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6th Circuit Rejects ‘Benign Language’ Exception in FDCPA Envelope Disclosure Claim

glassine envelopes debt collectionThe U.S. Court of Appeals for the Sixth Circuit recently held that the plain language of 15 U.S.C. 1692f(8), a provision of the Fair Debt Collection Practices Act (FDCPA) regulating what may be shown on an envelope when a debt collector communicates with a consumer by mail, does not include a “benign language” exception.

A copy of the opinion in Donovan v. FirstCredit, Inc. is available at:  Link to Opinion.

A consumer appealed from a judgment entered against her after the district court granted a defendant’s motion for judgment on the pleadings.

The consumer received a letter from the defendant demanding payment of a medical debt. The letter came in an envelope with two transparent glassine windows stacked on top of each other. Always visible through the lower window was the consumer’s name and address. Likewise, always visible through the top window was an empty checkbox followed by the phrase “Payment in full is enclosed.” Sometimes visible was also a second empty checkbox followed by “I need to discuss this further. My phone number is ___.”

The consumer alleged that the visibility of the checkboxes and accompanying language “created the risk that anyone who caught a glimpse of Plaintiff’s mail would recognize that she was receiving mail from a debt collector, causing her embarrassment and emotional distress.” This, the consumer alleged, constituted a violation of 15 U.S.C. § 1692f(8), which prohibits a debt collector’s use of “any language or symbol, other than the debt collector’s address, on any envelope when communicating with a consumer by use of the mails…”

The defendant argued that Section 1692f(8) includes a “benign language” exception and that its letter did not violate the FDCPA because the markings were benign. The consumer argued that Section 1692f(8) should not be interpreted to include a “benign language” exception and, even if it did, the language visible through the glassine windows was not benign. The district court, noting a circuit split on the issue, agreed with the defendant, concluding that Section 1692f(8) should be read to include a “benign language” exception.

Because the appeal involved the interpretation of Section 1692f(8), the Court’s task was to give effect to congressional intent. “If the language of the statute is clear, the court applies the statute as written.” In re Corrin, 849 F.3d 653, 657 (6th Cir. 2017). However, where “the language is ambiguous or leads to an absurd result,” courts may rely on extra-textual sources, such as legislative history or administrative guidance, to interpret a statute. Id. 

On appeal, the consumer argued that the Court’s interpretive task ends with the express text of the statute, which she maintained unambiguously forbids the markings visible through the glassine window. The defendant argued a literal reading of Section 1692f(8) would lead to absurd results, such that it is appropriate to go beyond the text of the statute and read a “benign language” exception – i.e., an exception for markings that do not indicate that a communication is from a debt collector – into the statute based on its legislative history and administrative guidance from the FTC.

Specifically, the defendant argued that Section 1692f(8) leads to an absurd result because it simultaneously endorses debt collectors’ use of the mail to communicate with consumers while prohibiting debt collectors from including language and symbols on their envelopes that are necessary for communicating by mail – for example, the consumer’s address and postage.

The Court noted a newly formed circuit split on this issue.

On one side, the Seventh Circuit has held that Section 1692f(8)’s plain text unambiguously prohibits markings on envelopes other than those “required for sending communications through the mail,” the debt collector’s return address, and, in limited circumstances, the debt collector’s name. Preston v. Midland Credit Mgmt., Inc., 948 F.3d 772, 782, 784 (7th Cir. 2020).

On the other side, the Fifth and Eighth Circuits have held that Section 1692f(8) is ambiguous or that it leads to absurd results, invoking legislative history and administrative guidance to read a “benign language” exception into the statute. Strand v. Diversified Collection Service, Inc., 380 F.3d 316, 319 (8th Cir. 2004); Goswami v. American Collections Enterprise, Inc., 377 F.3d 488, 494 (5th Cir. 2004).

The Court held that the consumer stated a claim for relief under Section 1692f(8) because its plain text forecloses a “benign language” exception. Relying on Preston, the Court noted that Section 1692f(8) “plainly sanctions the ‘use of mails’ to communicate with a debtor and therefore also sanctions the use of the language and symbols required for sending communications through the mail.” Preston, 948 F.3d at 782.

“Put differently, the blanket prohibition on ‘any language or symbol’ is triggered only ‘when communicating with a consumer by the use of the mail’ and thus operates under the presupposition that the envelope used by the debt collector will employ those features necessary to facilitate its delivery. In this context, the provision’s blanket prohibition is best understood as prohibiting ‘any language or symbol’ on the envelope other than ‘language or symbols to ensure the successful delivery of the communication,’ with a statutory carve-out for the debt collector’s return address and its name (where the name does not indicate that the sender is a debt collector).”

The Court believed that its reading of Section 1692f(8) was fully consistent with the FDCPA’s three stated purposes, more so than a “benign language” exception.

First, the Court believed that interpreting § 1692f(8) to exempt language and symbols that facilitate mail delivery serves to “eliminate abusive debt collection practices by debt collectors.” 15 U.S.C. § 1692(e). In addition, prohibiting language and symbols on envelopes aside from what is required for efficient mail delivery furthers the purpose of preventing embarrassment resulting from conspicuous language visible on an envelope that indicates that the contents of the envelope pertain to debt collection.

Second, the Court believed that “interpreting § 1692f(8) to only language and symbols that facilitate mail delivery insures that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged.” According to the Court, “[t]his reading of § 1692f(8) applies across the board to all debt collectors and provides an easy-to-follow, predictable rule.” In contrast, “[a] more flexible approach to § 1692f(8) – like a ‘benign language’ exception – would incentivize gamesmanship, disadvantaging ethical debt collectors that are unwilling to push the limits of the rule in favor of their less scrupulous exceptions.”

Third, the Court believed that its interpretation better “promotes consistent State action to protect consumers against debt collection abuses[,]” since bright-line rules are easier to apply consistently. 15 U.S.C. § 1692f(e). As the Court noted, “as more and more courts apply the ‘benign language’ exception it becomes increasingly difficult to reconcile the results.”

According to the Court, “[r]easonable minds may differ as to whether markings on an envelope are benign, but there can be little disagreement as to whether markings on an envelope are required to facilitate mail delivery. Thus, the narrower reading of § 1692f(8) better promotes consistency in the enforcement of the FDCPA.”

Accordingly, the Court reversed the judgment of the district court and remanded for further proceedings consistent with its opinion.

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The attorneys of Maurice Wutscher are seasoned business lawyers with substantial experience in business law, financial services litigation and regulatory compliance. They represent consumer and commercial financial services companies, including depository and non-depository mortgage lenders and servicers, as well as mortgage loan investors, financial asset buyers and sellers, loss mitigation companies, third-party debt collectors, and other financial services providers. They have defended scores of putative class actions, have substantial experience in federal appellate court litigation and bring substantial trial and complex bankruptcy experience. They are leaders and influencers in their highly specialized area of law. They serve in leadership positions in industry associations and regularly publish and speak before national audiences.

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