

Document Info

Docket Number: 04-2289

Judges: Per Curiam

Filed Date: 4/18/2005

Precedential Status: Precedential

Modified Date: 9/24/2015

Authorities (19)

Lori Pettit v. Retrieval Masters Creditors Bureau, Inc., ... , 211 F.3d 1057 ( 2000 )

Clyde Ammons v. Aramark Uniform Services, Inc. , 368 F.3d 809 ( 2004 )

United States v. Bill S. Conn, Sr. , 297 F.3d 548 ( 2002 )

Kevin Miller v. McCalla Raymer, Padrick, Cobb, Nichols, and ... , 214 F.3d 872 ( 2000 )

Carl Chauncey v. Jdr Recovery Corporation , 118 F.3d 516 ( 1997 )

Darlene Jenkins v. George W. Heintz and Bowman, Heintz, ... , 124 F.3d 824 ( 1997 )

donna-t-taylor-individually-and-on-behalf-of-all-others-similarly , 365 F.3d 572 ( 2004 )

Zenith Electronics Corp. v. Wh-Tv Broadcasting Corp., Cross-... , 395 F.3d 416 ( 2005 )

Stephen P. Turner v. J.V.D.B. & Associates, Inc., an ... , 330 F.3d 991 ( 2003 )

Margaret Walker v. National Recovery, Inc. , 200 F.3d 500 ( 1999 )

Raul Avila, on Behalf of Himself and All Others Similarly ... , 84 F.3d 222 ( 1996 )

Curtis Bartlett v. John A. Heibl and John A. Heibl, ... , 128 F.3d 497 ( 1997 )

jodi-fields-v-wilber-law-firm-pc-a-dissolved-corporation-and-donald , 383 F.3d 562 ( 2004 )

Jeffrey L. Gammon, Individually and on Behalf of All Others ... , 27 F.3d 1254 ( 1994 )

Lenora Johnson v. Revenue Management Corporation, Brendt ... , 169 F.3d 1057 ( 1999 )

Caldean M. Chuway v. National Action Financial Services Inc. , 362 F.3d 944 ( 2004 )

Sheldon Debs v. Northeastern Illinois University and Board ... , 153 F.3d 390 ( 1998 )

Daubert v. Merrell Dow Pharmaceuticals, Inc. , 113 S. Ct. 2786 ( 1993 )

Kumho Tire Co. v. Carmichael , 119 S. Ct. 1167 ( 1999 )

View All Authorities »