Washington Wiley v. Portfolio Recovery Associates, LLC

Background

This order addressed two motions filed in three related cases brought by Sonji Washington Wiley, Melissa Becker, and Felicia Yang against Portfolio Recovery Associates, LLC (PRA). PRA had separately sued each plaintiff in Minnesota state court to collect alleged debts from store credit cards.

The summonses in those state-court cases instructed the plaintiffs to send their written answers to Anita Sunde at a post-office box in Fargo, North Dakota. The summonses also warned that plaintiffs would lose their cases and could face default judgments if they did not respond. Minnesota Rule of Civil Procedure 4.01 requires a summons to provide an address within Minnesota where the subscriber can be served in person and by mail. The state courts in the collection cases found that PRA’s summonses did not comply with that rule.

The plaintiffs then sued PRA under the Fair Debt Collection Practices Act (FDCPA), claiming that the summonses violated 15 U.S.C. §§ 1692e(2), 1692e(5), 1692e(10), and 1692f(1). The present motions addressed the claims based on the summonses. Becker had additional FDCPA claims that were not before the court on these motions.

PRA’s Motions for Judgment on the Pleadings

PRA moved for judgment on the pleadings, a motion asking the court to end claims based on the pleadings without a trial. The court treated the motions like motions to dismiss for failure to state a claim. PRA argued that the plaintiffs lacked standing and that the summonses did not violate the FDCPA as a matter of law.

The court denied the motions. It held that the plaintiffs plausibly alleged a violation of 15 U.S.C. § 1692e(5), which prohibits a debt collector from threatening to take an action that cannot legally be taken or is not intended to be taken. The court also found that the plaintiffs had plausibly alleged a concrete injury sufficient for standing because they alleged an unlawful threat to obtain default judgments.

Plaintiffs’ Motions for Partial Summary Judgment

The plaintiffs moved for partial summary judgment on PRA’s liability. Summary judgment is appropriate when the record shows no genuine dispute about a fact that could affect the outcome and the moving party is entitled to judgment as a matter of law.

The court found that the plaintiffs established the first two elements of FDCPA liability: they were targets of collection activity involving consumer debts, and PRA acted as a debt collector. PRA did not identify evidence creating a genuine dispute about whether the store-card debts were incurred primarily for personal, family, or household purposes.

The court then analyzed whether PRA committed a prohibited act. It held that the summonses violated Minnesota Rule of Civil Procedure 4.01 because they directed the plaintiffs to send their answers to a North Dakota address, even though the rule required an in-state address. The additional Minnesota addresses stamped at the end of the summonses did not correct the problem because the summons body and the signature block directed answers to the North Dakota address.

The court further held that the summonses threatened default judgments if the plaintiffs failed to comply with that directive. Because PRA could not legally obtain a valid default judgment based on the defective summonses, the court concluded that PRA threatened to take an action that could not legally be taken. It found that this violation was material under controlling Eighth Circuit precedent.

Disposition

The court ruled that one FDCPA violation was sufficient to establish liability. It therefore did not decide whether the plaintiffs had adequately pleaded their remaining FDCPA claims. The court denied PRA’s motions for judgment on the pleadings and granted the plaintiffs’ motions for partial summary judgment as to PRA’s FDCPA liability.