District Court (Cal.) Says Reminder of Minimum Amount Due to Keep Credit Card Current in Validation Letter Did Not Create FDCPA “Overshadowing” Claim

In Robertson v. AllianceOne Receivables Mgmt., No. 1:19-cv-00749-DAD-SKO, 2020 U.S. Dist. LEXIS 15768 (E.D. Cal. Jan. 29, 2020), Judge Drozd dismissed an FDCPA overshadowing claim.

AllianceOne contends the validation statement in its notice is not overshadowed or contradicted by other messages appearing in the notice. AllianceOne also argues that the least sophisticated debtor would not construe the notice to have demanded payment because the notice was only a prudential reminder to plaintiff about her account and lawful debt collection activities. (Doc. No. 6-1 at 11-12.) Plaintiff counters that the notice “demands payment on [the] Target account within . . . 19 day[s] and thereby overshadows Plaintiff and the Class Members right to [] dispute or request validation within [the] 30-day period afforded to consumers.” (Doc. No. 7 at 16.) Plaintiff also notes that the language “Minimum Amount is Due” appears five times before the validation notice and once after it, which, she contends, emphasizes plaintiff’s duty to make a payment. (Id. at 7, 20). The court is not persuaded by plaintiff’s arguments. First, the language “Minimum Amount is Due” never appears in the notice. Second, the notice does not demand a payment, and plaintiff’s position to the contrary “read[s] language into the validation notice that is simply not there.” Stuppiello, 2017 U.S. Dist. LEXIS 213450, 2017 WL 5983815, at *5. The notice states that the “Minimum Amount Due[] [is] $238.00,” notes that this is the “amount that will bring your account to a current status and stop collections . . . if paid by 05/28/2019,” and asks plaintiff to “PLEASE NOTE that the due date of 05/28/2019 for paying the Minimum Amount Due does not eliminate nor affect any of your rights described in the IMPORTANT DISCLOSURES below.” (Compl. at Ex. A). In other words, [a]lthough the validation notice requests payment of the debt and explains that payment of the debt will allow [plaintiff] to avoid further collection activity[,] [t]he notice does not state that this is the ‘only’ or ‘exclusive’ way to avoid further collection activity . . . . It simply provides [her] with an avenue for avoiding further collection activities. Stuppiello, 2017 U.S. Dist. LEXIS 213450, 2017 WL 5983815, at *5. Third, “a request for payment of the debt or a request for the consumer to contact the debt collector contained in a validation notice does not automatically violate [*13]  the FDCPA.” Id. For example, in Renick v. Dun & Bradstreet Receivable Management Services, the Ninth Circuit found that the notice before it did not overshadow or contradict the consumer’s validation rights because the statement on the reverse [side of a notice] that ‘PROMPT PAYMENT IS REQUESTED’ was in the same font as the accompanying validation notice; was followed by a statement informing Renick that he had 30 days to challenge the debt’s validity; and did not convey a threat that could induce Renick to ignore his right to take 30 days to verify his debt and act immediately. 290 F.3d 1055, 1057 (9th Cir. 2002) (internal quotation marks and citation omitted). Instructive in this regard is the following observation by the district court in Stuppiello: Defendant’s request for payment contained in the validation notice at issue was in the same font as the surrounding text, including the text containing the required section 1692(a) disclosures, and was placed in a separate paragraph [from] . . . the statutory disclosures. The request for payment did not contain any language contradicting the [] admonition in the notice that the debtor has thirty days to contest the validity of the debt. The request for payment was not emphasized in any other way. The request for payment was a request rather than a demand. And, finally, the request for payment carried no sense of urgency. The request for payment did not set forth a deadline or timeframe for the payment, and the request did not include any language stating that the payment must be made “immediately” or “now.” Stuppiello, 2017 U.S. Dist. LEXIS 213450, 2017 WL 5983815, at *6 (internal quotation marks and citations omitted). In contrast, notices that have been found to overshadow or contradict the validation statements contained therein have been misleading in form and content. For example, in Swanson, the Ninth Circuit found that, with respect to the notice before it, there was little question that it [wa]s misleading in both form and content. The required debt validation notice [wa]s placed at the very bottom of the form in small ordinary face type, dwarfed by a bold faced, underlined message three times the size which dominate[d] the center of the page . . . [and] the substance of the language st[ood] in threatening contradiction to the text of the debt validation notice. 869 F.2d at 1225-26. Here, the validation statement is in the same font as the surrounding text and is prominently indented so as to draw the reader’s attention to it. Moreover, unlike the notices in Renick and Stuppiello, the notice here directed the reader to “PLEASE READ CAREFULLY ALL OF THE IMPORTANT DISCLOSURES PROVIDED BELOW” and to “PLEASE NOTE that the due date of 05/28/2019 . . . does not eliminate nor affect any of your rights described in the IMPORTANT DISCLOSURES.” (Compl. at Ex. A.) Thus, the notice provided in this case clearly directs the creditor to the validation statement, in an explicit effort to not overshadow or contradict the creditor’s validation rights. Finally, as discussed above, the notice in this case did not demand a payment.