United States District Court, D. Minnesota
N. ERICKSEN UNITED STATES DISTRICT JUDGE
Holly Morris sued Defendant Midland Funding, LLC in Minnesota
state Court alleging violations of the Fair Debt Collection
Practices Act (“FDCPA”), 15 U.S.C. § 1692e.
See ECF No. 1, Ex. A, Complaint. Midland removed to
federal court and moved to dismiss Morris's complaint.
See ECF No. 1, Notice of Removal; ECF No. 6, Motion
to Dismiss. For the following reasons, the Court grants
obtained credit cards from Citibank, N.A. and Synchrony Bank.
Midland claims to have acquired Morris's Citibank and
Synchrony accounts. Morris filed a Chapter 13 bankruptcy
petition in United States Bankruptcy Court in the District of
Minnesota under court file number 18-bk-32063. As part of
Morris's bankruptcy proceedings, Midland filed
“Proof of Claim” documents for both the Citibank
and Synchrony accounts (“Proofs of Claim”). With
respect to the Citibank account, Midland represented it had a
claim for $7, 185.18 in principal, $0 in interest, and $0 in
fees. With respect to the Synchrony account, Midland
represented it had a claim for $6, 409.91 in principal, $0 in
interest, and $0 in fees. Morris alleges that the Citibank
debt was in fact comprised of $6, 990.57 in principal,
$157.61 of interest, and $37 of fees. Compl. ¶ 22.
Similarly, the Synchrony debt included approximately $40 in
interest and fees. Compl. ¶ 39. Thus, by describing the
debt balances in the Proofs of Claim as “principal,
” without itemizing “fees and interest, ”
Morris claims that Midland violated 15 U.S.C. §§
1692e(2)(A) and 1692e(10). Morris seeks actual damages,
statutory damages up to $1, 000, and attorneys' fees
under the FDCPA.
ruling on a motion to dismiss for failure to state a claim
pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure, a court must accept the facts alleged in the
complaint as true and grant all reasonable inferences in
favor of the nonmoving party. See Crooks v. Lynch,
557 F.3d 846, 848 (8th Cir. 2009). “To survive a motion
to dismiss 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)). “A
pleading that offers labels and conclusions or a formulaic
recitation of the elements of a cause of action will not
do.” Id. Plausibility is assessed by
“draw[ing] on . . . judicial experience and common
sense.” Id. at 679.
may consider the complaint, matters of public record, orders,
materials embraced by the complaint, and exhibits attached to
the complaint in deciding a motion to dismiss under Rule
12(b)(6). Porous Media Corp. v. Pall Corp., 186 F.3d
1077, 1079 (8th Cir.1999). Exhibits A through E attached to
the Declaration of Patrick D. Newman, ECF No. 9, are
bankruptcy filings that are matters of public record and are
referenced in, or are embraced by, Morris's Complaint.
See generally Compl. It is therefore appropriate for
the Court to consider these documents on Midland's Motion
to Dismiss without converting it into one for summary
debt collector may not use any false, deceptive, or
misleading representation or means in connection with the
collection of any debt.” 15 U.S.C. § 1692e.
Conduct that runs afoul of § 1692e includes “[t]he
false representation of the character, amount, or legal
status of any debt, ” id. § 1692e(2)(A),
as well as “[t]he use of any false representation or
deceptive means to collect or attempt to collect any debt or
to obtain information concerning a consumer, ”
id. § 1692e(10). A false representation must be
material for it to be actionable under § 1692e. See
Hill v. Accounts Receivable Services, LLC, 888 F.3d 343,
345-46 (8th Cir. 2018).
alleges that the Proofs of Claim Midland filed in
Morris's bankruptcy case are “false, deceptive, or
misleading” under § 1692e. Morris's §
1692e claim is premised on the allegation that Midland
violated Rule 3001 of the Federal Rules of Bankruptcy
Procedure, which requires that all proofs of claim seeking
pre-bankruptcy interest, fees, expenses, or other charges
must be accompanied by an itemized statement of those
amounts. Pl.'s Mem. 7; Fed. R. Bank. P. 3001(c)(2)(A).
For example, to establish that Midland's non-itemized
Proofs of Claim were “objectively false, ” Morris
points out that “Rule 3001 specifically requires a
creditor to itemize interest and fees.” Pl.'s Mem.
at 4. Similarly, to show that Midland's failure to
itemize debt is material under § 1692e, Morris explains
that the “purpose of Rule 3001”-i.e. the
purpose of requiring itemization-“is to give the
interested parties to a consumer's bankruptcy the
information necessary to intelligently make a decision
regarding whether to challenge the proof of claim.”
Pl.'s Mem. at 8. Taken as a whole, Morris's Complaint
assumes that Midland's alleged violation of Rule 3001 is
proof positive of an actionable FDCPA claim.
is mistaken. The failure to abide by the Federal Rules of
Bankruptcy Procedure does not necessarily provide a basis for
an actionable FDCPA claim. In Johnson v. Midland,
the Supreme Court held that the filing of an “obviously
time-barred claim” was not “unfair” or
“unconscionable” within the terms of the FDCPA,
even though that practice was sanctionable under the Federal
Rules of Bankruptcy Procedure. 137 S.Ct. 1407, 1414-15
(2017). In support, the Court explained that the FDCPA and
the Bankruptcy Code have “different purposes and
structural features.” Id. at 1415. “The
[FDCPA] seeks to help consumers . . . by preventing consumer
bankruptcies in the first place.” Id.
“The Bankruptcy Code, by way of contrast, creates and
maintains what we have called the “delicate balance of
a debtor's protections and obligations.”
Id. at 1415. “To find the Fair Debt Collection
Practices Act applicable [to creditors' filing proofs of
claim on allegedly stale debts] . . . would authorize a new
significant bankruptcy-related remedy in the absence of
language in the Code providing for it.” Id. at
reasoning has been applied where a debtor seeks to have an
alleged violation of Rule 3001 serve as the basis for
liability under the FDCPA. In re Derby, No.
17-34385-KLP, 2019 WL 1423084, at *3-7 (Bankr. E.D. Va. Mar.
28, 2019). There, the court held that
the Supreme Court's decision in [Johnson] leads
this Court to find that the Complaint, which involves issues
related to the filing of a proof of claim in order to collect
payment of a debt that may be enforceable under state law,
fails to state a cause of action under the FDCPA. The
Bankruptcy Code and Rules provide the appropriate and
exclusive means to determine whether [the claim] should ...