Raymond v. Arcadia Recovery Bureau, LLC

Background

Arthur Raymond sued Arcadia Recovery Bureau, LLC, and Cornell University, also known as Weill Cornell Medical College. He alleged that Weill Cornell sent him a $126.67 medical bill, that he disputed the debt through his attorneys at Fagenson & Puglisi, and that he asked Weill Cornell not to contact him directly. Weill Cornell later hired Arcadia to collect the debt, and Arcadia sent Raymond a collection letter at his home.

Raymond asserted claims against Arcadia under the Fair Debt Collection Practices Act, a federal law regulating abusive and deceptive conduct by debt collectors. He also asserted New York General Business Law § 349 and negligence claims against Arcadia and Weill Cornell. Weill Cornell moved to dismiss the entire amended complaint, including the federal claims asserted only against Arcadia.

Federal Debt-Collection Claims

The court considered Raymond’s claims under 15 U.S.C. § 1692c(a)(2), which generally bars a debt collector from contacting a consumer about a debt when the collector knows the consumer is represented by an attorney regarding that debt. The court held that a plaintiff must adequately allege that the debt collector had actual knowledge of the representation before making the contact. Knowledge held by the creditor is not automatically attributed to the debt collector, and the debt collector has no statutory duty to ask whether the consumer is represented.

Raymond alleged that Arcadia knew he was represented, but the court found that allegation conclusory because it merely repeated the legal requirement without identifying facts supporting an inference that Arcadia actually knew. Raymond’s allegation that he informed Weill Cornell about his attorneys did not establish Arcadia’s knowledge. The court therefore dismissed the § 1692c claim without prejudice.

The court also dismissed Raymond’s claim under 15 U.S.C. § 1692e, which generally prohibits false, deceptive, or misleading conduct in debt collection. Raymond’s only stated theory was that sending the letter to a consumer whom Arcadia knew was represented was deceptive. Because he had not adequately alleged Arcadia’s actual knowledge, and had identified no other basis for the § 1692e claim, that claim was dismissed as well.

State-Law Claims and Disposition

After dismissing all claims over which it had original federal jurisdiction, the court declined to exercise supplemental jurisdiction, meaning authority to hear related state-law claims, over Raymond’s New York General Business Law and negligence claims. Those claims were dismissed without prejudice.

The court dismissed the complaint without prejudice and granted Raymond leave to file an amended complaint addressing the identified deficiencies, if he had a good-faith basis to do so. The amended complaint was due within 21 days of the order. The court stated that failure to file it within that period would result in dismissal of the case with prejudice. The Clerk was directed to terminate the pending motion at Docket 17.