United States District Court, E.D. Tennessee, Greeneville
SANDRA K. WATSON, Plaintiff,
ARC MANAGEMENT GROUP, LLC, Defendant.
MEMORANDUM OPINION AND ORDER
RONNIE GREER, UNITED STATES DISTRICT JUDGE
before the Court are (1) the plaintiff's motion for
partial summary judgment, [Doc. 33]; and (2) the
defendant's motion for summary judgment, [Doc. 41], in
this Fair Debt Collection Practices Act (“FDCPA”
or “the Act”), 15 U.S.C. § 1692 et
seq., case. The plaintiff's motion seeks judgment in
her favor only as to the liability of the defendant, ARC
Management Group, LLC, (“ARC”), reserving the
determination of damages for a trial by jury. ARC has
responded to the plaintiff's motion, [Doc. 36],
contending that summary judgment for the plaintiff is not
appropriate. ARC argues that it did not violate the FDCPA by
reporting a valid debt to a consumer reporting agency, [Doc.
36 at 4-5]. The plaintiff has replied, [Doc. 40], and this
motion is ripe for disposition.
defendant's motion, [Doc. 41], seeks judgment in its
favor on all of plaintiff's claims. The defendant's
motion reiterates many of the same arguments raised in its
response to the plaintiff's motion, and states that these
grounds entitle the defendant to judgment as a matter of law.
The plaintiff opposes the motion, [Doc. 43], again stating
many of the same grounds raised in her own summary judgment
motion. The time for the defendant to file a reply brief has
passed, and this motion is also ripe.
reasons that follow, the plaintiff's motion for partial
summary judgment will be DENIED, and the defendant's
motion for summary judgment will be GRANTED. This action will
therefore be DISMISSED in its entirety.
representative of the class, the plaintiff, Sandra K. Watson,
brings this putative class action lawsuit asserting
violations of the FDCPA by ARC. The plaintiff is alleged to
have incurred a medical debt of $1, 070 to Hamblen Emergency
Group, LLC, [Doc. 29 ¶ 10]. At some point, the plaintiff
allegedly defaulted on the medical debt, and the debt was
assigned to ARC for purposes of collection, [Doc. 29 ¶
11]. ARC admits that it is a collection service as defined by
Tennessee state law, and that it reported the plaintiff's
medical debt to Equifax. Both parties agree that
“Equifax is an entity that regularly engages in the
business of assembling, evaluating and disseminating
information concerning consumers for the purpose of
furnishing credit reports to third parties.” [Doc. 37
at 3]. ARC was not licensed in Tennessee as a collection
service agency at the time the debt was reported to Equifax,
but since such time ARC has acquired a valid license issued
by the Tennessee Collection Service Board. The parties do not
dispute that the Plaintiff obtained copies of her Equifax
credit report on April 29, 2016, August 15, 2016, and August
18, 2016, and each report indicated that the plaintiff's
medical debt was owed. Otherwise, ARC did not make any phone
calls or send any letters to the plaintiff to collect on the
debt, nor did they file suit against the plaintiff to collect
on the debt.
plaintiff claims that ARC violated the FDCPA by reporting the
debt to Equifax. She further claims that ARC's reporting
of the debt to Equifax before they were licensed by the
Tennessee Collection Services Board constitutes a violation
of the FDCPA.
STANDARD OF REVIEW
judgment under Rule 56 of the Federal Rules of Civil
Procedure is proper “if the movant shows that there is
no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P.
56(a). The moving party bears the burden of establishing that
no genuine issues of material fact exist. Moore v. Philip
Morris Cos., 8 F.3d 335, 339 (6th Cir. 1993). All facts
and all inferences to be drawn therefrom must be viewed in
the light most favorable to the non-moving party.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986); Burchett v. Kiefer, 310
F.3d 937, 942 (6th Cir. 2002). This Court's function at
the point of summary judgment is limited to determining
whether sufficient evidence has been presented to make the
issue of fact a proper question for the factfinder.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250
(1986). The genuine issue must also be material; that is, it
must involve facts that might affect the outcome of the suit
under governing law. Id. If this Court concludes
that a fair-minded jury could not return a verdict in favor
of the non-moving party based on the evidence presented, it
may enter a summary judgment. Anderson, 477 U.S. at
251-52; Lansing Dairy, Inc. v. Espy, 39 F.3d 1339,
1347 (6th Cir. 1994).
party opposing a Rule 56 motion may not simply rest on the
mere allegations or denials contained in the party's
pleadings. Anderson, 477 U.S. at 256. Instead, an
opposing party must affirmatively present competent evidence
sufficient to establish a genuine issue of material fact
necessitating the trial of that issue. Id. Merely
alleging that a factual dispute exists cannot defeat a
properly supported motion for summary judgment. Id.
A genuine issue for trial is not established by evidence that
is merely colorable, or by factual disputes that are
irrelevant or unnecessary. Id. at 248-52.
enacted the FDCPA in order “to eliminate abusive debt
collection practices by debt collectors, to insure that those
debt collectors who refrain from using abusive debt
collections practices are not competitively disadvantaged,
and to promote consistent State action to protect consumers
against debt collection abuses.” 15 U.S.C. §
1692(e). In determining whether a debt collector's
practice violates the FDCPA, the Court is required to use the
objective “least sophisticated consumer” test.
Lewis v. ACB Bus. Servs., Inc., 135 F.3d 389, 400
(6th Cir. 1998); see also Kistner v. Law Offices of
Michael P. Margelefsky, LLC, 518 F.3d 433, 428 (6th Cir.
2008); Barany-Snyder v. Weiner, 539 F.3d 327, 333
(6th Cir. 2008).
U.S.C. § 1692e generally bars debt collectors from using
false, deceptive or misleading representations or means in
order to collect a debt, while § 1692f prohibits debt
collectors from using unfair or unconscionable means to
collect a debt.
Sixth Circuit has noted that the Act is
“extraordinarily broad” and must be enforced as
written, even when eminently sensible exceptions are proposed
in the face of an innocent and/or de minimis
violation. See Frey v. Gangwish, 970 F.2d 1516, 1521
(6th Cir. 1992). While § 1692e lists a number of
examples of false or misleading representations, the text of
the statute itself indicates that the examples are not meant
to limit its prohibition on the use of false, deceptive or
misleading representations in connection with the collection
of a debt. 15 U.S.C. § 1692e. Likewise, § 1692f
contains the same language, making clear that the examples
set forth therein do not “limit[ ] the general
application” of its prohibition on the use of unfair or
unconscionable means to collect or attempt to collect any
debt. 15 U.S.C. § 1692f. The Seventh Circuit observed
that the phrase “unfair or unconscionable” used
in § 1692f “is as vague as they come.”
Beler v. Blatt, Hasenmiller, Leibsker & Moore,
480 F.3d 470, 474 (7th Cir. 2007).
Plaintiff's Motion for Partial Summary Judgment
filed a motion for partial summary judgment on her claims
only as to ARC's liability for violations of the FDCPA.
The plaintiff argues that (1) ARC was not a licensed debt
collector at the time it reported the debt to Equifax, and
(2) ARC illegally reported the debt to Equifax in an attempt
to collect the debt from the plaintiff. The plaintiff argues
that ARC's report to Equifax violated specific provisions
of the FDCPA including 15 U.S.C. §§ 1692e,
1692e(2)(A), 1692e(5), 1692e(9), 1692e(10), and 1692f.
the plaintiff defaulted on her debt to Hamblen County
Emergency Group, LLC, ARC was assigned the debt for purposes
of collection. ARC does not dispute that it was not a
licensed collection service in Tennessee when it reported the
plaintiff's debt to Equifax. The FDCPA itself does not
require collection services to be licensed. However, the
Sixth Circuit has previously held that
Congress did not turn every violation of state law into a
violation of the FDCPA. But that does not mean that a
violation of state law can never also be a violation
of the FDCPA. The proper question in the context of an FDCPA
claim is whether the plaintiff alleged an action that falls
within the broad range of conduct prohibited by the Act. The
legality of the action taken under state law may be
Currier v. First Resolution Inv. Corp., 762 F.3d
529, 537 (6th Cir. 2014) (emphasis in original). The
Tennessee Collection Service Act (“TCSA”),
Tennessee Code Annotated § 62-20-101 et seq.,
requires “all persons who commence, conduct or operate
any collection services business” to obtain a license
from the Tennessee Collection Service Board. Tenn. Code Ann.
§ 62-20-105. The TCSA specifically exempts from these
license requirements “any person that holds or acquires
accounts, bills or other forms of indebtedness through
purchase, assignment, or otherwise; and only engages in