nyamu v. Portfolio Recovery Associates

Background

Caroline Nyamu sued Portfolio Recovery Associates, LLC (PRA), and LVNV Funding, LLC, asserting claims under the Fair Debt Collection Practices Act (FDCPA), New York General Business Law § 349, and common-law professional malpractice. She alleged that, after her authorized representative sent defendants a letter stating that she refused to pay her debts and asking them to stop communicating with her, defendants continued reporting the debts to credit-reporting agencies. She alleged that two banks then denied her an extension of consumer credit.

The defendants removed the case from New York state court. PRA moved to dismiss for failure to state a claim, and LVNV moved for judgment on the pleadings. Nyamu also sought permission to file an amended complaint. A magistrate judge recommended granting both defendants’ motions and denying permission to amend. Nyamu filed objections to that recommendation.

Court’s Analysis

Judge Schofield adopted the magistrate judge’s report in full. The court explained that the FDCPA claims were based on the theory that continued credit reporting after a refusal-to-pay and cease-communication letter violated 15 U.S.C. §§ 1692c, 1692d, 1692e, and 1692f.

Relying on the Second Circuit’s analysis in a prior related case, the court held that reporting a debt to credit-reporting agencies does not constitute a prohibited communication with the consumer under § 1692c(c), even after a consumer asks that communications stop. The court also held that the FDCPA expressly permits reporting to consumer-reporting agencies under §§ 1692c(b) and 1692d(3). Because Nyamu identified no additional misstatement, omission, or conduct beyond the credit reporting itself, the court rejected her claims under §§ 1692e and 1692f.

The court rejected Nyamu’s argument that reporting her refusal to pay amounted to publishing a prohibited list of consumers who allegedly refuse to pay debts. It found that the distinction between an “alleged” refusal and a factual refusal did not change the result under the statute.

The court also held that the New York General Business Law § 349 claim failed because the complaint did not allege facts showing that defendants’ communications were misleading or deceptive. The professional-malpractice claim failed because the complaint did not identify specific negligent conduct beyond defendants’ credit reporting, which the court found permissible under the FDCPA.

Disposition

The court found no legal or factual error in the report, overruled Nyamu’s objections, granted PRA’s motion to dismiss, and granted LVNV’s motion for judgment on the pleadings. It denied Nyamu’s request for leave to amend because the proposed amendments relied on the same legally insufficient theory and did not add facts supporting a viable claim. The complaint was dismissed with prejudice, and the case was closed.