FDCPA Claim Not Mooted by Offer

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A law firm trying to collect on a debt allegedly owed not by plaintiff, but by her late husband, could not avoid her suit under the Fair Debt Collection Practices Act with a Rule 68 Offer of Judgment that provided for the maximum statutory damages but an equivocal offer of actual damages; since the FDCPA suit was not mooted, the 4^th Circuit reverses dismissal of the suit, as plaintiff has stated FDCPA claims with allegations that defendants failed to disclose that a communication was from a debt collector and contacted her directly, instead of communicating with her lawyer.

The initial question in this appeal is whether defendants’ Rule 68 offer of judgment mooted plaintiff’s case. Defendants said their offer provided plaintiff with the maximum recovery available to her and thus mooted her case. Plaintiff conceded at oral argument that the offer of judgment provided her all possible statutory damages. The Act, however places no statutory cap on a plaintiff’s actual damages, and plaintiff sought an unspecified award of actual damages. As to actual damages, the Rule 68 offer provided for either $250 or an amount determined by the court upon plaintiff’s submission of affidavits or other evidence of actual damages.

Certainly, had plaintiff made a specific demand for actual damages and defendant offered that amount or more, the offer of judgment would have mooted plaintiff’s action. Similarly, had plaintiff quantified her alleged damages in response to a discovery request and defendants offered that amount, her case would be moot. But at this stage of the proceedings, we simply cannot hold plaintiff could not possibly recover more than $250 if her case proceeded to a jury trial. The first option offered by defendants did not moot plaintiff’s case.

The second option offered by defendants also failed to moot plaintiff’s case. To moot a plaintiff’s case, an offer must be unequivocal. Moreover, defendants’ offer deprives plaintiff of her right to have a jury determine disputes of fact regarding actual damages.

Defendants contend their offer permitted a jury trial on actual damages because the district court could have impaneled a jury for that purpose. However, such relief would be in the district court’s discretion. In sum, neither option offered by defendants to satisfy plaintiff’s alleged actual damages moots her case.

The district court erred in concluding plaintiff failed to allege a violation of 15 U.S.C. § 1692e(11), which covers a debt collector’s “failure to disclose” certain information, namely that a communication is from a debt collector. Whether a materiality requirement attaches to § 1692e has no impact on plaintiff’s allegations that defendants violated § 1692e(11).

The district court also erred in dismissing plaintiff’s claim that defendants violated § 1692c(a)(2) by writing to her about the alleged debt, despite her having advised them to contact her only through her lawyer. In violation of § 1692c(a)(2), defendants communicated not with her attorney, but directly with her, she alleges. The district court also erred in requiring plaintiff to allege defendants “willfully” violated the Act. The statute itself contains no scienter requirement.

We hold defendants’ offer of judgment did not moot the case and the district court erred in concluding plaintiff’s amended complaint failed to allege violations of 15 U.S.C. §§ 1692c(a)(2) and 1692(11).

Judgment for defendant lawyer and law firm reversed and case remanded.

Warren v. Sessoms & Rogers P.A. (Motz) No. 10-2105, Jan. 11, 2012; USDC at Raleigh, N.C.(Boyle) Anthony J. Majestro for appellant; Dauna L. Bartley for appellee. VLW 012-2-007, 16 pp.