Supreme Court of Appeals (W.Va.) Conforms State Law FDCPA to Federal FDCPA: No Proof of Actual Damages Required to Obtain Statutory Penalty under State-law FDCPA

The West Virginia Supreme Court of Appeals in Vanderbilt Mortg. and Finance, Inc. v. Cole, — S.E.2d —-, 2013 WL 870442 (W.Va. 2013), recently synced the West Virginia state-law version of the FDCPA with the federal FDCPA in finding that the state-law FDCPA did not require proof of actual damages in order to obtain a statutory penalty.  The Supreme Court of Appeals explained:

In this appeal, Vanderbilt challenges the circuit court’s authority to award civil penalties in the absence of an award of actual damages. Vanderbilt argues that an award of civil penalties must be reasonably related to the actual harm suffered, and because Ms. Cole was found to have suffered no actual harm, the award of civil damages was improper. Vanderbilt also alleges that because it believes civil penalties should not have been awarded, the circuit court erred by increasing the penalties to reflect inflation. Finally, Vanderbilt sug-gests that the plain language of the controlling statute, W. Va.Code § 46A–5–101(1), requires that actual damages be awarded as a prerequisite to awarding civil penalties. ¶  West Virginia Code § 46A–5–101(1) states, in pertinent part, . . . If a creditor has violated the provisions of this chapter applying to … statements of account and evidences of payment [or] … any prohibited debt collection practice …, the consumer has a cause of action to recover actual damages and in addition a right in an action to recover from the person violating this chapter a penalty in an amount determined by the court not less than one hundred dollars nor more than one thousand dollars. (Emphasis added). ¶  We begin by addressing Vanderbilt’s interpretation of the “and in addition” language of the statute, which Vanderbilt argues conditions the award of civil penalties on an award of actual damages. Regarding the interpretation of statutes, the Court has consistently held, “ ‘ “A statutory provision which is clear and unambiguous and plainly expresses the legislative intent will not be interpreted by the courts but will be given full force and effect.”  . . . “A statute is open to construction only where the language used requires interpretation because of ambiguity which renders it susceptible of two or more constructions or of such doubtful or obscure meaning that reasonable minds might be uncertain or disagree as to its meaning.” Hereford v. Meek, 132 W. Va. 373, 386, 52 S.E.2d 740, 747 (1949). We agree with Vanderbilt that the statute is susceptible to different interpretations. ¶  Upon examination of the plain language of the statute, it does not contain any explicit conditional language, indicating that the Legislature did not intend to condition the award of civil penalties on the award of actual damages. Furthermore, the conjunction “and” separates the specifically delineated rights to pursue damages; there is a right to bring a “cause of action to recover actual damages” and “a right in action to recover … a penalty.” Separating the different grounds that give rise to a cause of action also indicates the Legislature’s intent that an award of civil penalties is not conditioned on an award of actual damages. . . ¶ . . . The Court has enunciated the purpose of the WVCCPA: “The purpose of the [WVCCPA] is to protect consumers from unfair, illegal, and deceptive acts or practices by providing an avenue of relief for consumers who would otherwise have difficulty proving their case under a more traditional cause of action.”  . . . Finally, we have explained that the WVCCPA should be construed liberally in favor of the consumer. Dunlap, 213 W. Va. at 399, 582 S.E.2d at 846. ¶ The Fair Debt Collection Practices Act (“FDCPA”) is the federal equivalent to the WVCCPA, and like the WVCCPA, it also allows consumers to seek actual damages and civil penalties from creditors. . . . The Ninth Circuit Court of Appeals has interpreted this statute as allowing consumers to receive awards of civil penalties without also awarding actual damages. In Baker v. G.C. Servs. Corp., 677 F.2d 775, 780 (9th Cir.1982), the Ninth Circuit reasoned,  . . .Policy also supports the award of statutory damages without proof of actual damages. The only actual damages that a plaintiff would be likely to incur would be for emotional distress caused by abusive debt collection practices and, unless the violations are extreme and outrageous, traditional stringent evidentiary hurdles would be difficult to overcome. ¶  Following the reasoning set forth in Dunlap, Harless, and Baker, this Court believes that the Legislature, in creating W. Va.Code § 46A–5–101(1), has created a mechanism by which those who have suffered no quantifiable harm may yet recover civil penalties for being subject to undesirable treatment described in Article 2 of the Act. We find that by including the option for consumers to pursue civil penalties, the Legislature intended that § 46A–5–101(1) function, in part, as a disincentive for creditors to engage in certain undesirable behaviors that might not result in actual damages. Therefore, based on the language of the WVCCPA and what we perceive to be the Legislature’s intent in enacting the WVCCPA, we hold that under W. Va.Code § 46A–5–101(1) (1996), an award of civil penalties is not conditioned on an award of actual damages.  ¶  We are by no means the first jurisdiction to allow an award of civil penalties in the absence of an award of actual damages. A number of courts, including the United States Supreme Court, have awarded civil penalties without awarding actual damages. See, e.g ., F.W. Woolworth Co. v. Contemporary Arts, Inc., 344 U.S. 228, 233 (1952) (“Even for uninjurious and un-profitable invasions of copyright the court may, if it deems just, impose a liability within statutory limits to sanction and vindicate the statutory policy.”); St. Louis, Iron Mountain & S. Ry. Co. v. Williams, 251 U.S. 63, 66 (1919) (“Nor does giving the penalty to the aggrieved passenger require that it be confined or proportioned to his loss or damages … as it is imposed as a punishment for the violation of a public law….”); Baker v. G.C. Servs. Corp., 677 F.2d 775, 781 (9th Cir.1982) (concluding that under the FDCPA, “statutory damages are available without proof of actual damages”); Knoll v. Allied Interstate, Inc., 502 F.Supp.2d 943 (D.Minn.2007) (finding that the FDCPA is a remedial, strict liability statute, and thus, the debtor was not required to prove deception or actual damages to recover); McCammon v. Bibler, Newman & Reynolds, P.A., 493 F.Supp.2d 1166 (D.Kan.2007) (finding that actual damages are not required for standing under FDCPA because the FDCPA permits recovery of statutory damages in absence of actual damages); In re Hobbs, No. 10–42736 (Bkrtcy. E.D. Tex. filed 2012) (“[I]n light of the statutory damage provision, the Plaintiff need not show actual damages in order to recover under [the Code].”); DirectTV, Inc. v. Cantu, No. SA–04–CV–136–RF, 2004 WL 2623932, at *4 (W.D.Tex. Sept. 29, 2004) (“The law has held for many years that statutes may provide for damages even where a plaintiff cannot prove actual damages.”).